EXHIBIT 10.56
REVOLVING CREDIT LOAN AGREEMENT
THIS REVOLVING CREDIT
LOAN AGREEMENT (this "Agreement") is
made and
delivered this 4th day of March 2008, by and between
Mission West Properties,
Inc., a Maryland corporation ("Borrower"), and
Heritage Bank of Commerce (the
"Bank").
WITNESSETH
WHEREAS, the Borrower
desires to borrow up to Ten
Million Dollars
($10,000,000.00) from the Bank from time to time to
meet the working capital
needs of the Borrower; and
WHEREAS, the Bank is willing to provide
such financing subject to the terms
and conditions set forth in this Agreement;
NOW, THEREFORE, in
consideration of the premises and the mutual promises
herein contained and in reliance upon Borrower's
representations and warranties
set forth herein, the Borrower and the Bank agree as follows:
1. DEFINITIONS.
1.1 DEFINED TERMS. As used in
this Agreement, the following terms shall
have the following respective meanings:
"Affiliate" shall mean, when
used with respect to any person, any other
person which, directly or indirectly, controls or is
controlled by or is under
common control with such person. For purposes of
this definition, "control"
(including the correlative meanings of the
terms "controlled by" and "under
common control with"), with respect to
any person, shall mean possession,
directly or indirectly, of the power to direct or cause
the direction of the
management and policies of such person, whether through the
ownership of voting
securities or by contract or otherwise.
"Agreement" is defined in the first
paragraph of this Agreement.
"Average Annual Rate of
Interest" is defined the weighted average of the
annual interest rate on variable and fixed rate
debt as reflected in the Form
10-K, Item 7A.
"Bank" is defined in the first paragraph
of this Agreement.
"Bankruptcy Code" shall
mean Title 11 of the United States
Code, as
amended, or any successor act or code.
"Borrower" is defined in the first
paragraph of this Agreement.
"Business Day" shall mean a
day on which the Bank is open to carry on its
normal commercial lending business.
"Commitment" shall mean
the Bank's agreement to lend to
Borrower in
accordance with and subject to the terms of this Agreement.
"Commitment Amount" shall mean, as of any
applicable date of determination,
Ten Million Dollars and no cents ($10,000,000.00).
"Consolidated" or
"consolidated" shall mean, when used with reference to
any financial term in this Agreement, the aggregate for
two or more persons of
the amounts signified by such term
for all such persons determined on a
consolidated basis in accordance with GAAP as defined
below. Unless otherwise
specified herein, reference to "consolidated"
financial statements or data of
the Borrower includes consolidation with its Subsidiaries (as
defined below) in
accordance with GAAP.
"Controversy" is defined in Section
8.16.
"Cost Award" is defined in Section
8.16.
"Cost Statement of Decision" is defined in
Section 8.16.
"Debt" shall mean, as of any applicable
date of determination, all items of
indebtedness, obligation or liability of a person, whether matured
or unmatured,
liquidated or unliquidated, direct or indirect, absolute or
contingent, joint or
several, that should be classified as liabilities in accordance
with GAAP.
<PAGE>
"Debt Coverage
Ratio" shall mean, as of
any applicable date of
determination, the ratio of: (1) the sum of Borrower's
Net Operating Income,
divided by (2) annual debt service on total outstanding mortgage
debt plus total
open line of credit commitments amortized over 25 years
at the "Average Annual
Rate of Interest." The Debt Coverage Ratio shall be determined by
the Bank as of
each Fiscal Quarter (as defined below) and on the basis of the
preceding twelve
(12) month period (actual or based on annualized quarters) as
follows: (i) as to
each Fiscal Quarter ending on March
31, June 30, and September 30,
from
Borrower's SEC Form 10-Q filed with the
Securities and Exchange Commission
relating to such quarter, with such quarterly year to date
results annualized;
and (ii) as to each Fiscal Quarter ending on December
31, from Borrower's SEC
Form 10-K relating to the year
ending on such date. Notwithstanding
the
foregoing, the Bank may also rely on
other information that Borrower is
obligated to provide to the Bank pursuant to
Section 5.1 of this Agreement.
