SEVENTH AMENDED AND RESTATED
AGREEMENT OF LIMITED PARTNERSHIP
OF
KILROY REALTY, L.P.
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ARTICLE 1.
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DEFINED TERMS
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1
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Section 1.1.
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Definitions
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1
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ARTICLE 2.
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ORGANIZATIONAL MATTERS
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20
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Section 2.1.
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Organization
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20
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Section 2.2.
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Name
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21
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Section 2.3.
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Resident Agent; Principal Office
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21
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Section 2.4.
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Power of Attorney
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21
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Section 2.5.
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Term
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22
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Section 2.6.
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Number of Partners
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23
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ARTICLE 3.
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PURPOSE
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23
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Section 3.1.
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Purpose and Business
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23
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Section 3.2.
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Powers
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23
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Section 3.3.
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Partnership Only for Purposes Specified
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24
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Section 3.4.
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Representations and Warranties by the Parties
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24
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ARTICLE 4.
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CAPITAL CONTRIBUTIONS
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26
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Section 4.1.
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Capital Contributions of the Partners
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26
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Section 4.2.
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Loans by Third Parties
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26
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Section 4.3.
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Additional Funding and Capital Contributions
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26
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Section 4.4.
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Stock Incentive Plan
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29
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Section 4.5.
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Other Contribution Provisions
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29
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Section 4.6.
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No Preemptive Rights
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29
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ARTICLE 5.
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DISTRIBUTIONS
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29
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Section 5.1.
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Requirement and Characterization of Distributions
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29
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Section 5.2.
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Distributions in Kind
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30
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Section 5.3.
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Distributions Upon Liquidation
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30
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Section 5.4.
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Distributions to Reflect Issuance of Additional Partnership Interests
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30
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ARTICLE 6.
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ALLOCATIONS
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31
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Section 6.1.
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Timing and Amount of Allocations of Net Income and Net Loss
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31
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Section 6.2.
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General Allocations
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31
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Section 6.3.
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Additional Allocation Provisions
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33
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Section 6.4.
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Tax Allocations
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35
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Section 6.5.
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Special Allocations
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36
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ARTICLE 7.
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MANAGEMENT AND OPERATIONS OF BUSINESS
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36
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Section 7.1.
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Management
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36
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Section 7.2.
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Certificate of Limited Partnership
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40
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Section 7.3.
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Restrictions on General Partner's Authority
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40
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Section 7.4.
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Reimbursement of the General Partner
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43
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Section 7.5.
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Outside Activities of the General Partner
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43
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Section 7.6.
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Contracts with Affiliates
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44
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Section 7.7.
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Indemnification
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45
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Section 7.8.
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Liability of the General Partner
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47
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Section 7.9.
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Other Matters Concerning the General Partner
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48
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Section 7.10.
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Title to Partnership Assets
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49
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Section 7.11.
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Reliance by Third Parties
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49
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ARTICLE 8.
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RIGHTS AND OBLIGATIONS OF LIMITED PARTNERS
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49
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Section 8.1.
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Limitation of Liability
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49
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Section 8.2.
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Management of Business
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50
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Section 8.3.
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Outside Activities of Limited Partners
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50
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Section 8.4.
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Return of Capital
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50
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Section 8.5.
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Rights of Limited Partners Relating to the Partnership
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51
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Section 8.6.
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Common Limited Partner Redemption Rights
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51
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ARTICLE 9.
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BOOKS, RECORDS, ACCOUNTING AND REPORTS
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54
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Section 9.1.
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Records and Accounting
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54
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Section 9.2.
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Fiscal Year
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54
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Section 9.3.
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Reports
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54
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Section 9.4.
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Nondisclosure of Certain Information
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55
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ARTICLE 10.
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TAX MATTERS
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55
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Section 10.1.
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Preparation of Tax Returns
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55
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Section 10.2.
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Tax Elections
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55
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Section 10.3.
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Tax Matters Partner
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56
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Section 10.4.
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Organizational Expenses
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57
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Section 10.5.
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Withholding
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57
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ARTICLE 11.
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TRANSFERS AND WITHDRAWALS
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58
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Section 11.1.
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Transfer
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58
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Section 11.2.
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Transfer of General Partner's Partnership Interest
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58
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Section 11.3.
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Limited Partners' Rights to Transfer
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60
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Section 11.4.
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Substituted Limited Partners
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62
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Section 11.5.
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Assignees
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63
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Section 11.6.
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General Provisions
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63
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Section 11.7.
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Transfer of Pledged Partnership Units
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65
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ARTICLE 12.
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ADMISSION OF PARTNERS
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66
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Section 12.1.
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Admission of Successor General Partner
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66
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Section 12.2.
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Admission of Additional Limited Partners
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66
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Section 12.3.
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Amendment of Agreement and Certificate of Limited Partnership
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67
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ARTICLE 13.
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DISSOLUTION AND LIQUIDATION
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67
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Section 13.1.
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Dissolution
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67
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Section 13.2.
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Winding Up
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68
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Section 13.3.
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Compliance with Timing Requirements of Regulations
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69
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Section 13.4.
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Deemed Distribution and Recontribution
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70
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Section 13.5.
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Rights of Limited Partners
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70
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Section 13.6.
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Notice of Dissolution
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70
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Section 13.7.
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Cancellation of Certificate of Limited Partnership
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71
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Section 13.8.
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Reasonable Time for Winding-Up
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71
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Section 13.9.
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Waiver of Partition
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71
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ARTICLE 14.
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AMENDMENT OF PARTNERSHIP AGREEMENT; CONSENTS
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71
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Section 14.1.
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Amendments
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71
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Section 14.2.
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Action by the Partners
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72
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ARTICLE 15.
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GENERAL PROVISIONS
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73
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Section 15.1.
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Addresses and Notice
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73
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Section 15.2.
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Titles and Captions
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73
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Section 15.3.
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Pronouns and Plurals
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73
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Section 15.4.
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Further Action
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73
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Section 15.5.
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Binding Effect
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73
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Section 15.6.
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Creditors
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73
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Section 15.7.
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Waiver
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74
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Section 15.8.
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Counterparts
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74
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Section 15.9.
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Applicable Law
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74
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Section 15.10.
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Invalidity of Provisions
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74
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Section 15.11.
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Limitation to Preserve REIT Status
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74
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Section 15.12.
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Entire Agreement
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75
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Section 15.13.
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No Rights as Stockholders
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75
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ARTICLE 16.
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SERIES A PREFFERED UNITS
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75
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Section 16.1.
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Designation and Number
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75
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Section 16.2.
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Distributions
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76
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Section 16.3.
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Liquidation Proceeds
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78
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Section 16.4.
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Redemption
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78
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Section 16.5.
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Voting Rights
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81
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Section 16.6.
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Transfer Restrictions
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82
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Section 16.7.
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Exchange Rights
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82
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Section 16.8.
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No Conversion Rights
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87
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Section 16.9.
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No Sinking Fund
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87
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ARTICLE 17.
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[INTENTIONALLY OMITTED]
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87
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ARTICLE 18.
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RIGHTS OF CERTAIN LIMITED PARTNERS
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87
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Section 18.1.
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Limited Partner Consent
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87
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Section 18.2.
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Redemption Rights
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88
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Section 18.3.
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Activities of Investors
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89
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Section 18.4.
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Sale of Allen Properties
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89
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Section 18.5.
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Transfer of Partnership Units
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89
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Section 18.6.
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Distributions and Allocations
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90
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Section 18.7.
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Admission of Additional Investors
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90
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ARTICLE 19.
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[INTENTIONALLY OMITTED]
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90
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ARTICLE 20.
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[INTENTIONALLY OMITTED]
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90
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ARTICLE 21.
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[INTENTIONALLY OMITTED]
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90
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ARTICLE 22.
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SERIES G PREFERRED UNITS
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90
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Section 22.1.
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Designation and Number
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90
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Section 22.2.
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Distributions
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91
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Section 22.3.
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Liquidation Proceeds
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93
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Section 22.4.
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Redemption
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93
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Section 22.5.
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Ranking
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94
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Section 22.6.
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Voting Rights
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95
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Section 22.7.
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Transfer Restrictions
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95
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Section 22.8.
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Conversion
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95
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Section 22.9.
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No Sinking Fund
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95
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ARTICLE 23.
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SERIES H PREFERRED UNITS
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95
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Section 23.1.
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Designation and Number
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95
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Section 23.2.
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Distributions
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95
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Section 23.3.
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Liquidation Proceeds
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97
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Section 23.4.
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Redemption
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98
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Section 23.5.
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Ranking
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99
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Section 23.6.
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Voting Rights
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99
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Section 23.7.
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Transfer Restrictions
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99
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Section 23.8.
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Conversion
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99
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Section 23.9.
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No Sinking Fund
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100
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EXECUTION VERSION
SEVENTH AMENDED AND RESTATED
AGREEMENT OF LIMITED PARTNERSHIP
OF
KILROY REALTY, L.P.
THIS SEVENTH AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP, dated as of August 15, 2012, is entered into by and among Kilroy Realty Corporation, a Maryland corporation (the “
Company
”), as the General Partner and the Persons whose names are set forth on Exhibit A attached hereto, as the Limited Partners, together with any other Persons who become Partners in the Partnership as provided herein.
ARTICLE 1.
DEFINED TERMS
WHEREAS, the General Partner and each of the Limited Partners set forth on Exhibit A hereto are parties to that certain Sixth Amended and Restated Agreement of Limited Partnership of Kilroy Realty, L.P., dated March 27, 2012 (the “
Sixth Amended and Restated Agreement
”); and
WHEREAS, the General Partner desires to amend the Sixth Amended and Restated Agreement to (a) provide for the issuance of 6.375% Series H Cumulative Redeemable Preferred Units of the Partnership to the General Partner, in exchange for the contribution by the General Partner of cash to the Partnership, (b) reflect the redemption of the 7.80% Series E Cumulative Redeemable Preferred Units of the Partnership and the redemption of the 7.50% Series F Cumulative Redeemable Preferred Units of the Partnership, each of which occurred on April 16, 2012 (collectively (a) and (b), the “
Amendment
”), and (c) restate the Sixth Amended and Restated Agreement to give effect to the Amendment; and
WHEREAS, pursuant to Sections 4.3.C and 7.3.E of the Sixth Amended and Restated Agreement, approval only of the General Partner, and not of the Limited Partners, is required to give effect to the Amendment and the seventh restatement of the Agreement of Limited Partnership; and
WHEREAS, by virtue of the execution of this Agreement by the General Partner, the General Partner hereby approves the Amendment and seventh restatement of the Agreement of Limited Partnership, effective as of the date hereof.
NOW, THEREFORE, BE IT RESOLVED, that for good and adequate consideration, the receipt of which is hereby acknowledged, the parties hereto agree as follows:
Section 1.1.
Definitions
.
The following definitions shall be for all purposes, unless otherwise clearly indicated to the contrary, applied to the terms used in this Agreement.
“
Act
” means the Delaware Revised Uniform Limited Partnership Act, as it may be amended from time to time, and any successor to such statute.
“
Additional Funds
” shall have the meaning set forth in Section 4.3.A.
“
Additional Limited Partner
” means a Person admitted to the Partnership as a Limited Partner pursuant to Section 12.2 hereof and who is shown as such on the books and records of the Partnership.
“
Adjusted Capital Account Deficit
” means, with respect to any Partner, the deficit balance, if any, in such Partner’s Capital Account as of the end of the relevant fiscal year, after giving effect to the following adjustments:
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(i)
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decrease such deficit by any amounts which such Partner is obligated to restore pursuant to this Agreement or is deemed to be obligated to restore pursuant to Regulations Section 1.704-1(b)(2)(ii)(c) or the penultimate sentence of each of Regulations Sections 1.704-2(i)(5) and 1.704-2(g); and
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(ii)
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increase such deficit by the items described in Regulations Section 1.704-1(b)(2)(ii)(d)(4), (5) and (6).
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The foregoing definition of Adjusted Capital Account Deficit is intended to comply with the provisions of Regulations Section 1.704-1(b)(2)(ii)(d) and shall be interpreted consistently therewith.
“
Adjusted Net Income
” means for each fiscal year of the Partnership or other applicable period, an amount equal to the Partnership’s Net Income or Net Loss for such fiscal year or other period, computed without regard to the items set forth below, provided if the Adjusted Net Income for such fiscal year is a negative number (i.e., a net loss), then the Adjusted Net Income for that fiscal year shall be treated as if it was zero:
(i) Depreciation; and
(ii) Net gain or loss realized in connection with the actual or hypothetical sale of all or substantially all of the assets of the Partnership, including but not limited to net gain or loss treated as realized in connection with an adjustment to the Gross Asset Value of the Partnership’s assets as set forth in the definition of “Gross Asset Value”.
“
Adjustment Date
” shall have the meaning set forth in Section 4.3.E.
“
Affiliate
” means, with respect to any Person, any Person directly or indirectly controlling, controlled by or under common control with such Person.
“
Agreed Value
” means (i) in the case of any Contributed Property set forth in
Exhibit A and as of the time of its contribution to the Partnership, the Agreed Value of such property as set forth in Exhibit A; (ii) in the case of any Contributed Property not set forth in Exhibit A and as of the time of its contribution to the Partnership, the fair market value of such property or other consideration as determined by the General Partner, reduced by any liabilities either assumed by the Partnership upon such contribution or to which such property is subject when contributed; and (iii) in the case of any property distributed to a Partner by the Partnership, the fair market value of such property as determined by the General Partner at the time such property is distributed, reduced by any indebtedness either assumed by such Partner upon such distribution or to which such property is subject at the time of the distribution as determined under Section 752 of the Code and the Regulations thereunder.
“
Agreement
” means this Seventh Amended and Restated Agreement of Limited Partnership, as it may be amended, modified, supplemented or restated from time to time.
“
Appraisal
” means with respect to any assets, the opinion of an independent third party experienced in the valuation of similar assets, selected by the General Partner in good faith; such opinion may be in the form of an opinion by such independent third party that the value for such asset as set by the General Partner is fair, from a financial point of view, to the Partnership.
“
Assignee
” means a Person to whom one or more Partnership Units have been transferred in a manner permitted under this Agreement, but who has not become a Substituted Limited Partner, and who has the rights set forth in Section 11.5.
“
Available Cash
” means, with respect to any period for which such calculation is being made, (i) the sum of:
a. the Partnership’s Net Income or Net Loss (as the case may be) for such period,
b. Depreciation and all other noncash charges deducted in determining Net Income or Net Loss for such period,
c. the amount of any reduction in reserves of the Partnership referred to in clause (ii)(f) below (including, without limitation, reductions resulting because the General Partner determines such amounts are no longer necessary),
d. the excess of the net proceeds from the sale, exchange, disposition, or refinancing of Partnership property for such period over the gain (or loss, as the case may be) recognized from any such sale, exchange, disposition, or refinancing during such period (excluding Terminating Capital Transactions), and
e. all other cash received by the Partnership for such period that was not included in determining Net Income or Net Loss for such period;
a. all principal debt payments made during such period by the Partnership,
b. capital expenditures made by the Partnership during such period,
c. investments in any entity (including loans made thereto) to the extent that such investments are not otherwise described in clauses (ii)(a) or (b),
d. all other expenditures and payments not deducted in determining Net Income or Net Loss for such period,
e. any amount included in determining Net Income or Net Loss for such period that was not received by the Partnership during such period,
f. the amount of any increase in reserves established during such period which the General Partner determines are necessary or appropriate in its sole and absolute discretion, and
g. the amount of any working capital accounts and other cash or similar balances which the General Partner determines to be necessary or appropriate in its sole and absolute discretion.
Notwithstanding the foregoing, Available Cash shall not include any cash received or reductions in reserves, or take into account any disbursements made or reserves established, after commencement of the dissolution and liquidation of the Partnership.
“
Board of Directors
” means the Board of Directors of the General Partner.
“
Business Day
” shall mean each day, other than a Saturday or a Sunday, which is not a day on which banking institutions in Los Angeles, California, or New York, New York are authorized or required by law, regulation or executive order to close.
“
Capital Account
” means, with respect to any Partner, the Capital Account maintained for such Partner in accordance with the following provisions:
(a) To each Partner’s Capital Account there shall be added such Partner’s Capital Contributions, such Partner’s share of Net Income and any items in the nature of income or gain which are specially allocated pursuant to Section 6.3, and the amount of any Partnership liabilities assumed by such Partner or which are secured by any property distributed to such Partner.
(b) From each Partner’s Capital Account there shall be subtracted the amount of cash and the Gross Asset Value of any property distributed to such Partner pursuant to any provision of this Agreement, such Partner’s distributive share of Net Losses and any items in the nature of expenses or losses which are specially allocated pursuant to Section 6.3 hereof, and the amount of any liabilities of such Partner assumed by the Partnership or which are secured by any property contributed by such Partner to the Partnership.
(c) In the event any interest in the Partnership is transferred in accordance with the terms of this Agreement the transferee shall succeed to the Capital Account of the transferor to the extent it relates to the transferred interest.
(d) In determining the amount of any liability for purposes of subsections (a) and (b) hereof, there shall be taken into account Code section 752(c) and any other applicable provisions of the Code and Regulations.
(e) Upon the conversion of Series G Preferred Units into Common Units, (x) the adjustments and allocations required by the Proposed Treasury Regulations relating to non-compensatory options (as the same may be finalized), including Proposed Treasury Regulations Section 1.704-1(b)(2)(iv)(h)(2) and (s) (as the same may be finalized) and Proposed Regulations Section 1.704-1(b)(4)(ix) (as the same may be finalized), shall be made, or (y) such other adjustments and allocations as determined by the General Partner in its sole discretion to be necessary or appropriate to cause each Partnership Unit acquired by a Partner upon such exercise to have the same economic rights as other Partnership Units of the same class.
(f) Upon the conversion of Series H Preferred Units into Common Units, (x) the adjustments and allocations required by the Proposed Treasury Regulations relating to non-compensatory options (as the same may be finalized), including Proposed Treasury Regulations Section 1.704-1(b)(2)(iv)(h)(2) and (s) (as the same may be finalized) and Proposed Regulations Section 1.704-1(b)(4)(ix) (as the same may be finalized), shall be made, or (y) such other adjustments and allocations as determined by the General Partner in its sole discretion to be necessary or appropriate to cause each Partnership Unit acquired by a Partner upon such exercise to have the same economic rights as other Partnership Units of the same class.
(g) The foregoing provisions and the other provisions of this Agreement relating to the maintenance of Capital Accounts are intended to comply with Regulations Sections 1.704-1(b) and 1.704-2, and shall be interpreted and applied in a manner consistent with such Regulations. In the event the General Partner shall determine that it is prudent to modify the manner in which the Capital Accounts, or any debits or credits thereto (including, without limitation, debits or credits relating to liabilities which are secured by contributed or distributed property or which are assumed by the Partnership, the General Partner, or the Limited Partners) are computed in order to comply with such Regulations, the General Partner may make such modification, provided, that it is not likely to have a material effect on the amounts distributable to any Person pursuant to Article 13 of this Agreement upon the dissolution of the Partnership. The General Partner also shall (i) make any adjustments that are necessary or appropriate to maintain equality between the Capital Accounts of the Partners and the amount of Partnership capital reflected on the Partnership’s balance sheet, as computed for book purposes, in accordance with Regulations Section 1.704‑1(b)(2)(iv)(q), and (ii) make any appropriate modifications in the event unanticipated events might otherwise cause this Agreement not to comply with Regulations Section 1.704‑1(b) or Section 1.704-2.
“
Capital Contribution
” means, with respect to any Partner, the amount of money and the initial Gross Asset Value of any property (other than money) contributed to the Partnership by such Partner.
“
Cash Amount
” means, with respect to any Partnership Units subject to a Redemption, an amount of cash equal to the Deemed Partnership Interest Value attributable to such Partnership Units.
“
Certificate
” means the Certificate of Limited Partnership relating to the Partnership filed in the office of the Secretary of State of Delaware, as amended from time to time in accordance with the terms hereof and the Act.
“
Charter
” means the Articles of Incorporation of the General Partner filed with the Maryland State Department of Assessments and Taxation on September 13, 1996, as amended or restated from time to time.
“
Code
” means the Internal Revenue Code of 1986, as amended from time to time or any successor statute thereto, as interpreted by the applicable regulations thereunder. Any reference herein to a specific section or sections of the Code shall be deemed to include a reference to any corresponding provision of future law.
“
Common Limited Partner
” means any Person holding Common Units, and named as a Common Limited Partner in Exhibit A attached hereto, as such Exhibit may be amended from time to time, or any Substituted Limited Partner or Additional Limited Partner, in such Person’s capacity as a Common Limited Partner in the Partnership.
“
Common Unit
” means a Partnership Unit representing a Partnership Interest that is without preference as to distributions and allocations.
“
Company
” shall have the meaning set forth in the preamble to this Agreement.
“
Consent
” means the consent to, approval of, or vote on a proposed action by a Partner given in accordance with Article 14 hereof.
“
Consent of the Limited Partners
” means the Consent of a Majority in Interest of the Limited Partners, other than the Preferred Limited Partners, which Consent shall be obtained prior to the taking of any action for which it is required by this Agreement and may be given or withheld by a Majority in Interest of the Limited Partners, unless otherwise expressly provided herein, in their sole and absolute discretion.
“
Consent of the Partners
” means the Consent of Partners, other than the Preferred Limited Partners, holding Percentage Interests that in the aggregate are equal to or greater than 60% of the aggregate Percentage Interests of all Partners, other than the Preferred Limited Partners, which Consent shall be obtained prior to the taking of any action for which it is required by this Agreement and may be given or withheld by such Partners, in their sole and absolute discretion.
“
Constructively Own
” means ownership under the constructive ownership rules described in Exhibit G.
“
Contributed Property
” means each property or other asset, in such form as may be permitted by the Act, but excluding cash, contributed or deemed contributed to the Partnership (or, to the extent provided in applicable regulations, deemed contributed by the Partnership on termination and reconstitution thereof pursuant to Section 708 of the Code).
“
Debt
” means, as to any Person, as of any date of determination, (i) all indebtedness of such Person for borrowed money or for the deferred purchase price of property or services; (ii) all amounts owed by such Person to banks or other Persons in respect of reimbursement obligations under letters of credit, surety bonds and other similar instruments guaranteeing payment or other performance of obligations by such Person; (iii) all indebtedness for borrowed money or for the deferred purchase price of property or services secured by any lien on any property owned by such Person, to the extent attributable to such Person’s interest in such property, even though such Person has not assumed or become liable for the payment thereof; and (iv) lease obligations of such Person which, in accordance with generally accepted accounting principles, should be capitalized.
“
Deemed Partnership Interest Value
” means, as of any date with respect to any class of Partnership Interests, the Deemed Value of the Partnership Interests of such class multiplied by the applicable Partner’s Percentage Interest of such class.
“
Deemed Value of the Partnership Interests
” means, as of any date with respect to any class or series of Partnership Interests (i) the total number of Partnership Units of the General Partner in such class of Partnership Interests (as provided for in Sections 4.1 and 4.3.C) issued and outstanding as of the close of business on such date multiplied by the sum of (x) the Fair Market Value of the number of shares of capital stock of the General Partner which corresponds to one Partnership Unit of such class or series of Partnership Interests on such date (as adjusted pursuant to Section 7.5 (in the event the General Partner acquires material assets, other than on behalf of the Partnership) and for stock dividends and distributions, stock splits and subdivisions, reverse stock splits and combinations, distributions of rights, warrants or options, and distributions of evidences of indebtedness or assets relating to assets not received by the General Partner pursuant to a pro rata distribution by the Partnership); divided by (ii) the Percentage Interest of the General Partner in such class or series of Partnership Interests on such date; provided, that, if no outstanding shares of capital stock of the General Partner correspond to a class of series of Partnership Interests, the Deemed Value of Partnership Interests with respect to such class or series shall be equal to an amount reasonably determined by the General Partner. Without limiting the generality of the foregoing, the Deemed Value of the Partnership Interests referenced in the preceding sentence shall be adjusted for the issuance, distribution and triggering of exercisability of the Rights (which adjustment shall be made as necessary to equitably reflect the dilution in REIT Shares resulting from the issuance and exercise of outstanding Rights, if any, in each case taking into account any increase pursuant to Section 4.5.B in the number of Partnership Units held by the Limited Partners).
“
Depreciation
” means, for each fiscal year or other period, an amount equal to the depreciation, amortization or other cost recovery deduction allowable with respect to an asset for such year or other period, except that if the Gross Asset Value of an asset differs from its adjusted basis for federal income tax purposes at the beginning of such year or other period, Depreciation shall be an amount which bears the same ratio to such beginning Gross Asset Value as the federal income tax depreciation, amortization or other cost recovery deduction for such year or other period bears to such beginning adjusted tax basis;
provided
,
however
, that if the federal income tax depreciation, amortization or other cost recovery deduction for such year is zero, Depreciation shall be determined with reference to such beginning Gross Asset Value using any reasonable method selected by the General Partner.
“
Effective Date
” means the date of closing of the initial public offering of REIT Shares upon which date contributions set forth on Exhibit A shall become effective.
“
Excess Units
” shall have the meaning set forth in Section 16.7.A(iii).
“
Exchange Notice
” shall have the meaning set forth in Section 16.7.B.
“
Exchange Price
” shall have the meaning set forth in Section 16.7.A(i).
“
Fair Market Value
” means, with respect to any security of the General Partner, the average of the daily market price for the ten (10) consecutive trading days immediately preceding the date with respect to which “
Fair Market Value
” must be determined hereunder or, if such date is not a Business Day, the immediately preceding Business Day. The market price for each such trading day shall be: (i) if such security is listed or admitted to trading on any securities exchange or the Nasdaq National Market, the closing price, regular way, on such day, or if no such sale takes place on such day, the average of the closing bid and asked prices on such day, (ii) if such security is not listed or admitted to trading on any securities exchange or the Nasdaq National Market, the last reported sale price on such day or, if no sale takes place on such day, the average of the closing bid and asked prices on such day, as reported by a reliable quotation source designated by the General Partner, or (iii) if such security is not listed or admitted to trading on any securities exchange or the Nasdaq National Market and no such last reported sale price or closing bid and asked prices are available, the average of the reported high bid and low asked prices on such day, as reported by a reliable quotation source designated by the General Partner, or if there shall be no bid and asked prices on such day, the average of the high bid and low asked prices, as so reported, on the most recent day (not more than 10 days prior to the date in question) for which prices have been so reported; provided, that if there are no bid and asked prices reported during the 10 days prior to the date in question, the Fair Market Value of such security shall be determined by the General Partner acting in good faith on the basis of such quotations and other information as it considers, in its reasonable judgment, appropriate. In the event the REIT Shares Amount for shares of common stock includes Rights that a holder of such shares would be entitled to receive, then the Fair Market Value of such Rights shall be determined by the General Partner acting in good faith on the basis of such quotations and other information as it considers, in its reasonable judgment, appropriate; provided, that in connection with determining the Deemed Value of the Partnership Interests for
purposes of determining the number of additional Partnership Units issuable upon a Capital Contribution funded by an underwritten public offering of shares of capital stock of the General Partner, the Fair Market Value of such shares shall be the public offering price per share of such class of capital stock sold; and, provided further, that the Fair Market Value of any Rights issued pursuant to the applicable Rights Agreement shall be deemed to have no value unless the Rights have been distributed pursuant to the terms set forth in the applicable Rights Agreement (i.e., if the Rights issued pursuant thereto are no longer “attached” to the REIT Shares and are able to trade independently). Notwithstanding the foregoing, the General Partner in its reasonable discretion may use (x) a different “Fair Market Value” for purposes of making the determinations under subparagraph (b) of the definition of “Gross Asset Value” and Section 4.3.E. in connection with the contribution of Property to the Partnership by a third-party, provided such value shall be based upon the value per REIT Share (or per Partnership Unit) agreed upon by the General Partner and such third-party for purposes of such contribution, (y) the “Common Stock Price” as defined in the Series G Articles Supplementary (or such other price for the REIT Shares that was used to determine the number of REIT Shares issued upon the conversion of REIT Series G Preferred Shares into REIT Shares) for purposes of making the determinations under subparagraph (b) of the definition of “Gross Asset Value” in connection with the conversion of the Series G Preferred Units pursuant to Section 22.8, and (z) the “Common Stock Price” as defined in the Series H Articles Supplementary (or such other price for the REIT Shares that was used to determine the number of REIT Shares issued upon the conversion of REIT Series H Preferred Shares into REIT Shares) for purposes of making the determinations under subparagraph (b) of the definition of “Gross Asset Value” in connection with the conversion of the Series H Preferred Units pursuant to Section 23.8.
“
Funding Debt
” means the incurrence of any Debt by or on behalf of the General Partner for the purpose of providing funds to the Partnership.
“
General Partner
” means the Company or its successors as general partner of the Partnership.
“
General Partner Interest
” means a Partnership Interest held by the General Partner. A General Partner Interest may be expressed as a number of Partnership Units.
“
General Partner Loan
” shall have the meaning set forth in Section 4.3.B.
“
General Partner Payment
” shall have the meaning set forth in Section 15.11.
“
Gross Asset Value
” means, with respect to any asset, the asset’s adjusted basis for federal income tax purposes, except as follows:
(a) The initial Gross Asset Value of any asset contributed by a Partner to the Partnership shall be the gross fair market value of such asset, (subject to any adjustments required with respect to the conversion feature of the Series G Preferred Units or the Series H Preferred Units), as determined by the contributing Partner and the General Partner (as set forth on Exhibit A attached hereto, as such Exhibit may be amended from time to time);
provided
, that if the contributing Partner is the General Partner then, except with respect to the General
Partner’s initial Capital Contribution which shall be determined as set forth on Exhibit A, or capital contributions of cash, REIT Shares or other shares of capital stock of the General Partner, the determination of the fair market value of the contributed asset shall be determined by (i) the price paid by the General Partner if the asset is acquired by the General Partner contemporaneously with its contribution to the Partnership, or (ii) by Appraisal if otherwise acquired by the General Partner.
(b) Immediately prior to the times listed below, the Gross Asset Values of all Partnership assets shall be adjusted to equal their respective gross fair market values, as determined by the General Partner using such reasonable method of valuation as it may adopt,
provided
however
, that for such purpose, the net value of all of the Partnership assets, in the aggregate, shall be equal to the Deemed Value of the Partnership Interests of all classes of Partnership Interests then outstanding, regardless of the method of valuation adopted by the General Partner:
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(i)
|
the acquisition of an additional interest in the Partnership by a new or existing Partner in exchange for more than a de minimis Capital Contribution, if the General Partner reasonably determines that such adjustment is necessary or appropriate to reflect the relative economic interests of the Partners in the Partnership;
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(ii)
|
the distribution by the Partnership to a Partner of more than a de minimis amount of Partnership property as consideration for an interest in the Partnership if the General Partner reasonably determines that such adjustment is necessary or appropriate to reflect the relative economic interests of the Partners in the Partnership;
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(iii) the liquidation of the Partnership within the meaning of Regulations Section 1.704‑1(b)(2)(ii)(g);
(iv) immediately after the conversion of any Series G Preferred Units into Common Units;
(v) immediately after the conversion of any Series H Preferred Units into Common Units; and
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(vi)
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at such other times as the General Partner shall reasonably determine necessary or advisable in order to comply with Regulations Sections 1.704‑1(b) and 1.704-2.
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(c) The Gross Asset Value of any Partnership asset distributed to a Partner shall be the gross fair market value of such asset on the date of distribution as determined by the distributee and the General Partner;
provided
, that if the distributee is the General Partner, or if the distributee and the General Partner cannot agree on such a determination, by Appraisal.
(d) The Gross Asset Values of Partnership assets shall be increased (or decreased) to reflect any adjustments to the adjusted basis of such assets pursuant to Code Section 734(b) or Code Section 743(b), but only to the extent that such adjustments are taken into account in determining Capital Accounts pursuant to Regulations Section 1.704-1(b)(2)(iv)(m);
provided
,
however
, that Gross Asset Values shall not be adjusted pursuant to this subparagraph (d) to the extent that the General Partner reasonably determines that an adjustment pursuant to subparagraph (b) is necessary or appropriate in connection with a transaction that would otherwise result in an adjustment pursuant to this subparagraph (d).
(e) If the Gross Asset Value of a Partnership asset has been determined or adjusted pursuant to subparagraph (a), (b) or (d), such Gross Asset Value shall thereafter be adjusted by the Depreciation taken into account with respect to such asset for purposes of computing Net Income and Net Losses.
“
Holder
” means either the Partner or Assignee owning a Partnership Unit.
“
Immediate Family
” means, with respect to any natural Person, such natural Person’s estate or heirs or current spouse or former spouse, parents, parents-in-law, children, siblings and grandchildren and any trust or estate, all of the beneficiaries of which consist of such Person or such Person’s spouse, former spouse, parents, parents-in-law, children, siblings or grandchildren.
“
Incapacity
” or “
Incapacitated
” means, (i) as to any individual Partner, death, total physical disability or entry by a court of competent jurisdiction adjudicating him or her incompetent to manage his or her Person or his or her estate; (ii) as to any corporation which is a Partner, the filing of a certificate of dissolution, or its equivalent, for the corporation or the revocation of its charter; (iii) as to any partnership which is a Partner, the dissolution and commencement of winding up of the partnership; (iv) as to any estate which is a Partner, the distribution by the fiduciary of the estate’s entire interest in the Partnership; (v) as to any trustee of a trust which is a Partner, the termination of the trust (but not the substitution of a new trustee); or (vi) as to any Partner, the bankruptcy of such Partner. For purposes of this definition, bankruptcy of a Partner shall be deemed to have occurred when (a) the Partner commences a voluntary proceeding seeking liquidation, reorganization or other relief under any bankruptcy, insolvency or other similar law now or hereafter in effect, (b) the Partner is adjudged as bankrupt or insolvent, or a final and nonappealable order for relief under any bankruptcy, insolvency or similar law now or hereafter in effect has been entered against the Partner, (c) the Partner executes and delivers a general assignment for the benefit of the Partner’s creditors, (d) the Partner files an answer or other pleading admitting or failing to contest the material allegations of a petition filed against the Partner in any proceeding of the nature described in clause (b) above, (e) the Partner seeks, consents to or acquiesces in the appointment of a trustee, receiver or liquidator for the Partner or for all or any substantial part of the Partner’s properties, (f) any proceeding seeking liquidation, reorganization or other relief under any bankruptcy, insolvency or other similar law now or hereafter in effect has not been dismissed within 120 days after the commencement thereof, (g) the appointment without the Partner’s consent or acquiescence of a trustee, receiver or liquidator has not been vacated or stayed within 90 days of such appointment, or (h) an appointment referred to in clause (g) is not vacated within 90 days after the expiration of any such stay.
“
Indemnitee
” means (i) any Person subject to a claim or demand or made or threatened to be made a party to, or involved or threatened to be involved in, an action, suit or proceeding by reason of his or her status as (A) the General Partner or (B) a director, officer, employee or agent of the Partnership or the General Partner, and (ii) such other Persons (including Affiliates of the General Partner or the Partnership) as the General Partner may designate from time to time, in its sole and absolute discretion.
“
IRS
” means the Internal Revenue Service, which administers the internal revenue laws of the United States.
“
Junior Units
” means Partnership Units representing any class or series of Partnership Interest ranking, as to distributions and voluntary or involuntary liquidation, dissolution and winding up of the Partnership, junior to the Series A Preferred Units, the Series G Preferred Units and the Series H Preferred Units.
“
Limited Partner
” means each Preferred Limited Partner or Common Limited Partner.
“
Limited Partnership Interest
” means a Partnership Interest of a Limited Partner representing a fractional part of the Partnership Interests of all Limited Partners and includes any and all benefits to which the Holder of such a Partnership Interest may be entitled as provided in this Agreement, together with all obligations of such Person to comply with the terms and provisions of this Agreement. A Limited Partnership Interest may be expressed as a number of Partnership Units.
“
Liquidating Events
” shall have the meaning set forth in Section 13.1.
“
Liquidator
” shall have the meaning set forth in Section 13.2.A.
“
Majority in Interest of the Limited Partners
” means Limited Partners (other than the General Partner, any Limited Partner 50% or more of whose equity is owned, directly or indirectly, by the General Partner and any Preferred Limited Partner) holding Percentage Interests that in the aggregate are greater than fifty percent (50%) of the aggregate Percentage Interests of all Limited Partners (other than the General Partner, any Limited Partner 50% or more of whose equity is owned, directly or indirectly, by the General Partner and any Preferred Limited Partner).
“
Majority in Interest of Partners
” means Partners (other than Preferred Limited Partners) holding Percentage Interests that are greater than fifty percent (50%) of the aggregate Percentage Interests of all Partners (other than Preferred Limited Partners).
“
Net Income
” or “
Net Loss
” means for each fiscal year of the Partnership, an amount equal to the Partnership’s taxable income or loss for such fiscal year, determined in
accordance with Code Section 703(a) (for this purpose, all items of income, gain, loss or deduction required to be stated separately pursuant to Code Section 703(a)(1) shall be included in taxable income or loss), with the following adjustments:
(a) Any income of the Partnership that is exempt from federal income tax and not otherwise taken into account in computing Net Income or Net Loss pursuant to this definition of Net Income or Net Loss shall be added to such taxable income or loss;
(b) Any expenditures of the Partnership described in Code Section 705(a)(2)(B) or treated as Code Section 705(a)(2)(B) expenditures pursuant to Regulations Section 1.704-1(b)(2)(iv)(i), and not otherwise taken into account in computing Net Income or Net Loss pursuant to this definition of Net Income or Net Loss shall be subtracted from such taxable income or loss;
(c) In the event the Gross Asset Value of any Partnership asset is adjusted pursuant to subparagraph (b) or subparagraph (c) of the definition of Gross Asset Value, the amount of such adjustment shall be taken into account as gain or loss from the disposition of such asset for purposes of computing Net Income or Net Loss;
(d) Gain or loss resulting from any disposition of property with respect to which gain or loss is recognized for federal income tax purposes shall be computed by reference to the Gross Asset Value of the property disposed of, notwithstanding that the adjusted tax basis of such property differs from its Gross Asset Value;
(e) In lieu of the depreciation, amortization, and other cost recovery deductions taken into account in computing such taxable income or loss, there shall be taken into account Depreciation for such fiscal year;
(f) To the extent an adjustment to the adjusted tax basis of any Partnership asset pursuant to Code Section 734(b) or Code Section 743(b) is required pursuant to Regulations Section 1.704-1(b)(2)(iv)(m)(4) to be taken into account in determining Capital Accounts as a result of a distribution other than in liquidation of a Partner’s interest in the Partnership, the amount of such adjustment shall be treated as an item of gain (if the adjustment increases the basis of the asset) or loss (if the adjustment decreases the basis of the asset) from the disposition of the asset and shall be taken into account for purposes of computing Net Income or Net Loss; and
(g) Notwithstanding any other provision of this definition of Net Income or Net Loss, any items which are specially allocated pursuant to Section 6.3 hereof shall not be taken into account in computing Net Income or Net Loss. The amounts of the items of Partnership income, gain, loss, or deduction available to be specially allocated pursuant to Section 6.3 hereof shall be determined by applying rules analogous to those set forth in this definition of Net Income or Net Loss.
“
New Securities
” means (i) any rights, options, warrants or convertible or exchangeable securities having the right to subscribe for or purchase REIT Shares or other shares of capital stock of the General Partner, excluding grants under any Stock Incentive Plan, or (ii) any Debt issued by the General Partner that provides any of the rights described in clause (i).
“
Nonrecourse Deductions
” shall have the meaning set forth in Regulations Section 1.704-2(b)(1), and the amount of Nonrecourse Deductions for a Partnership Year shall be determined in accordance with the rules of Regulations Section 1.704-2(c).
“
Nonrecourse Liability
” shall have the meaning set forth in Regulations Section 1.752-1(a)(2).
“
Notice of Redemption
” means the Notice of Redemption substantially in the form of Exhibit B to this Agreement.
“
Original Limited Partner
” means the Limited Partners of the Partnership, listed on Schedule A hereto, as of January 31, 1997.
“
Parity Preferred Unit
” means any class or series of Partnership Interests of the Partnership now or hereafter authorized, issued or outstanding expressly designated by the Partnership to rank on a parity with the Series A Preferred Units, the Series G Preferred Units and the Series H Preferred Units with respect to distributions or rights upon voluntary or involuntary liquidation, winding up or dissolution of the Partnership, or both, as the context may require.
“
Partner
” means a General Partner or a Limited Partner, and “
Partners
” means the General Partner and the Limited Partners.
“
Partner Minimum Gain
” means an amount, with respect to each Partner Nonrecourse Debt, equal to the Partnership Minimum Gain that would result if such Partner Nonrecourse Debt were treated as a Nonrecourse Liability, determined in accordance with Regulations Section 1.704-2(i)(3).
“
Partner Nonrecourse Debt
” shall have the meaning set forth in Regulations Section 1.704-2(b)(4).
“
Partner Nonrecourse Deductions
” shall have the meaning set forth in Regulations Section 1.704-2(i)(2), and the amount of Partner Nonrecourse Deductions with respect to a Partner Nonrecourse Debt for a Partnership Year shall be determined in accordance with the rules of Regulations Section 1.704-2(i)(2).
“
Partnership
” means the limited partnership formed under the Act and pursuant to this Agreement, and any successor thereto.
“
Partnership Interest
” means, an ownership interest in the Partnership of either a Limited Partner or the General Partner and includes any and all benefits to which the Holder of such a Partnership Interest may be entitled as provided in this Agreement, together with all obligations of such Person to comply with the terms and provisions of this Agreement. There
may be one or more classes of Partnership Interests as provided in Section 4.3. A Partnership Interest may be expressed as a number of Partnership Units. Unless otherwise expressly provided for by the General Partner at the time of the original issuance of any Partnership Interests, all Partnership Interests (whether of a Limited Partner or a General Partner) shall be of the same class. The Partnership Interests represented by the Common Units, the Series A Preferred Units, the Series G Preferred Units and the Series H Preferred Units are the only Partnership Interests and each such type of unit is a separate class of Partnership Interest for all purposes of this Agreement.
“
Partnership Minimum Gain
” shall have the meaning set forth in Regulations Section 1.704-2(b)(2), and the amount of Partnership Minimum Gain, as well as any net increase or decrease in Partnership Minimum Gain, for a Partnership Year shall be determined in accordance with the rules of Regulations Section 1.704-2(d).
“
Partnership Record Date
” means the record date established by the General Partner for the distribution of Available Cash with respect to Common Units pursuant to Section 5.1 hereof which record date shall be the same as the record date established by the General Partner for a distribution to its stockholders of some or all of its portion of such distribution.
“
Partnership Unit
” means, with respect to any class of Partnership Interest, a fractional, undivided share of such class of Partnership Interest issued pursuant to Sections 4.1 and 4.3. The ownership of Partnership Units may be evidenced by a certificate for units substantially in the form of Exhibit D hereto or as the General Partner may determine with respect to any class of Partnership Units issued from time to time under Sections 4.1 and 4.3.
“
Partnership Year
” means the fiscal year of the Partnership, which shall be the calendar year.
“
Percentage Interest
” means, as to a Partner holding a class of Partnership Interests, its interest in the Partnership as determined by dividing the Partnership Units of such class owned by such Partner by the total number of Partnership Units of such class then outstanding as specified in Exhibit A attached hereto, as such Exhibit may be amended from time to time. If the Partnership issues more than one class of Partnership Interest, the interest in the Partnership among the classes of Partnership Interests shall be determined as set forth in the amendment to the Partnership Agreement setting forth the rights and privileges of such additional classes of Partnership Interest, if any, as contemplated by Section 4.3.C hereof.
“
Person
” means an individual or a corporation, partnership, limited liability company, trust, unincorporated organization, association or other entity.
“
Pledge
” shall have the meaning set forth in Section 11.3.A.
“
Pledge Agreement
” means the Pledge Agreement dated as of January 31, 1997 among the Company, as agent, and the Pledgors, as same may be amended, modified or supplemented from time to time in accordance with its terms.
“
Pledgors
” means Kilroy Industries, a California corporation, John B. Kilroy, Sr. and John B. Kilroy, Jr.
“
Preferred Distribution Shortfall
” means, with respect to any Partnership Interests that are entitled to any preference in distributions of Available Cash pursuant to this Agreement, the aggregate amount of the required distributions for such outstanding Partnership Interests for all prior distribution periods
minus
the aggregate amount of the distributions made with respect to such outstanding Partnership Interests pursuant to this Agreement.
“
Preferred Limited Partner
” means any Person holding a Preferred Unit, and named as a Preferred Limited Partner in Exhibit A attached hereto, as such Exhibit may be amended from time to time, or any Substitute Limited Partner or Additional Limited Partner, in such Person’s capacity as a Preferred Limited Partner in the Partnership.
“
Preferred Share
” means a share of the General Partner’s preferred stock, par value $.01 per share, with such rights, priorities and preferences as shall be designated by the Board of Directors or a duly authorized committee thereof in accordance with the General Partner’s Charter.
“
Preferred Unit
” means a Partnership Unit representing a Limited Partnership Interest, with such preferential rights and priorities as shall be designated by the General Partner pursuant to Section 4.3.C hereof, including, without limitation, the Series A Preferred Units, the Series G Preferred Units and the Series H Preferred Units.
“
Preferred Unit Partnership Record Date
” shall have the meaning set forth in Section 16.2.A hereof.
“
Preferred Unit Distribution Payment Date
” shall have the meaning set forth in Section 16.2.A hereof.
“
Properties
” means such interests in real property and personal property including without limitation, fee interests, interests in ground leases, interests in joint ventures, interests in mortgages, and Debt instruments as the Partnership may hold from time to time.
“
PTP
” shall have the meaning set forth in Section 16.6 hereof.
“
Qualified REIT Subsidiary
” means any Subsidiary of the General Partner that is a “qualified REIT subsidiary” within the meaning of Section 856(i) of the Code.
“
Qualified Transferee
” means an “Accredited Investor” as defined in Rule 501 promulgated under the Securities Act.
“
Redemption
” shall have the meaning set forth in Section 8.6.A.
“
Redemption Notice
” shall have the meaning set forth in Section 16.7.B
“
Redemption Price
” shall have the meaning set forth in Section 16.4.A.
“
Regulations
” means the Income Tax Regulations promulgated under the Code, as such regulations may be amended from time to time (including corresponding provisions of succeeding regulations).
“
Regulatory Allocations
” shall have the meaning set forth in Section 6.3.A(viii) of this Agreement.
“
REIT
” means a real estate investment trust under Sections 856 through 860 of the Code.
“
REIT Series A Preferred Share
” means a share of 7.45% Series A Cumulative Redeemable Preferred Stock, par value $.01 per share, liquidation preference $50 per share, of the General Partner.
“
REIT Series G Preferred Share
” means a share of 6.875% Series G Cumulative Redeemable Preferred Stock, par value $.01 per share, liquidation preference $25 per share, of the General Partner.
“
REIT Series H Preferred Share
” means a share of 6.375% Series H Cumulative Redeemable Preferred Stock, par value $.01 per share, liquidation preference $25 per share, of the General Partner.
“
REIT Requirements
” shall have the meaning set forth in Section 5.1.
“
REIT Share
” means a share of common stock, par value $.01 per share, of the General Partner.
“
REIT Shares Amount
” means, as of any date, an aggregate number of REIT Shares equal to the number of Tendered Units, or in the case of Section 11.2.B, all Units, as adjusted (x) pursuant to Section 7.5 (in the event the General Partner acquires material assets, other than on behalf of the Partnership) and (y) for stock dividends and distributions, stock splits and subdivisions, reverse stock splits and combinations, distributions of rights, warrants or options, and distributions of evidences of indebtedness or assets relating to assets not received by the General Partner pursuant to a pro rata distribution by the Partnership. Without limiting the generality of the foregoing, such aggregate number of REIT Shares referenced in the preceding sentence shall be adjusted for the issuance, distribution and triggering of exercisability of outstanding Rights, if any, governed by the applicable Rights Agreement (which adjustment shall be satisfied by issuing together with the REIT Shares Amount the aggregate number of such Rights (if prior to expiration of such Rights pursuant to the applicable Rights Agreement) or REIT Shares (if subsequent to the triggering of the exercisability of such Rights and subsequent to the expiration of such Rights pursuant to the applicable Rights Agreement) necessary to reflect equitably the dilution in REIT Shares resulting from the issuance and exercise of such Rights, in each case taking into account any increase pursuant to Section 4.5.B in the number of Partnership Units held by the Limited Partners).
“
Rights
” means the rights issued pursuant to a Rights Agreement.
“
Rights Agreement
” means any shareholder Rights Agreement as may be adopted and implemented from time to time by the rights agent as named in such Rights Agreement, and any successor thereto.
“
Securities Act
” means the Securities Act of 1933, as amended, and the rules and regulations of the Securities and Exchange Commission promulgated thereunder.
“
Securities Exchange Act
” means the Securities Exchange Act of 1934, as amended, and the rules and regulations of the Securities and Exchange Commission promulgated thereunder.
“
Senior Preferred Unit
” shall mean the Series A Preferred Units, the Series G Preferred Units and the Series H Preferred Units, and any class or series of Partnership Interests of the Partnership now or hereafter authorized, issued or outstanding expressly designated by the Partnership to rank on parity with the Series A Preferred Units, the Series G Preferred Units and the Series H Preferred Units with respect to distributions and rights upon voluntary or involuntary liquidation, winding up or dissolution of the Partnership, as the context may require.
“
Series A Contributor
” means the Belair Capital Fund, LLC, as party to the Contribution Agreement, dated February 6, 1998, and the Contribution Agreement, dated April 20, 1998, and any Affiliate to which the Series A Preferred Units may be assigned in accordance with this Agreement.
“
Series A Limited Partner
” means any Person holding Series A Preferred Units and named as a Series A Limited Partner in Exhibit A attached hereto, as such Exhibit may be amended from time to time, or any Substitute Limited Partner, in such Person’s capacity as a Series A Limited Partner in the Partnership.
“
Series A Preferred Capital
” means a Capital Account balance equal to the product of (i) the number of Series A Preferred Units then held by the Series A Limited Partners and/or the General Partner multiplied by (ii) the sum of $50 and any Preferred Distribution Shortfall per Series A Preferred Unit.
“
Series A Preferred Units
” means the Partnership’s 7.45% Series A Cumulative Redeemable Limited Partnership Units, with the rights, priorities and preferences set forth herein.
“
Series A Priority Return
” shall mean an amount equal to (x) 7.45% per annum at all times on and after March 5, 2004 and (y) 8.075% at all times before and excluding March 5, 2004, in each case determined on the basis of a 360-day year of twelve 30-day months (or actual days for any month which is shorter than a full monthly period), cumulative to the extent not distributed for any given distribution period pursuant to Sections 5.1 and 16.2 hereof, on the stated value of $50 per Series A Preferred Unit, commencing on the date of issuance of such Series A Preferred Unit as set forth on Exhibit A hereto.
“
Series G Articles Supplementary
” means the Articles Supplementary of the General Partner in connection with its REIT Series G Preferred Shares, as filed with the Maryland Department of Assessments and Taxation on March 23, 2012.
“
Series G Partner
” means Kilroy Realty Corporation, a Maryland corporation, as the holder of Series G Preferred Units.
“
Series G Preferred Capital
” means a Capital Account balance equal to the product of (i) the number of Series G Preferred Units then held by the General Partner multiplied by (ii) the sum of $25 and any Preferred Distribution Shortfall per Series G Preferred Unit.
“
Series G Preferred Units
” shall have the meaning set forth in Section 22.1.
“
Series G Preferred Unit Distribution Payment Date
” shall have the meaning set forth in Section 22.2.A.
“
Series G Preferred Unit Distribution Period
” means the period from and including March 27, 2012 to but excluding the first Series G Preferred Unit Distribution Payment Date, and each subsequent period from and including a Series G Preferred Unit Distribution Payment Date to but excluding the next succeeding Series G Preferred Unit Distribution Payment Date.
“
Series G Priority Return
” shall mean an amount equal to 6.875% of the $25.00 liquidation preference per Series G Preferred Unit per annum (equivalent to an annual rate of $1.71875 per Series G Preferred Unit), computed on the basis of a 360-day year consisting of twelve 30-day months.
“
Series H Articles Supplementary
” means the Articles Supplementary of the General Partner in connection with its REIT Series H Preferred Shares, as filed with the Maryland Department of Assessments and Taxation on August 14, 2012.
“
Series H Partner
” means Kilroy Realty Corporation, a Maryland corporation, as the holder of Series H Preferred Units.
“
Series H Preferred Capital
” means a Capital Account balance equal to the product of (i) the number of Series H Preferred Units then held by the General Partner multiplied by (ii) the sum of $25 and any Preferred Distribution Shortfall per Series H Preferred Unit.
“
Series H Preferred Units
” shall have the meaning set forth in Section 23.1.
“
Series H Preferred Unit Distribution Payment Date
” shall have the meaning set forth in Section 23.2.A.
“
Series H Preferred Unit Distribution Period
” means the period from and including August 15, 2012 to but excluding the first Series H Preferred Unit Distribution Payment Date, and each subsequent period from and including a Series H Preferred Unit Distribution Payment Date to but excluding the next succeeding Series H Preferred Unit Distribution Payment Date.
“
Series H Priority Return
” shall mean an amount equal to 6.375% of the $25.00 liquidation preference per Series H Preferred Unit per annum (equivalent to an annual rate of $1.59375 per Series H Preferred Unit), computed on the basis of a 360-day year consisting of twelve 30-day months.
“
Specified Redemption Date
” means the day of receipt by the General Partner of a Notice of Redemption.
“
Stock Incentive Plan
” means any stock incentive plan of the General Partner.
“
Subsidiary
” shall mean with respect to any person, any corporation, partnership, limited liability company, joint venture or other entity of which a majority of (i) voting power of the voting equity securities or (ii) the outstanding equity interests, is owned, directly or indirectly, by such person.
“
Subsidiary Partnership
” means any partnership or limited liability company that is a Subsidiary of the Partnership.
“
Substituted Limited Partner
” means a Person who is admitted as a Limited Partner to the Partnership pursuant to Section 11.4.
“
Surviving Partnership
” shall have the meaning set forth in Section 11.2.C.
“
Tax Items
” shall have the meaning set forth in Section 6.4.A.
“
Tenant
” means any tenant from which the General Partner derives rent either directly or indirectly through partnerships, including the Partnership.
“
Tendered Units
” shall have the meaning set forth in Section 8.6.A.
“
Tendering Partner
” shall have the meaning set forth in Section 8.6.A.
“
Terminating Capital Transaction
” means any sale or other disposition of all or substantially all of the assets of the Partnership or a related series of transactions that, taken together, result in the sale or other disposition of all or substantially all of the assets of the Partnership.
ARTICLE 2.
ORGANIZATIONAL MATTERS
Section 2.1.
Organization
The Partnership is a limited partnership formed pursuant to the provisions of the Act and upon the terms and conditions set forth in this Agreement. Except as expressly provided
herein, the rights and obligations of the Partners and the administration and termination of the Partnership shall be governed by the Act. The Partnership Interest of each Partner shall be personal property for all purposes.
Section 2.2.
Name
The name of the Partnership is Kilroy Realty, L.P. The Partnership’s business may be conducted under any other name or names deemed advisable by the General Partner, including the name of the General Partner or any Affiliate thereof. The words “Limited Partnership,” “L.P.,” “Ltd.” or similar words or letters shall be included in the Partnership’s name where necessary for the purposes of complying with the laws of any jurisdiction that so requires.
The General Partner in its sole and absolute discretion may change the name of the Partnership at any time and from time to time and shall notify the Limited Partners of such change in the next regular communication to the Limited Partners.
Section 2.3.
Resident Agent; Principal Office
The name and address of the resident agent of the Partnership in the State of Delaware is Prentice-Hall Corporation Systems, Inc., 1013 Centre Road, Wilmington, DE 19805. The address of the principal office of the Partnership in the State of Delaware is c/o Prentice-Hall Corporation Systems, Inc., 1013 Centre Road, Wilmington, DE 19805 at such address. The principal office of the Partnership is located at 12200 West Olympic Boulevard, Los Angeles, California 90064, or such other place as the General Partner may from time to time designate by notice to the Limited Partners. The Partnership may maintain offices at such other place or places within or outside the State of Delaware as the General Partner deems advisable.
Section 2.4.
Power of Attorney
A. Each Limited Partner and each Assignee constitutes and appoints the General Partner, any Liquidator, and authorized officers and attorneys-in-fact of each, and each of those acting singly, in each case with full power of substitution, as its true and lawful agent and attorney-in-fact, with full power and authority in its name, place and stead to:
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(1)
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execute, swear to, acknowledge, deliver, file and record in the appropriate public offices (a) all certificates, documents and other instruments (including, without limitation, this Agreement and the Certificate and all amendments or restatements thereof) that the General Partner or the Liquidator deems appropriate or necessary to form, qualify or continue the existence or qualification of the Partnership as a limited partnership (or a partnership in which the Limited Partners have limited liability) in the State of Delaware and in all other jurisdictions in which the Partnership may conduct business or own property; (b) all instruments that the General Partner or any Liquidator deems appropriate or necessary to reflect any amendment, change, modification or restatement of this Agreement in accordance with its terms; (c) all conveyances and other instruments or documents that the General Partner or any Liquidator deems appropriate
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or necessary to reflect the dissolution and liquidation of the Partnership pursuant to the terms of this Agreement, including, without limitation, a certificate of cancellation; (d) all instruments relating to the admission, withdrawal, removal or substitution of any Partner pursuant to, or other events described in, Articles 11, 12 and 13 hereof or the Capital Contribution of any Partner; and (e) all certificates, documents and other instruments relating to the determination of the rights, preferences and privileges of Partnership Interests; and
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(2)
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execute, swear to, acknowledge and file all ballots, consents, approvals, waivers, certificates and other instruments appropriate or necessary, in the sole and absolute discretion of the General Partner or any Liquidator, to make, evidence, give, confirm or ratify any vote, consent, approval, agreement or other action which is made or given by the Partners hereunder or is consistent with the terms of this Agreement or appropriate or necessary, in the sole discretion of the General Partner or any Liquidator, to effectuate the terms or intent of this Agreement.
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Nothing contained herein shall be construed as authorizing the General Partner or any Liquidator to amend this Agreement except in accordance with Article 14 hereof or as may be otherwise expressly provided for in this Agreement.
B. The foregoing power of attorney is hereby declared to be irrevocable and a power coupled with an interest, in recognition of the fact that each of the Partners will be relying upon the power of the General Partner and any Liquidator to act as contemplated by this Agreement in any filing or other action by it on behalf of the Partnership, and it shall survive and not be affected by the subsequent Incapacity of any Limited Partner or Assignee and the transfer of all or any portion of such Limited Partner’s or Assignee’s Partnership Units and shall extend to such Limited Partner’s or Assignee’s heirs, successors, assigns and personal representatives. Each such Limited Partner or Assignee hereby agrees to be bound by any representation made by the General Partner or any Liquidator, acting in good faith pursuant to such power of attorney; and each such Limited Partner or Assignee hereby waives any and all defenses which may be available to contest, negate or disaffirm the action of the General Partner or any Liquidator, taken in good faith under such power of attorney. Each Limited Partner or Assignee shall execute and deliver to the General Partner or any Liquidator, within 15 days after receipt of the General Partner’s or Liquidator’s request therefor, such further designation, powers of attorney and other instruments as the General Partner or the Liquidator, as the case may be, deems necessary to effectuate this Agreement and the purposes of the Partnership.
Section 2.5.
Term
The term of the Partnership commenced on October 2, 1996 and shall continue until December 31, 2095 unless it is dissolved sooner pursuant to the provisions of Article 13 or as otherwise provided by law.
Section 2.6.
Number of Partners
The Partnership shall not at any time have more than 100 partners (including as partners those persons indirectly owning an interest in the Partnership through a partnership, limited liability company, S corporation or grantor trust (such entity, a “flow through entity”), but only if substantially all of the value of such person’s interest in the flow through entity is attributable to the flow through entity’s interest (direct or indirect) in the Partnership).
ARTICLE 3.
PURPOSE
Section 3.1.
Purpose and Business
The purpose and nature of the business to be conducted by the Partnership is (i) to conduct any business that may be lawfully conducted by a limited partnership organized pursuant to the Act,
provided
,
however
, that such business shall be limited to and conducted in such a manner as to permit the General Partner at all times to be classified as a REIT for federal income tax purposes, unless the General Partner ceases to qualify as a REIT for reasons other than the conduct of the business of the Partnership, (ii) to enter into any partnership, joint venture or other similar arrangement to engage in any of the foregoing or to own interests in any entity engaged, directly or indirectly, in any of the foregoing and (iii) to do anything necessary or incidental to the foregoing. In connection with the foregoing, and without limiting the General Partner’s right in its sole discretion to cease qualifying as a REIT, the Partners acknowledge that the General Partner’s current status as a REIT inures to the benefit of all the Partners and not solely the General Partner.
Section 3.2.
Powers
The Partnership is empowered to do any and all acts and things necessary, appropriate, proper, advisable, incidental to or convenient for the furtherance and accomplishment of the purposes and business described herein and for the protection and benefit of the Partnership, including, without limitation, full power and authority, directly or through its ownership interest in other entities, to enter into, perform and carry out contracts of any kind, borrow money and issue evidences of indebtedness, whether or not secured by mortgage, deed of trust, pledge or other lien, acquire and develop real property, and manage, lease, sell, transfer and dispose of real property;
provided
,
however
, notwithstanding anything to the contrary in this Agreement, the Partnership shall not take, or refrain from taking, any action which, in the judgment of the General Partner, in its sole and absolute discretion, (i) could adversely affect the ability of the General Partner to continue to qualify as a REIT, (ii) absent the consent of the General Partner which may be given or withheld in its sole and absolute discretion, and except with respect to the distribution of Available Cash to the Series A Limited Partners in accordance with Section 16.2, to the Series G Partner in accordance with Section 22.2 and to the Series H Partner in accordance with Section 23.2, could subject the General Partner to any taxes under Section 857 or Section 4981 of the Code, or (iii) could violate any law or regulation of any governmental body or agency having jurisdiction over the General Partner or its securities, unless any such action (or inaction) under (i), (ii) or (iii) shall have been specifically consented to by the General Partner in writing.
Section 3.2.1
Partnership Only for Purposes Specified
The Partnership shall be a partnership only for the purposes specified in Section 3.1 hereof, and this Agreement shall not be deemed to create a partnership among the Partners with respect to any activities whatsoever other than the activities within the purposes of the Partnership as specified in Section 3.1 hereof. Except as otherwise provided in this Agreement, no Partner shall have any authority to act for, bind, commit or assume any obligation or responsibility on behalf of the Partnership, its properties or any other Partner. No Partner, in its capacity as a Partner under this Agreement, shall be responsible or liable for any indebtedness or obligation of another Partner, nor shall the Partnership be responsible or liable for any indebtedness or obligation of any Partner, incurred either before or after the execution and delivery of this Agreement by such Partner, except as to those responsibilities, liabilities, indebtedness or obligations incurred pursuant to and as limited by the terms of this Agreement and the Act.
Section 3.3.
Representations and Warranties by the Parties
A. Each Partner that is an individual represents and warrants to each other Partner that (i) such Partner has in the case of any Person other than an individual, the power and authority, and in the case of an individual, the legal capacity, to enter into this Agreement and perform such Partner’s obligations hereunder, (ii) the consummation of the transactions contemplated by this Agreement to be performed by such Partner will not result in a breach or violation of, or a default under, any agreement by which such Partner or any of such Partner’s property is or are bound, or any statute, regulation, order or other law to which such Partner is subject, (iii) such Partner is neither a “foreign person” within the meaning of Section 1445(f) of the Code nor a “foreign partner” within the meaning of Section 1446(e) of the Code, and (iv) this Agreement has been duly executed and delivered by such Partner and is binding upon, and enforceable against, such Partner in accordance with its terms.
B. Each Partner that is not an individual represents and warrants to each other Partner that (i) its execution and delivery of this Agreement and all transactions contemplated by this Agreement to be performed by it have been duly authorized by all necessary action, including without limitation, that of its general partner(s), committee(s), trustee(s), beneficiaries, directors and/or stockholder(s), as the case may be, as required, (ii) the consummation of such transactions shall not result in a breach or violation of, or a default under, its certificate of limited partnership, partnership agreement, trust agreement, limited liability company operating agreement, charter or by‑laws, as the case may be, any agreement by which such Partner or any of such Partner’s properties or any of its partners, beneficiaries, trustees or stockholders, as the case may be, is or are bound, or any statute, regulation, order or other law to which such Partner or any of its partners, trustees, beneficiaries or stockholders, as the case may be, is or are subject, (iii) such Partner is neither a “foreign person” within the meaning of Section 1445(f) of the Code nor a “foreign partner” within the meaning of Section 1446(e) of the Code, and (iv) this Agreement has been duly executed and delivered by such Partner and is binding upon, and enforceable against, such Partner in accordance with its terms.
C. Each Partner represents, warrants and agrees that it has acquired and continues to hold its interest in the Partnership for its own account for investment only and not for the purpose of, or with a view toward, the resale or distribution of all or any part thereof, nor with a view toward selling or otherwise distributing such interest or any part thereof at any particular time or under any predetermined circumstances. Each Partner further represents and warrants that it is a sophisticated investor, able and accustomed to handling sophisticated financial matters for itself, particularly real estate investments, and that it has a sufficiently high net worth that it does not anticipate a need for the funds it has invested in the Partnership in what it understands to be a highly speculative and illiquid investment.
D. Each Limited Partner, other than any Limited Partner to whom the General Partner has granted an exception in its sole discretion to this Section 3.4.D (but, with respect to any such Limited Partner, only to the extent of the exception so granted by the General Partner), further represents, warrants and agrees as follows:
(i) At any time a Person actually owns or Constructively Owns a 25% or greater capital interest or profits interest in the Partnership, such Person does not and will not, without the prior written consent of the General Partner, (a) actually own or Constructively Own (1) with respect to any Tenant that is a corporation, any stock of such Tenant and (2) with respect to any Tenant that is not a corporation, any interests in either the assets or net profits of such Tenant; or (b) actually own or Constructively Own any stock in the General Partner, other than any REIT Shares or other shares of capital stock of the General Partner such Person may actually or Constructively acquire (1) as a result of an exchange of Tendered Units pursuant to Section 8.6 or (2) upon the exercise of options granted or delivery of REIT Shares pursuant to any Stock Incentive Plan, in each case subject to the applicable ownership limitations with respect to such shares of capital stock as set forth in the Charter.
(ii) Upon request of the General Partner, such Limited Partner will disclose to the General Partner the amount of REIT Shares or other shares of capital stock of the General Partner that it actually owns or Constructively Owns.
(iii) Such Limited Partner understands that if, for any reason, (a) the representations, warranties or agreements set forth in Section 3.4.D(i) are violated or (b) the Partnership’s actual ownership or Constructive Ownership of REIT Shares or other shares of capital stock of the General Partner violates the limitations set forth in the Charter, then (x) some or all of the redemption or exchange rights of the Limited Partners may become non-exercisable, and (y) some or all of such shares owned by the Limited Partners and/or some or all of the Partnership Units owned by the Limited Partners may be automatically transferred to a trust for the benefit of a charitable beneficiary, as provided in the Charter and Exhibit E of this Agreement, respectively.
E. The representations and warranties contained in Sections 3.4.A, 3.4.B, 3.4.C and 3.4.D hereof shall survive the execution and delivery of this Agreement by each Partner and the dissolution and winding up of the Partnership.
F. Each Partner hereby acknowledges that no representations as to potential profit, cash flows, funds from operations or yield, if any, in respect of the Partnership or the General Partner have been made by any Partner or any employee or representative or Affiliate of any Partner, and that projections and any other information, including, without limitation, financial and descriptive information and documentation, which may have been in any manner submitted to such Partner shall not constitute any representation or warranty of any kind or nature, express or implied.
ARTICLE 4.
CAPITAL CONTRIBUTIONS
Section 4.1.
Capital Contributions of the Partners
At the time of their respective execution of this Agreement, the Partners shall make or shall have made Capital Contributions as set forth in Exhibit A to this Agreement. The Partners shall own Partnership Units of the class and in the amounts set forth in Exhibit A and shall have a Percentage Interest in the Partnership as set forth in Exhibit A, which Percentage Interest shall be adjusted in Exhibit A from time to time by the General Partner to the extent necessary to accurately reflect exchanges, redemptions, Capital Contributions, the issuance of additional Partnership Units or similar events having an effect on a Partner’s Percentage Interest. Except as required by law or as otherwise provided in Sections 4.3, 4.4 and 10.5, no Partner shall be required or permitted to make any additional Capital Contributions or loans to the Partnership. Unless otherwise specified by the General Partner at the time of the creation of any class of Partnership Interests, the corresponding class of capital stock for any Partnership Units issued shall be REIT Shares.
Section 4.2.
Loans by Third Parties
Subject to Section 4.3, the Partnership may incur Debt, or enter into other similar credit, guarantee, financing or refinancing arrangements for any purpose (including, without limitation, in connection with any further acquisition of Properties) with any Person that is not the General Partner upon such terms as the General Partner determines appropriate;
provided
, that the Partnership shall not incur any Debt that is recourse to the General Partner, except to the extent otherwise agreed to by the General Partner in its sole discretion.
Section 4.3.
Additional Funding and Capital Contributions
A.
General
. The General Partner may, at any time and from time to time, determine that the Partnership requires additional funds (“Additional Funds”) for the acquisition of additional Properties or for such other Partnership purposes as the General Partner may determine. Additional Funds may be raised by the Partnership, at the election of the General
Partner, in any manner provided in, and in accordance with, the terms of this Section 4.3. No Person shall have any preemptive, preferential or similar right or rights to subscribe for or acquire any Partnership Interest, except as set forth in this Section 4.3.
B.
General Partner Loans
. The General Partner may enter into a Funding Debt, including, without limitation, a Funding Debt that is convertible into REIT Shares, and lend the Additional Funds to the Partnership (a “General Partner Loan”);
provided
,
however
, that the General Partner shall not be obligated to lend the net proceeds of any Funding Debt to the Partnership in a manner that would be inconsistent with the General Partner’s ability to remain qualified as a REIT. If the General Partner enters into such a Funding Debt, the General Partner Loan will consist of the net proceeds from such Funding Debt and will be on comparable terms and conditions, including interest rate, repayment schedule and costs and expenses, as shall be applicable with respect to or incurred in connection with such Funding Debt.
C.
Issuance of Additional Partnership Interests
. The General Partner may raise all or any portion of the Additional Funds by accepting additional Capital Contributions of cash. The General Partner may also accept additional Capital Contributions of real property or any other non-cash assets. In connection with any such additional Capital Contributions (of cash or property), and subject to Section 16.5 hereof, the General Partner is hereby authorized to cause the Partnership from time to time to issue to Partners (including the General Partner) or other Persons (including, without limitation, in connection with the contribution of property to the Partnership) additional Partnership Units or other Partnership Interests in one or more classes, or one or more series of any of such classes, with such designations, preferences and relative, participating, optional or other special rights, powers, and duties, including rights, powers, and duties senior to then existing Limited Partnership Interests, all as shall be determined by the General Partner in its sole and absolute discretion subject to Delaware law, and as set forth by amendment to this Agreement, including without limitation, (i) the allocations of items of Partnership income, gain, loss, deduction, and credit to such class or series of Partnership Interests; (ii) the right of each such class or series of Partnership Interests to share in Partnership distributions; (iii) the rights of each such class or series of Partnership Interests upon dissolution and liquidation of the Partnership; and (iv) the right to vote, including, without limitation, the limited partner approval rights set forth in Section 11.2.A hereof;
provided
, that no such additional Partnership Units or other Partnership Interests shall be issued to the General Partner unless either (a) the additional Partnership Interests are issued in connection with the grant, award, or issuance of shares of the General Partner pursuant to Section 4.3.D below, which shares have designations, preferences, and other rights (except voting rights) such that the economic interests attributable to such shares are substantially similar to the designations, preferences and other rights of the additional Partnership Interests issued to the General Partner in accordance with this Section 4.3.C, or (b) the additional Partnership Interests are issued to all Partners holding Partnership Interests in the same class in proportion to their respective Percentage Interests in such class. In the event that the Partnership issues additional Partnership Interests pursuant to this Section 4.3.C, the General Partner shall make such revisions to this Agreement (including but not limited to the revisions described in Sections 5.4, 6.2.B, and 8.6) as it determines are necessary to reflect the issuance of such additional Partnership Interests.
D.
Issuance of REIT Shares or Other Securities by the General Partner
. The General Partner shall not issue any additional REIT Shares (other than REIT Shares issued pursuant to Section 8.6 hereof or pursuant to a dividend or distribution (including any stock split) of REIT Shares issued to all of its common stockholders or other capital stock issued to all of its stockholders who hold a class of stock of the General Partner), other shares of capital stock of the General Partner (other than in connection with the acquisition of Partnership Interests in exchange for capital stock of the General Partner which corresponds in ranking to the Partnership’s Partnership Interests being acquired) or New Securities unless the General Partner shall make a Capital Contribution of the net proceeds (including, without limitation, cash and Properties) from the issuance of such additional REIT Shares, other shares of capital stock or New Securities, as the case may be, and from the exercise of the rights contained in such additional New Securities, as the case may be. The General Partner’s Capital Account shall be increased by the amount of cash or the value of Properties so contributed.
E.
Percentage Interest Adjustments in the Case of Capital Contributions for Partnership Units
. Upon the acceptance of additional Capital Contributions in exchange for any class or series of Partnership Units, the Percentage Interest related thereto shall be equal to a fraction, the numerator of which is equal to the amount of cash and the Agreed Value of the Properties contributed as of the Business Day immediately preceding the date on which the additional Capital Contributions are made (an “Adjustment Date”) and the denominator of which is equal to the sum of (i) the Deemed Value of the Partnership Interests of such class or series (computed as of the Business Day immediately preceding the Adjustment Date) plus (ii) the aggregate amount of cash and the Agreed Value of the Property contributed to the Partnership on such Adjustment Date in respect of such class or series of Partnership Interests. The Percentage Interest of each other Partner holding Partnership Interests of such class or series not making a full
pro
rata
Capital Contribution shall be adjusted to equal a fraction, the numerator of which is equal to the sum of (i) the Deemed Partnership Interest Value of such Limited Partner in respect of such class or series (computed as of the Business Day immediately preceding the Adjustment Date) and (ii) the amount of cash and the Agreed Value of the Property contributed by such Partner to the Partnership in respect of such class or series as of such Adjustment Date, and the denominator of which is equal to the sum of (i) the Deemed Value of the Partnership Interests of such class (computed as of the Business Day immediately preceding the Adjustment Date),
plus
(ii) the aggregate amount of cash and the Agreed Value of the Property contributed to the Partnership on such Adjustment Date in respect of such class or series. Notwithstanding the foregoing, solely for purposes of calculating a Partner’s Percentage Interest pursuant to this Section 4.3.E, (i) in the case of cash Capital Contributions by the General Partner, such Capital Contributions will be deemed to equal the cash contributed by the General Partner plus, in the case of cash contributions funded by an offering of REIT Shares or other shares of capital stock of the General Partner, the offering costs attributable to the cash contributed to the Partnership and (ii) in the case of the contribution of Properties (or any portion thereof) by the General Partner which were acquired by the General Partner in exchange for REIT Shares immediately prior to such contribution, the General Partner shall be issued a number of Partnership Units equal to the number of REIT Shares issued by the General Partner in exchange for such Properties, the Partnership Units held by the other Partners shall not be adjusted and the Partners’ Percentage Interests shall be adjusted accordingly. The General Partner shall promptly give each Partner written notice of its Percentage Interest, as adjusted.
Section 4.4.
Stock Incentive Plan
If at any time or from time to time the General Partner sells or issues REIT Shares pursuant to any Stock Incentive Plan, the General Partner shall contribute any proceeds therefrom to the Partnership as an additional Capital Contribution and shall receive an amount of additional Partnership Units equal to the number of REIT Shares so sold or issued. The General Partner’s Capital Account shall be increased by the amount of cash so contributed.
Section 4.5.
Other Contribution Provisions
A. In the event that any Partner is admitted to the Partnership and is given a Capital Account in exchange for services rendered to the Partnership, such transaction shall be treated by the Partnership and the affected Partner as if the Partnership had compensated such Partner in cash, and the Partner had contributed such cash to the capital of the Partnership. In addition, with the consent of the General Partner, one or more Limited Partners may enter into contribution agreements with the Partnership which have the effect of providing a guarantee of certain obligations of the Partnership.
B. Notwithstanding the foregoing provisions of this Article IV, in the event the General Partner has made contributions of cash to the Partnership attributable to the General Partner's receipt of cash pursuant to the exercise of outstanding Rights, if any, the General Partner shall be issued a number of Partnership Units as a result of such contribution equal to the number of REIT Shares sold pursuant to such exercise. In such case or in the event the General Partner makes other contributions to the Partnership in connection with the issuance of REIT Shares after any Rights have become exercisable, the number of Partnership Units held by the Limited Partners shall be increased to equitably offset the dilution resulting from such issuance.
Section 4.6.
No Preemptive Rights
Except to the extent expressly granted by the Partnership pursuant to another agreement, no Person shall have any preemptive, preferential or other similar right with respect to (i) making additional Capital Contributions or loans to the Partnership or (ii) issuance or sale of any Partnership Units or other Partnership Interests.
ARTICLE 5.
DISTRIBUTIONS
Section 5.1.
Requirement and Characterization of Distributions
The General Partner shall cause the Partnership to distribute all, or such portion as the General Partner may in its discretion determine, Available Cash generated by the Partnership to the Partners who are Partners on the applicable record date with respect to such distribution,
(1) first, with respect to any Partnership Interests that are entitled to any preference in distribution, in accordance with the rights of such class of Partnership Interests (and within such class, pro rata in proportion to the respective Percentage Interests on the applicable record date), and, (2) second, with respect to Partnership Interests that are not entitled to any preference in distribution, pro rata to each such class on a quarterly basis and in accordance with the terms of such class to the Partners who are Partners of such class on the Partnership Record Date with respect to such distribution (and within each such class, pro rata in proportion with the respective Percentage Interests on such Partnership Record Date). Unless otherwise expressly provided for herein or in an agreement at the time a new class of Partnership Interests is created in accordance with Article 4 hereof, no Partnership Interest shall be entitled to a distribution in preference to any other Partnership Interest. The General Partner shall take such reasonable efforts, as determined by it in its sole and absolute discretion and consistent with its qualification as a REIT, to cause the Partnership to distribute sufficient amounts to enable the General Partner to pay stockholder dividends that will (a) satisfy the requirements for qualifying as a REIT under the Code and Regulations (“
REIT Requirements
”), and (b) avoid any federal income or excise tax liability of the General Partner, except to the extent that a distribution pursuant to clause (b) would prevent the Partnership from making a distribution to the Holders of Series A Preferred Units in accordance with Section 16.2, Series G Preferred Units in accordance with Section 22.2 or Series H Preferred Units in accordance with Section 23.2.
Section 5.2.
Distributions in Kind
Except as expressly provided herein, no right is given to any Partner to demand and receive property other than cash. The General Partner may determine, in its sole and absolute discretion, to make a distribution in kind to the Partners of Partnership assets, and such assets shall be distributed in such a fashion as to ensure that the fair market value is distributed and allocated in accordance with Articles 5, 6 and 10; provided, however, that, in such case, the General Partners shall distribute only cash to the Series A Limited Partners, the Series G Partner and the Series H Partner.
Section 5.3.
Distributions Upon Liquidation
Proceeds from a Terminating Capital Transaction shall be distributed to the Partners in accordance with Section 13.2.
Section 5.4.
Distributions to Reflect Issuance of Additional Partnership Interests
.
In the event that the Partnership issues additional Partnership Interests to the General Partner or any Additional Limited Partner pursuant to Section 4.3.C or 4.4 hereof, the General Partner shall make such revisions to this Article 5 as it determines are necessary to reflect the issuance of such additional Partnership Interests.
ARTICLE 6.
ALLOCATIONS
Section 6.1.
Timing and Amount of Allocations of Net Income and Net Loss
Net Income and Net Loss of the Partnership shall be determined and allocated with respect to each fiscal year of the Partnership as of the end of each such year. Subject to the other provisions of this Article 6, an allocation to a Holder of a share of Net Income or Net Loss shall be treated as an allocation of the same share of each item of income, gain, loss or deduction that is taken into account in computing Net Income or Net Loss.
Section 6.2.
General Allocations
A.
In General
. Except as otherwise provided in this Article 6, Net Income and Net Loss allocable with respect to a class of Partnership Interests shall be allocated to each of the Holders holding such class of Partnership Interests in accordance with their respective Percentage Interest of such class.
B.1.
Net Income
. Except as provided in Section 6.3, Net Income for any Partnership Year shall be allocated in the following manner and order of priority:
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(a)
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First,
100% to the General Partner in an amount equal to the remainder, if any, of the cumulative Net Losses allocated to the General Partner pursuant to Section 6.2.B.2(d) for all prior Partnership Years
minus
the cumulative Net Income allocated to the General Partner pursuant to this Section 6.2.B.1(a) for all prior Partnership Years;
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(b)
|
Second,
100% to each Holder in an amount equal to the remainder, if any, of the cumulative Net Losses allocated to each such Holder pursuant to Section 6.2.B.2(c) for all prior Partnership Years
minus
the cumulative Net Income allocated to such Holder pursuant to this Section 6.2.B.1(b) for all prior Partnership Years;
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(c)
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Third,
100% to the Holders of Senior Preferred Units in an amount equal to the remainder, if any, of the cumulative Net Losses allocated to such Holder pursuant to Section 6.2.B.2(b) for all prior Partnership Years
minus
the cumulative Net Income allocated to such Holders pursuant to this Section 6.2.B.1(c) for all prior Partnership Years;
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(d)
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Fourth,
100% to the Holders of Common Units in an amount equal to the remainder, if any, of the cumulative Net Losses allocated to each such Holder pursuant to Section 6.2.B.2(a) for all prior Partnership Years
minus
the cumulative Net Income allocated to each Holder pursuant to this Section 6.2.B.1(d) for all prior Partnership Years;
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(e)
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Fifth,
100% to the Holders of Senior Preferred Units in an amount equal to the sum of (i) in respect of the Series A Preferred Units, an amount equal to the cumulative Series A Priority Return to the last day of the current Partnership Year or to the date of redemption, to the extent Series A Preferred Units are redeemed during such year, over the cumulative Net Income allocated to the Holders of such units pursuant to this Section 6.2.B.1(e) for all prior Partnership Years; (ii) in respect of the Series G Preferred Units, an amount equal to the cumulative Series G Priority Return to the last day of the current Partnership Year or to the date of redemption or conversion, to the extent Series G Preferred Units are redeemed or converted during such year, over the cumulative Net Income allocated to the Holders of such units pursuant to this Section 6.2.B.1(e) for all prior Partnership Years, provided that in connection with any conversion of Series G Preferred Units, the General Partner shall be permitted to make allocations of income or loss with respect to such Series G Preferred Units and the Common Units issued upon such conversion that are consistent with the distributions payable with respect to such Series G Preferred Units and Common Units, and (iii) in respect of the Series H Preferred Units, an amount equal to the cumulative Series H Priority Return to the last day of the current Partnership Year or to the date of redemption or conversion, to the extent Series H Preferred Units are redeemed or converted during such year, over the cumulative Net Income allocated to the Holders of such units pursuant to this Section 6.2.B.1(e) for all prior Partnership Years, provided that in connection with any conversion of Series H Preferred Units, the General Partner shall be permitted to make allocations of income or loss with respect to such Series H Preferred Units and the Common Units issued upon such conversion that are consistent with the distributions payable with respect to such Series H Preferred Units and Common Units; and
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(f)
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Sixth
, 100% to the Holders of Common Units in accordance with their respective Percentage Interests in the Common Units.
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To the extent the allocations of Net Income set forth above in any paragraph of this Section 6.2.B.1 are not sufficient to entirely satisfy the allocation set forth in such paragraph, such allocation shall be made in proportion to the total amount that would have been allocated pursuant to such paragraph without regard to such shortfall.
B.2.
Net Losses
. Except as provided in Section 6.3, Net Losses for any Partnership Year shall be allocated in the following manner and order of priority:
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(a)
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First,
100% to the Holders of Common Units in accordance with their respective Percentage Interests in the Common Units (to the extent consistent with this Section 6.2.B.2(a)) until the Adjusted Capital Account (ignoring for this purpose any amounts a Holder is obligated to contribute
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to the capital of the Partnership or is deemed obligated to restore pursuant to Regulations Section 1.704-1(b)(2)(ii)(c)(2) and ignoring the Holder’s Series A Preferred Capital, Series G Preferred Capital and Series H Preferred Capital) of each such Holder is zero;
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(b)
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Second,
100% to the Holders of Senior Preferred Units, pro rata to each such Holder’s Adjusted Capital Account (ignoring for this purpose any amounts a Holder is obligated to contribute to the capital of the Partnership or is deemed obligated to contribute pursuant to Regulations Section 1.704-1(b)(2)(ii)(c)(2)), until the Adjusted Capital Account (as so modified) of each such Holder is zero;
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(c)
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Third
, 100% to the Holders to the extent of, and in proportion to, the positive balance (if any) in their Adjusted Capital Accounts; and
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(d)
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Fourth
, 100% to the General Partner
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C.
Allocations to Reflect Issuance of Additional Partnership Interests
. In the event that the Partnership issues additional Partnership Interests to the General Partner or any Additional Limited Partner pursuant to Section 4.3 or 4.4, the General Partner shall make such revisions to this Section 6.2 or to Section 12.2.B as it determines are necessary to reflect the terms of the issuance of such additional Partnership Interests, including making preferential allocations to certain classes of Partnership Interests, subject to the terms of the Series A Preferred Units, the Series G Preferred Units and the Series H Preferred Units.
Section 6.3.
Additional Allocation Provisions
Notwithstanding the foregoing provisions of this Article 6:
A.
Regulatory Allocations
.
(i)
Minimum Gain Chargeback
. Except as otherwise provided in Regulations Section 1.704-2(f), notwithstanding the provisions of Section 6.2, or any other provision of this Article 6, if there is a net decrease in Partnership Minimum Gain during any fiscal year, each Holder shall be specially allocated items of Partnership income and gain for such year (and, if necessary, subsequent years) in an amount equal to such Holder’s share of the net decrease in Partnership Minimum Gain, as determined under Regulations Section 1.704-2(g). Allocations pursuant to the previous sentence shall be made in proportion to the respective amounts required to be allocated to each Holder pursuant thereto.
The items to be allocated shall be determined in accordance with Regulations Sections 1.704-2(f)(6) and 1.704-2(j)(2). This Section 6.3.A(i) is intended to qualify as a “minimum gain chargeback” within the meaning of Regulation Section 1.704-2(f) which shall be controlling in the event of a conflict between such Regulation and this Section 6.3.A(i).
(ii)
Partner Minimum Gain Chargeback
. Except as otherwise provided in Regulations Section 1.704-2(i)(4), and notwithstanding the provisions of Section 6.2, or any
other provision of this Article 6 (except Section 6.3.A(i)), if there is a net decrease in Partner Minimum Gain attributable to a Partner Nonrecourse Debt during any fiscal year, each Partner who has a share of the Partner Minimum Gain attributable to such Partner Nonrecourse Debt, determined in accordance with Regulations Section 1.704-2(i)(5), shall be specially allocated items of Partnership income and gain for such year (and, if necessary, subsequent years) in an amount equal to such Holder’s share of the net decrease in Partner Minimum Gain attributable to such Partner Nonrecourse Debt, determined in accordance with Regulations Section 1.704-2(i)(4). Allocations pursuant to the previous sentence shall be made in proportion to the respective amounts required to be allocated to each Holder pursuant thereto. The items to be so allocated shall be determined in accordance with Regulations Sections 1.704-2(i)(4) and 1.704-2(j)(2). This Section 6.3.A(ii) is intended to qualify as a “chargeback of partner nonrecourse debt minimum gain” within the meaning of Regulation Section 1.704-2(i) which shall be controlling in the event of a conflict between such Regulation and this Section 6.3.A(ii).
(iii)
Nonrecourse Deductions and Partner Nonrecourse Deductions
. Any Nonrecourse Deductions for any fiscal year shall be specially allocated to the Holders in accordance with their respective Percentage Interest in Common Units. Any Partner Nonrecourse Deductions for any fiscal year shall be specially allocated to the Holder(s) who bears the economic risk of loss with respect to the Partner Nonrecourse Debt to which such Partner Nonrecourse Deductions are attributable, in accordance with Regulations Sections 1.704-2(b)(4) and 1.704-2(i).
(iv)
Qualified Income Offset
. If any Holder unexpectedly receives an adjustment, allocation or distribution described in Regulations Section 1.704-1(b)(2)(ii)(d)(4), (5) or (6), items of Partnership income and gain shall be allocated, in accordance with Regulations Section 1.704-1(b)(2)(ii)(d), to the Holder in an amount and manner sufficient to eliminate, to the extent required by such Regulations, the Adjusted Capital Account Deficit of the Holder as quickly as possible provided that an allocation pursuant to this Section 6.3.A(iv) shall be made if and only to the extent that such Holder would have an Adjusted Capital Account Deficit after all other allocations provided in this Article 6 have been tentatively made as if this Section 6.3.A(iv) were not in the Agreement. It is intended that this Section 6.3.A(iv) qualify and be construed as a “qualified income offset” within the meaning of Regulations 1.704-1(b)(2)(ii)(d), which shall be controlling in the event of a conflict between such Regulations and this Section 6.3.A(iv).
(v)
Gross Income Allocation
. In the event any Holder has a deficit Capital Account at the end of any fiscal year which is in excess of the sum of (a) the amount (if any) such Holder is obligated to restore to the Partnership, and (b) the amount such Holder is deemed to be obligated to restore pursuant to Regulations Section 1.704-1(b)(2)(ii)(c) or the penultimate sentences of Regulations Sections 1.704-2(g)(1) and 1.704-2(i)(5), each such Holder shall be specially allocated items of Partnership income and gain in the amount of such excess as quickly as possible,
provided
, that an allocation pursuant to this Section 6.3.A(v) shall be made if and only to the extent that such Holder would have a deficit Capital Account in excess of such sum after all other allocations provided in this Article 6 have been tentatively made as if this Section 6.3.A(v) and Section 6.3.A(iv) were not in the Agreement.
(vi)
Limitation on Allocation of Net Loss
. To the extent any allocation of Net Loss would cause or increase an Adjusted Capital Account Deficit as to any Holder, such allocation of Net Loss shall be reallocated among the other Holders in accordance with their respective Percentage Interests in Common Units subject to the limitations of this Section 6.3.A(vi).
(vii)
Section 754 Adjustment
. To the extent an adjustment to the adjusted tax basis of any Partnership asset pursuant to Code Section 734(b) or Code Section 743(b) is required, pursuant to Regulations Section 1.704-1(b)(2)(iv)(m)(2) or Regulations Section 1.704-1(b)(2)(iv)(m)(4), to be taken into account in determining Capital Accounts as the result of a distribution to a Holder in complete liquidation of his interest in the Partnership, the amount of such adjustment to the Capital Accounts shall be treated as an item of gain (if the adjustment increases the basis of the asset) or loss (if the adjustment decreases such basis) and such gain or loss shall be specially allocated to the Holders in accordance with their interests in the Partnership in the event that Regulations Section 1.704-1(b)(2)(iv)(m)(2) applies, or to the Holders to whom such distribution was made in the event that Regulations Section 1.704-1(b)(2)(iv)(m)(4) applies.
(viii)
Curative Allocation
. The allocations set forth in Sections 6.3.A(i), (ii), (iii), (iv), (v), (vi), and (vii) (the “Regulatory Allocations”) are intended to comply with certain regulatory requirements, including the requirements of Regulations Sections 1.704-1(b) and 1.704-2. Notwithstanding the provisions of Sections 6.1 and 6.2, the Regulatory Allocations shall be taken into account in allocating other items of income, gain, loss and deduction among the Holders so that, to the extent possible, the net amount of such allocations of other items and the Regulatory Allocations to each Holder shall be equal to the net amount that would have been allocated to each such Holder if the Regulatory Allocations had not occurred.
B. For purposes of determining a Holder’s proportional share of the “excess nonrecourse liabilities” of the Partnership within the meaning of Regulations Section 1.752-3(a)(3), each Holder’s interest in Partnership profits shall be such Holder’s Percentage Interest in Common Units.
Section 6.4.
Tax Allocations
A.
In General
. Except as otherwise provided in this Section 6.4, for income tax purposes each item of income, gain, loss and deduction (collectively, “Tax Items”) shall be allocated among the Holders in the same manner as its correlative item of “book” income, gain, loss or deduction is allocated pursuant to Sections 6.2 and 6.3.
B.
Allocations Respecting Section 704(c) Revaluations
. Notwithstanding Section 6.4.A, Tax Items with respect to Partnership property that is contributed to the Partnership by a Partner shall be shared among the Holders for income tax purposes pursuant to Regulations promulgated under Section 704(c) of the Code, so as to take into account the variation, if any, between the basis of the property to the Partnership and its initial Gross Asset Value. With respect to Partnership property that is initially contributed to the Partnership upon its formation pursuant to Section 4.1, such variation between basis and initial Gross Asset Value
shall be taken into account under the “traditional method” as described in Regulations Section 1.704-3(b). With respect to properties subsequently contributed to the Partnership, the Partnership shall account for such variation under any method approved under Section 704(c) of the Code and the applicable regulations as chosen by the General Partner;
provided
,
however
, contributions by Kilroy Airport Imperial Company shall be shared among the Partners using the “traditional method” as described in Regulations Section 1.704-3(b)(1). In the event the Gross Asset Value of any Partnership asset is adjusted pursuant to subparagraph (b) of the definition of Gross Asset Value (provided in Article 1), (ii) subsequent allocations of Tax Items with respect to such asset shall take account of the variation, if any, between the adjusted basis of such asset and its Gross Asset Value in the same manner as under Section 704(c) of the Code and the applicable regulations consistent with the requirements of Regulations Section 1.704-1(b)(2)(iv)(g) using any method approved under 704(c) of the Code and the applicable regulations as chosen by the General Partner.
Section 6.5.
Special Allocations
A. Notwithstanding the provisions in Sections 6.1, 6.2.B.1 and 6.2.B.2, but subject to the other provisions of this Article 6, if the Partnership has positive Adjusted Net Income for a fiscal year, such Adjusted Net Income shall first be allocated to the Holders of Senior Preferred Units under Section 6.2.B.1(e) for such fiscal year, with the remaining items of Net Income or Net Loss allocated to the Partners pursuant to Sections 6.2.B.1 and 6.2.B.2.
B. Notwithstanding the provisions of Sections 6.1, 6.2.B.1 and 6.2.B.2, but subject to Sections 6.3 and 6.5.A, in the event Net Income, Net Loss or items thereof are being allocated to a Partner to offset prior Net Loss, Net Income or items thereof which have been allocated to such Partner, the General Partner shall attempt to allocate such offsetting Net Income, Net Loss or items thereof which are of the same or similar character (including without limitation Section 704(b) book items versus tax items) to the original allocations with respect to such Partner.
ARTICLE 7.
MANAGEMENT AND OPERATIONS OF BUSINESS
Section 7.1.
Management
A. Except as otherwise expressly provided in this Agreement, all management powers over the business and affairs of the Partnership are exclusively vested in the General Partner, and no Limited Partner shall have any right to participate in or exercise control or management power over the business and affairs of the Partnership. The General Partner may not be removed by the Limited Partners with or without cause, except with the consent of the General Partner. In addition to the powers now or hereafter granted a general partner of a limited partnership under the Act and other applicable law or which are granted to the General Partner under any other provision of this Agreement, the General Partner, subject to the other provisions hereof including Section 7.3, shall have full power and authority to do all things deemed necessary or desirable by it to conduct the business of the Partnership, to exercise all powers set forth in Section 3.2 hereof and to effectuate the purposes set forth in Section 3.1 hereof, including, without limitation:
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(1)
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the making of any expenditures, the lending or borrowing of money (including, without limitation, making prepayments on loans and borrowing money to permit the Partnership to make distributions to its Partners in such amounts as will permit the General Partner (for so long as the General Partner has determined to qualify as a REIT) to avoid the payment of any federal income tax (including, for this purpose, any excise tax pursuant to Section 4981 of the Code) and to make distributions to its stockholders sufficient to permit the General Partner to maintain REIT status), the assumption or guarantee of, or other contracting for, indebtedness and other liabilities, the issuance of evidences of indebtedness (including the securing of same by mortgage, deed of trust or other lien or encumbrance on all or any of the Partnership’s assets) and the incurring of any obligations it deems necessary for the conduct of the activities of the Partnership;
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(2)
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the making of tax, regulatory and other filings, or rendering of periodic or other reports to governmental or other agencies having jurisdiction over the business or assets of the Partnership;
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(3)
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subject to the provisions of Section 7.3.D hereof, the acquisition, disposition, mortgage, pledge, encumbrance, hypothecation or exchange of any assets of the Partnership or the merger or other combination of the Partnership with or into another entity;
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(4)
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the mortgage, pledge, encumbrance or hypothecation of all or any assets of the Partnership, and the use of the assets of the Partnership (including, without limitation, cash on hand) for any purpose consistent with the terms of this Agreement and on any terms it sees fit, including, without limitation, the financing of the conduct or the operations of the General Partner or the Partnership, the lending of funds to other Persons (including, without limitation, the General Partner (if necessary to permit the financing or capitalization of a subsidiary of the General Partner or the Partnership) and any Subsidiaries of the Partnership) and the repayment of obligations of the Partnership, any of its Subsidiaries and any other Person in which it has an equity investment;
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(5)
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the negotiation, execution, and performance of any contracts, leases, conveyances or other instruments that the General Partner considers useful or necessary to the conduct of the Partnership’s operations or the implementation of the General Partner’s powers under this Agreement;
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(6)
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the distribution of Partnership cash or other Partnership assets in accordance with this Agreement;
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(7)
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the selection and dismissal of employees of the Partnership (including, without limitation, employees having titles such as “president,” “vice president,” “secretary” and “treasurer”), and agents, outside attorneys, accountants, consultants and contractors of the Partnership, the determination of their compensation and other terms of employment or hiring, including waivers of conflicts of interest and the payment of their expenses and compensation out of the Partnership’s assets;
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(8)
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the maintenance of such insurance for the benefit of the Partnership and the Partners as it deems necessary or appropriate;
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(9)
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the formation of, or acquisition of an interest in, and the contribution of property to, any further limited or general partnerships, joint ventures or other relationships that it deems desirable (including, without limitation, the acquisition of interests in, and the contributions of property to any Subsidiary and any other Person in which it has an equity investment from time to time);
provided
, that as long as the General Partner has determined to continue to qualify as a REIT, the Partnership may not engage in any such formation, acquisition or contribution that would cause the General Partner to fail to qualify as a REIT;
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(10)
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the control of any matters affecting the rights and obligations of the Partnership, including the conduct of litigation and the incurring of legal expense and the settlement of claims and litigation, and the indemnification of any Person against liabilities and contingencies to the extent permitted by law;
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(11)
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the undertaking of any action in connection with the Partnership’s direct or indirect investment in any Person (including, without limitation, contributing or loaning Partnership funds to, incurring indebtedness on behalf of, or guarantying the obligations of any such Persons);
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(12)
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subject to the other provisions in this Agreement, the determination of the fair market value of any Partnership property distributed in kind using such reasonable method of valuation as it may adopt,
provided
, that such methods are otherwise consistent with requirements of this Agreement;
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(13)
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the management, operation, leasing, landscaping, repair, alteration, demolition or improvement of any real property or improvements owned by the Partnership or any Subsidiary of the Partnership or any Person in which the Partnership has made a direct or indirect equity investment;
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(14)
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holding, managing, investing and reinvesting cash and other assets of the Partnership;
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(15)
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the collection and receipt of revenues and income of the Partnership;
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(16)
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the exercise, directly or indirectly through any attorney-in-fact acting under a general or limited power of attorney, of any right, including the right to vote, appurtenant to any asset or investment held by the Partnership;
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(17)
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the exercise of any of the powers of the General Partner enumerated in this Agreement on behalf of or in connection with any Subsidiary of the Partnership or any other Person in which the Partnership has a direct or indirect interest, or jointly with any such Subsidiary or other Person;
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(18)
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the exercise of any of the powers of the General Partner enumerated in this Agreement on behalf of any Person in which the Partnership does not have an interest, pursuant to contractual or other arrangements with such Person; and
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(19)
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the making, execution and delivery of any and all deeds, leases, notes, deeds to secure debt, mortgages, deeds of trust, security agreements, conveyances, contracts, guarantees, warranties, indemnities, waivers, releases or legal instruments or other agreements in writing necessary or appropriate in the judgment of the General Partner for the accomplishment of any of the powers of the General Partner enumerated in this Agreement.
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B. Each of the Limited Partners agrees that the General Partner is authorized to execute, deliver and perform the above-mentioned agreements and transactions on behalf of the Partnership without any further act, approval or vote of the partners, notwithstanding any other provisions of this Agreement (except as provided in Section 7.3), the Act or any applicable law, rule or regulation.
The execution, delivery or performance by the General Partner or the Partnership of any agreement authorized or permitted under this Agreement shall not constitute a breach by the General Partner of any duty that the General Partner may owe the Partnership or the Limited Partners or any other Persons under this Agreement or of any duty stated or implied by law or equity.
C. At all times from and after the date hereof, the General Partner may cause the Partnership to obtain and maintain (i) casualty, liability and other insurance (including, without limitation, earthquake insurance) on the properties of the Partnership and (ii) liability insurance for the Indemnities hereunder.
D. At all times from and after the date hereof, the General Partner may cause the Partnership to establish and maintain working capital and other reserves in such amounts as the General Partner, in its sole and absolute discretion, deems appropriate and reasonable from time to time.
E. In exercising its authority under this Agreement, the General Partner may, but, other than as set forth in the following sentence, in Section 11.2.D and as expressly set forth in the agreements listed on Exhibit F hereto, shall be under no obligation to, take into account the tax consequences to any Partner (including the General Partner) of any action taken by the
General Partner. The General Partner, on behalf of the Partnership, shall use commercially reasonable efforts to cooperate with the Common Limited Partners to minimize any taxes payable in connection with any repayment, refinancing, replacement or restructuring of Debt, or any sale, exchange or any other disposition of assets, of the Partnership. The General Partner and the Partnership shall not have liability to a Limited Partner under any circumstances as a result of an income tax liability incurred by such Limited Partner as a result of an action (or inaction) by the General Partner pursuant to its authority under this Agreement.
F. Except as otherwise provided herein, to the extent the duties of the General Partner require expenditures of funds to be paid to third parties, the General Partner shall not have any obligations hereunder except to the extent that Partnership funds are reasonably available to it for the performance of such duties, and nothing herein contained shall be deemed to authorize or require the General Partner, in its capacity as such, to expend its individual funds for payment to third parties or to undertake any individual liability or obligation on behalf of the Partnership.
Section 7.2.
Certificate of Limited Partnership
To the extent that such action is determined by the General Partner to be reasonable and necessary or appropriate, the General Partner shall file amendments to and restatements of the Certificate and do all the things to maintain the Partnership as a limited partnership (or a partnership in which the limited partners have limited liability) under the laws of the State of Delaware and to maintain the Partnership’s qualification to do business as a foreign limited partnership in each other state, the District of Columbia or other jurisdiction, in which the Partnership may elect to do business or own property.
Subject to the terms of Section 8.5.A(4) hereof, the General Partner shall not be required, before or after filing, to deliver or mail a copy of the Certificate or any amendment thereto to any Limited Partner. The General Partner shall use all reasonable efforts to cause to be filed such other certificates or documents as may be reasonable and necessary or appropriate for the formation, continuation, qualification and operation of a limited partnership (or a partnership in which the limited partners have limited liability) in the State of Delaware, and any other state, or the District of Columbia or other jurisdiction, in which the Partnership may elect to do business or own property.
Section 7.3.
Restrictions on General Partner’s Authority
A. The General Partner may not take any action in contravention of this Agreement, including, without limitation:
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(1)
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take any action that would make it impossible to carry on the ordinary business of the Partnership, except as otherwise provided in this Agreement;
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(2)
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possess Partnership property, or assign any rights in specific Partnership property, for other than a Partnership purpose except as otherwise provided in this Agreement;
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(3)
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admit a Person as a Partner, except as otherwise provided in this Agreement;
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(4)
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perform any act that would subject a Limited Partner to liability as a general partner in any jurisdiction or any other liability except as provided herein or under the Act; or
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(5)
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enter into any contract, mortgage, loan or other agreement that prohibits or restricts, or has the effect of prohibiting or restricting, the ability of a Limited Partner to exercise its rights to a Redemption in full, except with the written consent of such Limited Partner.
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B. The General Partner shall not, without the prior Consent of the Partners, (in addition to any Consent of the Limited Partners required by any other provision hereof) undertake, on behalf of the Partnership, any of the following actions or enter into any transaction which would have the effect of such transactions:
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(1)
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except as provided in Section 7.3.E, amend, modify or terminate this Agreement other than to reflect the admission, substitution, termination or withdrawal of partners pursuant to Article 12 hereof;
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(2)
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make a general assignment for the benefit of creditors or appoint or acquiesce in the appointment of a custodian, receiver or trustee for all or any part of the assets of the Partnership;
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(3)
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institute any proceeding for bankruptcy on behalf of the Partnership; or
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(4)
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confess a judgment against the Partnership.
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C. The General Partner shall not, without the prior Consent of the Limited Partners, undertake, on behalf of the Partnership, any of the following actions or enter into any transaction which would have the effect of such transactions:
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(1)
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approve or acquiesce to the transfer of the Partnership Interest of the General Partner to any Person other than the Partnership; or
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(2)
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admit into the Partnership any Additional or Substitute General Partners.
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in each case other than incident to a transaction pursuant to Section 11.2.B or Section 11.2.C.
D. If the aggregate Limited Partnership Interests of all Limited Partners represents 5.0% or more of the aggregate Partnership Interests, the General Partner shall not, without the prior Consent of the Limited Partners, undertake, on behalf of the Partnership, any of the following actions or enter into any transaction which would have the effect of such transactions:
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(1)
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dissolve the Partnership, or
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(2)
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prior to the seventh anniversary of the date of this Agreement, sell any of the property listed on Exhibit C,
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in each case other than incident to a transaction pursuant to Section 11.2.B or Section 11.2.C.
E. Notwithstanding Sections 7.3.B, 7.3.C and 7.3.D hereof, but subject to Section 7.3.F hereof, the General Partner shall have the power, without the Consent of the Limited Partners, to amend this Agreement as may be required to facilitate or implement any of the following purposes:
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(1)
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to add to the obligations of the General Partner or surrender any right or power granted to the General Partner or any Affiliate of the General Partner for the benefit of the Limited Partners;
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(2)
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to reflect the issuance of additional Partnership Interests pursuant to Sections 4.3.C and 4.4 or the admission, substitution, termination, or withdrawal of Partners in accordance with this Agreement;
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(3)
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to reflect a change that is of an inconsequential nature and does not adversely affect the Limited Partners in any material respect, or to cure any ambiguity in, correct or supplement any provision in, or make other changes with respect to matters arising under, this Agreement that will not be inconsistent with law or with the provisions of this Agreement;
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(4)
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to satisfy any requirements, conditions, or guidelines contained in any order, directive, opinion, ruling or regulation of a federal or state agency or contained in federal or state law;
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(5)
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to reflect such changes as are reasonably necessary for the General Partner to maintain its status as a REIT, including changes which may be necessitated due to a change in applicable law (or an authoritative interpretation thereof) or a ruling of the IRS; and
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(6)
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to modify, as set forth in the definition of “Capital Account,” the manner in which Capital Accounts are computed.
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The General Partner will provide notice to the Limited Partners when any action under this Section 7.3.E is taken.
F. Notwithstanding Sections 7.3.B, 7.3.C, 7.3.D and 7.3.E hereof, this Agreement shall not be amended, and no action may be taken by the General Partner, without the Consent of each Common Limited Partner or Preferred Limited Partner adversely affected if such amendment or action would (i) convert a Limited Partner’s interest in the Partnership into a general partner’s interest (except as the result of the General Partner acquiring such interest),
(ii) modify the limited liability of a Limited Partner, (iii) alter rights of the Partner to receive distributions pursuant to Article 5, Section 13.2.A(4), Article 16 or the allocations specified in Article 6 (except as permitted pursuant to Section 4.3 and Section 7.3.E(2) hereof), (iv) alter or modify the rights to a Redemption or the REIT Shares Amount as set forth in Section 8.6, and related definitions hereof, (v) alter the redemption or exchange rights as set forth in Sections 16.4 and 16.7 hereof, as applicable, or (vi) amend this Section 7.3.F. Further, no amendment may alter the restrictions on the General Partner’s authority set forth elsewhere in this Section 7.3 without the Consent specified in such section. In addition, notwithstanding Sections 7.3.B, 7.3.C, 7.3.D and 7.3.E hereof, Section 11.2 of this Agreement shall not be amended, and no action in contravention of Section 11.2 hereof shall be taken, without the Consent of the Limited Partners.
Section 7.4.
Reimbursement of the General Partner
A. Except as provided in this Section 7.4 and elsewhere in this Agreement (including the provisions of Articles 5 and 6 regarding distributions, payments and allocations to which it may be entitled), the General Partner shall not be compensated for its services as general partner of the Partnership.
B. Subject to Section 15.11, the General Partner shall be reimbursed on a monthly basis, or such other basis as the General Partner may determine in its sole and absolute discretion, for all expenses it incurs relating to the ownership of interests in and operation of, or for the benefit of, the Partnership.
The Limited Partners acknowledge that the General Partner’s sole business is the ownership of interests in and operation of the Partnership and that such expenses are incurred for the benefit of the Partnership;
provided
, that the General Partner shall not be reimbursed for expenses it incurs relating to the organization of the Partnership and the General Partner or the initial public offering or subsequent public offerings of REIT Shares, other shares of capital stock or Funding Debt by the General Partner, but shall be reimbursed for expenses it incurs with respect to any other issuance of additional Partnership Interests pursuant to the provisions hereof. Such reimbursements shall be in addition to any reimbursement to the General Partner as a result of indemnification pursuant to Section 7.7 hereof.
C. If and to the extent any reimbursements to the General Partner pursuant to this Section 7.4 constitute gross income of the General Partner (as opposed to the repayment of advances made by the General Partner on behalf of the Partnership), such amounts shall constitute guaranteed payments within the meaning of Section 707(c) of the Code, shall be treated consistently therewith by the Partnership and all Partners, and shall not be treated as distributions for purposes of computing the Partners’ Capital Accounts.
Section 7.5.
Outside Activities of the General Partner
A. Except in connection with a transaction authorized in Section 11.2 hereof, without the Consent of the Limited Partners, the General Partner shall not, directly or indirectly, enter into or conduct any business, other than in connection with the ownership, acquisition and disposition of Partnership Interests as a General Partner and the management of the business of the Partnership, its operation as a public reporting company with a class (or classes) of securities
registered under the Securities Exchange Act, its operation as a REIT and such activities as are incidental to the same. Without the Consent of the Limited Partners, the General Partner shall not, directly or indirectly, participate in or otherwise acquire any interest in any real or personal property, except its General Partner Interest, its minority interest in any Subsidiary Partnership(s) (held directly or indirectly through a Qualified REIT Subsidiary) that the General Partner holds in order to maintain such Subsidiary Partnership’s status as a partnership, and such bank accounts, similar instruments or other short-term investments as it deems necessary to carry out its responsibilities contemplated under this Agreement and the Charter. In the event the General Partner desires to contribute cash to any Subsidiary Partnership to acquire or maintain an interest of 1% or less in the capital of such partnership, the General Partner may acquire such cash from the Partnership in exchange for a reduction in the General Partner’s Partnership Units, in an amount equal to the amount of such cash divided by the Fair Market Value of a REIT Share on the day such cash is received by the General Partner. Notwithstanding the foregoing, the General Partner may acquire Properties in exchange for REIT Shares, to the extent such Properties are immediately contributed by the General Partner to the Partnership, pursuant to the terms described in Section 4.3.E. Any Limited Partner Interests acquired by the General Partner, whether pursuant to exercise by a Limited Partner of its right of Redemption, or otherwise, shall be automatically converted into a General Partner Interest comprised of an identical number of Partnership Units with the same rights, priorities and preferences as the class or series so acquired.
If, at any time, the General Partner acquires material assets (other than on behalf of the Partnership) the definition of “REIT Shares Amount” shall be adjusted, as reasonably agreed to by the General Partner and the other Limited Partners, to reflect the relative Fair Market Value of a share of capital stock of the General Partner relative to the Deemed Partnership Interest Value of the related Partnership Unit. The General Partner’s General Partner Interest in the Partnership, its minority interest in any Subsidiary Partnership(s) (held directly or indirectly through a Qualified REIT Subsidiary) that the General Partner holds in order to maintain such Subsidiary Partnership’s status as a partnership, and interests in such short-term liquid investments, bank accounts or similar instruments as the General Partner deems necessary to carry out its responsibilities contemplated under this Agreement and the Charter are interests which the General Partner is permitted to acquire and hold for purposes of this Section 7.5.A.
B. In the event the General Partner exercises its rights under the Charter to purchase REIT Shares or Preferred Shares, then the General Partner shall cause the Partnership to redeem from it a number of Partnership Units of the appropriate class as determined based on, in the case of REIT Shares the REIT Shares Amount equal to the number of REIT Shares so purchased, or in the case of Preferred Shares an equal number of Preferred Units of the class or series which correspond to the class or series, as the case may be, of the Preferred Shares so purchased, in each case on the same terms that the General Partner purchased such REIT Shares or Preferred Shares (as applicable).
Section 7.6.
Contracts with Affiliates
A. The Partnership may lend or contribute to Persons in which it has an equity investment, and such Persons may borrow funds from the Partnership, on terms and conditions established in the sole and absolute discretion of the General Partner. The foregoing authority shall not create any right or benefit in favor of any Person.
B. Except as provided in Section 7.5.A, the Partnership may transfer assets to joint ventures, other partnerships, corporations or other business entities in which it is or thereby becomes a participant upon such terms and subject to such conditions consistent with this Agreement and applicable law.
C. The General Partner, in its sole and absolute discretion and without the approval of the Limited Partners, may propose and adopt on behalf of the Partnership employee benefit plans funded by the Partnership for the benefit of employees of the General Partner, the Partnership, Subsidiaries of the Partnership or any Affiliate of any of them in respect of services performed, directly or indirectly, for the benefit of the Partnership, the General Partner, or any of the Partnership’s Subsidiaries. The General Partner also is expressly authorized to cause the Partnership to issue to it Partnership Units corresponding to REIT Shares issued by the General Partner pursuant to its Stock Incentive Plan or any similar or successor plan and to repurchase such Partnership Units from the General Partner to the extent necessary to permit the General Partner to repurchase such REIT Shares in accordance with such plan.
D. The General Partner is expressly authorized to enter into, in the name and on behalf of the Partnership, a right of first opportunity arrangement and other conflict avoidance agreements with various Affiliates of the Partnership and the General Partner, on such terms as the General Partner, in its sole and absolute discretion, believes are advisable.
Section 7.7.
Indemnification
A. The Partnership shall indemnify an Indemnitee from and against any and all losses, claims, damages, liabilities, joint or several, expenses (including legal fees and expenses), judgments, fines, settlements, and other amounts arising from any and all claims, demands, actions, suits or proceedings, civil, criminal, administrative or investigative, that relate to the operations of the Partnership as set forth in this Agreement in which any Indemnitee may be involved, or is threatened to be involved, as a party or otherwise, unless it is established that: (i) the act or omission of the Indemnitee was material to the matter giving rise to the proceeding and either was committed in bad faith or was the result of active and deliberate dishonesty; (ii) the Indemnitee actually received an improper personal benefit in money, property or services; or (iii) in the case of any criminal proceeding, the Indemnitee had reasonable cause to believe that the act or omission was unlawful. Without limitation, the foregoing indemnity shall extend to any liability of any Indemnitee, pursuant to a loan guaranty or otherwise, for any indebtedness of the Partnership or any Subsidiary of the Partnership (including, without limitation, any indebtedness which the Partnership or any Subsidiary of the Partnership has assumed or taken subject to), and the General Partner is hereby authorized and empowered, on behalf of the Partnership, to enter into one or more indemnity agreements consistent with the provisions of this Section 7.7 in favor of any Indemnitee having or potentially having liability for any such indebtedness. The termination of any proceeding by judgment, order or settlement does not create a presumption that the Indemnitee did not meet the requisite standard of conduct set forth
in this Section 7.7.A. The termination of any proceeding by conviction or upon a plea of
nolo contendere
or its equivalent, or any entry of an order of probation prior to judgment, creates a rebuttable presumption that the Indemnitee acted in a manner contrary to that specified in this Section 7.7.A. Any indemnification pursuant to this Section 7.7 shall be made only out of the assets of the Partnership.
B. Reasonable expenses incurred by an Indemnitee who is a party to a proceeding may be paid or reimbursed by the Partnership in advance of the final disposition of the proceeding upon receipt by the Partnership of (i) a written affirmation by the Indemnitee of the Indemnitee’s good faith belief that the standard of conduct necessary for indemnification by the Partnership as authorized in Section 7.7.A has been met, and (ii) a written undertaking by or on behalf of the Indemnitee to repay the amount if it shall ultimately be determined that the standard of conduct has not been met.
C. The indemnification provided by this Section 7.7 shall be in addition to any other rights to which an Indemnitee or any other Person may be entitled under any agreement, pursuant to any vote of the Partners, as a matter of law or otherwise, and shall continue as to an Indemnitee who has ceased to serve in such capacity.
D. The Partnership may purchase and maintain insurance, on behalf of the Indemnitees and such other Persons as the General Partner shall determine, against any liability that may be asserted against or expenses that may be incurred by any such Person in connection with the Partnership’s activities, regardless of whether the Partnership would have the power to indemnify such Person against such liability under the provisions of this Agreement.
E. For purposes of this Section 7.7, the Partnership shall be deemed to have requested an Indemnitee to serve as fiduciary of an employee benefit plan whenever the performance by it of its duties to the Partnership also imposes duties on, or otherwise involves services by, it to the plan or participants or beneficiaries of the plan; excise taxes assessed on an Indemnitee with respect to an employee benefit plan pursuant to applicable law shall constitute fines within the meaning of Section 7.7; and actions taken or omitted by the Indemnitee with respect to an employee benefit plan in the performance of its duties for a purpose reasonably believed by it to be in the interest of the participants and beneficiaries of the plan shall be deemed to be for a purpose which is not opposed to the best interests of the Partnership.
F. In no event may an Indemnitee subject the Limited Partners to personal liability by reason of the indemnification provisions set forth in this Agreement.
G. An Indemnitee shall not be denied indemnification in whole or in part under this Section 7.7 because the Indemnitee had an interest in the transaction with respect to which the indemnification applies if the transaction was otherwise permitted by the terms of this Agreement.
H. The provisions of this Section 7.7 are for the benefit of the Indemnitees, their heirs, successors, assigns and administrators and shall not be deemed to create any rights for the benefit of any other Persons. Any amendment, modification or repeal of this Section 7.7
or any provision hereof shall be prospective only and shall not in any way affect the limitations on the Partnership’s liability to any Indemnitee under this Section 7.7 as in effect immediately prior to such amendment, modification or repeal with respect to claims arising from or relating to matters occurring, in whole or in part, prior to such amendment, modification or repeal, regardless of when such claims may arise or be asserted.
I. If and to the extent any reimbursements to the General Partner pursuant to this Section 7.7 constitute gross income of the General Partner (as opposed to the repayment of advances made by the General Partner on behalf of the Partnership) such amounts shall constitute guaranteed payments within the meaning of Section 707(c) of the Code, shall be treated consistently therewith by the Partnership and all Partners, and shall not be treated as distributions for purposes of computing the Partners’ Capital Accounts.
J. Any indemnification hereunder is subject to, and limited by, the provisions of Section 17-108 of the Act.
K. In the event the Partnership is made a party to any litigation or otherwise incurs any loss or expense as a result of or in connection with any Partner’s personal obligations or liabilities unrelated to Partnership business, such Partner shall indemnify and reimburse the Partnership for all such loss and expense incurred, including legal fees, and the Partnership Interest of such Partner may be charged therefor. The liability of a Partner under this Section 7.7.K shall not be limited to such Partner’s Partnership Interest, but shall be enforceable against such Partner personally.
Section 7.8.
Liability of the General Partner
A. Notwithstanding anything to the contrary set forth in this Agreement, none of the General Partner and any of its officers, directors, agents and employees shall be liable or accountable in damages or otherwise to the Partnership, any Partners or any Assignees, or their successors or assigns, for losses sustained, liabilities incurred or benefits not derived as a result of errors in judgment or mistakes of fact or law or any act or omission if the General Partner acted in good faith.
B. The Limited Partners expressly acknowledge that the General Partner is acting for the benefit of the Partnership, the Limited Partners and the General Partner’s stockholders collectively, that the General Partner is under no obligation to give priority to the separate interests of the Limited Partners or the General Partner’s stockholders (including, without limitation, the tax consequences to Limited Partners or Assignees or to stockholders) in deciding whether to cause the Partnership to take (or decline to take) any actions and that the General Partner shall not be liable to the Partnership or to any Limited Partner for monetary damages for losses sustained, liabilities incurred, or benefits not derived by Limited Partners in connection with such decisions,
provided
, that the General Partner has acted in good faith.
C. Subject to its obligations and duties as General Partner set forth in Section 7.1.A hereof, the General Partner may exercise any of the powers granted to it by this Agreement and perform any of the duties imposed upon it hereunder either directly or by or through its agents. The General Partner shall not be responsible for any misconduct or negligence on the part of any such agent appointed by it in good faith.
D. Any amendment, modification or repeal of this Section 7.8 or any provision hereof shall be prospective only and shall not in any way affect the limitations on the liability of the General Partner and any of its officers, directors, agents and employees to the Partnership and the Limited Partners under this Section 7.8 as in effect immediately prior to such amendment, modification or repeal with respect to claims arising from or relating to matters occurring, in whole or in part, prior to such amendment, modification or repeal, regardless of when such claims may arise or be asserted.
Section 7.9.
Other Matters Concerning the General Partner
A. The General Partner may rely and shall be protected in acting or refraining from acting upon any resolution, certificate, statement, instrument, opinion, report, notice, request, consent, order, bond, debenture, or other paper or document believed by it to be genuine and to have been signed or presented by the proper party or parties.
B. The General Partner may consult with legal counsel, accountants, appraisers, management consultants, investment bankers and other consultants and advisers selected by it, and any act taken or omitted to be taken in reliance upon the opinion of such Persons as to matters which such General Partner reasonably believes to be within such Person’s professional or expert competence shall be conclusively presumed to have been done or omitted in good faith and in accordance with such opinion.
C. The General Partner shall have the right, in respect of any of its powers or obligations hereunder, to act through any of its duly authorized officers and a duly appointed attorney or attorneys-in-fact. Each such attorney shall, to the extent provided by the General Partner in the power of attorney, have full power and authority to do and perform all and every act and duty which is permitted or required to be done by the General Partner hereunder.
D. Notwithstanding any other provisions of this Agreement or any non-mandatory provision of the Act, any action of the General Partner on behalf of the Partnership or any decision of the General Partner to refrain from acting on behalf of the Partnership, undertaken in the good faith belief that such action or omission is necessary or advisable in order to protect the ability of the General Partner, for so long as the General Partner has determined to qualify as a REIT, to (i) continue to qualify as a REIT or (ii) except with respect to the distribution of Available Cash to the Series A Limited Partners in accordance with Section 16.2, the Series G Partner in accordance with Section 22.2 and the Series H Partner in accordance with Section 23.2, avoid the General Partner incurring any taxes under Section 857 or Section 4981 of the Code, is expressly authorized under this Agreement and is deemed approved by all of the Limited Partners.
Section 7.10.
Title to Partnership Assets
Title to Partnership assets, whether real, personal or mixed and whether tangible or intangible, shall be deemed to be owned by the Partnership as an entity, and no Partners, individually or collectively, shall have any ownership interest in such Partnership assets or any portion thereof. Title to any or all of the Partnership assets may be held in the name of the Partnership, the General Partner or one or more nominees, as the General Partner may determine, including Affiliates of the General Partner.
The General Partner hereby declares and warrants that any Partnership assets for which legal title is held in the name of the General Partner or any nominee or Affiliate of the General Partner shall be deemed held by the General Partner or such nominee or Affiliate for the use and benefit of the Partnership in accordance with the provisions of this Agreement;
provided
,
however
, that the General Partner shall use its best efforts to cause beneficial and record title to such assets to be vested in the Partnership as soon as reasonably practicable. All Partnership assets shall be recorded as the property of the Partnership in its books and records, irrespective of the name in which legal title to such Partnership assets is held.
Section 7.11.
Reliance by Third Parties
Notwithstanding anything to the contrary in this Agreement, any Person dealing with the Partnership shall be entitled to assume that the General Partner has full power and authority to encumber, sell or otherwise use in any manner any and all assets of the Partnership and to enter into any contracts on behalf of the Partnership, and such Person shall be entitled to deal with the General Partner as if it were the Partnership’s sole party in interest, both legally and beneficially. Each Limited Partner hereby waives any and all defenses or other remedies which may be available against such Person to contest, negate or disaffirm any action of the General Partner in connection with any such dealing. In no event shall any Person dealing with the General Partner or its representatives be obligated to ascertain that the terms of this Agreement have been complied with or to inquire into the necessity or expedience of any act or action of the General Partner or its representatives. Each and every certificate, document or other instrument executed on behalf of the Partnership by the General Partner or its representatives shall be conclusive evidence in favor of any and every Person relying thereon or claiming thereunder that (i) at the time of the execution and delivery of such certificate, document or instrument, this Agreement was in full force and effect, (ii) the Person executing and delivering such certificate, document or instrument was duly authorized and empowered to do so for and on behalf of the Partnership and (iii) such certificate, document or instrument was duly executed and delivered in accordance with the terms and provisions of this Agreement and is binding upon the Partnership.
ARTICLE 8.
RIGHTS AND OBLIGATIONS OF LIMITED PARTNERS
Section 8.1.
Limitation of Liability
The Limited Partners shall have no liability under this Agreement except as expressly provided in this Agreement or under the Act.
Section 8.2.
Management of Business
No Limited Partner or Assignee (other than the General Partner, any of its Affiliates or any officer, director, employee, general partner, agent or trustee of the General Partner, the Partnership or any of their Affiliates, in their capacity as such) shall take part in the operations, management or control (within the meaning of the Act) of the Partnership’s business, transact any business in the Partnership’s name or have the power to sign documents for or otherwise bind the Partnership. The transaction of any such business by the General Partner, any of its Affiliates or any officer, director, employee, general partner, agent or trustee of the General Partner, the Partnership or any of their Affiliates, in their capacity as such, shall not affect, impair or eliminate the limitations on the liability of the Limited Partners or Assignees under this Agreement.
Section 8.3.
Outside Activities of Limited Partners
Subject to any agreements entered into by a Limited Partner or its Affiliates with the General Partner, Partnership or a Subsidiary, any Limited Partner and any officer, director, employee, agent, trustee, Affiliate or stockholder of any Limited Partner shall be entitled to and may have business interests and engage in business activities in addition to those relating to the Partnership, including business interests and activities in direct competition with the Partnership or that are enhanced by the activities of the Partnership. Neither the Partnership nor any Partners shall have any rights by virtue of this Agreement in any business ventures of any Limited Partner or Assignee. Subject to such agreements, none of the Limited Partners nor any other Person shall have any rights by virtue of this Agreement or the partnership relationship established hereby in any business ventures of any other Person, other than the Limited Partners benefiting from the business conducted by the General Partner, and such other Person shall have no obligation pursuant to this Agreement to offer any interest in any such business ventures to the Partnership, any Limited Partner or any such other Person, even if such opportunity is of a character which, if presented to the Partnership, any Limited Partner or such other Person, could be taken by such other Person.
Section 8.4.
Return of Capital
Except pursuant to the rights of Redemption set forth in Section 8.6 and the redemption and exchange rights set forth in Sections 16.4 and 16.7, no Limited Partner shall be entitled to the withdrawal or return of his or her Capital Contribution, except to the extent of distributions made pursuant to this Agreement or upon termination of the Partnership as provided herein. Except as expressly set forth herein with respect to the rights, priorities and preferences of the Preferred Limited Partners holding any series of Preferred Units, no Limited Partner or Assignee shall have priority over any other Limited Partner or Assignee either as to the return of Capital Contributions, or as otherwise expressly provided in this Agreement, as to profits, losses, distributions or credits.
Section 8.5.
Rights of Limited Partners Relating to the Partnership
A. In addition to other rights provided by this Agreement or by the Act, and except as limited by Section 8.5.C hereof, each Limited Partner shall have the right, for a purpose reasonably related to such Limited Partner’s interest as a limited partner in the Partnership, upon written demand with a statement of the purpose of such demand and at the Partnership’s expense:
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(1)
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to obtain a copy of the most recent annual and quarterly reports filed with the Securities and Exchange Commission by the General Partner pursuant to the Securities Exchange Act, and each communication sent to the stockholders of the General Partner;
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(2)
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to obtain a copy of the Partnership’s federal, state and local income tax returns for each Partnership Year;
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(3)
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to obtain a current list of the name and last known business, residence or mailing address of each Partner;
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(4)
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to obtain a copy of this Agreement and the Certificate and all amendments thereto, together with executed copies of all powers of attorney pursuant to which this Agreement, the Certificate and all amendments thereto have been executed; and
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(5)
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to obtain true and full information regarding the amount of cash and a description and statement of any other property or services contributed by each Partner and which each Partner has agreed to contribute in the future, and the date on which each became a Partner.
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B. The Partnership shall notify each Common Limited Partner in writing of any adjustment made in the calculation of the REIT Shares Amount within 10 Business Days of the date such change becomes effective.
C. Notwithstanding any other provision of this Section 8.5, the General Partner may keep confidential from the Limited Partners, for such period of time as the General Partner determines in its sole and absolute discretion to be reasonable, any information that (i) the General Partner believes to be in the nature of trade secrets or other information the disclosure of which the General Partner in good faith believes is not in the best interests of the Partnership or (ii) the Partnership or the General Partner is required by law or by agreements with unaffiliated third parties to keep confidential.
Section 8.6.
Common Limited Partner Redemption Rights
A. On or after the date two years after the Effective Date or on or after such later date as is expressly provided in an agreement entered into between the Partnership and any Common Limited Partner, each Common Limited Partner shall have the right (subject to the
terms and conditions set forth herein and in any other such agreement, as applicable) to require the Partnership to redeem all or a portion of the Common Partnership Units held by such Common Limited Partner (such Partnership Units being hereafter referred to as “Tendered Units”) in exchange for the Cash Amount (a “Redemption”),
provided
, that the terms of such Common Partnership Units do not provide that such Common Partnership Units are not entitled to a right of Redemption;
provided
further
, that Common Partnership Units subject to the Pledge Agreement shall, to the extent the pledgee thereunder is entitled to exercise remedies thereunder, be subject to redemption prior to the date two years after the Effective Date. Unless otherwise expressly provided in this Agreement or a separate agreement entered into between the Partnership and the Holders of such Partnership Units, all Common Partnership Units shall be entitled to a right of Redemption hereunder. Any Redemption shall be exercised pursuant to a Notice of Redemption delivered to the General Partner by the Common Limited Partner who is exercising the right (the “Tendering Partner”). The Cash Amount shall be delivered as a certified check payable to the Tendering Partner within ten (10) days of the Specified Redemption Date in accordance with the instructions set forth in the Notice of Redemption.
B. Notwithstanding Section 8.6.A above, if a Common Limited Partner has delivered to the General Partner a Notice of Redemption then the General Partner may, in its sole and absolute discretion, (subject to the limitations on ownership and transfer of REIT Shares set forth in Article IV.E of the Charter) elect to acquire some or all of the Tendered Units from the Tendering Partner in exchange for the REIT Shares Amount (as of the Specified Redemption Date) and, if the General Partner so elects, the Tendering Partner shall sell the Tendered Units to the General Partner in exchange for the REIT Shares Amount. In such event, the Tendering Partner shall have no right to cause the Partnership to redeem such Tendered Units. The General Partner shall promptly give such Tendering Partner written notice of its election, and the Tendering Partner may elect to withdraw its redemption request at any time prior to the acceptance of the Cash Amount or REIT Shares Amount by such Tendering Partner. Notwithstanding the foregoing, the General Partner, at the request of a Common Limited Partner that is a corporation or limited liability company, shall be required to issue, and the General Partner agrees to issue, the REIT Shares Amount in exchange for such Common Limited Partner’s Tendered Units, subject to the ownership restrictions applicable to such shares set forth in the Charter. In addition, the General Partner agrees to maintain an amount of authorized but unissued REIT Shares equal to the number of REIT Shares issuable upon the exchange of Common Partnership Units owned from time to time by Common Limited Partners that are corporations.
C. The REIT Shares Amount, if applicable, shall be delivered as duly authorized, validly issued, fully paid and nonassessable REIT Shares and, if applicable, free of any pledge, lien, encumbrance or restriction, other than those provided in the Charter, the Bylaws of the General Partner, the Securities Act, relevant state securities or blue sky laws and any applicable registration rights agreement with respect to such REIT Shares entered into by the Tendering Partner. The REIT Shares Amount shall be registered in the name and otherwise delivered as set forth in the Notice of Redemption. Notwithstanding any delay in such delivery (but subject to Section 8.6.E), the Tendering Partner shall be deemed the owner of such REIT Shares for all purposes, including without limitation, rights to vote or consent, and receive dividends, as of the Specified Redemption Date.
D. Each Common Limited Partner covenants and agrees with the General Partner that all Tendered Units shall be delivered to the General Partner free and clear of all liens, claims and encumbrances whatsoever and should any such liens, claims and/or encumbrances exist or arise with respect to such Tendered Units, the General Partner shall be under no obligation to acquire the same. Each Common Limited Partner further agrees that, in the event any state or local property transfer tax is payable as a result of the transfer of its Tendered Units to the General Partner (or its designee), such Common Limited Partner shall assume and pay such transfer tax.
E. Notwithstanding the provisions of Sections 8.6.A, 8.6.B, 8.6.C or any other provision of this Agreement, a Common Limited Partner (i) shall not be entitled to effect a Redemption for cash or an exchange for REIT Shares to the extent the ownership or right to acquire REIT Shares pursuant to such exchange by such Partner on the Specified Redemption Date would cause such Partner or any other Person, or, in the opinion of counsel selected by the General Partner, may cause such Partner or any other Person, to violate the restrictions on ownership and transfer of REIT Shares set forth in Article IV.E of the Charter and (ii) shall have no rights under this Agreement to acquire REIT Shares which would otherwise be prohibited under the Charter. To the extent any attempted Redemption or exchange for REIT Shares would be in violation of this Section 8.6.E, it shall be null and void
ab initio
and such Common Limited Partner shall not acquire any rights or economic interest in the cash otherwise payable upon such redemption or the REIT Shares otherwise issuable upon such exchange.
F. Notwithstanding anything herein to the contrary (but subject to Section 8.6.E), with respect to any Redemption or exchange for REIT Shares pursuant to this Section 8.6:
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(1)
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All Common Partnership Units acquired by the General Partner pursuant thereto shall automatically, and without further action required, be converted into and deemed to be General Partner Interests comprised of the same number and class of Common Partnership Units.
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(2)
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Without the consent of the General Partner, each Common Limited Partner may not effect a Redemption for less than 500 Partnership Units or, if the Common Limited Partner holds less than 500 Partnership Units, all of the Common Partnership Units held by such Common Limited Partner.
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(3)
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Without the consent of the General Partner, each Common Limited Partner may not effect a Redemption during the period after the Partnership Record Date with respect to a distribution and before the record date established by the General Partner for a distribution to its common stockholders of some or all of its portion of such distribution.
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(4)
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The consummation of any Redemption or exchange for REIT Shares shall be subject to the expiration or termination of the applicable waiting period, if any, under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended.
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(5)
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Each Tendering Partner shall continue to own all Common Partnership Units subject to any Redemption or exchange for REIT Shares, and be treated as a Common Limited Partner with respect to such Common Partnership Units for all purposes of this Agreement, until such Common Partnership Units are transferred to the General Partner and paid for or exchanged as of the Specified Redemption Date. Until a Specified Redemption Date, the Tendering Partner shall have no rights as a stockholder of the General Partner with respect to such Tendering Partner’s Common Partnership Units.
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G. In the event that the Partnership issues additional Partnership Interests to any Additional Limited Partner pursuant to Section 4.3.C hereof, the General Partner shall make such revisions to this Section 8.6 as it determines are necessary to reflect the issuance of such additional Partnership Interests.
ARTICLE 9.
BOOKS, RECORDS, ACCOUNTING AND REPORTS
Section 9.1.
Records and Accounting
The General Partner shall keep or cause to be kept at the principal office of the Partnership appropriate books and records with respect to the Partnership’s business, including without limitation, all books and records necessary to provide to the Limited Partners any information, lists and copies of documents required to be provided pursuant to Section 9.3 hereof. Any records maintained by or on behalf of the Partnership in the regular course of its business may be kept on, or be in the form of, punch cards, magnetic tape, photographs, micrographics or any other information storage device,
provided
, that the records so maintained are convertible into clearly legible written form within a reasonable period of time.
The books of the Partnership shall be maintained, for financial and tax reporting purposes, on an accrual basis in accordance with generally accepted accounting principles.
Section 9.2.
Fiscal Year
The fiscal year of the Partnership shall be the calendar year.
Section 9.3.
Reports
A. As soon as available, but in no event later than five Business Days following the date on which Company files its annual report in respect of a fiscal year on Form 10-K, or such other applicable form (“Form 10-K”), with the Securities and Exchange
Commission (the “Commission”) (or, in the event that Partnership is required under rules and regulations promulgated by the Commission to file with the Commission a Form 10-K separate from Company’s Form 10-K, five business days after the filing of such report by Partnership with the Commission), the General Partner shall cause to be mailed to each Limited Partner a complete copy of Partnership’s audited financial statements for such fiscal year including a balance sheet, income statement and cash flow statement for such fiscal year prepared and audited by an independent certified public accountant in accordance with GAAP; and
B. As soon as available, but in no event later than five Business Days following the date on which Company files its quarterly report in respect of a fiscal quarter on Form 10-Q, or such other applicable form (“Form 10-Q”), with the Commission (or, in the event the Operating Partnership is required under rules and regulations promulgated by the Commission to file with the Commission a Form 10-Q separate from Company’s Form 10-Q, five business days after the filing of such report by Partnership with the Commission), the General Partner shall cause to be mailed to each Limited Partner a complete copy of Partnership’s unaudited quarterly financial statements for such fiscal quarter including a balance sheet, income statement and cash flow statement for such fiscal quarter prepared in accordance with GAAP.
Section 9.4.
Nondisclosure of Certain Information
Notwithstanding the provisions of Sections 9.1 and 9.3, the General Partner may keep confidential from the Limited Partners any information that the General Partner believes to be in the nature of trade secrets or other information the disclosure of which the General Partner in good faith believes is not in the best interests of the Partnership or which the Partnership is required by law or by agreements with unaffiliated third parties to keep confidential.
ARTICLE 10.
TAX MATTERS
Section 10.1.
Preparation of Tax Returns
The General Partner shall arrange for the preparation and timely filing of all returns of Partnership income, gains, deductions, losses and other items required of the Partnership for federal and state income tax purposes and shall use all reasonable efforts to furnish, within 90 days of the close of each taxable year, the tax information reasonably required by Limited Partners for federal and state income tax reporting purposes. The Limited Partners shall promptly provide the General Partner with such information relating to any Contributed Property contributed by such Limited Partner to the Partnership.
Section 10.2.
Tax Elections
Except as otherwise provided herein, the General Partner shall, in its sole and absolute discretion, determine whether to make any available election pursuant to the Code, including the election under Section 754 of the Code. The General Partner shall have the right to
seek to revoke any such election (including without limitation, any election under Section 754 of the Code) upon the General Partner’s determination in its sole and absolute discretion that such revocation is the best interests of the Partners.
Section 10.3.
Tax Matters Partner
A. The General Partner shall be the “tax matters partner” of the Partnership for federal income tax purposes. Pursuant to Section 6223(c) of the Code, upon receipt of notice from the IRS of the beginning of an administrative proceeding with respect to the Partnership, the tax matters partner shall furnish the IRS with the name, address and profit interest of each of the Limited Partners and Assignees;
provided
,
however
, that such information is provided to the Partnership by the Limited Partners and Assignees.
B. The tax matters partner is authorized, but not required:
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(1)
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to enter into any settlement with the IRS with respect to any administrative or judicial proceedings for the adjustment of Partnership items required to be taken into account by a Partner for income tax purposes (such administrative proceedings being referred to as a “tax audit” and such judicial proceedings being referred to as “judicial review”), and in the settlement agreement the tax matters partner may expressly state that such agreement shall bind all Partners, except that such settlement agreement shall not bind any Partner (i) who (within the time prescribed pursuant to the Code and Regulations) files a statement with the IRS providing that the tax matters partner shall not have the authority to enter into a settlement agreement on behalf of such Partner or (ii) who is a “notice partner” (as defined in Section 6231 of the Code) or a member of a “notice group” (as defined in Section 6223(b)(2) of the Code);
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(2)
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in the event that a notice of a final administrative adjustment at the Partnership level of any item required to be taken into account by a Partner for tax purposes (a “final adjustment”) is mailed to the tax matters partner, to seek judicial review of such final adjustment, including the filing of a petition for readjustment with the Tax Court or the United States Claims Court, or the filing of a complaint for refund with the District Court of the United States for the district in which the Partnership’s principal place of business is located;
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(3)
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to intervene in any action brought by any other Partner for judicial review of a final adjustment;
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(4)
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to file a request for an administrative adjustment with the IRS at any time and, if any part of such request is not allowed by the IRS, to file an appropriate pleading (petition or complaint) for judicial review with respect to such request;
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(5)
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to enter into an agreement with the IRS to extend the period for assessing any tax which is attributable to any item required to be taken into account by a Partner for tax purposes, or an item affected by such item; and
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(6)
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to take any other action on behalf of the Partners of the Partnership in connection with any tax audit or judicial review proceeding to the extent permitted by applicable law or regulations.
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The taking of any action and the incurring of any expense by the tax matters partner in connection with any such proceeding, except to the extent required by law, is a matter in the sole and absolute discretion of the tax matters partner and the provisions relating to indemnification of the General Partner set forth in Section 7.7 of this Agreement shall be fully applicable to the tax matters partner in its capacity as such.
C. The tax matters partner shall receive no compensation for its services. All third party costs and expenses incurred by the tax matters partner in performing its duties as such (including legal and accounting fees) shall be borne by the Partnership. Nothing herein shall be construed to restrict the Partnership from engaging an accounting firm to assist the tax matters partner in discharging its duties hereunder, so long as the compensation paid by the Partnership for such services is reasonable.
Section 10.4.
Organizational Expenses
The Partnership shall elect to deduct expenses, if any, incurred by it in organizing the Partnership ratably over a 60-month period as provided in Section 709 of the Code.
Section 10.5.
Withholding
Each Limited Partner hereby authorizes the Partnership to withhold from or pay on behalf of or with respect to such Limited Partner any amount of federal, state, local, or foreign taxes that the General Partner determines that the Partnership is required to withhold or pay with respect to any amount distributable or allocable to such Limited Partner pursuant to this Agreement, including, without limitation, any taxes required to be withheld or paid by the Partnership pursuant to Sections 1441, 1442, 1445 or 1446 of the Code. Any amount paid on behalf of or with respect to a Limited Partner shall constitute a loan by the Partnership to such Limited Partner, which loan shall be repaid by such Limited Partner within 15 days after notice from the General Partner that such payment must be made unless (i) the Partnership withholds such payment from a distribution which would otherwise be made to the Limited Partner or (ii) the General Partner determines, in its sole and absolute discretion, that such payment may be satisfied out of the available funds of the Partnership which would, but for such payment, be distributed to the Limited Partner. Any amounts withheld pursuant to the foregoing clauses (i) or (ii) shall be treated as having been distributed to such Limited Partner. Each Limited Partner hereby unconditionally and irrevocably grants to the Partnership a security interest in such Limited Partner’s Partnership Interest to secure such Limited Partner’s obligation to pay to the Partnership any amounts required to be paid pursuant to this Section 10.5. In the event that a Limited Partner fails to pay any amounts owed to the Partnership pursuant to this Section 10.5
when due, the General Partner may, in its sole and absolute discretion, elect to make the payment to the Partnership on behalf of such defaulting Limited Partner, and in such event shall be deemed to have loaned such amount to such defaulting Limited Partner and shall succeed to all rights and remedies of the Partnership as against such defaulting Limited Partner (including, without limitation, the right to receive distributions and the holding of a security interest in such Limited Partner’s Partnership Interest). Any amounts payable by a Limited Partner hereunder shall bear interest at the base rate on corporate loans at large United States money center commercial banks, as published from time to time in the
Wall Street Journal
, plus two percentage points (but not higher than the maximum lawful rate) from the date such amount is due (
i.e.
, 15 days after demand) until such amount is paid in full. Each Limited Partner shall take such actions as the Partnership or the General Partner shall request in order to perfect or enforce the security interest created hereunder.
ARTICLE 11.
TRANSFERS AND WITHDRAWALS
Section 11.1.
Transfer
A. The term “transfer,” when used in this Article 11 with respect to a Partnership Interest, shall be deemed to refer to a transaction by which the General Partner purports to assign its General Partner Interest to another Person or by which a Limited Partner purports to assign its Limited Partnership Interest to another Person, and includes a sale, assignment, gift (outright or in trust), pledge, encumbrance, hypothecation, mortgage, exchange or any other disposition by law or otherwise.
Except to the extent otherwise specified, the term “transfer” when used in this Article 11 does not include any Redemption or exchange for REIT Shares pursuant to Section 8.6. or any exchange for REIT Series A Preferred Shares pursuant to Section 16.7. No part of the interest of a Limited Partner shall be subject to the claims of any creditor, any spouse for alimony or support, or to legal process, and may not be voluntarily or involuntarily alienated or encumbered, except as may be specifically provided for in this Agreement.
B. No Partnership Interest shall be transferred, in whole or in part, except in accordance with the terms and conditions set forth in this Article 11. Any transfer or purported transfer of a Partnership Interest not made in accordance with this Article 11 shall be null and void
ab initio
unless otherwise consented to by the General Partner in its sole and absolute discretion.
Section 11.2.
Transfer of General Partner’s Partnership Interest
A. The General Partner shall not withdraw from the Partnership and shall not transfer all or any portion of its interest in the Partnership (whether by sale, statutory merger or consolidation, liquidation or otherwise) without the Consent of the Partners, which may be given or withheld by each such Partner in its sole and absolute discretion, and only upon the admission of a successor General Partner pursuant to Section 12.1. Upon any transfer of a Partnership Interest in accordance with the provisions of this Section 11.2, the transferee shall become a
substitute General Partner for all purposes herein, and shall be vested with the powers and rights of the transferor General Partner, and shall be liable for all obligations and responsible for all duties of the General Partner, once such transferee has executed such instruments as may be necessary to effectuate such admission and to confirm the agreement of such transferee to be bound by all the terms and provisions of this Agreement with respect to the Partnership Interest so acquired. It is a condition to any transfer otherwise permitted hereunder that the transferee assumes, by operation of law or express agreement, all of the obligations of the transferor General Partner under this Agreement with respect to such transferred Partnership Interest, and no such transfer (other than pursuant to a statutory merger or consolidation wherein all obligations and liabilities of the transferor General Partner are assumed by a successor corporation by operation of law) shall relieve the transferor General Partner of its obligations under this Agreement without the Consent of the Partners, in their reasonable discretion. In the event the General Partner withdraws from the Partnership, in violation of this Agreement or otherwise, or otherwise dissolves or terminates, or upon the Incapacity of the General Partner, a majority in interest of the remaining Partners may elect to continue the Partnership business by selecting a substitute General Partner in accordance with the Act.
B. Without limiting Section 16.5 of this Agreement, the General Partner shall not engage in any merger, consolidation or other combination with or into another person, sale of all or substantially all of its assets or any reclassification, recapitalization or change of its outstanding equity interests (each, a “
Termination Transaction
”), unless the Termination Transaction has been approved by a Consent of the Partners and, except as otherwise provided in Section 11.2.C, in connection with which all Common Limited Partners either will receive, or will have the right to elect to receive, for each Partnership Unit an amount of cash, securities, or other property equal to the product of the REIT Shares Amount and the greatest amount of cash, securities or other property paid to a holder of one REIT Share in consideration of one REIT Share pursuant to the terms of the Termination Transaction;
provided
, that if, in connection with the Termination Transaction, a purchase, tender or exchange offer shall have been made to and accepted by the holders of the outstanding REIT Shares, each Holder of Common Partnership Units shall receive, or shall have the right to elect to receive, the greatest amount of cash, securities, or other property which such Holder would have received had it exercised its right to Redemption (as set forth in Section 8.6) and received REIT Shares in exchange for its Partnership Units immediately prior to the expiration of such purchase, tender or exchange offer and had thereupon accepted such purchase, tender or exchange offer and then such Termination Transaction shall have been consummated.
C. Without limiting Section 16.5 of this Agreement, the General Partner may merge, or otherwise combine its assets, with another entity without satisfying the requirements of Section 11.2.B hereof if: (i) immediately after such merger or other combination, substantially all of the assets directly or indirectly owned by the surviving entity, other than Partnership Units held by such General Partner, are owned directly or indirectly by the Partnership or another limited partnership or limited liability company which is the survivor of a merger, consolidation or combination of assets with the Partnership (in each case, the “
Surviving Partnership
”); (ii) the Common Limited Partners own a percentage interest of the Surviving Partnership based on the relative fair market value of the net assets of the Partnership (as determined pursuant to Section 11.2.E) and the other net assets of the Surviving Partnership (as determined pursuant to Section
11.2.E) immediately prior to the consummation of such transaction; (iii) the rights preferences and privileges of the Common Limited Partners in the Surviving Partnership are at least as favorable as those in effect immediately prior to the consummation of such transaction and as those applicable to any other limited partners or non-managing members of the Surviving Partnership; and (iv) such rights of the Common Limited Partners include the right to exchange their interests in the Surviving Partnership for at least one of: (a) the consideration available to such Common Limited Partners pursuant to Section 11.2.B or (b) if the ultimate controlling person of the Surviving Partnership has publicly traded common equity securities, such common equity securities, with an exchange ratio based on the relative fair market value of such securities (as determined pursuant to Section 11.2.E) and the REIT Shares.
D. In connection with any transaction permitted by Section 11.2.B or Section 11.2.C hereof, the General Partner shall use its commercially reasonable efforts to structure such Termination Transaction to avoid causing the Common Limited Partners to recognize gain for federal income tax purposes by virtue of the occurrence of or their participation in such Termination Transaction.
E. In connection with any transaction permitted by Section 11.2.B or 11.2.C, the relative fair market values shall be reasonably determined by the General Partner as of the time of such transaction and, to the Common extent applicable, shall be no less favorable to the Limited Partners than the relative values reflected in the terms of such transaction.
Section 11.3.
Limited Partners’ Rights to Transfer
A. Prior to the second anniversary of the closing of the initial public offering of REIT Shares, no Limited Partner shall transfer all or any portion of its Partnership Interest to any transferee without the consent of the General Partner, which consent may be withheld in its sole and absolute discretion;
provided
,
however
, that any Limited Partner may, at any time (whether prior to or after such second anniversary), without the consent of the General Partner, (i) transfer all or any portion of its Partnership Interest to the General Partner, (ii) transfer all or any portion of its Partnership Interest to an Affiliate, another Original Limited Partner or to an Immediate Family member, subject to the provisions of Section 11.6, or in the case of an Original Limited Partner, to such Original Limited Partner’s shareholders, members, partners or beneficiaries, as the case may be, (iii) transfer all or any portion of its Partnership Interest to a trust for the benefit of a charitable beneficiary or to a charitable foundation, subject to the provisions of Section 11.6, and (iv) subject to the provisions of Section 11.6, pledge (a “Pledge”) all or any portion of its Partnership Interest to a lending institution, which is not an Affiliate of such Limited Partner, as collateral or security for a bona fide loan or other extension of credit, and transfer such pledged Partnership Interest to such lending institution in connection with the exercise of remedies under such loan or extension or credit. Each Limited Partner or Assignee (resulting from a transfer made pursuant to clauses (i)-(iv) of the proviso of the preceding sentence) shall have the right to transfer all or any portion of its Partnership Interest, subject to the provisions of Section 11.6 and the satisfaction of each of the following conditions (in addition to the right of each such Limited Partner or Assignee to continue to make any such transfer permitted by clauses (i)-(iv) of such proviso without satisfying either of the following conditions):
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(a)
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General Partner Right of First Refusal
. The transferring Partner shall give written notice of the proposed transfer to the General Partner, which notice shall state (i) the identity of the proposed transferee, and (ii) the amount and type of consideration proposed to be received for the transferred Partnership Units. The General Partner shall have ten (10) days upon which to give the transferring Partner notice of its election to acquire the Partnership Units on the proposed terms. If it so elects, it shall purchase the Partnership Units on such terms within ten (10) days after giving notice of such election. If it does not so elect, the transferring Partner may transfer such Partnership Units to a third party, on economic terms no more favorable to the transferee than the proposed terms, subject to the other conditions of this Section 11.3.
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(b)
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Qualified Transferee
. Any transfer of a Partnership Interest shall be made only to Qualified Transferees.
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It is a condition to any transfer otherwise permitted hereunder that the transferee assumes by operation of law or express agreement all of the obligations of the transferor Limited Partner under this Agreement with respect to such transferred Partnership Interest and no such transfer (other than pursuant to a statutory merger or consolidation wherein all obligations and liabilities of the transferor Partner are assumed by a successor corporation by operation of law) shall relieve the transferor Partner of its obligations under this Agreement without the approval of the General Partner, in its reasonable discretion. Notwithstanding the foregoing, any transferee of any transferred Partnership Interest shall be subject to any and all ownership limitations contained in the Charter, which may limit or restrict such transferee’s ability to exercise its Redemption rights or the exchange rights set forth in Section 16.7, and to the representations set forth in Section 3.4.D. Any transferee, whether or not admitted as a Substituted Limited Partner, shall take subject to the obligations of the transferor hereunder. Unless admitted as a Substituted Limited Partner, no transferee, whether by a voluntary transfer, by operation of law or otherwise, shall have any rights hereunder, other than the rights of an Assignee as provided in Section 11.5.
B. If a Limited Partner is subject to Incapacity, the executor, administrator, trustee, committee, guardian, conservator, or receiver of such Limited Partner’s estate shall have all the rights of a Limited Partner, but not more rights than those enjoyed by other Limited Partners, for the purpose of settling or managing the estate, and such power as the Incapacitated Limited Partner possessed to transfer all or any part of his or its interest in the Partnership. The Incapacity of a Limited Partner, in and of itself, shall not dissolve or terminate the Partnership.
C. The General Partner may prohibit any transfer otherwise permitted under Section 11.3 by a Limited Partner of his or her Partnership Units if, in the opinion of legal counsel to the Partnership, such transfer would require the filing of a registration statement under the Securities Act by the Partnership or would otherwise violate any federal or state securities laws or regulations applicable to the Partnership or the Partnership Unit.
D. No transfer by a Limited Partner of his or her Partnership Units (including any Redemption or exchange for REIT Shares pursuant to Section 8.6 and the redemption or exchange rights set forth in Sections 16.4 and 16.7, or any other acquisition of Common Units, Series A Preferred Units, Series G Preferred Units or Series H Preferred Units by the General Partner or the Partnership) may be made to any person if (i) in the opinion of legal counsel for the Partnership, it could result in the Partnership being treated as an association taxable as a corporation, or (ii) such transfer could be treated as effectuated through an “established securities market” or a “secondary market (or the substantial equivalent thereof)” within the meaning of Section 7704 of the Code.
E. No transfer of any Partnership Units may be made to a lender to the Partnership or any Person who is related (within the meaning of Section 1.752-4(b) of the Regulations) to any lender to the Partnership whose loan constitutes a Nonrecourse Liability, without the consent of the General Partner, in its sole and absolute discretion;
provided
, that as a condition to such consent, the lender will be required to enter into an arrangement with the Partnership and the General Partner to redeem or exchange for the REIT Shares Amount, or the specified amount of REIT Series A Preferred Shares, or as the case may be, any Partnership Units in which a security interest is held simultaneously with the time at which such lender would be deemed to be a partner in the Partnership for purposes of allocating liabilities to such lender under Section 752 of the Code.
F. No Limited Partner may withdraw from the Partnership except as a result of transfer, Redemption or exchange of Partnership Units pursuant hereto.
Section 11.4.