Exhibit C hereto includes an example of the calculation
of Debt Coverage Ratio
as defined herein from Borrower's SEC Form 10-K for the period
ending September
30, 2007, and is provided for example purposes only.
"Debt to Tangible Net Worth Ratio" shall
mean, as of any applicable date of
determination, the ratio of (1) Borrower's
Debt, divided by (2) Borrower's
Tangible Net Worth. The Debt to Tangible Net Worth Ratio
shall be determined by
the Bank as of each Fiscal Quarter (as defined
below) and on the basis of the
preceding twelve (12) month period (actual
or based on annual quarters) as
follows: (i) as to each Fiscal Quarter
ending on March 31, June 30, and
September 30, from Borrower's SEC Form
10-Q filed with the Securities and
Exchange Commission relating to the quarter ending on such
date; and (ii) as to
each Fiscal Quarter ending on
December 31, from Borrower's SEC Form
10-K
relating to the year ending on such date.
Notwithstanding the foregoing, the
Bank may also rely on other information that Borrower is obligated
to provide to
the Bank pursuant to Section 6.1 of this Agreement. Exhibit C
hereto includes an
example of the calculation of Debt to Tangible Net Worth Ratio as
defined herein
from Borrower's SEC Form 10-Q for the period ending
September 30, 2007, and is
provided for example purposes only.
"Default" shall mean a condition or event
which, with the giving of notice
or the passage of time, or both, would
become an Event of Default as defined
below.
"Default Rate" shall
mean, as of the applicable
date or time of
determination, the Variable Rate, as defined below, plus five
percent (5%), or,
if the Bank exercises its option under Section 2.13 of this
Agreement to change
the rate of interest to the Prime Variable Rate, then
the Prime Variable Rate,
as defined below, plus five percent (5%).
"Effective Date" shall mean the date
this Agreement becomes effective as
set forth in Section 8.1 herein.
"ERISA" shall mean the Employee
Retirement Income Security Act of 1974, as
amended, or any successor act or code.
"Event of Default" shall mean any of
those conditions or events listed in
Section 7.1 of this Agreement.
"Financial Statements" shall mean
all those consolidated balance sheets,
consolidated earnings statements and other
consolidated financial data which
have been furnished to the Bank for the purposes of, or in
connection with, this
Agreement and the transactions contemplated hereby, including
without limit the
following: the Borrower's SEC Form 10-K for the period ending
December 31, 2007.
"Fiscal Quarter" shall mean
each three month period ending on March 31,
June 30, September 30, and December 31 of each year.
"Funding Date" shall mean,
with respect to any Revolving Loan made by the
Bank hereunder, the date of the funding of such Revolving Loan by
Bank.
"GAAP" shall mean, as of any
applicable date of determination, generally
accepted accounting principles consistently applied in the United
States.
"Indebtedness" shall mean all loans,
advances, indebtedness, obligations
and liabilities of Borrower to the Bank under this Agreement,
together with all
other indebtedness, obligations and liabilities
whatsoever of the Borrower to
the Bank, whether matured or unmatured, liquidated or
unliquidated, direct or
indirect, absolute or contingent, joint or
several, due or to become due, now
existing or hereafter arising.
"Internal Revenue Code" shall
mean the Internal Revenue Code of 1986, as
amended from time to time and hereafter, and any successor
statute.
"Legal Rate" shall mean the maximum
interest rate allowed by law to be paid
by the Borrower or received by the
Bank with respect to the Indebtedness
represented by the Note.
"Lender" shall mean any
bank, financial institution, finance
company,
insurance or other financial institution or any other person
who extends or has
extended any credit or loan or line of credit to any other
person.
<PAGE>
"LIBOR" shall mean the one-month
London Inter-Bank Offered Rate, rounded
up, if necessary, to the nearest whole 1/100 of 1%.
"Loan" shall mean the Revolving Loans.
"Loan Documents" shall
mean this Agreement, the Note, and
all other
agreements, instruments and documents
(together with all amendments and
supplements thereto and replacements
thereof) now or hereafter executed by
Borrower that evidence or secure all or any
portion of the Indebtedness or
Borrower's obligations hereunder.