Substituted Limited Partners
A. No Limited Partner shall have the right to substitute a transferee as a Limited Partner in his or her place (including any transferee permitted by Section 11.3).
The General Partner shall, however, have the right to consent to the admission of a permitted transferee of the interest of a Limited Partner, other than a transferee in a transfer permitted by Section 11.3 hereof, as a Substituted Limited Partner, pursuant to this Section 11.4, which consent may be given or withheld by the General Partner in its sole and absolute discretion. The General Partner’s failure or refusal to permit a transferee of any such interests to become a Substituted Limited Partner shall not give rise to any cause of action against the Partnership or any Partner.
B. A transferee who has been admitted as a Substituted Limited Partner in accordance with this Article 11 shall have all the rights and powers and be subject to all the restrictions and liabilities of a Limited Partner under this Agreement. The admission of any transferee as a Substituted Limited Partner shall be subject to the transferee executing and delivering to the Partnership an acceptance of all of the terms and conditions of this Agreement (including without limitation, the provisions of Section 2.4 and such other documents or instruments as may be required to effect the admission, each in form and substance satisfactory
to the General Partner) and the acknowledgment by such transferee that each of the representations and warranties set forth in Section 3.4 hereof are true and correct with respect to such transferee as of the date of the transfer of the Partnership Interest to such transferee and will continue to be true to the extent required by such representations and warranties.
C. Upon the admission of a Substituted Limited Partner, the General Partner shall amend Exhibit A to reflect the name, address, number of Partnership Units, and Percentage Interest of such Substituted Limited Partner and to eliminate or adjust, if necessary, the name, address and interest of the predecessor of such Substituted Limited Partner.
Section 11.5.
Assignees
If the General Partner, in its sole and absolute discretion, does not consent to the admission of any permitted transferee under Section 11.3 as a Substituted Limited Partner, as described in Section 11.4, such transferee shall be considered an Assignee for purposes of this Agreement. An Assignee shall be entitled to all the rights of an assignee of a limited partnership interest under the Act, including the right to receive distributions from the Partnership and the share of Net Income, Net Losses, gain and loss attributable to the Partnership Units assigned to such transferee, the rights to transfer the Partnership Units provided in this Article 11, the right of Redemption provided in Section 8.6 and the right of exchange for REIT Series A Preferred Shares set forth in Section 16.7, but shall not be deemed to be a Holder of Partnership Units for any other purpose under this Agreement, and shall not be entitled to effect a Consent with respect to such Partnership Units on any matter presented to the Limited Partners for approval (such Consent remaining with the transferor Limited Partner). In the event any such transferee desires to make a further assignment of any such Partnership Units, such transferee shall be subject to all the provisions of this Article 11 to the same extent and in the same manner as any Limited Partner desiring to make an assignment of Partnership Units. Notwithstanding anything contained in this Agreement to the contrary, as a condition to becoming an Assignee, any prospective Assignee must first execute and deliver to the Partnership an acknowledgment that each of the representations and warranties set forth in Section 3.4 hereof are true and correct with respect to such prospective Assignee as of the date of the prospective assignment of the Partnership Interest to such prospective Assignee and will continue to be true to the extent required by such representations or warranties.
Section 11.6.
General Provisions
A. No Limited Partner may withdraw from the Partnership other than as a result of (i) a permitted transfer of all of such Limited Partner’s Partnership Units in accordance with this Article 11 and the transferee(s) of such Units being admitted to the Partnership as a Substituted Limited Partner(s) or (ii) pursuant to the exercise of its right of Redemption of all of such Limited Partner’s Partnership Units under Section 8.6, its right of redemption or exchange of all of such Limited Partner’s Series A Preferred Units under Section 16.7.
B. Any Limited Partner who shall transfer all of such Limited Partner’s Partnership Units in a transfer permitted pursuant to this Article 11 where such transferee was admitted as a Substituted Limited Partner or pursuant to the exercise of its rights of Redemption
of all of such Limited Partner’s Partnership Units under Section 8.6 or its right of redemption, exchange of all of such Limited Partner’s Series A Preferred Units under Section 16.7 shall cease to be a Limited Partner.
C. Transfers pursuant to this Article 11 may only be made on the first day of a fiscal quarter of the Partnership, unless the General Partner otherwise agrees.
D. If any Partnership Interest is transferred, assigned or redeemed during any quarterly segment of the Partnership’s fiscal year in compliance with the provisions of this Article 11 or transferred or redeemed pursuant to Sections 8.6, 16.4, 16.7, 22.4 or 23.4 on any day other than the first day of a Partnership Year, then Net Income, Net Losses, each item thereof and all other items attributable to such Partnership Interest for such fiscal year shall be divided and allocated between the transferor Partner and the transferee Partner by taking into account their varying interests during the fiscal year in accordance with Section 706(d) of the Code or as otherwise specified in this Agreement or as otherwise determined by the General Partner (to the extent consistent with Section 706(d) of the Code), using the interim closing of the books method. Except as otherwise required by Section 706(d) of the Code, solely for purposes of making such allocations, each of such items for the calendar month in which the transfer, assignment or redemption occurs shall be allocated to the Person who is a Partner as of midnight on the last day of said month and none of such items for the calendar month in which a redemption occurs will be allocated to the redeeming Partner. All distributions of Available Cash with respect to which the Partnership Record Date is before the date of such transfer, assignment, exchange or redemption shall be made to the transferor Partner, and all distributions of Available Cash thereafter, in the case of a transfer or assignment other than a redemption, shall be made to the transferee Partner.
E. In addition to any other restrictions on transfer herein contained, including without limitation the provisions of this Article 11 and Section 2.6, in no event may any transfer or assignment of a Partnership Interest by any Partner (including by way of a redemption or exchange for REIT Series A Preferred Shares or any other acquisition of Common Units or Series A Preferred Units, Series G Preferred Units and Series H Preferred Units by the Partnership or the General Partner) be made (i) to any person or entity who lacks the legal right, power or capacity to own a Partnership Interest; (ii) in violation of applicable law; (iii) except with the consent of the General Partner, which may be given or withheld in its sole and absolute discretion, of any component portion of a Partnership Interest, such as the Capital Account, or rights to distributions, separate and apart from all other components of a Partnership Interest; (iv) except with the consent of the General Partner, which may be given or withheld in its sole and absolute discretion, if in the opinion of legal counsel to the Partnership such transfer would cause a termination of the Partnership for federal or state income tax purposes (except as a result of the redemption or exchange for REIT Shares, and a redemption or exchange for Preferred Shares or cash pursuant to Sections 16.4 or 16.7 of all Partnership Units held by all Limited Partners or pursuant to a Termination Transaction expressly permitted under Section 11.2); (v) if in the opinion of counsel to the Partnership such transfer could cause the Partnership to cease to be classified as a partnership for federal or state income tax purposes (except as a result of the redemption or exchange for REIT Shares and a redemption or exchange for Preferred Shares
pursuant to Sections 16.4, 16.7, 22.4 or 23.4 of all Partnership Units held by all Limited Partners); (vi) if such transfer would cause the Partnership to become, with respect to any employee benefit plan subject to Title I of ERISA, a “party-in-interest” (as defined in Section 3(14) of ERISA) or a “disqualified person” (as defined in Section 4975(c) of the Code); (vii) if such transfer would, in the opinion of counsel to the Partnership, cause any portion of the assets of the Partnership to constitute assets of any employee benefit plan pursuant to Department of Labor Regulations Section 2510.2-101; (viii) if such transfer requires the registration of such Partnership Interest or requires the registration of the exchange of such Partnership Interests for any capital stock of the General Partner for which such General Partner Interest may be exchanged pursuant to any applicable federal or state securities laws, (other than pursuant to any applicable registration rights agreement); (ix) if such transfer could be treated as effectuated through an “established securities market” or a “secondary market” (or the substantial equivalent thereof) within the meaning of Section 7704 of the Code or such transfer could cause the Partnership to become a “Publicly Traded Partnership,” as such term is defined in Sections 469(k)(2) or 7704(b) of the Code; (x) if such transfer subjects the Partnership to be regulated under the Investment Company Act of 1940, the Investment Advisors Act of 1940 or the Employee Retirement Income Security Act of 1974, each as amended; (xi) if the transferee or assignee of such Partnership Interest is unable to make the representations set forth in Section 3.4.D or such transfer could otherwise adversely affect the ability of the General Partner to remain qualified as a REIT; or (xii) if in the opinion of legal counsel for the Partnership such transfer could adversely affect the ability of the General Partner to continue to qualify as a REIT or, except with the consent of the General Partner, which may be given or withheld in its sole and absolute discretion, subject the General Partner to any additional taxes under Section 857 or Section 4981 of the Code.
F. The General Partner shall monitor the transfers of interests in the Partnership (including any acquisition of Common Units, Series A Preferred Units, Series G Preferred Units or Series H Preferred Units by the Partnership or the General Partner) to determine (i) if such interests are being traded on an “established securities market” or a “secondary market (or the substantial equivalent thereof)” within the meaning of Section 7704 of the Code, and (ii) whether such transfers of interests would result in the Partnership being unable to qualify for at least one of the “safe harbors” set forth in Regulations Section 1.7704-1 (or such other applicable guidance subsequently published by the IRS setting forth safe harbors under which interests will not be treated as “readily tradable on a secondary market (or the substantial equivalent thereof)” within the meaning of Section 7704 of the Code) including, without limitation, IRS Notice 88-75, to the extent applicable (the “Safe Harbors”). The General Partner shall have authority (but shall not be required to) to take any steps it determines are necessary or appropriate in its sole and absolute discretion to prevent any trading of interests which could cause the Partnership to become a PTP, or any recognition by the Partnership of such transfers, or to insure that at least one of the Safe Harbors is met.
Section 11.7.
Transfer of Pledged Partnership Units
A. Notwithstanding anything to the contrary in this Agreement but subject to Section 11.6 hereof, any or all of the Limited Partnership Interests pledged to the Company, as
agent on behalf of the pledgees, pursuant to the Pledge Agreement may be transferred, without the consent of any other Partner, to any Person designated by the Company in its sole and absolute discretion in connection with the exercise by the Company of its rights and remedies under the Pledge Agreement. Any such transferee shall be admitted as a Substituted Limited Partner, subject to the provisions of Section 11.4 hereof.
B. Each of the Pledgors hereby constitutes and appoints the Company and authorized officers and attorneys-in-fact of the Company, and each of those acting singly, in each case with full power of substitution, as its true and lawful agent and attorney-in-fact, with full power and authority in its name, place and stead to effect any transfer of Partnership Interests pledged pursuant to the Pledge Agreement referred to in Subparagraph A of this Section 11.7. The foregoing power of attorney is hereby declared to be irrevocable and a power coupled with an interest, and it shall survive and not be affected by the subsequent Incapacity of any Pledgor and shall extend to such Pledgor’s heirs, successors, assigns and personal representatives. Each such Pledgor hereby waives any and all defenses which may be available to contest, negate or disaffirm the action of the Company taken in good faith under such power of attorney.
ARTICLE 12.
ADMISSION OF PARTNERS
Section 12.1.
Admission of Successor General Partner
A successor to all of the General Partner’s General Partner Interest pursuant to Section 11.2 hereof who is proposed to be admitted as a successor General Partner shall be admitted to the Partnership as the General Partner, effective upon such transfer. Any such transferee shall carry on the business of the Partnership without dissolution. In each case, the admission shall be subject to the successor General Partner executing and delivering to the Partnership an acceptance of all of the terms and conditions of this Agreement and such other documents or instruments as may be required to effect the admission. In the case of such admission on any day other than the first day of a Partnership Year, all items attributable to the General Partner Interest for such Partnership Year shall be allocated between the transferring General Partner and such successor as provided in Article 11 hereof.
Section 12.2.
Admission of Additional Limited Partners
A. A Person who makes a Capital Contribution to the Partnership in accordance with this Agreement shall be admitted to the Partnership as an Additional Limited Partner only upon furnishing to the General Partner (i) evidence of acceptance in form satisfactory to the General Partner of all of the terms and conditions of this Agreement, including, without limitation, the power of attorney granted in Section 2.4 hereof and (ii) such other documents or instruments as may be required in the discretion of the General Partner in order to effect such Person’s admission as an Additional Limited Partner.
B. Notwithstanding anything to the contrary in this Section 12.2, no Person shall be admitted as an Additional Limited Partner without the consent of the General Partner,
which consent may be given or withheld in the General Partner’s sole and absolute discretion. The admission of any Person as an Additional Limited Partner shall become effective on the date upon which the name of such Person is recorded on the books and records of the Partnership, following the receipt of the Capital Contribution in respect of such Limited Partner, the documents set forth in Paragraph A of this Section 12.2 hereof and the consent of the General Partner to such admission. If any Additional Limited Partner is admitted to the Partnership on any day other than the first day of a Partnership Year, then Net Income, Net Losses, each item thereof and all other items allocable among Partners and Assignees for such Partnership Year shall be allocated among such Limited Partner and all other Partners and Assignees by taking into account their varying interests during the Partnership Year in accordance with Section 706(d) of the Code, using the interim closing books method. Solely for purposes of making such allocations, each of such items for the calendar month in which an admission of an Additional Limited Partner occurs shall be allocated among all the Partners and Assignees, including such Additional Limited Partner, in a reasonable manner determined by the General Partner in its sole discretion.
Section 12.3.
Amendment of Agreement and Certificate of Limited Partnership
For the admission to the Partnership of any Partner, the General Partner shall take all steps necessary and appropriate under the Act to amend the records of the Partnership and, if necessary, to prepare as soon as practical an amendment of this Agreement (including an amendment of Exhibit A) and, if required by law, shall prepare and file an amendment to the Certificate and may for this purpose exercise the power of attorney granted pursuant to Section 2.4 hereof.
ARTICLE 13.
DISSOLUTION AND LIQUIDATION
Section 13.1.
Dissolution
The Partnership shall not be dissolved by the admission of Substituted Limited Partners or Additional Limited Partners or by the admission of a successor General Partner in accordance with the terms of this Agreement. Upon the withdrawal of the General Partner, any successor General Partner (selected as described in Section 13.1.B below) shall continue the business of the Partnership. The Partnership shall dissolve, and its affairs shall be wound up, upon the first to occur of any of the following (“Liquidating Events”):
A. the expiration of its term as provided in Section 2.5 hereof;
B. an event of withdrawal of the General Partner, as defined in the Act, unless, within 90 days after the withdrawal, all of the remaining Partners agree in writing, in their sole and absolute discretion, to continue the business of the Partnership and to the appointment, effective as of the date of withdrawal, of a substitute General Partner;
C. subject to the provisions of Section 7.3.D(1) hereof, an election to dissolve the Partnership made by the General Partner;
D. entry of a decree of judicial dissolution of the Partnership pursuant to the provisions of the Act;
E. the sale of all or substantially all of the assets and properties of the Partnership;
F. the Incapacity of the General Partner, unless a majority in interest of all of the remaining Partners in their sole and absolute discretion agree in writing to continue the business of the Partnership and to the appointment, effective as of a date prior to the date of such Incapacity, of a substitute General Partner; or
G. the Redemption or exchange for REIT Shares or REIT Series A Preferred Shares of all Partnership Units (other than those of the General Partner) pursuant to this Agreement.
Section 13.2.
Winding Up
A. Upon the occurrence of a Liquidating Event, the Partnership shall continue solely for the purposes of winding up its affairs in an orderly manner, liquidating its assets, and satisfying the claims of its creditors and Partners. No Partner shall take any action that is inconsistent with, or not necessary to or appropriate for, the winding up of the Partnership’s business and affairs. The General Partner (or, in the event there is no remaining General Partner, any Person elected by a Majority in Interest of the Limited Partners (the “Liquidator”)) shall be responsible for overseeing the winding up and dissolution of the Partnership and shall take full account of the Partnership’s liabilities and assets and the Partnership property shall be liquidated as promptly as is consistent with obtaining the fair value thereof, and the proceeds therefrom (which may, to the extent determined by the General Partner, include shares of stock of the General Partner) shall be applied and distributed in the following order:
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(1)
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First, to the payment and discharge of all of the Partnership’s debts and liabilities to creditors other than the Partners;
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(2)
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Second, to the payment and discharge of all of the Partnership’s debts and liabilities to the General Partner;
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(3)
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Third, to the payment and discharge of all of the Partnership’s debts and liabilities to the other Partners; and
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(4)
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The balance, if any, to the Partners in accordance with their Capital Account balances, determined after giving effect to all contributions and distributions for all periods, and after taking into account all Capital Account adjustments for the Partnership taxable year during which the liquidation occurs (other than those made as a result of the liquidating distribution set forth in this Section 13.2.A(4)).
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The General Partner shall not receive any additional compensation for any services performed pursuant to this Article 13 other than reimbursement of its expenses as provided in Section 7.4.
B. Notwithstanding the provisions of Section 13.2.A hereof which require liquidation of the assets of the Partnership, but subject to the order of priorities set forth therein, if prior to or upon dissolution of the Partnership the Liquidator determines that an immediate sale of part or all of the Partnership’s assets would be impractical or would cause undue loss to the Partners, the Liquidator may, in its sole and absolute discretion, defer for a reasonable time the liquidation of any assets except those necessary to satisfy liabilities of the Partnership (including to those Partners as creditors) and/or distribute to the Partners, in lieu of cash, as tenants in common and in accordance with the provisions of Section 13.2.A hereof, undivided interests in such Partnership assets as the Liquidator deems not suitable for liquidation. Any such distributions in kind shall be made only if, in the good faith judgment of the Liquidator, such distributions in kind are in the best interest of the Partners, and shall be subject to such conditions relating to the disposition and management of such properties as the Liquidator deems reasonable and equitable and to any agreements governing the operation of such properties at such time. The Liquidator shall determine the fair market value of any property distributed in kind using such reasonable method of valuation as it may adopt.
C. The Partnership shall be terminated when any notes received in connection with any such sale or disposition referenced in Section 13.1.E above, or in connection with the liquidation of the Partnership have been paid and all of the cash or property available for application and distribution under this Agreement have been applied and distributed in accordance with this Agreement.
Section 13.3.
Compliance with Timing Requirements of Regulations
In the event the Partnership is “liquidated” within the meaning of Regulations Section 1.704-1(b)(2)(ii)(g), distributions shall be made pursuant to this Article 13 to the General Partner and Limited Partners who have positive Capital Accounts in compliance with Regulations Section 1.704‑1(b)(2)(ii)(b)(2). If any Partner has a deficit balance in his or her Capital Account (after giving effect to all contributions, distributions and allocations for the taxable years, including the year during which such liquidation occurs), such Partner shall have no obligation to make any contribution to the capital of the Partnership with respect to such deficit, and such deficit shall not be considered a debt owed to the Partnership or to any other Person for any purpose whatsoever, except to the extent otherwise agreed to by such Partner and the General Partner. In the discretion of the Liquidator or the General Partner, a pro rata portion of the distributions that would otherwise be made to the General Partner and Limited Partners pursuant to this Article 13 may be:
A. distributed to a trust established for the benefit of the General Partner and Limited Partners for the purposes of liquidating Partnership assets, collecting amounts owed to the Partnership, and paying any contingent or unforeseen liabilities or obligations of the
Partnership or of the General Partner arising out of or in connection with the Partnership. The assets of any such trust shall be distributed to the General Partner and Limited Partners from time to time, in the reasonable discretion of the Liquidator or the General Partner, in the same proportions and the amount distributed to such trust by the Partnership would otherwise have been distributed to the General Partner and Limited Partners pursuant to this Agreement; or
B. withheld to establish any reserves deemed necessary or appropriate for any contingent or unforeseen liabilities or obligations of the Partnership; and to reflect the unrealized portion of any installment obligations owed to the Partnership;
provided
that
, such withheld amounts shall be distributed to the General Partner and Limited Partners as soon as practicable.
Section 13.4.
Deemed Distribution and Recontribution
Notwithstanding any other provision of this Article 13, in the event the Partnership is liquidated within the meaning of Regulations Section 1.704-1(b)(2)(ii)(g) but no Liquidating Event has occurred, the Partnership’s property shall not be liquidated, the Partnership’s liabilities shall not be paid or discharged, and the Partnership’s affairs shall not be wound up. Instead, the Partnership shall be deemed to have distributed the Partnership property in kind to the General Partner and Limited Partners, who shall be deemed to have assumed and taken such property subject to all Partnership liabilities, all in accordance with their respective Capital Accounts. Immediately thereafter, the General Partner and Limited Partners shall be deemed to have recontributed the Partnership property in kind to the Partnership, which shall be deemed to have assumed and taken such property subject to all such liabilities.
Section 13.5.
Rights of Limited Partners
Except as otherwise provided in this Agreement, each Limited Partner shall look solely to the assets of the Partnership for the return of his Capital Contribution and shall have no right or power to demand or receive property from the General Partner. Except as expressly set forth herein with respect to the rights, priorities and preferences of the Preferred Limited Partners holding any series of Preferred Units, no Limited Partner shall have priority over any other Limited Partner as to the return of his Capital Contributions, distributions or allocations.
Section 13.6.
Notice of Dissolution
In the event a Liquidating Event occurs or an event occurs that would, but for provisions of Section 13.1, result in a dissolution of the Partnership, the General Partner shall, within 30 days thereafter, provide written notice thereof to each of the Partners and to all other parties with whom the Partnership regularly conducts business (as determined in the discretion of the General Partner) and shall publish notice thereof in a newspaper of general circulation in each place in which the Partnership regularly conducts business (as determined in the discretion of the General Partner).
Section 13.7.
Cancellation of Certificate of Limited Partnership
Upon the completion of the liquidation of the Partnership cash and property as provided in Section 13.2 hereof, the Partnership shall be terminated and the Certificate and all qualifications of the Partnership as a foreign limited partnership in jurisdictions other than the State of Delaware shall be canceled and such other actions as may be necessary to terminate the Partnership shall be taken.
Section 13.8.
Reasonable Time for Winding-Up
A reasonable time shall be allowed for the orderly winding-up of the business and affairs of the Partnership and the liquidation of its assets pursuant to Section 13.2 hereof, in order to minimize any losses otherwise attendant upon such winding-up, and the provisions of this Agreement shall remain in effect between the Partners during the period of liquidation.
Section 13.9.
Waiver of Partition
Each Partner hereby waives any right to partition of the Partnership property.
ARTICLE 14.
AMENDMENT OF PARTNERSHIP AGREEMENT; CONSENTS
Section 14.1.
Amendments
A. The actions requiring consent or approval of the Partners or of the Limited Partners pursuant to this Agreement, including Sections 7.3 and 16.5, or otherwise pursuant to applicable law, are subject to the procedures in this Article 14.
B. Amendments to this Agreement requiring the consent or approval of Limited Partners may be proposed by the General Partner or by any Limited Partner. Following such proposal, the General Partner shall submit any proposed amendment to the Partners or of the Limited Partners, as applicable. The General Partner shall seek the written consent or approval of the Partners or of the Limited Partners on the proposed amendment or shall call a meeting to vote thereon and to transact any other business that it may deem appropriate. For purposes of obtaining a written consent, the General Partner may require a response within a reasonable specified time, but not less than 15 days, and failure to respond in such time period shall constitute a consent which is consistent with the General Partner’s recommendation (if so recommended) with respect to the proposal;
provided
, that an action shall become effective at such time as requisite consents are received even if prior to such specified time. The Series A Limited Partners agree not to object to an amendment proposed after December 31, 1999 to one or more of Sections 2.6, 11.3.D, 11.6.E and 11.6.F that is deemed appropriate or necessary by the General Partner in its sole and absolute discretion.
Section 14.2.
Action by the Partners
A. Meetings of the Partners may be called by the General Partner and shall be called upon the receipt by the General Partner of a written request by Common Limited Partners holding 25 percent or more of the Partnership Interests held by Common Limited Partners. The call shall state the nature of the business to be transacted. Notice of any such meeting shall be given to all Partners not less than seven days nor more than 30 days prior to the date of such meeting. Partners may vote in person or by proxy at such meeting.
Whenever the vote of the Percentage Interests of the Partners, or the Consent of the Partners or Consent of the Limited Partners is permitted or required under this Agreement, such vote or Consent may be given at a meeting of Partners or may be given in accordance with the procedure prescribed in Section 14.1 hereof.
B. Any action required or permitted to be taken at a meeting of the Partners may be taken without a meeting if a written consent setting forth the action so taken is signed by the Percentage Interests as is expressly required by this Agreement for the action in question. Such consent may be in one instrument or in several instruments, and shall have the same force and effect as a vote of the Percentage Interests of the Partners (expressly required by this Agreement). Such consent shall be filed with the General Partner. An action so taken shall be deemed to have been taken at a meeting held on the effective date so certified.
C. Each Limited Partner may authorize any Person or Persons to act for him by proxy on all matters in which a Limited Partner is entitled to participate, including waiving notice of any meeting, or voting or participating at a meeting. Every proxy must be signed by the Limited Partner or his attorney-in-fact. No proxy shall be valid after the expiration of 11 months from the date thereof unless otherwise provided in the proxy. Every proxy shall be revocable at the pleasure of the Limited Partner executing it.
D. To the extent the Company is entitled to exercise its rights and remedies under the Pledge Agreement, the Company is hereby authorized to act for each Pledgor with respect to such Pledgor’s Partnership Interests pledged pursuant to the Pledge Agreement by proxy on all matters in which such Pledgor is now or hereafter entitled to participate under this Agreement by reason of such pledged Partnership Interests, including waiving notice of any meeting, or voting or participating at a meeting. Notwithstanding anything to the contrary in Subparagraph C of this Section 14.2, the foregoing proxy is irrevocable and coupled with an interest, shall survive and not be affected by the subsequent Incapacity of any Pledgor and shall extend to such Pledgor’s heirs, successors, assigns and personal representatives and shall be valid until such time as all collateral subject to the Pledge Agreement, if any, is returned to the Pledgors pursuant to the terms of the Pledge Agreement.
E. Each meeting of Partners shall be conducted by the General Partner or such other Person as the General Partner may appoint pursuant to such rules for the conduct of the meeting as the General Partner or such other Person deems appropriate.
F. Except as otherwise herein expressly provided, on matters on which Limited Partners are entitled to vote, each Limited Partner shall have a vote equal to the number of Partnership Units held.
ARTICLE 15.
GENERAL PROVISIONS
Section 15.1.
Addresses and Notice
Any notice, demand, request or report required or permitted to be given or made to a Partner or Assignee under this Agreement shall be in writing and shall be deemed given or made when delivered in person or when sent by certified first class United States mail, nationally recognized overnight delivery service or facsimile transmission to the Partner or Assignee at the address set forth in Exhibit A or such other address as the Partners shall notify the General Partner in writing.
Section 15.2.
Titles and Captions
All article or section titles or captions in this Agreement are for convenience only. They shall not be deemed part of this Agreement and in no way define, limit, extend or describe the scope or intent of any provisions hereof. Except as specifically provided otherwise, references to “Articles” and “Sections” are to Articles and Sections of this Agreement.
Section 15.3.
Pronouns and Plurals
Whenever the context may require, any pronoun used in this Agreement shall include the corresponding masculine, feminine or neuter forms, and the singular form of nouns, pronouns and verbs shall include the plural and vice versa.
Section 15.4.
Further Action
The parties shall execute and deliver all documents, provide all information and take or refrain from taking action as may be necessary or appropriate to achieve the purposes of this Agreement.
Section 15.5.
Binding Effect
This Agreement shall be binding upon and inure to the benefit of the parties hereto and their heirs, executors, administrators, successors, legal representatives and permitted assigns.
Section 15.6.
Creditors
Other than as expressly set forth herein with respect to Indemnitees, none of the provisions of this Agreement shall be for the benefit of, or shall be enforceable by, any creditor of the Partnership.
Section 15.7.
Waiver
No failure or delay by any party to insist upon the strict performance of any covenant, duty, agreement or condition of this Agreement or to exercise any right or remedy consequent upon any breach thereof shall constitute waiver of any such breach or any other covenant, duty, agreement or condition.
Section 15.8.
Counterparts
This Agreement may be executed in counterparts, all of which together shall constitute one agreement binding on all the parties hereto, notwithstanding that all such parties are not signatories to the original or the same counterpart. Each party shall become bound by this Agreement immediately upon affixing its signature hereto.
Section 15.9.
Applicable Law
This Agreement shall be construed in accordance with and governed by the laws of the State of Delaware, without regard to the principles of conflicts of law.
Section 15.10.
Invalidity of Provisions
If any provision of this Agreement is or becomes invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein shall not be affected thereby. The failure of any amendment to this Agreement to be effective as to any particular Limited Partner shall not render it ineffective as to any other Limited Partner.
Section 15.11.
Limitation to Preserve REIT Status
To the extent that any amount paid or credited to the General Partner or its officers, directors, employees or agents pursuant to Sections 7.4 or 7.7 would constitute gross income to the General Partner for purposes of Sections 856(c)(2) or 856(c)(3) of the Code (a “General Partner Payment”) then, notwithstanding any other provision of this Agreement, the amount of such General Partner Payments for any fiscal year shall not exceed the lesser of:
A. an amount equal to the excess, if any, of (a) 4.17% of the General Partner’s total gross income (but not including the amount of any General Partner Payments) for the fiscal year which is described in subsections (A) through (H) of Section 856(c)(2) of the Code over (b) the amount of gross income (within the meaning of Section 856(c)(2) of the Code) derived by the General Partner from sources other than those described in subsections (A) through (H) of Section 856(c)(2) of the Code (but not including the amount of any General Partner Payments); or
B. an amount equal to the excess, if any, of (a) 25% of the General Partner’s total gross income (but not including the amount of any General Partner Payments) for the fiscal year which is described in subsections (A) through (I) of Section 856(c)(3) of the Code over (b)
the amount of gross income (within the meaning of Section 856(c)(3) of the Code) derived by the General Partner from sources other than those described in subsections (A) through (I) of Section 856(c)(3) of the Code (but not including the amount of any General Partner Payments);
provided
,
however
, that General Partner Payments in excess of the amounts set forth in subparagraphs (i) and (ii) above may be made if the General Partner, as a condition precedent, obtains an opinion of tax counsel that the receipt of such excess amounts would not adversely affect the General Partner’s ability to qualify as a REIT. To the extent General Partner Payments may not be made in a year due to the foregoing limitations, such General Partner Payments shall carry over and be treated as arising in the following year,
provided
,
however
, that such amounts shall not carry over for more than five years, and if not paid within such five year period, shall expire;
provided
further
, that (i) as General Partner Payments are made, such payments shall be applied first to carry over amounts outstanding, if any, and (ii) with respect to carry over amounts for more than one Partnership Year, such payments shall be applied to the earliest Partnership Year first.
Section 15.12.
Entire Agreement
This Agreement (together with the agreements listed on Exhibit F hereto as to rights and obligations in respect of the Units held by the Limited Partners who are parties thereto, or their permitted transferees) contains the entire understanding and agreement among the Partners with respect to the subject matter hereof and supersedes any other prior written or oral understandings or agreements among them with respect thereto.
Section 15.13.
No Rights as Stockholders
Nothing contained in this Agreement shall be construed as conferring upon the Holders of Partnership Units any rights whatsoever as stockholders of the General Partner, including without limitation any right to receive dividends or other distributions made to stockholders of the General Partner or to vote or to consent or to receive notice as stockholders in respect of any meeting of stockholders for the election of directors of the General Partner or any other matter.
ARTICLE 16.
SERIES A PREFERRED UNITS
Section 16.1.
Designation and Number
A series of Partnership Units in the Partnership designated as the 7.45% Series A Cumulative Redeemable Preferred Units (the “
Series A Preferred Units
”) is hereby established. The number of Series A Preferred Units shall be 1,500,000.
Section 16.2.
Distributions
A.
Payment of Distributions
. Subject to the rights of Holders of Parity Preferred Units as to the payment of distributions, pursuant to Section 5.1 hereof, Holders of Series A Preferred Units will be entitled to receive, when, as and if declared by the Partnership acting through the General Partner, out of Available Cash, cumulative preferential cash distributions at the rate per annum of (x) 7.45% at all times on and after March 5, 2004 and (y) 8.075% at all times before and excluding March 5, 2004, in each case of the original Capital Contribution per Series A Preferred Unit. Such distributions shall be cumulative, shall accrue from the original date of issuance and will be payable (A) quarterly (such quarterly periods for purposes of payment and accrual will be the quarterly periods ending on the dates specified in this sentence and not calendar year quarters) in arrears, on or before February 15, May 15, August 15 and November 15 of each year and, (B), in the event of (i) an exchange of Series A Preferred Units into REIT Series A Preferred Shares, or (ii) a redemption of Series A Preferred Units, on the exchange date or redemption date, as applicable (each a “
Preferred Unit Distribution Payment Date
”), commencing (i) in the case of Series A Preferred Units originally issued on February 6, 1998, on May 15, 1998 and (ii) in the case of all other Series A Preferred Units, on the first of such payment dates to occur following their original date of issuance. The amount of the distribution payable for any period will be computed on the basis of a 360-day year of twelve 30-day months and for any period shorter than a full quarterly period for which distributions are computed, the amount of the distribution payable will be computed on the basis of the actual number of days elapsed in such a 30-day month. If any date on which distributions are to be made on the Series A Preferred Units is not a Business Day (as defined herein), then payment of the distribution to be made on such date will be made on the next succeeding day that is a Business Day (and without any interest or other payment in respect of any such delay) except that, if such Business Day is in the next succeeding calendar year, such payment shall be made on the immediately preceding Business Day, in each case with the same force and effect as if made on such date. Distributions on the Series A Preferred Units will be made to the Holders of record of the Series A Preferred Units on the relevant record dates, which will be fifteen (15) days prior to the relevant Preferred Unit Distribution Payment Date (the “
Preferred Unit Partnership Record Date
”).
B.
Distributions Cumulative
. Notwithstanding the foregoing, distributions on the Series A Preferred Units will accrue whether or not the terms and provisions of any agreement of the Partnership at any time prohibit the current payment of distributions, whether or not the Partnership has earnings, whether or not there are funds legally available for the payment of such of such distributions and whether or not such distributions are authorized. Accrued but unpaid distributions on the Series A Preferred Units will accumulate as of the Preferred Unit Distribution Payment Date on which they first become payable. Accumulated and unpaid distributions will not bear interest.
C.
Priority as to Distributions
. (i) So long as any Series A Preferred Units are outstanding, no distribution of cash or other property shall be authorized, declared, paid or set apart for payment on or with respect to any Junior Units, nor shall any cash or other property (other than capital stock of the General Partner which corresponds to the class or series of the
Partnership Interests being acquired) be set aside for or applied to the purchase, redemption or other acquisition for consideration of any Series A Preferred Units, any Parity Preferred Units (including the Series G Preferred Units and the Series H Preferred Units) or any Junior Units, unless, in each case, all distributions accumulated on all Series A Preferred Units and all classes and series of outstanding Parity Preferred Units as to payment of distributions have been paid in full. The foregoing sentence will not prohibit (a) distributions payable solely in Junior Units, (b) the exchange or conversion of Junior Units or Parity Preferred Units (including the Series G Preferred Units and the Series H Preferred Units) into Junior Units, or (c) the redemption of Partnership Interests corresponding to REIT Series A Preferred Shares, Parity Preferred Stock with respect to distributions or Junior Stock to be purchased by the General Partner pursuant to the Charter with respect to the General Partner’s common stock and comparable charter provisions with respect to other classes or series of capital stock of the General Partner to preserve the General Partner’s status as a real estate investment trust, provided that such redemption shall be upon the same terms as the corresponding purchase pursuant to Article IV.E. of the Charter or such other comparable provisions.
(ii) So long as distributions have not been paid in full (or a sum sufficient for such full payment is not irrevocably so set apart) upon the Series A Preferred Units, the Series G Preferred Units and the Series H Preferred Units, all distributions authorized and declared on the Series A Preferred Units and all classes or series of outstanding Parity Preferred Units with respect to distributions shall be authorized and declared so that the amount of distributions authorized and declared per Series A Preferred Unit and such other classes or series of Parity Preferred Units shall in all cases bear to each other the same ratio that accrued distributions per Series A Preferred Unit and such other classes or series of Parity Preferred Units (which shall not include any accumulation in respect of unpaid distributions for prior distribution periods if such class or series of Parity Preferred Units do not have cumulative distribution rights) bear to each other.
(iii) Notwithstanding anything to the contrary set forth herein, distributions on Partnership Interests held by either (a) the General Partner or (b) any other Holder of Partnership Interest in the Partnership, in each case ranking junior to or on parity with the Series A Preferred Units, the Series G Preferred Units and the Series H Preferred Units may be made, without preserving the priority of distributions described in Sections 16.2.C(i) and (ii), but only to the extent such distributions are required to preserve the real estate investment trust status of the General Partner and in the case of any Holder other than the General Partner only to the extent required by the Partnership Agreement.
D.
No Further Rights
. Holders of Series A Preferred Units shall not be entitled to any distributions, whether payable in cash, other property or otherwise, in excess of the full cumulative distributions described herein.
Section 16.3.
Liquidation Proceeds
A. Upon voluntary or involuntary liquidation, dissolution or winding-up of the Partnership, distributions on the Series A Preferred Units shall be made in accordance with Article 13 of the Partnership Agreement.
B.
Notice
. Written notice of any such voluntary or involuntary liquidation, dissolution or winding-up of the Partnership, stating the payment date or dates when, and the place or places where, the amounts distributable in such circumstances shall be payable, shall be given by (i) fax and (ii) by first class mail, postage pre-paid, not less than 30 and not more that 60 days prior to the payment date stated therein, to each record Holder of the Series A Preferred Units at the respective addresses of such Holders as the same shall appear on the transfer records of the Partnership.
C.
No Further Rights
. After payment of the full amount of the liquidating distributions to which they are entitled, the Holders of Series A Preferred Units will have no right or claim to any of the remaining assets of the Partnership.
D.
Consolidation, Merger or Certain Other Transactions
. The consolidation or merger or other business combination of the Partnership with or into any corporation, trust or other entity (or of any corporation, trust or other entity with or into the Partnership) shall not be deemed to constitute a liquidation, dissolution or winding-up of the Partnership.
Section 16.4.
Redemption
A.
Right of Optional Redemption
. The Series A Preferred Units may not be redeemed prior to September 30, 2009. On or after such date, the Partnership shall have the right to redeem the Series A Preferred Units, in whole or in part, at any time or from time to time, upon not less than 30 nor more than 60 days’ written notice, at a redemption price, payable in cash, equal to the Capital Account balance of the Holder of Series A Preferred Units (the “
Redemption Price
”);
provided
,
however
, that no redemption pursuant to this Section 16.4 will be permitted if the Redemption Price does not equal or exceed the original Capital Contribution of such Holder plus the cumulative Priority Return to the redemption date to the extent not previously distributed. If fewer than all of the outstanding Series A Preferred Units are to be redeemed, the Series A Preferred Units to be redeemed shall be selected
pro rata
(as nearly as practicable without creating fractional units).
B.
Limitation on Redemption
. (i) The Redemption Price of the Series A Preferred Units (other than the portion thereof consisting of accumulated but unpaid distributions) will be payable solely out of the sale proceeds of capital stock of the General Partner, which will be contributed by the General Partner to the Partnership as additional capital contribution, or out of the sale of limited partner interests in the Partnership and from no other source. For purposes of the preceding sentence, “capital stock” means any equity securities (including Common Stock and Preferred Stock (as such terms are defined in the Charter)), shares, participation or other ownership interests (however designated) and any rights (other than debt securities convertible into or exchangeable for equity securities) or options to purchase any of the foregoing.
(ii) The Partnership may not redeem fewer than all of the outstanding Series A Preferred Units unless all accumulated and unpaid distributions have been paid on all Series A Preferred Units for all quarterly distribution periods terminating on or prior to the date of redemption.
C.
Redemption at the Option of the Series A Preferred Limited Partners
. Notwithstanding any provision herein to the contrary but expressly subject to the limitations set forth in this Section 16.4.C., so long as any Series A Preferred Units remain outstanding, in the event of the occurrence of a Covered Transaction (defined below), the Partnership shall offer to redeem, on the date such Covered Transaction is completed or occurs, all of the Series A Preferred Units outstanding at the Redemption Price, payable in cash, provided, however, that the Company shall only be obligated to effect such redemption if the redemption of the Series A Preferred Units was elected in writing by the holders of not less than a majority of the then outstanding Series A Preferred Units in accordance with this Section 16.4.C. The payment of any portion of the Redemption Price shall be subject to the restrictions or limitations imposed upon such payment by applicable law or otherwise under this Agreement or the terms applicable to any Parity Preferred Units. The Partnership shall give written notice of a Covered Transaction to each of the respective holders of record of the Series A Preferred Units, at their respective addresses as they appear on the transfer records of the Partnership, by the earlier of (i) not less than thirty (30) days prior to the completion or occurrence of a Covered Transaction, if such completion or occurrence is known, or (ii) as soon as practicable after the completion or occurrence of a Covered Transaction. Such notice shall not set forth any non-public information concerning such Covered Transaction. Each of the holders of record of the Series A Preferred Units shall have until 5:00 p.m. (PST) on the fifteenth (15
th
) day following receipt of such notice from the Partnership, to give the Partnership notice of such holder’s election that the Series A Preferred Units be redeemed. Notwithstanding any provision herein to the contrary, with respect to a Covered Transaction that arises under clause (c) of the definition of Covered Transaction set forth below, in the event that the Company so fails to qualify as a real estate investment trust for any reason other than an affirmative election by the Company not to qualify, (a) the Partnership shall give notice of the occurrence of a Covered Transaction to each of the holders of record of the Series A Preferred Units within 15 days after discovery of such failure to qualify, (b) each of the holders of record of the Series A Preferred Units shall have until 5:00 p.m. (PST) on the fifteenth (15
th
) day following receipt of such notice from the Partnership, to give the Partnership notice of such holder’s election that the Series A Preferred Units be redeemed and (c) if the holders of not less than a majority of the then outstanding Series A Preferred Units have elected to have the Series A Preferred Units redeemed, the Series A Preferred Units shall be redeemed on a date not later than 45 days following the date of discovery of the Company’s failure to qualify. For purposes of this Section 16.4.C, the term “
Covered Transaction
” shall mean (a) the Company’s completion of a “Rule 13e-3 transaction” (as defined in Rule 13e-3 under the Securities Exchange Act of 1934, as amended (the “
Exchange Act
”)) in which, as a result of such
transaction, the Company’s common stock is no longer registered under Section 12 of the Exchange Act, except that this clause (a) shall not apply to any involuntary delisting of the Company’s common stock from the New York Stock Exchange or any national securities exchange (as defined in the Exchange Act), (b) the completion of any transaction or series of transactions that would result in a Reorganization Event (defined below) of the Company or the Partnership or (c) the Company’s failure (or election not) to qualify as a real estate investment trust as defined in Section 856 (or any successor section) of the Internal Revenue Code of 1986, as amended.
For purposes of this Section 16.4.C, the term “Reorganization Event” shall mean (x) any sale or other disposition of all or substantially all of the assets of the Partnership or the Company, as the case may be, to an entity that is not an Affiliate of the Company; or (y) any consolidation, amalgamation, merger, business combination, share exchange, reorganization or similar transaction involving the Partnership or the Company, as the case may be, pursuant to which the Partners of the Partnership or the stockholders of the Company, as the case may be, immediately prior to the consummation of such transaction will own less than a majority of the equity interests in the entity surviving such transaction;
provided
,
however
, a Reorganization Event shall not include any transaction contemplated by clauses (x) or (y) of this definition if the surviving entity has unsecured debt outstanding which is rated at least the lowest credit rating level established as investment grade by at least two of Standard & Poor’s, Moody’s Investor Service and Fitch Ratings (it being understood that as of the date of this Agreement the lowest investment grade rating of Standard & Poor’s is BBB-, the lowest investment grade rating of Moody’s is Baa3 and the lowest investment grade rating of Fitch Ratings is BBB-) and such rating has been reaffirmed in light of the contemplated transaction.
D.
Procedures for Redemption
. (i) Notice of redemption will be (i) faxed, and (ii) mailed by the Partnership, by certified mail, postage prepaid, not less than 30 nor more than 60 days prior to the redemption date, addressed to the respective Holders of record of the Series A Preferred Units at their respective addresses as they appear on the records of the Partnership. No failure to give or defect in such notice shall affect the validity of the proceedings for the redemption of any Series A Preferred Units except as to the Holder to whom such notice was defective or not given. In addition to any information required by law, each such notice shall state: (a) the redemption date, (b) the Redemption Price, (c) the aggregate number of Series A Preferred Units to be redeemed and if fewer than all of the outstanding Series A Preferred Units are to be redeemed, the number of Series A Preferred Units to be redeemed held by such Holder, which number shall equal such Holder’s pro rata share (based on the percentage of the aggregate number of outstanding Series A Preferred Units that the total number of Series A Preferred Units held by such Holder represents) of the aggregate number of Series A Preferred Units to be redeemed, (d) the place or places where such Series A Preferred Units are to be surrendered for payment of the Redemption Price, (e) that distributions on the Series A Preferred Units to be redeemed will cease to accumulate on such redemption date and (f) that payment of the Redemption Price will be made upon presentation and surrender of such Series A Preferred Units.
(ii) If the Partnership gives a notice of redemption in respect of Series A Preferred Units (which notice will be irrevocable) then, by 12:00 noon, New York City time, on the redemption date, the Partnership will deposit irrevocably in trust for the benefit of the Series A Preferred Units being redeemed funds sufficient to pay the applicable Redemption Price and will give irrevocable instructions and authority to pay such Redemption Price to the Holders of the Series A Preferred Units upon surrender of the Series A Preferred Units by such Holders at the place designated in the notice of redemption. On and after the date of redemption, distributions will cease to accumulate on the Series A Preferred Units or portions thereof called for redemption, unless the Partnership defaults in the payment thereof. If any date fixed for redemption of Series A Preferred Units is not a Business Day, then payment of the Redemption Price payable on such date will be made on the next succeeding day that is a Business Day (and without any interest or other payment in respect of any such delay) except that, if such Business Day falls in the next calendar year, such payment will be made on the immediately preceding Business Day, in each case with the same force and effect as if made on such date fixed for redemption. If payment of the Redemption Price is improperly withheld or refused and not paid by the Partnership, distributions on such Series A Preferred Units will continue to accumulate from the original redemption date to the date of payment, in which case the actual payment date will be considered the date fixed for redemption for purposes of calculating the applicable Redemption Price.
Section 16.5.
Voting Rights
A.
General
. Holders of the Series A Preferred Units will not have any voting rights or right to consent to any matter requiring the consent or approval of the Limited Partners, except as set forth below and in Section 7.3.F.
B.
Certain Voting Rights
. So long as any Series A Preferred Units remains outstanding, the Partnership shall not, without the affirmative vote of the Holders of at least two-thirds of the Series A Preferred Units outstanding at the time (i) authorize or create, or increase the authorized or issued amount of, any class or series of Partnership Interests ranking prior to the Series A Preferred Units with respect to payment of distributions or rights upon liquidation, dissolution or winding-up or reclassify any Partnership Interests of the Partnership into any such Partnership Interest, or create, authorize or issue any obligations or security convertible into or evidencing the right to purchase any such Partnership Interests, (ii) authorize or create, or increase the authorized or issued amount of any Parity Preferred Units or reclassify any Partnership Interest of the Partnership into any such Partnership Interest or create, authorize or issue any obligations or security convertible into or evidencing the right to purchase any such Partnership Interests but only to the extent such Parity Preferred Units are issued to an affiliate of the Partnership, other than the General Partner to the extent the issuance of such interests was to allow the General Partner to issue corresponding preferred stock to persons who are not affiliates of the Partnership or (iii) either consolidate, merge into or with, or convey, transfer or lease its assets substantially as an entirety to, any corporation or other entity or amend, alter or repeal the provisions of the Partnership Agreement (including, without limitation, this Article 16), whether by merger, consolidation or otherwise, in each case in a manner that would materially and adversely affect the powers, special rights, preferences, privileges or voting power of the Series
A Preferred Units or the Holders thereof;
provided
,
however
, that with respect to the occurrence of any event set forth in (iii) above, so long as (a) the Partnership is the surviving entity and the Series A Preferred Units remain outstanding with the terms thereof unchanged, or (b) the resulting, surviving or transferee entity is a partnership, limited liability company or other pass-through entity organized under the laws of any state and substitutes the Series A Preferred Units for other interests in such entity having substantially the same terms and rights as the Series A Preferred Units, including with respect to distributions, voting rights and rights upon liquidation, dissolution or winding-up, then the occurrence of any such event shall not be deemed to materially and adversely affect such rights, privileges or voting powers of the Holders of the Series A Preferred Units; and
provided
further
, that any increase in the amount of Partnership Interests or the creation or issuance of any other class or series of Partnership Interests, in each case ranking (a) junior to the Series A Preferred Units with respect to payment of distributions and the distribution of assets upon liquidation, dissolution or winding-up, or (b) on a parity to the Series A Preferred Units with respect to payment of distributions and the distribution of assets upon liquidation, dissolution or winding-up to the extent such Partnership Interest are not issued to an affiliate of the Partnership, other than the General Partner to the extent the issuance of such interests was to allow the General Partner to issue corresponding preferred stock to persons who are not affiliates of the Partnership, shall not be deemed to materially and adversely affect such rights, preferences, privileges or voting powers.
Section 16.6.
Transfer Restrictions
The Series A Preferred Units shall be subject to the provisions of Article 11 hereof;
provided
,
however
, that the Series A Preferred Units shall not be subject to the right of first refusal of the General Partner as described in Section 11.3 hereof and any Affiliate of the Series A Contributor to whom the Series A Preferred Units are assigned (in whole or in part) in accordance with this Agreement (other than the right of first refusal) shall be admitted to the Partnership as a Substitute Limited Partner. No transfer of Series A Preferred Units is permitted, without the consent of the General Partner which consent may be given or withheld in its sole and absolute discretion, if such transfer would result in more than four partners holding all outstanding Series A Preferred Units within the meaning of Treasury Regulation Section 1.7704-1(h)(3)(i);
provided
,
however
, that the General Partner’s consent may not be unreasonably withheld if (a) such transfer would not result in more than ten partners holding all outstanding Series A Preferred Units within the meaning of Treasury Regulation Section 1.7704-1(h)(3)(i) and (b) the General Partner is relying on a provision other than Treasury Regulation Section 1.7704-1(h) to avoid classification of Operating Partnership as a “publicly traded partnership” within the meaning of Code Section 7704 (a “PTP”). In addition, no transfer may be made to any person if such transfer would cause the exchange of the Series A Preferred Units for REIT Series A Preferred Shares, as provided herein, to be required to be registered under the Securities Act of 1933, as amended, or any state securities laws.
Section 16.7.
Exchange Rights
A.
Right to Exchange
. (i) Series A Preferred Units will be exchangeable in whole but not in part unless expressly otherwise provided herein at anytime on or after
September 30, 2015, at the option of 51% of the Holders of all outstanding Series A Preferred Units, for authorized but previously unissued REIT Series A Preferred Shares at an exchange rate of one REIT Series A Preferred Share from the General Partner for one Series A Preferred Unit, subject to adjustment as described below (the “Exchange Price”),
provided
that the Series A Preferred Units will become exchangeable at any time, in whole but not in part unless expressly otherwise provided herein, at the option of 51% of the Holders of all outstanding Series A Preferred Units for REIT Series A Preferred Shares if (y) at any time full distributions shall not have been timely made on any Series A Preferred Unit with respect to six (6) prior quarterly distribution periods, whether or not consecutive,
provided
,
however
, that a distribution in respect of Series A Preferred Units shall be considered timely made if made within two (2) Business Days after the applicable Preferred Unit Distribution Payment Date if at the time of such late payment there shall not be any prior quarterly distribution periods in respect of which full distributions were not timely made or (z) upon receipt by a Holder or Holders of Series A Preferred Units of (A) notice from the General Partner that the General Partner or a Subsidiary of the General Partner has taken the position that the Partnership is, or upon the consummation of an identified event in the immediate future will be, a PTP and (B) an opinion rendered by outside nationally recognized independent counsel familiar with such matters addressed to a Holder or Holders of Series A Preferred Units, that the Partnership is or likely is, or upon the occurrence of a defined event in the immediate future will be or likely will be, a PTP. In addition, the Series A Preferred Units may be exchanged for REIT Series A Preferred Shares, in whole but not in part unless expressly otherwise provided herein, at the option of 51% of the Holders of all outstanding Series A Preferred Units prior to September 30, 2015 and after February 6, 2001 if such Holders of a Series A Preferred Units shall deliver to the General Partner either (i) a private letter ruling addressed to such Holder of Series A Preferred Units or (ii) an opinion of independent counsel reasonably acceptable to the General Partner based on the enactment of temporary or final Treasury Regulations or the publication of a Revenue Ruling, in either case to the effect that an exchange of the Series A Preferred Units at such earlier time would not cause the Series A Preferred Units to be considered “stock and securities” within the meaning of section 351(e) of the Code for purposes of determining whether the Holder of the Series A Preferred Units is an “investment company” under section 721(b) of the Code if an exchange is permitted at such earlier date. Furthermore, the Series A Preferred Units, if the Series A Contributor so determines, may be exchanged in whole but not in part (regardless of whether held by the Series A Contributor) for REIT Series A Preferred Shares (but only if the exchange in whole may be accomplished consistently with the ownership limitations set forth under the Series A Articles Supplementary (as defined herein), taking into account exceptions thereto) if at any time (i) the Partnership takes the position that assets and income of the Partnership are such as would not permit the Partnership to satisfy the income and assets tests of Section 856 of the Code if the Partnership were a real estate investment trust within the meaning of the Code or (ii) any Holder of the Series A Preferred Units shall deliver to the Partnership and the Company an opinion of independent counsel reasonably acceptable to the Company to the effect that the assets and income of the Partnership are such as would not permit the Partnership to satisfy the income and assets tests of Section 856 of the Code if the Partnership were a real estate investment trust within the meaning of the Code.
(ii) Notwithstanding anything to the contrary set forth in Section 16.7.A(i), if an Exchange Notice (as defined herein) has been delivered to the General Partner, then the General Partner may, at its option, within ten (10) Business Days after receipt of the Exchange Notice, elect to cause the Partnership to redeem all or a portion of the outstanding Series A Preferred Units for cash in an amount equal to the original Capital Contribution per Series A Preferred Unit and all accrued and unpaid distributions thereon to the date of redemption. If the General Partner elects to redeem fewer than all of the outstanding Series A Preferred Units, the number of Series A Preferred Units held by each Holder to be redeemed shall equal such Holder’s pro rata share (based on the percentage of the aggregate number of outstanding Series A Preferred Units that the total number of Series A Preferred Units held by such Holder represents) of the aggregate number of Series A Preferred Units being redeemed.
(iii) In the event an exchange of all Series A Preferred Units pursuant to Section 16.7.A would violate the provisions on ownership limitation of the General Partner set forth in Section 7 of the Articles Supplementary to the Charter with respect to REIT Series A Preferred Shares (the “Series A Articles Supplementary”), each Holder of Series A Preferred Units shall be entitled to exchange, pursuant to the provisions of Section 16.7.B, a number of Series A Preferred Units which would comply with the provisions on the ownership limitation of the General Partner set forth in such Section 7 of the Series A Articles Supplementary, with respect to such Holder, and any Series A Preferred Units not so exchanged (the “Excess Units”) shall be redeemed by the Partnership for cash in an amount equal to the original Capital Contribution per Excess Unit, plus any accrued and unpaid distributions thereon to the date of redemption subject to any restriction thereon contained in any debt instrument or agreement of the Partnership. In the event an exchange would result in Excess Units, as a condition to such exchange, each Holder of such units agrees to provide representations and covenants reasonably requested by the General Partner relating to (i) the widely held nature of the interests in such Holder, sufficient to assure the General Partner that the Holder’s ownership of stock of the General Partner (without regard to the limits described above) will not cause any individual to own in excess of 6.2% of the stock of the General Partner; and (ii) to the extent such Holder can so represent and covenant without obtaining information from its owners (other than one or more direct or indirect parent corporations, limited liability companies or partnerships and not the holders of any interests in any such parent), the Holder’s ownership of tenants of the Partnership and its affiliates. For purposes of determining the number of Excess Units under this Section 16.7.A(iii), the “Beneficial Ownership Limit” and “Constructive Ownership Limit” set forth in the Series A Articles Supplementary shall be deemed to be 0.8 percentage points less than the limits set forth in the Series A Articles Supplementary. To the extent the General Partner would not be able to pay the cash set forth above in exchange for the Excess Units, and to the extent consistent with the Charter, the General Partner agrees that it will grant to the Holders of the Series A Preferred Units exceptions to the Beneficial Ownership Limit and Constructive Ownership Limit set forth in the Series A Articles Supplementary sufficient to allow such Holders to exchange all of their Series A Preferred Units for REIT Series A Preferred Stock, provided such Holders furnish to the General Partner representations acceptable to the General Partner in its sole and absolute discretion which assure the General Partner that such exceptions will not jeopardize the General Partner’s tax status as a REIT for purposes of federal and applicable state law. Notwithstanding any provision of this Agreement to the contrary, no Series
A Limited Partner shall be entitled to effect an exchange of Series A Preferred Units for REIT Series A Preferred Shares to the extent that ownership or right to acquire such shares would cause the Partner or any other Person or, in the opinion of counsel selected by the General Partner, may cause the Partner or any other Person, to violate the restrictions on ownership and transfer of REIT Series A Preferred Shares set forth in the Charter. To the extent any such attempted exchange for REIT Series A Preferred Shares would be in violation of the previous sentence, it shall be
void ab initio
and such Series A Limited Partner shall not acquire any rights or economic interest in the REIT Series A Preferred Shares otherwise issuable upon such exchange.
(iv) The redemption of Series A Preferred Units described in Section 16.7.A(ii) and (iii) shall be subject to the provisions of Section 16.4.B(i) and Section 16.4.D(ii);
provided
,
however
, that the term “Redemption Price” in such Sections 16.4.B(i) and 16.4.D(ii) shall be read to mean the original Capital Contribution per Series A Preferred Unit being redeemed as set forth on Exhibit A plus all accrued and unpaid distributions to the redemption date.
B.
Procedure for Exchange and/or Redemption of Series A Preferred Units
.
(i) Any exchange shall be exercised pursuant to a notice of exchange (the “
Exchange Notice
”) delivered to the General Partner by the Partners representing at least 51% of the outstanding Series A Preferred Units (or by Series A Contributor in the case of an exchange pursuant to the last sentence of Section 16.7.A.(i) hereof) by (a) fax and (b) by certified mail postage prepaid. The General Partner may effect any exchange of Series A Preferred Units, or exercise its option to cause the Partnership to redeem any portion of the Series A Preferred Units for cash pursuant to Section 16.7.A(ii) or redeem Excess Units pursuant to Section 16.7.A(iii), by delivering to each Holder of record of Series A Preferred Units, within ten (10) Business Days following receipt of the Exchange Notice, (a) if the General Partner elects to cause the Partnership to acquire any of the Series A Preferred Units then outstanding, (1) certificates representing the Series A Preferred Shares being issued in exchange for the Series A Preferred Units of such Holder being exchanged and (2) a written notice (a “
Redemption Notice
”) stating (A) the redemption date, which may be the date of such Redemption Notice or any other date which is not later than sixty (60) days following the receipt of the Exchange Notice, (B) the redemption price, (C) the place or places where the Series A Preferred Units are to be surrendered and (D) that distributions on the Series A Preferred Units will cease to accumulate on such redemption date, or (b) if the General Partner elects to cause the Partnership to redeem all of the Series A Preferred Units then outstanding in exchange for cash, a Redemption Notice. Series A Preferred Units which are redeemed shall be deemed canceled (and any corresponding Partnership Interest represented thereby deemed terminated) on the redemption date. Holders of Series A Preferred Units shall deliver any canceled certificates representing Series A Preferred Units which have been exchanged or redeemed to the office of General Partner (which currently is located at 12200 West Olympic Boulevard, Suite 200, Los Angeles, California 90064) within ten (10) Business Days of the exchange or redemption with respect thereto. Notwithstanding anything to the contrary contained herein, any and all Series A Preferred Units to be exchanged for REIT Series A Preferred Stock pursuant to this Section 16.7 shall be so exchanged in a single
transaction at one time. As a condition to exchange, the General Partner may require the Holders of Series A Preferred Units to make such representations as may be reasonably necessary for the General Partner to establish that the issuance of REIT Series A Preferred Shares pursuant to the exchange shall not be required to be registered under the Securities Act or any state securities laws. Any Series A Preferred Shares issued pursuant to this Section 16.7 shall be delivered as shares which are duly authorized, validly issued, fully paid and nonassessable, free of any pledge, lien, encumbrance or restriction other than those provided in the Charter, the By-Laws of the General Partner, the Securities Act and relevant state securities or blue sky laws.
The certificates representing the REIT Series A Preferred Shares issued upon exchange of the Series A Preferred Units shall contain the following legend:
THE SHARES REPRESENTED BY THIS CERTIFICATE MAY NOT BE TRANSFERRED, SOLD, ASSIGNED, PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF EXCEPT (A) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”) OR (B) IF THE CORPORATION HAS BEEN FURNISHED WITH A SATISFACTORY OPINION OF COUNSEL FOR THE HOLDER OF THE SHARES REPRESENTED HEREBY, OR OTHER EVIDENCE SATISFACTORY TO THE CORPORATION, THAT SUCH TRANSFER, SALE, ASSIGNMENT, PLEDGE, HYPOTHECATION OR OTHER DISPOSITION IS EXEMPT FROM THE PROVISIONS OF SECTION 5 OF THE ACT AND THE RULES AND REGULATIONS THEREUNDER.
(ii) In the event of an exchange of Series A Preferred Units for REIT Series A Preferred Shares, an amount equal to the accrued and unpaid distributions to the date of exchange on any Series A Preferred Units tendered for exchange shall (i) accrue on the REIT Series A Preferred Shares into which such Series A Preferred Units are exchanged, and (ii) continue to accrue on such Series A Preferred Units, which shall remain outstanding following such exchange, with the General Partner as the Holder of such Series A Preferred Units. Notwithstanding anything to the contrary set forth herein, in no event shall a Holder of a Series A Preferred Unit that was validly exchanged for REIT Series A Preferred Shares pursuant to this section (other than the General Partner now holding such Series A Preferred Unit), receive a distribution out of Available Cash of the Partnership, if such Holder, after exchange, is entitled to receive a distribution out of Available Cash with respect to the REIT Series A Preferred Shares for which such Series A Preferred Unit was exchanged or redeemed. Further for purposes of the foregoing, in the event of an exchange of Series A Preferred Units for REIT Shares, if the accrued and unpaid distributions per Series A Preferred Unit is not the same for each Series A Preferred Unit, the accrued and unpaid distributions per Series A Preferred Unit for each such Series A Preferred Unit shall be equal to the greatest amount of such accrued and unpaid distributions per Series A Preferred Unit on any such unit.
(iii) Fractional REIT Series A Preferred Shares are not to be issued upon exchange but, in lieu thereof, the General Partner will pay a cash adjustment based upon the fair market value of the REIT Series A Preferred Shares on the day prior to the exchange date as determined in good faith by the Board of Directors of the General Partner.
C.
Adjustment of Exchange Price
. In case the General Partner shall be a party to any transaction (including, without limitation, a merger, consolidation, statutory share exchange, tender offer for all or substantially all of the General Partner’s capital stock or sale of all or substantially all of the General Partner’s assets), in each case as a result of which the REIT Series A Preferred Shares will be converted into the right to receive shares of capital stock, other securities or other property (including cash or any combination thereof), each Series A Preferred Unit will thereafter be exchangeable into the kind and amount of shares of capital stock and other securities and property receivable (including cash or any combination thereof) upon the consummation of such transaction by a Holder of that number of REIT Series A Preferred Shares or fraction thereof into which one Series A Preferred Unit was exchangeable immediately prior to such transaction. The General Partner may not become a party to any such transaction unless the terms thereof are consistent with the foregoing.
Section 16.8.
No Conversion Rights
The Holders of the Series A Preferred Units shall not have any rights to convert such shares into shares of any other class or series of stock or into any other securities of, or interest in, the Partnership.
Section 16.9.
No Sinking Fund
No sinking fund shall be established for the retirement or redemption of Series A Preferred Units.
ARTICLE 17.
[intentionally omitted]
ARTICLE 18.
RIGHTS OF CERTAIN LIMITED PARTNERS
Section 18.1.
Limited Partner Consent
With respect to matters requiring by the terms of this Agreement the consent or approval of the Limited Partners of the Partnership, including any amendments to, or waivers of, the provisions of this Agreement, each of the investors set forth on Schedule 1 (each an “
Investor
,” and collectively the “
Investors
”), other than those set forth on Schedule 2, hereby agrees that it shall vote (which term shall include the giving of any written consent or approval) all of its Partnership Units, and all of its Partnership Units shall be deemed to have been voted, in
the same proportion and in the same manner as the Partnership Units held and voted by John B. Kilroy, Jr., or, in the event of his death, by his legal representative;
provided
,
however
,
that with respect to any matter requiring the consent or approval of the Limited Partners that would amend the preferences, rights or privileges of such Investor’s Partnership Units under the provisions of the Partnership Agreement in a materially adverse manner, which amendment would not also similarly affect the other Limited Partners, such Investor’s Partnership Units shall be voted in accordance with such Investor’s direction.
Section 18.2.
Redemption Rights
A. Pursuant to Section 8.6 hereof, each Common Limited Partner has the right, subject to the terms and conditions set forth in Section 8.6 hereof, to require the Partnership to redeem all or a portion of the Partnership Units held by such Common Limited Partner for the Cash Amount or, at the General Partner’s election, the REIT Shares Amount (the “
Redemption Right
”),
provided
,
however
,
that such Redemption Right shall not be available to any Investor with respect to any Partnership Unit until a holding period for any such Partnership Unit has occurred ending on the date which is the later of (i) October 31, 2000 (or, in the case of the Investors set forth on Schedule 1, January 31, 1999) and (ii) one year from the date of issuance of such Partnership Unit to such Investor.
B.
Provided
further
,
that the fourth and fifth full sentences under Section 8.6.B hereof shall not be applicable to the Redemption Rights of any Investor. Notwithstanding the foregoing subsection 18.2.A, if any Partnership Unit of any Investor has been pledged to a lending institution, which is not an Affiliate of such Investor (a “Lender”), as collateral or security for a bona fide loan or other extension of credit, then, to the extent the Lender has exercised its remedies under such pledge and becomes the owner of such Partnership Unit, such Lender will be entitled to the Redemption Right with respect to such Partnership Unit beginning January 31, 1999, but in no event shall such Partnership Unit of the Lender be subject to the Redemption Right prior to the date which is one year from the date of issuance of such Partnership Unit to such Investor.
C. Notwithstanding the foregoing subsections 18.2.A and 18.2.B, following the occurrence of a Change of Control (as defined below), each Investor may exercise the Redemption Right,
provided
, that such Redemption Right shall not be available to any Investor with respect to any Partnership Unit until a holding period for any such Partnership Unit of no less than one year from the date of issuance of such Partnership Unit to such Investor has occurred. “
Change of Control
” means the sale, transfer or other conveyance by John B. Kilroy, Jr. (the “
Transfer
”), in one or more transactions, of a total of at least 70% of the Equity Interests (as defined below) beneficially owned by John B. Kilroy, Jr. on October 31, 1997, other than (i) any involuntary Transfer, (ii) any Transfer in respect of a marital dissolution or similar proceeding, (iii) any Transfer to a trust for the benefit of John B. Kilroy, Jr., his spouse or any member of his immediate family, (iv) any Transfer to a trust for which John B. Kilroy, Jr. serves as trustee, and (v) any Transfer to any entity, all of the interests of which are beneficially owned by John B. Kilroy, Jr. “Equity Interests” means Partnership Units and capital stock of the General Partner.
Section 18.3.
Activities of Investors
Section 8.3 hereof relating to the business activities of Limited Partners and certain other persons is modified with respect to each Investor in all respects by the terms of the Contribution Agreement, dated October 31, 1997, by and among the Partnership, the General Partner and the other parties named therein (the “
Allen Group Contribution Agreement
”) and any other documents entered into in connection with the acquisition of the Allen Properties (as defined in the Allen Group Contribution Agreement) pursuant thereto.
Section 18.4.
Sale of Allen Properties
The General Partner shall not sell any of the Allen Properties prior to October 31, 2002 unless (i) the sale will not constitute a taxable event to the Investors, or (ii) the sale is incident to a transaction pursuant to Section 11.2.B or 11.2.C hereof.
Section 18.5.
Transfer of Partnership Units
A. Subject to the provisions of this Section 18.5, transfers of Partnership Interests by the Investors shall be governed by the provisions of Article 11 hereof,
provided
,
however
, that the restrictions on transfer prescribed in Section 11.3 shall apply with respect to transfer by Investors through October 30, 2000. If any Partnership Units of an Investor shall be pledged in accordance with the terms of Section 11.3.A(iv) hereof and the pledgee exercises its remedies under such pledge by acceleration, notice of intent to foreclose or other exercise, the Partnership may either:
(i) purchase the indebtedness, security interest in the Partnership Units and any other rights with respect to the Partnership Units held by the pledgee for the amounts owed to pledgee or any lesser amount agreed to by such pledgee and the Partnership or
(ii) after a foreclosure of such pledgee’s security interest in the Partnership Units, at any time until the later of (A) October 31, 2000 or (B) the date that such Partnership Units become subject to the Redemption Right, acquire the Partnership Units from such pledgee for an amount equal to the Deemed Partnership Interest Value for such Partnership Units.
The pledgee shall give the Partnership any notice of default or delinquency given to such Investor and no less than 30 days written notice of any proposed public or private sale, transfer or exchange of such Partnership Units.
B. Upon the transfer of Partnership Units by an Investor pursuant to the terms of the Article 11 and this Section 18.5 hereof, the transferee shall be subject to and bound by all of the provisions of this Agreement as if such transferee were an Investor.
Section 18.6.
Distributions and Allocations
A. For the fiscal quarter in which Partnership Units are issued to an Investor, such Investor shall be entitled to a distribution equal to its pro rata share of the distributions made on all Limited Partnership Interests held by Common Limited Partners multiplied by a fraction, the numerator of which shall be the number of days in such fiscal quarter in which the Investor has held the Partnership Units, and the denominator of which shall be the total number of days in such fiscal quarter.
B. For the fiscal quarter in which the Partnership Units are issued to an Investor, net income and net loss (and items thereof) shall be allocated to such Investor and the other Partners by taking into account their varying interests in the Partnership during the year using a method selected by the General Partner in its sole discretion, which is in accordance with Section 706(d) of the Code.
Section 18.7.
Admission of Additional Investors
Any Investor (other than an Investor listed on Schedule 1 hereto) who makes a Capital Contribution after the date hereof will be admitted as a Limited Partner at such time and Exhibit A will be revised to reflect such Capital Contribution. Each Investor will confirm that the representations and warranties set forth in Section 3.4 hereof, and Section 11.1(x) of the Contribution Agreement, as to such Investor will be true and correct on the date of any subsequent Capital Contributions by such Investor. Each Investor agrees to be bound by the terms and conditions of this Agreement.
ARTICLE 19.
[INTENTIONALLY OMITTED]
ARTICLE 20.
[INTENTIONALLY OMITTED]
ARTICLE 21.
[INTENTIONALLY OMITTED]
ARTICLE 22.
SERIES G PREFERRED UNITS
Section 22.1.
Designation and Number
. A series of Partnership Units in the Partnership designated as the “6.875% Series G Cumulative Redeemable Preferred Units” (the “
Series G Preferred Units
”) is hereby established. The number of Series G Preferred Units shall be 4,600,000.
Section 22.2.
Distributions
.
A.
Payment of Distributions
. Subject to the rights of Holders of Parity Preferred Units as to the payment of distributions, pursuant to Section 5.1, the General Partner, as holder of the Series G Preferred Units, will be entitled to receive, when, as and if declared by the Partnership acting through the General Partner, out of Available Cash, cumulative preferential cash distributions in an amount equal to the Series G Priority Return. Distributions shall accrue daily, shall accrue and be cumulative from and including March 27, 2012 and will be payable (i) quarterly (such quarterly periods for purposes of payment and accrual will be the quarterly periods ending on the dates specified in this sentence and not calendar quarters) in arrears on February 15, May 15, August 15 and November 15 of each year, commencing May 15, 2012, and (ii) in the event of a redemption of Series G Preferred Units, on the redemption date (each a “
Series G Preferred Unit Distribution Payment Date
”). If any date on which distributions are to be made on the Series G Preferred Units is not a Business Day, then payment of the distribution to be made on such date will be made on the next succeeding day that is a Business Day (and without any interest or other payment in respect of any such delay). The distributions payable on any Series G Preferred Unit Distribution Payment Date shall include distributions accrued to but excluding such Series G Preferred Unit Distribution Payment Date.
B.
Distributions Cumulative
. Notwithstanding the foregoing, distributions on the Series G Preferred Units will accrue and be cumulative from March 27, 2012, whether or not the terms and provisions set forth in Section 22.2.C at any time prohibit the current payment of distributions, whether or not the Partnership has earnings, whether or not there are funds legally available for the payment of such distributions and whether or not such distributions are authorized. No interest, or sum in lieu of interest, will be payable in respect of any distribution payment or payments on the Series G Preferred Units which may be in arrears, and the General Partner, as holder of the Series G Preferred Units, will not be entitled to any distributions, whether payable in cash, securities or other property, in excess of full cumulative distributions described above. Any distribution payment made on the Series G Preferred Units will first be credited against the earliest accrued but unpaid distribution due with respect to the Series G Preferred Units.
C.
Priority as to Distributions
.
(i) Except as provided in Section 22.2.C(ii) below, unless full cumulative distributions for all past Series G Preferred Unit Distribution Periods on the Series G Preferred Units have been or contemporaneously are authorized and paid or authorized and a sum sufficient for the payment thereof is set apart for such payment, no distributions (other than in Common Units or any other class or series of Partnership Interests ranking junior to the Series G Preferred Units as to distributions and as to the distribution of assets upon liquidation, dissolution and winding up of the Partnership) shall be authorized or paid or set aside for payment nor shall any other distribution be authorized or made on Common Units or any other
classes or series of Partnership Interests ranking junior to or on parity with the Series G Preferred Units as to distributions or as to the distribution of assets upon liquidation, dissolution or winding up of the Partnership nor shall any Common Units or any other classes or series of Partnership Interests ranking junior to or on parity with the Series G Preferred Units as to distributions or as to the distribution of assets upon liquidation, dissolution or winding up of the Partnership be redeemed, purchased or otherwise acquired for any consideration (or any amounts be paid to or made available for a sinking fund for the redemption of any such units) by the Partnership (except by conversion into or exchange for Common Units or any other classes or series of Partnership Interests ranking junior to the Series G Preferred Units as to distributions and as to the distribution of assets upon liquidation, dissolution and winding up of the Partnership and except for purchases of Series G Preferred Units in connection with the General Partner’s purchase of REIT Series G Preferred Shares pursuant to the Series G Articles Supplementary for the purpose of preserving the General Partner’s qualification as a REIT for federal and/or state income tax purposes, or purchases of other Partnership Interests in connection with the General Partner’s purchase of corresponding stock pursuant to comparable provisions of the Charter with respect to other classes or series of the General Partner’s stock). With respect to the Series G Preferred Units, all references in this Article 22 to “past Series G Preferred Unit Distribution Periods” shall mean, as of any date, Series G Preferred Unit Distribution Periods ending on or prior to such date, and with respect to any other class or series of Partnership Units ranking on a parity as to distributions with the Series G Preferred Units, all references in this Article 22 to “past distribution periods” (and all similar references) shall mean, as of any date, distribution periods with respect to such other class or series of Partnership Units ending on or prior to such date.
(ii) When full cumulative distributions for all past Series G Preferred Unit Distribution Periods are not paid in full (or a sum sufficient for such full payment is not set apart) upon the Series G Preferred Units and when full cumulative distributions for all past distribution periods are not paid in full (or a sum sufficient for such full payment is not set apart) upon the units of any other Parity Preferred Units ranking on a parity as to distributions with the Series G Preferred Units, then all distributions authorized on the Series G Preferred Units and any other outstanding classes or series of Parity Preferred Units ranking on a parity as to distributions with the Series G Preferred Units shall be declared pro rata so that the amount of distributions authorized per unit on the Series G Preferred Units and such other classes or series of Parity Preferred Units ranking on a parity as to distributions with the Series G Preferred Units shall in all cases bear to each other the same ratio that accumulated and unpaid distributions per unit on the Series G Preferred Units and such other classes or series of Parity Preferred Units ranking on a parity as to distributions with the Series G Preferred Units (which, in the case of any such other classes or series of Parity Preferred Units ranking on a parity as to distributions with the Series G Preferred Units, shall not include any accumulation in respect of unpaid distributions for past distribution periods if such other Parity Preferred Units ranking on a parity as to distributions with the Series G Preferred Units does not have a cumulative distribution) bear to each other.
Section 22.3.
Liquidation Proceeds
.
A.
Distributions
. Upon any voluntary or involuntary liquidation, dissolution or winding-up of the Partnership, distributions on the Series G Preferred Units shall be made in accordance with Article 13.
B.
Notice
. Written notice of any such voluntary or involuntary liquidation, dissolution or winding-up of the Partnership, stating the payment date or dates when, and the place or places where, the amounts distributable in such circumstances shall be payable, shall be given by the General Partner pursuant to Section 13.6.
C.
No Further Rights
. After payment of the full amount of the liquidating distributions to which it is entitled, the General Partner, as holder of the Series G Preferred Units, will have no right or claim to any of the remaining assets of the Partnership.
D.
Consolidation, Merger or Certain Other Transactions
. The voluntary sale, conveyance, lease, exchange or transfer (for cash, shares of stock, securities or other consideration) of all or substantially all of the property or assets of the Partnership to, or the consolidation or merger or other business combination of the Partnership with or into, any corporation, trust or other entity (or of any corporation, trust or other entity with or into the Partnership) shall not be deemed to constitute a liquidation, dissolution or winding-up of the Partnership.
Section 22.4.
Redemption
.
A.
Redemption
. If the General Partner elects to redeem any of the REIT Series G Preferred Shares in accordance with the terms of the Series G Articles Supplementary, the Partnership shall, on the date set for redemption of such REIT Series G Preferred Shares, redeem the number of Series G Preferred Units equal to the number of REIT Series G Preferred Shares for which the General Partner has given notice of redemption pursuant to Subparagraph F of Article FIRST of the Series G Articles Supplementary, at a redemption price, payable in cash, equal to the product of (i) the number of Series G Preferred Units being redeemed, and (ii) an amount equal to the sum of $25.00, any Preferred Distribution Shortfall per Series G Preferred Unit, and any accrued and unpaid distribution per Series G Preferred Unit for the current distribution period.
B.
Procedures for Redemption
. The following provisions set forth the procedures for redemption:
(i) Notice of redemption will be given by the General Partner to the Partnership concurrently with the notice of the General Partner sent to the holders of its REIT Series G Preferred Shares in connection with such redemption. Such notice shall state: (a) the redemption date; (b) the number of Series G Preferred Units to be redeemed; (c) the redemption price and whether or not accrued and unpaid distributions will be payable; (d) the place or places where the Series G Preferred Units are to be surrendered for payment of the redemption price; (e) the procedures that the General Partner must follow to surrender the certificates for redemption,
including whether the certificates shall be properly endorsed or assigned for transfer; (f) that distributions on the Series G Preferred Units to be redeemed will cease to accumulate on such redemption date; and (g) whether such redemption is being made pursuant to Subparagraph F(1) or Subparagraph F(2) of Article FIRST of the Series G Articles Supplementary. If less than all of the Series G Preferred Units are to be redeemed, the notice shall also specify the number of Series G Preferred Units to be redeemed.
(ii) On or after the redemption date, the General Partner shall present and surrender the certificates, if any, representing the Series G Preferred Units to the Partnership at the place designated in the notice of redemption and thereupon the redemption price of such Units (including all accumulated and unpaid distributions to but excluding the redemption date) shall be paid to the General Partner and each surrendered Unit certificate, if any, shall be canceled. If less than all the Units represented by any such certificate representing Series G Preferred Units are to be redeemed, a new certificate shall be issued representing the unredeemed Units.
(iii) From and after the redemption date (unless the Partnership defaults in payment of the redemption price plus accrued and unpaid distributions, if any, payable upon redemption), all distributions on the Series G Preferred Units designated for redemption in such notice shall cease to accrue, such Series G Preferred Units shall no longer be deemed outstanding and all rights of the General Partner will terminate, except the right to receive the redemption price plus accrued and unpaid distributions, if any, payable upon redemption. At its election, the Partnership, prior to a redemption date, may irrevocably deposit the redemption price (including accumulated and unpaid distributions to but excluding the redemption date) of the Series G Preferred Units so called for redemption in trust for the General Partner with a bank or trust company, in which case the redemption notice to the General Partner shall (a) state the date of such deposit, (b) specify the office of such bank or trust company as the place of payment of the redemption price and (c) require the General Partner to surrender the certificates, if any, representing such Series G Preferred Units at such place on or about the date fixed in such redemption notice (which may not be later than the redemption date) against payment of the redemption price (including all accumulated and unpaid distributions to the redemption date). Any monies so deposited which remain unclaimed by the General Partner at the end of two years after the redemption date shall be returned by such bank or trust company to the Partnership.
Section 22.5.
Ranking
.
The Series G Preferred Units rank, with respect to rights to the payment of distributions and the distribution of assets in the event of any voluntary or involuntary liquidation, dissolution or winding up of the Partnership, (i) senior to all Common Units and to all other Partnership Units other than Partnership Units referred to in clauses (ii) and (iii) of this sentence; (ii) on a parity with all Parity Preferred Units, including the Series A Preferred Units and the Series H Preferred Units; and (iii) junior to all Partnership Units the terms of which specifically provide that such Partnership Units rank senior to the Series G Preferred Units with respect to rights to the payment of distributions and the distribution of assets in the event of any liquidation, dissolution and winding up of the Partnership.
Section 22.6.
Voting Rights
.
The General Partner shall not have any voting or consent rights in respect of its partnership interest represented by the Series G Preferred Units.
Section 22.7.
Transfer Restrictions
.
The Series G Preferred Units shall not be transferable.
Section 22.8.
Conversion
.
In the event of a conversion of REIT Series G Preferred Shares into REIT Shares at the option of the holders of REIT Series G Preferred Shares pursuant to the terms of the Series G Articles Supplementary, then, upon conversion of such REIT Series G Preferred Shares, the General Partner shall convert a number of Series G Preferred Units equal to the number of REIT Series G Preferred Shares so converted into a number of Common Units equal to the number of REIT Shares issued on conversion of such REIT Series G Preferred Shares, as adjusted to take into account any changes to the REIT Shares Amount pursuant to subparagraph (y) of the definition of REIT Shares Amount. In the event of a conversion of REIT Series G Preferred Shares into REIT Shares, to the extent the General Partner is required to pay cash in lieu of fractional REIT Shares pursuant to the Series G Articles Supplementary in connection with such conversion, the Partnership shall distribute an equal amount of cash to the General Partner.
Section 22.9.
No Sinking Fund
.
No sinking fund shall be established for the retirement or redemption of Series G Preferred Units.
ARTICLE 23.
SERIES H PREFERRED UNITS
Section 23.1.
Designation and Number
. A series of Partnership Units in the Partnership designated as the “6.375% Series H Cumulative Redeemable Preferred Units” (the “
Series H Preferred Units
”) is hereby established. The number of Series H Preferred Units shall be 4,000,000.
Section 23.2.
Distributions
.
A.
Payment of Distributions
. Subject to the rights of Holders of Parity Preferred Units as to the payment of distributions, pursuant to Section 5.1, the General Partner, as holder of the Series H Preferred Units, will be entitled to receive, when, as and if declared by the Partnership acting through the General Partner, out of Available Cash, cumulative preferential cash distributions in an amount equal to the Series H Priority Return. Distributions shall accrue daily, shall accrue and be cumulative from and including August 15, 2012 and will be payable (i) quarterly (such quarterly periods for purposes of payment and accrual will be the quarterly periods ending on the dates specified in this sentence and not calendar quarters) in
arrears on February 15, May 15, August 15 and November 15 of each year, commencing November 15, 2012, and (ii) in the event of a redemption of Series H Preferred Units, on the redemption date (each a “
Series H Preferred Unit Distribution Payment Date
”). If any date on which distributions are to be made on the Series H Preferred Units is not a Business Day, then payment of the distribution to be made on such date will be made on the next succeeding day that is a Business Day (and without any interest or other payment in respect of any such delay). The distributions payable on any Series H Preferred Unit Distribution Payment Date shall include distributions accrued to but excluding such Series H Preferred Unit Distribution Payment Date.
B.
Distributions Cumulative
. Notwithstanding the foregoing, distributions on the Series H Preferred Units will accrue and be cumulative from August 15, 2012, whether or not the terms and provisions set forth in Section 23.2.C at any time prohibit the current payment of distributions, whether or not the Partnership has earnings, whether or not there are funds legally available for the payment of such distributions and whether or not such distributions are authorized. No interest, or sum in lieu of interest, will be payable in respect of any distribution payment or payments on the Series H Preferred Units which may be in arrears, and the General Partner, as holder of the Series H Preferred Units, will not be entitled to any distributions, whether payable in cash, securities or other property, in excess of full cumulative distributions described above. Any distribution payment made on the Series H Preferred Units will first be credited against the earliest accrued but unpaid distribution due with respect to the Series H Preferred Units.
C.
Priority as to Distributions
.
(i) Except as provided in Section 23.2.C(ii) below, unless full cumulative distributions for all past Series H Preferred Unit Distribution Periods on the Series H Preferred Units have been or contemporaneously are authorized and paid or authorized and a sum sufficient for the payment thereof is set apart for such payment, no distributions (other than in Common Units or any other class or series of Partnership Interests ranking junior to the Series H Preferred Units as to distributions and as to the distribution of assets upon liquidation, dissolution and winding up of the Partnership) shall be authorized or paid or set aside for payment nor shall any other distribution be authorized or made on Common Units or any other classes or series of Partnership Interests ranking junior to or on parity with the Series H Preferred Units as to distributions or as to the distribution of assets upon liquidation, dissolution or winding up of the Partnership nor shall any Common Units or any other classes or series of Partnership Interests ranking junior to or on parity with the Series H Preferred Units as to distributions or as to the distribution of assets upon liquidation, dissolution or winding up of the Partnership be redeemed, purchased or otherwise acquired for any consideration (or any amounts be paid to or made available for a sinking fund for the redemption of any such units) by the Partnership (except by conversion into or exchange for Common Units or any other classes or series of Partnership Interests ranking junior to the Series H Preferred Units as to distributions and as to the distribution of assets upon liquidation, dissolution and winding up of the Partnership and except for purchases of Series H Preferred Units in connection with the General Partner’s purchase of REIT Series H Preferred Shares pursuant to the Series H Articles Supplementary for the purpose of preserving the General Partner’s qualification as a REIT for
federal and/or state income tax purposes, or purchases of other Partnership Interests in connection with the General Partner’s purchase of corresponding stock pursuant to comparable provisions of the Charter with respect to other classes or series of the General Partner’s stock). With respect to the Series H Preferred Units, all references in this Article 23 to “past Series H Preferred Unit Distribution Periods” shall mean, as of any date, Series H Preferred Unit Distribution Periods ending on or prior to such date, and with respect to any other class or series of Partnership Units ranking on a parity as to distributions with the Series H Preferred Units, all references in this Article 23 to “past distribution periods” (and all similar references) shall mean, as of any date, distribution periods with respect to such other class or series of Partnership Units ending on or prior to such date.
(ii) When full cumulative distributions for all past Series H Preferred Unit Distribution Periods are not paid in full (or a sum sufficient for such full payment is not set apart) upon the Series H Preferred Units and when full cumulative distributions for all past distribution periods are not paid in full (or a sum sufficient for such full payment is not set apart) upon the units of any other Parity Preferred Units ranking on a parity as to distributions with the Series H Preferred Units, then all distributions authorized on the Series H Preferred Units and any other outstanding classes or series of Parity Preferred Units ranking on a parity as to distributions with the Series H Preferred Units shall be declared pro rata so that the amount of distributions authorized per unit on the Series H Preferred Units and such other classes or series of Parity Preferred Units ranking on a parity as to distributions with the Series H Preferred Units shall in all cases bear to each other the same ratio that accumulated and unpaid distributions per unit on the Series H Preferred Units and such other classes or series of Parity Preferred Units ranking on a parity as to distributions with the Series H Preferred Units (which, in the case of any such other classes or series of Parity Preferred Units ranking on a parity as to distributions with the Series H Preferred Units, shall not include any accumulation in respect of unpaid distributions for past distribution periods if such other Parity Preferred Units ranking on a parity as to distributions with the Series H Preferred Units does not have a cumulative distribution) bear to each other.
Section 23.3.
Liquidation Proceeds
.
A.
Distributions
. Upon any voluntary or involuntary liquidation, dissolution or winding-up of the Partnership, distributions on the Series H Preferred Units shall be made in accordance with Article 13.
B.
Notice
. Written notice of any such voluntary or involuntary liquidation, dissolution or winding-up of the Partnership, stating the payment date or dates when, and the place or places where, the amounts distributable in such circumstances shall be payable, shall be given by the General Partner pursuant to Section 13.6.
C.
No Further Rights
. After payment of the full amount of the liquidating distributions to which it is entitled, the General Partner, as holder of the Series H Preferred Units, will have no right or claim to any of the remaining assets of the Partnership.
D.
Consolidation, Merger or Certain Other Transactions
. The voluntary sale, conveyance, lease, exchange or transfer (for cash, shares of stock, securities or other
consideration) of all or substantially all of the property or assets of the Partnership to, or the consolidation or merger or other business combination of the Partnership with or into, any corporation, trust or other entity (or of any corporation, trust or other entity with or into the Partnership) shall not be deemed to constitute a liquidation, dissolution or winding-up of the Partnership.
Section 23.4.
Redemption
.
A.
Redemption
. If the General Partner elects to redeem any of the REIT Series H Preferred Shares in accordance with the terms of the Series H Articles Supplementary, the Partnership shall, on the date set for redemption of such REIT Series H Preferred Shares, redeem the number of Series H Preferred Units equal to the number of REIT Series H Preferred Shares for which the General Partner has given notice of redemption pursuant to Subparagraph F of Article FIRST of the Series H Articles Supplementary, at a redemption price, payable in cash, equal to the product of (i) the number of Series H Preferred Units being redeemed, and (ii) an amount equal to the sum of $25.00, any Preferred Distribution Shortfall per Series H Preferred Unit, and any accrued and unpaid distribution per Series H Preferred Unit for the current distribution period.
B.
Procedures for Redemption
. The following provisions set forth the procedures for redemption:
(i) Notice of redemption will be given by the General Partner to the Partnership concurrently with the notice of the General Partner sent to the holders of its REIT Series H Preferred Shares in connection with such redemption. Such notice shall state: (a) the redemption date; (b) the number of Series H Preferred Units to be redeemed; (c) the redemption price and whether or not accrued and unpaid distributions will be payable; (d) the place or places where the Series H Preferred Units are to be surrendered for payment of the redemption price; (e) the procedures that the General Partner must follow to surrender the certificates for redemption, including whether the certificates shall be properly endorsed or assigned for transfer; (f) that distributions on the Series H Preferred Units to be redeemed will cease to accumulate on such redemption date; and (g) whether such redemption is being made pursuant to Subparagraph F(1) or Subparagraph F(2) of Article FIRST of the Series H Articles Supplementary. If less than all of the Series H Preferred Units are to be redeemed, the notice shall also specify the number of Series H Preferred Units to be redeemed.
(ii) On or after the redemption date, the General Partner shall present and surrender the certificates, if any, representing the Series H Preferred Units to the Partnership at the place designated in the notice of redemption and thereupon the redemption price of such Units (including all accumulated and unpaid distributions to but excluding the redemption date) shall be paid to the General Partner and each surrendered Unit certificate, if any, shall be canceled. If less than all the Units represented by any such certificate representing Series H Preferred Units are to be redeemed, a new certificate shall be issued representing the unredeemed Units.
(iii) From and after the redemption date (unless the Partnership defaults in payment of the redemption price plus accrued and unpaid distributions, if any, payable upon redemption), all distributions on the Series H Preferred Units designated for redemption in such notice shall cease to accrue, such Series H Preferred Units shall no longer be deemed outstanding and all rights of the General Partner will terminate, except the right to receive the redemption price plus accrued and unpaid distributions, if any, payable upon redemption. At its election, the Partnership, prior to a redemption date, may irrevocably deposit the redemption price (including accumulated and unpaid distributions to but excluding the redemption date) of the Series H Preferred Units so called for redemption in trust for the General Partner with a bank or trust company, in which case the redemption notice to the General Partner shall (a) state the date of such deposit, (b) specify the office of such bank or trust company as the place of payment of the redemption price and (c) require the General Partner to surrender the certificates, if any, representing such Series H Preferred Units at such place on or about the date fixed in such redemption notice (which may not be later than the redemption date) against payment of the redemption price (including all accumulated and unpaid distributions to the redemption date). Any monies so deposited which remain unclaimed by the General Partner at the end of two years after the redemption date shall be returned by such bank or trust company to the Partnership.
Section 23.5.
Ranking
.
The Series H Preferred Units rank, with respect to rights to the payment of distributions and the distribution of assets in the event of any voluntary or involuntary liquidation, dissolution or winding up of the Partnership, (i) senior to all Common Units and to all other Partnership Units other than Partnership Units referred to in clauses (ii) and (iii) of this sentence; (ii) on a parity with all Parity Preferred Units, including the Series A Preferred Units and the Series G Preferred Units; and (iii) junior to all Partnership Units the terms of which specifically provide that such Partnership Units rank senior to the Series H Preferred Units with respect to rights to the payment of distributions and the distribution of assets in the event of any liquidation, dissolution and winding up of the Partnership.
Section 23.6.
Voting Rights
.
The General Partner shall not have any voting or consent rights in respect of its partnership interest represented by the Series H Preferred Units.
Section 23.7.
Transfer Restrictions
.
The Series H Preferred Units shall not be transferable.
Section 23.8.
Conversion
.
In the event of a conversion of REIT Series H Preferred Shares into REIT Shares at the option of the holders of REIT Series H Preferred Shares pursuant to the terms of the Series H Articles Supplementary, then, upon conversion of such REIT Series H Preferred Shares, the General Partner shall convert a number of Series H Preferred Units equal to the number of REIT Series H Preferred Shares so converted into a number of
Common Units equal to the number of REIT Shares issued on conversion of such REIT Series H Preferred Shares, as adjusted to take into account any changes to the REIT Shares Amount pursuant to subparagraph (y) of the definition of REIT Shares Amount. In the event of a conversion of REIT Series H Preferred Shares into REIT Shares, to the extent the General Partner is required to pay cash in lieu of fractional REIT Shares pursuant to the Series H Articles Supplementary in connection with such conversion, the Partnership shall distribute an equal amount of cash to the General Partner.
Section 23.9.
No Sinking Fund
.
No sinking fund shall be established for the retirement or redemption of Series H Preferred Units.
(Signature Page Follows)
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first written above.
GENERAL PARTNER:
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KILROY REALTY CORPORATION
By:
/s/ Jeffrey C. Hawken
____________________
Name: Jeffrey C. Hawken
Title: Executive Vice President and Chief Operating Officer of the Company
By:
/s/ Tyler H. Rose
___
_____________________
Name: Tyler H. Rose
Title: Executive Vice President, Chief Financial Officer and Secretary of the Company
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(Seventh Amended and Restated Agreement of Limited Partnership)
S-1
SCHEDULE 1
INVESTORS
INVESTORS WHO RECEIVED UNITS ON OCTOBER 31, 1997:
Richard S. Allen, Inc.
Commercial Management Corporation
Allen Investments, Inc.
Steven L. Black
Martin V. Clevenger
Self Directed Individual Retirement Account(s) Of Martin V. Clevenger
Allen Development, Inc.
THE FOLLOWING INVESTORS MAY RECEIVE UNITS AFTER OCTOBER 31, 1997 AND MAY EXECUTE THE AGREEMENT AT A LATER DATE:
T. Patrick Smith
Doyle & Associates, Inc.
LPL Holdings, Inc.
SCHEDULE 2
Doyle & Associates, Inc., a California corporation
Martin V. Clevenger, an individual
Self Directed Individual Retirement Account(s) of Martin V. Clevenger
LPL Holdings, Inc., a Delaware corporation
EXHIBIT A
PARTNERS, CONTRIBUTIONS AND PARTNERSHIP INTERESTS
Limited Partners of KRLP
John B. Kilroy, Jr.
Kilroy Industries
John B. Kilroy, Sr.
Robin E. Kilroy Living Trust
T. Patrick Smith 2001 Trust
James Reynolds
Jay Shidler
Susan Hahn
Anne McCahon
Dana Pantuso Living Trust
Patrice Kilroy
Lawrence Taff
Martin V. Clevenger
Kilroy Airport Imperial Company
Operation Walk
USA Sunset Media 3, LLC
USA Sunset Media 5, LLC
USA Sunset Media 12, LLC
USA Sunset Media 14, LLC
USA Sunset Media 16, LLC
USA Sunset Media 25, LLC
USA Sunset Media 27, LLC
USA Sunset Media 29, LLC
Preferred Limited Partners of KRLP
Clearwood Realty
Belbrook Realty
Beldore Realty
Clearfork Realty
BSSF RP Holdings LLC
EXHIBIT B
NOTICE OF REDEMPTION
The undersigned hereby [irrevocably] (i) exchanges ____________ Limited Partnership Units in Kilroy Realty, L.P. in accordance with the terms of the Limited Partnership Agreement of Kilroy Realty, L.P. dated as of __________, as amended, and the rights of Redemption referred to therein, (ii) surrenders such Limited Partnership Units and all right, title and interest therein, and (iii) directs that the cash (or, if applicable, REIT Shares) deliverable upon Redemption or exchange be delivered to the address specified below, and if applicable, that such REIT Shares be registered or placed in the name(s) and at the address(es) specified below.
Dated:________________________
Name of Limited Partner:
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(Signature of Limited Partner)
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(Street Address)
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(City) (State) (Zip Code)
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Signature Guaranteed by:
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Issue REIT Shares in the name of:
Please insert social security or identifying number:
Address (if different than above):
EXHIBIT C
SCHEDULE OF CERTAIN PROPERTY OF THE PARTNERSHIP
2260 E. Imperial Highway, El Segundo, California
EXHIBIT D
FORM OF PARTNERSHIP UNIT CERTIFICATE
CERTIFICATE FOR PARTNERSHIP UNITS OF
KILROY REALTY, L.P.
No.___________
____________UNITS
Kilroy Realty Corporation as the General Partner of Kilroy Realty, L.P., a Delaware limited partnership (the “Operating Partnership”), hereby certifies that
is a Limited Partner of the Operating Partnership whose Partnership Interests therein, as set forth in the Agreement of Limited Partnership of Kilroy Realty, L.P., dated as of ______________, 1997 (as it may be amended, modified or supplemented from time to time in accordance with its terms, (the “Partnership Agreement”), under which the Operating Partnership is existing and as filed in the office of the Delaware [State Department of Assessments and Taxation] (copies of which are on file at the Operating Partnership’s principal office at __________________________________________________, represent
units of limited partnership interest in the Operating Partnership (the “Partnership Units”).
THE PARTNERSHIP UNITS REPRESENTED BY THIS CERTIFICATE OR INSTRUMENT MAY NOT BE TRANSFERRED, SOLD, ASSIGNED, PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF UNLESS SUCH TRANSFER, SALE, ASSIGNMENT, PLEDGE, HYPOTHECATION OR OTHER DISPOSITION COMPLIES WITH THE PROVISIONS OF THE PARTNERSHIP AGREEMENT (A COPY OF WHICH IS ON FILE WITH THE OPERATING PARTNERSHIP). EXCEPT AS OTHERWISE PROVIDED IN THE PARTNERSHIP AGREEMENT, NO TRANSFER, SALE, ASSIGNMENT, PLEDGE, HYPOTHECATION OR OTHER DISPOSITION OF THE PARTNERSHIP UNITS REPRESENTED BY THIS CERTIFICATE MAY BE MADE EXCEPT (A) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR (B) IF THE OPERATING PARTNERSHIP HAS BEEN FURNISHED WITH A SATISFACTORY OPINION OF COUNSEL FOR THE HOLDER OF THE PARTNERSHIP UNITS REPRESENTED BY THIS CERTIFICATE THAT SUCH TRANSFER, SALE ASSIGNMENT, PLEDGE, HYPOTHECATION OR OTHER DISPOSITION IS EXEMPT FROM THE PROVISIONS OF SECTION 5 OF THE ACT AND THE RULES AND REGULATIONS IN EFFECT THEREUNDER.
DATED:
, 1997.
KILROY REALTY CORPORATION
General Partner of
Kilroy Realty, L.P.
ATTEST:
EXHIBIT E
RESTRICTIONS ON OWNERSHIP AND TRANSFER TO PRESERVE TAX BENEFIT
(a)
Definitions
. for the purposes of this Exhibit E, the following terms shall have the following meanings:
“Charitable Beneficiary” shall mean one or more beneficiaries of a Trust, as determined pursuant to subsection (c)(vi), each of which shall be an organization described in Sections 170(b)(1)(A), 170(c)(2) and 501(c)(3) of the Code.
“Code” shall mean the Internal Revenue Code of 1986, as amended.
“Constructive Ownership” shall mean ownership of Partnership Units by a Person who is or would be treated as an owner of such Partnership Units either actually or constructively through the application of Section 318 of the Code, as modified by Section 856(d)(5) of the Code. The terms “Constructive Owner,” “Constructively Owns” and “Constructively Owned” shall have the correlative meanings.
“Exempted Person” shall mean any Person exempted from time to time by the General Partner in its sole and absolute discretion.
“Market Price” shall mean the market price of the Partnership Units on the relevant date as determined in good faith by the General Partner;
provided
,
however
, if the General Partner has outstanding shares of capital stock which correspond to such Partnership Units, the Market Price of each such Partnership Unit shall be equal to the Value of a share of such capital stock, subject to adjustment if the right to exchange such Partnership Units for such stock is other than one-to-one.
“Ownership Limit” shall mean 24.5% of the capital or profits interests of the Partnership.
“Person” shall mean an individual, corporation, partnership, limited liability company, estate, trust (including a trust qualified under Section 401(a) or 501(c)(17) of the Code), a portion of a trust permanently set aside for or to be used exclusively for the purposes described in Section 642(c) of the Code, association, private foundation within the meaning of Section 509(a) of the Code, joint stock company or other entity.
“Purported Beneficial Transferee” shall mean, with respect to any purported Transfer (or other event) which results in a transfer to a Trust, as provided in subsection (b)(ii), the Purported Record Transferee, unless the Purported Record Transferee would have acquired or owned Partnership Units for another Person who is the beneficial transferee or owner of such Partnership Units, in which case the Purported Beneficial Transferee shall be such Person.
“Purported Record Transferee” shall mean, with respect to any purported Transfer (or other event) which results in a transfer to a Trust, as provided in subsection (b)(ii), the Holder of the Partnership Units as set forth or to be set forth in Exhibit A to the Partnership Agreement, and any Assignee of such Partnership Units, if such Transfer or ownership had been valid under subsection (b)(i).
“Restriction Termination Date” shall mean the first day after the date hereof on which the General Partner determines, in its sole and absolute discretion, that compliance with subsection (b)(i) is no longer necessary or advisable.
“Transfer” shall mean any sale, transfer, gift, assignment, devise or other disposition of Partnership Units, (including (i) the granting of any option or entering into any agreement for the sale, transfer or other disposition of Partnership Units or (ii) the sale, transfer, assignment or other disposition of any securities (or rights convertible into or exchangeable for Partnership Units), whether voluntary or involuntary, whether such transfer has occurred of record or beneficially or Constructively (including but not limited to transfers of interests in other entities which results in changes in Constructive Ownership of Partnership Units), and whether such transfer has occurred by operation of law or otherwise.
“Trust” shall mean each of the trusts provided for in subsection (c).
“Trustee” shall mean any Person unaffiliated with the Partnership, or a Purported Beneficial Transferee, or a Purported Record Transferee, that is appointed by the Partnership to serve as trustee of a Trust.
Capitalized terms used and not defined herein shall have the meanings ascribed to them in the Third Amended and Restated Agreement of Limited Partnership of Kilroy Realty, L.P. (the “Partnership Agreement), as such agreement may be amended from time to time. All references to “Section” refer to the Partnership Agreement.
(b)
Restriction on Ownership and Transfers
.
(i) Prior to the Restriction Termination Date, no Person, other than an Exempted Person, shall at any time Constructively Own Partnership Units in excess of the Ownership Limit if the representations contained in Section 3.4.D(i) are not at such time true and correct.
(ii) If, prior to the Restriction Termination Date, any Transfer or other event occurs that, if effective, would result in any Person Constructively Owning Partnership Units in violation of subsection (b)(i), (1) then that number of Partnership Units that otherwise would cause such Person to violate subsection (b)(i) (rounded up to the nearest whole Partnership Unit) shall be
automatically transferred (provided such Transfer is not in violation of the restrictions on transfer set forth in the Partnership Agreement, except to the extent the General Partner waives such restrictions) to a Trust for the benefit of a Charitable Beneficiary, as described in subsection (c), effective as of the close of business on the business day prior to the date of such Transfer or other event, and such Purported Beneficial Transferee shall thereafter have no rights in such Partnership Units or (2) if, for any reason, the transfer to the Trust described in clause (1) of this sentence is not automatically effective as provided therein to prevent any Person from Constructively Owning Partnership Units in violation of subsection (b)(i), then the Transfer of that number of Partnership Units that otherwise would cause any Person to violate subsection (b)(i) shall be void
ab initio
, and the Purported Beneficial Transferee shall have no rights in such Partnership Units.
(c)
Transfers of Partnership Units in Trust
.
(i) Upon any purported Transfer or other event described in subsection (b)(ii), such Partnership Units shall be deemed to have been transferred to the Trustee in his capacity as trustee of a Trust for the exclusive benefit of one or more Charitable Beneficiaries. Such transfer to the Trustee shall be deemed to be effective as of the close of business on the business day prior to the purported Transfer or other event that results in a transfer to the Trust pursuant to subsection (b)(ii). The Trustee shall be appointed by the Partnership and shall be a Person unaffiliated with the Partnership, any Purported Beneficial Transferee, or any Purported Record Transferee. Each Charitable Beneficiary shall be designated by the Partnership as provided in subsection (c)(vi).
(ii) Partnership Units held by the Trustee shall be issued and outstanding Partnership Units of the Partnership. The Purported Beneficial Transferee or Purported Record Transferee shall have no rights in the Partnership Units held by the Trustee. The Purported Beneficial Transferee or Purported Record Transferee shall not benefit economically from ownership of any Partnership Units held in trust by the Trustee, shall have no rights to distributions or allocations with respect to Partnership Units held in the Trust and shall not possess any rights to vote or other rights attributable to the Partnership Units held in the Trust.
(iii) The Trustee shall have all voting rights and rights to distributions and allocations with respect to Partnership Units held in the Trust, which rights shall be exercised for the exclusive benefit of the Charitable Beneficiary. Any distribution paid prior to the discovery by the Partnership that Partnership Units have been transferred to the Trustee shall be paid to the Trustee upon demand, and any distribution with respect to such Partnership Units shall be paid when due to the Trustee. Any distributions so paid over to the Trustee shall be held in trust for the Charitable Beneficiary.
The Purported Record Transferee and Purported Beneficial Transferee shall have no voting rights with respect to the Partnership Units held in the Trust and, subject to Delaware law, effective as of the date the Partnership Units has been transferred to the Trustee, the Trustee shall have the authority (at the Trustee’s sole discretion) (i) to rescind as void any vote cast by a Purported Record Transferee with respect to such Partnership Units prior to the discovery by the Partnership that the Partnership Units has been transferred to the Trustee and (ii) to recast such vote in accordance with the desires of the Trustee acting for the benefit of the Charitable Beneficiary;
provided, however, that if the Partnership has already taken irreversible action, then the Trustee shall not have the authority to rescind and recast such vote. Notwithstanding any other provision of this Exhibit E to the contrary, until the Partnership has received notification that the Partnership Units have been transferred into a Trust, the Partnership shall be entitled to rely on its Partnership Unit transfer and other unitholder records for purposes of preparing Exhibit A to the Partnership Agreement, lists of unitholders entitled to vote at meetings, and otherwise conducting votes of Partners.
(iv) Within 20 days of receiving notice from the Partnership that Partnership Units have been transferred to the Trust, the Trustee of the Trust shall, in accordance with the terms of (and subject to the limitations contained in) the Partnership Agreement, sell the Partnership Units held in the Trust to a Person, designated by the Trustee, whose ownership of the Partnership Units will not violate the ownership limitations set forth in subsection (b)(i). Upon such sale, the interest of the Charitable Beneficiary in the Partnership Units sold shall terminate and the Trustee shall distribute the net proceeds of the sale to the Purported Record Transferee and to the Charitable Beneficiary as provided in this subsection (c)(iv). The Purported Record Transferee shall receive the lesser of (1) the price paid by the Purported Record Transferee for the Partnership Units in the transaction that resulted in such transfer to the Trust (or, if the event which resulted in the transfer to the Trust did not involve a purchase of such Partnership Units at Market Price, the Market Price of such Partnership Units on the day of the event which resulted in the transfer of such Partnership Units to the Trust) and (2) the price per Partnership Unit received by the Trustee (net of any commissions and other expenses of sale) from the sale or other disposition of the Partnership Units held in the Trust. Any net sales proceeds in excess of the amount payable to the Purported Record Transferee shall be immediately paid to the Charitable Beneficiary together with any distributions thereon. If, prior to the discovery by the Partnership that Partnership Units have been transferred to the Trustee, such Partnership Units are sold by a Purported Record Transferee then (i) such Partnership Units shall be deemed to have been sold on behalf of the Trust and (ii) to the extent that the Purported Record Transferee received an amount for such Partnership Units that exceeds the amount that such Purported Record Transferee was entitled to receive pursuant to this subsection (c)(iv), such excess shall be paid to the Trustee upon demand. The expenses described in item (2) above shall include any expenses of administering the Trust, any transfer of Partnership Units thereto or disposition of Partnership Units thereby, which shall be allocated equitably among the Partnership Units which are transferred to the Trust.
(v) Partnership Units transferred to the Trustee shall be deemed to have been offered for sale to the Partnership, or its designee, at a price per Partnership Unit equal to the lesser of (i) the price paid by the Purported Record Transferee for the Partnership Units in the transaction that resulted in such transfer to the Trust (or, if the event which resulted in the transfer to the Trust did not involve a purchase of such Partnership Units at Market Price, the Market Price of such Partnership Units on the day of the event which resulted in the transfer of such Partnership Units to the Trust) and (ii) the Market Price on the date the Partnership, or its designee, accepts such offer. The Partnership shall have the right to accept such offer until the Trustee has sold the Partnership Units held in the Trust pursuant to subsection (c)(iv). Upon such a sale to the Partnership, the interest of the Charitable Beneficiary in the Partnership Units sold shall terminate and the Trustee shall distribute the net proceeds of the sale to the Purported Record Transferee and any distributions held by the Trustee with respect to such Partnership Units shall thereupon be paid to the Charitable Beneficiary.
(vi) By written notice to the Trustee, the Partnership shall designate one or more nonprofit organizations to be the Charitable Beneficiary of the interest in the Trust such that (i) the Partnership Units held in the Trust would not violate the restrictions set forth in subsection (b)(i) in the hands of such Charitable Beneficiary.
(d)
Remedies For Breach
. If the General Partner shall at any time determine in good faith that a Transfer or other event has taken place in violation of subsection (b) or that a Person intends to acquire, has attempted to acquire or may acquire beneficial ownership (determined without reference to any rules of attribution) or Constructive Ownership of any Partnership Units of the Partnership in violation of subsection (b), the General Partner shall take such action as it deems advisable to refuse to give effect or to prevent such Transfer, including, but not limited to, causing the Partnership to redeem Partnership Units, refusing to give effect to such Transfer on the books of the Partnership or instituting proceedings to enjoin such Transfer;
provided
,
however
, that any Transfers (or, in the case of events other than a Transfer, ownership or Constructive Ownership) in violation of subsection (b)(i), shall automatically result in the transfer to a Trust as described in subsection (b)(ii).
(e)
Notice of Restricted Transfer
. Any Person who acquires or attempts to acquire or own Partnership Units in violation of subsection (b), or any Person who is a Purported Beneficial Transferee such that an automatic transfer to a Trust results under subsection (b)(ii), shall immediately give written notice to the Partnership of such event and shall provide to the Partnership such other information as the Partnership may request in order to determine the effect, if any, of such Transfer or attempted Transfer on such Person’s compliance with subsection (b)(i).
(f)
Owners Required To Provide Information
. Prior to the Restriction Termination Date each Person who is a beneficial owner or Constructive Owner of Partnership Units and each Person who is holding Partnership Units for a beneficial owner or Constructive Owner shall provide to the Partnership such information that the Partnership may request, in good faith, in order to determine the Partnership’s status as a partnership (as opposed to a corporation) or the General Partner’s status as a REIT for federal income tax purposes.
(g)
Remedies Not Limited
. Nothing contained in this Exhibit E shall limit the authority of the General Partner to take such other action as it deems necessary or advisable to protect the Partnership and the interests of its Partners by preservation of the Partnership’s status as a partnership (as opposed to a corporation) or the General Partner’s status as a REIT for federal income tax purposes.
(h)
Ambiguity
. In the case of an ambiguity in the application of any of the provisions of this Exhibit E, including any definition contained in subsection (a), the General Partner shall have the power to determine the application of the provisions of this Exhibit E with respect to any situation based on the facts known to it. In the event that a provision of this Exhibit E requires an action by the General Partner and Exhibit E fails to provide specific guidance with respect to such
action, the General Partner shall have the power to determine the action to be taken so long as such action is not contrary to the provisions of Exhibit E. Absent a decision to the contrary by the General Partner (which the General Partner may make in its sole and absolute discretion), if a Person would have (but for the remedies set forth in subsection (b)) acquired Constructive Ownership of Partnership Units in violation of subsection (b)(i), such remedies (as applicable) shall apply first to the Partnership Units which, but for such remedies, would have been actually owned by such Person, and second to Partnership Units which, but for such remedies, would have been Constructively Owned (but not actually owned) by such Person, pro rata among the Persons who actually own such Partnership Units based upon the relative number of the Partnership Units held by each such Person.
EXHIBIT F
SCHEDULE OF CERTAIN AGREEMENTS CONTAINING
LIMITATIONS ON GENERAL PARTNERS GENERAL AUTHORITY
1.
Purchase and Sale Agreement, Contribution Agreement and Joint Escrow Instructions by and between Shidler West Acquisition Company, LLC, and Kilroy Realty, L.P. dated May 12, 1997.
2.
Contribution Agreement, dated as of October 21, 1997, by and among Kilroy Realty, L.P., Kilroy Realty Corporation and the other parties named therein.
3.
Contribution Agreement, dated as of February 6, 1998, by and among Belair Capital Fund LLC, Kilroy Realty, L.P. and Kilroy Realty Corporation.
4.
First Supplement to Second Amended and Restated Agreement of Limited Partnership of Kilroy Realty, L.P., dated as of March 27, 1998, by and among Kilroy Realty, L.P. and the other parties named therein.
5.
Contribution Agreement and Joint Escrow Instructions, dated as of April 15, 1998, by and between Kilroy Realty, L.P. and Kilroy Calabasas Associates
6.
Contribution Agreement, dated as of April 20, 1998, by and among Belair Capital Fund LLC, Kilroy Realty, L.P. and Kilroy Realty Corporation.
EXHIBIT G
CONSTRUCTIVE OWNERSHIP DEFINITION
The term “Constructively Owns” means ownership determined through the application of the constructive ownership rules of Section 318(a) of the Code, as modified by Section 856(d)(5) of the Code. Generally, these rules provide the following:
a.
an individual is considered as owning the Ownership Interest that is owned, actually or constructively, by or for his spouse, his children, his grandchildren, and his parents;
b.
an Ownership Interest that is owned, actually or constructively, by or for a partnership, limited liability company or estate is considered as owned proportionately by its partners, members or beneficiaries;
c.
an Ownership Interest that is owned, actually or constructively, by or for a trust is considered as owned by its beneficiaries in proportion to the actuarial interest of such beneficiaries (provided, however, that in the case of a “grantor trust” the Ownership Interest will be considered as owned by the grantors);
d.
if ten percent (10%) or more in value of the stock in a corporation is owned, actually or constructively, by or for any person, such person shall be considered as owning the Ownership Interest that is owned, actually or constructively, by or for such corporation in that proportion which the value of the stock which such person so owns bears to the value of all the stock in such corporation;
e.
an Ownership Interest that is owned, actually or constructively, by or for a partner or member which actually or constructively owns a 25% or greater capital interest or profits interest in a partnership or limited liability company, or by or for a beneficiary of an estate or trust, shall be considered as owned by the partnership, limited liability company, estate, or trust (or, in the case of a grantor trust, the grantors);
f.
if ten percent (10%) or more in value of the stock in a corporation is owned, actually or constructively, by or for any person, such corporation shall be considered as owning the Ownership Interest that is owned, actually or constructively, by or for such person;
g.
if any person has an option to acquire an Ownership Interest (including an option to acquire an option or any one of a series of such options), such Ownership Interest shall be considered as owned by such person;
h.
an Ownership Interest that is constructively owned by a person by reason of the application of the rules described in paragraphs (a) through (g) above shall, for purposes of applying paragraphs (a) through (g), be considered as actually owned by such person provided, however, that (i) an Ownership Interest constructively owned by an individual by reason of paragraph (a) shall not be considered as owned by him for purposes of again applying paragraph (a) in order to make another the constructive owner of such Ownership Interest, (ii) an Ownership Interest constructively owned by a partnership, estate, trust, or corporation by reason of the application of paragraphs (e) or (f) shall not be considered as owned by it for purposes of applying paragraphs (b), (c), or (d) in order to make another the constructive owner of such Ownership Interest, (iii) if an Ownership Interest may be considered as owned by an individual under paragraphs (a) or (g), it shall be considered as owned by him under paragraph (g) and (iv) for purposes of the above described rules, an S corporation shall be treated as a partnership and any stockholder of the S corporation shall be treated as a partner of such partnership except that this rule shall not apply for purposes of determining whether stock in the S corporation is constructively owned by any person.
i.
For purposes of the above summary of the constructive ownership rules, the term “Ownership Interest” means the ownership of stock with respect to a corporation and, with respect to any other type of entity, the ownership of an interest in either its assets or net profits.
FIRST AMENDMENT
TO AGREEMENT OF LIMITED PARTNERSHIP
OF KILROY REALTY, L.P.
THIS FIRST AMENDMENT TO THE SEVENTH AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP OF KILROY REALTY, L.P. (this “
First Amendment
”) is entered into as of May 7, 2014, by and among KILROY REALTY CORPORATION, a Maryland corporation (the “
Company
”), as the General Partner, and the Persons whose names are set forth on
Exhibit A
attached hereto, as the Limited Partners, together with any other Persons who become Partners in the Partnership as provided in the Partnership Agreement (as defined below).
RECITALS
A. The General Partner and the Limited Partners have entered into that certain Seventh Amended and Restated Agreement of Limited Partnership of Kilroy Realty, L.P. dated August 15, 2012 (the “
Partnership Agreement
”);
B. Pursuant to
Section 7.3.E.(3)
of the Partnership Agreement, the Partnership Agreement may be amended by the General Partner to reflect a change that is of an inconsequential nature and that does not adversely affect the Limited Partners in any material respect, or to cure any ambiguity in, correct or supplement any provision in, or make other changes with respect to matters arising under, the Partnership Agreement that are not inconsistent with law or with the provisions of the Partnership Agreement; and
C. The General Partner and the Partnership believe it is desirable and in the best interest of the Partnership to amend the Partnership Agreement, pursuant to
Section 7.3.E.(3)
of the Partnership Agreement.
AGREEMENT
NOW, THEREFORE, in consideration of the mutual promises hereinafter set forth and of other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto, intending to be legally bound hereby, do agree as follows:
Defined Terms
. Capitalized terms used but not defined herein shall have the meanings assigned to such terms in the Partnership Agreement.
Amendment of the Partnership Agreement
. The Partnership Agreement is hereby amended as follows:
The defined term “
Properties
” contained in
Section 1.1
of the Partnership Agreement is hereby amended and restated in its entirety as follows:
“
Properties
” means such interests in real property and personal property including without limitation, fee interests, interests in ground leases, interests in joint ventures, partnerships, limited liability companies, corporations and interests other entities, interests in mortgages, and Debt instruments.”
Section 4.3.D
of the Partnership Agreement is hereby amended and restated in its entirety as follows:
“
Issuance of REIT Shares or Other Securities by the General Partner
. The General Partner shall not issue any additional REIT Shares (other than REIT Shares issued pursuant to
Section 8.6
hereof or pursuant to a dividend or distribution (including any stock split) of REIT Shares issued to all of its common stockholders or other capital stock issued to all of its stockholders who hold a class of stock of the General Partner), other shares of capital stock of the General Partner (other than in connection with the direct or indirect acquisition of Partnership Interests in exchange for capital stock of the General Partner which corresponds in ranking to the Partnership’s Partnership Interests being acquired) or New Securities unless the General Partner shall make a Capital Contribution of the net proceeds (including, without limitation, cash and Properties), or the Properties (or interests therein) acquired with such net proceeds, from the issuance of such additional REIT Shares, other shares of capital stock or New Securities, as the case may be, and from the exercise of the rights contained in such additional New Securities, as the case may be. The General Partner’s Capital Account shall be increased by the amount of cash or the value of Properties (or interests therein) so contributed.
The General Partner may hold the net proceeds from the issuance of additional REIT Shares, other shares of capital stock or New Securities, as the case may be, taking into account the intended use of such proceeds, so long the General Partner makes a Capital Contribution of such net proceeds, or Properties (or interests therein) acquired with such net proceeds, as soon as reasonably practicable but not later than six months following such issuance, except no such contribution shall be required to the extent the Properties acquired by the General Partner are direct or indirect interests in Partnership Interests or to the extent such net proceeds are used by the General Partner to make distributions to its shareholders.”
The third sentence of
Section 4.3.E
of the Partnership Agreement is hereby amended and restated in its entirety as follows:
“Notwithstanding the foregoing, solely for purposes of calculating a Partner’s Percentage Interest pursuant to this
Section 4.3.E
, (i) in the case of cash Capital Contributions by the General Partner, such Capital Contributions will be deemed to equal the cash contributed by the General Partner plus, in the case of cash contributions funded by an offering of REIT Shares or other shares of capital stock of the General Partner, the offering costs attributable to the cash contributed to the Partnership and (ii) in the case of the contribution of Properties (or any interest therein) by the General Partner which were acquired by the General Partner in exchange for REIT Shares, other shares of capital stock of the General Partner or cash, in connection with such contribution, the General Partner shall be issued a number of Partnership Units equal to the number of REIT Shares or other shares of capital stock issued by the General Partner in exchange for such Properties or for the cash used to acquire such Properties, the Partnership Units held by the other Partners shall not be adjusted and the Partners’ Percentage Interests shall be adjusted accordingly.”
The fourth sentence of
Section 7.5.A
of the Partnership Agreement to the end of such Section is hereby amended and restated in its entirety as follows:
“Notwithstanding the foregoing, the General Partner may acquire Properties in exchange for REIT Shares, other shares of capital stock or New Securities, or cash, in each case solely to the extent such Properties (or interests therein) are contributed by the General Partner to the Partnership, pursuant to the terms described in
Section 4.3.E
, except no such contribution shall be required to the extent the Properties acquired by the General Partner are direct or indirect interests in Partnership Interests. Any Limited Partner Interests directly or indirectly acquired by the General Partner, whether pursuant to exercise by a Limited Partner of its right of Redemption, or otherwise, shall be automatically converted into a General Partner Interest comprised of an identical number of Partnership Units with the same rights, priorities and preferences as the class or series so acquired. If, at any time, the General Partner acquires material assets (other than on behalf of the Partnership), to the extent reasonably determined by the General Partner to be necessary, the definition of “REIT Shares Amount” shall be adjusted, as reasonably agreed to by the General Partner and the other Limited Partners, to reflect the relative Fair Market Value of a share of capital stock of the General Partner relative to the Deemed Partnership Interest Value of the related Partnership Unit.
The General Partner’s General Partner Interest in the Partnership, its minority interest in any Subsidiary Partnership(s) (held directly or indirectly through a Qualified REIT Subsidiary or a 100% owned limited liability company) that the General Partner holds in order to maintain such Subsidiary Partnership’s status as a partnership, Properties which meet the requirements of this
Section 7.5.A
(and prior to their contribution to the Partnership pursuant to
Section 4.3.D
), interests in such short-term liquid investments, bank accounts or similar instruments as the General Partner deems necessary to carry out its responsibilities contemplated under this Agreement and the Charter and interests in Qualified REIT Subsidiaries or 100% owned limited liability companies which hold any of the foregoing, are interests which the General Partner is permitted to acquire and hold for purposes of this
Section 7.5.A
.”
The following is added to the end of
Section 7.5.B
of the Partnership Agreement:
“For the avoidance of doubt, nothing contained herein shall restrict or prohibit the General Partner from causing the Partnership to redeem General Partner Interests for cash.”
Effect of Amendment
. Except as specifically modified hereby, all terms and provisions of the Partnership Agreement shall continue to remain in full force and effect. Each reference in the Partnership Agreement to “this Agreement,” “hereunder,” “hereof,” “herein” or words of like import shall mean and be a reference to the Partnership Agreement as amended hereby, and this First Amendment and the Partnership Agreement shall be read together and construed as a single instrument.
Counterparts
. This First Amendment may be executed in two or more counterparts, each of which when and as executed shall be deemed to be an original, and all of which when taken together shall constitute one and the same instrument.
Binding Effect
. This First Amendment shall be binding upon and inure to the benefit of the parties hereto and their heirs, executors, administrators, successors, legal representatives and permitted assigns.
Headings
. The headings in this First Amendment are for convenience of reference only and shall not limit or otherwise affect the meaning hereof.
Applicable Law
. This First Amendment shall be construed in accordance with and governed by the laws of the State of Delaware, without regard to the principles of conflicts of law.
Invalidity of Provisions
. If any provision of this First Amendment is or becomes invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein shall not be affected thereby.
[SIGNATURE PAGE FOLLOWS]
IN WITNESS WHEREOF, the undersigned has executed this First Amendment as of the date first above written.
KILROY REALTY CORPORATION,
a Maryland corporation
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By:
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/s/ Tyler H. Rose
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Tyler H. Rose
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Executive Vice President, Chief Financial Officer and Secretary
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By:
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/s/ Joseph E. Magri
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Joseph E. Magri
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Senior Vice President, Corporate Counsel and Assistant Secretary
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EXHIBIT A
Limited Partners of KRLP
John B. Kilroy, Jr.
Kilroy Industries
John B. Kilroy, Sr.
Robin E. Kilroy Living Trust
T. Patrick Smith 2001 Trust
James Reynolds
Jay H. Shidler
Susan Hahn
Anne Kilroy
Dana Pantuso Living Trust
Patrice Kilroy
Lawrence J. Taff
Martin and Rebecca Clevenger Family Trust
Kilroy Airport Imperial Company
Operation Walk
Keith and Kim Adams Family Trust
David T. Russell Living Trust
Runes Living Trust
USA Sunset Media 14, LLC
USA Sunset Media 16, LLC
USA Sunset Media 27, LLC
USA Sunset Media 29, LLC
Exhibit 10.2
Execution Version
AMENDED AND RESTATED CREDIT AGREEMENT
dated as of June 23, 2014
among
KILROY REALTY, L.P.
JPMORGAN CHASE BANK, N.A.,
as Bank and as Administrative Agent for the Banks,
J.P. MORGAN SECURITIES LLC, MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED OR ITS AFFILIATE and WELLS FARGO SECURITIES, LLC
as Joint Lead Arrangers and Joint Bookrunners,
BANK OF AMERICA, N.A.,
as Bank and Syndication Agent,
WELLS FARGO BANK, N.A., BARCLAYS BANK PLC, COMPASS BANK,
PNC BANK, NATIONAL ASSOCIATION, ROYAL BANK OF CANADA,
UNION BANK, N.A. and U.S. BANK NATIONAL ASSOCIATION,
as Banks and Co-Documentation Agents,
and
THE BANKS LISTED HEREIN
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ARTICLE I
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DEFINITIONS
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1
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Section 1.1
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Definitions
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1
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Section 1.2
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Accounting Terms and Determinations
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29
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Section 1.3
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Types of Borrowings
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30
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ARTICLE II
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THE CREDITS
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30
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Section 2.1
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Commitments to Lend
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30
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Section 2.2
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Notice of Committed Borrowing
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31
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Section 2.3
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Money Market Borrowings
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32
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Section 2.4
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Notice to Banks; Funding of Loans
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36
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Section 2.5
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Notes
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37
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Section 2.6
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Maturity of Loans
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38
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Section 2.7
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Interest Rates
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38
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Section 2.8
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Fees
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40
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Section 2.9
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Mandatory Termination
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41
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Section 2.10
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Mandatory Prepayment
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41
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Section 2.11
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Optional Prepayments
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42
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Section 2.12
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General Provisions as to Payments
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43
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Section 2.13
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Funding Losses
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45
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Section 2.14
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Computation of Interest and Fees
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45
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Section 2.15
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Method of Electing Interest Rates
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45
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Section 2.16
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Letters of Credit
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47
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Section 2.17
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Letter of Credit Usage Absolute
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49
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Section 2.18
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Swingline Loan Subfacility
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50
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Section 2.19
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Extending Facilities
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52
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ARTICLE III
|
CONDITIONS
|
55
|
|
Section 3.1
|
Closing
|
55
|
|
Section 3.2
|
Borrowings
|
57
|
|
ARTICLE IV
|
REPRESENTATIONS AND WARRANTIES
|
58
|
|
Section 4.1
|
Existence and Power
|
58
|
|
Section 4.2
|
Power and Authority
|
58
|
|
Section 4.3
|
No Violation
|
58
|
|
Section 4.4
|
Financial Information
|
59
|
|
Section 4.5
|
Litigation
|
59
|
|
Section 4.6
|
Compliance with ERISA
|
59
|
|
Section 4.7
|
Environmental Compliance
|
60
|
|
Section 4.8
|
Taxes
|
61
|
|
Section 4.9
|
Full Disclosure
|
61
|
|
Section 4.10
|
Solvency
|
62
|
|
Section 4.11
|
Use of Proceeds; Margin Regulations
|
62
|
|
Section 4.12
|
Governmental Approvals
|
62
|
|
TABLE OF CONTENTS
(continued)
Page
|
|
|
|
|
Section 4.13
|
Investment Company Act
|
62
|
|
Section 4.14
|
Closing Date Transactions
|
62
|
|
Section 4.15
|
Representations and Warranties in Loan Documents
|
62
|
|
Section 4.16
|
Patents, Trademarks, etc
|
62
|
|
Section 4.17
|
No Default
|
63
|
|
Section 4.18
|
Licenses, etc
|
63
|
|
Section 4.19
|
Compliance with Law
|
63
|
|
Section 4.20
|
No Burdensome Restrictions
|
63
|
|
Section 4.21
|
Brokers' Fees
|
63
|
|
Section 4.22
|
Labor Matters
|
63
|
|
Section 4.23
|
Organizational Documents
|
63
|
|
Section 4.24
|
Principal Offices
|
64
|
|
Section 4.25
|
REIT Status
|
64
|
|
Section 4.26
|
Ownership of Property
|
64
|
|
Section 4.27
|
Insurance
|
64
|
|
Section 4.28
|
Anti-Corruption Laws
|
64
|
|
Section 4.29
|
Sanctions
|
64
|
|
ARTICLE V
|
AFFIRMATIVE AND NEGATIVE COVENANTS
|
64
|
|
Section 5.1
|
Information
|
64
|
|
Section 5.2
|
Payment of Obligations
|
67
|
|
Section 5.3
|
Maintenance of Property; Insurance
|
67
|
|
Section 5.4
|
Conduct of Business
|
67
|
|
Section 5.5
|
Compliance with Laws
|
67
|
|
Section 5.6
|
Inspection of Property, Books and Records
|
68
|
|
Section 5.7
|
Existence
|
68
|
|
Section 5.8
|
Financial Covenants
|
68
|
|
Section 5.9
|
Restriction on Fundamental Changes; Operation and Control
|
69
|
|
Section 5.10
|
Changes in Business
|
70
|
|
Section 5.11
|
Sale of Unencumbered Asset Pool Properties
|
70
|
|
Section 5.12
|
Fiscal Year; Fiscal Quarter
|
70
|
|
Section 5.13
|
Margin Stock
|
70
|
|
Section 5.14
|
Use of Proceeds
|
70
|
|
Section 5.15
|
General Partner Status
|
71
|
|
ARTICLE VI
|
DEFAULTS
|
71
|
|
Section 6.1
|
Events of Default
|
71
|
|
Section 6.2
|
Rights and Remedies
|
73
|
|
Section 6.3
|
Notice of Default
|
75
|
|
Section 6.4
|
Actions in Respect of Letters of Credit
|
75
|
|
ARTICLE VII
|
THE ADMINISTRATIVE AGENT
|
77
|
|
Section 7.1
|
Appointment and Authorization
|
77
|
|
TABLE OF CONTENTS
(continued)
Page
|
|
|
|
|
Section 7.2
|
Administrative Agent and Affiliates
|
77
|
|
Section 7.3
|
Action by Administrative Agent
|
77
|
|
Section 7.4
|
Consultation with Experts
|
78
|
|
Section 7.5
|
Liability of Administrative Agent
|
78
|
|
Section 7.6
|
Indemnification
|
79
|
|
Section 7.7
|
Credit Decision
|
79
|
|
Section 7.8
|
Successor Administrative Agent
|
79
|
|
Section 7.9
|
Administrative Agent's Fee
|
80
|
|
Section 7.10
|
Copies of Notices
|
80
|
|
ARTICLE VIII
|
CHANGE IN CIRCUMSTANCES
|
81
|
|
Section 8.1
|
Alternate Rate of Interest
|
81
|
|
Section 8.2
|
Illegality
|
81
|
|
Section 8.3
|
Increased Cost and Reduced Return
|
82
|
|
Section 8.4
|
Taxes
|
83
|
|
Section 8.5
|
Base Rate Loans Substituted for Affected Euro-Dollar Loans
|
87
|
|
Section 8.6
|
SPC Loans
|
88
|
|
Section 8.7
|
Mitigation Obligations; Replacement of Banks
|
89
|
|
ARTICLE IX
|
MISCELLANEOUS
|
90
|
|
Section 9.1
|
Notices
|
90
|
|
Section 9.2
|
No Waivers
|
92
|
|
Section 9.3
|
Expenses; Indemnification
|
92
|
|
Section 9.4
|
Sharing of Set-Offs
|
93
|
|
Section 9.5
|
Amendments and Waivers
|
94
|
|
Section 9.6
|
Successors and Assigns
|
94
|
|
Section 9.7
|
USA Patriot Act
|
98
|
|
Section 9.8
|
Defaulting Lenders
|
98
|
|
Section 9.9
|
Governing Law; Submission to Jurisdiction
|
100
|
|
Section 9.10
|
Marshaling; Recapture
|
101
|
|
Section 9.11
|
Counterparts; Integration; Effectiveness
|
101
|
|
Section 9.12
|
WAIVER OF JURY TRIAL
|
101
|
|
Section 9.13
|
Survival
|
101
|
|
Section 9.14
|
Domicile of Loans
|
102
|
|
Section 9.15
|
Limitation of Liability
|
102
|
|
Section 9.16
|
No Bankruptcy Proceedings
|
102
|
|
Section 9.17
|
Optional Increase in Commitments
|
102
|
|
Section 9.18
|
Severability
|
105
|
|
Section 9.19
|
Interest Rate Limitation
|
105
|
|
Section 9.20
|
Transitional Arrangements
|
105
|
|
Section 9.21
|
Confidentiality
|
106
|
|
|
|
|
Exhibit A-1 - Form of Revolving Note
Exhibit A-2 - Form of Term Note
Exhibit A-3 - Form of Designated Lender Note
Exhibit B - Unencumbered Asset Pool Properties (Fee Interests)
Exhibit C - Unencumbered Asset Pool Properties (Leasehold Interests)
Exhibit D - Form of Assignment and Assumption Agreement
Exhibit E - Form of Money Market Quote Request
Exhibit F - Form of Invitation for Money Market Quotes
Exhibit G - Form of Money Market Quote
Exhibit H - Form of Designation Agreement
Exhibit I - Forms of U.S. Tax Compliance Certificates
Schedule 1 - Commitments
Schedule 4.22 - Labor Matters
AMENDED AND RESTATED CREDIT AGREEMENT dated as of June 23, 2014, among KILROY REALTY, L.P. (the “
Borrower
”), JPMORGAN CHASE BANK, N.A., as Bank and as Administrative Agent for the Banks (the “
Administrative Agent
”), J.P. MORGAN SECURITIES LLC, as Joint Lead Arranger and Joint Bookrunner, MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED OR ITS AFFILIATE, as Joint Lead Arranger and Joint Bookrunner, WELLS FARGO SECURITIES, LLC, as Joint Lead Arranger and Joint Bookrunner, BANK OF AMERICA, N.A., as Bank and Syndication Agent, WELLS FARGO BANK, N.A., BARCLAYS BANK PLC, COMPASS BANK, PNC BANK, NATIONAL ASSOCIATION, ROYAL BANK OF CANADA, UNION BANK, N.A. and U.S. BANK NATIONAL ASSOCIATION, as Banks and Co-Documentation Agents, and the BANKS listed on the signature pages hereof (the “
Banks
”).
RECITALS
WHEREAS, the Borrower, JPMorgan Chase Bank, N.A., as administrative agent, and the lenders party thereto are parties to an Amended and Restated Revolving Credit Agreement dated as of November 28, 2012 (the “
Existing Revolving Credit Agreement
”); and
WHEREAS, the Borrower, JPMorgan Chase Bank, N.A., as administrative agent and the lenders party thereto are parties to a Credit Agreement dated as of March 29, 2012, as amended by Amendment No. 1 to Credit Agreement dated as of November 28, 2012 (the “
Existing Term Loan Agreement
”, and together with the Existing Revolving Credit Agreement, collectively, the “
Existing Credit Agreements
”);
WHEREAS, the parties wish to amend and restate the Existing Credit Agreements in their entirety.
For good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree to amend and restate the Existing Credit Agreements in their entirety as follows:
ARTICLE I
DEFINITIONS
Section 1.1
Definitions
. The following terms, as used herein, have the following meanings:
“
Absolute Rate Auction
” means a solicitation of Money Market Quotes setting forth Money Market Absolute Rates pursuant to Section 2.3.
"
Acquisition Property
" means, as of any date of determination, any Real Property Assets acquired within such fiscal quarter and/or the immediately preceding three fiscal quarters.
“
Additional Credit Extension Amendment
” means an amendment to this Agreement providing for any Incremental Commitments which shall be consistent with the
applicable provisions of this Agreement relating to such Incremental Commitments and otherwise reasonably satisfactory to the Administrative Agent and the Borrower.
“
Adjusted Annual EBITDA
” means, for any period, Annual EBITDA for such period, minus the sum of (a) interest income other than interest income from mortgage notes not in excess of $5,000,000 per annum, and (b) a management fee reserve in an amount equal to 3% of consolidated total revenue (after deduction of interest income of the Borrower and its subsidiaries for such period), plus the sum of (a) general and administrative expenses for such period to the extent included in Annual EBITDA and (b) actual management fees relating to Real Property for such period.
“
Adjusted London Interbank Offered Rate
” has the meaning set forth in Section 2.7(b).
“
Administrative Agent
” means JPMorgan Chase Bank, N.A., in its capacity as administrative agent for the Banks hereunder, and its successors in such capacity.
“
Administrative Questionnaire
” means, with respect to each Bank, an administrative questionnaire in the form prepared by the Administrative Agent and submitted to the Administrative Agent (with a copy to the Borrower) duly completed by such Bank.
“
Affiliate
” means, with respect to a specified Person, another Person that directly, or indirectly through one or more intermediaries, Controls or is Controlled by or is under common Control with the Person specified. In no event shall (x) the Administrative Agent or any Bank or (y) any other Person that is engaged in the business of making commercial loans (including revolving loans) in the ordinary course of business and for which the General Partner or the Borrower does not, directly or indirectly, possess the power to cause the direction of the investment policies of such Person be deemed to be an Affiliate of the Borrower.
“
Agency Site
” means the Electronic System established by the Administrative Agent to administer this Agreement.
“
Agent Party
” has the meaning set forth in
Section 9.1(d)(ii)
.
“
Agreement
” means this Amended and Restated Credit Agreement, as the same may from time to time hereafter be modified, supplemented or amended.
“
Aggregate Exposure
” means, with respect to any Bank at any time, an amount equal to the sum of (i) the aggregate then unpaid principal amount of such Bank’s Term Loans and (ii) the amount of such Bank’s Revolving Commitment then in effect or, if the Revolving Commitments have been terminated, the amount of such Bank’s outstanding Revolving Loans.
“
Aggregate Exposure Percentage
” means, with respect to any Bank at any time, the ratio (expressed as a percentage) of such Bank’s Aggregate Exposure at such time to the Aggregate Exposures of all Banks at such time.
“
Annual EBITDA
” means, measured as of the last day of each calendar quarter (and without duplication), an amount derived from (i) total revenues relating to all Real Property
Assets of the Borrower, the General Partner and their Consolidated Subsidiaries or to the Borrower’s or the General Partner’s interest in Minority Holdings for the previous four consecutive calendar quarters including the quarter then ended, on an accrual basis without giving effect to the straight-lining of rents, plus (ii) interest and other income of the Borrower, the General Partner and their Consolidated Subsidiaries, including, without limitation, real estate service revenues, for such period, plus (iii) nonrecurring extraordinary losses (including losses from the sale of Real Property Assets and/or early extinguishment of Debt or the forgiveness of Debt) for such period, plus (iv) non-cash compensation expense for such period not in excess of $15,000,000 per annum, plus (v) costs and expenses incurred during such period with respect to acquisitions consummated during such period, less (vi) total operating expenses and other expenses relating to such Real Property Assets and to the Borrower’s and the General Partner’s interest in Minority Holdings for such period (other than interest, taxes, depreciation, amortization, and other non-cash items), less (vii) total corporate operating expenses (including general overhead expenses) and other expenses of the Borrower, the General Partner, their Consolidated Subsidiaries and the Borrower’s and the General Partner’s interest in Minority Holdings (other than interest, taxes, depreciation, amortization and other non-cash items), less (viii) gains from discontinued operations and extraordinary gains or losses, for such period, and less (ix) nonrecurring extraordinary gains (including gains from the sale of Real Property Assets and/or the early extinguishment of Debt or the forgiveness of Debt) for such period. For purposes of this Agreement, Annual EBITDA shall be deemed to include only the Borrower’s pro rata share (such share being based upon the Borrower’s percentage ownership interest as shown on the Borrower’s annual audited financial statements) of the Annual EBITDA of any Person in which the Borrower, directly or indirectly, owns an interest.
“
Anti-Corruption Laws
” means all laws, rules, and regulations of any jurisdiction applicable to the Borrower or any of its Affiliates from time to time concerning or relating to bribery or corruption
“
Applicable Interest Rate
” means the lesser of (x) the rate at which the interest rate applicable to any floating rate Debt could be fixed, at the time of calculation, by the Borrower entering into an unsecured interest rate swap agreement (or, if such rate is incapable of being fixed by entering into an unsecured interest rate swap agreement at the time of calculation, a reasonably determined fixed rate equivalent), and (y) the rate at which the interest rate applicable to such floating rate Debt is actually capped, at the time of calculation, if the Borrower has entered into an interest rate cap agreement with respect thereto or if the documentation for such Debt contains a cap.
“
Applicable Lending Office
” means, with respect to any Bank, (i) in the case of its Base Rate Loans and Swingline Loans, its Domestic Lending Office, (ii) in the case of its Euro-Dollar Loans, its Euro-Dollar Lending Office, and (iii) in the case of its Money Market Loans, its Money Market Lending Office.
“
Applicable Margin
” means, (a) with respect to each Revolving Loan, the respective percentages per annum determined, at any time, based on the range into which Borrower’s Credit Rating then falls, in accordance with the following table.
|
|
|
|
|
|
Range of Borrower’s Credit
|
Applicable Margin for
|
Applicable Margin for Base
|
Rating*
|
Euro-Dollar Revolving Loans
(% per annum)
|
Rate Revolving Loans
(% per annum)
|
A-/A3 or better
|
0.875
|
%
|
0.000
|
%
|
BBB+/Baal
|
0.925
|
%
|
0.000
|
%
|
BBB/Baa2
|
1.050
|
%
|
0.050
|
%
|
BBB-/Baa3
|
1.250
|
%
|
0.250
|
%
|
<BBB-/Baa3 or unrated
|
1.650
|
%
|
0.650
|
%
|
(b) with respect to each Term Loan, the respective percentages per annum determined, at any time, based on the range into which Borrower’s Credit Rating then falls, in accordance with the following table.
|
|
|
|
|
|
Range of Borrower’s Credit Rating*
|
Applicable Margin for Euro-Dollar Term Loans
(% per annum)
|
Applicable Margin for Base Rate Term Loans
(% per annum)
|
A-/A3 or better
|
0.900
|
%
|
0.000
|
%
|
BBB+/Baal
|
0.975
|
%
|
0.000
|
%
|
BBB/Baa2
|
1.150
|
%
|
0.150
|
%
|
BBB-/Baa3
|
1.400
|
%
|
0.400
|
%
|
<BBB-/Baa3 or unrated
|
1.900
|
%
|
0.900
|
%
|
* Applicable rating for purposes of determining the Applicable Margin is Borrower’s Credit Rating and if there are only two Borrower’s Credit Ratings, then it will be the higher of the two. In the event that the Borrower’s Credit Ratings are more than one level apart, the median rating will be used. If there are three Borrower’s Credit Ratings and such ratings are split, then, if the difference between the highest and lowest is one level apart, it will be the highest of the three, but if the difference is more than one level, the rating will be the average of the two highest (or if such average is not a recognized category, then the second highest rating will be used). If there is only one Borrower’s Credit Rating, the Applicable Margin shall be based on such rating.
Should Borrower (or General Partner) lose its Investment Grade Rating from both S&P and Moody’s, pricing will revert to the unrated portion of the table above. Upon reinstatement of such Investment Grade Rating from either S&P or Moody’s, pricing will revert to the rated pricing table above.
“
Approved Fund
” means any Person (other than a natural person) that is engaged in making, purchasing, holding or investing in bank loans and similar extensions of credit in the ordinary course of its business and that is administered or managed by (a) a Bank, (b) an Affiliate of a Bank or (c) an entity or an Affiliate of an entity that administers or manages a Bank.
“
Assignee
” has the meaning set forth in Section 9.6(c).
“
Availability Period
” has the meaning set forth in Section 2.9.
“
Bank
” means each bank listed on the signature pages hereof, each Assignee which becomes a Bank pursuant to Section 9.6(c), and their respective successors and each Designated Lender;
provided
,
however
, that the term “
Bank
” shall exclude each Designated Lender when used in reference to a Committed Revolving Loan, the Revolving Commitments or terms relating to the Committed Revolving Loans and the Revolving Commitments and shall further exclude each Designated Lender for all other purposes hereunder except that any Designated Lender which funds a Money Market Loan shall, subject to Section 9.6(d), have the rights (including the rights given to a Bank contained in Section 9.3 and otherwise in Article 9) and obligations of a Bank associated with holding such Money Market Loan.
“
Bankruptcy Code
” means Title 11 of the United States Code, entitled “Bankruptcy”, as amended from time to time, and any successor statute or statutes.
“
Bankruptcy Event
” means, with respect to any Person, such Person becomes the subject of a bankruptcy or insolvency proceeding, or has had a receiver, conservator, trustee, administrator, custodian, assignee for the benefit of creditors or similar Person charged with the reorganization or liquidation of its business appointed for it, or, in the good faith determination of the Administrative Agent, has taken any action in furtherance of, or indicating its consent to, approval of, or acquiescence in, any such proceeding or appointment, provided that a Bankruptcy Event shall not result solely by virtue of any ownership interest, or the acquisition of any ownership interest, in such Person by a Governmental Authority or instrumentality thereof, unless such ownership interest results in or provides such Person with immunity from the jurisdiction of courts within the United States or from the enforcement of judgments or writs of attachment on its assets or permits such Person (or such Governmental Authority or instrumentality) to reject, repudiate, disavow or disaffirm any contracts or agreements made by such Person
.
“
Base Rate
” means, for any day, a rate per annum equal to the highest of (i) the Prime Rate, (ii) the Federal Funds Rate +.50% and (iii) one-month London Interbank Offered Rate (determined as though the interest period commenced as of the date of determination and based on the LIBO Screen Rate) + 1%. Any change in the Base Rate due to a change in the Prime Rate, the Federal Funds Rate or the London Interbank Offered Rate shall be effective from and including the effective date of such change in the Prime Rate, the Federal Funds Rate or the London Interbank Offered Rate, respectively.
“
Base Rate Borrowing
” means a Borrowing comprised of Base Rate Loans.
“
Base Rate Loan
” means a Committed Loan to be made by a Bank as a Base Rate Loan in accordance with the applicable Notice of Borrowing or pursuant to Article VIII.
“
Benefit Arrangement
” means at any time an employee benefit plan within the meaning of Section 3(3) of ERISA which is not a Plan or a Multiemployer Plan and which is maintained or otherwise contributed to by any member of the ERISA Group.
“
Borrower
” means Kilroy Realty, L.P. and its successors.
“
Borrower’s Credit Rating
” means the rating assigned by the Rating Agencies to the General Partner’s or the Borrower’s senior unsecured long term indebtedness, or if no such rating is available, then the General Partner’s or the Borrower’s issuer rating.
“
Borrowing
” has the meaning set forth in Section 1.3.
“
Capital Expenditures
” means, for any period, the sum of all recurring expenditures on capital improvements (whether paid in cash or accrued as a liability) by the Borrower which are capitalized on the consolidated balance sheet of the Borrower in conformity with GAAP, but less (i) all expenditures made with respect to the acquisition by the Borrower and its Consolidated Subsidiaries of any interest in real property within nine months after the date such interest in real property is acquired and (ii) capital expenditures made from the proceeds of insurance or condemnation awards (or payments in lieu thereof) or indemnity payments received during such period by Borrower or any of its Consolidated Subsidiaries from third parties.
“
Cash or Cash Equivalents
” means (i) cash, (ii) direct obligations of the United States Government, including, without limitation, treasury bills, notes and bonds, (iii) interest bearing or discounted obligations of Federal agencies and Government sponsored entities or pools of such instruments offered by banks rated AA or better by S&P or Aa2 by Moody’s and dealers, including, without limitation, Federal Home Loan Mortgage Corporation participation sale certificates, Government National Mortgage Association modified pass-through certificates, Federal National Mortgage Association bonds and notes, Federal Farm Credit System securities, (iv) time deposits, domestic and Eurodollar certificates of deposit, bankers acceptances, commercial paper rated at least A-1 by S&P and P-1 by Moody’s, and/or guaranteed by an Aa rating by Moody’s, an AA rating by S&P, or better rated credit, floating rate notes, other money market instruments and letters of credit each issued by banks which have a long-term debt rating of at least AA by S&P or Aa2 by Moody’s, (v) obligations of domestic corporations, including, without limitation, commercial paper, bonds, debentures, and loan participations, each of which is rated at least AA by S&P, and/or Aa2 by Moody’s, and/or unconditionally guaranteed by an AA rating by S&P, an Aa2 rating by Moody’s, or better rated credit, (vi) obligations issued by states and local governments or their agencies, rated at least MIG-1 by Moody’s and/or SP-1 by S&P and/or guaranteed by an irrevocable letter of credit of a bank with a long-term debt rating of at least AA by S&P or Aa2 by Moody’s, (vii) repurchase agreements with major banks and primary government securities dealers fully secured by U.S. Government or agency collateral equal to or exceeding the principal amount on a daily basis and held in safekeeping, (viii) real estate loan pool participations, guaranteed by an entity with an AA rating given by S&P or an Aa2 rating given by Moody’s, or better rated credit, and (ix) shares of any mutual fund that has its assets primarily invested in the types of investments referred to in clauses (i) through (v).
“
Change in Law
” has the meaning set forth in Section 8.3.
“
Charges
” has the meaning set forth in Section 9.19.
“
Class
” when used in reference to any Loan or Borrowing, refers to whether such Loan or the Loans comprising such Borrowing are Revolving Loans or Term Loans.
“
Closing Date
” has the meaning set forth in Section 3.1.
“
Commitment
” means, with respect to each Bank, its Revolving Commitment and/or its Term Commitment, as the context may require.
“
Commitment Percentage
” means, with respect to each Bank, its Revolving Commitment Percentage and/or its Term Commitment Percentage, as the context may require.
“
Committed Borrowing
” means a Committed Revolving Borrowing and/or a Committed Term Borrowing, as the context may require.
“
Committed Loans
” means Committed Revolving Loans and/or Committed Term Loans, as the context may require.
“
Committed Revolving Borrowing
” has the meaning set forth in Section 1.3.
“
Committed Revolving Loan
” means a Revolving Loan made by a Bank pursuant to Section 2.1(a);
provided
that, if any such Revolving Loan or Loans (or portions thereof) are combined or subdivided pursuant to a Notice of Interest Rate Election, the term “Committed Revolving Loan” shall refer to the combined principal amount resulting from such combination or to each of the separate principal amounts resulting from such subdivision, as the case may be.
“
Committed Term Borrowing
” has the meaning set forth in Section 1.3.
“
Committed Term Loan
” means a Term Loan made by a Bank pursuant to Section 2.1(b) or Section 9.17;
provided
that, if any such Term Loan or loans (or portions thereof) are combined or subdivided pursuant to a Notice of Interest Rate Election, the term “Committed Term Loan” shall refer to the combined principal amount resulting from such combination or to each of the separate principal amounts resulting from such subdivision, as the case may be.
“
Communications
” has the meaning set forth in
Section 9.1(d)(ii)
.
“
Completion of Construction
” means the issuance of a temporary or permanent certificate of occupancy for the improvements under construction, permitting the use and occupancy thereof for their regular intended uses.
“
Consolidated Subsidiary
” means, at any date, any Subsidiary or other entity which is consolidated with the Borrower in accordance with GAAP.
“
Consolidated Tangible Net Worth
” means at any date the difference between (a) Total Asset Value, less (b) Total Debt.
“
Contingent Obligation
” as to any Person means, without duplication, (i) any guaranty of the principal of the Debt of any other Person, (ii) any contingent obligation of such Person required to be shown on such Person’s balance sheet in accordance with GAAP, and (iii) any obligation required to be disclosed in the footnotes to such Person’s financial statements, guaranteeing partially or in whole any non-recourse Debt, lease, dividend or other obligation, exclusive of contractual indemnities (including, without limitation, any indemnity or price-
adjustment provision relating to the purchase or sale of securities or other assets) and guarantees of non-monetary obligations (other than guarantees of completion) which have not yet been called on or quantified, of such Person or of any other Person. The amount of any Contingent Obligation described in clause (iii) shall be deemed to be (a) with respect to a guaranty of interest or interest and principal, or operating income guaranty, the sum of all payments required to be made thereunder (which in the case of an operating income guaranty shall be deemed to be equal to the debt service for the note secured thereby), calculated at the Applicable Interest Rate, through (i) in the case of an interest or interest and principal guaranty, the stated date of maturity of the obligation (and commencing on the date interest could first be payable thereunder), or (ii) in the case of an operating income guaranty, the date through which such guaranty will remain in effect, and (b) with respect to all guarantees not covered by the preceding clause (a), an amount equal to the stated or determinable amount of the primary obligation in respect of which such guaranty is made or, if not stated or determinable, the maximum reasonably anticipated liability in respect thereof (assuming such Person is required to perform thereunder) as recorded on the balance sheet and on the footnotes to the most recent financial statements of the Borrower required to be delivered pursuant to Section 4.4 hereof. Notwithstanding anything contained herein to the contrary, guarantees of completion shall not be deemed to be Contingent Obligations unless and until a claim for payment or performance has been made thereunder, at which time any such guaranty of completion shall be deemed to be a Contingent Obligation in an amount equal to any such claim. Subject to the preceding sentence, (i) in the case of a joint and several guaranty given by such Person and another Person (but only to the extent such guaranty is recourse, directly or indirectly to the Borrower), the amount of the guaranty shall be deemed to be 100% thereof unless and only to the extent that such other Person has delivered Cash or Cash Equivalents to secure all or any part of such Person’s guaranteed obligations, (ii) in the case of joint and several guarantees given by a Person in whom the Borrower owns an interest (which guarantees are non-recourse to the Borrower), to the extent the guarantees, in the aggregate, exceed 15% of total real estate investments of such Person, the amount in excess of 15% shall be deemed to be a Contingent Obligation of the Borrower, and (iii) in the case of a guaranty (whether or not joint and several) of an obligation otherwise constituting Debt of such Person, the amount of such guaranty shall be deemed to be only that amount in excess of the amount of the obligation constituting Debt of such Person. Notwithstanding anything contained herein to the contrary, “Contingent Obligations” shall not be deemed to include guarantees of Unused Commitments or of construction loans to the extent the same have not been drawn.