"Material Adverse Effect" or
"Materially Adverse Effect" shall mean, with
respect to a Person, a material adverse effect upon the
condition (financial or
otherwise), operations, performance or properties or assets of such
Person.
"Net Operating Income" shall mean
total revenues less expenses adding back
interest expense and adding back depreciation expense.
"Note" shall mean the Revolving Credit
Note.
"Notice of Borrowing"
shall mean a notice substantially in the form of
Exhibit B hereto.
"PBGC" shall mean the Pension
Benefit Guaranty Corporation or any person
succeeding to the present powers and functions of the Pension
Benefit Guaranty
Corporation.
"Person" or "person" shall mean any
individual, corporation, partnership,
joint venture, association, trust,
unincorporated association, joint stock
company, government, municipality,
political subdivision or agency, or other
entity.
"Prime Variable Rate" shall
mean that variable rate of interest equal to
the Prime Rate as published in the Wall Street Journal minus 3/4
percent (3/4%),
per annum, with the interest rate to be initially
calculated by the Bank as of
approximately 10:00 a.m. San Jose, California time on the date on
which the Bank
exercises its option under Section 2.13 if such option date
is the first day of
the month, or, if not, as of approximately 10:00 a.m. San
Jose, California time
as the first day of the month during which such option date occurs,
and with the
interest rate to thereafter fluctuate with changes in such
Prime Rate with such
fluctuations to be effective, and the interest rate to be adjusted,
on the first
day of each month.
"Revolving Credit Note" shall mean a
promissory note conforming to Section
2.4 of this Agreement and in the form
and content of Exhibit A to this
Agreement.
"Revolving Loan" shall
mean advances or loans made by the Bank to
the
Borrower under this Agreement.
"Section" when used to refer to a portion
of this Agreement shall mean the
section to which reference is made plus all subparts and
subsections thereof.
"Solvent" shall mean, as to any person at
the time of determination, that
such person (a) owns property and
assets the value of which (both at fair
valuation and at present fair salable value) is greater than the
amount required
to pay all of such person's liabilities (including
contingent liabilities and
debts); (b) is able to pay all of its debts as such
debts mature; and (c) has
capital sufficient to carry on its business and
transactions and all business
and transactions in which it is about to engage.
"Subsidiary" shall mean any
corporation (whether now existing or hereafter
organized or acquired) in which more than fifty percent (50%) of
the outstanding
securities having ordinary voting power for the election of
directors, as of any
applicable date of determination, shall be owned directly, or
indirectly through
one or more Subsidiaries, by the Borrower.
"Tangible Net Worth" shall
be calculated each Fiscal Quarter and shall
mean, as of any applicable date of determination,
Total Stockholders' Equity
(but not including Minority Interest) as stated
in the Consolidated Balance
Sheet of Borrower in Borrower's SEC Form 10-Q or, as
applicable, SEC Form 10-K
(or other financial information that Bank may obtain
regarding Borrower or that
may be provided by Borrower to Bank in
accordance with), less intangibles
calculated in accordance with GAAP.
"Termination Date" shall mean June 15,
2009.
"Total Loans of
Borrower" shall mean, as of the
date of any such
determination, the sum of the total outstanding principal balance
of all secured
loans to Borrower from any Lender plus the total amount of
all the balances and
the credit commitments under any and all
unsecured loans, unsecured lines of
credit, unsecured credit facilities of any kind
(including but not limited to
the Commitment Amount), and any other commitments
evidencing any extension of
unsecured debt to Borrower by any Lender.
<PAGE>
"UCC" shall mean
Uniform Commercial Code of the State
of California
(approved June 8, 1968) as amended.
"Variable Rate" shall mean that
variable rate of interest equal to the sum
of the one-month LIBOR plus 1.75 percent (1.75%), per
annum, the interest rate
to be initially calculated by the Bank as of approximately
10:00 a.m. San Jose,
California time on the Funding Date if the
Funding Date is the first day of a
month, or, if not, as of approximately 10:00 a.m. San
Jose, California time on
the first day of the month during which the Funding
Date occurs, and with the
interest rate to thereafter fluctuate
with changes in such LIBOR with such
fluctuations to be effective, and the interest rate to be adjusted,
on the first
day of each month.