“
Control
” means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a Person, whether through the ability to exercise voting power, by contract or otherwise. “
Controlling
” and “
Controlled
” have meanings correlative thereto.
“
Credit Party
” means the Administrative Agent, each Fronting Bank, the Swingline Lender or any other Bank.
“
Debt
” of any Person (including Minority Holdings) means, without duplication, (A) (i) the face amount of all indebtedness of such Person for borrowed money or for the deferred purchase price of property or any asset and, (ii) the face amount of all indebtedness of such Person evidenced by a note, bond, debenture or similar instrument (whether or not disbursed in full in the case of a construction loan), (B) the face amount of all letters of credit
issued for the account of such Person and, without duplication, all unreimbursed amounts drawn thereunder, (C) as shown on such Person’s balance sheet, all Contingent Obligations of such Person, (D) all “mark to market” liabilities of such Person under any interest rate protection agreement (including, without limitation, any interest rate swaps, caps, floors, collars and similar agreements) or other hedging agreements and currency swaps and foreign exchange contracts or similar agreements. For purposes of this Agreement, Debt (other than Contingent Obligations) of the Borrower shall be deemed to include only the Borrower’s pro rata share (such share being based upon the Borrower’s percentage ownership interest as shown on the Borrower’s annual audited financial statements) of the Debt of any Person in which the Borrower, directly or indirectly, owns an interest, provided that such Debt is nonrecourse, both directly and indirectly, to the Borrower.
“
Default
” means any condition or event which constitutes an Event of Default or which with the giving of notice or lapse of time or both would, unless cured or waived, become an Event of Default.
“
Defaulting Lender
” means any Bank that (a) has failed, within two Domestic Business Days of the date required to be funded or paid, to (i) fund any portion of its Loans, (ii) fund any portion of its participations in Letters of Credit or Swingline Loans or (iii) pay over to any Credit Party any other amount required to be paid by it hereunder, unless, in the case of clause (i) above, such Bank notifies the Administrative Agent in writing that such failure is the result of such Bank’s good faith determination that a condition precedent to funding (specifically identified and including the particular default, if any) has not been satisfied, (b) has notified the Borrower or any Credit Party in writing, or has made a public statement to the effect, that it does not intend or expect to comply with any of its funding obligations under this Agreement (unless such writing or public statement indicates that such position is based on such Bank’s good faith determination that a condition precedent (specifically identified and including the particular default, if any) to funding a loan under this Agreement cannot be satisfied) or generally under other agreements in which it commits to extend credit, (c) has failed, within three Domestic Business Days after request by a Credit Party, acting in good faith, to provide a certification in writing from an authorized officer of such Bank that it will comply with its obligations (and is financially able to meet such obligations) to fund prospective Loans and participations in then outstanding Letters of Credit and Swingline Loans under this Agreement, provided that such Bank shall cease to be a Defaulting Lender pursuant to this clause (c) upon such Credit Party’s receipt of such certification in form and substance satisfactory to it and the Administrative Agent, or (d) has become the subject of a Bankruptcy Event.
“
Designated Lender
” means a special purpose corporation that (i) shall have become a party to this Agreement pursuant to Section 9.6(d), and (ii) is not otherwise a Bank.
“
Designated Lender Notes
” means promissory notes of the Borrower, substantially in the form of Exhibit A-3 hereto, evidencing the obligation of the Borrower to repay Money Market Loans made by Designated Lenders, and “Designated Lender Note” means any one of such promissory notes issued under Section 9.6(d) hereof.
“
Designating Lender
” shall have the meaning set forth in Section 9.6(d) hereof.
“
Designation Agreement
” means a designation agreement in substantially the form of Exhibit H attached hereto, entered into by a Bank and a Designated Lender and accepted by the Administrative Agent.
“
Development Properties
” means any Real Property Assets which are 100% owned in fee (or leasehold pursuant to a Financeable Ground Lease) by the Borrower, the General Partner or any of their Consolidated Subsidiaries and which are not subject to any Lien (other than Permitted Liens), and which are under development or redevelopment, provided that Real Property Assets shall cease to be Development Properties as of the earlier to occur of (a) the date which is eighteen (18) months after Completion of Construction thereof, and (b) the first fiscal quarter in which the occupancy rate of the applicable Development Property has averaged eighty-five percent (85%) or more.
“
Dollar
” and “
$
” mean dollars which are the lawful money of the United States.
“
Domestic Business Day
” means any day except a Saturday, Sunday or other day on which commercial banks in New York City and Los Angeles are authorized by law to close.
“
Domestic Lending Office
” means, as to each Bank, its office located within the United States at its address set forth in its Administrative Questionnaire (or identified in its Administrative Questionnaire as its Domestic Lending Office) or such other office within the United States as such Bank may hereafter designate as its Domestic Lending Office by notice to the Borrower and the Administrative Agent; provided that no Bank shall be permitted to change its Domestic Lending Office if as a result of such change either (i) pursuant to the provisions of Section 8.1 or Section 8.2, Borrower would be unable to maintain any Loans as Euro-Dollar Loans; or (ii) Borrower would be required to make any payment to such Bank pursuant to the provisions of Section 8.3 or Section 8.4.
“
Electronic Signature
” means an electronic sound, symbol, or process attached to, or associated with, a contract or other record and adopted by a person with the intent to sign, authenticate or accept such contract or record.
“
Electronic System
” means any electronic system, including e-mail, e-fax, Intralinks®, ClearPar®, Debt Domain, Syndtrak and any other Internet or extranet-based site, whether such electronic system is owned, operated or hosted by the Administrative Agent or any of its respective Related Persons or any other Person, providing for access to data protected by passcodes or other security system.
“
Eligible Assignee
” means (a) a Lender (other than a Defaulting Lender) or any Affiliate or Approved Fund thereof or (b) one or more banks, finance companies, insurance or other financial institutions which (1) has (or, in the case of a bank which is a subsidiary, such bank’s parent has) a rating of its senior debt obligations of not less than Baa-1 by Moody’s or a comparable rating by a rating agency acceptable to Administrative Agent, and (2) has total assets in excess of Ten Billion Dollars ($10,000,000,000).
“
Environmental Affiliate
” means any partnership, or joint venture, trust or corporation in which an equity interest is owned by the Borrower, either directly or indirectly.
“
Environmental Approvals
” means any permit, license, approval, ruling, variance, exemption or other authorization required under applicable Environmental Laws by a court or governmental agency having jurisdiction.
“
Environmental Claim
” means, with respect to any Person, any notice, claim, demand or similar communication (written or oral) by any other Person alleging potential liability for investigatory costs, cleanup costs, governmental response costs, natural resources damage, property damage, personal injuries, fines or penalties arising out of, based on or resulting from (i) the presence, or release into the environment, of any Material of Environmental Concern at any location, whether or not owned by such Person or (ii) circumstances forming the basis of any violation, or alleged violation, of any Environmental Law, in each case as to which could reasonably be expected to have a Material Adverse Effect.
“
Environmental Laws
” means any and all federal, state, local and foreign statutes, laws, judicial decisions, regulations, ordinances, rules, judgments, orders, decrees, plans, injunctions, permits, concessions, grants, franchises, licenses, agreements and other governmental restrictions relating to the environment, the effect of the environment on human health or to emissions, discharges or releases of pollutants, contaminants, Material of Environmental Concern or hazardous wastes into the environment including, without limitation, ambient air, surface water, ground water, or land, or otherwise relating to the manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling of pollutants, contaminants, Material of Environmental Concern or hazardous wastes or the clean-up or other remediation thereof.
“
Environmental Report
” has the meaning set forth in Section 4.7.
“
ERISA
” means the Employee Retirement Income Security Act of 1974, as amended, or any successor statute.
“
ERISA Group
” means the Borrower, any Subsidiary and all members of a controlled group of corporations and all trades or businesses (whether or not incorporated) under common control which, together with the Borrower or any Subsidiary, are treated as a single employer under Section 414 of the Internal Revenue Code.
“
Euro-Dollar Borrowing
” has the meaning set forth in Section 1.3.
“
Euro-Dollar Business Day
” means any Domestic Business Day on which commercial banks are open for international business (including dealings in Dollar deposits) in London.
“
Euro-Dollar Lending Office
” means, as to each Bank, its office, branch or Affiliate located at its address set forth in its Administrative Questionnaire (or identified in its Administrative Questionnaire as its Euro-Dollar Lending Office) or such other office, branch or Affiliate of such Bank as it may hereafter designate as its Euro-Dollar Lending Office by notice to the Borrower and the Administrative Agent; provided that no Bank shall be permitted to change its Euro-Dollar Lending Office if as a result of such change either (i) pursuant to the provisions of Section 8.1 or Section 8.2, Borrower would be unable to maintain any Loans as
Euro-Dollar Loans; or (ii) Borrower would be required make any payment to such Bank pursuant to the provisions of Sections 8.3 or Section 8.4.
“
Euro-Dollar Loan
” means a Committed Loan to be made by a Bank as a Loan bearing interest at the Adjusted London Interbank Offered Rate in accordance with the applicable Notice of Committed Borrowing or Notice of Interest Rate Election.
“
Euro-Dollar Reserve Percentage
” has the meaning set forth in Section 2.7(b).
“
Event of Default
” has the meaning set forth in Section 6.1.
“
Excluded Taxes
” means any of the following Taxes imposed on or with respect to a Recipient or required to be withheld or deducted from a payment to a Recipient, (a) Taxes imposed on or measured by net income (however denominated), franchise Taxes, and branch profits Taxes, in each case, (i) imposed as a result of such Recipient being organized under the laws of, or having its principal office or, in the case of any Bank, its applicable lending office located in, the jurisdiction imposing such Tax (or any political subdivision thereof) or (ii) that are Other Connection Taxes, (b) U.S. Federal withholding Taxes imposed on amounts payable to or for the account of such Recipient with respect to an applicable interest in a Loan, Letter of Credit or Commitment pursuant to a law in effect on the date on which (i) such Recipient acquires such interest in the Loan, Letter of Credit or Commitment (other than pursuant to an assignment request by the Borrower under Section 8.7(b)) or (ii) in the case of a Bank, such Bank changes its lending office, except in each case to the extent that, pursuant to Section 8.4, amounts with respect to such Taxes were payable either to such Bank’s assignor immediately before such Bank acquired the applicable interest in a Loan, Letter of Credit or Commitment or to such Bank immediately before it changed its lending office, (c) Taxes attributable to such Recipient’s failure to comply with Section 8.4(f) and (d) any U.S. Federal withholding Taxes imposed under FATCA.
“
Existing Loan Facility
” has the meaning set forth in Section 2.19(a).
“
Existing Credit Agreements
” has the meaning set forth in the recitals.
“
Existing Revolving Credit Agreement
” has the meaning set forth in the recitals.
“
Existing Term Loan Agreement
” has the meaning set forth in the recitals.
“
Extended Loans
” has the meaning set forth in Section 2.19(a).
“
Extended Revolving Commitments
” has the meaning set forth in Section 2.19(a).
“
Extending Lender
” has the meaning set forth in Section 2.19(b).
“
Extension
” has the meaning set forth in Section 2.19(a).
“
Extension Election
” has the meaning set forth in Section 2.19(b).
“
Extension Request
” has the meaning set forth in Section 2.19(a).
“
Facility
” means each of the Term Loan Facility and the Revolving Credit Facility, and collectively, the “
Facilities
”.
“
FATCA
” means Sections 1471 through 1474 of the Internal Revenue Code, as of the date of this Agreement (or any amended or successor version that is substantively comparable and not materially more onerous to comply with), any current or future regulations or official interpretations thereof and any agreements entered into pursuant to Section 1471(b)(1) of the Internal Revenue Code, as all of the same may be modified or qualified by any applicable intergovernmental agreement within the meaning of Sections 1.1471-1(b) and 1.1471-1T(b) of the United States Treasury Regulations; provided, that if the definition of FATCA as generally accepted by major financial institutions in the REIT finance market shall change, the Banks agree to act in good faith to amend this definition so that it is consistent with such accepted definition.
“
Federal Funds Rate
” means, for any day, the rate per annum (rounded upward, if necessary, to the nearest 1/100th of 1%) equal to the weighted average of the rates on overnight Federal funds transactions with members of the Federal Reserve System arranged by Federal funds brokers on such day, as published by the Federal Reserve Bank of New York on the Domestic Business Day next succeeding such day; provided that (i) if such day is not a Domestic Business Day, the Federal Funds Rate for such day shall be such rate on such transactions on the next preceding Domestic Business Day as so published on the next succeeding Domestic Business Day, and (ii) if no such rate is so published on such next succeeding Domestic Business Day, the Federal Funds Rate for such day shall be the average of the rates, quoted to the Administrative Agent from at least three federal funds brokers of recognized standing selected by the Administrative Agent, on such day on such transactions as determined by the Administrative Agent.
“
Federal Reserve Board
” means the Board of Governors of the Federal Reserve System as constituted from time to time.
“
FFO
” means “funds from operations,” defined to mean net income (or loss) (computed in accordance with GAAP), excluding gains (or losses) from debt restructurings and sales of properties, plus depreciation and amortization, after adjustments for Minority Holdings. Adjustments for Minority Holdings will be calculated to reflect FFO on the same basis as above.
“
Financeable Ground Lease
” means either (x) a ground lease reasonably satisfactory to the Required Banks, or (y) a ground lease which provides (i) for a remaining term of not less than 25 years (including options and renewals), (ii) that the ground lease will not be terminated until any leasehold mortgagee shall have received notice of a default and has had a reasonable opportunity to cure the same or complete foreclosure, and has failed to do so, (iii) for a new lease on substantially the same terms to any leasehold mortgagee recognized under such ground lease as tenant if the ground lease is terminated for any reason, (iv) for non-merger of the fee and leasehold estates, and (v) transferability of the tenant’s interest under the ground lease, subject only to the landlord’s reasonable approval. Notwithstanding the foregoing, it is hereby
agreed that the ground lease with respect to the Real Property Asset commonly known as “Kilroy Airport Center, Long Beach, California”, shall be deemed to be a “Financeable Ground Lease”.
“
Fitch
” means Fitch, Inc. or any successor thereto.
“
FMV Cap Rate
” means 6.00%.
“
Foreign Bank
” means (a) if the Borrower is a U.S. Person, a Bank that is not a U.S. Person, and (b) if the Borrower is not a U.S. Person, a Bank that is resident or organized under the laws of a jurisdiction other than that in which the Borrower is resident for tax purposes.
“
Fronting Bank
” shall mean each of JPMorgan Chase Bank, N.A., Bank of America, N.A. and Wells Fargo Bank, N.A. and which is designated by Borrower in its Notice of Borrowing as the Bank which shall issue a Letter of Credit with respect to such Notice of Borrowing.
“
GAAP
” means generally accepted accounting principles in the United States recognized as such in the opinions and pronouncements of the Accounting Principles Board and the American Institute of Certified Public Accountants and Board or in such other statements by such other entity as may be approved by a significant segment of the accounting profession within the United States, which are applicable to the circumstances as of the date of determination.
“
General Partner
” means Kilroy Realty Corporation, a Maryland corporation.
“
Governmental Authority
” means any Federal, state or local government or any other political subdivision thereof or agency exercising executive, legislative, judicial, regulatory or administrative functions having jurisdiction over the Borrower or any Real Property Asset.
“
Group of Loans
” means, at any time, a group of Loans for each Class of Loan consisting of (i) all Committed Loans of such Class which are Base Rate Loans at such time, or (ii) all Committed Loans of such Class which are Euro-Dollar Loans having the same Interest Period at such time;
provided
that, if a Loan of any particular Bank is converted to or made as a Base Rate Loan pursuant to Section 8.2 or 8.4, such Loan shall be included in the same Group or Groups of Loans from time to time as it would have been in if it had not been so converted or made.
“
Guaranty
” means the Guaranty of Payment, of even date herewith, made by the General Partner.
“
Impacted Interest Period
” has the meaning set forth in Section 2.7(b).
“
Increased Amount Date
” has the meaning set forth in Section 9.17(a).
“
Incremental Commitments
” has the meaning set forth in Section 9.17(a).
“
Indemnified Taxes
” means (a) Taxes, other than Excluded Taxes, imposed on or with respect to any payment made by or on account of any obligation of the Borrower under any Loan Document and (b) to the extent not otherwise described in (a) hereof, Other Taxes.
“
Indemnitee
” has the meaning set forth in Section 9.3(b).
“
Initial Funding Date
” means the Closing Date on which all of the conditions described in Sections 3.1 and 3.2 have been satisfied (or waived) in a manner satisfactory to the Administrative Agent and the Banks and on which the initial Loans under this Agreement are made by the Banks to the Borrower.
“
Interest Period
” means: (i) with respect to each Euro-Dollar Borrowing, the period commencing on the date of such Committed Borrowing or of any Notice of Interest Rate Election with respect to such Committed Borrowing and ending one, two, three, six or, if available from all of the Banks, twelve months thereafter (or a period of seven (7) days, not more frequently than twice in any calendar quarter, unless any Bank has previously advised the Administrative Agent and the Borrower that it does not accept, in its sole discretion, the Offered Rate), as the Borrower may elect in the applicable Notice of Committed Borrowing or Notice of Interest Rate Election;
provided
that:
(a) any Interest Period which would otherwise end on a day which is not a Euro-Dollar Business Day shall be extended to the next succeeding Euro-Dollar Business Day unless such Euro-Dollar Business Day falls in another calendar month, in which case such Interest Period shall end on the next preceding Euro-Dollar Business Day;
(b) any Interest Period which begins on the last Euro-Dollar Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the calendar month at the end of such Interest Period) shall end on the last Euro-Dollar Business Day of a calendar month; and
(c) any Interest Period which would otherwise end after the applicable Maturity Date shall end on the applicable Maturity Date.
(ii) with respect to each Base Rate Borrowing, the period commencing on the date of such Committed Borrowing or Notice of Interest Rate Election and ending 30 days thereafter;
provided
that any Interest Period which would otherwise end on a day which is not a Domestic Business Day shall be extended to the next succeeding Domestic Business Day; and provided that any Interest Period which would otherwise end after the Maturity Date shall end on the Maturity Date.
(iii) with respect to each Money Market LIBOR Loan, the period commencing on the date of borrowing specified in the applicable Notice of Borrowing and ending one, two, three or, if available from all applicable Banks, six months thereafter, as the Borrower may elect in the applicable Notice of Money Market Borrowing in accordance with Section 2.3;
provided
that:
(a) any Interest Period which would otherwise end on a day which is not a Euro-Dollar Business Day shall be extended to the next succeeding Euro-Dollar Business Day unless such Euro-Dollar Business Day falls in another calendar month, in which case such Interest Period shall end on the next preceding Euro-Dollar Business Day;
(b) any Interest Period which begins on the last Euro-Dollar Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the calendar month at the end of such Interest Period) shall, subject to clause (c) below, end on the last Euro-Dollar Business Day of a calendar month;
(c) if any Interest Period includes a date on which a payment of principal of Loans is required to be made under Section 2.10 but does not end on such date, then (i) the principal amount (if any) of each Money Market LIBOR Loan required to be repaid on such date and (ii) the remainder (if any) of each such Money Market LIBOR Loan shall have an Interest Period determined as set forth above; and
(d) any Interest Period which would otherwise end after the Maturity Date shall end on the Maturity Date.
(iv) with respect to each Money Market Absolute Rate Loan, the period commencing on the date of borrowing specified in the applicable Notice of Borrowing and ending such number of days thereafter (but not less than 14 days nor more than 180 days) as the Borrower may elect in accordance with Section 2.3;
provided
that:
(a) any Interest Period which would otherwise end on a day which is not a Euro-Dollar Business Day shall be extended to the next succeeding Euro-Dollar Business Day;
(b) if any Interest Period includes a date on which a payment of principal of Loans is required to be made under Section 2.10 but does not end on such date, then (i) the principal amount (if any) of each Money Market Absolute Rate Loan required to be repaid on such date and (ii) the remainder (if any) of each such Money Market Absolute Rate Loan shall have an Interest Period determined as set forth above; and
(c) any Interest Period which would otherwise end after the Maturity Date shall end on the Maturity Date.
“
Internal Revenue Code
” means the Internal Revenue Code of 1986, as amended, or any successor statute.
“
Interpolated Rate
” means, at any time, for any Interest Period, the rate
per annum
(rounded to the same number of decimal places as the LIBO Screen Rate) determined by the Administrative Agent (which determination shall be conclusive and binding absent manifest error) to be equal to the rate that results from interpolating on a linear basis between: (a) the LIBO Screen Rate for the longest period for which the LIBO Screen Rate is available for U.S. Dollars that is shorter than the Impacted Interest Period; and (b) the LIBO Screen Rate for the
shortest period (for which that Screen Rate is available for U.S. Dollars) that exceeds the Impacted Interest Period, in each case, at such time.
“
IntraLinks
” means an electronic service provider that provides a secure means to post information via the internet, at all times accessible by the Administrative Agent and the Banks.
“
Investment Grade Rating
” means a rating for a Person’s senior long-term unsecured debt, or if no such rating has been issued, a “shadow” rating, of BBB- or better from S&P, and a rating or “shadow” rating of Baa3 or better from Moody’s or a rating or “shadow” rating equivalent to the foregoing from Fitch. Any such “shadow” rating shall be evidenced by a letter from the applicable Rating Agency or by such other evidence as may be reasonably acceptable to the Administrative Agent (as to any such other evidence, the Administrative Agent shall present the same to, and discuss the same with, the Banks).
“
Joint Bookrunner
” shall mean each of J.P. Morgan Securities LLC, Merrill Lynch, Pierce, Fenner & Smith Incorporated or its Affiliate and Wells Fargo Securities, LLC in their respective capacities as joint bookrunner, and their respective successors in such capacity.
“
Joint Lead Arranger
” shall mean each of J.P. Morgan Securities LLC, Merrill Lynch, Pierce, Fenner & Smith Incorporated or its Affiliate and Wells Fargo Securities, LLC in their respective capacities as joint lead arranger, and their respective successors in such capacity.
“
Letter(s) of Credit
” has the meaning provided in Section 2.2(b).
“
Letter of Credit Application
” means an application and agreement for the issuance or amendment of a Letter of Credit in the form from time to time in use by and acceptable to the applicable Fronting Bank; in the event of any inconsistency between the terms of such Letter of Credit Application and this Agreement, the terms of this Agreement shall be controlling.
“
Letter of Credit Collateral
” has the meaning provided in Section 6.4.
“
Letter of Credit Collateral Account
” has the meaning provided in Section 6.4.
“
Letter of Credit Documents
” has the meaning provided in Section 2.17.
“
Letter of Credit Usage
” means at any time the sum of (i) the aggregate maximum amount available to be drawn under the Letters of Credit then outstanding, assuming compliance with all requirements for drawing referred to therein, and (ii) the aggregate amount of the Borrower’s unpaid obligations under this Agreement in respect of the Letters of Credit.
“
LIBOR Auction
” means a solicitation of Money Market Quotes setting forth Money Market Margins based on the London Interbank Offered Rate pursuant to Section 2.3.
“
LIBO Screen Rate
” has the meaning set forth in Section 2.7(b).
“
Lien
” means, with respect to any asset, any mortgage, lien, pledge, charge, security interest or encumbrance of any kind, or any other type of preferential arrangement that has the practical effect of creating a security interest, in respect of such asset. For the purposes of this Agreement, each of the Borrower and any Subsidiary shall be deemed to own subject to a Lien any asset which it has acquired or holds subject to the interest of a vendor or lessor under any conditional sale agreement, capital lease or other title retention agreement relating to such asset.
“
Loan
” means a Revolving Loan and/or a Term Loan, as the context may require.
“
Loan Documents
” means this Agreement, the Notes, the Guaranty, the Letter(s) of Credit, the Letter of Credit Documents and any related documents.
“
Loan Extension Amendment
” has the meaning set forth in Section 2.19(c).
“
London Interbank Offered Rate
” has the meaning set forth in Section 2.7(b).
“
Majority Facility Banks
” means, with respect to any Facility, the holders of more than 50% of the aggregate unpaid principal amount of the Term Loans or the aggregate unpaid principal amount of the Revolving Loans, as the case may be, outstanding under such Facility (or, in the case of the Revolving Credit Facility, prior to any termination of the Revolving Commitments, the holders of more than 50% of the Revolving Commitments).
“
Mandatory Borrowing
” has the meaning set forth in Section 2.18(b)(iii).
“
Margin Stock
” shall have the meaning provided such term in Regulation U, Regulation T and Regulation X of the Federal Reserve Board.
“
Material Adverse Effect
” means a material adverse effect upon (i) the business, operations, properties or assets of the Borrower or (ii) the ability of the Borrower to perform its obligations hereunder in all material respects, including to pay interest and principal.
“
Material of Environmental Concern
” means and includes pollutants, contaminants, hazardous wastes, and toxic, radioactive, caustic or otherwise hazardous substances, including petroleum, its derivatives, by-products and other hydrocarbons, or any substance having any constituent elements displaying any of the foregoing characteristics.
“
Material Plan
” means at any time a Plan having aggregate Unfunded Liabilities in excess of $5,000,000.
“
Material
Subsidiary
” means any Subsidiary of the Borrower and/or the General Partner to which 10% or more of Total Asset Value is attributable.
“
Maturity Date
” means the Revolving Credit Maturity Date and/or a Term Loan Maturity Date, as the context may require.
“
Maximum Rate
” has the meaning set forth in Section 9.19.
“
Minority Holdings
” means partnerships, limited liability companies and corporations held or owned by the Borrower which are not consolidated with the Borrower on its financial statements.
“
Money Market Absolute Rate
” has the meaning set forth in Section 2.3(d)(ii)(4).
“
Money Market Absolute Rate Loan
” means a Revolving Loan to be made by a Bank pursuant to an Absolute Rate Auction.
“
Money Market Lending Office
” means, as to each Bank, its Domestic Lending Office or such other office, branch or Affiliate of such Bank as it may hereafter designate as its Money Market Lending Office by notice to the Borrower and the Administrative Agent;
provided
that any Bank may from time to time by notice to the Borrower and the Administrative Agent designate separate Money Market Lending Offices for its Money Market LIBOR Loans, on the one hand, and its Money Market Absolute Rate Loans, on the other hand, in which case all references herein to the Money Market Lending Office of such Bank shall be deemed to refer to either or both of such offices, as the context may require.
“
Money Market LIBOR Loan
” means a Revolving Loan to be made by a Bank pursuant to a LIBOR Auction (including such a loan bearing interest at the Base Rate pursuant to Section 2.3).
“
Money Market Loan
” means a Money Market LIBOR Loan or a Money Market Absolute Rate Loan.
“
Money Market Margin
” has the meaning set forth in Section 2.3(d)(ii)(3).
“
Money Market Quote
” means an offer by a Bank to make a Money Market Loan in accordance with Section 2.3.
“
Money Market Quote Request
” means a, invitation substantially in the form of
Exhibit E
hereto.
“
Moody’s
” means Moody’s Investors Service, Inc. or any successor thereto.
“
Multiemployer Plan
” means at any time a “multiemployer plan” within the meaning of Section 4001(a)(3) of ERISA to which any member of the ERISA Group is then making or accruing an obligation to make contributions or has within the preceding five plan years made contributions, including for these purposes any Person which ceased to be a member of the ERISA Group during such five year period.
“
Net Offering Proceeds
” means all cash received by the Borrower or the General Partner as a result of the sale of common shares of beneficial interest, preferred shares of beneficial interest (including perpetual preferred), partnership interests, limited liability company interests, or other ownership or equity interests in the Borrower or the General Partner (or evidence of indebtedness of the Borrower or the General Partner convertible into any of the foregoing) less customary costs and discounts of issuance paid by the Borrower or the General Partner, as the case may be.
“
New Acquisition
” shall mean any Real Property Asset acquired after the date hereof.
“
New Revolving Commitments
” has the meaning set forth in Section 9.17(a).
“
New Revolving Credit Bank
” has the meaning set forth in Section 9.17(a).
“
New Term Commitments
” has the meaning set forth in Section 9.17(a).
“
New Term Loan
” has the meaning set forth in Section 9.17(e).
“
New Term Loan Bank
” has the meaning set forth in Section 9.17(a).
“
Non-Recourse Debt
” means Debt of the Borrower or the General Partner on a consolidated basis for which the right of recovery of the obligee thereof is limited to recourse against the Real Property Assets securing such Debt (subject to such limited exceptions to the non-recourse nature of such Debt such as fraud, misappropriation, misapplication and environmental indemnities, as are usual and customary in like transactions at the time of the incurrence of such Debt).
“
Notes
” means, collectively, the promissory notes of the Borrower, each substantially in the form of
Exhibit A-1
or
A-2
hereto, evidencing the obligation of the Borrower to repay the Loans, together with any Designated Lender Notes, and “Note” means any one of such promissory notes issued hereunder.
“
Notice of Borrowing
” means a Notice of Committed Borrowing or a Notice of Money Market Borrowing.
“
Notice of Committed Borrowing
” has the meaning set forth in Section 2.2.
“
Notice of Interest Rate Election
” has the meaning set forth in Section 2.15(a).
“
Notice of Money Market Borrowing
” has the meaning set forth in Section 2.3(f).
“
Obligations
” means all obligations, liabilities and indebtedness of every nature of the Borrower from time to time owing to any Bank under or in connection with this Agreement or any other Loan Document, including, without limitation, (i) the outstanding principal amount of the Committed Loans at such time, plus (ii) the Letter of Credit Usage at such time, plus (iii) the outstanding principal amount of any Money Market Loans at such time.
“
Offered Rate
” means a rate per annum quoted by the Administrative Agent, plus the Applicable Margin for the applicable Class of Euro-Dollar Loans, for an Interest Period of seven (7) days.
“
Other Connection Taxes
” means, with respect to any Recipient, Taxes imposed as a result of a present or former connection between such Recipient and the jurisdiction imposing such Tax (other than connections arising solely from such Recipient having executed, delivered, become a party to, performed its obligations under, received payments under, received
or perfected a security interest under, engaged in any other transaction pursuant to or enforced any Loan Document, or sold or assigned an interest in any Loan, Letter of Credit or Loan Document).
“
Other Taxes
” means all present or future stamp, court or documentary, intangible, recording, filing or similar Taxes that arise from any payment made under, from the execution, delivery, performance, enforcement or registration of, from the receipt or perfection of a security interest under, or otherwise with respect to, any Loan Document, except any such Taxes that are Other Connection Taxes imposed with respect to an assignment (other than an assignment made pursuant to Section 8.7).
“
Outstanding Balance
” means, the sum of (i) the aggregate outstanding and unpaid principal balance of all Revolving Loans and (ii) the Letter of Credit Usage.
“
Parent
” means, with respect to any Bank, any Person as to which such Bank is, directly or indirectly, a subsidiary.
“
Participant Register
” has the meaning set forth in Section 9.6(b).
“
Participant
” has the meaning set forth in Section 9.6(b).
“
PBGC
” means the Pension Benefit Guaranty Corporation or any entity succeeding to any or all of its functions under ERISA.
“
Permitted Liens
” means (a) Liens in favor of the Borrower or the General Partner on all or any part of the assets of Subsidiaries of the Borrower or the General Partner, as applicable, provided that (i) the Debt to which such Lien relates is held by the Borrower, (ii) such Debt is not otherwise pledged or encumbered, and (iii) no more than 5% of the Unencumbered Asset Pool Properties Value may be subject to any such Liens; (b) Liens to secure the performance of statutory obligations, surety or appeal bonds, performance bonds, completion bonds, government contracts or other obligations of a like nature, including Liens in connection with workers’ compensation, unemployment insurance and other types of statutory obligations or to secure the performance of tenders, bids, leases, contracts (other than for the repayment of Debt) and other similar obligations incurred in the ordinary course of business; (c) Liens for taxes, assessments or governmental charges or claims that are not yet delinquent or that are being contested in good faith by appropriate proceedings promptly instituted and diligently concluded; provided, that any reserve or other appropriate provision as shall be required in conformity with GAAP shall have been made therefor; (d) Liens on property of the Borrower, the General Partner or any Subsidiary thereof in favor of the Federal or any state government to secure certain payments pursuant to any contract, statute or regulation; (e) easements (including, without limitation, reciprocal easement agreements and utility agreements), rights of way, covenants, consents, reservations, encroachments, variations and zoning and other restrictions, charges or encumbrances (whether or not recorded), which do not interfere materially with the ordinary conduct of the business of the Borrower, the General Partner or any Subsidiary thereof and which do not materially detract from the value of the property to which they attach or materially impair the use thereof by the Borrower, the General Partner or any Subsidiary thereof; (f) statutory Liens of carriers, warehousemen, mechanics, suppliers, materialmen, repairmen or
other Liens imposed by law and arising in the ordinary course of business, for sums due and payable which are not then past due (or which, if past due, are being contested in good faith and with respect to which adequate reserves are being maintained to the extent required by GAAP); (g) Liens not otherwise permitted by this definition and incurred in the ordinary course of business of any or all of the Borrower, the General Partner or any Subsidiary thereof with respect to obligations which do not exceed $500,000 in principal amount in the aggregate at any one time outstanding; and (h) the interests of lessees and lessors under leases of real or personal property made in the ordinary course of business which would not have a Material Adverse Effect.
“
Person
” means an individual, a corporation, a partnership, a limited liability company, an association, a trust or any other entity or organization, including a government or political subdivision or an agency or instrumentality thereof.
“
Plan
” means at any time an employee pension benefit plan (within the meaning of Section 3(2) of ERISA, other than a Multiemployer Plan) which is covered by Title IV of ERISA or subject to the minimum funding standards under Section 412 of the Internal Revenue Code and either (i) is maintained, or contributed to, by any member of the ERISA Group for employees of any member of the ERISA Group or (ii) has at any time within the preceding five years been maintained, or contributed to, by any Person which was at such time a member of the ERISA Group for employees of any Person which was at such time a member of the ERISA Group.
“
Prime Rate
” means the rate of interest publicly announced by the Administrative Agent in New York City from time to time as its Prime Rate.
“
Qualified Institution
” has the meaning set forth in Section 9.17(b).
“
Quotation Date
” has the meaning set forth in Section 2.7(b).
“
Rating Agencies
” means, collectively, S&P, Moody’s and Fitch.
“
Real Property Assets
” means as of any time, the real property assets owned directly or indirectly by the Borrower, the General Partner and/or their Consolidated Subsidiaries at such time, and “
Real Property Asset
” means any one of them.
“
Recipient
” means (a) the Administrative Agent, (b) any Bank and (c) any Fronting Bank, as applicable.
“
Recourse Debt
” shall mean Debt of the Borrower, the General Partner or any Consolidated Subsidiary that is not Non-Recourse Debt.
“
Register
” has the meaning set forth in Section 9.6(g).
“
Regulation T
” means Regulation T of the Board of Governors of the Federal Reserve System, as in effect from time to time.
“
Regulation U
” means Regulation U of the Board of Governors of the Federal Reserve System, as in effect from time to time.
“
Regulation X
” means Regulation X of the Board of Governors of the Federal Reserve System, as in effect from time to time.
“
Regulatory Change
” has the meaning set forth in Section 8.3(a).
“
REIT
” has the meaning set forth in Section 3.1(o).
“
Related Parties
” means, with respect to any specified Person, such Person’s Affiliates and the respective directors, officers, employees, agents and advisors of such Person and such Person’s Affiliates.
“
Release
” means any release, spill, emission, leaking, pumping, pouring, dumping, emptying, deposit, discharge, leaching or migration.
“
Required Banks
” means, at any time, Banks having at least fifty-one percent (51%) of the aggregate amount of (x) the Revolving Commitments or, if the Revolving Commitments shall have been terminated, holding Notes evidencing at least fifty-one percent (51%) of the aggregate unpaid principal amount of the Revolving Loans (provided, that in the case of Swingline Loans, the amount of each Revolving Credit Bank’s funded participation interest in such Swingline Loans shall be considered for purposes hereof as if it were a direct loan and not a participation interest, and the aggregate amount of Swingline Loans owing to the Swingline Lender shall be considered for purposes hereof as reduced by the amount of such funded participation interests) plus (y) the outstanding Term Loans; provided, however, that no Defaulting Lender shall be permitted to vote on any matter requiring the vote of the Required Banks and for purposes of determining the Required Banks, the Commitment of such Bank or the unpaid principal amount of Loans evidenced by Notes held by such Bank, as applicable, shall not be counted.
“
Required Revolving Credit Banks
” means, at any time, Revolving Credit Banks having at least fifty-one percent (51%) of the aggregate amount of the Revolving Commitments or, if the Revolving Commitments shall have been terminated, holding Notes evidencing at least fifty-one percent (51%) of the aggregate unpaid principal amount of the Revolving Loans (provided, that in the case of Swingline Loans, the amount of each Revolving Credit Bank’s funded participation interest in such Swingline Loans shall be considered for purposes hereof as if it were a direct loan and not a participation interest, and the aggregate amount of Swingline Loans owing to the Swingline Lender shall be considered for purposes hereof as reduced by the amount of such funded participation interests); provided, however, that no Defaulting Lender shall be permitted to vote on any matter requiring the vote of the Required Revolving Credit Banks and for purposes of determining the Required Revolving Banks, the Revolving Commitment of such Revolving Credit Bank or the unpaid principal amount of Revolving Loans evidenced by Notes held by such Revolving Credit Bank, as applicable, shall not be counted.
“
Revolving Commitment
” means, with respect to each Bank, the commitment of such Bank to make Revolving Loans and to acquire participations in Letters of Credit and Swingline Loans hereunder, expressed as the maximum aggregate amount of such commitment,
as such amount may be reduced from time to time pursuant to Sections 2.10(b) and 2.11(f), or increased pursuant to Section 9.17 (and including any Extended Revolving Commitment). The initial amount of each Bank’s Revolving Commitment is set forth on Schedule 1, the Additional Credit Extension Amendment or in the Assignment and Assumption Agreement pursuant to which such Bank shall have assumed its Revolving Commitment.
“
Revolving Commitment Percentage
” means, with respect to any Revolving Credit Bank, the percentage of the total Revolving Commitments represented by such Bank’s Revolving Commitment. If the Revolving Commitments have expired or terminated, the Revolving Commitment Percentages shall be determined based on the Revolving Commitments most recently in effect, giving effect to any assignments.
“
Revolving Credit Banks
” means the Banks that hold a Revolving Commitment.
“
Revolving Credit Facility
” means the Revolving Commitments and the Revolving Loans and Swingline Loans made, and Letters of Credit issued, thereunder.
“
Revolving Credit Maturity Date
” means July 1, 2019, subject to extension (with respect to Extended Revolving Commitments and Revolving Loans that are Extended Loans only) as provided in Section 2.19.
“
Revolving Loan
” means a Base Rate Loan, a Euro-Dollar Loan, a Money Market Loan or a Swingline Loan and “Revolving Loans” means Base Rate Loans, Euro-Dollar Loans, Money Market Loans or Swingline Loans or any combination of the foregoing (including any Extended Loans that are Revolving Loans).
“
Revolving Loan Amount
” means Six Hundred Million and 00/100 Dollars ($600,000,000) (as adjusted pursuant to Section 9.17).
“
S&P
” means Standard & Poor’s Ratings Service, a division of The McGraw-Hill Companies, Inc., or any successor thereto.
“
Sanctions
” means, with respect to any country, territory or Person, any international economic sanction administered or enforced by the United States Government (including, without limitation, the Office of Foreign Assets Control of the United States Department of the Treasury), the United Nations Security Council, the European Union, and Her Majesty’s Treasury of the United Kingdom, in each case to the extent applicable to such country, territory or Person.
“
Sanctioned Country
” means, at any time, a country or territory which is the subject or target of any Sanctions.
“
Sanctioned Person
” means, at any time, (a) any Person listed in any Sanctions-related list of designated Persons maintained by the Office of Foreign Assets Control of the U.S. Department of the Treasury, the U.S. Department of State, the U.S. Department of Commerce or the U.S. Department of the Treasury or by the United Nations Security Council, the European Union or any EU member state, (b) any Person operating, organized or resident in a Sanctioned Country or (c) any Person controlled by any such Person.
“
Secured Debt
” means all Debt secured by a Lien on real property.
“
Separate Parcel
” means a Real Property Asset that is a single, legally subdivided, separately zoned parcel that can be legally transferred or conveyed separate and distinct from any other Real Property Asset without benefit of any other Real Property Asset.
“
Solvent
” means, with respect to any Person, that the fair saleable value of such Person’s assets exceeds the Debts of such Person.
“
Subsidiary
” means any corporation or other entity of which securities or other ownership interests representing either (i) ordinary voting power to elect a majority of the board of directors or other persons performing similar functions or (ii) a majority of the economic interest therein, are at the time directly or indirectly owned by the Borrower.
“
Swingline Borrowing
” has the meaning set forth in Section 1.3.
“
Swingline Commitment
” has the meaning set forth in Section 2.18(a).
“
Swingline Lender
” means JPMorgan Chase Bank, N.A., in its capacity as swingline lender hereunder, and its permitted successors in such capacity in accordance with the terms of this Agreement.
“
Swingline Loan
” means a loan made by the Swingline Lender pursuant to Section 2.18.
“
Syndication Agent
” means Bank of America, N.A., in its capacity as syndication agent for the Banks, and its successors in such capacity.
“
Taxes
” means all present or future taxes, levies, imposts, duties, deductions, withholdings (including backup withholding), assessments, fees or other charges imposed by any Governmental Authority, including any interest, additions to tax or penalties applicable thereto.
“
Term Commitment
” means, with respect to each Bank, the commitment of such Bank to make Term Loans, as such amount may be reduced from time to time pursuant to Sections 2.9(b) and 2.11(f), or increased pursuant to Section 9.17. The initial amount of each Bank’s Term Commitment is set forth on Schedule 1, the Additional Credit Extension Amendment or in the Assignment and Assumption Agreement pursuant to which such Bank shall have assumed its Term Commitment.
“
Term Commitment Percentage
” means, with respect to any Term Loan Bank, the percentage of the total Term Commitments represented by such Bank’s Term Commitment.
“
Term Loan
” means a Loan made pursuant to Section 2.1(b) and including any incremental Term Loan made pursuant to Section 9.17 or any Extended Loans that are Term Loans.
“
Term Loan Amount
” means One Hundred Fifty Million and 00/100 Dollars ($150,000,000) (as adjusted pursuant to Section 9.17).
“
Term Loan Banks
” means the Banks that hold a Term Commitment and/or Term Loans.
“
Term Loan Facility
” means the Term Commitments and the Term Loans made thereunder.
“
Term Loan Maturity Date
” means July 1, 2019, subject to extension (with respect to Term Loans that are Extended Loans only) as provided in Section 2.19.
“
Total Asset Value
” means, the sum of (v) with respect to each Real Property Asset (excluding Acquisition Properties) for which there is a valid certificate of occupancy or a representation from the Borrower that it is legally permitted to occupy such Real Property Asset and is not less than 85% leased and occupied as of the last day of the applicable fiscal quarter, the quotient of (i) Adjusted Annual EBITDA (calculated after giving effect to any required free rent periods by calculating the average cash rent over the term of the lease during such free rent periods) with respect thereto for the previous four (4) consecutive quarters (or, if (A) owned for less than four (4) quarters, the Adjusted Annual EBITDA (calculated after giving effect to any required free rent periods by calculating the average cash rent over the term of the lease during such free rent periods) for such period, annualized, or (B) 85% leased and occupied for less than a full fiscal quarter, the Adjusted Annual EBITDA (calculated after giving effect to any required free rent periods by calculating the average cash rent over the term of the lease during such free rent periods) for the period so leased and occupied (whether or not owned for the previous four (4) fiscal quarters), annualized), including the quarter then ended, but less reserves for Capital Expenditures of (A) $0.30 per square foot per annum for each Real Property Asset that is an office property, and (B) $0.15 per square foot per annum for each Real Property Asset that is an industrial property, divided by (ii) the FMV Cap Rate, (w) with respect to each Real Property Asset (excluding Acquisition Properties) for which there is a valid certificate of occupancy or a representation from the Borrower that it is lawfully permitted to occupy such Real Property Asset but which is or has been less than 85% leased or occupied for four full consecutive fiscal quarters, an amount equal to 75% of the book value thereof, net of impairment charges, provided, however, that if any such Real Property Asset shall remain less than 85% leased or occupied for more than 24 consecutive months, then the value thereof shall be equal to 50% of book value, (
x
) with respect to each Acquisition Property, 100% of its book value (after any impairments), unless the Borrower has made a one-time election to value such Real Estate Asset in accordance with clause (v) or (w) hereof, (y) with respect to land and Development Properties, the lesser of (i) the cost actually paid by the Borrower, the General Partner or any of their Subsidiaries, and (ii) the market value, each as determined in accordance with GAAP, of such land or Development Properties, and (z) Unrestricted Cash or Cash Equivalents of the Borrower, the General Partner and their Subsidiaries as of the date of determination;
provided
that for purposes of determining Total Asset Value, the aggregate contributions to Total Asset Value from investments in land and Development Properties and from the Borrower’s and the General Partner’s interests in any joint venture, whether consolidated or unconsolidated, shall not exceed 30% of Total Asset Value.
“
Total Debt
” means the sum of the balance sheet amount of all Debt of the Borrower, the General Partner and their Consolidated Subsidiaries. Total Debt shall not be
determined in accordance with GAAP, but instead shall be equal to the sum of the stated principal amount of each item of Debt.
“
Total Debt Ratio
” means the ratio, as of the date of determination, of (i) the sum of (x) the Total Debt of the Borrower, the General Partner and their Consolidated Subsidiaries and (y) the Borrower’s and the General Partner’s pro rata share of the Total Debt of any Minority Holdings of the Borrower or the General Partner to (ii) Total Asset Value.
“
Total Debt Service
” means, as of the last day of each calendar quarter, an amount equal to the sum of (i) interest (whether accrued, paid or capitalized) payable by Borrower on its Debt for the previous four consecutive quarters including the quarter then ended, plus (ii) scheduled payments of principal on such Debt, whether or not paid by the Borrower (excluding balloon payments) for the previous four consecutive quarters including the quarter then ended, plus (iii) the Borrower’s and the General Partner’s pro rata share of the Total Debt Service of any Minority Holdings of the Borrower or the General Partner.
“
Unencumbered Asset Pool Net Operating Cash Flow
” means, as of any date of determination the Adjusted Annual EBITDA attributable to the Unencumbered Asset Pool Properties. Notwithstanding the foregoing, with respect to any Unencumbered Asset Pool Property owned by the Borrower, the General Partner or any of their Consolidated Subsidiaries for a period of less four (4) fiscal quarters, Unencumbered Asset Pool Net Operating Cash Flow shall be determined in a manner consistent with the foregoing calculation utilizing annualized Adjusted Annual EBITDA for the relevant period of the Borrower’s, the General Partner’s or any of their Consolidated Subsidiaries’ ownership of such Unencumbered Asset Pool Property.
“
Unencumbered Asset Pool Properties
” means, as of any date, the Real Property Assets listed in
Exhibit B
and
Exhibit C
attached hereto and made a part hereof, together with all Real Property Assets which have become part of the Unencumbered Asset Pool Properties as of such date, each of which is:
(i) located in the United States;
(ii) 100% owned in fee (or leasehold pursuant to a Financeable Ground Lease in the case of assets listed on
Exhibit C
as leaseholds) by (x) the Borrower or (y) a wholly-owned direct or indirect Subsidiary of the Borrower and/or the General Partner that is not liable for any Debt and is not the subject of a Bankruptcy Event;
(iii) either (individually or when combined with any other Real Property Asset in a mixed-use complex) a completed industrial property or primarily a completed office property which may have secondary uses or is part of a mixed-use complex or a Development Property which will be either an industrial or office property or a mortgage note;
(iv) not subject to any Lien (other than Permitted Liens);
(v) in the case of a Real Property Asset owned or leased by a wholly-owned Subsidiary, not subject to any agreement or arrangement by which the direct or indirect equity interests in such Subsidiary are subject to any Lien (other than Permitted Liens); and
(vi) not subject to any agreement or arrangement that prohibits or restricts the creation or assumption of any Lien on the assets of, or equity interests in, the Borrower or Subsidiary that owns or leases such Real Property Asset.
“
Unencumbered Asset Pool Properties Value
” means the sum of:
(i) with respect to the Unencumbered Asset Pool Properties (excluding Acquisition Properties) for which there is a valid certificate of occupancy or a representation from the Borrower that it is legally permitted to occupy such Real Property Asset and which is not less than 85% leased and occupied as of the last day of the applicable fiscal quarter, the quotient of (x) the Unencumbered Asset Pool Net Operating Cash Flow (calculated after giving effect to any required free rent periods by calculating the average cash rent over the term of the lease during such free rent periods) with respect thereto for the previous four (4) consecutive quarters (or if (A) owned for less than four (4) quarters, the Unencumbered Asset Pool Net Operating Cash Flow (calculated after giving effect to any required free rent periods by calculating the average cash rent over the term of the lease during such free rent periods) for such period, annualized, or (B) 85% leased and occupied for less than a full fiscal quarter, the Unencumbered Asset Pool Net Operating Cash Flow (calculated after giving effect to any required free rent periods by calculating the average cash rent over the term of the lease during such free rent periods) for the period so leased and occupied (whether or not owned for the previous four (4) fiscal quarters), annualized), including the quarter then ended, but less reserves for Capital Expenditures of (A) $0.30 per square foot per annum for each Unencumbered Asset Pool Property that is an office property, and (B) $0.15 per square foot per annum for each Unencumbered Asset Pool Property that is an industrial property, divided by (y) the FMV Cap Rate, provided, however, that if any such Unencumbered Asset Pool Property shall have been less than 85% leased and occupied for four (4) full consecutive fiscal quarters, then the value thereof shall be equal to an amount equal to 75% of the book value thereof, net of impairment charges, provided, however, that if any such Real Property Asset shall remain less than 85% leased or occupied for more than 24 consecutive months, then the value thereof shall be equal to 50% of book value; and
(ii) with respect to the Unencumbered Asset Pool Properties which are Development Properties or mortgage notes, fifty percent (50%) of (A) in the case of Development Properties, the lesser of (A) the cost actually paid by the Borrower, the General Partner or any of their Subsidiaries, and (B) the market value, each as determined in accordance with GAAP, of such Development Properties, and (B) in the case of mortgage notes, the book value thereof, determined in accordance with GAAP, provided that the value attributable to Development Properties and mortgage notes, in the aggregate shall not at any time exceed 15% of Unencumbered Asset Pool Properties Value; and
(iii) with respect to the Unencumbered Asset Pool Properties which are Acquisition Properties, 100% of book value (after any impairments) of such Acquisition Properties, unless the Borrower has made a one-time election to value such Real Estate Asset in accordance with clause (i) of this definition; and
(iv) Unrestricted Cash or Cash Equivalents of the Borrower, the General Partner and their Subsidiaries as of the date of determination.
“
Unfunded Liabilities
” means, with respect to any Plan at any time, the amount (if any) by which (i) the value of all benefit liabilities under such Plan, determined on a plan termination basis using the assumptions prescribed by the PBGC for purposes of Section 4044 of ERISA, exceeds (ii) the fair market value of all Plan assets allocable to such liabilities under Title IV of ERISA (excluding any accrued but unpaid contributions), all determined as of the then most recent valuation date for such Plan, but only to the extent that such excess represents a potential liability of a member of the ERISA Group to the PBGC or any other Person under Title IV of ERISA.
“
United States
” means the United States of America, including the States and the District of Columbia, but excluding its territories and possessions.
“
Unrestricted Cash or Cash Equivalents
” means Cash or Cash Equivalents, including the cash proceeds of any like-kind exchange under Section 1031 of the Internal Revenue Code, that is not subject to any pledge, lien or control agreement, less (i) $35,000,000, (ii) amounts normally and customarily set aside by Borrower for operating, capital and interest reserves, and (iii) amounts placed with third parties as deposits or security for contractual obligations.
“
Unsecured Debt
” means Debt not secured by a Lien on real property.
“
Unsecured Debt Ratio
” means, as of any date of determination, the ratio of the Unencumbered Asset Pool Properties Value as of the date of determination to the aggregate amount of Unsecured Debt of the Borrower, the General Partner and their Consolidated Subsidiaries outstanding as of such date of determination.
“
Unsecured Debt Service
” means, for any calendar quarter, the interest actually payable (or accrued) on the Loans and all other Unsecured Debt.
“
Unused Commitments
” means an amount equal to all unadvanced funds (other than unadvanced funds in connection with any construction loan) which any third party is obligated to advance to the Borrower or otherwise, pursuant to any Loan Document, written instrument or otherwise.
“
U.S. Person
” means a “United States person” within the meaning of Section 7701(a)(30) of the Code.
“
U.S. Tax Compliance Certificate
” has the meaning set forth in Section 8.4(f)(ii)(B)(3).
Section 1.2
Accounting Terms and Determinations
. Unless otherwise specified herein, all accounting terms used herein shall be interpreted, all accounting determinations hereunder shall be made, and all financial statements required to be delivered hereunder shall be prepared in accordance with GAAP, applied on a basis consistent (except for changes concurred in by the Borrower’s independent public accountants) with the most recent audited consolidated financial statements of the Borrower delivered to the Administrative Agent and the Banks; provided that, if the Borrower notifies the Administrative Agent and the Banks that the Borrower wishes to amend any covenant in Article V to eliminate the effect of any
change in GAAP on the operation of such covenant (or if the Administrative Agent notifies the Borrower that the Required Banks wish to amend Article V for such purpose), then the Borrower’s compliance with such covenant shall be determined on the basis of GAAP in effect immediately before the relevant change in GAAP became effective, until either such notice is withdrawn or such covenant is amended in a manner satisfactory to the Borrower and the Required Banks.
Section 1.3
Types of Borrowings
. The term “Borrowing” denotes the aggregation of Loans of one or more Banks to be made to the Borrower pursuant to Article II on the same date, all of which Loans are of the same type (subject to Article VIII) and Class and, except in the case of Base Rate Loans, Money Market Absolute Rate Loans and Swingline Loans, have the same Interest Period. Borrowings are classified for purposes of this Agreement either by reference to the pricing of Loans comprising such Borrowing (e.g., a “Euro-Dollar Borrowing” is a Borrowing comprised of Euro-Dollar Loans), Class (e.g. a Borrowing of Term Loans) or by reference to the provisions of Article II under which participation therein is determined (i.e., a “Committed Revolving Borrowing” is a Borrowing under Section 2.1(a) in which all Revolving Credit Banks participate in proportion to their Revolving Commitments, a “Committed Term Borrowing” is a Borrowing under Section 2.1(b) in which all Term Loan Banks participate in proportion to their Term Commitments, while a “Money Market Borrowing” is a Borrowing under Section 2.3, and a “Swingline Borrowing” is a Borrowing under Section 2.18 in which only the Swingline Lender participates (subject to the provisions of said Section 2.18)).
ARTICLE II
THE CREDITS
Section 2.1
Commitments to Lend
. (a) Each Revolving Credit Bank severally agrees, on the terms and conditions set forth in this Agreement, to make Committed Revolving Loans to the Borrower and participate in Letters of Credit issued by a Fronting Bank on behalf of the Borrower pursuant to this Section from time to time during the Availability Period in amounts such that the aggregate principal amount of Committed Revolving Loans by such Revolving Credit Bank at any one time outstanding plus such Revolving Credit Bank’s Revolving Commitment Percentage of Swingline Loans outstanding together with such Revolving Credit Bank’s Revolving Commitment Percentage of the Letter of Credit Usage shall not exceed the amount of its Revolving Commitment. The aggregate amount of Committed Revolving Loans to be made hereunder together with the Letter of Credit Usage, Swingline Loans and outstanding Money Market Loans shall not exceed the Revolving Loan Amount. Each Borrowing under this subsection (a) shall be in an aggregate principal amount of at least $2,500,000, or an integral multiple of $500,000 in excess thereof and, other than with respect to Money Market Loans and Swingline Loans, shall be made from the several Revolving Credit Banks ratably in proportion to their respective Revolving Commitments. Subject to the limitations set forth herein, any amounts repaid may be reborrowed.
(b) Each Term Loan Bank severally agrees, on the terms and conditions set forth in this Agreement, to make Term Loans to the Borrower pursuant to this Section on the Initial Funding Date in an amount equal to its Commitment. If the Term Loan Amount shall be
increased in accordance with Section 9.17, each Term Loan Bank whose Term Commitment shall have been increased in accordance therewith or who shall have become a Term Loan Bank hereunder, severally agrees, on the terms and conditions set forth in this Agreement, to make Term Loans to the Borrower pursuant to this Section from time to time in amounts such that the aggregate principal amount of Term Loans by such Term Loan Bank at any one time outstanding shall not exceed the amount of its Term Commitment. The aggregate amount of Term Loans to be made hereunder shall not exceed the Term Loan Amount. Each Borrowing under this subsection (a) shall be in an aggregate principal amount of at least $2,500,000, or an integral multiple of $500,000 in excess thereof and shall be made from the several Term Loan Banks ratably in proportion to their respective Term Commitments. Any amounts repaid may be not be reborrowed.
Section 2.2
Notice of Committed Borrowing
. (a) The Borrower shall give the Administrative Agent notice (a “Notice of Committed Borrowing”) not later than 2:00 p.m. (New York City time) (x) one Domestic Business Day before each Base Rate Borrowing, (y) three (3) Euro-Dollar Business Days before each Euro-Dollar Borrowing, or (z) three (3) Domestic Business Days before each Borrowing bearing interest at the Offered Rate, specifying:
(1) the date of such Borrowing, which shall be a Domestic Business Day in the case of a Base Rate Borrowing or a Borrowing bearing interest at the Offered Rate or a Euro-Dollar Business Day in the case of a Euro-Dollar Borrowing,
(2) the aggregate amount of such Borrowing,
(3) the Class of such Borrowing,
(4) whether the Loans comprising such Borrowing are to be Base Rate Loans, Loans bearing interest at the Offered Rate or Euro-Dollar Loans,
(5) in the case of a Euro-Dollar Borrowing, the duration of the Interest Period applicable thereto, subject to the provisions of the definition of Interest Period,
(6) the intended use for the proceeds of such Borrowing, and
(7) that no Default or Event of Default has occurred or is continuing.
Notwithstanding the time frame set forth in clause (a)(x) above, in the event that the Money Market Quotes submitted by the Revolving Credit Banks pursuant to Section 2.3(c) below are, in the aggregate, in an amount less than the principal amount requested by the Borrower in the related Money Market Quote Request, then the Borrower shall be permitted to give the Administrative Agent notice of its intent to make a Base Rate Revolving Borrowing, in the amount of the difference between accepted Money Market Quotes and the principal amount requested by Borrower in the related Money Market Quote Request, no later than 2:30 p.m. (New York City time) on the date of such Borrowing.
(b) The Borrower shall give the Administrative Agent, and the designated Fronting Banks, written notice, together with a Letter of Credit Application, in the event that it desires to have Letters of Credit (each, a “
Letter of Credit
”) issued hereunder no later than 2:00 p.m., New York City time, at least four (4) Domestic Business Days prior to the date of such issuance. Each such notice shall specify (i) the designated Fronting Bank(s), (ii) the aggregate amount of the requested Letters of Credit, (iii) the individual amount of each requested Letter of Credit and the number of Letters of Credit to be issued, (iv) the date of such issuance (which shall be a Domestic Business Day), (v) the name and address of the beneficiary, (vi) the expiration date of the Letter of Credit (which in no event shall be later than twelve (12) months after the issuance of such Letter of Credit or the Maturity Date, whichever is earlier), (vii) the purpose and circumstances for which such Letter of Credit is being issued, (viii) the terms upon which each such Letter of Credit may be drawn down (which terms shall not leave any discretion to such Fronting Bank) and (ix) a certification that the aggregate outstanding amount of all Letters of Credit issued by such Fronting Bank under this Agreement does not exceed $16,666,666.67. Each such notice may be revoked telephonically by the Borrower to the applicable Fronting Bank and the Administrative Agent any time prior to the date of issuance of the Letter of Credit by the applicable Fronting Bank, provided such revocation is confirmed in writing by the Borrower to such Fronting Bank and the Administrative Agent within one (1) Domestic Business Day by facsimile. No later than 2:00 p.m., New York City time, on the date that is four (4) Domestic Business Days prior to the date of issuance, the Borrower shall specify a precise description of the documents and the verbatim text of any certificate to be presented by the beneficiary of such Letter of Credit, which if presented by such beneficiary prior to the expiration date of the Letter of Credit would require the applicable Fronting Bank to make a payment under the Letter of Credit;
provided
, that any Fronting Bank may, in its reasonable judgment, require changes in any such documents and certificates only in conformity with changes in customary and commercially reasonable practice or law and,
provided
further
, that no Letter of Credit shall require payment against a conforming draft to be made thereunder on the following Domestic Business Day that such draft is presented if such presentation is made later than 10:00 A.M. New York City time (except that if the beneficiary of any Letter of Credit requests at the time of the issuance of its Letter of Credit that payment be made on the same Domestic Business Day against a conforming draft, such beneficiary shall be entitled to such a same day draw, provided such draft is presented to the applicable Fronting Bank no later than 10:00 A.M. New York City time and provided further the Borrower shall have requested to such Fronting Bank and the Administrative Agent that such beneficiary shall be entitled to a same day draw). In determining whether to pay on such Letter of Credit, such Fronting Bank shall be responsible only to determine that the documents and certificates required to be delivered under the Letter of Credit have been delivered and that they comply on their face with the requirements of that Letter of Credit.
Section 2.3
Money Market Borrowings
.
(a)
The Money Market Option
. In addition to Committed Revolving Borrowings pursuant to Section 2.1(a), at such time as the Borrower’s Credit Rating is an Investment Grade Rating from at least two Rating Agencies, one of which shall be S&P or Moody’s, the Borrower may, as set forth in this Section 2.3, request the Revolving Credit Banks during the Availability Period to make offers to make Money Market Loans to the Borrower, not to exceed, at such time, the lesser of (i) the aggregate Revolving Commitments less the
Outstanding Balance, and (ii) 50% of the aggregate Revolving Commitments. Such Revolving Credit Banks may, but shall have no obligation to, make such offers and the Borrower may, but shall have no obligation to, accept any such offers in the manner set forth in this Section.
(b)
Money Market Quote Request
. When the Borrower wishes to request offers to make Money Market Loans under this Section, it shall transmit to the Administrative Agent by telex or facsimile transmission a Money Market Quote Request substantially in the form of
Exhibit E
hereto so as to be received not later than 2:00 p.m. (New York City time) on (x) the fourth Euro-Dollar Business Day prior to the date of Borrowing proposed therein, in the case of a LIBOR Auction, or (y) the Domestic Business Day next preceding the date of Borrowing proposed therein, in the case of an Absolute Rate Auction (or, in either case, such other time or date as the Borrower and the Administrative Agent shall have mutually agreed and shall have notified to the Banks not later than the date of the Money Market Quote Request for the first LIBOR Auction or Absolute Rate Auction for which such change is to be effective) specifying:
(i) the proposed date of Borrowing, which shall be a Euro-Dollar Business Day in the case of a LIBOR Auction or a Domestic Business Day in the case of an Absolute Rate Auction,
(ii) the aggregate amount of such Borrowing, which shall be $10,000,000 or a larger multiple of $500,000,
(iii) the duration of the Interest Period applicable thereto, subject to the provisions of the definition of Interest Period, and
(iv) whether the Money Market Quotes requested are to set forth a Money Market Margin or a Money Market Absolute Rate.
The Borrower may request offers to make Money Market Loans for more than one Interest Period in a single Money Market Quote Request. No Money Market Quote Request shall be given within thirty days (or such other number of days as the Borrower and the Administrative Agent may agree) of any other Money Market Quote Request.
(c)
Invitation for Money Market Quotes
. Promptly upon receipt of a Money Market Quote Request, the Administrative Agent shall send to the Revolving Credit Banks by telex or facsimile transmission an Invitation for Money Market Quotes substantially in the form of
Exhibit F
hereto, which shall constitute an invitation by the Borrower to each Revolving Credit Bank to submit Money Market Quotes offering to make the Money Market Loans to which such Money Market Quote Request relates in accordance with this Section 2.3.
(d)
Submission and Contents of Money Market Quotes
. (i) Each Revolving Credit Bank may submit a Money Market Quote containing an offer or offers to make Money Market Loans in response to any Invitation for Money Market Quote Request. Each Money Market Quote must comply with the requirements of this subsection (d) and must be submitted to the Administrative Agent by telex or facsimile transmission at its offices specified in or pursuant to Section 9.1 not later than (x) 10:00 a.m. (New York City time) on the third Euro-Dollar Business Day prior to the proposed date of Borrowing, in the case of a LIBOR Auction, or (y)
10:00 a.m. (New York City time) on the proposed date of Borrowing, in the case of an Absolute Rate Auction (or, in either case, such other time or date as the Borrower and the Administrative Agent shall have mutually agreed and shall have notified to the Banks not later than the date of the Money Market Quote Request for the first LIBOR Auction or Absolute Rate Auction for which such change is to be effective);
provided
that Money Market Quotes submitted by the Administrative Agent (or any Affiliate of the Administrative Agent) in the capacity of a Revolving Credit Bank may be submitted, and may only be submitted, if the Administrative Agent or such Affiliate notifies the Borrower of the terms of the offer or offers contained therein not later than thirty (30) minutes prior to the applicable deadline for the other Revolving Credit Banks. Subject to Articles III and VI, any Money Market Quote so made shall be irrevocable except with the written consent of the Administrative Agent given on the instructions of the Borrower. Such Money Market Loans may be funded by such Revolving Credit Bank’s Designated Lender (if any) as provided in Section 9.6(d); however such Revolving Credit Bank shall not be required to specify in its Money Market Quote whether such Money Market Loans will be funded by such Designated Lender.
(ii) Each Money Market Quote shall be in substantially the form of
Exhibit G
hereto and shall in any case specify:
(1) the proposed date of Borrowing,
(2) the principal amount of the Money Market Loan for which each such offer is being made, which principal amount (w) may be greater than or less than the Revolving Commitment of the quoting Revolving Credit Bank, (x) must be $10,000,000 or a larger multiple of $500,000, (y) may not exceed the principal amount of Money Market Loans for which offers were requested and (z) may be subject to an aggregate limitation as to the principal amount of Money Market Loans for which offers being made by such quoting Revolving Credit Bank may be accepted,
(3) in the case of a LIBOR Auction, the margin above or below the applicable London Interbank Offered Rate (the “
Money Market Margin
”) offered for each such Money Market Loan, expressed as a percentage (specified to the nearest 1/10,000th of 1%) to be added to or subtracted from such base rate,
(4) in the case of an Absolute Rate Auction, the rate of interest per annum (specified to the nearest 1/10,000th of 1%) (the “
Money Market Absolute Rate
”) offered for each such Money Market Loan, and
(5) the identity of the quoting Revolving Credit Bank.
A Money Market Quote may set forth up to five separate offers by the quoting Revolving Credit Bank with respect to each Interest Period specified in the related Money Market Quote Request.
(iii) Any Money Market Quote shall be disregarded if it:
(1) is not substantially in conformity with
Exhibit G
hereto or does not specify all of the information required by subsection (d)(ii) above;
(2) contains qualifying, conditional or similar language;
(3) proposes terms other than or in addition to those set forth in the applicable Invitation for Money Market Quotes; or
(4) arrives after the time set forth in subsection (d)(i).
(e)
Notice to Borrower
. The Administrative Agent shall promptly notify the Borrower (x) with respect to each Money Market Quote submitted in accordance with subsection (d), of the terms of such Money Market Quote and the identity of the Revolving Credit Bank submitting such Money Market Quote and (y) of any Money Market Quote that amends, modifies or is otherwise inconsistent with a previous Money Market Quote submitted by such Revolving Credit Bank with respect to the same Money Market Quote Request. Any such subsequent Money Market Quote shall be disregarded by the Administrative Agent unless such subsequent Money Market Quote is submitted solely to correct a manifest error in such former Money Market Quote. The Administrative Agent’s notice to the Borrower shall specify (A) the aggregate principal amount of Money Market Loans for which offers have been received for each Interest Period specified in the related Money Market Quote Request, (B) the respective principal amounts and Money Market Margins or Money Market Absolute Rates, as the case may be, so offered and (C) if applicable, limitations on the aggregate principal amount of Money Market Loans for which offers in any single Money Market Quote may be accepted.
(f)
Acceptance and Notice by Borrower
. Not later than 1:00 p.m. (New York City time) on (x) the third Euro-Dollar Business Day prior to the proposed date of Borrowing, in the case of a LIBOR Auction, or (y) the proposed date of Borrowing, in the case of an Absolute Rate Auction (or, in either case, such other time or date as the Borrower and the Administrative Agent shall have mutually agreed and shall have notified to the Revolving Credit Banks not later than the date of the Money Market Quote Request for the first LIBOR Auction or Absolute Rate Auction for which such change is to be effective), the Borrower shall notify the Administrative Agent of its acceptance or non-acceptance of the offers so notified to it pursuant to subsection (e). In the case of acceptance, such notice (a “
Notice of Money Market Borrowing
”) shall specify the aggregate principal amount of offers for each Interest Period that are accepted. The Borrower may accept any Money Market Quote in whole or in part; provided that:
(i) the aggregate principal amount of each Money Market Borrowing may not exceed the applicable amount set forth in the related Money Market Quote Request;
(ii) the principal amount of each Money Market Borrowing must be $10,000,000 or a larger multiple of $500,000;
(iii) acceptance of offers may only be made on the basis of ascending Money Market Margins or Money Market Absolute Rates, as the case may be; and
(iv) the Borrower may not accept any offer that is described in subsection (d)(iii) or that otherwise fails to comply with the requirements of this Agreement.
(g)
Allocation by Administrative Agent
. If offers are made by two or more Revolving Credit Banks with the same Money Market Margins or Money Market Absolute Rates, as the case may be, for a greater aggregate principal amount than the amount in respect of which such offers are accepted for the related Interest Period, the principal amount of Money Market Loans in respect of which such offers are accepted shall be allocated by the Administrative Agent among such Banks as nearly as possible (in multiples of $500,000, as the Administrative Agent may deem appropriate) in proportion to the aggregate principal amounts of such offers. Determinations by the Administrative Agent of the amounts of Money Market Loans shall be conclusive in the absence of manifest error.
(h)
Notification by Administrative Agent
. Upon receipt of the Borrower’s Notice of Money Market Borrowing in accordance with Section 2.3(f) hereof, the Administrative Agent shall, on the date such Notice of Money Market Borrowing is received by the Administrative Agent, notify each Revolving Credit Bank of the principal amount of the Money Market Borrowing accepted by the Borrower and of such Revolving Credit Bank’s share (if any) of such Money Market Borrowing and such Notice of Money Market Borrowing shall not thereafter be revocable by the Borrower. A Revolving Credit Bank who is notified that it has been selected to make a Money Market Loan may designate its Designated Lender (if any) to fund such Money Market Loan on its behalf, as described in Section 9.6(d). Any Designated Lender which funds a Money Market Loan shall on and after the time of such funding become the obligee under such Money Market Loan and be entitled to receive payment thereof when due. No Revolving Credit Bank shall be relieved of its obligation to fund a Money Market Loan, and no Designated Lender shall assume such obligation, prior to the time the applicable Money Market Loan is funded.
Section 2.4
Notice to Banks; Funding of Loans
.
(a) Upon receipt of a Notice of Committed Borrowing, the Administrative Agent shall notify each applicable Bank on the same day as it receives the Notice of Committed Borrowing of the contents thereof and of such Bank’s share of such Borrowing and such Notice of Committed Borrowing shall not thereafter be revocable by the Borrower.
(b) Not later than 2:00 P.M. (New York City time) on the date of each Committed Borrowing, each applicable Bank shall make available its share of such Committed Borrowing, in Federal or other funds immediately available in New York City, to the Administrative Agent at its address referred to in Section 9.1. The Administrative Agent will make the funds so received from the Banks available to the Borrower at the Administrative Agent’s aforesaid address. If the Borrower has requested the issuance of a Letter of Credit, no later than 12:00 Noon (New York City time) on the date of such issuance as indicated in the notice delivered pursuant to Section 2.2(b), a Fronting Bank shall issue such Letter of Credit in the amount so requested and deliver the same to the Borrower with a copy thereof to the Administrative Agent. At the request of any Revolving Credit Bank, the Administrative Agent promptly shall deliver copies thereof to such Revolving Credit Bank. Immediately upon the issuance of each Letter of Credit by a Fronting Bank, such Fronting Bank shall be deemed to have sold and transferred to each other Revolving Credit Bank, and each such other Revolving Credit Bank shall be deemed, and hereby agrees, to have irrevocably and unconditionally purchased and received from such Fronting Bank, without recourse or warranty, an undivided
interest and a participation in such Letter of Credit, any drawing thereunder, and the obligations of the Borrower hereunder with respect thereto, and any security therefor or guaranty pertaining thereto, in an amount equal to such Revolving Credit Bank’s ratable share thereof (based upon the ratio its Revolving Commitment bears to the aggregate of all Revolving Commitments). Upon any change in any of the Revolving Commitments in accordance herewith, there shall be an automatic adjustment to such participations to reflect such changed shares. The applicable Fronting Bank shall have the primary obligation to fund any and all draws made with respect to such Letter of Credit notwithstanding any failure of a participating Revolving Credit Bank to fund its ratable share of any such draw. Unless the Administrative Agent determines that any applicable condition specified in Article III has not been satisfied, the Administrative Agent will instruct the applicable Fronting Bank to make such Letter of Credit available to the Borrower and the applicable Fronting Bank shall make such Letter of Credit available to the Borrower at the Borrower’s aforesaid address or at such address in the United States as Borrower shall request on the date of the Borrowing.
(c) Not later than 3:00 p.m. (New York City time) on the date of each Swingline Borrowing as indicated in the applicable Notice of Committed Borrowing, the Swingline Lender shall make available such Swingline Borrowing in Federal funds immediately available in New York, New York to the Administrative Agent at its address referred to in Section 9.1.
(d) Unless the Administrative Agent shall have received notice from a Bank prior to the date of any Borrowing that such Bank will not make available to the Administrative Agent such Bank’s share of such Borrowing, the Administrative Agent may assume that such Bank has made such share available to the Administrative Agent on the date of such Borrowing in accordance with subsection (b) of this Section 2.4 and the Administrative Agent may, in reliance upon such assumption, make available to the Borrower on such date a corresponding amount. If and to the extent that such Bank shall not have so made such share available to the Administrative Agent, such Bank and the Borrower severally agree to repay to the Administrative Agent forthwith on demand such corresponding amount together with interest thereon, for each day from the date such amount is made available to the Borrower until the date such amount is repaid to the Administrative Agent, at (i) in the case of the Borrower, a rate per annum equal to the higher of the Federal Funds Rate and the interest rate applicable thereto pursuant to Section 2.7 and (ii) in the case of such Bank, the Federal Funds Rate. If such Bank shall repay to the Administrative Agent such corresponding amount, such amount so repaid shall constitute such Bank’s Loan included in such Borrowing for purposes of this Agreement.
Section 2.5
Notes
.
(a) At the request of any Bank, its Loans shall be evidenced by the Notes, each of which shall be payable to each applicable Bank for the account of its Applicable Lending Office in an amount equal to each such Bank’s Commitment.
(b) Each Bank may, by notice to the Borrower and the Administrative Agent, request that its Loans of a particular Class be evidenced by a separate Note in an amount equal to the aggregate unpaid principal amount of such Bank’s Loans of such Class. Each such Note shall be in substantially the form of
Exhibit A-1
or
Exhibit A-
2 hereto, as applicable, with
appropriate modifications to reflect the fact that it evidences solely Loans of the relevant Class for such Bank. Each reference in this Agreement to the “
Note
” of such Bank shall be deemed to refer to and include any or all of such Notes, as the context may require.
(c) Upon receipt of each Bank’s Note, the Administrative Agent shall forward such Note to such Bank. Each Bank shall record the date, amount, type and maturity of each Loan made by it and the date and amount of each payment of principal made by the Borrower with respect thereto, and may, if such Bank so elects in connection with any transfer or enforcement of its Note, endorse on the schedule forming a part thereof appropriate notations to evidence the foregoing information with respect to each such Loan then outstanding;
provided
that the failure of any Bank to make any such recordation or endorsement shall not affect the obligations of the Borrower hereunder or under the Notes. Each Bank is hereby irrevocably authorized by the Borrower so to endorse its Notes and to attach to and make a part of its Notes a continuation of any such schedule as and when required.
(d) There shall be no more than ten (10) Euro-Dollar Revolving Borrowings, and no more than four (4) Euro-Dollar Term Loan Borrowings, outstanding at any one time pursuant to this Agreement.
Section 2.6
Maturity of Loans
. The Revolving Loans, except as otherwise provided herein with respect to Swingline Loans or as otherwise provided in Section 6.2, shall mature, and the principal amount thereof shall be due and payable, on the Revolving Credit Maturity Date. Swingline Loans shall mature, and the principal amount thereof shall be due and payable, in accordance with Section 2.18(b)(iii). The Term Loans shall mature, and the principal amount thereof shall be due and payable, on the Term Loan Maturity Date.
Section 2.7
Interest Rates
.
(a) Each Base Rate Loan shall bear interest on the outstanding principal amount thereof, for each day from the date such Loan is made until it becomes due, at a rate per annum equal to the sum of the Applicable Margin for Base Rate Loans for the applicable Class of Loans plus the Base Rate for such day. Such interest shall be payable in arrears for each Interest Period on the last day thereof.
(b) Each Euro-Dollar Loan shall bear interest on the outstanding principal amount thereof, for each day during the Interest Period applicable thereto, at a rate per annum equal to the sum of the Applicable Margin for Euro-Dollar Loans for the applicable Class of Loans plus the Adjusted London Interbank Offered Rate for such day. Such interest shall be payable in arrears for each Interest Period on the last day thereof and, if such Interest Period is longer than three months, at intervals of three months after the first day thereof.
“
Adjusted London Interbank Offered Rate
” applicable to any Interest Period means a rate per annum equal to the quotient obtained (rounded upward, if necessary, to the next higher 1/100 of 1%) by dividing (i) the applicable London Interbank Offered Rate by (ii) 1.00 minus the Euro-Dollar Reserve Percentage.
“
Euro-Dollar Reserve Percentage
” means for any day that percentage (expressed as a decimal) which is in effect on such day, as prescribed by the Board of Governors of the
Federal Reserve System (or any successor) for determining the maximum reserve requirement for a member bank of the Federal Reserve System in New York City with deposits exceeding five billion dollars in respect of “Eurocurrency liabilities” (or in respect of any other category of liabilities which includes deposits by reference to which the interest rate on Euro-Dollar Loans is determined or any category of extensions of credit or other assets which includes loans by a non-United States office of any Bank to United States residents). The Adjusted London Interbank Offered Rate shall be adjusted automatically on and as of the effective date of any change in the Euro-Dollar Reserve Percentage.
The “
London Interbank Offered Rate
” applicable to a particular Interest Period shall mean the London interbank offered rate as administered by ICE Benchmark Administration (or any other Person that takes over the administration of such rate for U.S. Dollars for a period equal in length to such Interest Period as displayed on pages LIBOR01 or LIBOR02 of the Reuters screen that displays such rate (or, in the event such rate does not appear on a Reuters page or screen, on any successor or substitute page on such screen that displays such rate, or on the appropriate page of such other information service that publishes such rate from time to time as selected by the Administrative Agent in its reasonable discretion; in each case the “
LIBO Screen Rate
”) at approximately 11:00 a.m., London time, two Business Days prior to the commencement of such Interest Period; provided that, if the LIBO Screen Rate shall be less than zero, such rate shall be deemed to be zero for the purposes of this Agreement and provided, further, if the LIBO Screen Rate shall not be available at such time for such Interest Period (an “
Impacted Interest Period
”) with respect to U.S. Dollars then the London Interbank Offered Rate shall be the Interpolated Rate, provided, that, if any Interpolated Rate shall be less than zero, such rate shall be deemed to be zero for purposes of this Agreement.
The “
Quotation Date
” means, in relation to any period for which an interest rate is to be determined, two (2) Euro-Dollar Business Days before the first day of that period, unless market practice differs in the relevant interbank market for a currency, in which case the Quotation Date for that currency will be determined by the Administrative Agent in accordance with market practice in the London interbank market (and if quotations would normally be given by leading banks in the London interbank market on more than one day, the Quotation Date will be the last of those days).
(c) Subject to Section 8.1, each Money Market LIBOR Loan shall bear interest on the outstanding principal amount thereof, for the Interest Period applicable thereto, at a rate per annum equal to the sum of the London Interbank Offered Rate for such Interest Period (determined in accordance with Section 2.7(b) as if the related Money Market LIBOR Borrowing were a Committed Euro-Dollar Borrowing) plus (or minus) the Money Market Margin quoted by the Revolving Credit Bank making such Loan in accordance with Section 2.3. Each Money Market Absolute Rate Loan shall bear interest on the outstanding principal amount thereof, for the Interest Period applicable thereto, at a rate per annum equal to the Money Market Absolute Rate quoted by the Revolving Credit Bank making such Loan in accordance with Section 2.3. Such interest shall be payable for each Interest Period on the last day thereof and, if such Interest Period is longer than 3 months, at intervals of 3 months after the first day thereof.
(d) Interest on all Loans bearing interest at the Offered Rate shall be payable for each applicable Interest Period on the last day thereof.
(e) In the event that, and for so long as, any Event of Default shall have occurred and be continuing, the outstanding principal amount of the Loans, and, to the extent permitted by law, overdue interest in respect of all Loans, shall bear interest at the annual rate of the sum of the Base Rate and two percent (2%).
(f) The Administrative Agent shall determine each interest rate applicable to the Loans hereunder. The Administrative Agent shall give prompt notice to the Borrower and the Banks of each rate of interest so determined, and its determination thereof shall be conclusive in the absence of manifest error.
Section 2.8
Fees
.
(a)
Facility Fee
.
(i) During the Availability Period, the Borrower shall pay to the Administrative Agent for the account of the Revolving Credit Banks ratably in proportion to their respective Revolving Commitments, a facility fee on the full Revolving Loan Amount at the respective percentages per annum based upon the Borrower’s Credit Rating in accordance with the following table:
|
|
|
|
Borrower’s Credit Rating
|
Facility Fee
|
A-/A3 or better
|
0.125
|
%
|
BBB+/Baa1
|
0.150
|
%
|
BBB/Baa2
|
0.200
|
%
|
BBB-/Baa3
|
0.250
|
%
|
<BBB-/Baa3 or unrated
|
0.300
|
%
|
(ii) The facility fee shall be payable at all times (quarterly in arrears), irrespective of usage, on each January 1, April 1, July 1, and October 1 during the Availability Period and any extensions thereof. Any change in the Borrower’s Credit Rating causing it to move into a different range on the table shall effect an immediate change in the applicable percentage per annum. If there are only two Borrower’s Credit Ratings, it will be the higher of the two. In the event that the Borrower’s Credit Ratings are more than one level apart, the median rating will be used. If there are three Borrower’s Credit Ratings, and such ratings are split, then, if the difference between the highest and lowest is one level apart, it will be the highest of the three, but if the difference is more than one level, the rating will be the average of the two highest (or if such average is not a recognized category, then the second highest rating will be used). If there is only one Borrower’s Credit Rating, the facility fee shall be based on such rating. Should Borrower (or General Partner) lose its Investment Grade Rating from both S&P and Moody’s, the facility fee will revert to the unrated portion of the table above. Upon reinstatement of such Investment Grade Rating from either S&P or Moody’s, the facility fee will revert to the rated pricing table above.
(b)
Letter of Credit Fee
. During the Availability Period, the Borrower shall pay to the Administrative Agent, for the account of the Revolving Credit Banks in proportion to their interests in respect of undrawn issued Letters of Credit, a fee (a “
Letter of Credit Fee
”) in
an amount, provided that no Event of Default shall have occurred and be continuing, equal to a rate per annum equal to the Applicable Margin with respect to Euro-Dollar Revolving Loans on the daily average of such issued and undrawn Letters of Credit, which fee shall be payable, in arrears, on each January 1, April 1, July 1 and October 1 during the Availability Period. From the occurrence, and during the continuance, of an Event of Default, such fee shall be increased to be equal to two percent (2%) per annum on the daily average of such issued and undrawn Letters of Credit.
(c)
Fronting Bank Fee
. The Borrower shall pay any Fronting Bank, for its own account, a fee (a “
Fronting Bank Fee
”) at a rate per annum equal to 0.125% of the issued and undrawn amount of the Letters of Credit issued by such Fronting Bank (or such lesser amount as agreed to by the applicable Fronting Bank), in no cases less than $500, in addition to each Fronting Bank’s customary administrative charges related to the issuance or amendment of, or drawing upon, Letters of Credit, which fee shall be in addition to and not in lieu of, the Letter of Credit Fee. The Fronting Bank Fee shall be payable in arrears on each January 1, April 1, July 1 and October 1 during the Availability Period.
(d)
Fees Non-Refundable
. All fees set forth in this Section 2.8 shall be deemed to have been earned on the date payment is due in accordance with the provisions hereof and shall be non-refundable. The obligation of the Borrower to pay such fees in accordance with the provisions hereof shall be binding upon the Borrower and shall inure to the benefit of the Administrative Agent and the Banks regardless of whether any Loans are actually made.
Section 2.9
Mandatory Termination
. (a) Unless earlier terminated pursuant to Section 6.2, the term (the “
Availability Period
”) of the Revolving Commitments shall commence on the Closing Date and terminate and expire, and the Borrower shall return or cause to be returned all Letters of Credit to the Fronting Banks, on the Revolving Credit Maturity Date.
(b) The Term Loans shall terminate and expire on the Term Loan Maturity Date.
Section 2.10
Mandatory Prepayment
. (a) In the event that an Unencumbered Asset Pool Property (or any Separate Parcel that originally formed a part of an Unencumbered Asset Pool Property) is sold, transferred or released from the restrictions of Section 5.11 hereof, the Borrower shall, simultaneously with such sale, transfer or release, prepay the Loans in an amount equal to 100% of the net proceeds of such sale or transfer, in the event of a sale or transfer, or such lesser amount as shall be required for the Borrower to remain in compliance with this Agreement, in the event of such a sale, transfer or release. Such prepayments shall be applied to either the Revolving Credit Facility or the Term Loan Facility as directed by the Borrower; provided, however, that if Borrower fails to give such direction, such prepayments shall first be applied to the Revolving Credit Facility, and then to the Term Loan Facility if such prepayment amounts are needed for the Borrower to remain in compliance with this Agreement. Notwithstanding the foregoing, a simultaneous like-kind exchange under Section 1031 of the Internal Revenue Code will not be subject to the provisions of this Section 2.10(a), provided that the exchanged property has qualified as a New Acquisition and any cash “boot” associated therewith shall be applied to prepayment of the Loans or such lesser amount of such cash “boot” as shall be required for the Borrower to remain in compliance with this Agreement. Sale of an
Unencumbered Asset Pool Property (or any Separate Parcel that originally formed a part of a Unencumbered Asset Pool Property) in violation of this Section 2.10 shall constitute an Event of Default.
(b) In the event that the Unsecured Debt Ratio is not maintained as of the last day of a calendar quarter, either (i) the Borrower will add a Real Property Asset to the Unencumbered Asset Pool Properties in accordance with this Agreement which, on a
pro
forma
basis (
i.e
. the Unsecured Debt Ratio shall be recalculated to include such Real Property Asset as though the same had been an Unencumbered Asset Pool Property for the entire applicable period) would result in compliance with the Unsecured Debt Ratio, or (ii) the Borrower shall prepay to the Administrative Agent, for the account of the applicable Banks, an amount necessary to cause the Unsecured Debt Ratio to be in compliance within ninety (90) days of the date on which the Unsecured Debt Ratio failed to be maintained. Such prepayments shall be applied to either the Revolving Credit Facility or the Term Loan Facility as directed by the Borrower; provided, however, that if Borrower fails to give such direction, such prepayments shall first be applied to the Revolving Credit Facility, and then to the Term Loan Facility if such prepayment amounts are needed for the Borrower to remain in compliance with this Agreement. Failure by the Borrower to comply with the Unsecured Debt Ratio within ninety (90) days of the date of such non-compliance shall be an Event of Default.
Section 2.11
Optional Prepayments
.
(a) The Borrower may, upon at least one Domestic Business Day’s notice to the Administrative Agent, prepay to the Administrative Agent, for the account of the applicable Banks, any Base Rate Borrowing or Loans bearing interest at the Offered Rate in whole at any time, or from time to time in part in amounts aggregating One Million Dollars ($1,000,000), or an integral multiple of One Million Dollars ($1,000,000) in excess thereof or, if less, the outstanding principal balance, by paying the principal amount to be prepaid together with accrued interest thereon to the date of prepayment. The Borrower may, from time to time on any Domestic Business Day so long as prior notice is given to the Administrative Agent and the Swingline Lender no later than 1:00 p.m. (New York City time) on the day on which the Borrower intends to make such prepayment, prepay any Swingline Loans in whole or in part in amounts aggregating $100,000 or a higher integral multiple of $100,000 (or, if less, the aggregate outstanding principal amount of all Swingline Loans then outstanding) by paying the principal amount to be prepaid together with accrued interest thereon to the date of prepayment. Each such optional prepayment shall be applied to prepay ratably the Loans of the several applicable Banks (or the Swingline Lender in the case of Swingline Loans) included in such Borrowing.
(b) Except as provided in Section 8.2, the Borrower may not prepay all or any portion of the principal amount of any Euro-Dollar Loan prior to the maturity thereof unless the Borrower shall also pay any applicable expenses pursuant to Section 2.13. Any such prepayment shall be upon at least one (1) Euro-Dollar Business Day’s notice to the Administrative Agent, and the Administrative Agent shall notify the applicable Banks of receipt of any such notice on the same Euro-Dollar Business Day as received by it. Any notice of prepayment delivered pursuant to this Section 2.11(b) shall set forth the amount of such prepayment which is applicable to any Loan made for working capital purposes. Each such optional prepayment shall
be in the amounts set forth in Section 2.11(a) above and shall be applied to prepay ratably the Loans of the applicable Banks included in such Borrowing.
(c) The Borrower may not prepay any Money Market Loan.
(d) The Borrower may, upon at least one (1) Domestic Business Day’s notice to the Administrative Agent (by 2:00 p.m. New York time on such Domestic Business Day), reimburse the Administrative Agent for the benefit of the Fronting Banks for the amount of any drawing under a Letter of Credit in whole or in part in any amount.
(e) The Borrower may at any time return any undrawn Letter of Credit to a Fronting Bank in whole, but not in part, and such Fronting Bank shall give the Administrative Agent and each of the Revolving Credit Banks notice of such return.
(f) The Borrower may at any time and from time to time cancel all or any part of the unused Commitments under the Revolving Credit Facility in amounts aggregating One Million Dollars ($1,000,000), or an integral multiple of One Million Dollars ($1,000,000) in excess thereof, by the delivery to the Administrative Agent and the Revolving Credit Banks of a notice of cancellation upon at least three (3) Domestic Business Days’ notice to Administrative Agent and such Revolving Credit Banks, whereupon, all or such portion of the Revolving Commitments shall terminate as to such Revolving Credit Banks,
pro rata
on the date set forth in such notice of cancellation, and, if there are any Revolving Loans then outstanding in an aggregate amount which exceeds the aggregate Revolving Commitments (after giving effect to any such reduction), the Borrower shall prepay to the Administrative Agent, for the account of such Revolving Credit Banks, all or such portion of the Revolving Loans outstanding on such date in accordance with the requirements of Sections 2.11(a) and (b). In no event shall the Borrower be permitted to cancel Revolving Commitments for which a Letter of Credit has been issued and is outstanding unless the Borrower returns (or causes to be returned) such Letter of Credit to the applicable Fronting Bank. The Borrower shall be permitted to designate in its notice of cancellation which Revolving Loans, if any, are to be prepaid. A reduction of the Revolving Commitments pursuant to this Section 2.11(f) shall not effect a reduction in the Swingline Commitment (unless so elected by the Borrower) until the aggregate Revolving Commitments have been reduced to an amount equal to the Swingline Commitment.
(g) Upon receipt of a notice of prepayment or cancellation or a return of a Letter of Credit pursuant to this Section, the Administrative Agent shall promptly, and in any event within one (1) Domestic Business Day, notify each Revolving Credit Bank of the contents thereof and of such Revolving Credit Bank’s ratable share (if any) of such prepayment or cancellation and such notice shall not thereafter be revocable by the Borrower.
(h) Any amounts so prepaid pursuant to this Section 2.11 with respect to the Revolving Credit Facility only may be reborrowed subject to the other terms of this Agreement. In the event that the Borrower elects to cancel all or any portion of the Revolving Commitments and the Swingline Commitment pursuant to Section 2.11(f) hereof, such cancellation shall be irrevocable and such amounts may not be reborrowed.
Section 2.12
General Provisions as to Payments
.
(a) The Borrower shall make each payment of principal of, and interest on, the Loans and of fees hereunder, not later than 3:00 p.m. (New York City time) on the date when due, in Federal or other funds immediately available in New York City, to the Administrative Agent at its address referred to in Section 9.1. The Administrative Agent will distribute to each applicable Bank its ratable share of each such payment received by the Administrative Agent for the account of the applicable Banks on the same day as received by the Administrative Agent if received by the Administrative Agent by 3:00 p.m. (New York City time), or, if received by the Administrative Agent after 3:00 p.m. (New York City time), on the immediately following Domestic Business Day. If the Administrative Agent shall fail to distribute to a Bank its ratable share of a payment on the same day it is received or the immediately following Domestic Business Day, as applicable in accordance with the immediately preceding sentence, the Administrative Agent shall pay to such Bank the interest accrued on such payment at the Federal Funds Rate, commencing on the day the Administrative Agent should have made the payment to such Bank and ending on the day prior to the date payment is actually made. Whenever any payment of principal of, or interest on, the Base Rate Loans or Swingline Loans or of fees shall be due on a day which is not a Domestic Business Day, the date for payment thereof shall be extended to the next succeeding Domestic Business Day. Whenever any payment of principal of, or interest on, the Euro-Dollar Loans shall be due on a day which is not a Euro-Dollar Business Day, the date for payment thereof shall be extended to the next succeeding Euro-Dollar Business Day unless such Euro-Dollar Business Day falls in another calendar month, in which case the date for payment thereof shall be the next preceding Euro-Dollar Business Day. If the date for any payment of principal is extended by operation of law or otherwise, interest thereon shall be payable for such extended time. Each payment (including each prepayment) by the Borrower on account of principal of and interest on the Term Loans shall be made
pro
rata
according to the respective outstanding principal amounts of the Term Loans then held by each Term Loan Bank. Each payment (including each prepayment) by the Borrower on account of principal of and interest on the Revolving Loans shall be made
pro
rata
according to the respective Revolving Commitment Percentages of each Revolving Credit Bank.
(b) Unless the Administrative Agent shall have received notice from the Borrower prior to the date on which any payment is due to the Banks hereunder that the Borrower will not make such payment in full, the Administrative Agent may assume that the Borrower has made such payment in full to the Administrative Agent on such date and the Administrative Agent may, in reliance upon such assumption, cause to be distributed to each Bank on such due date an amount equal to the amount then due such Bank. If and to the extent that the Borrower shall not have so made such payment, each Bank shall repay to the Administrative Agent forthwith on demand such amount distributed to such Bank together with interest thereon, for each day from the date such amount is distributed to such Bank until the date such Bank repays such amount to the Administrative Agent, at the Federal Funds Rate.
(c) All payments made on the Loans shall be credited, to the extent of the amount thereof, in the following manner, in each case ratably among the parties entitled thereto in accordance with the amounts then due to such party: (a) first, against all costs, expenses and other fees (including reasonable attorneys’ fees) arising under the terms hereof, of which, if no Event of Default shall have occurred and be continuing, the Borrower has received notice pursuant to the terms hereof, (b) second, against the amount of interest accrued and unpaid on the Loans as of the date of such payment, (c) third, against all principal due and owing on the Loans
as of the date of such payment, and (d) fourth, to all other amounts constituting any portion of the Obligations.
(d) If any Bank is a Defaulting Lender, then the Administrative Agent may (or at the request of the Borrower, shall), in its discretion and notwithstanding any contrary provision hereof, (i) apply any amounts thereafter received by the Administrative Agent for the account of such Bank for the benefit of the Administrative Agent, the Swingline Lender or the Fronting Banks to satisfy such Bank’s obligations to it hereunder until such Bank is not a Defaulting Lender, and/or (ii) hold any such amounts in a segregated account as cash collateral for, and application to, any future funding obligations of such Bank hereunder, in the case of each of clauses (i) and (ii) above, in any order as determined by the Administrative Agent in its discretion.
Section 2.13
Funding Losses
. If the Borrower makes any payment of principal with respect to any Euro-Dollar Loan (pursuant to Article II, VI or VIII or otherwise, and specifically including any payments made pursuant to Sections 2.10 or 2.11) on any day other than the last day of the Interest Period applicable thereto, or if the Borrower fails to borrow any Euro-Dollar Loans, after notice has been given to any Bank in accordance with Section 2.4(a), or to prepay any Euro-Dollar Loans, after notice has been given to any Bank in accordance with Section 2.11(b), the Borrower shall reimburse each Bank within 15 days after demand for any resulting loss or expense incurred by it (or by an existing Participant in the related Loan; provided that no Participant shall be entitled to receive more than the Bank, with respect to which such Participant is a Participant, would be entitled to receive under this Section 2.13), including (without limitation) any loss incurred in obtaining, liquidating or employing deposits from third parties, but excluding loss of margin for the period after any such payment or failure to borrow, provided that such Bank shall have delivered to the Borrower a certificate as to the amount of such loss or expense and the calculation thereof, which certificate shall be conclusive in the absence of manifest error.
Section 2.14
Computation of Interest and Fees
. Interest based on the Prime Rate hereunder shall be computed on the basis of a year of 365 days (or 366 days in a leap year) and paid for the actual number of days elapsed (including the first day but excluding the last day). All other interest and fees shall be computed on the basis of a year of 360 days and paid for the actual number of days elapsed (including the first day but excluding the last day).
Section 2.15
Method of Electing Interest Rates
.
(a) The Loans included in each Borrowing shall bear interest initially at the type of rate specified by the Borrower in the applicable Notice of Committed Borrowing or as otherwise provided in Section 2.18 with respect to Mandatory Borrowings. Thereafter, the Borrower may from time to time elect to change or continue the type of interest rate borne by each Group of Loans (subject in each case to the provisions of Article VIII), as follows:
(i) if such Loans are Base Rate Loans, the Borrower may elect to convert such Loans to Euro-Dollar Loans or Loans bearing interest at the Offered Rate as of any Euro-Dollar Business Day;
(ii) if such Loans are Euro-Dollar Loans or Loans bearing interest at the Offered Rate, the Borrower may elect to convert such Loans to Base Rate Loans or elect to continue such Loans as Euro-Dollar Loans for an additional Interest Period, in each case effective on the last day of the then current Interest Period applicable to such Loans.
Each such election shall be made by delivering a notice (a “
Notice of Interest Rate Election
”) to the Administrative Agent at least three (3) Euro-Dollar Business Days before the conversion or continuation selected in such notice is to be effective (unless the relevant Loans are to be continued as Base Rate Loans, in which case such notice shall be delivered to the Administrative Agent no later than 2:00 p.m. (New York City time) at least one (1) Domestic Business Day before such continuation is to be effective). A Notice of Interest Rate Election may, if it so specifies, apply to only a portion of the aggregate principal amount of the relevant Group of Loans;
provided
that (i) such portion is allocated ratably among the Loans comprising such Group, (ii) the portion to which such notice applies, and the remaining portion to which it does not apply, are each $1,000,000 or any larger multiple of $1,000,000, (iii) there shall be no more than ten (10) Revolving Borrowings, and no more than four (4) Term Loan Borrowings, comprised of Euro-Dollar Loans outstanding at any time under this Agreement, (iv) no Loan may be continued as, or converted into, a Euro-Dollar Loan when any Event of Default has occurred and is continuing, and (v) no Interest Period shall extend beyond the applicable Maturity Date.
(b) Each Notice of Interest Rate Election shall specify:
(i) the Group of Loans (or portion thereof) to which such notice applies;
(ii) the date on which the conversion or continuation selected in such notice is to be effective, which shall comply with the applicable clause of subsection (a) above;
(iii) if the Loans comprising such Group are to be converted, the new type of Loans and, if such new Loans are Euro-Dollar Loans, the duration of the initial Interest Period applicable thereto; and
(iv) if such Loans are to be continued as Euro-Dollar Loans for an additional Interest Period, the duration of such additional Interest Period.
Each Interest Period specified in a Notice of Interest Rate Election shall comply with the provisions of the definition of Interest Period.
(c) Upon receipt of a Notice of Interest Rate Election from the Borrower pursuant to subsection (a) above, the Administrative Agent shall notify each Bank on the same day as it receives such Notice of Interest Rate Election of the contents thereof and such notice shall not thereafter be revocable by the Borrower. If the Borrower fails to deliver a timely Notice of Interest Rate Election to the Administrative Agent for any Group of Euro-Dollar Loans, such Loans shall be converted into Base Rate Loans on the last day of the then current Interest Period applicable thereto.
Section 2.16
Letters of Credit
. (1) Subject to the (a) terms contained in this Agreement and the other Loan Documents, including Section 2.1(a) hereof, upon the receipt of a notice in accordance with Section 2.2(b) requesting the issuance of a Letter of Credit, a Fronting Bank shall issue a Letter of Credit or Letters of Credit in such form as is reasonably acceptable to the Borrower in an amount or amounts equal to the amount or amounts requested by the Borrower. Letters of Credit issued and outstanding under the Existing Revolving Credit Agreement are Letters of Credit for purposes of this Agreement.
(b) Each Letter of Credit shall be issued in the minimum amount of Five Hundred Thousand Dollars ($500,000).
(c) The Letter of Credit Usage shall be no more than Fifty Million Dollars ($50,000,000) at any one time and the Fronting Banks shall issue Letters of Credit on a proportional basis with no one Fronting Bank issuing Letters of Credit in an aggregate amount of more than one-third (1/3) such amount.
(d) Notwithstanding anything herein to the contrary, no Fronting Bank shall have any obligation hereunder to issue any Letter of Credit the proceeds of which would be made to any Person which to the knowledge of such Fronting Bank is a Sanctioned Person.
(e) In the event of any request for a drawing under any Letter of Credit by the beneficiary thereunder, the applicable Fronting Bank(s) shall endeavor to notify the Borrower and the Administrative Agent (and the Administrative Agent shall endeavor to notify each Revolving Credit Bank thereof) on or before the date on which such Fronting Bank(s) intend to honor such drawing, and, except as provided in this subsection (e), the Borrower shall reimburse such Fronting Bank(s), in immediately available funds, on the same day on which such drawing is honored in an amount equal to the amount of such drawing. Notwithstanding anything contained herein to the contrary, however, unless the Borrower shall have notified the Administrative Agent and the Fronting Banks prior to 2:00 p.m. (New York time) on the Domestic Business Day immediately prior to the date of such drawing that the Borrower intends to reimburse the Fronting Banks for the amount of such drawing with funds other than the proceeds of the Revolving Loans, the Borrower shall be deemed to have timely given a Notice of Committed Borrowing pursuant to Section 2.2 to the Administrative Agent, requesting a Borrowing of Base Rate Revolving Loans on the date on which such drawing is honored and in an amount equal to the amount of such drawing. Each Revolving Credit Bank (other than the Fronting Banks) shall, in accordance with Section 2.4(b), make available its share of such Borrowing to the Administrative Agent, the proceeds of which shall be applied directly by the Administrative Agent to reimburse the Fronting Banks for the amount of such draw. In the event that any such Revolving Credit Bank fails to make available to the Fronting Banks the amount of such Revolving Credit Bank’s participation on the date of a drawing, the Fronting Banks (through the Administrative Agent) shall be entitled to recover such amount on demand from such Revolving Credit Bank together with interest at the Federal Funds Rate commencing on the date such drawing is honored.
(f) If, at the time a beneficiary under any Letter of Credit requests a drawing thereunder, an Event of Default as described in Section 6.1(f) or Section 6.1(g) shall have occurred and is continuing, then on the date on which a Fronting Bank shall have honored such
drawing, the Borrower shall have an unreimbursed obligation (the “
Unreimbursed Obligation
”) to such Fronting Bank in an amount equal to the amount of such drawing, which amount shall bear interest at the annual rate of the sum of the Base Rate plus two percent (2%). Each Revolving Credit Bank shall purchase an undivided participating interest in the Unreimbursed Obligation in an amount equal to its Revolving Commitment Percentage thereof, and upon receipt thereof the Administrative Agent shall deliver to such Revolving Credit Bank an Unreimbursed Obligation participation certificate dated the date of the Fronting Bank’s receipt of such funds and in the amount of such Revolving Credit Bank’s Revolving Commitment Percentage thereof.
(g) If, after the date hereof, any change in any law or regulation or in the interpretation thereof by any court or administrative or governmental authority charged with the administration thereof shall either (i) impose, modify or deem applicable any reserve, special deposit or similar requirement against letters of credit issued by, or assets held by, or deposits in or for the account of, or participations in any letter of credit, upon any Revolving Credit Bank (including the Fronting Banks) or (ii) impose on any Revolving Credit Bank any other condition regarding this Agreement or such Revolving Credit Bank (including the Fronting Banks) as it pertains to the Letters of Credit or any participation therein and the result of any event referred to in the preceding clause (i) or (ii) shall be to increase, by an amount deemed by a Fronting Bank or such Revolving Credit Bank to be material, the cost to such Fronting Bank or any Revolving Credit Bank of issuing or maintaining any Letter of Credit or participating therein then the Borrower shall pay to such Fronting Bank or such Revolving Credit Bank, within 15 days after written demand by such Revolving Credit Bank (with a copy to the Administrative Agent), which demand shall be accompanied by a certificate showing, in reasonable detail, the calculation of such amount or amounts, such additional amounts as shall be required to compensate such Fronting Bank or such Revolving Credit Bank for such increased costs or reduction in amounts received or receivable hereunder.
(h) The Borrower hereby agrees to protect, indemnify, pay and save each Fronting Bank harmless from and against any and all claims, demands, liabilities, damages, losses, costs, charges and expenses (including reasonable attorneys’ fees and disbursements) which any Fronting Bank may incur or be subject to as a result of (i) the issuance of the Letters of Credit, other than as a result of the gross negligence or willful misconduct of such Fronting Bank or (ii) the failure of a Fronting Bank to honor a drawing under any Letter of Credit as a result of any act or omission, whether rightful or wrongful, of any present or future de jure or de facto government or Governmental Authority (collectively, “
Governmental Acts
”), other than as a result of the gross negligence or willful misconduct of such Fronting Bank. As between the Borrower and a Fronting Bank, the Borrower assumes all risks of the acts and omissions of, or misuses of, the Letters of Credit issued by such Fronting Bank, by the beneficiaries of such Letters of Credit. In furtherance and not in limitation of the foregoing, no Fronting Bank shall be responsible (i) for the form, validity, sufficiency, accuracy, genuineness or legal effect of any document submitted by any party in connection with the application for and issuance of such Letters of Credit, even if it should in fact prove to be in any or all respects invalid, insufficient, inaccurate, fraudulent or forged; (ii) for the validity or insufficiency of any instrument transferring or assigning or purporting to transfer or assign any such Letter of Credit or the rights or benefits thereunder or proceeds thereof, in whole or in part, which may prove to be invalid or ineffective for any reason; (iii) for failure of the beneficiary of any such Letter of Credit to
comply fully with conditions required in order to draw upon such Letter of Credit; (iv) for errors, omissions, interruptions or delays in transmission or delivery of any message, by mail, cable, telegraph, telex, facsimile transmission, or otherwise; (v) for errors in interpretation of any technical terms; (vi) for any loss or delay in the transmission or otherwise of any documents required in order to make a drawing under any such Letter of Credit or of the proceeds thereof; (vii) for the misapplication by the beneficiary of any such Letter of Credit of the proceeds of such Letter of Credit; and (viii) for any consequence arising from causes beyond the control of such Fronting Bank, including any Government Acts, in each case other than as a result of the gross negligence or willful misconduct of such Fronting Bank. None of the above shall affect, impair or prevent the vesting of any Fronting Bank’s rights and powers hereunder. In furtherance and extension and not in limitation of the specific provisions hereinabove set forth, any action taken or omitted by a Fronting Bank under or in connection with the Letters of Credit issued by it or the related certificates, if taken or omitted in good faith, shall not put such Fronting Bank under any resulting liability to the Borrower.
(i) If a Fronting Bank or the Administrative Agent is required at any time, pursuant to any bankruptcy, insolvency, liquidation or reorganization law or otherwise, to return to the Borrower any reimbursement by the Borrower of any drawing under any Letter of Credit, each Revolving Credit Bank shall pay to such Fronting Bank (through the Administrative Agent) or the Administrative Agent, as the case may be, its share of such payment, but without interest thereon unless such Fronting Bank or the Administrative Agent is required to pay interest on such amounts to the person recovering such payment, in which case with interest thereon, computed at the same rate, and on the same basis, as the interest that such Fronting Bank or the Administrative Agent is required to pay.
Section 2.17
Letter of Credit Usage Absolute
. The obligations of the Borrower under this Agreement in respect of any Letter of Credit shall be unconditional and irrevocable, and shall be paid strictly in accordance with the terms of this Agreement (as the same may be amended from time to time) and any Letter of Credit Documents (as hereinafter defined) under all circumstances, including, without limitation, to the extent permitted by law, the following circumstances:
(a) any lack of validity or enforceability of any Letter of Credit or any other agreement or instrument relating thereto (collectively, the “
Letter of Credit Documents
”) or any Loan Document;
(b) any change in the time, manner or place of payment of, or in any other term of, all or any of the obligations of the Borrower in respect of the Letters of Credit or any other amendment or waiver of or any consent by the Borrower to departure from all or any of the Letter of Credit Documents or any Loan Document;
provided
, that no Fronting Bank shall consent to any such change or amendment unless previously consented to in writing by the Borrower;
(c) any exchange, release or non-perfection of any collateral, or any release or amendment or waiver of or consent to departure from any guaranty, for all or any of the obligations of the Borrower in respect of the Letters of Credit;
(d) the existence of any claim, set-off, defense or other right that the Borrower may have at any time against any beneficiary or any transferee of a Letter of Credit (or any Persons for whom any such beneficiary or any such transferee may be acting), the Administrative Agent, any Fronting Bank or any Revolving Credit Bank (other than a defense based on the gross negligence or willful misconduct of the Administrative Agent, such Fronting Bank or such Revolving Credit Bank) or any other Person, whether in connection with the Loan Documents, the transactions contemplated hereby or by the Letters of Credit Documents or any unrelated transaction;
(e) any draft or any other document presented under or in connection with any Letter of Credit or other Loan Document proving to be forged, fraudulent, invalid or insufficient in any respect or any statement therein being untrue or inaccurate in any respect;
provided
, that payment by a Fronting Bank under such Letter of Credit against presentation of such draft or document shall not have constituted gross negligence or willful misconduct of the Fronting Bank;
(f) payment by a Fronting Bank against presentation of a draft or certificate that does not comply with the terms of the Letter of Credit;
provided
, that such payment shall not have constituted gross negligence or willful misconduct of such Fronting Bank; and
(g) any other circumstance or happening whatsoever other than the payment in full of all obligations hereunder in respect of any Letter of Credit or any agreement or instrument relating to any Letter of Credit, whether or not similar to any of the foregoing, that might otherwise constitute a defense available to, or a discharge of, the Borrower;
provided
, that such other circumstance or happening shall not have been the result of gross negligence or willful misconduct of the applicable Fronting Bank.
Section 2.18
Swingline Loan Subfacility
.
(a)
Swingline Commitment
. Subject to the terms and conditions of this Section 2.18, the Swingline Lender, in its individual capacity, agrees to make certain revolving credit loans to the Borrower (each a “
Swingline Loa
n” and, collectively, the “
Swingline Loans
”) from time to time during the Availability Period hereof; provided, however, that the aggregate amount of Swingline Loans outstanding at any time shall not exceed the lesser of (i) the aggregate Revolving Commitments less the Outstanding Balance, and (ii) 15% of the aggregate Revolving Commitments (the “
Swingline Commitment
”). Subject to the limitations set forth herein, any amounts repaid in respect of Swingline Loans may be reborrowed.
(b)
Swingline Borrowings
.
(i)
Notice of Borrowing
. With respect to any Swingline Borrowing, the Borrower shall give the Swingline Lender and the Administrative Agent notice in writing which is received by the Swingline Lender and Administrative Agent not later than 2:00 p.m. (New York City time) on the proposed date of such Swingline Borrowing (and confirmed by telephone by such time), specifying (A) that a Swingline Borrowing is being requested, (B) the amount of such Swingline Borrowing, (C) the proposed date of such Swingline Borrowing, which shall be a Domestic Business Day, and (D) that no
Default or Event of Default has occurred and is continuing both before and after giving effect to such Swingline Borrowing. Such notice shall be irrevocable.
(ii)
Minimum Amounts
. Each Swingline Borrowing shall be in a minimum principal amount of $1,000,000, or larger multiples of $1,000,000 in excess thereof.
(iii)
Repayment of Swingline Loans
. Each Swingline Loan shall be due and payable on the earliest of (A) ten (10) days after the date of the applicable Swingline Borrowing, (B) the date of the next Committed Revolving Borrowing, and (C) the Revolving Credit Maturity Date. If, and to the extent, any Swingline Loans shall be outstanding on the date of any Committed Revolving Borrowing, such Swingline Loans shall first be repaid from the proceeds of such Committed Revolving Borrowing prior to the disbursement of the same to the Borrower. If, and to the extent, a Committed Revolving Borrowing is not requested prior to the Revolving Credit Maturity Date or the end of the five (5) day period after a Swingline Borrowing, or unless the Borrower shall have notified the Administrative Agent and the Swingline Lender prior to 1:00 P.M. (New York City time) on the fourth (4th) day after the Swingline Borrowing that the Borrower intends to reimburse the Swingline Lender for the amount of such Swingline Borrowing with funds other than proceeds of the Revolving Loans, the Borrower shall be deemed to have requested a Committed Revolving Borrowing comprised entirely of Base Rate Loans in the amount of the applicable Swingline Loan then outstanding, the proceeds of which shall be used to repay such Swingline Loan to the Swingline Lender. In addition, if (x) the Borrower does not repay the Swingline Loan on or prior to the end of such five (5) day period, or (y) a Default or Event of Default shall have occurred during such five (5) day period, the Swingline Lender may, at any time, in its sole discretion, by written notice to the Borrower and the Administrative Agent, demand repayment of its Swingline Loans by way of a Committed Revolving Borrowing, in which case the Borrower shall be deemed to have requested a Committed Revolving Borrowing comprised entirely of Base Rate Loans in the amount of such Swingline Loans then outstanding, the proceeds of which shall be used to repay such Swingline Loans to the Swingline Lender. Any Committed Revolving Borrowing which is deemed requested by the Borrower in accordance with this Section 2.18(b)(iii) is hereinafter referred to as a “
Mandatory Borrowing
”. Each Revolving Credit Bank hereby irrevocably agrees to make Committed Revolving Loans promptly upon receipt of notice from the Swingline Lender of any such deemed request for a Mandatory Borrowing in the amount and in the manner specified in the preceding sentences and on the date such notice is received by such Revolving Credit Bank (or the next Domestic Business Day if such notice is received after 12:00 noon (New York City time)) notwithstanding (I) that the amount of the Mandatory Borrowing may not comply with the minimum amount of Committed Revolving Borrowings otherwise required hereunder, (II) whether any conditions specified in Section 3.2 are then satisfied, (III) whether a Default or an Event of Default then exists, (IV) failure of any such deemed request for a Committed Revolving Borrowing to be made by the time otherwise required in Section 2.2, (V) the date of such Mandatory Borrowing (provided that such date must be a Domestic Business Day), or (VI) any termination of the Revolving Commitments immediately prior to such Mandatory Borrowing or contemporaneously therewith; provided, however, that no
Revolving Credit Bank shall be obligated to make Committed Revolving Loans in respect of a Mandatory Borrowing if a Default or an Event of Default then exists and the applicable Swingline Loan was made by the Swingline Lender without receipt of a written Notice of Borrowing in the form specified in subclause (i) above or after Administrative Agent has delivered a notice of Default or Event of Default which has not been rescinded.
(iv)
Purchase of Participations
. In the event that any Mandatory Borrowing cannot for any reason be made on the date otherwise required above (including, without limitation, as a result of the commencement of a proceeding under the Bankruptcy Code with respect to the Borrower), then each Revolving Credit Bank hereby agrees that it shall forthwith purchase (as of the date the Mandatory Borrowing would otherwise have occurred, but adjusted for any payment received from the Borrower on or after such date and prior to such purchase) from the Swingline Lender such participations in the outstanding Swingline Loans as shall be necessary to cause each such Revolving Credit Bank to share in such Swingline Loans ratably based upon its Revolving Commitment Percentage (determined before giving effect to any termination of the Revolving Commitments pursuant to Section 6.2), provided that (A) all interest payable on the Swingline Loans with respect to any participation shall be for the account of the Swingline Lender until but excluding the day upon which the Mandatory Borrowing would otherwise have occurred, and (B) in the event of a delay between the day upon which the Mandatory Borrowing would otherwise have occurred and the time any purchase of a participation pursuant to this sentence is actually made, the purchasing Revolving Credit Bank shall be required to pay to the Swingline Lender interest on the principal amount of such participation for each day from and including the day upon which the Mandatory Borrowing would otherwise have occurred to but excluding the date of payment for such participation, at the rate equal to the Federal Funds Rate, for the two (2) Domestic Business Days after the date the Mandatory Borrowing would otherwise have occurred, and thereafter at a rate equal to the Base Rate. Notwithstanding the foregoing, no Revolving Credit Bank shall be obligated to purchase a participation in any Swingline Loan if a Default or an Event of Default then exists and such Swingline Loan was made by the Swingline Lender without receipt of a written Notice of Borrowing in the form specified in subclause (i) above or after Administrative Agent has delivered a notice of Default or Event of Default which has not been rescinded.
(c)
Interest Rate
. Each Swingline Loan shall bear interest on the outstanding principal amount thereof, for each day from the date such Swingline Loan is made until the date it is repaid, at a rate per annum equal to the Federal Funds Rate plus the Applicable Margin for Euro-Dollar Revolving Loans for such day.
Section 2.19
Extending Facilities
.
(a) The Borrower may at any time and from time to time request that all or any portion of Term Loans or Revolving Loans or the Revolving Commitment with a like maturity date (an “
Existing Loan Facility
”) be converted to extend the scheduled maturity date(s) with respect to all or a portion of any principal amount of such Term Loans, Revolving Loans or Revolving Commitments, as applicable, and to otherwise modify the terms of such Term Loans,
Revolving Loans or Revolving Commitments to the extent not prohibited in this
Section 2.19
(any such Term Loans or Revolving Loans which have been so converted, “
Extended Loans
”, and any such Revolving Commitments which have been so converted, “
Extended Revolving Commitments
”) and to provide for other terms consistent with this
Section 2.19
(an “
Extension
”). Any such request shall be made on a pro rata basis and on the same terms to each applicable Bank. In order to establish any Extended Loans or Extended Revolving Commitments, the Borrower shall provide a notice to the Administrative Agent (who shall provide a copy of such notice to each of the Banks under the applicable Existing Loan Facility) (an “
Extension Request
”) setting forth the proposed terms of the Extended Loans or Extended Revolving Commitments to be established,
provided
that:
(i) all or any of the scheduled amortization payments of principal of the Extended Loans (including the maturity date) may be delayed to later dates than the scheduled amortization payments of principal (including the maturity date) of the Term Loans or Revolving Loans, as applicable, of such Existing Loan Facility to the extent provided in the applicable Loan Extension Amendment;
(ii) the interest margins with respect to the Extended Loans or Extended Revolving Commitments may be different than the interest margins for the Term Loans, Revolving Loans or Revolving Commitments, as applicable, of such Existing Loan Facility, and upfront fees may be paid to the Extending Lenders, in each case, to the extent provided in the applicable Loan Extension Amendment;
(iii) the Loan Extension Amendment may provide for other covenants and terms that apply solely to any period after the latest applicable Maturity Date of the Term Loans, Revolving Loans and Revolving Loan Commitments being converted as in effect on the effective date of the Loan Extension Amendment immediately prior to the establishment of such Extended Loans or Extended Revolving Commitments; or
(iv) no Extended Loans that were Term Loans may be optionally prepaid prior to the date on which the Term Loans under the Existing Loan Facility from which they were converted are repaid in full unless such optional prepayment is accompanied by a pro rata optional prepayment of the Term Loans under such Existing Loan Facility; and
(v) (A) the borrowing and repayment (except for (x) payments of interest and fees at different rates on Extended Revolving Commitments (and related outstandings), (y) repayments required upon the maturity date of the non-extending Revolving Commitments and (z) repayment made in connection with a permanent repayment and termination of commitments) of Loans with respect to Extended Revolving Commitments after the applicable Extension date shall be made on a pro rata basis with all other Revolving Commitments of such tranche, (B) all Swingline Loans and Letters of Credit shall be participated on a pro rata basis by all Banks with Revolving Commitments in accordance with their percentage of the Revolving Commitments subject to the express terms herein, (C) the permanent repayment of Revolving Loans with respect to, and termination of, Extended Revolving Commitments after the applicable Extension date shall be made on a pro rata basis with all other Revolving
Commitments, except that the Borrower shall be permitted to permanently repay and terminate commitments of any such Class on a better than a pro rata basis as compared to any other Class with a later maturity date than such Class, (D) assignments and participations of Extended Revolving Commitments and extended Revolving Loans shall be governed by the same assignment and participation provisions applicable to Revolving Commitments and Revolving Loans and (E) at no time shall there be Revolving Commitments hereunder (including Extended Revolving Commitments and any original Revolving Commitments) which have more than two (2) different maturity dates.
Any Extended Loans and/or Extended Revolving Commitments converted pursuant to any Loan Extension Amendment shall be designated a separate Class of Extended Loans or Extended Revolving Commitments, as the case may be, for all purposes of this Agreement;
provided
that any Extended Loans converted from an Existing Loan Facility may, to the extent provided in the applicable Loan Extension Amendment, be designated as an increase in any previously established Class of Loans or Commitments with respect to such Existing Loan Facility. Any Extended Term Loans shall constitute a separate Class of Term Loans from the Class of Term Loans from which there were converted, any Extended Revolving Loans shall constitute a separate Class of Revolving Loans from the Class of Revolving Loans from which there were converted and any Extended Revolving Commitments shall constitute a separate tranche of Revolving Commitments from the tranche of Revolving Commitments from which they were converted. No Extension shall constitute a voluntary or mandatory prepayment for purpose of
Sections 2.10
and
2.11
. Each Extension shall become effective only with respect to the Loans and Commitments of the Banks that accept an Extension Request.
(b) The Borrower shall provide the applicable Extension Request at least ten (10) Business Days
prior to the date on which Banks under the Existing Loan Facility are requested to respond. No Extension Request is required to be in any minimum amount or increment;
provided
that the Borrower may specify as a condition to consummating any such Extension that a minimum amount (to be specified in the applicable Extension Request) of Term Loans, Revolving Loans or Revolving Commitments be tendered (subject to waiver by the Borrower in its sole discretion). No Bank shall have any obligation to agree to have any of its Term Loans, Revolving Loans or Revolving Commitments, as applicable, of any Existing Loan Facility converted into Extended Loans or Extended Revolving Commitments pursuant to any Extension Request. Any Bank (an “
Extending Lender
”) wishing in its sole and individual discretion to have all or any portion of its Term Loans, Revolving Loans or Revolving Commitments, as applicable, under the Existing Loan Facility subject to such Extension Request converted into Extended Loans or Extended Revolving Commitments shall notify the Administrative Agent (an “
Extension Election
”) on or prior to the date specified in such Extension Request of the amount of its Term Loans, Revolving Loans or Revolving Commitments, as applicable, under the Existing Loan Facility which it has elected to request be converted into Extended Loans or Extended Revolving Commitments. In the event that the aggregate amount of Term Loans, Revolving Loans and Revolving Commitments under the Existing Loan Facility subject to Extension Elections exceeds the amount of Extended Loans or Extended Revolving Commitments requested pursuant to the Extension Request, Term Loans, Revolving Loans and Revolving Commitments subject to Extension Elections shall be converted to Extended Loans or Extended Revolving Commitments on a pro rata basis based on the amount of Term Loans, Revolving Loans and Revolving Commitments, as applicable, included in such
Extension Election. It shall be a condition precedent to the effectiveness of any Extension that no Default or Event of Default shall exist on the date of the Extension Request and on the date of the Extension.
(c) Each Class of Extended Loans and Extended Revolving Commitments shall be established pursuant to an amendment (a “
Loan Extension Amendment
”) to this Agreement among the Borrower, the Administrative Agent and each Extending Lender providing an Extended Loan or Extended Revolving Commitment thereunder which shall be consistent with the provisions set forth in paragraph (a) above (but which shall not require the consent of any other Bank) and which may include such technical amendments to this Agreement as may be necessary or appropriate in the reasonable opinion of the Administrative Agent and the Borrower. Each Loan Extension Amendment shall be binding on the Banks, the General Partner and the other parties hereto. In connection with any Loan Extension Amendment, the Borrower shall deliver a reaffirmation of the Guaranty from the General Partner and such resolutions, certificates, opinions of counsel (including in-house opinions in lieu of opinions of outside counsel) and other documents in connection therewith as may be reasonably requested by the Administrative Agent.
(d) This
Section 2.19
shall supersede any provisions in
Sections 9.4
or
9.5
to the contrary.
ARTICLE III
CONDITIONS
Section 3.1
Closing
. The closing hereunder shall occur on the date (the “
Closing Date
”) when each of the following conditions is satisfied (or waived by the Administrative Agent and the Required Banks, such waiver to be evidenced by the continuation or funding after the date hereof of Loans and notice of such waiver to be given to the Banks by the Administrative Agent), each document to be dated the Closing Date unless otherwise indicated:
(a) the Borrower shall have executed and delivered to the Administrative Agent Notes for the account of each Bank that shall have requested the same, dated on or before the Closing Date complying with the provisions of Section 2.5;
(b) the Borrower shall have executed and delivered to the Administrative Agent a duly executed original of this Agreement;
(c) the General Partner shall have executed and delivered to the Administrative Agent a duly executed original of the Guaranty;
(d) the Administrative Agent shall have received an opinion of Latham & Watkins LLP, counsel for the Borrower and the General Partner, reasonably acceptable to the Administrative Agent, the Banks and their counsel;
(e) the Administrative Agent shall have received all documents the Administrative Agent may reasonably request relating to the existence of the Borrower, the
General Partner, the authority for and the validity of this Agreement and the other Loan Documents, and any other matters relevant hereto, all in form and substance reasonably satisfactory to the Administrative Agent. Such documentation shall include, without limitation, the articles of incorporation and by-laws or the partnership agreement and limited partnership certificate, as applicable, of the Borrower and the General Partner, as amended, modified or supplemented to the Closing Date, each certified to be true, correct and complete by a senior officer of the Borrower or the General Partner, as the case may be, as of the Closing Date, together with a good standing certificate from the Secretary of State (or the equivalent thereof) of the State of Delaware with respect to the Borrower and of the State of Maryland with respect to the General Partner, and a good standing certificate from the Secretary of State (or the equivalent thereof) of each other State in which the Borrower and the General Partner is required to be qualified to transact business, each to be dated not more than forty-five (45) days prior to the Closing Date;
(f) the Administrative Agent shall have received all certificates, agreements and other documents and papers referred to in this Section 3.1 and Section 3.2, unless otherwise specified, in sufficient counterparts, reasonably satisfactory in form and substance to the Administrative Agent in its sole discretion;
(g) the Borrower and the General Partner shall have taken all actions required to authorize the execution and delivery of this Agreement and the other Loan Documents and the performance thereof by the Borrower and the General Partner;
(h) the Administrative Agent and the Banks shall have received an unaudited consolidated balance sheet and income statement of the Borrower for the fiscal quarter ended March 31, 2014;
(i) the Administrative Agent shall be satisfied that neither the Borrower nor the General Partner is subject to any present or contingent environmental liability which could reasonably be expected to have a Material Adverse Effect;
(j) the Administrative Agent shall have received wire transfer instructions in connection with the Loans to be made on the Closing Date;
(k) the Administrative Agent shall have received, for its and any other Bank’s account, all fees due and payable pursuant to Section 2.8 hereof on or before the Closing Date, and the reasonable fees and expenses accrued through the Closing Date of Bingham McCutchen LLP;
(l) the Administrative Agent shall have received copies of all consents, licenses and approvals, if any, required in connection with the execution, delivery and performance by the Borrower, and the validity and enforceability against the Borrower, of the Loan Documents, or in connection with any of the transactions contemplated thereby to occur on or prior to the Closing Date, and such consents, licenses and approvals shall be in full force and effect;
(m) the representations and warranties of the Borrower contained in this Agreement shall be true and correct in all material respects on and as of the Closing Date both before and after giving effect to the making of any Loans;
(n) receipt by the Administrative Agent and the Banks of a certificate of the chief financial officer, treasurer or the chief accounting officer of the Borrower certifying that the Borrower is in compliance with all covenants of the Borrower contained in this Agreement, including, without limitation, the requirements of Section 5.8, as of the Closing Date; and
(o) the General Partner shall intend to continue to qualify as a real estate investment trust under Section 856 of the Internal Revenue Code (a “
REIT
”).
The Administrative Agent shall promptly notify the Borrower and the Banks of the Closing Date, and such notice shall be conclusive and binding on all parties hereto.
Section 3.2
Borrowings
. The obligation of any Bank to make a Loan on the occasion of any Borrowing or to participate in any Letter of Credit issued by a Fronting Bank and the obligation of any Fronting Bank to issue a Letter of Credit or the obligation of the Swingline Lender to make a Swingline Loan on the occasion of any Borrowing is subject to the satisfaction of the following conditions:
(a) the Closing Date shall have occurred on or prior to June 30, 2014;
(b) receipt by the Administrative Agent of a Notice of Borrowing as required by Section 2.2 or 2.3;
(c) immediately after such Borrowing, (i) the Outstanding Balance for the Revolving Credit Facility will not exceed the aggregate amount of the Revolving Commitments, (ii) the aggregate outstanding and unpaid principal balance of all Term Loans made on the Closing Date will not exceed the Term Loan Amount, (iii) with respect to each Revolving Credit Bank, such Revolving Credit Bank’s pro rata portion of the Committed Revolving Loans and Letter of Credit Usage will not exceed such Revolving Credit Bank’s Revolving Commitment, as applicable and (iv) with respect to each Term Loan Bank, such Term Loan Bank’s pro rata portion of the Term Loans will not exceed such Term Loan Bank’s Term Commitment;
(d) immediately before and after such Borrowing, no Default or Event of Default shall have occurred and be continuing both before and after giving effect to the making of such Loans;
(e) the representations and warranties of the Borrower contained in this Agreement (other than representations and warranties which speak as of a specific date) shall be true and correct in all material respects on and as of the date of such Borrowing both before and after giving effect to the making of such Loans;
(f) no law or regulation shall have been adopted, no order, judgment or decree of any governmental authority shall have been issued, and no litigation shall be pending or threatened, which does or, with respect to any threatened litigation, seeks to enjoin, prohibit or
restrain, the making or repayment of the Loans, the issuance of any Letter of Credit or any participations therein or the consummation of the transactions contemplated hereby; and
(g) no event, act or condition shall have occurred after the Closing Date which, in the reasonable judgment of the Administrative Agent or the Required Banks, as the case may be, has had or is likely to have a Material Adverse Effect.
Each Borrowing hereunder shall be deemed to be a representation and warranty by the Borrower on the date of such Borrowing as to the facts specified in clauses (c) through (f) of this Section (except that with respect to clause (f), such representation and warranty shall be deemed to be limited to laws, regulations, orders, judgments, decrees and litigation affecting the Borrower and not solely the Banks).
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
In order to induce the Administrative Agent and each of the other Banks which may become a party to this Agreement to make the Loans and to induce the Fronting Banks to issue the Letters of Credit, the Borrower makes the following representations and warranties. Such representations and warranties shall survive the effectiveness of this Agreement, the execution and delivery of the other Loan Documents and the making of the Loans.
Section 4.1
Existence and Power
. The Borrower is duly organized, validly existing and in good standing as a limited partnership under the laws of the State of Delaware and has all powers and all material governmental licenses, authorizations, consents and approvals required to own its property and assets and carry on its business as now conducted or as it presently proposes to conduct and has been duly qualified and is in good standing in every jurisdiction in which the failure to be so qualified and/or in good standing is likely to have a Material Adverse Effect.
Section 4.2
Power and Authority
. The Borrower has the organizational power and authority to execute, deliver and carry out the terms and provisions of each of the Loan Documents to which it is a party and has taken all necessary action to authorize the execution and delivery on behalf of the Borrower and the performance by the Borrower of such Loan Documents. The Borrower has duly executed and delivered each Loan Document to which it is a party, and each such Loan Document constitutes the legal, valid and binding obligation of the Borrower, enforceable in accordance with its terms, except as enforceability may be limited by applicable insolvency, bankruptcy or other laws affecting creditors rights generally, or general principles of equity, whether such enforceability is considered in a proceeding in equity or at law.
Section 4.3
No Violation
. Neither the execution, delivery or performance by or on behalf of the Borrower of the Loan Documents, nor compliance by the Borrower with the terms and provisions thereof nor the consummation of the transactions contemplated by the Loan Documents, (i) will contravene any applicable provision of any law, statute, rule, regulation, order, writ, injunction or decree of any court or governmental instrumentality applicable to
Borrower except to the extent such contravention is not likely to have a Material Adverse Effect, or (ii) will conflict with or result in any breach of, any of the terms, covenants, conditions or provisions of, or constitute a default under, or result in the creation or imposition of (or the obligation to create or impose) any Lien upon any of the property or assets of the Borrower pursuant to the terms of any material indenture, mortgage, deed of trust, or other agreement or other instrument to which the Borrower (or of any partnership of which the Borrower is a partner) is a party or by which it or any of its property or assets is bound or to which it is subject except to the extent such conflict or breach is not likely to have a Material Adverse Effect, or (iii) will conflict with or result in a breach of any organizational document of any Subsidiary, the certificate of limited partnership, partnership agreement or other organizational document of Borrower, or the General Partner’s articles of incorporation or by-laws.
Section 4.4
Financial Information
.
(a) The audited consolidated balance sheets and statements of income of the Borrower and the General Partner as of December 31, 2013 and the unaudited balance sheets and statements of income of the Borrower and the General Partner as of March 31, 2014 fairly present, in conformity with GAAP, the consolidated financial position of the Borrower and the General Partner as of such date and their consolidated results of operations for such fiscal periods.
(b) Since December 31, 2013, except as disclosed in public filings with the Securities and Exchange Commission (i) there has been no material adverse change in the business, financial position or results of operations of the Borrower or the General Partner and (ii) except as previously disclosed to the Administrative Agent and to the Banks, neither the Borrower nor the General Partner has incurred any material indebtedness or guaranty.
Section 4.5
Litigation
.
(a) There is no action, suit or proceeding pending against, or to the knowledge of the Borrower, threatened against or affecting, (i) the Borrower, the General Partner or any of their Subsidiaries, (ii) the Loan Documents or any of the transactions contemplated by the Loan Documents or (iii) any of their assets, in any case before any court or arbitrator or any governmental body, agency or official which could reasonably be expected to have a Material Adverse Effect or which in any manner draws into question the validity of this Agreement or the other Loan Documents.
(b) There are no final nonappealable judgments or decrees in an aggregate amount of One Million Dollars ($1,000,000) or more entered by a court or courts of competent jurisdiction against the Borrower or the General Partner (other than any judgment as to which, and only to the extent, a reputable insurance company has acknowledged coverage of such claim in writing).
Section 4.6
Compliance with ERISA
.
(a) Except as previously disclosed to the Administrative Agent in writing as of the Closing Date, each member of the ERISA Group has fulfilled its obligations under the minimum funding standards of ERISA and the Internal Revenue Code with respect to each Plan
and is in compliance in all material respects with the presently applicable provisions of ERISA and the Internal Revenue Code with respect to each Plan. No member of the ERISA Group has (i) sought a waiver of the minimum funding standard under Section 412 of the Internal Revenue Code in respect of any Plan, (ii) failed to make any contribution or payment to any Plan or Multiemployer Plan or in respect of any Benefit Arrangement, or made any amendment to any Plan or Benefit Arrangement, which has resulted or could result in the imposition of a Lien or the posting of a bond or other security under ERISA or the Internal Revenue Code or (iii) incurred any liability under Title IV of ERISA other than a liability to the PBGC for premiums under Section 4007 of ERISA.
(b) Except for each “employee benefit plan” (as such term is defined in Section 3(3) of ERISA) that is maintained, participated in or contributed to, by one or more members of the ERISA Group, no member of the ERISA Group is a “party in interest” (as such term is defined in Section 3(14) of ERISA or a “disqualified person” (as such term is defined in Section 4975(e)(2) of the Internal Revenue Code) with respect to any funded employee benefit plan and none of the assets of any such plans have been invested in a manner that would cause the transactions contemplated by the Loan Documents to constitute a nonexempt prohibited transaction (as such term is defined in Section 4975 of the Internal Revenue Code or Section 406 of ERISA).
Section 4.7
Environmental Compliance
. To the best of Borrower’s knowledge, except as set forth in the Phase I environmental report(s) delivered to and accepted by the Administrative Agent with respect to each of the Unencumbered Asset Pool Properties (as supplemented or amended, the “
Environmental Reports
”), (i) there are in effect all Environmental Approvals which are required to be obtained under all Environmental Laws with respect to such Property, except for such Environmental Approvals the absence of which would not have a Material Adverse Effect, (ii) the Borrower is in compliance in all material respects with the terms and conditions of all such Environmental Approvals, and is also in compliance in all material respects with all other Environmental Laws or any plan, order, decree, judgment, injunction, notice or demand letter issued, entered or approved thereunder, except to the extent failure to comply would not have a Material Adverse Effect.
Except as set forth in the Environmental Reports or otherwise disclosed in writing to the Administrative Agent as of the Closing Date or with respect to a New Acquisition, as of the date of such New Acquisition, to Borrower’s actual knowledge:
(i) There are no Environmental Claims or investigations pending or threatened by any Governmental Authority with respect to any alleged failure by the Borrower to have any Environmental Approval required in connection with the conduct of the business of the Borrower on any of the Unencumbered Asset Pool Properties, or with respect to any generation, treatment, storage, recycling, transportation, Release or disposal of any Material of Environmental Concern generated by the Borrower or any lessee on any of the Unencumbered Asset Pool Properties;
(ii) No Material of Environmental Concern has been Released at the Property to an extent that it may reasonably be expected to have a Material Adverse Effect;
(iii) No PCB (in amounts or concentrations which exceed those set by applicable Environmental Laws) is present at any of the Unencumbered Asset Pool Properties;
(iv) No friable asbestos is present at any of the Unencumbered Asset Pool Properties;
(v) There are no underground storage tanks for Material of Environmental Concern, active or abandoned, at any of the Unencumbered Asset Pool Properties;
(vi) No Environmental Claims have been filed with a Governmental Authority with respect to any of the Unencumbered Asset Pool Properties, and none of the Unencumbered Asset Pool Properties is listed or proposed for listing on the National Priority List promulgated pursuant to CERCLA, on CERCLIS or on any similar state list of sites requiring investigation or clean-up;
(vii) There are no Liens arising under or pursuant to any Environmental Laws on any of the Unencumbered Asset Pool Properties, and no government actions have been taken or are in process which could subject any of the Unencumbered Asset Pool Properties to such Liens; and
(viii) There have been no environmental investigations, studies, audits, tests, reviews or other analyses conducted by, or which are in the possession of, the Borrower in relation to any of the Unencumbered Asset Pool Properties which have not been made available to the Administrative Agent.
Section 4.8
Taxes
. The initial tax year of the Borrower for federal income tax purposes was 1996. The federal income tax returns of the Borrower and its Consolidated Subsidiaries for the fiscal year ended December 31, 2012 have been filed. The Borrower and its Subsidiaries have filed all United States Federal income tax returns and all other material tax returns which are required to be filed by them and have paid all taxes due pursuant to such returns or pursuant to any assessment received by the Borrower or any Subsidiary except those being contested in good faith. The charges, accruals and reserves on the books of the Borrower and its Subsidiaries in respect of taxes or other governmental charges are, in the opinion of the Borrower, adequate.
Section 4.9
Full Disclosure
. All information heretofore furnished by the Borrower to the Administrative Agent or any Bank for purposes of or in connection with this Agreement or any transaction contemplated hereby is true and accurate in all material respects on the date as of which such information is stated or certified. The Borrower has disclosed to the Banks in writing any and all facts known to the Borrower which materially and adversely affect or are likely to materially and adversely affect (to the extent the Borrower can now reasonably foresee), the business, operations or financial condition of the Borrower considered as one enterprise or the ability of the Borrower to perform its obligations under this Agreement or the other Loan Documents.
Section 4.10
Solvency
. On the Closing Date and after giving effect to the transactions contemplated by the Loan Documents occurring on the Closing Date, the Borrower is Solvent.
Section 4.11
Use of Proceeds; Margin Regulations
. All proceeds of the Loans will be used by the Borrower only in accordance with the provisions hereof. No part of the proceeds of any Loan will be used by the Borrower to purchase or carry any Margin Stock or to extend credit to others for the purpose of purchasing or carrying any Margin Stock. Neither the making of any Loan nor the use of the proceeds thereof will violate or be inconsistent with the provisions of Regulations T, U or X of the Federal Reserve Board.
Section 4.12
Governmental Approvals
. No order, consent, approval, license, authorization, or validation of, or filing, recording or registration with, or exemption by, any governmental or public body or authority, or any subdivision thereof, is required to authorize, or is required in connection with the execution, delivery and performance of any Loan Document or the consummation of any of the transactions contemplated thereby other than those that have already been duly made or obtained and remain in full force and effect.
Section 4.13
Investment Company Act
. The Borrower is not (x) an “investment company” or a company “controlled” by an “investment company”, within the meaning of the Investment Company Act of 1940, as amended or (y) subject to any other federal or state law or regulation which purports to restrict or regulate its ability to borrow money.
Section 4.14
Closing Date Transactions
. On the Closing Date and immediately prior to or concurrently with the making of the Loans, the transactions (other than the making of the Loans) intended to be consummated on the Closing Date will have been consummated in accordance with all applicable laws. On or prior to the Closing Date, all consents and approvals of, and filings and registrations with, and all other actions by, any Person required in order to make or consummate such transactions have been obtained, given, filed or taken and are in full force and effect.
Section 4.15
Representations and Warranties in Loan Documents
. All representations and warranties made by the Borrower in the Loan Documents are true and correct in all material respects.
Section 4.16
Patents, Trademarks, etc
. The Borrower has obtained and holds in full force and effect all patents, trademarks, service marks, trade names, copyrights and other such rights, free from burdensome restrictions, which are necessary for the operation of its business as presently conducted, the impairment of which is likely to have a Material Adverse Effect. To the Borrower’s knowledge, no material product, process, method, substance, part or other material presently sold by or employed by the Borrower in connection with such business infringes any patent, trademark, service mark, trade name, copyright, license or other such right owned by any other Person. There is not pending or, to the Borrower’s knowledge, threatened any claim or litigation against or affecting the Borrower contesting its right to sell or use any such product, process, method, substance, part or other material.
Section 4.17
No Default
. No Default or Event of Default exists under or with respect to any Loan Document. The Borrower is not in default in any material respect beyond any applicable grace period under or with respect to any other material agreement, instrument or undertaking to which it is a party or by which it or any of its property is bound in any respect, the existence of which default is likely (to the extent that the Borrower can now reasonably foresee) to result in a Material Adverse Effect.
Section 4.18
Licenses, etc
. The Borrower has obtained and holds in full force and effect, all franchises, licenses, permits, certificates, authorizations, qualifications, accreditations, easements, rights of way and other consents and approvals which are necessary for the operation of its businesses as presently conducted, the absence of which is likely (to the extent that the Borrower can now reasonably foresee) to have a Material Adverse Effect.
Section 4.19
Compliance With Law
. The Borrower is in compliance with all laws, rules, regulations, orders, judgments, writs and decrees, including, without limitation, all building and zoning ordinances and codes, the failure to comply with which is likely (to the extent that the Borrower can now reasonably foresee) to have a Material Adverse Effect.
Section 4.20
No Burdensome Restrictions
. The Borrower is not a party to any agreement or instrument or subject to any other obligation or any charter or corporate or partnership restriction, as the case may be, which, individually or in the aggregate, is likely (to the extent that the Borrower can now reasonably foresee) to have a Material Adverse Effect.
Section 4.21
Brokers’ Fees
. The Borrower has not dealt with any broker or finder with respect to the transactions contemplated by the Loan Documents (except with respect to the acquisition or disposition of Real Property Assets) or otherwise in connection with this Agreement (it being understood that J.P. Morgan Securities LLC, Merrill Lynch, Pierce, Fenner & Smith Incorporated or its Affiliates, and Wells Fargo Securities, LLC, have acted as arrangers for the Facilities and the fees and expenses of which shall be paid by Borrower), and the Borrower has not done any acts, had any negotiations or conversation, or made any agreements or promises which will in any way create or give rise to any obligation or liability for the payment by the Borrower of any brokerage fee, charge, commission or other compensation to any party with respect to the transactions contemplated by the Loan Documents (except with respect to the acquisition or disposition of Real Property Assets), other than the fees payable hereunder.
Section 4.22
Labor Matters
. Except as set forth on Schedule 4.22 attached hereto and made a part hereof, there are no collective bargaining agreements or Multiemployer Plans covering the employees of the Borrower and the Borrower has not suffered any strikes, walkouts, work stoppages or other material labor difficulty within the last five (5) years.
Section 4.23
Organizational Documents
. The documents delivered pursuant to Section 3.1(e) constitute, as of the Closing Date, all of the organizational documents (together with all amendments and modifications thereof) of the Borrower. The Borrower represents that it has delivered to the Administrative Agent true, correct and complete copies of each of the documents set forth in this Section 4.23.
Section 4.24
Principal Offices
. The principal office, chief executive office and principal place of business of the Borrower is 12200 West Olympic Boulevard, Suite 200, Los Angeles, California 90064.
Section 4.25
REIT Status
. For the fiscal year ended December 31, 2013, the General Partner qualified, and the General Partner intends to continue to qualify, as a REIT.
Section 4.26
Ownership of Property
. The Borrower and/or the General Partner, directly or indirectly, owns fee simple title to or a ground leasehold interest in each of the Unencumbered Asset Pool Properties.
Section 4.27
Insurance
. The Borrower or its tenants, as applicable, currently maintains insurance at 100% replacement cost insurance coverage in respect of each of the Real Property Assets, as well as comprehensive general liability insurance (including “builders’ risk”) against claims for personal, and bodily injury and/or death, to one or more persons, or property damage, as well as workers’ compensation insurance, in each case with respect to the Real Property Assets with insurers having an A.M. Best policyholders’ rating of not less than A-VIII in amounts that prudent owner of assets such as the Real Property Assets would maintain.
Section 4.28
Anti-Corruption Laws
. None of the Borrower, any Subsidiary of the Borrower, or, to the knowledge of the chief executive officer, chief financial officer or general counsel of the Borrower, any director, officer or employee thereof is currently in violation of any Anti-Corruption Laws.
Section 4.29
Sanctions
. None of the Borrower, any Subsidiary of the Borrower, or, to the knowledge of the chief executive officer, chief financial officer or general counsel of the Borrower, any director, officer or employee thereof is an individual or entity currently the subject of any Sanctions or in violation of any Sanctions, nor is the Borrower or any Subsidiary of the Borrower located, organized or resident in a Sanctioned Country.
ARTICLE V
AFFIRMATIVE AND NEGATIVE COVENANTS
The Borrower covenants and agrees that, so long as any Bank has any Commitment hereunder or any Loan or Letter of Credit is outstanding or any Obligations remain unpaid:
Section 5.1
Information
. The Borrower will deliver:
(a) to the Administrative Agent and to each of the Banks (which delivery may be made electronically, including via IntraLinks), as soon as available and in any event within 105 days after the end of each fiscal year of the Borrower, an audited consolidated balance sheet of the Borrower as of the end of such fiscal year and the related consolidated statements of cash flow and operations for such fiscal year, setting forth in each case in comparative form the figures for the previous fiscal year, audited by Deloitte & Touche or other independent public accountants of similar standing;
(b) to the Administrative Agent and to each of the Banks (which delivery may be made electronically, including via IntraLinks), as soon as available and in any event within sixty (60) days after the end of each quarter of each fiscal year (other than the last quarter in any fiscal year) of the Borrower, a statement of the Borrower, prepared in accordance with GAAP, setting forth the operating income and operating expenses of the Borrower, in sufficient detail so as to calculate Unencumbered Asset Pool Net Operating Cash Flow of the Borrower for the immediately preceding quarter;
(c) to the Administrative Agent and to each of the Banks (which delivery may be made electronically, including via IntraLinks), simultaneously with the delivery of each set of financial statements referred to in clauses (a) and (b) above, a certificate of the chief financial officer, controller, treasurer or vice president-corporate finance of the Borrower (i) setting forth in reasonable detail the calculations required to establish whether the Borrower was in compliance with the requirements of Section 5.8 on the date of such financial statements;(ii) stating whether any Default exists on the date of such certificate and, if any Default then exists, setting forth the details thereof and the action which the Borrower is taking or proposes to take with respect thereto; and (iii) certifying (x) that such financial statements fairly present the financial condition and the results of operations of the Borrower as of the dates and for the periods indicated, in accordance with GAAP, subject, in the case of interim financial statements, to normal year-end adjustments, and (y) that such officer has reviewed the terms of the Loan Documents and has made, or caused to be made under his or her supervision, a review in reasonable detail of the business and condition of the Borrower during the period beginning on the date through which the last such review was made pursuant to this Section 5.1(c) and ending on a date not more than ten (10) Domestic Business Days prior to the date of such delivery and that on the basis of such review of the Loan Documents and the business and condition of the Borrower, to the best knowledge of such officer, no Default or Event of Default under any other provision of Section 6.1 occurred or, if any such Default or Event of Default has occurred, specifying the nature and extent thereof and, if continuing, the action the Borrower proposes to take in respect thereof;
(d) to the Administrative Agent and to each of the Banks, (i) within five (5) days after the president, chief financial officer, treasurer, controller or other executive officer of the Borrower obtains knowledge of any Default, if such Default is then continuing, a certificate of the chief financial officer or the president of the Borrower setting forth the details thereof and the action which the Borrower is taking or proposes to take with respect thereto; and (ii) promptly and in any event within ten (10) days after the Borrower obtains knowledge thereof, notice of (x) any litigation or governmental proceeding pending or threatened against the Borrower which is likely to individually or in the aggregate, result in a Material Adverse Effect, and (y) any other event, act or condition which is likely to result in a Material Adverse Effect;
(e) to the Administrative Agent and to each of the Banks, if and when any member of the ERISA Group (i) gives or is required to give notice to the PBGC of any “reportable event” (as defined in Section 4043 of ERISA) with respect to any Plan which might constitute grounds for a termination of such Plan under Title IV of ERISA, or knows that the plan administrator of any Plan has given or is required to give notice of any such reportable event, a copy of the notice of such reportable event given or required to be given to the PBGC; (ii) receives notice of complete or partial withdrawal liability under Title IV of ERISA or notice
that any Multiemployer Plan is in reorganization, is insolvent or has been terminated, a copy of such notice; (iii) receives notice from the PBGC under Title IV of ERISA of an intent to terminate, impose liability (other than for premiums under Section 4007 of ERISA) in respect of, or appoint a trustee to administer any Plan, a copy of such notice; (iv) applies for a waiver of the minimum funding standard under Section 412 of the Internal Revenue Code, a copy of such application; (v) gives notice of intent to terminate any Plan under Section 4041(c) of ERISA, a copy of such notice and other information filed with the PBGC; (vi) gives notice of withdrawal from any Plan pursuant to Section 4063 of ERISA, a copy of such notice; or (vii) fails to make any payment or contribution to any Plan or Multiemployer Plan or in respect of any Benefit Arrangement or makes any amendment to any Plan or Benefit Arrangement which has resulted or could result in the imposition of a Lien or the posting of a bond or other security, a certificate of the chief financial officer or the chief accounting officer of the Borrower setting forth details as to such occurrence and action, if any, which the Borrower or applicable member of the ERISA Group is required or proposes to take;
(f) to the Administrative Agent and to each of the Banks, promptly and in any event within five (5) Domestic Business Days after the Borrower obtains actual knowledge of any of the following events, a certificate of the Borrower executed by an officer of the Borrower specifying the nature of such condition and the Borrower’s, and if the Borrower has actual knowledge thereof, the Environmental Affiliate’s proposed initial response thereto: (i) the receipt by the Borrower, or, if the Borrower has actual knowledge thereof, any of the Environmental Affiliates, of any communication (written or oral), whether from a governmental authority, citizens group, employee or otherwise, that alleges that the Borrower, or, if the Borrower has actual knowledge thereof, any of the Environmental Affiliates, is not in compliance with applicable Environmental Laws, and such noncompliance is likely to have a Material Adverse Effect, (ii) the Borrower shall obtain actual knowledge that there exists any Environmental Claim which is likely to have a Material Adverse Effect pending or threatened against the Borrower or any Environmental Affiliate or (iii) the Borrower obtains actual knowledge of any release, emission, discharge or disposal of any Material of Environmental Concern that is likely to form the basis of any Environmental Claim against the Borrower or any Environmental Affiliate;
(g) to the Administrative Agent and to each of the Banks, promptly and in any event within five (5) Domestic Business Days after receipt of any material notices or correspondence from any company or agent for any company providing insurance coverage to the Borrower relating to any material loss or loss of the Borrower with respect to any of the Unencumbered Asset Pool Properties, copies of such notices and correspondence; and
(h) to the Administrative Agent and to each of the Banks (which delivery may be made electronically, including via IntraLinks or posting to the internet website of the General Partner), promptly upon the mailing thereof to the shareholders or partners of the Borrower, copies of all financial statements, reports and proxy statements so mailed;
(i) to the Administrative Agent and to each of the Banks (which delivery may be made electronically, including via IntraLinks or posting to the internet website of the General Partner), promptly upon the filing thereof, copies of all registration statements (other than the exhibits thereto and any registration statements on Form S-8 or its equivalent) and reports on
Forms 10-K, 10-Q and 8-K (or their equivalents) which the Borrower shall have filed with the Securities and Exchange Commission;
(j) to the Administrative Agent and to each of the Banks (which delivery may be made electronically, including via IntraLinks), simultaneously with delivery of the information required by Sections 5.1(a) and (b), a statement of Unencumbered Asset Pool Net Operating Cash Flow with respect to each Unencumbered Asset Pool Property and a list of all Unencumbered Asset Pool Properties; and
(k) to the Administrative Agent and to each of the Banks (which delivery may be made electronically, including via IntraLinks), from time to time such additional information regarding the financial position or business of the Borrower as the Administrative Agent, at the request of any Bank, may reasonably request.
Section 5.2
Payment of Obligations
. The Borrower will pay and discharge, at or before maturity, all its material obligations and liabilities including, without limitation, any obligation pursuant to any agreement by which it or any of its properties is bound and any tax liabilities, in any case, where failure to do so will likely result in a Material Adverse Effect except (i) such tax liabilities may be contested in good faith by appropriate proceedings, and the Borrower will maintain in accordance with GAAP, appropriate reserves for the accrual of any of the same; or (ii) such obligation or liability as may be contested in good faith by appropriate proceedings.
Section 5.3
Maintenance of Property; Insurance
.
(a) The Borrower will keep each of the Unencumbered Asset Pool Properties in good repair, working order and condition, subject to ordinary wear and tear.
(b) The Borrower shall (a) maintain insurance as specified in Section 4.27 hereof with insurers meeting the qualifications described therein, which insurance shall in any event not provide for materially less coverage than the insurance in effect on the Closing Date, and (b) furnish to each Bank, or use reasonable efforts to obtain from a tenant, if applicable, from time to time, upon written request, copies of the policies under which such insurance is issued, certificates of insurance and such other information relating to such insurance as such Bank may reasonably request. The Borrower will deliver to the Banks (i) upon request of any Bank through the Administrative Agent from time to time, full information as to the insurance carried, (ii) within five (5) days of receipt of notice from any insurer, a copy of any notice of cancellation or material change in coverage from that existing on the date of this Agreement and (iii) forthwith, notice of any cancellation or nonrenewal of coverage by the Borrower.
Section 5.4
Conduct of Business
. The Borrower’s primary business will continue to be acquiring, owning, operating, managing, developing (to the extent permitted in this Agreement), and leasing office and industrial properties.
Section 5.5
Compliance with Laws
. (a) The Borrower will comply in all material respects with all applicable laws, ordinances, rules, regulations, and requirements of governmental authorities (including, without limitation, Environmental Laws, all zoning and
building codes and ERISA and the rules and regulations thereunder) except where the necessity of compliance therewith is contested in good faith by appropriate proceedings.
(b) In the ordinary course of its business and at such times as the Borrower reasonably deems appropriate, the Borrower shall conduct periodic reviews of the effect of Environmental Laws on its business, operations and properties, in the course of which it shall use commercially reasonable efforts to identify and evaluate applicable liabilities and costs (including, without limitation, any capital or operating expenditures required as a matter of Environmental Law for clean-up or closure of properties presently or previously owned, any capital or operating expenditures required as a matter of Environmental Law to achieve or maintain compliance with Environmental Law or as a condition of any license, permit or contract to which the Borrower is a party or a beneficiary, any related constraints on operating activities, including, without limitation, any periodic or permanent shutdown of any facility or reduction in the level of or change in the nature of operations conducted thereat, any costs or liabilities in connection with off-site disposal of wastes or Materials of Environmental Concern, and any actual or potential liabilities to third parties, including, without limitation, employees, and any related costs and expenses). The Borrower shall notify the Administrative Agent immediately if, on the basis of any such review, the Borrower has reasonably concluded that such associated potential liabilities and costs, including, without limitation, the costs of compliance with Environmental Laws, could reasonably be expected to have a Material Adverse Effect.
Section 5.6
Inspection of Property, Books and Records
. The Borrower will keep proper books of record and account in which full, true and correct entries shall be made of all dealings and transactions in relation to its business and activities; and will permit representatives of any Bank at such Bank’s expense to visit and inspect any of its properties to examine and make abstracts from any of its books and records and to discuss its affairs, finances and accounts with its officers and employees, all at such reasonable times, upon reasonable notice, but in no event more than once each fiscal year unless an Event of Default has occurred and is continuing, then as often as may reasonably be desired.
Section 5.7
Existence
.
(a) The Borrower shall do or cause to be done all things necessary to preserve and keep in full force and effect its corporate existence or its partnership existence, as applicable.
(b) The Borrower shall do or cause to be done all things necessary to preserve and keep in full force and effect its patents, trademarks, servicemarks, tradenames, copyrights, franchises, licenses, permits, certificates, authorizations, qualifications, accreditations, easements, rights of way and other rights, consents and approvals the nonexistence of which is likely to have a Material Adverse Effect.
Section 5.8
Financial Covenants
.
(a)
Total Debt to Total Asset Value
. As of the last day of each calendar quarter, the Total Debt Ratio will not be greater than 60%; provided, however, with respect to any period in which the Borrower or any of its Consolidated Subsidiaries have acquired a Real Property Asset (or multiple Real Property Assets in a single transaction) for a price of more than
$150,000,000, Total Debt to Total Asset Value for such quarter and the next succeeding quarter may increase to 65%, provided such ratio does not exceed 60% thereafter.
(b)
Fixed Charge Coverage
. As of the last day of each calendar quarter, the ratio of (x) Annual EBITDA, less reserves for Capital Expenditures of (i) $.30 per square foot per annum for each Real Property Asset that is an office property and (ii) $.15 per square foot per annum for each Real Property Asset that is an industrial property, to (y) the sum of (i) Total Debt Service and (ii) dividends or other payments payable by the General Partner with respect to any preferred stock issued by the General Partner and distributions or other payments payable by the Borrower with respect to any preferred partnership units of the Borrower, will not be less than 1.5:1.0.
(c)
Limitation on Secured Debt
. Secured Debt of the Borrower, the General Partner and their Consolidated Subsidiaries, which for purposes hereof shall be deemed to include the Borrower’s and the General Partner’s pro rata share of the Secured Debt of any Minority Holdings of the Borrower or the General Partner, shall at no time exceed thirty percent (30%) of Total Asset Value.
(d)
Unsecured Debt Ratio
. As of each of (x) the last day of each calendar quarter, and (y) any Borrowing, the Unsecured Debt Ratio shall not be less than 1.67:1.0.
(e)
Unencumbered Asset Pool Debt Service Coverage
. As of the last day of each calendar quarter and as of the date of any sale or secured financing of any Unencumbered Asset Pool Property, the ratio of (i) Unencumbered Asset Pool Net Operating Cash Flow to (ii) Unsecured Debt Service will not be less than 1.75:1.0.
(f)
Dividends
. The Borrower will not, as determined on an aggregate annual basis, pay any partnership distributions in excess of the greater of (i) 95% of its consolidated FFO for such year, and (ii) an amount which results in distributions to the General Partner (excluding therefrom any preferred partnership distributions to the extent the same have been deducted from consolidated FFO for such year) in an amount sufficient to permit the General Partner to pay dividends to its shareholders which it reasonably believes are necessary for it to (A) maintain its qualification as a REIT for federal and state income tax purposes, and (B) avoid the payment of federal or state income or excise tax. During the continuance of an Event of Default under Section 6.1(a), the Borrower shall make only those partnership distributions which result in distributions to the General Partner in an amount sufficient to permit the General Partner to pay dividends to its shareholders which it reasonably believes are necessary to maintain its status as a REIT for federal and state income tax purposes.
(g)
Minimum Consolidated Tangible Net Worth
. The Consolidated Tangible Net Worth will at no time be less than the sum of (i) $2,200,000,000 plus (ii) 75% of all Net Offering Proceeds received from and after December 31, 2013.
Section 5.9
Restriction on Fundamental Changes; Operation and Control
. (a) The Borrower shall not enter into any merger or consolidation, unless the Borrower is the surviving entity, or liquidate, wind-up or dissolve (or suffer any liquidation or dissolution), discontinue its business or convey, lease, sell, transfer or otherwise dispose of, in one transaction
or series of transactions, any substantial part of the business or property of the Borrower and its Subsidiaries, taken as a whole, whether now or hereafter acquired, hold an interest in any subsidiary which is not controlled by the Borrower or the General Partner or enter into other business lines, without the prior written consent of the Administrative Agent, which consent shall not be given unless the Required Banks so consent.
(b) The Borrower shall not amend its articles of incorporation, by-laws or agreement of limited partnership, as applicable, in any material respect which is reasonably likely to have an adverse effect on the Banks, without the Administrative Agent’s consent, which shall not be unreasonably withheld or delayed.
Section 5.10
Changes in Business
. The Borrower shall not enter into any business which is substantially different from that conducted by the Borrower on the Closing Date after giving effect to the transactions contemplated by the Loan Documents.
Section 5.11
Sale of Unencumbered Asset Pool Properties
. Concurrent with the sale or transfer of any Unencumbered Asset Pool Property that exceeds fifteen percent (15%) of the Unencumbered Asset Pool Properties Value, the Borrower shall (i) deliver written notice to the Administrative Agent, (ii) deliver to the Administrative Agent a certificate from its chief financial officer, chief accounting officer, vice president or other duly authorized officer certifying that at the time of such sale or other disposal (based on pro-forma calculations for the previous period assuming that such Unencumbered Asset Pool Property was not a Unencumbered Asset Pool Property for the relevant period) all of the covenants contained in Section 5.8 are and after giving effect to the transaction shall continue to be true and accurate in all respects, and (iii) pay to the Administrative Agent an amount equal to that, if any, required pursuant to Section 2.10(a). In the event that a Separate Parcel that originally formed a part of a Unencumbered Asset Pool Property is to be sold or transferred, the value of the remaining portion of the Unencumbered Asset Pool Property will be determined by Administrative Agent at the time of sale or transfer in its sole discretion.
Section 5.12
Fiscal Year; Fiscal Quarter
. The Borrower shall not change its fiscal year or any of its fiscal quarters without the Administrative Agent’s prior written consent, which consent shall not be unreasonably withheld or delayed.
Section 5.13
Margin Stock
. None of the proceeds of the Loans will be used, directly or indirectly, for the purpose, whether immediate, incidental or ultimate, of buying or carrying any Margin Stock.
Section 5.14
Use of Proceeds
. The Borrower shall use the proceeds of the Loans for its general business purposes; provided, however, that no Swingline Loan shall be used for the purpose of refinancing another Swingline Loan, in whole or part. The Borrower shall not, directly or indirectly, use any Letter of Credit or any part of the proceeds of any of the Loans or lend, contribute or otherwise make available such proceeds to any Person, to fund or finance any activities or business of any Person, or in any Sanctioned Country, that, at the time of such funding, is known by the chief executive officer, chief financial officer or general counsel of the Borrower to be the subject of Sanctions, or in any other manner that will result in a violation by any Person of Sanctions, including, without limitation, any party hereto.
Section 5.15
General Partner Status
. The General Partner shall at all times (i) maintain its status as a self-directed and self-administered real estate investment trust under the Internal Revenue Code, and (ii) remain a publicly traded company listed on the New York Stock Exchange.
ARTICLE VI
DEFAULTS
Section 6.1
Events of Default
. Each of the following shall constitute an event of default under this Agreement (an “Event of Default”):
(a) (i) the Borrower shall fail to pay when due any principal of any Loan, or (ii) the Borrower shall fail to pay when due any interest on any Loan, any fees or any amounts payable hereunder within three (3) Domestic Business Days after the same is due;
(b) the Borrower shall fail to observe or perform any covenant contained in Section 5.7(a) (with respect to the Borrower’s existence) or Sections 5.8 to 5.15, inclusive, subject to any applicable grace periods set forth therein;
(c) the Borrower shall fail to observe or perform any covenant or agreement contained in this Agreement (other than those covered by clause (a) or (b) above) for 30 days after written notice thereof has been given to the Borrower by the Administrative Agent;
(d) any representation, warranty, certification or statement made by the Borrower in this Agreement or in any certificate, financial statement or other document delivered pursuant to this Agreement shall prove to have been incorrect in any material respect when made (or deemed made);
(e) the Borrower, the General Partner or any Material Subsidiary shall default in the payment when due (whether by scheduled maturity, required prepayment, acceleration, demand or otherwise) of any amount owing in respect of any Recourse Debt or Debt guaranteed by the Borrower, the General Partner or such Material Subsidiary (other than the Obligations) in an aggregate principal amount of more than $50,000,000 and such default shall continue beyond the giving of any required notice and the expiration of any applicable grace period (as the same may be extended by the applicable lender) and such default shall not be waived by the applicable lender (which waiver shall serve to reinstate the applicable loan), or the Borrower, the General Partner or any Material Subsidiary shall default in the performance or observance of any obligation or condition with respect to any such Debt or any other event shall occur or condition exist beyond the giving of any required notice and the expiration of any applicable grace period (as the same may be extended by the applicable lender), if in any such case as a result of such default, event or condition, the lender (including the holder or holders thereof, or any trustee or agent for such holders) of any such Debt shall accelerate the maturity of any such Debt or shall be permitted (without any further requirement of notice or lapse of time), to accelerate the maturity of any such Debt, and such default shall not be waived by the applicable lender (which waiver shall serve to reinstate the applicable loan), or any such Debt shall become or be declared
to be due and payable prior to its stated maturity other than as a result of a regularly scheduled payment;
(f) the Borrower, the General Partner or any Material Subsidiary shall commence a voluntary case or other proceeding seeking liquidation, reorganization or other relief with respect to itself or its debts under any bankruptcy, insolvency or other similar law now or hereafter in effect or seeking the appointment of a trustee, receiver, liquidator, custodian or other similar official of it or any substantial part of its property, or shall consent to any such relief or to the appointment of or taking possession by any such official in an involuntary case or other proceeding commenced against it, or shall make a general assignment for the benefit of creditors, or shall fail generally to pay its debts as they become due, or shall take any corporate action to authorize any of the foregoing;
(g) an involuntary case or other proceeding shall be commenced against the Borrower, the General Partner or any Material Subsidiary seeking liquidation, reorganization or other relief with respect to it or its debts under any bankruptcy, insolvency or other similar law now or hereafter in effect or seeking the appointment of a trustee, receiver, liquidator, custodian or other similar official of it or any substantial part of its property, and such involuntary case or other proceeding shall remain undismissed and unstayed for a period of 60 days; or an order for relief shall be entered against the Borrower, the General Partner or any Material Subsidiary under the federal bankruptcy laws as now or hereafter in effect;
(h) the Borrower shall default in its obligations under any Loan Document other than this Agreement beyond any applicable notice and grace periods;
(i) the General Partner shall default in its obligations under the Guaranty beyond any applicable notice and grace periods;
(j) any member of the ERISA Group shall fail to pay when due an amount or amounts aggregating in excess of $1,000,000 which it shall have become liable to pay under Title IV of ERISA, or notice of intent to terminate a Material Plan shall be filed under Title IV of ERISA by any member of the ERISA Group, any plan administrator or any combination of the foregoing, or the PBGC shall institute proceedings under Title IV of ERISA to terminate, to impose liability (other than for premiums under Section 4007 of ERISA) in respect of, or to cause a trustee to be appointed to administer any Material Plan, or a condition shall exist by reason of which the PBGC would be entitled to obtain a decree adjudicating that any Material Plan must be terminated, or there shall occur a complete or partial withdrawal from, or a default, within the meaning of Section 4219(c)(5) of ERISA, with respect to, one or more Multiemployer Plans which could cause one or more members of the ERISA Group to incur a current payment obligation in excess of $1,000,000;
(k) one or more final nonappealable judgments or decrees in an aggregate amount of $10,000,000 as of such date shall be entered by a court or courts of competent jurisdiction against the Borrower or the General Partner (other than any judgment as to which, and only to the extent, a reputable insurance company has acknowledged coverage of such claim in writing) and (i) any such judgments or decrees shall not be stayed, discharged, paid, bonded or vacated within thirty (30) days (or bonded, vacated or satisfied within thirty (30) after any stay is
lifted) or (ii) enforcement proceedings shall be commenced by any creditor on any such judgments or decrees;
(l) (i) any Environmental Claim shall have been asserted against the Borrower or any Environmental Affiliate, (ii) any release, emission, discharge or disposal of any Material of Environmental Concern shall have occurred, and such event is reasonably likely to form the basis of an Environmental Claim against the Borrower or any Environmental Affiliate, or (iii) the Borrower or the Environmental Affiliates shall have failed to obtain any Environmental Approval necessary for the ownership, or operation of its business, property or assets or any such Environmental Approval shall be revoked, terminated, or otherwise cease to be in full force and effect, in the case of clauses (i), (ii) or (iii) above, if the existence of such condition has had or is reasonably likely to have a Material Adverse Effect;
(m) (i) during any consecutive twenty-four (24) month period commencing on or after the date hereof, individuals who at the beginning of such period constituted the Board of Directors of the General Partner of the Borrower (together with any new directors whose election by the Board of Directors or whose nomination for election by the General Partner stockholders was approved by a vote of at least a majority of the members of the Board of Directors then in the office who either were members of the Board of Directors at the beginning of such period or whose election or nomination for election was previously so approved) cease for any reason to constitute a majority of the members of the Board of Directors then in office, except for any such change resulting from (x) death or disability of any such member, (y) satisfaction of any requirement for the majority of the members of the Board of Directors of the General Partner to qualify under applicable law as independent directors, or (z) the replacement of any member of the Board of Directors who is an officer or employee of the General Partner with any other officer or employee of the General Partner or its Affiliate; or (ii) the acquisition of ownership, directly or indirectly, beneficially or of record, by any Person or group (within the meaning of the Securities Exchange Act of 1934 and the rules of the Securities and Exchange Commission thereunder as in effect on the date hereof) of equity interests representing more than thirty-five percent (35%) of the aggregate ordinary voting power represented by the issued and outstanding equity interests of the General Partner;
(n) the General Partner shall cease at any time to qualify as a REIT; and
(o) at any time, for any reason, the Borrower or the General Partner seeks to repudiate its obligations under any Loan Document.
Section 6.2
Rights and Remedies
. (a) Upon the occurrence of any Event of Default described in Sections 6.1(f) or (g), the unpaid principal amount of, and any and all accrued interest on, the Loans and any and all accrued fees and other Obligations hereunder 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 notices or requirements of any kind (including, without limitation, valuation and appraisement, diligence, presentment, notice of intent to demand or accelerate and notice of acceleration), all of which are hereby expressly waived by the Borrower; and upon the occurrence and during the continuance of any other Event of Default, the Administrative Agent may, and at the request of the Required Banks shall, exercise any of its rights and remedies hereunder and by written notice to the
Borrower, declare the Commitment(s) of each Bank to make Loans to be terminated whereupon the same shall forthwith terminate, declare the unpaid principal amount of and any and all accrued and unpaid interest on the Loans and any and all accrued fees and other Obligations hereunder to be, and the same shall thereupon be, immediately due and payable with all additional interest from time to time accrued thereon and without presentation, demand, or protest or other requirements of any kind other than as provided in the Loan Documents (including, without limitation, valuation and appraisement, diligence, presentment, and notice of intent to demand or accelerate), all of which are hereby expressly waived by the Borrower.
(b) Notwithstanding the foregoing, upon the occurrence and during the continuance of any Event of Default other than any Event of Default described in Sections 6.1(f) or (g), the Administrative Agent shall not exercise any of its rights and remedies hereunder nor declare the unpaid principal amount of and any and all accrued and unpaid interest on the Loans and any and all accrued fees and other Obligations hereunder to be immediately due and payable, until such time as the Administrative Agent shall have delivered a notice to the Banks specifying the Event of Default which has occurred and whether Administrative Agent recommends the acceleration of the Obligations due hereunder or the exercise of other remedies hereunder. The Banks shall notify the Administrative Agent if they approve or disapprove of the acceleration of the Obligations due hereunder or the exercise of such other remedy recommended by Administrative Agent within five (5) Domestic Business Days after receipt of such notice. If any Bank shall not respond within such five (5) Domestic Business Day period, then such Bank shall be deemed to have accepted Administrative Agent’s recommendation for acceleration of the Obligations due hereunder or the exercise of such other remedy. Regardless of the Administrative Agent’s recommendation, if the Required Banks shall approve the acceleration of the Obligations due hereunder or the exercise of such other remedy, then Administrative Agent shall declare the Commitment(s) of each Bank to make Loans to be terminated whereupon the same shall forthwith terminate and declare the unpaid principal amount of and any and all accrued and unpaid interest on the Loans and any and all accrued fees and other Obligations hereunder to be immediately due and payable or exercise such other remedy approved by the Required Banks. If the Required Banks shall neither approve nor disapprove the acceleration of the Obligations due hereunder or such other remedy recommended by Administrative Agent, then Administrative Agent may accelerate the Obligations due hereunder or exercise any of its rights and remedies hereunder in its sole discretion. If the Required Banks shall disapprove the acceleration of the Obligations due hereunder or the exercise of such other remedy recommended by Administrative Agent, but approve of another remedy, then to the extent permitted hereunder, Administrative Agent shall exercise such remedy. In the event the Administrative Agent exercises any remedy provided in any of the Loan Documents, the Administrative Agent shall act as a collateral agent for the Banks.
(c) Notwithstanding the foregoing, if in Administrative Agent’s sole judgment, immediate action is required after an Event of Default has occurred to prevent loss to the Banks, the Administrative Agent may exercise any of its rights and remedies pursuant to this Agreement, including, without limitation, acceleration of the Obligations hereunder, without the prior consent of the Required Banks provided that the Administrative Agent has notified the Banks of its intention so to exercise such rights and remedies and within 48 hours (such hours being counted only on Domestic Business Days) thereafter the Required Banks have not instructed the Administrative Agent to the contrary.
Section 6.3
Notice of Default
. If the Administrative Agent shall not already have given any notice to the Borrower under Section 6.1, the Administrative Agent shall give notice to the Borrower under Section 6.1 promptly upon being requested to do so by the Required Banks and shall thereupon notify all the Banks thereof.
Section 6.4
Actions in Respect of Letters of Credit
. (a) If, at any time and from time to time, any Letter of Credit shall have been issued hereunder and an Event of Default shall have occurred and be continuing, then, upon the occurrence and during the continuation thereof, the Administrative Agent may, and if requested by the Required Revolving Credit Banks the Administrative Agent shall, whether in addition to the taking by the Administrative Agent of any of the actions described in this Article or otherwise, make a demand upon the Borrower to, and forthwith upon such demand (but in any event within ten (10) days after such demand) the Borrower shall, pay to the Administrative Agent, on behalf of the Revolving Credit Banks, in same day funds at the Administrative Agent’s office designated in such demand, for deposit in a special cash collateral account (the “Letter of Credit Collateral Account”) to be maintained in the name of the Administrative Agent (on behalf of the Revolving Credit Banks) and under its sole dominion and control at such place as shall be designated by the Administrative Agent, an amount equal to the amount of the Letter of Credit Usage under the Letters of Credit;
provided
that if an Event of Default described in Section 6.1(f) or (g) has occurred and is continuing, such obligation of the Borrower to deliver such amounts to the Cash Collateral Account shall become automatically due and payable without presentment, demand, protest or other notices or requirements of any kind, all of which are hereby expressly waived by the Borrower. The Borrower shall also deposit amounts into the Letter of Credit Collateral Account in accordance with Section 9.8(c)(ii). Interest shall accrue on the Letter of Credit Collateral Account at a rate equal to the rate on overnight funds.
(b) The Borrower hereby pledges, assigns and grants to the Administrative Agent, as administrative agent for its benefit and the ratable benefit of the Revolving Credit Banks a lien on and a security interest in, the following collateral (the “
Letter of Credit Collateral”
):
(i) the Letter of Credit Collateral Account, all cash deposited therein and all certificates and instruments, if any, from time to time representing or evidencing the Letter of Credit Collateral Account;
(ii) all notes, certificates of deposit and other instruments from time to time hereafter delivered to or otherwise possessed by the Administrative Agent for or on behalf of the Borrower in substitution for or in respect of any or all of the then existing Letter of Credit Collateral;
(iii) all interest, dividends, cash, instruments and other property from time to time received, receivable or otherwise distributed in respect of or in exchange for any or all of the then existing Letter of Credit Collateral; and
(iv) to the extent not covered by the above clauses, all proceeds of any or all of the foregoing Letter of Credit Collateral.
The lien and security interest granted hereby secures the payment of all obligations of the Borrower now or hereafter existing hereunder and under any other Loan Document.
(c) The Borrower hereby authorizes the Administrative Agent for the ratable benefit of the Revolving Credit Banks to apply, from time to time after funds are deposited in the Letter of Credit Collateral Account, funds then held in the Letter of Credit Collateral Account to the payment of any amounts, in such order as the Administrative Agent may elect, as shall have become due and payable by the Borrower to the Revolving Credit Banks in respect of the Letters of Credit.
(d) Neither the Borrower nor any Person claiming or acting on behalf of or through the Borrower shall have any right to withdraw any of the funds held in the Letter of Credit Collateral Account, except as provided in Section 6.4(h) hereof.
(e) The Borrower agrees that it will not (i) sell or otherwise dispose of any interest in the Letter of Credit Collateral or (ii) create or permit to exist any lien, security interest or other charge or encumbrance upon or with respect to any of the Letter of Credit Collateral, except for the security interest created by this Section 6.4.
(f) If any Event of Default shall have occurred and be continuing:
(i) The Administrative Agent may, in its sole discretion, without notice to the Borrower except as required by law and at any time from time to time, charge, set off or otherwise apply all or any part of the Letter of Credit Collateral first, (x) amounts previously drawn on any Letter of Credit that have not been reimbursed by the Borrower and (y) any Letter of Credit Usage described in clause (ii) of the definition thereof that are then due and payable and second, with the consent of the Required Revolving Credit Banks, any other unpaid Obligations then due and payable against the Letter of Credit Collateral Account or any part thereof, in such order as the Administrative Agent shall elect. The rights of the Administrative Agent under this Section 6.4 are in addition to any rights and remedies which any Revolving Credit Bank may have.
(ii) The Administrative Agent may also exercise, in its sole discretion, in respect of the Letter of Credit Collateral Account, in addition to the other rights and remedies provided herein or otherwise available to it, all the rights and remedies of a secured party upon default under the Uniform Commercial Code in effect in the State of New York at that time.
(g) The Administrative Agent shall be deemed to have exercised reasonable care in the custody and preservation of the Letter of Credit Collateral if the Letter of Credit Collateral is accorded treatment substantially equal to that which the Administrative Agent accords its own property, it being understood that, assuming such treatment, the Administrative Agent shall not have any responsibility or liability with respect thereto.
(h) At such time as (x) all Events of Default have been cured or waived in writing and (y) all cash collateral (or the appropriate portion thereof) provided to reduce the Fronting Banks’ exposure to any Defaulting Lender’s Letter of Credit Usage pursuant to Section
9.8(c)(ii) shall no longer be required to be held as cash collateral pursuant to this Section 6.4 as a result of (x) the elimination or reduction of the applicable exposure to a Defaulting Lender’s Letter of Credit Usage (including by the termination of the Defaulting Lender status of such Bank) or (y) the Administrative Agent’s determination that there exists excess cash collateral, all amounts (or excess portion thereof) remaining in the Letter of Credit Collateral Account shall be promptly returned to the Borrower;
provided
that the Borrower and each applicable Fronting Bank may agree to continue to hold cash collateral to support future anticipated exposure to a Defaulting Lender’s Letter of Credit Usage. Absent such cure or written waiver, any surplus of the funds held in the Letter of Credit Collateral Account and remaining after payment in full of all of the Obligations of the Borrower hereunder and under any other Loan Document after the Maturity Date and cancellation or return of all Letters of Credit shall be paid to the Borrower or to whomsoever may be lawfully entitled to receive such surplus.
ARTICLE VII
THE ADMINISTRATIVE AGENT
Section 7.1
Appointment and Authorization
. Each Bank and each Fronting Bank irrevocably appoints and authorizes the Administrative 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 the Administrative Agent by the terms hereof or thereof, together with all such powers as are reasonably incidental thereto. Except as otherwise expressly permitted by this Agreement or with the prior written consent of the Administrative Agent, only the Administrative Agent (and not one or more of the Banks) shall have the authority to deal directly with the Borrower under this Agreement and each Bank acknowledges that all notices, demands or requests from such Bank to Borrower must be forwarded to the Administrative Agent for delivery to the Borrower. Each Bank acknowledges that, except as otherwise expressly set forth in this Agreement, the Borrower has no obligation to act or refrain from acting on instructions or demands of one or more Banks absent written instructions from Administrative Agent in accordance with its rights and authority hereunder.
Section 7.2
Administrative Agent and Affiliates
. JPMorgan Chase Bank, N.A. shall have the same rights and powers under this Agreement as any other Bank and may exercise or refrain from exercising the same as though it were not the Administrative Agent, and JPMorgan Chase Bank, N.A. and its Affiliates may accept deposits from, lend money to, and generally engage in any kind of business with the Borrower or any subsidiary or Affiliate of the Borrower as if it were not the Administrative Agent hereunder, and the term “Bank” and “Banks” shall include JPMorgan Chase Bank, N.A. in its individual capacity.
Section 7.3
Action by Administrative Agent
. (a) The obligations of the Administrative Agent hereunder are only those expressly set forth herein. Without limiting the generality of the foregoing, the Administrative Agent shall not be required to take any action with respect to any Default, except as expressly provided in Article VI. The Administrative Agent shall not have by reason of the execution and delivery of the Loan Documents to which it is a party, the performance of any of its obligations thereunder, or by the use of the term “Administrative Agent”, a fiduciary relationship in respect of any Bank or the Borrower.
(b) The Administrative Agent shall promptly forward, or make available by Intralinks or other internet access system, to each Bank tangible or electronic copies, or notify (in writing or electronically and, if electronically, the Administrative Agent will also transmit a fax indicating that the information in question is being transmitted electronically) each Bank as to the contents, of all notices, financial statements and other significant materials and communications received from the Borrower pursuant to the terms of this Agreement or any other Loan Document and, in the event that the Borrower fails to pay when due the principal of or interest on any Loan, the Administrative Agent shall promptly give notice thereof to the Banks. As to any matters not expressly provided for by the Loan Documents, the Administrative Agent shall not be required to exercise any discretion or take any action, but shall be required to act or to refrain from acting (and shall be fully protected in so acting or refraining from acting) upon the instructions of the Required Banks, and such instructions shall be binding upon all the Banks; provided, however, that the Administrative Agent shall not be required to take any action that exposes the Administrative Agent to personal liability or that is contrary to this Agreement or applicable law. If the Borrower shall have made any payment of principal of and interest on the Loans or any other amount due hereunder in accordance with Article II hereof and the Administrative Agent shall not have distributed to each Bank its proper share of such payment on the date on which such payment shall be received (other than as a result of any shutdown of or disturbance in any payment system or any other event or circumstance beyond the reasonable control of the Administrative Agent), then the Administrative Agent shall pay such proper share to such Bank together with interest thereon at the Federal Funds Rate for each day from the date such payment shall have been received from the Borrower until the date such amount is paid by the Administrative Agent to such Bank. If any Bank transfers funds to the Administrative Agent in anticipation of the making of a Loan that is subsequently not made, then the Administrative Agent agrees to repay such funds to such Bank upon the receipt of a notice from such Bank requesting the repayment of such funds, together with interest thereon at the Federal Funds Rate for each day from the date which is the day upon which Administrative Agent shall have received a notice from such bank requesting the repayment of such funds until the date such amount is paid by the Administrative Agent to such Bank.
Section 7.4
Consultation with Experts
. The Administrative Agent may consult with legal counsel (who may be counsel for the Borrower), independent public accountants and other experts selected by it and shall not be liable for any action taken or omitted to be taken by it in good faith in accordance with the advice of such counsel, accountants or experts.
Section 7.5
Liability of Administrative Agent
. Neither the Administrative Agent nor any of its Affiliates nor any of their respective directors, officers, agents or employees shall be liable for any action taken or not taken by it in connection herewith (i) with the consent or at the request of the Required Banks or, where required by the terms of this Agreement, all of the Banks, or (ii) in the absence of its own gross negligence or willful misconduct. Except as expressly set forth herein, the Administrative Agent shall not have any duty to disclose, and shall not be liable for the failure to disclose, any information relating to the Borrower or any of its Subsidiaries that is communicated to or obtained by the bank serving as Administrative Agent or any of its Affiliates in any capacity. The Administrative Agent shall be deemed not to have knowledge of any Default (other than a Default under Section 6.1(a) with respect to the payment of principal, interest, facility fees or Letter of Credit Fees) unless and until written notice thereof is given to the Administrative Agent by the Borrower or a Bank. Neither the Administrative
Agent nor any of its directors, officers, agents or employees shall be responsible for or have any duty to ascertain, inquire into or verify (i) any statement, warranty or representation made in connection with this Agreement or any borrowing hereunder or the contents of any report or certificate delivered hereunder; (ii) the performance or observance of any of the covenants or agreements of the Borrower; (iii) the satisfaction of any condition specified in Article III, except receipt of items required to be delivered to the Administrative Agent; or (iv) the validity, effectiveness or genuineness of this Agreement, the other Loan Documents or any other instrument or writing furnished in connection herewith. The Administrative Agent shall not incur any liability by acting in reliance upon any notice, consent, certificate, statement, or other writing (which may be sent by electronic means) believed by it in good faith to be genuine or to be signed by the proper party or parties. The Administrative Agent also may rely upon any statement made to it orally or by telephone and believed by it in good faith to be made by the proper Person, and shall not incur any liability for relying thereon.
Section 7.6
Indemnification
. (a) Each Bank shall, ratably in accordance with its Aggregate Exposure Percentage, indemnify the Administrative Agent, their Affiliates and their respective directors, officers, agents and employees (to the extent not reimbursed by the Borrower) against any cost, expense (including counsel fees and disbursements), claim, demand, action, loss or liability (except such as result from such indemnitees’ gross negligence or willful misconduct as finally determined by a court of competent jurisdiction) that such indemnitees may suffer or incur as a result of, or in connection with, the Administrative Agent’s capacity as Administrative Agent in connection with this Agreement, the other Loan Documents or any action taken or omitted by such indemnitees in accordance with this Agreement, including any amounts that the Borrower fails to pay under Section 9.3(a).
(b) Each Revolving Credit Bank shall, ratably in accordance with its Revolving Commitment Percentage, indemnify the Fronting Banks, the Swingline Lender, their Affiliates and their respective directors, officers, agents and employees (to the extent not reimbursed by the Borrower) against any cost, expense (including counsel fees and disbursements), claim, demand, action, loss or liability (except such as result from such indemnitees’ gross negligence or willful misconduct as finally determined by a court of competent jurisdiction) that such indemnitees may suffer or incur as a result of, or in connection with, the Administrative Agent’s capacity as Administrative Agent in connection with this Agreement, the other Loan Documents or any action taken or omitted by such indemnitees in accordance with this Agreement, including any amounts that the Borrower fails to pay under Section 9.3(a).
Section 7.7
Credit Decision
. Each Bank acknowledges that it has, independently and without reliance upon the Administrative Agent or any other Bank, and based on such documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Agreement. Each Bank also acknowledges that it will, independently and without reliance upon the Administrative Agent or any other Bank, 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 any action under this Agreement.
Section 7.8
Successor Administrative Agent
. The Administrative Agent may resign at any time by giving notice thereof to the Banks and the Borrower. In addition, if the
Administrative Agent at any time shall have been finally determined to have committed gross negligence or willful misconduct in connection with its performance of its duties as Administrative Agent hereunder or if the Commitment of the Administrative Agent, in its capacity as a Bank, inclusive of participations, shall be less than $10,000,000, then, upon notice from the Required Banks, the Administrative Agent shall resign. Upon any such resignation, the Required Banks shall have the right to appoint a successor Administrative Agent with the consent of the Borrower (which consent will not be unreasonably withheld or delayed); provided that the consent of the Borrower shall not be required if an Event of Default shall have occurred and be continuing. If no successor Administrative Agent shall have been so appointed by the Required Banks, and shall have accepted such appointment, within 30 days after the retiring Administrative Agent gives notice of resignation, then the retiring Administrative Agent may, on behalf of the Banks, appoint a successor Administrative Agent, with the reasonable approval of the Borrower provided that no Event of Default shall have occurred and be outstanding, which shall be a commercial bank organized or licensed under the laws of the United States of America or of any State thereof and having a combined capital and surplus of at least $500,000,000, total assets of at least $25,000,000,000 and a long-term senior unsecured indebtedness rating of BBB+ or better by S&P (if rated by S&P) and Baa1 by Moody’s (if rated by Moody’s). Upon the acceptance of its appointment as the Administrative Agent hereunder by a successor Administrative Agent, such successor Administrative Agent shall thereupon succeed to and become vested with all the rights and duties of the retiring Administrative Agent, and the retiring Administrative Agent shall be discharged from its duties and obligations hereunder first accruing or arising after the effective date of such retirement. After any retiring Administrative Agent’s resignation hereunder as Administrative Agent, the provisions of this Article shall inure to its benefit as to any actions taken or omitted to be taken by it while it was the Administrative Agent.
If, at any time during the Availability Period, the Administrative Agent shall no longer have any Commitment or hold outstanding Loans under this Agreement, the Administrative Agent shall give notice of its offer to resign to the Banks and the Borrower. Upon any such offer of resignation, the Required Banks shall have the right to appoint a successor Administrative Agent or to retain the Administrative Agent with the consent of the Borrower; provided that the consent of the Borrower shall not be required if an Event of Default shall have occurred and be continuing.
Section 7.9
Administrative Agent’s Fee
. The Borrower shall pay to the Administrative Agent for its own account fees in the amounts and at the times previously agreed upon between the Borrower and the Administrative Agent.
Section 7.10
Copies of Notices
. The Administrative Agent shall deliver to each Bank a copy of any notice sent to the Borrower by the Administrative Agent in connection with the performance of its duties as the Administrative Agent hereunder; and the Administrative Agent shall deliver to each Bank a copy of any notice sent to the Administrative Agent by the Borrower in connection with any Default or Event of Default hereunder.
ARTICLE VIII
CHANGE IN CIRCUMSTANCES
Section 8.1
Alternate Rate of Interest
. If prior to the commencement of any Interest Period for a Euro-Dollar Borrowing:
(a) the Administrative Agent determines (which determination shall be conclusive absent manifest error) that adequate and reasonable means do not exist for ascertaining the Adjusted London Interbank Offered Rate or the London Interbank Offered Rate, as applicable, for such Interest Period; or
(b) the Administrative Agent is advised by the Majority Facility Banks for the applicable Facility that the Adjusted London Interbank Offered Rate or the London Interbank Offered Rate, as applicable, for such Interest Period will not adequately and fairly reflect the cost to such Banks (or Bank) of making or maintaining their Loans (or its Loan) included in such Borrowing under such Facility for such Interest Period;
then the Administrative Agent shall give notice thereof to the Borrower and the Banks by telephone or telecopy as promptly as practicable thereafter and, until the Administrative Agent
notifies the Borrower and the Banks that the circumstances giving rise to such notice no longer exist, (i) any Notice of Interest Rate Election that requests the conversion of any Borrowing under such Facility to, or continuation of any Borrowing under such Facility as, a Euro-Dollar Borrowing shall be ineffective, and (ii) if any Borrowing Request requests a Euro-Dollar Borrowing under such Facility, such Borrowing shall be made as an Base Rate Borrowing;
provided
that if the circumstances giving rise to such notice affect only Borrowings under a particular Facility, then the Borrowings under the other Facility shall be permitted.
Section 8.2
Illegality
. If, after the date of this Agreement, the adoption of any applicable law, rule or regulation, or any change in any existing applicable law, rule or regulation, or any change in the interpretation or administration thereof by any governmental authority, central bank or comparable agency charged with the interpretation or administration thereof, or compliance by any Bank (or its Euro-Dollar Lending Office) with any request or directive (whether or not having the force of law) of any such authority, central bank or comparable agency shall make it unlawful or impossible for any Bank (or its Euro-Dollar Lending Office) to make, maintain or fund its Euro-Dollar Loans or Money Market Loans, or, with respect to Revolving Credit Banks, to participate in any Letter of Credit issued by a Fronting Bank, or, with respect to a Fronting Bank, to issue any Letter of Credit, and such Bank shall so notify the Administrative Agent, the Administrative Agent shall forthwith give notice thereof to the other Banks and the Borrower, whereupon until such Bank notifies the Borrower and the Administrative Agent that the circumstances giving rise to such suspension no longer exist, the obligation of such Bank to make or convert Euro-Dollar Loans or Money Market Loans, or with respect to Revolving Credit Banks, to participate in any Letter of Credit issued by a Fronting Bank or, with respect to a Fronting Bank, to issue any Letter of Credit, shall be suspended. Before giving any notice to the Administrative Agent pursuant to this Section, such Bank shall designate a different Euro-Dollar Lending Office if such designation will avoid the need for giving such notice and will not, in the judgment of such Bank, be otherwise
disadvantageous to such Bank. If such Bank shall determine that it may not lawfully continue to maintain and fund any of its outstanding Euro-Dollar Loans or Money Market Loans (as the case may be) to maturity and shall so specify in such notice, the Borrower shall immediately prepay in full the then outstanding principal amount of each such Euro-Dollar Loan or Money Market Loan, together with accrued interest thereon. Concurrently with prepaying each such Euro-Dollar Loan, the Borrower shall borrow a Base Rate Loan in an equal principal amount from such Bank (on which interest and principal shall be payable contemporaneously with the related Euro-Dollar Loans or Money Market Loans of the other Banks), and such Bank shall make such a Base Rate Loan.
Section 8.3
Increased Cost and Reduced Return
.
(a) If, after (x) the date hereof, in the case of any Committed Loan or any obligation to make Committed Loans or (y) the date of the related Money Market Quote, in the case of any Money Market Loan, the adoption of any applicable law, rule or regulation, or any change in any applicable law, rule, directive, decision or regulation, or any change in the interpretation, re-interpretation, application or administration thereof by any governmental authority, central bank or comparable agency charged with the interpretation or administration thereof (“
Change of Law
”), or compliance by any Bank (or its Applicable Lending Office) with any request, decision or directive (whether or not having the force of law) of any such authority, central bank or comparable agency shall impose, modify or deem applicable any reserve (including, without limitation, any such requirement imposed by the Board of Governors of the Federal Reserve System (but excluding with respect to any Euro-Dollar Loan any such requirement reflected in an applicable Euro-Dollar Reserve Percentage)), special deposit, insurance assessment or similar requirement against assets of, deposits with or for the account of, or credit extended by, any Bank (or its Applicable Lending Office) or shall impose on any Bank (or its Applicable Lending Office) or on the London interbank market any other condition affecting its Euro-Dollar Loans or Money Market LIBOR Loans, its Notes, or its obligation to make Euro-Dollar Loans, and the result of any of the foregoing is to increase the cost to such Bank (or its Applicable Lending Office) of making or maintaining any Euro-Dollar Loan, or to reduce the amount of any sum received or receivable by such Bank (or its Applicable Lending Office) under this Agreement or under its Notes with respect thereto, by an amount deemed by such Bank to be material, then, within 15 days after demand by such Bank (with a copy to the Administrative Agent), which demand shall be accompanied by a certificate showing, in reasonable detail, the calculation of such amount or amounts, the Borrower shall pay to such Bank such additional amount or amounts as will compensate such Bank for such increased cost or reduction. For purposes hereof, all requests, rules, guidelines or directives in connection with the Dodd-Frank Wall Street Reform and Consumer Protection Act shall be deemed to be a change after the date hereof or after the date of the related Money Market Quote, as applicable, regardless of the date enacted, implemented, adopted or issued and all requests, rules, guidelines or directives promulgated by the Bank for International Settlements, the Basel Committee on Banking Regulations and Supervisory Practices (or any successor or similar authority) or the United States financial regulatory authorities, in each case pursuant to Basel III shall be deemed to be such a change regardless of the date adopted, issued, promulgated or implemented (each a “
Regulatory Change
”), provided, however, that if the applicable Bank shall have implemented changes prior to the Closing Date in response to any such requests, rules, guidelines or
directives, then the same shall not be deemed to be a change after the date hereof or after the date of the related Money Market Quote, as applicable, with respect to such Bank.
(b) If any Bank shall have determined that, after the date hereof, the adoption of any applicable law, rule or regulation regarding capital or liquidity requirements, or any change in any such law, rule or regulation, or any change in the interpretation or administration thereof by any governmental authority, central bank or comparable agency charged with the interpretation or administration thereof, or any request or directive regarding capital or liquidity requirements (whether or not having the force of law) of any such authority, central bank or comparable agency, including any Regulatory Change, has or would have the effect of reducing the rate of return on capital of such Bank (or its Parent) as a consequence of such Bank’s obligations hereunder to a level below that which such Bank (or its Parent) could have achieved but for such adoption, change, request or directive (taking into consideration its policies with respect to capital or liquidity requirements) by an amount deemed by such Bank to be material, then from time to time, within 15 days after demand by such Bank (with a copy to the Administrative Agent), which demand shall be accompanied by a certificate showing, in reasonable detail, the calculation of such amount or amounts, the Borrower shall pay to such Bank such additional amount or amounts as will compensate such Bank (or its Parent) for such reduction.
(c) Each Bank will promptly notify the Borrower and the Administrative Agent of any event of which it has knowledge, occurring after the date hereof, which will entitle such Bank to compensation pursuant to this Section (although failure or delay on the part of any Bank to provide such notice or to demand compensation pursuant to this Section, after receiving notice of increased cost or reduced rate of return, shall not constitute a waiver of such Bank’s right to demand such compensation unless such failure materially prejudices Borrower’s rights hereunder) and will designate a different Applicable Lending Office if such designation will avoid the need for, or reduce the amount of, such compensation and will not, in the judgment of such Bank, be otherwise disadvantageous to such Bank. A certificate of any Bank claiming compensation under this Section and setting forth the additional amount or amounts to be paid to it hereunder shall be conclusive in the absence of manifest error. In determining such amount, such Bank may use any reasonable averaging and attribution methods.
Section 8.4
Taxes
.
(a)
Payments Free of Taxes
. Any and all payments by or on account of any obligation of the Borrower under any Loan Document shall be made without deduction or withholding for any Taxes, except as required by applicable law. If any applicable law (as determined in the good faith discretion of an applicable withholding agent) requires the deduction or withholding of any Tax from any such payment by a withholding agent, then the applicable withholding agent shall be entitled to make such deduction or withholding and shall timely pay the full amount deducted or withheld to the relevant Governmental Authority in accordance with applicable law and, if such Tax is an Indemnified Tax, then the sum payable by the Borrower shall be increased as necessary so that after such deduction or withholding has been made (including such deductions and withholdings applicable to additional sums payable under this Section 8.4) the applicable Recipient receives an amount equal to the sum it would have received had no such deduction or withholding been made.
(b)
Payment of Other Taxes by the Borrower
. The Borrower shall timely pay to the relevant Governmental Authority in accordance with applicable law, or at the option of the Administrative Agent timely reimburse it for, Other Taxes.
(c)
Evidence of Payments
. As soon as practicable after any payment of Taxes by the Borrower to a Governmental Authority pursuant to this Section 8.4, the Borrower shall deliver to the Administrative Agent the original or a certified copy of a receipt issued by such Governmental Authority evidencing such payment, a copy of the return reporting such payment or other evidence of such payment reasonably satisfactory to the Administrative Agent.
(d)
Indemnification by the Borrower
. Without duplication of Sections 8.4(a) or (b) above, the Borrower shall indemnify each Recipient, within 10 days after demand therefor, for the full amount of any Indemnified Taxes (including Indemnified Taxes imposed or asserted on or attributable to amounts payable under this Section) payable or paid by such Recipient or required to be withheld or deducted from a payment to such Recipient and any reasonable expenses arising therefrom or with respect thereto, whether or not such Indemnified Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority. A certificate as to the amount of such payment or liability delivered to the Borrower by a Bank (with a copy to the Administrative Agent), or by the Administrative Agent on its own behalf or on behalf of a Bank, shall be conclusive absent manifest error. The Administrative Agent shall reasonably cooperate, at its sole discretion and at no cost to the Administrative Agent or the Banks, with efforts by Borrower to recover any Taxes or Other Taxes which Borrower reasonably believes were incorrectly or illegally imposed.
(e)
Indemnification by the Banks
. Each Bank shall severally indemnify the Administrative Agent, within 10 days after demand therefor, for (i) any Indemnified Taxes attributable to such Bank (but only to the extent that the Borrower has not already indemnified the Administrative Agent for such Indemnified Taxes and without limiting the obligation of the Borrower to do so), (ii) any Taxes attributable to such Bank’s failure to comply with the provisions of Section 9.6(b) relating to the maintenance of a Participant Register and (iii) any Excluded Taxes attributable to such Bank, in each case, that are payable or paid by the Administrative Agent in connection with any Loan Document, and any reasonable expenses arising therefrom or with respect thereto, whether or not such Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority. A certificate as to the amount of such payment or liability delivered to any Bank by the Administrative Agent shall be conclusive absent manifest error. Each Bank hereby authorizes the Administrative Agent to set off and apply any and all amounts at any time owing to such Bank under any Loan Document or otherwise payable by the Administrative Agent to the Bank from any other source against any amount due to the Administrative Agent under this paragraph (e).
(f)
Status of Banks
. (i) The Administrative Agent or any Bank that is entitled to an exemption from or reduction of withholding Tax with respect to payments made under any Loan Document shall deliver to the Borrower and the Administrative Agent, at the time or times reasonably requested by the Borrower or the Administrative Agent, such properly completed and executed documentation reasonably requested by the Borrower or the Administrative Agent as will permit such payments to be made without withholding or at a reduced rate of withholding. In addition, the Administrative Agent or any Bank, if reasonably requested by the Borrower or
the Administrative Agent, shall deliver such other documentation prescribed by applicable law or reasonably requested by the Borrower or the Administrative Agent as will enable the Borrower or the Administrative Agent to determine whether or not such Recipient is subject to backup withholding or information reporting requirements. Notwithstanding anything to the contrary in the preceding two sentences, the completion, execution and submission of such documentation (other than such documentation set forth in Section 8.4(f)(ii)(A), (ii)(B) and (ii)(D) below) shall not be required if in the Recipient’s reasonable judgment such completion, execution or submission would subject such Recipient to any material unreimbursed cost or expense or would materially prejudice the legal or commercial position of such Recipient.
(ii) Without limiting the generality of the foregoing, in the event that the Borrower is a U.S. Person,
(A) the Administrative Agent and any Bank that is a U.S. Person shall deliver to the Borrower and the Administrative Agent on or prior to the date on which the Administrative Agent becomes the Administrative Agent under this Agreement or such Bank becomes a Bank under this Agreement, as applicable, (and from time to time thereafter upon the reasonable request of the Borrower or the Administrative Agent), executed originals of IRS Form W-9 certifying that such Administrative Agent or Bank, as applicable is exempt from U.S. federal backup withholding tax;
(B) any Foreign Bank shall, to the extent it is legally entitled to do so, deliver to the Borrower and the Administrative Agent (in such number of copies as shall be requested by the recipient) on or prior to the date on which such Foreign Bank becomes a Bank under this Agreement (and from time to time thereafter upon the reasonable request of the Borrower or the Administrative Agent), whichever of the following is applicable:
(1) in the case of a Foreign Bank claiming the benefits of an income tax treaty to which the United States is a party (x) with respect to payments of interest under any Loan Document, executed originals of IRS Form W-8BEN (or applicable successor form) establishing an exemption from, or reduction of, U.S. federal withholding Tax pursuant to the “interest” article of such tax treaty and (y) with respect to any other applicable payments under any Loan Document, IRS Form W-8BEN (or applicable successor form) establishing an exemption from, or reduction of, U.S. federal withholding Tax pursuant to the “business profits” or “other income” article of such tax treaty;
(2) executed originals of IRS Form W-8ECI;
(3) in the case of a Foreign Bank claiming the benefits of the exemption for portfolio interest under Section 881(c) of the Code, (x) a certificate substantially in the form of
Exhibit I-1
to the effect that such Foreign Bank is not a “bank” within the meaning of Section 881(c)(3)(A) of the Code, a “10 percent shareholder” of the Borrower within the meaning of Section 881(c)(3)(B) of the Code, or a “controlled foreign
corporation” described in Section 881(c)(3)(C) of the Code (a “
U.S. Tax Compliance Certificate
”) and (y) executed originals of IRS Form W-8BEN (or applicable successor form); or
(4) to the extent a Foreign Bank is not the beneficial owner, executed originals of IRS Form W-8IMY, accompanied by IRS Form W-8ECI, IRS Form W-8BEN (or applicable successor form), a U.S. Tax Compliance Certificate substantially in the form of
Exhibit I-2
or
Exhibit I-3
, IRS Form W-9, and/or other certification documents from each beneficial owner, as applicable;
provided
that if the Foreign Bank is a partnership and one or more direct or indirect partners of such Foreign Bank are claiming the portfolio interest exemption, such Foreign Bank may provide a U.S. Tax Compliance Certificate substantially in the form of
Exhibit I-4
on behalf of each such direct and indirect partner;
(C) any Foreign Bank shall, to the extent it is legally entitled to do so, deliver to the Borrower and the Administrative Agent (in such number of copies as shall be requested by the recipient) on or prior to the date on which such Foreign Bank becomes a Bank under this Agreement (and from time to time thereafter upon the reasonable request of the Borrower or the Administrative Agent), executed originals of any other form prescribed by applicable law as a basis for claiming exemption from or a reduction in U.S. Federal withholding Tax, duly completed, together with such supplementary documentation as may be prescribed by applicable law to permit the Borrower or the Administrative Agent to determine the withholding or deduction required to be made; and
(D) if a payment made to a Recipient under any Loan Document would be subject to U.S. federal withholding Tax imposed by FATCA if such Recipient were to fail to comply with the applicable reporting requirements of FATCA (including those contained in Section 1471(b) or 1472(b) of the Code, as applicable), such Recipient shall deliver to the Borrower and the Administrative Agent at the time or times prescribed by law and at such time or times reasonably requested by the Borrower or the Administrative Agent such documentation prescribed by applicable law (including as prescribed by Section 1471(b)(3)(C)(i) of the Code) and such additional documentation reasonably requested by the Borrower or the Administrative Agent as may be necessary for the Borrower and the Administrative Agent to comply with their obligations under FATCA and to determine that such Recipient has complied with such Recipient’s obligations under FATCA or to determine the amount to deduct and withhold from such payment. Solely for purposes of this clause (D), “FATCA” shall include any amendments made to FATCA after the date of this Agreement.
Each Recipient agrees that if any form or certification it previously delivered expires or becomes obsolete or inaccurate in any respect, it shall update such form or certification or promptly notify the Borrower and the Administrative Agent in writing of its legal inability to do so.
(g)
Treatment of Certain Refunds
. If any party determines, in its sole discretion exercised in good faith, that it has received a refund of any Taxes as to which it has been indemnified pursuant to this Section 8.4 (including by the payment of additional amounts pursuant to this Section 8.4), it shall pay to the indemnifying party an amount equal to such refund (but only to the extent of indemnity payments made under this Section 8.4 with respect to the Taxes giving rise to such refund), net of all out-of-pocket expenses (including Taxes) of such indemnified party and without interest (other than any interest paid by the relevant Governmental Authority with respect to such refund). Such indemnifying party, upon the request of such indemnified party, shall repay to such indemnified party the amount paid over pursuant to this paragraph (g) (plus any penalties, interest or other charges imposed by the relevant Governmental Authority) in the event that such indemnified party is required to repay such refund to such Governmental Authority. Notwithstanding anything to the contrary in this paragraph (g), in no event will the indemnified party be required to pay any amount to an indemnifying party pursuant to this paragraph (g) the payment of which would place the indemnified party in a less favorable net after-Tax position than the indemnified party would have been in if the Tax subject to indemnification and giving rise to such refund had not been deducted, withheld or otherwise imposed and the indemnification payments or additional amounts with respect to such Tax had never been paid. This paragraph shall not be construed to require any indemnified party to make available its Tax returns (or any other information relating to its Taxes that it deems confidential) to the indemnifying party or any other Person.
(h)
Survival
. Each party’s obligations under this Section 8.4 shall survive the resignation or replacement of the Administrative Agent or any assignment of rights by, or the replacement of, a Bank, the termination of the Commitments and the repayment, satisfaction or discharge of all obligations under any Loan Document.
(i)
Defined Terms
. For purposes of this Section 8.4, the term “
Bank
” includes any Fronting Bank and the term “
applicable law
” includes FATCA.
Section 8.5
Base Rate Loans Substituted for Affected Euro-Dollar Loans
. If (i) the obligation of any Bank to make, or convert outstanding Loans to, Euro-Dollar Loans has been suspended pursuant to Sections 8.1 or 8.2 or (ii) any Bank has demanded compensation under Section 8.3 or 8.4 with respect to its Euro-Dollar Loans and the Borrower shall, by at least five (5) Euro-Dollar Business Days’ prior notice to such Bank through the Administrative Agent, have elected that the provisions of this Section shall apply to such Bank, then, unless and until such Bank notifies the Borrower that the circumstances giving rise to such suspension or demand for compensation no longer exist:
(a) all Loans which would otherwise be made by such Bank as Euro-Dollar Loans shall be made instead as Base Rate Loans (on which interest and principal shall be payable contemporaneously with the related Euro-Dollar Loans of the other Banks), and
(b) after each of its Euro-Dollar Loans has been repaid, all payments of principal which would otherwise be applied to repay such Euro-Dollar Loans shall be applied to repay its Base Rate Loans instead.
Section 8.6
SPC Loans
. Notwithstanding anything to the contrary contained herein, any Bank (a “
Granting Bank
”) may grant to one special purpose funding vehicle (a “
SPC
”) sponsored by such Granting Bank, as identified as such in writing by such Granting Bank to the Administrative Agent and the Borrower from time to time (including, without limitation, by the execution of this Agreement on the date hereof by a Granting Bank and its SPC identified as such on the signature pages hereof), the option to provide to the Borrower all or any part of any Loan that such Granting Bank would otherwise be obligated to make to the Borrower pursuant to the terms hereof; provided, that (i) nothing herein shall constitute a commitment to make any Loan by any SPC, and (ii) if an SPC elects not to exercise such option or otherwise fails to provide all or any part of such Loan, the Granting Bank shall be obligated to make such Loan pursuant to the terms hereof. The making of a Loan by an SPC hereunder shall utilize the Commitment of such Granting Bank to the same extent, and as if, such Loan were made by such Granting Bank. Any SPC that makes a Loan shall (i) have in regard to such Loan all of the rights (exercisable, however, only through its Granting Bank acting as its agent) that such Granting Bank would have had if it had made such Loan directly, and (ii) comply with this Agreement in regard to such Loan on the same terms as any other Bank party hereto; provided that (A) the Granting Bank’s Commitment shall remain the Commitment of such Granting Bank, and (B) all monetary obligations of an SPC hereunder in respect of any Loan it provides shall remain the obligations of such Granting Bank to the extent at any time that such SPC elects not to or otherwise fails to perform or pay any such obligation. Each party hereto hereby agrees that no SPC shall be liable for any payment under this Agreement for which a Bank would otherwise be liable for so long as, and to the extent, its sponsoring Granting Bank makes such payment. Notwithstanding any Loan that may be provided by an SPC hereunder, the Administrative Agent and Borrower shall be entitled to continue to communicate and deal solely and directly with the Granting Bank in accordance with this Agreement in respect of such Loan. Each SPC that is a signatory hereto, and each SPC that subsequently is identified by its Granting Bank as having been granted such option, shall be deemed to have confirmed (and the Borrower and the Administrative Agent may require a written acknowledgment of such confirmation signed by any SPC not a signatory hereto that is subsequently so identified by its Granting Bank) to the Borrower and the Administrative Agent that (a) it has received a copy of the Agreement and each Loan Document, together with copies of the financial statements heretofore provided to the Banks under the terms of this Agreement and such other documents and information as it has deemed appropriate to make its own credit analysis and decision to enter into this Agreement; (b) agrees that it will independently and without reliance upon the Administrative Agent, its Granting Bank or any other Bank, and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under the Agreement and any other Loan Document; (c) appoints and authorizes the Administrative Agent to take such action as agent on its behalf and to exercise such powers and discretion under this Agreement and any other Loan Document as are delegated to the Administrative Agent by the terms thereof, together with such powers and discretion as are reasonably incidental thereto; (d) agrees that it will perform in accordance with their terms all of the obligations which by the terms of this Agreement and any other Loan Document are required to be performed by it as a Bank, subject to the terms of this Section 8.6; and (e) appoints its Granting Bank, or a specified branch or Affiliate thereof, as its agent and attorney in fact and grants to its Granting Bank an irrevocable power of attorney to receive payments made for the benefit of such SPC under this Agreement, to deliver and receive all communications and notices
under this Agreement and other Loan Documents and to exercise on such SPC’s behalf all rights to vote and to grant and make approvals, waivers, consents of amendments to or under this Agreement and other Loan Documents. Any document executed by such agent on such SPC’s behalf in connection with this Agreement or other Loan Documents shall be binding on such SPC. In furtherance of the foregoing, all the Banks and the Administrative Agent each hereby agrees (which agreement shall survive the termination of this Agreement) that, prior to the date that is one (1) year and one (1) day after the payment in full of all outstanding commercial paper or other senior indebtedness of any SPC, it will not institute against, or join any other person in instituting against, such SPC any bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings or similar proceedings under the laws of the United States or any State thereof. In addition, notwithstanding anything to the contrary contained in Section 9.6(c), any SPC may (i) with notice to, but without the prior written consent of, the Borrower or Administrative Agent, and without the payment of any processing fee therefor, assign all or a portion of its interests in any Loans to its Granting Bank or to any financial institutions consented to by the Borrower and the Administrative Agent (and, subject to all of the provisions of this paragraph, such consents shall be deemed to have been granted with respect to any SPC signatory hereto on the date hereof) providing liquidity and/or credit facilities to or for the account of such SPC to support the funding or maintenance of loans, and (ii) disclose on a confidential basis any non-public information relating to its Loans to any rating agency, commercial paper dealer or provider of liquidity and/or credit facilities to such SPC. Nothing in this Section 8.6 that would affect the rights or obligations of an SPC may be amended without the written consent of any SPC that has any Loan outstanding at the time of such amendment.
Section 8.7
Mitigation Obligations; Replacement of Banks
. (a) If any Bank requests compensation under Section 8.3, or if the Borrower is required to pay any additional amount to any Bank or any Governmental Authority for the account of any Bank pursuant to Section 8.4, then such Bank shall use reasonable efforts to designate a different lending office for funding or booking its Loans hereunder or to assign its rights and obligations hereunder to another of its offices, branches or Affiliates, if, in the judgment of such Bank, such designation or assignment (i) would eliminate or reduce amounts payable pursuant to Section 8.3 or 8.4, as the case may be, in the future and (ii) would not subject such Bank to any unreimbursed cost or expense and would not otherwise be disadvantageous to such Bank. The Borrower hereby agrees to pay all reasonable costs and expenses incurred by any Bank in connection with any such designation or assignment.
(b) If (w) any Bank is unable to make, maintain or fund its Eurodollar Loans or to participate in any Letter of Credit pursuant to Section 8.2 for a period of ten (10) consecutive days, or (x) any Bank requests compensation under Section 8.3, or if the Borrower is required to pay any additional amount to any Bank or any Governmental Authority for the account of any Bank pursuant to Section 8.4, or (y) if any Bank becomes a Defaulting Lender, or (z) any Bank has refused to consent to any proposed amendment, modification, waiver, termination or consent with respect to any provision of this Agreement or any other Loan Document that, pursuant to Section 9.5, requires the consent of all Banks or of all Banks affected thereby and with respect to which Banks constituting the Required Banks have consented to such proposed amendment, modification, waiver, termination or consent, then the Borrower may, at its sole expense and effort, upon notice to such Bank and the Administrative Agent, require such Bank to assign and delegate, without recourse (in accordance with and subject to the restrictions
contained in Section 9.6), all its interests, rights and obligations under this Agreement (other than any outstanding Money Market Loans held by it) to an assignee that shall assume such obligations (which assignee may be another Bank, if a Bank accepts such assignment);
provided
that (i) the Borrower shall have received the prior written consent of the Administrative Agent (and if a Revolving Commitment is being assigned, the Fronting Banks and the Swingline Lender), which consent shall not unreasonably be withheld or delayed (provided that no such consent shall be required for an assignment to any Bank so long as, after giving effect to such assignment, such Bank’s Revolving Commitment Percentage does not exceed 25%), (ii) such Bank shall have received payment of an amount equal to the outstanding principal of its Loans (other than Money Market Loans) and participations in Unreimbursed Obligations and Swingline Loans, accrued interest thereon, accrued fees and all other amounts payable to it hereunder, from the assignee (to the extent of such outstanding principal and accrued interest and fees) or the Borrower (in the case of all other amounts), (iii) in the case of any such assignment resulting from a claim for compensation under Section 8.3 or payments required to be made pursuant to Section 8.4, such assignment will result in a reduction in such compensation or payments and (iv) in the case of any such assignment resulting from a Bank’s refusal to consent to a proposed amendment, modification, waiver, termination or consent, the assignee shall approve the proposed amendment, modification, waiver, termination or consent. A Bank shall not be required to make any such assignment and delegation if, prior thereto, as a result of a waiver by such Bank or otherwise, the circumstances entitling the Borrower to require such assignment and delegation cease to apply.
ARTICLE IX
MISCELLANEOUS
Section 9.1
Notices
. (a) All notices, requests and other communications to any party hereunder shall be in writing (including bank wire, telex, facsimile transmission or similar writing) and shall be given to such party: (x) in the case of the Borrower or the Administrative Agent, at its address or telecopy number set forth on the signature pages hereof, together with copies thereof, in the case of the Borrower, to Latham & Watkins LLP, 355 S. Grand Avenue, Los Angeles, CA 90071, Attention: Glen B. Collyer, Esq., Telephone: (213) 485-1234, Telecopy: (213) 891-8763, and in the case of the Administrative Agent, to JPMorgan Chase Bank, N.A., 500 Stanton Christiana Road, Ops 2, Newark, DE 19713, Attention: Brittany Duffy, Telephone: (302) 634-8814, Telecopy number: (302) 634-4733, with a copy to: JPMorgan Chase Bank, N.A., 383 Madison Avenue, Floor 24, New York, NY 10179, Attention: Nadeige Charles, Telephone: (212) 622-4522, Telecopy number: (212) 270-2157, and to Bingham McCutchen LLP, One Federal Street, Boston, Massachusetts 02110, Attention: Stephen Miklus, Esq., Telephone: (617) 951-8364, Telecopy: (617) 951-8736, (y) in the case of any Bank, at its address or telecopy number set forth on the signature pages hereof or in its Administrative Questionnaire, or (z) in the case of any party, such other address or telecopy number as such party may hereafter specify for the purpose by notice to the Administrative Agent, the Banks and the Borrower. Each such notice, request or other communication shall be effective (i) if given by telecopy, when such telecopy is transmitted to the telecopy number specified in this Section, (ii) if given by mail, 72 hours after such communication is deposited in the mails with first class postage prepaid, addressed as aforesaid or (iii) if given by any other means, when delivered at the address
specified in this Section; provided that notices to the Administrative Agent under Article II or Article VIII shall not be effective until received.
(b) Notices and other communications to the Banks hereunder may be delivered or furnished by electronic communications pursuant to procedures approved by the Administrative Agent;
provided
that the foregoing shall not apply to notices pursuant to Article II unless otherwise agreed by the Administrative Agent and the applicable Bank. The Administrative Agent or the Borrower may, in its discretion, agree to accept notices and other communications to it hereunder by electronic communications pursuant to procedures approved by it;
provided
that approval of such procedures may be limited to particular notices or communications.
Unless the Administrative Agent otherwise prescribes, (i) notices and other communications sent to an e-mail address shall be deemed received upon the sender’s receipt of an acknowledgement from the intended recipient (such as by the “return receipt requested” function, as available, return e-mail or other written acknowledgement), and (ii) notices or communications posted to an Internet or intranet website shall be deemed received upon the deemed receipt by the intended recipient, at its e-mail address as described in the foregoing clause (i), of notification that such notice or communication is available and identifying the website address therefor;
provided
that, for both clauses (i) and (ii) above, if such notice, email or other communication is not sent during the normal business hours of the recipient, such notice or communication shall be deemed to have been sent at the opening of business on the next business day for the recipient.
(c) Any party hereto may change its address or telecopy number for notices and other communications hereunder by notice to the other parties hereto.
(d)
Electronic Systems
.
(i) Each Credit Party agrees that the Administrative Agent may, but shall not be obligated to, make Communications (as defined below) available to the Fronting Banks and the other Banks by posting the Communications on Debt Domain, Intralinks, Syndtrak, ClearPar or a substantially similar Electronic System.
(ii) Any Electronic System used by the Administrative Agent is provided “as is” and “as available.” The Agent Parties (as defined below) do not warrant the adequacy of such Electronic Systems and expressly disclaim liability for errors or omissions in the Communications. No warranty of any kind, express, implied or statutory, including, without limitation, any warranty of merchantability, fitness for a particular purpose, non-infringement of third-party rights or freedom from viruses or other code defects, is made by any Agent Party in connection with the Communications or any Electronic System. In no event shall the Administrative Agent or any of its Related Parties (collectively, the “
Agent Parties
”) have any liability to the Borrower or the other Credit Parties, any Bank, any Fronting Bank or any other Person or entity for damages of any kind, including, without limitation, direct or indirect, special, incidental or consequential damages, losses or expenses (whether in tort, contract or otherwise) arising out of the Borrower’s, any Credit Party’s or the Administrative Agent’s transmission of communications through an Electronic System. “
Communications
”
means, collectively, any notice, demand, communication, information, document or other material provided by or on behalf of any Credit Party pursuant to any Loan Document or the transactions contemplated therein which is distributed by the Administrative Agent, any Bank or any Fronting Bank by means of electronic communications pursuant to this Section, including through an Electronic System.
Section 9.2
No Waivers
. No failure or delay by the Administrative Agent or any Bank in exercising any right, power or privilege hereunder or under any Note shall operate as a waiver thereof nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right, power or privilege. The rights and remedies herein provided shall be cumulative and not exclusive of any rights or remedies provided by law.
Section 9.3
Expenses; Indemnification
. (a) The Borrower shall pay (i) all reasonable out-of-pocket expenses of the Administrative Agent (including, without limitation, reasonable fees and disbursements of special counsel to the Administrative Agent, local counsel for the Administrative Agent, and travel, site visits, third party reports (including Appraisals), mortgage recording taxes, environmental and engineering expenses), in connection with the preparation and administration of this Agreement, the Loan Documents and the documents and instruments referred to therein, the syndication of the Loans, any waiver or consent hereunder or any amendment or modification hereof or any Default or alleged Default hereunder, (ii) the customary issuance, presentation, amendment and other processing fees, and other standard costs and charges, of each Fronting Bank relating to Letters of Credit as from time to time in effect and (iii) if an Event of Default occurs, all out-of-pocket expenses incurred by the Administrative Agent and each Bank, including, without limitation, reasonable fees and disbursements of counsel for the Administrative Agent and each Bank, in connection with the enforcement of the Loan Documents and the instruments referred to therein and such Event of Default and collection, bankruptcy, insolvency and other enforcement proceedings resulting therefrom, including all such expenses incurred during any workout or restructuring; provided, however, that in no event shall the Borrower be required to pay for the attorneys’ fees and disbursements of more than one counsel to the Administrative Agent and the Banks unless there is a legal conflict of interest.
(b) The Borrower agrees to indemnify the Administrative Agent, the Fronting Banks, and each Bank, their respective Affiliates and the respective directors, officers, agents and employees of the foregoing (each an “
Indemnitee
”) and hold each Indemnitee harmless from and against any and all liabilities, losses, damages, costs and expenses of any kind, including, without limitation, the reasonable fees and disbursements of counsel and settlements and settlement costs, which may be incurred by such Indemnitee in connection with any investigative, administrative or judicial proceeding (whether or not such Indemnitee shall be designated a party thereto) and whether or not brought by the Borrower, the General Partner or any Affiliate of the Borrower, that may at any time (including, without limitation, at any time following the payment of the Obligations) be imposed on, asserted against or incurred by any Indemnitee as a result of, or arising out of, or in any way related to or by reason of, (i) any of the transactions contemplated by the Loan Documents or the execution, delivery or performance of any Loan Document (including, without limitation, the Borrower’s actual or proposed use of proceeds of the Loans, whether or not in compliance with the provisions hereof), (ii) any violation by the Borrower or the Environmental Affiliates of any applicable Environmental Law,
(iii) any Environmental Claim arising out of the management, use, control, ownership or operation of property or assets by the Borrower or any of the Environmental Affiliates, including, without limitation, all on-site and off-site activities involving Material of Environmental Concern, (iv) the breach of any environmental representation or warranty set forth herein, (v) the grant to the Administrative Agent and the Banks of any Lien in any property or assets of the Borrower or any stock or other equity interest in the Borrower, and (vi) the exercise by the Administrative Agent and the Banks of their rights and remedies (including, without limitation, foreclosure) under any agreements creating any such Lien (but excluding in each case, as to any Indemnitee, any such losses, liabilities, claims, damages, expenses, obligations, penalties, actions, judgments, suits, costs or disbursements incurred solely by reason of (y) the gross negligence or willful misconduct of such Indemnitee as finally determined by a court of competent jurisdiction or (z) any investigative, administrative or judicial proceeding imposed or asserted against any Indemnitee by any bank regulatory agency or by any equity holder of such Indemnitee). The Borrower’s obligations under this Section shall survive the termination of this Agreement and the payment of the Obligations. This Section 9.3(b) shall not apply with respect to Taxes other than any Taxes that represent losses, claims, damages, etc. arising from any non-Tax claim.
Section 9.4
Sharing of Set-Offs
. In addition to any rights now or hereafter granted under applicable law or otherwise, and not by way of limitation of any such rights, upon the occurrence and during the continuance of any Event of Default, each Bank is hereby authorized at any time or from time to time, without presentment, demand, protest or other notice of any kind to the Borrower or to any other Person, any such notice being hereby expressly waived, to set off and to appropriate and apply any and all deposits (general or special, time or demand, provisional or final), other than deposits held for the benefit of third parties, and any other indebtedness at any time held or owing by such Bank (including, without limitation, by branches and agencies of such Bank wherever located) to or for the credit or the account of the Borrower against and on account of the Obligations of the Borrower then due and payable to such Bank under this Agreement or under any of the other Loan Documents, including, without limitation, all interests in Obligations purchased by such Bank. Each Bank agrees that if it shall, by exercising any right of set-off or counterclaim or otherwise, receive payment of a proportion of the aggregate amount of principal and interest due with respect to any Note held by it or Letter of Credit participated in by it, or, in the case of a Fronting Bank, Letter of Credit issued by it, which is greater than the proportion received by any other Bank or Letter of Credit issued or participated in by such other Bank, in respect of the aggregate amount of principal and interest due with respect to any Note held by such other Bank, the Bank receiving such proportionately greater payment shall purchase such participations in the Notes held by the other Banks or Letter of Credit issued or participated in by such other Bank, and such other adjustments shall be made, as may be required so that all such payments of principal and interest with respect to the Notes held by the Banks or Letter of Credit issued or participated in by such other Banks shall be shared by the Banks pro rata; provided that (x) nothing in this Section shall impair the right of any Bank to exercise any right of set-off or counterclaim it may have and to apply the amount subject to such exercise to the payment of indebtedness of the Borrower other than its indebtedness under the Notes or the Letters of Credit, (y) the provisions of this Section shall not be construed to apply to any payment made by the Borrower pursuant to and in accordance with the express terms of this Agreement or any payment obtained by a Bank as consideration for the assignment of or sale of a participation in any of its Loans or Commitments to any assignee or
participant and (z) the provisions of this Section shall not be construed to apply to any Extension made in accordance with Section 2.19. The Borrower agrees, to the fullest extent that it may effectively do so under applicable law, that any holder of a participation in a Note, whether or not acquired pursuant to the foregoing arrangements, may exercise rights of set-off or counterclaim and other rights with respect to such participation as fully as if such holder of a participation were a direct creditor of the Borrower in the amount of such participation.
Section 9.5
Amendments and Waivers
. Any provision of this Agreement (including any of the financial covenants given by the Borrower pursuant to Section 5.8), the Notes, the Letters of Credit or other Loan Documents may be amended or waived if, but only if, such amendment or waiver is in writing and is signed by the Borrower and the Required Banks, (and, if the rights or duties of the Administrative Agent, the Fronting Banks or the Swingline Lender are affected thereby (including pursuant to Section 2.16, Section 2.18, Article VII or Section 9.8), by the Administrative Agent, the Fronting Banks or the Swingline Lender, as applicable) (and, if the rights or duties of only a specific Facility are affected thereby or if such amendment or waiver adversely affects the rights of a specific Facility in a manner that is different than such amendment or waiver effects the other Facility, the Majority Facility Banks for such Facility); provided that no such amendment or waiver shall (a) increase the Commitment of any Bank, unless signed by such Bank, (b) reduce the principal of or rate of interest on any Loan or any fees specified herein, unless signed by each Bank affected thereby, (c) postpone the date fixed for any payment of principal of or interest on any Loan, or the expiration date of any Letter of Credit beyond the Revolving Credit Maturity Date, or any fees hereunder or for any reduction or termination of any Commitment, unless signed by each Bank affected thereby (notwithstanding the foregoing, however, it is agreed that only the consent of the extending Banks shall be required for an Extension in accordance with Section 2.19), (d) release the Guaranty or otherwise release any other collateral, unless signed by each Bank affected thereby, (e) subordinate the Loans to any other Debt, unless signed by each Bank affected thereby, (f) change the percentage of the Commitments or of the aggregate unpaid principal amount of the Notes, or the number of Banks, which shall be required for the Banks or any of them to take any action under this Section 9.5 or any other provision of this Agreement, unless signed by each Bank affected thereby, (g) reduce the percentage specified in the definition of Majority Facility Banks with respect to any Facility, unless signed by all of the Banks under such Facility, (h) change Section 2.12(c) or Section 9.4 in a manner that would alter the pro rata sharing of payments required thereby, unless signed by each Bank affected thereby or (i) increase the sum of the aggregate Revolving Commitments plus the aggregate amount of all Term Loans made hereunder above $1,100,000,000 unless signed by all of the Banks. Notwithstanding the foregoing, no amendment, waiver or consent shall, unless in writing and signed by the Designating Lender on behalf of its Designated Lender affected thereby, (x) subject such Designated Lender to any additional obligations, (y) reduce the principal of, interest on, or other amounts due with respect to, the Designated Lender Note made payable to such Designated Lender, or (z) postpone any date fixed for any payment of principal of, or interest on, or other amounts due with respect to the Designated Lender Note made payable to the Designated Lender.
Section 9.6
Successors and Assigns
. (a) The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns, except that the Borrower may not assign or otherwise transfer any of its rights under
this Agreement or the other Loan Documents without the prior written consent of all Banks (and any attempted assignment or transfer by the Borrower without such consent shall be void).
(b) Any Bank may at any time grant to one or more banks or other entities, other than the Borrower and its Affiliates (each a “
Participant
”) participating interests in any or all of its Commitments or any or all of its Loans. In the event of any such grant by a Bank of a participating interest to a Participant, whether or not upon notice to the Borrower and the Administrative Agent, such Bank shall remain responsible for the performance of its obligations hereunder, and the Borrower and the Administrative Agent shall continue to deal solely and directly with such Bank in connection with such Bank’s rights and obligations under this Agreement. Any agreement pursuant to which any Bank may grant such a participating interest shall provide that such Bank shall retain the sole right and responsibility to enforce the obligations of the Borrower hereunder including, without limitation, the right to approve any amendment, modification or waiver of any provision of this Agreement;
provided
that such participation agreement may provide that such Bank will not agree to any modification, amendment or waiver of this Agreement described in clause (i), (ii), (iii) or (iv) of Section 9.5 without the consent of the Participant. The Borrower agrees that each Participant shall, to the extent provided in its participation agreement, be entitled to the benefits of Article VIII with respect to its participating interest (subject to the requirements and limitations therein, including the requirements under Section 8.4(d)(iii) (it being understood that the documentation required under Section 8.4(d)(iii) shall be delivered to the participating Bank)) to the same extent as if it were a Bank and had acquired its interest by assignment pursuant to paragraph (c) of this Section; provided that such Participant (i) agrees to be subject to the provisions of Sections 8.7 as if it were an assignee under paragraph (c) of this Section; and (ii) shall not be entitled to receive any greater payment under Sections 8.3 or 8.4, with respect to any participation, than its participating Bank would have been entitled to receive, except to the extent such entitlement to receive a greater payment results from a Change in Law that occurs after the Participant acquired the applicable participation. An assignment or other transfer which is not permitted by subsection (c) or (d) below shall be given effect for purposes of this Agreement only to the extent of a participating interest granted in accordance with this subsection (b). Each Bank that sells a participation shall, acting solely for this purpose as a non-fiduciary agent of the Borrower, maintain a register on which it enters the name and address of each Participant and the principal amounts (and stated interest) of each Participant’s interest in the Loans or other obligations under the Loan Documents (the “
Participant Register
”); provided that no Bank shall have any obligation to disclose all or any portion of the Participant Register (including the identity of any Participant or any information relating to a Participant's interest in any commitments, loans, letters of credit or its other obligations under any Loan Document) to any Person except to the extent that such disclosure is necessary to establish that such commitment, loan, letter of credit or other obligation is in registered form under Section 5f.103-1(c) of the United States Treasury Regulations. The entries in the Participant Register shall be conclusive absent manifest error, and such Bank shall treat each Person whose name is recorded in the Participant Register as the owner of such participation for all purposes of this Agreement notwithstanding any notice to the contrary. For the avoidance of doubt, the Administrative Agent (in its capacity as Administrative Agent) shall have no responsibility for maintaining a Participant Register.
(c) Any Bank may at any time assign to one or more Eligible Assignees (each an “
Assignee
”) all, or a proportionate part of all, of its rights and obligations under this
Agreement, the Notes and the other Loan Documents, and such Assignee shall assume such rights and obligations, pursuant to an Assignment and Assumption Agreement in substantially the form of
Exhibit D
attached hereto executed by such Assignee and such transferor Bank, with (and subject to) the prior written consent of (x) the Administrative Agent, which consent shall not be unreasonably withheld or delayed,
provided
that no consent of the Administrative Agent shall be required for an assignment of (A) any Revolving Commitment to an assignee that is a Revolving Credit Bank (other than a Defaulting Lender) immediately prior to giving effect to such assignment and (B) all or any portion of a Term Loan to a Bank, an Affiliate of a Bank or an Approved Fund, (y) provided no Event of Default shall have occurred and be continuing, the Borrower, which consent shall not be unreasonably withheld or delayed, provided further, however, that no such consent by the Borrower shall be required in the case of an assignment to another Bank, an Affiliate of a Bank or an Approved Fund, and the Borrower shall be deemed to have consented to an assignment unless it shall have objected thereto by written notice to the Administrative Agent within ten (10) Business Days after having received notice thereof and (z) in the case of an assignment of a Revolving Commitment, the Swingline Lender and each Fronting Bank, which consent will not be unreasonably withheld or delayed. Notwithstanding anything to the contrary contained herein, no Bank may assign or participate its interest to (x) the Borrower and its Affiliates, (y) a natural person or (z) a Defaulting Lender. Except in the case of an assignment to a Revolving Credit Bank or an Affiliate of a Revolving Credit Bank or an assignment of the entire remaining amount of the assigning Revolving Credit Bank's Revolving Commitments, the amount of the Revolving Commitments or Revolving Loans of the assigning Revolving Credit Bank subject to each such assignment (determined as of the date the Assignment and Assumption with respect to such assignment is delivered to the Administrative Agent) shall not be less than $5,000,000 unless each of the Borrower and the Administrative Agent otherwise consent,
provided
that no such consent of the Borrower shall be required if an Event of Default has occurred and is continuing. Each partial assignment shall be made as an assignment of a proportionate part of all the assigning Bank's rights and obligations under this Agreement (provided that this clause shall not be construed to prohibit the assignment of a proportionate part of the assigning Bank’s rights and obligations in respect of only one Facility). The assignee, if it shall not be a Bank, shall deliver to the Administrative Agent an Administrative Questionnaire. Upon execution and delivery (and acceptance and recording in the Register by the Administrative Agent) of such instrument and payment by such Assignee to such transferor Bank of an amount equal to the purchase price agreed between such transferor Bank and such Assignee, such Assignee shall be a Bank party to this Agreement and shall have all the rights and obligations of a Bank with a Commitment as set forth in such instrument of assumption, and the transferor Bank shall be released from its obligations hereunder to a corresponding extent, and no further consent or action by any party shall be required. Upon the consummation of any assignment pursuant to this subsection (c), the transferor Bank, the Administrative Agent and the Borrower shall make appropriate arrangements so that, if required, a new Note or Notes are issued to the Assignee. In connection with any such assignment (except for an assignment by a Bank to its Affiliate), the transferor Bank shall pay to the Administrative Agent an administrative fee for processing such assignment in the amount of $3,500. The Assignee shall deliver to the Borrower and the Administrative Agent certification as to exemption from deduction or withholding of any United States federal income taxes in accordance with Section 8.4.
(d) Any Bank that holds Revolving Commitments (each, a “
Designating Lender
”) may at any time designate one Designated Lender to fund Money Market Loans on behalf of such Designating Lender subject to the terms of this Section 9.6(d) and the provisions in Section 9.6(b) and (c) shall not apply to such designation. No Bank may designate more than one (1) Designated Lender. The parties to each such designation shall execute and deliver to the Administrative Agent for its acceptance a Designation Agreement. Upon such receipt of an appropriately completed Designation Agreement executed by a Designating Lender and a designee representing that it is a Designated Lender, the Administrative Agent will accept such Designation Agreement and will give prompt notice thereof to the Borrower, whereupon, (i) the Borrower shall execute and deliver to the Designating Bank a Designated Lender Note payable to the Designated Lender, (ii) from and after the effective date specified in the Designation Agreement, the Designated Lender shall become a party to this Agreement with a right (subject to the provisions of Section 2.3(b)) to make Money Market Loans on behalf of its Designating Lender pursuant to Section 2.3 after the Borrower has accepted a Money Market Loan (or portion thereof) of the Designating Lender, and (iii) the Designated Lender shall not be required to make payments with respect to any obligations in this Agreement except to the extent of excess cash flow of such Designated Lender which is not otherwise required to repay obligations of such Designated Lender which are then due and payable; provided, however, that regardless of such designation and assumption by the Designated Lender, the Designating Lender shall be and remain obligated to the Borrower and the Banks for each and every of the obligations of the Designating Lender and its related Designated Lender with respect to this Agreement, including, without limitation, any indemnification obligations under Section 7.6 hereof and any sums otherwise payable to the Borrower by the Designated Lender. Each Designating Lender shall serve as the administrative agent of the Designated Lender and shall on behalf of, and to the exclusion of, the Designated Lender: (i) receive any and all payments made for the benefit of the Designated Lender and (ii) give and receive all communications and notices and take all actions hereunder, including, without limitation, votes, approvals, waivers, consents and amendments under or relating to this Agreement and the other Loan Documents. Any such notice, communication, vote, approval, waiver, consent or amendment shall be signed by the Designating Lender as administrative agent for the Designated Lender and shall not be signed by the Designated Lender on its own behalf and shall be binding upon the Designated Lender to the same extent as if signed by the Designated Lender on its own behalf. The Borrower, the Administrative Agent, and the Banks may rely thereon without any requirement that the Designated Lender sign or acknowledge the same. No Designated Lender may assign or transfer all or any portion of its interest hereunder or under any other Loan Document, other than assignments to the Designating Lender which originally designated such Designated Lender or otherwise in accordance with the provisions of Section 9.6(b) and (c).
(e) Any Bank may at any time assign or pledge all or any portion of its rights under this Agreement and its Notes and the Letter(s) of Credit participated in by such Bank or, in the case of a Fronting Bank, issued by it, to secure obligations of such Bank, including any pledge to a Federal Reserve Bank or other central bank having jurisdiction over such Bank. No such assignment shall release the transferor Bank from its obligations hereunder or substitute any such assignee or pledgee for such Bank as a party hereto.
(f) No Assignee, Participant or other transferee of any Bank’s rights shall be entitled to receive any greater payment under Section 8.3 or 8.4 than such Bank would have been
entitled to receive with respect to the rights transferred, unless such transfer is made with the Borrower’s prior written consent or by reason of the provisions of Section 8.2, 8.3 or 8.4 requiring such Bank to designate a different Applicable Lending Office under certain circumstances or at a time when the circumstances giving rise to such greater payment did not exist.
(g) The Administrative Agent, acting solely for this purpose as a non-fiduciary agent of the Borrower, shall maintain a register for the recordation of the names and addresses of the Banks, and the Commitments of, and principal amounts (and stated interest) of the Loans owing to, each Bank pursuant to the terms hereof from time to time (the “
Register
”). The entries in the Register shall be conclusive absent manifest error, and the Borrower, the Administrative Agent and the Banks shall treat each Person whose name is recorded in the Register pursuant to the terms hereof as a Bank hereunder for all purposes of this Agreement. The Register shall be available for inspection by the Borrower and any Bank, at any reasonable time and from time to time upon reasonable prior notice.
Section 9.7
USA Patriot Act
. Each Bank hereby notifies the Borrower that pursuant to the requirements of the USA Patriot Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)) (the “Act”), it is required to obtain, verify and record information that identifies the Borrower, which information includes the name and address of the Borrower and other information that will allow such Bank to identify the Borrower in accordance with the Act.
Section 9.8
Defaulting Lenders
. Notwithstanding any provision of this Agreement to the contrary, if any Bank becomes a Defaulting Lender, then the following provisions shall apply for so long as such Bank is a Defaulting Lender:
(a) fees shall cease to accrue on the Commitment(s) of such Defaulting Lender pursuant to Section 2.8;
(b) the Revolving Commitments and Term Loans of such Defaulting Lender shall not be included in determining whether all Banks or the Required Banks have taken or may take any action hereunder (including any consent to any amendment or waiver pursuant to Section 9.5, except that the Defaulting Lender’s consent shall be required in connection with any increase in such Defaulting Lender’s Commitment(s) pursuant to Section 9.5(b)(i), any amendment pursuant to Section 9.5(b)(ii) affecting its Loans or pursuant to Section 9.5(z)), provided that any waiver, amendment or modification requiring the consent of all Banks or each affected Bank which affects such Defaulting Lender differently than other affected Banks shall require the consent of such Defaulting Lender;
(c) if any Swingline Loans or Letters of Credit exist at the time a Revolving Credit Bank becomes a Defaulting Lender then:
(i) all or any part of such liability, if any, with respect to Swingline Loans and Letters of Credit shall be reallocated among the non-Defaulting Lenders in accordance with their respective Revolving Commitment Percentages but only to the extent (x) the sum of all non-Defaulting Lenders’ Obligations under the Revolving Credit Facility plus such Defaulting Lender’s Revolving Commitment Percentage of Swingline
Loans and Letter of Credit Usage does not exceed the total of all non-Defaulting Lenders’ Revolving Commitments (it being understood that under no circumstance shall any such Revolving Credit Bank at any time be liable for any amounts in excess of its Revolving Commitment) and (y) the conditions set forth in Section 3.2(d) and (e) are satisfied at the time of such reallocation (and unless the Borrower shall have otherwise notified the Administrative Agent at such time, the Borrower shall be deemed to have represented and warranted that such conditions are satisfied at such time); and
(ii) if the reallocation described in clause (i) above cannot, or can only partially, be effected, the Borrower shall within five (5) Domestic Business Days following notice by the Administrative Agent (x) first, prepay such Defaulting Lender’s Revolving Commitment Percentage of the Swingline Loans and (y) second, cash collateralize for the benefit of the Fronting Banks only the Borrower’s obligations corresponding to such Defaulting Lender’s Revolving Commitment Percentage of the Letter of Credit Usage (after giving effect to any partial reallocation pursuant to clause (i) above) in accordance with the procedures set forth in Section 6.4(a) for so long as such Letters of Credit are outstanding;
(iii) if the Borrower cash collateralizes any portion of such Defaulting Lender’s Revolving Commitment Percentage of the Letter of Credit Usage pursuant to this Section 9.8(c), the Borrower shall not be required to pay any fees to such Defaulting Lender with respect to such Defaulting Lender’s Revolving Commitment Percentage of the Letter of Credit Usage during the period such Defaulting Lender’s Revolving Commitment Percentage of the Letter of Credit Usage is cash collateralized;
(iv) if the Revolving Commitment Percentage of the non-Defaulting Lenders with respect to Letter of Credit Usage is reallocated pursuant to this Section 9.8(c), then the fees payable to the Banks pursuant to this Agreement shall be adjusted in accordance with such non-Defaulting Lenders’ Revolving Commitment Percentages; or
(v) if any Defaulting Lender’s Revolving Commitment Percentage of Letter of Credit Usage is neither cash collateralized nor reallocated pursuant to clauses (i) or (ii) above, then, without prejudice to any rights or remedies of any Fronting Bank or any other Bank hereunder, all Facility Fees that otherwise would have been payable to such Defaulting Lender (solely with respect to the portion of such Defaulting Lender’s Commitment that was utilized by such Revolving Commitment Percentage of Letter of Credit Usage) and Letter of Credit Fees payable under Section 2.8 with respect to such Defaulting Lender’s Revolving Commitment Percentage of the Letter of Credit Usage shall be payable to applicable the Fronting Banks until and to the extent that such Revolving Commitment Percentage of Letter of Credit Usage is reallocated and/or cash collateralized; and
(d) if such Bank is a Revolving Credit Bank, so long as such Bank is a Defaulting Lender, the Swingline Lender shall not be required to fund any Swingline Loan and the Fronting Banks shall not be required to issue, amend or increase any Letter of Credit, unless it is satisfied that the related exposure and the then Defaulting Lender’s then outstanding Revolving Commitment Percentage of the Letter of Credit Usage will be 100% covered by the
Revolving Commitments of the non-Defaulting Lenders and/or cash collateral will be provided by the Borrower in accordance with Section 9.8(c), and participating interests in any such newly issued or increased Letter of Credit or newly made Swingline Loan shall be allocated among non-Defaulting Lenders in a manner consistent with Section 9.8(c)(i) (and Defaulting Lender shall not participate therein).
If (i) a Bankruptcy Event with respect to a Parent of any Bank shall occur following the date hereof and for so long as such event shall continue or (ii) the Swingline Lender or any Fronting Bank has a good faith belief that any Revolving Credit Bank has defaulted in fulfilling its obligations under one or more other agreements in which such Revolving Credit Bank commits to extend credit, the Swingline Lender shall not be required to fund any Swingline Loan and no Fronting Bank shall be required to issue, amend or increase any Letter of Credit, unless the Swingline Lender or a Fronting Bank, as the case may be, shall have entered into arrangements with the Borrower or such Revolving Credit Bank, satisfactory to the Swingline Lender or such Fronting Bank, as the case may be, to defease any risk to it in respect of such Bank hereunder.
In the event that the Administrative Agent, the Borrower, and if the Defaulting Lender is a Revolving Credit Bank, the Fronting Banks and the Swingline Lender each agrees that a Defaulting Lender has adequately remedied all matters that caused such Bank to be a Defaulting Lender, then the Revolving Commitment Percentages of the Banks with respect to Swingline Loans and Letters of Credit shall be readjusted to reflect the inclusion of such Revolving Credit Bank’s Revolving Commitment and on such date such Revolving Credit Bank shall purchase at par such of the Revolving Loans of the other Banks (other than Money Market Loans and Swingline Loans) as the Administrative Agent shall determine may be necessary in order for such Revolving Credit Bank to hold such Revolving Loans in accordance with its Revolving Commitment Percentage.
Section 9.9
Governing Law; Submission to Jurisdiction
.
(a) THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER AND THEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY THE LAWS OF THE STATE OF NEW YORK (WITHOUT GIVING EFFECT TO THE PRINCIPLES THEREOF RELATING TO CONFLICTS OF LAW THAT WOULD CAUSE THE APPLICATION OF ANY LAW OTHER THAN THE STATE OF NEW YORK).
(b) Any legal action or proceeding with respect to this Agreement or any other Loan Document and any action for enforcement of any judgment in respect thereof may be brought in the courts of the State of New York or of the United States of America for the Southern District of New York, and, by execution and delivery of this Agreement, the Borrower hereby accepts for itself and in respect of its property, generally and unconditionally, the non-exclusive jurisdiction of the aforesaid courts and appellate courts from any thereof. The Borrower irrevocably consents to the service of process out of any of the aforementioned courts in any such action or proceeding by the hand delivery, or mailing of copies thereof by registered or certified mail, postage prepaid, to the Borrower at its address set forth below. The Borrower hereby irrevocably waives any objection which it may now or hereafter have to the laying of
venue of any of the aforesaid actions or proceedings arising out of or in connection with this Agreement or any other Loan Document brought in the courts referred to above and hereby further irrevocably waives and agrees not to plead or claim in any such court that any such action or proceeding brought in any such court has been brought in an inconvenient forum. Nothing herein shall affect the right of the Administrative Agent, any Bank or any holder of a Note to serve process in any other manner permitted by law or to commence legal proceedings or otherwise proceed against the Borrower in any other jurisdiction.
Section 9.10
Marshaling; Recapture
. Neither the Administrative Agent nor any Bank shall be under any obligation to marshal any assets in favor of the Borrower or any other party or against or in payment of any or all of the Obligations. To the extent any Bank receives any payment by or on behalf of the Borrower, which payment or any part thereof is subsequently invalidated, declared to be fraudulent or preferential, set aside or required to be repaid to the Borrower or its estate, trustee, receiver, custodian or any other party under any bankruptcy law, state or federal law, common law or equitable cause, then to the extent of such payment or repayment, the Obligation or part thereof which has been paid, reduced or satisfied by the amount so repaid shall be reinstated by the amount so repaid and shall be included within the liabilities of the Borrower to such Bank as of the date such initial payment, reduction or satisfaction occurred.
Section 9.11
Counterparts; Integration; Effectiveness
. This Agreement may be signed in any number of counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument. This Agreement constitutes the entire agreement and understanding among the parties hereto and supersedes any and all prior agreements and understandings, oral or written, relating to the subject matter hereof. This Agreement shall become effective upon receipt by the Administrative Agent of counterparts hereof signed by each of the parties hereto. Delivery of an executed counterpart of a signature page of this Agreement by telecopy, emailed pdf, or any other electronic means that reproduces an image of the actual executed signature page shall be effective as delivery of a manually executed counterpart of this Agreement.
Section 9.12
WAIVER OF JURY TRIAL
. EACH OF THE BORROWER, THE ADMINISTRATIVE AGENT, THE BANKS, THE SWINGLINE LENDER AND THE FRONTING BANKS HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY. EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.
Section 9.13
Survival
. All indemnities set forth herein shall survive the execution and delivery of this Agreement and the other Loan Documents and the making and repayment of the Loans hereunder.
Section 9.14
Domicile of Loans
. Subject to the provisions of Article VIII, each Bank may transfer and carry its Loans at, to or for the account of any domestic or foreign branch office, subsidiary or Affiliate of such Bank.
Section 9.15
Limitation of Liability
. No claim may be made by the Borrower or any other Person against the Administrative Agent or any Bank or the Affiliates, directors, officers, employees, attorneys or agent 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 Agreement or by the other Loan Documents, or any act, omission or event occurring in connection therewith; and the Borrower hereby waives, releases and agrees 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.
Section 9.16
No Bankruptcy Proceedings
. Each of the Borrower, the Banks, and the Administrative Agent hereby agrees that it will not institute against any Designated Lender or join any other Person in instituting against any Designated Lender any bankruptcy, reorganization, arrangement, insolvency or liquidation proceeding under any federal or state bankruptcy or similar law, until the later to occur of (i) one year and one day after the payment in full of the latest maturing commercial paper note issued by such Designated Lender and (ii) the Maturity Date.
Section 9.17
Optional Increase in Commitments
. (a) At any time prior to the Maturity Date, provided no Event of Default shall have occurred and then be continuing, the Borrower may, elect to request (A) an increase to the existing Revolving Commitments (any such increase, the “
New Revolving Commitments
”) and/or (B) the establishment of one or more new term loan commitments (the “
New Term Commitments
”, together with the New Revolving Commitments, the “
Incremental Commitments
”), by up to an aggregate amount not to exceed $350,000,000 for all Incremental Commitments (so that after giving effect to all Incremental Commitments, the sum of the Revolving Commitments plus the principal amount of Term Loans made hereunder and pursuant to Section 2.1 does not exceed $1,100,000,000); provided, however, that in no event shall the aggregate amount of the New Revolving Commitments exceed $250,000,000 or the aggregate amount of the New Term Commitments exceed $100,000,000 unless and until, in each case, approved by further action of the Board of Directors of the General Partner. Each such notice shall specify the date (each, an “
Increased Amount Date
”) on which the Borrower proposes that such Incremental Commitments shall be effective, which shall be a date not less than ten (10) Business Days after the date on which such notice is delivered to the Administrative Agent. Such Incremental Commitments shall be made either by designating a Qualified Institution not theretofore a Bank to become a Bank (such designation to be effective only with the prior written consent of the Administrative Agent, which consent will not be unreasonably withheld) and/or by agreeing with an existing Bank or Banks that such Bank’s Commitment shall be increased, it being understood that no such existing Bank or Banks shall have any obligation to so increase its Commitment). Any arranger for the Incremental Commitments selected by the Borrower shall use commercially reasonable efforts, with the assistance of the Borrower, to arrange a syndicate of Banks or other Persons that are Qualified Institutions willing to hold the requested Incremental Commitments; provided that (x) any Incremental Commitments on any Increased Amount Date shall be in the minimum aggregate amount of $25,000,000, (y) any Bank approached to provide all or a portion of the Incremental Commitments may elect or decline, in its sole discretion, to provide an Incremental
Commitment; provided that the Banks will first be afforded the opportunity to provide the Incremental Commitments on a pro rata basis, and if any Bank so approached fails to respond within such ten (10) Business Day period after its receipt of such request, such Bank shall be deemed to have declined to provide such Incremental Commitments, and (z) any Bank or other Person that is a Qualified Institution (each, a “
New Revolving Credit Bank
” or “
New Term Loan Bank
,” as applicable) to whom any portion of such Incremental Commitment shall be allocated shall be subject to the approval of the Borrower and the Administrative Agent (such approval not to be unreasonably withheld or delayed), and, in the case of a New Revolving Commitment, the Fronting Banks and the Swingline Lender (each of which approvals shall not be unreasonably withheld), unless such New Revolving Credit Bank is an existing Revolving Credit Bank (other than a Defaulting Lender) with a Revolving Commitment at such time or such New Term Loan Bank is an existing Term Loan Bank or an Affiliate of an existing Bank. Upon execution and delivery by the Borrower and such Bank or other financial institution of an instrument in form reasonably satisfactory to the Administrative Agent, such existing Bank shall have a Commitment as therein set forth or such Qualified Institution shall become a Bank with a Commitment as therein set forth and all the rights and obligations of a Bank with such a Commitment hereunder;
provided that
:
(i) the Borrower shall provide prompt notice of such increase to the Administrative Agent, who shall promptly notify the Banks; and
(ii) the amount of such Incremental Increase, together with all other Incremental Increases in the aggregate amount of the Commitments pursuant to this Section 9.17 since the date of this Agreement, does not cause the sum of (x) the Term Loan Amount and (y) the Revolving Loan Amount to exceed $1,100,000,000.
(b) Upon any Incremental Commitments pursuant to this Section 9.17, within five (5) Business Days (in the case of any Base Rate Loans then outstanding) or at the end of the then current Interest Period with respect thereto (in the case of any Euro-Dollar Loans then outstanding), as applicable, each Bank’s Commitment Percentage shall be recalculated to reflect such Incremental Commitments and the outstanding principal balance of the Loans shall be reallocated among the Banks such that the outstanding principal amount of Loans owed to each Bank shall be equal to such Bank’s Commitment Percentage (as recalculated) thereof. All payments, repayments and other disbursements of funds by the Administrative Agent to Banks shall thereupon and, at all times thereafter be made in accordance with each Bank’s recalculated Commitment Percentage. For purposes hereof, “
Qualified Institution
” means a Bank, or one or more banks, finance companies, insurance or other financial institutions which (i) (A) has (or, in the case of a bank which is a subsidiary, such bank’s parent has) a rating of its senior debt obligations of not less than Baa-1 by Moody’s or a comparable rating by a rating agency acceptable to the Administrative Agent and (B) has total assets in excess of Ten Billion Dollars ($10,000,000,000), or (ii) is reasonably acceptable to the Administrative Agent.
(c) The terms and provisions of any New Revolving Commitments shall be identical to the existing Revolving Commitments. The terms and provisions of any New Term Commitments and any New Term Loans shall (a) provide that the maturity date of any New Term Loan that is a separate tranche shall be no earlier than the Term Loan Maturity Date and
the weighted average life to maturity of such New Term Loans shall not be shorter than the weighted average life to maturity of the existing Term Loans, (b) share ratably in any prepayments of the existing Term Facility, unless the Borrower and the New Term Loan Banks in respect of such New Term Loans elect lesser payments and (c) otherwise be identical to the existing Term Loans or reasonably acceptable to the Administrative Agent and each New Term Loan Bank.
(d) On any Increased Amount Date on which New Revolving Commitments are effected, subject to the satisfaction of the foregoing terms and conditions, (i) each of the Revolving Credit Banks shall assign to each of the New Revolving Credit Banks, and each of the New Revolving Credit Banks shall purchase from each of the Revolving Credit Banks, at the principal amount thereof (together with accrued interest), such interests in the Revolving Loans outstanding on such Increased Amount Date as shall be necessary in order that, after giving effect to all such assignments and purchases, such Revolving Loans will be held by existing Revolving Credit Banks and New Revolving Credit Banks ratably in accordance with their Revolving Commitments after giving effect to the addition of such New Revolving Commitments to the Revolving Commitments, (ii) each New Revolving Commitment shall be deemed for all purposes a Revolving Commitment and each Loan made thereunder shall be deemed, for all purposes, a Revolving Loan and (iii) each New Revolving Credit Bank shall become a Revolving Credit Bank with respect to its New Revolving Commitment and all matters relating thereto.
(e) On any Increased Amount Date on which any New Term Commitments are effected, subject to the satisfaction of the foregoing terms and conditions, (i) each New Term Loan Bank shall make a Term Loan to the Borrower (a “
New Term Loan
”) in an amount equal to its New Term Commitment, and (ii) each New Term Loan Bank shall become a Bank hereunder with respect to the New Term Commitment and the New Term Loans made pursuant thereto.
(f) The Administrative Agent shall notify the Banks promptly upon receipt of the Borrower’s notice of each Increased Amount Date and in respect thereof (i) the New Revolving Commitments and the New Revolving Credit Banks or the New Term Commitments and the New Term Loan Banks, as applicable, and (ii) in the case of each notice to any Revolving Credit Bank, the respective interests in such Revolving Credit Bank’s Revolving Loans, in each case subject to the assignments contemplated by this paragraph.
(g) The effectiveness of any Incremental Commitments and the availability of any Borrowings under any such Incremental Commitments shall be subject to the satisfaction of the following conditions precedent: (x) after giving pro forma effect to such Incremental Commitments and Borrowings and the use of proceeds thereof, (i) no Default or Event of Default has occurred and is continuing and (ii) as of the last day of the most recent calendar quarter for which financial statements have been delivered pursuant to Section 5.1, the Borrower would have been in compliance with the financial covenants set forth in Section 5.8; (y) the representations and warranties made or deemed made by the Borrower in any Loan Document shall be true and correct in all material respects on the effective date of such Incremental Commitments except to the extent that such representations and warranties expressly relate solely to an earlier date (in which case such representations and warranties shall have been true and correct in all material respects on and as of such earlier date); and (z) the Administrative
Agent shall have received each of the following, in form and substance reasonably satisfactory to the Administrative Agent: (i) if not previously delivered to the Administrative Agent, copies certified by the Secretary or Assistant Secretary of all corporate or other necessary action taken by the Borrower to authorize such Incremental Commitments; and (ii) a customary opinion of counsel to the Borrower (including in-house opinions in lieu of opinions of outside counsel, which may be in substantially the same form as delivered on the Closing Date), and addressed to the Administrative Agent and the applicable Banks, and (iii) if requested by any Bank, new Notes executed by the Borrower, payable to any new Bank, and replacement Notes executed by the Borrower, payable to any existing Bank.
(h) The Incremental Commitments shall be evidenced pursuant to one or more Additional Credit Extension Amendments executed and delivered by the Borrower, the New Revolving Credit Banks or New Term Loan Banks, as applicable, and the Administrative Agent, and each of which shall be recorded in the Register. Each Additional Credit Extension Amendment may, without the consent of any other Banks, effect such amendments to this Agreement and the other Loan Documents as may be necessary or appropriate, in the opinion of the Administrative Agent, to effect the provisions of this Section 9.17.
Section 9.18
Severability.
Any provision of this Agreement held to be invalid, illegal or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such invalidity, illegality or unenforceability without affecting the validity, legality and enforceability of the remaining provisions hereof; and the invalidity of a particular provision in a particular jurisdiction shall not invalidate such provision in any other jurisdiction.
Section 9.19
Interest Rate Limitation.
Notwithstanding anything herein to the contrary, if at any time the interest rate applicable to any Loan, together with all fees, charges and other amounts which are treated as interest on such Loan under applicable law (collectively the "
Charges
"), shall exceed the maximum lawful rate (the "
Maximum Rate
") which may be contracted for, charged, taken, received or reserved by the Bank holding such Loan in accordance with applicable law, the rate of interest payable in respect of such Loan hereunder, together with all Charges payable in respect thereof, shall be limited to the Maximum Rate and, to the extent lawful, the interest and Charges that would have been payable in respect of such Loan but were not payable as a result of the operation of this Section shall be cumulated and the interest and Charges payable to such Bank in respect of other Loans or periods shall be increased (but not above the Maximum Rate therefor) until such cumulated amount, together with interest thereon at the Federal Funds Rate to the date of repayment, shall have been received by such Bank.
Section 9.20
Transitional Arrangements
.
(a)
Existing Credit Agreements Superseded
. This Agreement shall supersede each of the Existing Credit Agreements in its entirety, except as provided in this
Section 9.20
. On the Closing Date, (i) the Term Loans outstanding under the Existing Term Loan Agreement and the Revolving Loans outstanding under the Existing Revolving Credit Agreement shall become Term Loans and Revolving Loans hereunder, (ii) the rights and obligations of the parties under each of the Existing Credit Agreements and the “Notes” defined therein shall be subsumed within and be governed by this Agreement and the Notes;
provided however
, that for purposes of
this clause (ii) any of the “Obligations” (as defined in each of the Existing Credit Agreements) outstanding under the Existing Credit Agreements shall, for purposes of this Agreement, be Obligations hereunder, (iii) this Agreement shall not in any way release or impair the rights, duties or Obligations created pursuant to each of the Existing Credit Agreements or any other Loan Document or affect the relative priorities thereof, in each case to the extent in force and effect thereunder as of the Closing Date, except as modified hereby or by documents, instruments and agreements executed and delivered in connection herewith, and all of such rights, duties and Obligations are assumed, ratified and affirmed by the Borrower; (iv) the Obligations incurred under each of the Existing Credit Agreements shall, to the extent outstanding on the Closing Date, continue outstanding under this Agreement and shall not be deemed to be paid, released, discharged or otherwise satisfied by the execution of this Agreement, and this Agreement shall not constitute a refinancing, substitution or novation of such Obligations or any of the other rights, duties and obligations of the parties hereunder; and (v) the execution, delivery and effectiveness of this Agreement shall not operate as a waiver of any right, power or remedy of Lenders or the Administrative Agent under the Existing Credit Agreements, nor constitute a waiver of any covenant, agreement or obligation under the Existing Credit Agreements, except to the extent that any such covenant, agreement or obligation is no longer set forth herein or is modified hereby. The Lenders’ interests in such Obligations, and participations in such Letters of Credit, shall be reallocated on the Closing Date in accordance with each Lender's applicable Revolving Commitment Percentages and Term Commitment Percentages.
(b)
Interest and Fees under Existing Credit Agreements
. All interest and all commitment, facility and other fees and expenses owing or accruing under or in respect of the Existing Credit Agreements shall be calculated as of the Closing Date (prorated in the case of any fractional periods), and shall be paid on the Closing Date in accordance with the method specified in the Existing Credit Agreements as if such agreements were still in effect.
Section 9.21
Confidentiality
. Each of the Administrative Agent, the Fronting Banks and the Banks agrees to maintain the confidentiality of the Information (as defined below), except that Information may be disclosed (a) to its and its Affiliates’ directors, officers, employees and agents, including accountants, legal counsel and other advisors (it being understood that the Persons to whom such disclosure is made will be informed of the confidential nature of such Information and such Persons shall either agree or have a legal obligation to keep such Information confidential), (b) to the extent requested by any regulatory authority (including any self-regulatory authority, such as the National Association of Insurance Commissioners), (c) to the extent required by applicable laws or regulations or by any subpoena or similar legal process, (d) to any other party to this Agreement, (e) in connection with the exercise of any remedies hereunder or any suit, action or proceeding relating to this Agreement or the enforcement of rights hereunder, (f) subject to an agreement containing provisions substantially the same as those of this Section, to (i) any assignee of or Participant in, or any prospective assignee of or Participant in, any of its rights or obligations under this Agreement or (ii) any actual or prospective counterparty (or its advisors) to any swap or derivative transaction relating to the Borrower and its obligations, (g) with the prior written consent of the Borrower or (h) to the extent such Information (i) becomes publicly available other than as a result of a breach of this Section or (ii) becomes available to the Administrative Agent, any Fronting Bank or any Bank on a non-confidential basis from a source other than the Borrower. For the purposes
of this Section, “Information” means all information received from the Borrower relating to the Borrower or its business, other than any such information that is available to the Administrative Agent, the any Fronting Bank or any Bank on a non-confidential basis prior to disclosure by the Borrower. Any Person required to maintain the confidentiality of Information as provided in this Section shall be considered to have complied with its obligation to do so if such Person has exercised the same degree of care to maintain the confidentiality of such Information as such Person would accord to its own confidential information.
[Signature pages to follow]
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their respective authorized officers as of the day and year first above written.
BORROWER:
KILROY REALTY, L.P., a Delaware limited partnership
By: Kilroy Realty Corporation, a Maryland corporation, its general partner
By: _
/s/ Tyler H. Rose
_
__________________________
Name: Tyler H. Rose
Title: Executive Vice President, Chief Financial Officer and Secretary
By:_
/s/ Michelle Ngo
_
_________________________
Name: Michelle Ngo
Title: Senior Vice President and Treasurer
Kilroy Realty, L.P.
12200 West Olympic Boulevard, Suite 200
Los Angeles, California 90064
Attn: Tyler Rose and Michelle Ngo
Telephone number: (310) 481-8400
Telecopy number: (310) 841-6580
[Signature Page - Amended and Restated Credit Agreement (Kilroy)]
ADMINISTRATIVE AGENT AND BANK:
JPMORGAN CHASE BANK, N.A., as Administrative Agent and as a Bank
By:_
/s/ Nadeige S. Charles
_________________
Name: Nadeige S. Charles
Title: Vice President
JPMorgan Chase Bank, N.A.
383 Madison Avenue, 24
th
Floor
New York, NY 10179
Attn: Nadeige S. Charles
Telephone number: (212) 622-4522
Telecopy number: (212) 270-2157
Domestic and Euro-Dollar
Lending Office:
JPMorgan Chase Bank, N.A.
500 Stanton Christiana Road, Ops 2, 3rd Floor
Newark, DE 19713
Attn: Loan and Agency Services
Telephone: (302) 634-8814
Telecopy number: (302) 634-4733
[Signature Page - Amended and Restated Credit Agreement (Kilroy)]
SYNDICATION AGENT AND BANK:
BANK OF AMERICA, N.A.
By:_
/s/ Helen Chan
________________
Name: Helen Chan
Title: Vice President
[Signature Page - Amended and Restated Credit Agreement (Kilroy)]
CO-DOCUMENTATION AGENT AND BANK:
WELLS FARGO BANK, NATIONAL ASSOCIATION
By:_
/s/ Dale Northup
______________
Name: Dale Northup
Title: Senior Vice President
[Signature Page - Amended and Restated Credit Agreement (Kilroy)]
BARCLAYS BANK PLC
By:_
/s/ Noam Azachi
_____________________
Name: Noam Azachi
Title: Vice President
[Signature Page - Amended and Restated Credit Agreement (Kilroy)]
CO-DOCUMENTATION AGENT AND BANK:
COMPASS BANK
By:_
/s/ Brian Tuerff
___________________
Name: Brian Tuerff
Title: Senior Vice President
[Signature Page - Amended and Restated Credit Agreement (Kilroy)]
CO-DOCUMENTATION AGENT AND BANK:
PNC BANK, NATIONAL ASSOCIATION
By:
/s/ Darin Mortimer
Name: Darin Mortimer
Title: Senior Vice President
[Signature Page - Amended and Restated Credit Agreement (Kilroy)]
CO-DOCUMENTATION AGENT AND BANK:
ROYAL BANK OF CANADA
By:_
/s/ Dan LePage
________________
Name: Dan LePage
Title: Authorized Signatory
[Signature Page - Amended and Restated Credit Agreement (Kilroy)]
CO-DOCUMENTATION AGENT AND BANK:
UNION BANK, N.A.
By:_
/s/ Juliana Matson
__________________
Name: Juliana Matson
Title: Vice President
[Signature Page - Amended and Restated Credit Agreement (Kilroy)]
CO-DOCUMENTATION AGENT AND BANK:
U.S. BANK NATIONAL ASSOCIATION
By:_
/s/ Scott McPherson
_________________
Name: Scott McPherson
Title: Senior Vice President
[Signature Page - Amended and Restated Credit Agreement (Kilroy)]
BANK OF THE WEST, a California banking corporation
By:_
/s/ Kent Horiuchi
_________________
Name: Kent Horiuchi
Title: Vice President
By:_
/s/ Sarah J. Burns
__________________
Name: Sarah J. Burns
Title: AVP
[Signature Page - Amended and Restated Credit Agreement (Kilroy)]
SUMITOMO MITSUI BANKING CORPORATION
By:_
/s/ Hideo Notsu
____________________
Name: Hideo Notsu
Title: Executive Director
[Signature Page - Amended and Restated Credit Agreement (Kilroy)]
COMERICA BANK
By:_
/s/ Charles Weddell
__________________
Name: Charles Weddell
Title: Vice President
[Signature Page - Amended and Restated Credit Agreement (Kilroy)]
KEYBANK NATIONAL ASSOCIATION
By:_
/s/ Sara Smith
________________________
Name: Sara Smith
Title: Assistant Vice President
[Signature Page - Amended and Restated Credit Agreement (Kilroy)]
EXHIBIT A-1
REVOLVING NOTE
$____________
New York, New York
[Date]
For value received, KILROY REALTY, L.P., a Delaware limited partnership (the “
Borrower
”) promises to pay to _______________ (the “
Revolving Credit Bank
”), for the account of its Applicable Lending Office, the principal sum of ________________ DOLLARS ($_________) or, if less, the aggregate unpaid principal amount of all Revolving Loans made by the Revolving Credit Bank to the Borrower pursuant to the Credit Agreement referred to below on the Revolving Credit Maturity Date. The Borrower promises to pay interest on the unpaid principal amount of each such Revolving Loan on the dates and at the rate or rates provided for in the Credit Agreement. All such payments of principal and interest shall be made in lawful money of the United States in Federal or other immediately available funds at the office of Administrative Agent under the Credit Agreement (as defined below).
All Revolving Loans made by the Revolving Credit Bank, the respective types and maturities thereof and all repayments of the principal thereof shall be recorded by the Revolving Credit Bank and, if the Revolving Credit Bank so elects in connection with any transfer or enforcement hereof, appropriate notations to evidence the foregoing information with respect to each such Revolving Loan then outstanding may be endorsed by the Revolving Credit Bank on the schedule attached hereto, or on a continuation of such schedule attached to and made a part hereof;
provided
that the failure of the Revolving Credit Bank to make any such recordation or endorsement shall not affect the obligations of the Borrower hereunder or under the Credit Agreement.
This Revolving Note is one of the Notes referred to in the Amended and Restated Credit Agreement, dated as of June 23, 2014, among the Borrower, the Banks party thereto, JPMorgan Chase Bank, N.A., as Administrative Agent and as Bank, J.P. Morgan Securities LLC, as Joint Lead Arranger and Joint Bookrunner, Merrill Lynch, Pierce, Fenner & Smith Incorporated, as Joint Lead Arranger and Joint Bookrunner, Wells Fargo Securities, LLC, as Joint Lead Arranger and Joint Bookrunner, and Bank of America, N.A., as Syndication Agent (as the same may be amended from time to time, the “
Credit Agreement
”).
[Signature Page to Follow]
Terms defined in the Credit Agreement are used herein with the same meanings. Reference is made to the Credit Agreement for provisions for the prepayment hereof and the acceleration of the maturity hereof.
KILROY REALTY, L.P., a Delaware limited partnership
By:
Kilroy Realty Corporation, a Maryland corporation, its general partner
By:
_____________________
Name:
Title:
By:
_____________________
Name:
Title:
Note (cont’d)
REVOLVING LOANS AND PAYMENTS OF PRINCIPAL
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Amount of Revolving Loan
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Type of Revolving Loan
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Amount of Principal Repaid
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Maturity Date
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Notation Made By
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EXHIBIT A-2
TERM NOTE
$____________
New York, New York
[Date]
For value received, KILROY REALTY, L.P., a Delaware limited partnership (the “
Borrower
”) promises to pay to _______________ (the “
Term Loan Bank
”), for the account of its Applicable Lending Office, the principal sum of _______________ DOLLARS ($________) or, if less, the aggregate unpaid principal amount of all Term Loans made by the Term Loan Bank to the Borrower pursuant to the Credit Agreement referred to below on the Term Loan Maturity Date. The Borrower promises to pay interest on the unpaid principal amount of each such Term Loan on the dates and at the rate or rates provided for in the Credit Agreement. All such payments of principal and interest shall be made in lawful money of the United States in Federal or other immediately available funds at the office of Administrative Agent under the Credit Agreement (as defined below).
All Term Loans made by the Term Loan Bank, the respective types and maturities thereof and all repayments of the principal thereof shall be recorded by the Term Loan Bank and, if the Term Loan Bank so elects in connection with any transfer or enforcement hereof, appropriate notations to evidence the foregoing information with respect to each such Term Loan then outstanding may be endorsed by the Term Loan Bank on the schedule attached hereto, or on a continuation of such schedule attached to and made a part hereof;
provided
that the failure of the Term Loan Bank to make any such recordation or endorsement shall not affect the obligations of the Borrower hereunder or under the Credit Agreement.
This Term Note is one of the Notes referred to in the Amended and Restated Credit Agreement, dated as of June 23, 2014, among the Borrower, the Banks party thereto, JPMorgan Chase Bank, N.A., as Administrative Agent and as Bank, J.P. Morgan Securities LLC, as Joint Lead Arranger and Joint Bookrunner, Merrill Lynch, Pierce, Fenner & Smith Incorporated, as Joint Lead Arranger and Joint Bookrunner, Wells Fargo Securities, LLC, as Joint Lead Arranger and Joint Bookrunner, and Bank of America, N.A., as Syndication Agent (as the same may be amended from time to time, the “
Credit Agreement
”).
[Signature Page to Follow]
Terms defined in the Credit Agreement are used herein with the same meanings. Reference is made to the Credit Agreement for provisions for the prepayment hereof and the acceleration of the maturity hereof.
KILROY REALTY, L.P., a Delaware limited partnership
By:
Kilroy Realty Corporation, a Maryland corporation, its general partner
By:
_____________________
Name:
Title:
By:
_____________________
Name:
Title:
Note (cont’d)
TERM LOANS AND PAYMENTS OF PRINCIPAL
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Amount of Term Loan
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Type of Term Loan
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Amount of Principal Repaid
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Maturity Date
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Notation Made By
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EXHIBIT A-3
DESIGNATED LENDER NOTE
(Money Market Loans)
$______________ New York, New York
[Date]
For value received, KILROY REALTY, L.P., a Delaware limited partnership (the “
Borrower
”) promises to pay to _______________ (the “
Bank
”), for the account of its Applicable Lending Office, the principal sum of _________________ DOLLARS ($_________) or, if less, the aggregate unpaid principal amount of all Money Market Loans made by the Bank to the Borrower pursuant to the Credit Agreement referred to below on the Revolving Credit Maturity Date. The Borrower promises to pay interest on the unpaid principal amount of each such Money Market Loan on the dates and at the rate or rates provided for in the Credit Agreement. All such payments of principal and interest shall be made in lawful money of the United States in Federal or other immediately available funds at the office of Administrative Agent under the Credit Agreement (as defined below).
All Money Market Loans made by the Bank, the respective types and maturities thereof and all repayments of the principal thereof shall be recorded by the Bank and, if the Bank so elects in connection with any transfer or enforcement hereof, appropriate notations to evidence the foregoing information with respect to each such Money Market Loan then outstanding may be endorsed by the Bank on the schedule attached hereto, or on a continuation of such schedule attached to and made a part hereof;
provided
that the failure of the Bank to make any such recordation or endorsement shall not affect the obligations of the Borrower hereunder or under the Credit Agreement.
This Designated Lender Note is one of the Notes referred to in the Amended and Restated Credit Agreement, dated as of June 23, 2014, among the Borrower, the Banks party thereto, JPMorgan Chase Bank, N.A., as Administrative Agent and as Bank, J.P. Morgan Securities LLC, as Joint Lead Arranger and Joint Bookrunner, Merrill Lynch, Pierce, Fenner & Smith Incorporated, as Joint Lead Arranger and Joint Bookrunner, Wells Fargo Securities, LLC, as Joint Lead Arranger and Joint Bookrunner, and Bank of America, N.A., as Syndication Agent (as the same may be amended from time to time, the “
Credit Agreement
”).
[Signature Page to Follow]
Terms defined in the Credit Agreement are used herein with the same meanings. Reference is made to the Credit Agreement for provisions for the prepayment hereof and the acceleration of the maturity hereof.
KILROY REALTY, L.P., a Delaware limited partnership
By: Kilroy Realty Corporation, a Maryland corporation, its general partner
By: _____________________
Name:
Title:
By: _____________________
Name:
Title:
Note (cont’d)
MONEY MARKET LOANS AND PAYMENTS OF PRINCIPAL
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Amount of Money Market Loan
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Type of Money Market Loan
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Amount of Principal Repaid
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Maturity Date
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Notation Made By
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EXHIBIT B
Unencumbered Asset Pool Properties (Fee Interests)
5/30/2014
Property
Location
2240 E. Imperial Highway
LA and Ventura
2250 E. Imperial Highway
LA and Ventura
12100 W. Olympic Boulevard
LA and Ventura
12200 W. Olympic Boulevard
LA and Ventura
12312 W. Olympic Boulevard
LA and Ventura
1633 26th Street
LA and Ventura
3130 Wilshire Boulevard
LA and Ventura
501 Santa Monica Boulevard
LA and Ventura
2829 Townsgate Road
LA and Ventura
2260 E. Imperial Highway
LA and Ventura
111 Pacifica
Orange County
999 Town & Country
Orange County
12225 El Camino Real
San Diego
12235 El Camino Real
San Diego
12780 El Camino Real
San Diego
12790 El Camino Real
San Diego
12348 High Bluff Drive
San Diego
12400 High Bluff Drive
San Diego
3579 Valley Center Drive
San Diego
3611 Valley Center Drive
San Diego
3661 Valley Center Drive
San Diego
3721 Valley Center Drive
San Diego
3811 Valley Center Drive
San Diego
6200 Greenwich Drive
San Diego
6220 Greenwich Drive
San Diego
13280 Evening Creek Drive South
San Diego
13290 Evening Creek Drive South
San Diego
13480 Evening Creek Drive North
San Diego
13500 Evening Creek Drive North
San Diego
13520 Evening Creek Drive North
San Diego
7525 Torrey Santa Fe
San Diego
7535 Torrey Santa Fe
San Diego
7545 Torrey Santa Fe
San Diego
7555 Torrey Santa Fe
San Diego
2355 Northside Drive
San Diego
2365 Northside Drive
San Diego
2375 Northside Drive
San Diego
2385 Northside Drive
San Diego
2305 Historic Decatur Road
San Diego
4921 Directors Place
San Diego
Property
Region
4939 Directors Place
San Diego
4955 Directors Place
San Diego
10770 Wateridge Circle
San Diego
6260 Sequence Drive
San Diego
6290 Sequence Drive
San Diego
6310 Sequence Drive
San Diego
6340 Sequence Drive
San Diego
6350 Sequence Drive
San Diego
10390 Pacific Center Court
San Diego
10394 Pacific Center Court
San Diego
10398 Pacific Center Court
San Diego
10421 Pacific Center Court
San Diego
10445 Pacific Center Court
San Diego
10455 Pacific Center Court
San Diego
5717 Pacific Center Boulevard
San Diego
9785 Towne Center Drive
San Diego
9791 Towne Center Drive
San Diego
4100 Bohannon Drive
San Francisco
4200 Bohannon Drive
San Francisco
4300 Bohannon Drive
San Francisco
4400 Bohannon Drive
San Francisco
4500 Bohannon Drive
San Francisco
4600 Bohannon Drive
San Francisco
4700 Bohannon Drive
San Francisco
100 First Street
San Francisco
250 Brannan Street
San Francisco
201 Third Street
San Francisco
301 Brannan Street
San Francisco
4040 Civic Center
San Francisco
331 Fairchild Drive
San Francisco
599 Mathilda
San Francisco
360 Third Street
San Francisco
15050 NE 36th Street
Seattle
837 N. 34th Streeet
Seattle
10900 NE 4th Street
S
eattle
401 Terry
Seattle
EXHIBIT C
Unencumbered Asset Pool Properties (Leasehold Interests)
5/30/2014
Property
Location
3750 Kilroy Airport Way
Long Beach, CA
3760 Kilroy Airport Way
Long Beach, CA
3780 Kilroy Airport Way
Long Beach, CA
3800 Kilroy Airport Way
Long Beach, CA
3840 Kilroy Airport Way
Long Beach, CA
3880 Kilroy Airport Way
Long Beach, CA
3900 Kilroy Airport Way
Long Beach, CA
601 108th Avenue NE
Bellevue, WA
EXHIBIT D
FORM OF ASSIGNMENT AND ASSUMPTION
ASSIGNMENT AND ASSUMPTION AGREEMENT
This Assignment and Assumption (the “
Assignment and Assumption
”) is dated as of the Effective Date set forth below and is entered into by and between [
Insert name of Assignor
] (the “
Assignor
”) and [
Insert name of Assignee
] (the “
Assignee
”). Capitalized terms used but not defined herein shall have the meanings given to them in the Credit Agreement identified below (as amended, the “
Credit Agreement
”), receipt of a copy of which is hereby acknowledged by the Assignee. The Standard Terms and Conditions set forth in Annex 1 attached hereto are hereby agreed to and incorporated herein by reference and made a part of this Assignment and Assumption as if set forth herein in full.
For an agreed consideration, the Assignor hereby irrevocably sells and assigns to the Assignee, and the Assignee hereby irrevocably purchases and assumes from the Assignor, subject to and in accordance with the Standard Terms and Conditions and the Credit Agreement, as of the Effective Date inserted by the Administrative Agent as contemplated below (i) all of the Assignor’s rights and obligations in its capacity as a Bank under the Credit Agreement and any other documents or instruments delivered pursuant thereto to the extent related to the amount and percentage interest identified below of all of such outstanding rights and obligations of the Assignor under the respective facilities identified below (including any letters of credit, guarantees, and swingline loans included in such facilities) and (ii) to the extent permitted to be assigned under applicable law, all claims, suits, causes of action and any other right of the Assignor (in its capacity as a Bank) against any Person, whether known or unknown, arising under or in connection with the Credit Agreement, any other documents or instruments delivered pursuant thereto or the loan transactions governed thereby or in any way based on or related to any of the foregoing, including contract claims, tort claims, malpractice claims, statutory claims and all other claims at law or in equity related to the rights and obligations sold and assigned pursuant to clause (i) above (the rights and obligations sold and assigned pursuant to clauses (i) and (ii) above being referred to herein collectively as the “
Assigned Interest
”). Such sale and assignment is without recourse to the Assignor and, except as expressly provided in this Assignment and Assumption, without representation or warranty by the Assignor.
1. Assignor: ______________________________
2. Assignee: ______________________________
[and is [a Bank] [an Affiliate of [
identify Bank
]
1
]]
3. Borrower: Kilroy Realty, L.P.
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4.
|
Administrative Agent: JPMorgan Chase Bank, N.A., as the administrative agent under the Credit Agreement
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_______________________
1
Select as applicable.
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5.
|
Credit Agreement: The Amended and Restated Credit Agreement dated as of June 23, 2014 among Kilroy Realty, L.P., the Banks parties thereto, JPMorgan Chase Bank, N.A., as Administrative Agent, and the other agents parties thereto
|
6. Assigned Interest:
|
|
|
|
|
Facility Assigned
2
|
Aggregate Amount of Commitment/Loans for all Banks
|
Amount of Commitment/Loans Assigned
|
Percentage Assigned of Commitment/Loans
3
|
|
$
|
$
|
%
|
|
$
|
$
|
%
|
|
$
|
$
|
%
|
Effective Date: _____________ ___, 20___ [TO BE INSERTED BY ADMINISTRATIVE AGENT AND WHICH SHALL BE THE EFFECTIVE DATE OF RECORDATION OF TRANSFER IN THE REGISTER THEREFOR.]
The Assignee, if not already a Bank, agrees to deliver to the Administrative Agent a completed Administrative Questionnaire in which the Assignee designates one or more credit contacts to whom all syndicate-level information (which may contain material non-public information about the Borrower, the General Partner and their Related Parties or their respective securities) will be made available and who may receive such information in accordance with the Assignee’s compliance procedures and applicable laws, including Federal and state securities laws.
The terms set forth in this Assignment and Assumption are hereby agreed to:
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ASSIGNOR
[NAME OF ASSIGNOR]
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By:
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Title:
|
ASSIGNEE
__________________________
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2
|
Fill in the appropriate terminology for the types of facilities under the Credit Agreement that are being assigned under this Assignment (e.g., “Revolving Commitment,” “Term Loan Commitment,” etc.)
|
|
|
3
|
Set forth, to at least 9 decimals, as a percentage of the applicable Commitment/Loans of all Banks thereunder.
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|
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|
[NAME OF ASSIGNEE]
|
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By:
|
|
|
Title:
|
Consented to and Accepted:
JPMORGAN CHASE BANK, N.A., as
Administrative Agent
By_________________________________
Title:
[Consented to:]
4
[NAME OF RELEVANT PARTY]
By________________________________
Title:
__________________________
4
To be added only if the consent of the Borrower and/or other parties (e.g. Swingline Lender, Fronting Bank) is required by the terms of the Credit Agreement.
STANDARD TERMS AND CONDITIONS FOR
ASSIGNMENT AND ASSUMPTION
1.
Representations and Warranties
.
1.1
Assignor
. The Assignor (a) represents and warrants that (i) it is the legal and beneficial owner of the Assigned Interest, (ii) the Assigned Interest is free and clear of any lien, encumbrance or other adverse claim, (iii) it has full power and authority, and has taken all action necessary, to execute and deliver this Assignment and Assumption and to consummate the transactions contemplated hereby and (iv) it is not a Defaulting Bank; and (b) assumes no responsibility with respect to (i) any statements, warranties or representations made in or in connection with the Credit Agreement, (ii) the execution, legality, validity, enforceability, genuineness, sufficiency or value of the Credit Agreement or any collateral thereunder, (iii) the financial condition of the Borrower, any of its Subsidiaries or Affiliates or any other Person obligated in respect of the Agreement or (iv) the performance or observance by the Borrower, any of its Subsidiaries or Affiliates or any other Person of any of their respective obligations under the Credit Agreement.
1.2.
Assignee
. The Assignee (a) represents and warrants that (i) it has full power and authority, and has taken all action necessary, to execute and deliver this Assignment and Assumption and to consummate the transactions contemplated hereby and to become a Bank under the Credit Agreement, (ii) it satisfies the requirements, if any, specified in the Credit Agreement that are required to be satisfied by it in order to acquire the Assigned Interest and become a Bank, (iii) from and after the Effective Date, it shall be bound by the provisions of the Credit Agreement as a Bank thereunder and, to the extent of the Assigned Interest, shall have the obligations of a Bank thereunder, (iv) it has received a copy of the Credit Agreement, together with copies of the most recent financial statements delivered pursuant to Section 5.1 thereof, as applicable, and such other documents and information as it has deemed appropriate to make its own credit analysis and decision to enter into this Assignment and Assumption and to purchase the Assigned Interest on the basis of which it has made such analysis and decision independently and without reliance on the Administrative Agent or any other Bank, and (v) attached to the Assignment and Assumption is any documentation required to be delivered by it pursuant to the terms of the Credit Agreement, duly completed and executed by the Assignee; and (b) agrees that (i) it will, independently and without reliance on the Administrative Agent, the Assignor or any other Bank, and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under the Agreement, and (ii) it will perform in accordance with their terms all of the obligations which by the terms of the Agreement are required to be performed by it as a Bank.
2.
Payments
. From and after the Effective Date, the Administrative Agent shall make all payments in respect of the Assigned Interest (including payments of principal, interest, fees and other amounts) to the Assignor for amounts which have accrued to but excluding the Effective Date and to the Assignee for amounts which have accrued from and after the Effective Date.
3.
General Provisions
. This Assignment and Assumption shall be binding upon, and inure to the benefit of, the parties hereto and their respective successors and assigns. This Assignment and Assumption may be executed in any number of counterparts, which together shall constitute
one instrument. Acceptance and adoption of the terms of this Assignment and Assumption by the Assignee and the Assignor by Electronic Signature or delivery of an executed counterpart of a signature page of this Assignment and Assumption by any Electronic System shall be effective as delivery of a manually executed counterpart of this Assignment and Assumption. This Assignment and Assumption shall be governed by, and construed in accordance with, the law of the State of New York.
EXHIBIT E
Form of Money Market Quote Request
[Date]
To: JPMORGAN CHASE BANK, N.A. (the “Administrative Agent”)
From: Kilroy Realty, L.P. (the “Borrower”)
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|
Re:
|
Amended and Restated Credit Agreement, dated as of June 23, 2014, among the Borrower, the Banks party thereto, the Administrative Agent, J.P. Morgan Securities LLC, as Joint Lead Arranger and Joint Bookrunner, Merrill Lynch, Pierce, Fenner & Smith Incorporated, as Joint Lead Arranger and Joint Bookrunner, Wells Fargo Securities, LLC, as Joint Lead Arranger and Joint Bookrunner, and Bank of America, N.A., as Syndication Agent (as the same may be amended from time to time, the “Credit Agreement”).
|
We hereby give notice pursuant to Section 2.3 of the Credit Agreement that we request Money Market Quotes for the following proposed Money Market Loan(s):
Date of Borrowing: __________________
Principal Amount
5
Interest Period
6
$
Such Money Market Quotes should offer a Money Market [Margin][Absolute Rate]. [The applicable base rate is the London Interbank Offered Rate.]
____________________________
5
Amount must be $10,000,000 or a larger multiple of $500,000.
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6
|
Not less than one month (LIBOR Auction) or not less than 30 days (Absolute Rate Auction), subject to the provisions of the definition of Interest Period.
|
The funding of Money Market Loans made in connection with this Money Market Quote Request [may/may not] be made by Designated Lenders.
Terms used herein have the meanings assigned to them in the Credit Agreement.
Kilroy Realty, L.P.
By: Kilroy Realty Corporation
By:_______________________
Name:
Title:
By:_______________________
Name:
Title:
EXHIBIT F
Form of Invitation for Money Market Quotes
To: [Name of Bank]
Re: Invitation for Money Market Quotes to Kilroy Realty, L.P. (the “Borrower”)
Pursuant to Section 2.3 of the Amended and Restated Credit Agreement, dated as of June 23, 2014, among the Borrower, the Banks party thereto, JPMorgan Chase Bank, N.A., as Administrative Agent and as Bank, J.P. Morgan Securities LLC, as Joint Lead Arranger and Joint Bookrunner, Merrill Lynch, Pierce, Fenner & Smith Incorporated, as Joint Lead Arranger and Joint Bookrunner, Wells Fargo Securities, LLC, as Joint Lead Arranger and Joint Bookrunner, and Bank of America, N.A., as Syndication Agent, we are pleased on behalf of the Borrower to invite you to submit Money Market Quotes to the Borrower for the following proposed Money Market Loan(s):
Date of Borrowing: __________________
Principal Amount
Interest Period
$
Such Money Market Quotes should offer a Money Market [Margin][Absolute Rate]. [The applicable base rate is the London Interbank Offered Rate.]
Please respond to this invitation by no later than 10:00 A.M. (New York City time) on [date].
JPMORGAN CHASE BANK, N.A., as
Administrative Agent
By:_____________________________
Authorized Officer
EXHIBIT G
Form of Money Market Quote
To: JPMorgan Chase Bank, N.A., as Administrative Agent (the “Administrative Agent”)
Re: Money Market Quote to Kilroy Realty, L.P. (the “Borrower”)
In response to your invitation on behalf of the Borrower dated _____________, 20__, we hereby make the following Money Market Quote on the following terms:
1. Quoting Revolving Credit Bank: ________________________________
2. Person to contact at quoting Revolving Credit Bank:
_____________________________
3. Date of Borrowing: ____________________*
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4.
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We hereby offer to make Money Market Loan(s) in the following principal amounts, for the following Interest Periods and at the following rates:
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Principal Interest Money Market
Amount**
Period***
[Margin****]
[Absolute Rate*****]
$
$
[Provided, that the aggregate principal amount of Money Market Loans for which the above offers may be accepted shall not exceed $____________.]**
We understand and agree that the offer(s) set forth above, subject to the satisfaction of the applicable conditions set forth in the Amended and Restated Credit Agreement, dated as of June 23, 2014, among the Borrower, the Banks party thereto, the Administrative Agent and as Bank, J.P. Morgan Securities LLC, as Joint Lead Arranger and Joint Bookrunner, Merrill Lynch, Pierce, Fenner & Smith Incorporated, as Joint Lead Arranger and Joint Bookrunner, Wells Fargo Securities, LLC, as Joint Lead Arranger and Joint Bookrunner, and Bank of America, N.A., as
Syndication Agent, irrevocably obligates us to make the Money Market Loan(s) for which any offer(s) are accepted, in whole or in part.
Very truly yours,
[NAME OF BANK]
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Dated:_______________
|
By:____________________________
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Authorized Officer
Exhibit H
FORM OF DESIGNATION AGREEMENT
Dated _____________, 201_
Reference is made to that certain Amended and Restated Credit Agreement, dated as of June 23, 2014 (the “Credit Agreement”), among the Borrower, the Banks party thereto, JPMorgan Chase Bank, N.A., as Administrative Agent and as Bank, J.P. Morgan Securities LLC, as Joint Lead Arranger and Joint Bookrunner, Merrill Lynch, Pierce, Fenner & Smith Incorporated, as Joint Lead Arranger and Joint Bookrunner, Wells Fargo Securities, LLC, as Joint Lead Arranger and Joint Bookrunner, and Bank of America, N.A., as Syndication Agent. Terms defined in the Credit Agreement are used herein with the same meaning.
[NAME OF DESIGNOR] (the “Designor”), [NAME OF DESIGNEE] (the “Designee”) and the Administrative Agent agree as follows:
1.
The Designor hereby designates the Designee, and the Designee hereby accepts such designation, to have a right to make Money Market Loans pursuant to Article III of the Credit Agreement. Any assignment by Designor to Designee of its rights to make a Money Market Loan pursuant to such Article III shall be effective at the time of the funding of such Money Market Loan and not before such time.
2.
Except as set forth in Section 7 below, the Designor makes no representation or warranty and assumes no responsibility pursuant to this Designation Agreement with respect to (a) any statements, warranties or representations made in or in connection with any Loan Document or the execution, legality, validity, enforceability, genuineness, sufficiency or value of any Loan Document or any other instrument and document furnished pursuant thereto and (b) the financial condition of the Borrower or the performance or observance by the Borrower of any of its obligations under any Loan Document or any other instrument or document furnished pursuant thereto.
3.
The Designee (a) confirms that it has received a copy of each Loan Document, together with copies of the financial statements referred to in Articles IV and V of the Credit Agreement and such other documents and information as it has deemed appropriate to make its own credit analysis and decision to enter into this Designation Agreement; (b) agrees that it will independently and without reliance upon the Administrative Agent, the Designor or any other Revolving Credit Bank 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 any Loan Document; (c) confirms that it is a Designated Lender; (d) appoints and authorizes the Administrative Agent to take such action as agent on its behalf and to exercise such powers and discretion under any Loan Document as are delegated to the Administrative Agent by the terms thereof, together with such powers and discretion as are reasonably incidental thereto; and (e) agrees to be bound by each and every provision of each Loan Document and
further agrees that it will perform in accordance with their terms all of the obligations which by the terms of any Loan Document are required to be performed by it as a Revolving Credit Bank.
4.
The Designee hereby appoints Designor as Designee’s agent and attorney in fact, and grants to Designor an irrevocable power of attorney, to receive payments made for the benefit of Designee under the Credit Agreement, to deliver and receive all communications and notices under the Credit Agreement and the other Loan Documents and to exercise on Designee’s behalf all rights to vote and to grant and make approvals, waivers, consents of amendments to or under the Credit Agreement or other Loan Documents. Any document executed by the Designor on the Designee’s behalf in connection with the Credit Agreement or the other Loan Documents shall be binding on the Designee. The Borrower, the Administrative Agent and each of the Banks may rely on and are beneficiaries of the preceding provisions.
5.
Following the execution of this Designation Agreement by the Designor and its Designee, it will be delivered to the Administrative Agent for acceptance and recording by the Administrative Agent. The effective date for this Designation Agreement (the “Effective Date”) shall be the date of acceptance hereof by the Administrative Agent, unless otherwise specified on the signature page thereto.
6.
The Administrative Agent hereby agrees that it will not institute against any Designated Lender or join any other Person in instituting against any Designated Lender any bankruptcy, reorganization, arrangement, insolvency or liquidation proceeding under any federal or state bankruptcy or similar law, until the later to occur of (i) one year and one day after the payment in full of the latest maturing commercial paper note issued by such Designated Lender and (ii) the Revolving Credit Maturity Date.
7.
The Designor unconditionally agrees to pay or reimburse the Designee and save the Designee harmless against all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind or nature whatsoever which may be imposed or asserted by any of the parties to the Loan Documents against the Designee, in its capacity as such, in any way relating to or arising out of this Agreement or any other Loan Documents or any action taken or omitted by the Designee hereunder or thereunder, provided that the Designor shall not be liable for any portion of such liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements if the same results from the Designee’s gross negligence or willful misconduct.
8.
Upon such acceptance and recording by the Administrative Agent, as of the Effective Date, the Designee shall be a party to the Credit Agreement with a right (subject to the provisions of Section 2.3(b)) to make Money Market Loans as a Revolving Credit Bank pursuant to Section 2.3 of the Credit Agreement and the rights and obligations of a Revolving Credit Bank related thereto;
provided
,
however
, that the Designee shall not be required to make payments with respect to such obligations except to the extent of excess cash flow of such Designee which is not otherwise required to repay obligations of such Designated Lender which are then due and payable. Notwithstanding the foregoing, the Designor, as administrative agent for the Designee, shall be and remain obligated to the Borrower and the Revolving Credit Banks for each and every of the obligations of the Designee and its Designor with respect to the Credit Agreement,
including, without limitation, any indemnification obligations under Section 7.6 of the Credit Agreement and any sums otherwise payable to the Borrower by the Designee.
9.
This Designation Agreement shall be governed by, and construed in accordance with, the laws of the State of New York.
10.
This Designation Agreement may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement. Delivery of an executed counterpart of a signature page to this Designation Agreement by facsimile transmission shall be effective as delivery of a manually executed counterpart of this Designation Agreement.
IN WITNESS WHEREOF, the Designor and the Designee, intending to be legally bound, have caused this Designation Agreement to be executed by their officers thereunto duly authorized as of the date first above written.
Effective Date:
________________________, 201__
[NAME OF DESIGNOR], as Designor
By: ___________________________
Title: _________________________
[NAME OF DESIGNEE] as Designee
By: ___________________________
Title: __________________________
Applicable Lending Office
(and address for notices):
[ADDRESS]
Accepted this _____ day
of ___________, 201_
JPMORGAN CHASE BANK, N.A.,
as Administrative Agent
By: _____________________
Title: ___________________
Exhibit I-1
FORM OF U.S. TAX COMPLIANCE CERTIFICATE
(For Foreign Banks That Are Not Partnerships For U.S. Federal Income Tax Purposes)
Reference is hereby made to the Amended and Restated Credit Agreement dated as of June 23, 2014 (as amended, supplemented or otherwise modified from time to time, the “
Credit Agreement
”), among Kilroy Realty, L.P., as Borrower, JPMorgan Chase Bank, N.A., as Administrative Agent, and each Bank from time to time party thereto.
Pursuant to the provisions of Section 8.4(f)(ii)(B)(3) of the Credit Agreement, the undersigned hereby certifies that (i) it is the sole record and beneficial owner of the Loan(s) (as well as any Note(s) evidencing such Loan(s)) in respect of which it is providing this certificate, (ii) it is not a bank within the meaning of Section 881(c)(3)(A) of the Code, (iii) it is not a ten percent shareholder of the Borrower within the meaning of Section 871(h)(3)(B) of the Code and (iv) it is not a controlled foreign corporation related to the Borrower as described in Section 881(c)(3)(C) of the Code.
The undersigned has furnished the Administrative Agent and the Borrower with a certificate of its non-U.S. Person status on IRS Form W-8BEN. By executing this certificate, the undersigned agrees that (1) if the information provided on this certificate changes, the undersigned shall promptly so inform the Borrower and the Administrative Agent, and (2) the undersigned shall have at all times furnished the Borrower and the Administrative Agent with a properly completed and currently effective certificate in either the calendar year in which each payment is to be made to the undersigned, or in either of the two calendar years preceding such payments.
Unless otherwise defined herein, terms defined in the Credit Agreement and used herein shall have the meanings given to them in the Credit Agreement.
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[NAME OF BANK]
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By:
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Name:
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Title:
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Date: ________ __, 201[_]
EXHIBIT I-2
FORM OF U.S. TAX COMPLIANCE CERTIFICATE
(For Foreign Banks That Are Partnerships For U.S. Federal Income Tax Purposes)
Reference is hereby made to the Amended and Restated Credit Agreement dated as of June 23, 2014 (as amended, supplemented or otherwise modified from time to time, the “
Credit Agreement
”), among Kilroy Realty, L.P., as Borrower, JPMorgan Chase Bank, N.A., as Administrative Agent, and each Bank from time to time party thereto.
Pursuant to the provisions of 8.4(f)(ii)(B)(4) of the Credit Agreement, the undersigned hereby certifies that (i) it is the sole record owner of the Loan(s) (as well as any Note(s) evidencing such Loan(s)) in respect of which it is providing this certificate, (ii) its direct or indirect partners/members are the sole beneficial owners of such Loan(s) (as well as any Note(s) evidencing such Loan(s)), (iii) with respect to the extension of credit pursuant to this Credit Agreement or any other Loan Document, neither the undersigned nor any of its direct or indirect partners/members is a bank extending credit pursuant to a loan agreement entered into in the ordinary course of its trade or business within the meaning of Section 881(c)(3)(A) of the Code, (iv) none of its direct or indirect partners/members is a ten percent shareholder of the Borrower within the meaning of Section 871(h)(3)(B) of the Code and (v) none of its direct or indirect partners/members is a controlled foreign corporation related to the Borrower as described in Section 881(c)(3)(C) of the Code.
The undersigned has furnished the Administrative Agent and the Borrower with IRS Form W-8IMY accompanied by one of the following forms from each of its partners/members that is claiming the portfolio interest exemption: (i) an IRS Form W-8BEN or (ii) an IRS Form W-8IMY accompanied by an IRS Form W-8BEN from each of such partner’s/member’s beneficial owners that is claiming the portfolio interest exemption. By executing this certificate, the undersigned agrees that (1) if the information provided on this certificate changes, the undersigned shall promptly so inform the Borrower and the Administrative Agent, and (2) the undersigned shall have at all times furnished the Borrower and the Administrative Agent with a properly completed and currently effective certificate in either the calendar year in which each payment is to be made to the undersigned, or in either of the two calendar years preceding such payments.
Unless otherwise defined herein, terms defined in the Credit Agreement and used herein shall have the meanings given to them in the Credit Agreement.
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[NAME OF BANK]
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By:
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Name:
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Title:
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Date: ________ __, 201[_]
EXHIBIT I-3
FORM OF U.S. TAX COMPLIANCE CERTIFICATE
(For Foreign Participants That Are Not Partnerships For U.S. Federal Income Tax Purposes)
Reference is hereby made to the Amended and Restated Credit Agreement dated as of June 23, 2014 (as amended, supplemented or otherwise modified from time to time, the “
Credit Agreement
”), among Kilroy Realty, L.P., as Borrower, JPMorgan Chase Bank, N.A., as Administrative Agent, and each Bank from time to time party thereto.
Pursuant to the provisions of 8.4(f)(ii)(B)(4) of the Credit Agreement, the undersigned hereby certifies that (i) it is the sole record and beneficial owner of the participation in respect of which it is providing this certificate, (ii) it is not a bank within the meaning of Section 881(c)(3)(A) of the Code, (iii) it is not a ten percent shareholder of the Borrower within the meaning of Section 871(h)(3)(B) of the Code, and (iv) it is not a controlled foreign corporation related to the Borrower as described in Section 881(c)(3)(C) of the Code.
The undersigned has furnished its participating Bank with a certificate of its non-U.S. Person status on IRS Form W-8BEN. By executing this certificate, the undersigned agrees that (1) if the information provided on this certificate changes, the undersigned shall promptly so inform such Bank in writing, and (2) the undersigned shall have at all times furnished such Bank with a properly completed and currently effective certificate in either the calendar year in which each payment is to be made to the undersigned, or in either of the two calendar years preceding such payments.
Unless otherwise defined herein, terms defined in the Credit Agreement and used herein shall have the meanings given to them in the Credit Agreement.
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[NAME OF PARTICIPANT]
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By:
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Name:
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Title:
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Date: ________ __, 201[_]
EXHIBIT I-4
FORM OF U.S. TAX COMPLIANCE CERTIFICATE
(For Foreign Participants That Are Partnerships For U.S. Federal Income Tax Purposes)
Reference is hereby made to the Amended and Restated Credit Agreement dated as of June 23, 2014 (as amended, supplemented or otherwise modified from time to time, the “
Credit Agreement
”), among Kilroy Realty, L.P., as Borrower, JPMorgan Chase Bank, N.A., as Administrative Agent, and each Bank from time to time party thereto.
Pursuant to the provisions of 8.4(f)(ii)(B)(4) of the Credit Agreement, the undersigned hereby certifies that (i) it is the sole record owner of the participation in respect of which it is providing this certificate, (ii) its direct or indirect partners/members are the sole beneficial owners of such participation, (iii) with respect such participation, neither the undersigned nor any of its direct or indirect partners/members is a bank extending credit pursuant to a loan agreement entered into in the ordinary course of its trade or business within the meaning of Section 881(c)(3)(A) of the Code, (iv) none of its direct or indirect partners/members is a ten percent shareholder of the Borrower within the meaning of Section 871(h)(3)(B) of the Code and (v) none of its direct or indirect partners/members is a controlled foreign corporation related to the Borrower as described in Section 881(c)(3)(C) of the Code.
The undersigned has furnished its participating Bank with IRS Form W-8IMY accompanied by one of the following forms from each of its partners/members that is claiming the portfolio interest exemption: (i) an IRS Form W-8BEN or (ii) an IRS Form W-8IMY accompanied by an IRS Form W-8BEN from each of such partner’s/member’s beneficial owners that is claiming the portfolio interest exemption. By executing this certificate, the undersigned agrees that (1) if the information provided on this certificate changes, the undersigned shall promptly so inform such Bank and (2) the undersigned shall have at all times furnished such Bank with a properly completed and currently effective certificate in either the calendar year in which each payment is to be made to the undersigned, or in either of the two calendar years preceding such payments.
Unless otherwise defined herein, terms defined in the Credit Agreement and used herein shall have the meanings given to them in the Credit Agreement.
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[NAME OF PARTICIPANT]
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By:
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Name:
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Title:
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Date: ________ __, 201[_]
SCHEDULE 1
COMMITMENTS
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Lender
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JPMORGAN CHASE BANK, N.A.
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BANK OF AMERICA, N.A.
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$57,000,000
|
WELLS FARGO BANK, NATIONAL ASSOCIATION
|
$57,000,000
|
BARCLAYS BANK PLC
|
$48,750,000
|
COMPASS BANK
|
$48,750,000
|
PNC BANK, NATIONAL ASSOCIATION
|
$48,750,000
|
ROYAL BANK OF CANADA
|
$48,750,000
|
UNION BANK, N.A.
|
$48,750,000
|
U.S. BANK NATIONAL ASSOCIATION
|
$48,750,000
|
BANK OF THE WEST, N.A.
|
$37,500,000
|
SUMITOMO MITSUI BANKING CORPORATION
|
$37,500,000
|
COMERICA BANK
|
$30,750,000
|
KEYBANK, NATIONAL ASSOCIATION
|
$30,750,000
|
TOTAL
|
$600,000,000
|
|
|
|
Lender
|
Term Commitment
|
JPMORGAN CHASE BANK, N.A.
|
$14,250,000
|
BANK OF AMERICA, N.A.
|
$14,250,000
|
WELLS FARGO BANK, NATIONAL ASSOCIATION
|
$14,250,000
|
BARCLAYS BANK PLC
|
$12,187,500
|
COMPASS BANK
|
$12,187,500
|
PNC BANK, NATIONAL ASSOCIATION
|
$12,187,500
|
ROYAL BANK OF CANADA
|
$12,187,500
|
UNION BANK, N.A.
|
$12,187,500
|
U.S. BANK NATIONAL ASSOCIATION
|
$12,187,500
|
BANK OF THE WEST, N.A.
|
$9,375,000
|
SUMITOMO MITSUI BANKING CORPORATION
|
$9,375,000
|
COMERICA BANK
|
$7,687,500
|
KEYBANK NATIONAL ASSOCIATION
|
$7,687,500
|
TOTAL
|
$150,000,000
|
SCHEDULE 4.22
LABOR MATTERS
None.