1.2 ACCOUNTING TERMS. All accounting terms
not specifically defined in this
Agreement shall be construed in accordance with GAAP.
1.3 SINGULAR AND PLURAL. Where the
context herein requires, the singular
number shall be deemed to include the plural, the masculine gender
shall include
the feminine and neuter genders, and vice versa.
2. COMMITMENT, PROCEDURES, INTEREST AND FEES.
2.1 REVOLVING CREDIT
COMMITMENT. Subject to the terms and conditions of
this Agreement and at any time from the Effective Date until
the earlier of (a)
the Termination Date, (b) such earlier date on which,
pursuant to the terms of
this Agreement and a result of acceleration or
otherwise, the Indebtedness is
fully due and payable, or (c) the termination of the Bank's
Commitment pursuant
to Section 7.2 of this Agreement or otherwise, the Bank agrees to
make Revolving
Loans to the Borrower on a revolving basis up to an aggregate
principal amount
outstanding at any time not to exceed the Commitment Amount.
Notwithstanding the
foregoing, the Bank shall not be obligated to make the
Revolving Loan if: (i)
any of the conditions precedent set forth in Section 3 of
this Agreement shall
not have been satisfied or waived by the Bank in accordance
with Section 8.4 of
this Agreement, or (ii) such proposed Revolving Loan
would cause the aggregate
unpaid principal amount of the Revolving Loans outstanding
under this Agreement
to exceed the Commitment Amount on the Funding Date.
2.2 INTEREST RATE. Except as
otherwise provided herein (including without
limitation Section 2.5 relating to the Default Rate),
each Revolving Loan will
bear interest on the unpaid principal amount thereof at the
Variable Rate.
2.3 BORROWING PROCEDURES.
2.3.1
NOTICE OF BORROWING. Whenever Borrower
desires to borrow,
Borrower shall provide to the
Bank at 150 Almaden Boulevard, San Jose,
California 95113,
Attention Roxanne Vane, or to such other
persons or
entities as Bank may
designate, an original Notice of
Borrowing. Such
Notice of Borrowing shall
be provided by no later than 11:00 A.M. (San
Jose, California time) for each
Revolving Loan requested and not less than
two (2) nor more than five (5)
Business Days prior to the noticed Funding
Date of each such Revolving
Loan. Each Notice of Borrowing shall specify
(A) the Funding Date
(which shall be a Business Day) in respect of the
Revolving Loan, (B) the amount
of the proposed Revolving Loan, (C) the
deposit account number of
Borrower with Bank to which the funds are to be
directed, and (D) the proposed use
of such Revolving Loan. Any Notice of
Borrowing shall be irrevocable. At
the time of execution of this Agreement
and as a condition to the
Bank's obligations hereunder, Borrower
shall
provide the Bank
with written documentation satisfactory to
the Bank
specifying the names of those
employees, officers or agents of Borrower
authorized by Borrower to execute
and submit Notices of Borrowing to the
Bank ("Authorized Agent") and a
signature exemplar of each such Authorized
Agent, and the Bank shall be entitled to
rely on such documentation until
notified in writing
by Borrower of any change(s) of the
persons so
authorized. Borrower agrees to indemnify,
defend and hold the Bank harmless
from and against any and all
liabilities, out of pocket costs (including
but not limited to
reasonable out of pocket attorneys' fees),
claims,
damages and demands
arising from or related to Bank's
acceptance of
instructions in any
Notice of Borrowing executed
and submitted an
Authorized Agent, unless
caused by the gross negligence
or willful
misconduct of the Person to be
indemnified.
2.3.2
BANK OBLIGATIONS. Subject to the terms and
conditions of this
Agreement including
without limitation Section 2.1
and subject to
Borrower's performance of and
compliance with the terms hereof including
without limitation
Section 2.3.1 herein, the Bank agrees
to make the
Revolving Loan pursuant
to a Notice of Borrowing on the Funding
Date
established by the Notice of Borrowing by
crediting the deposit account of
the Borrower with the
Bank specified in the Notice of Borrowing in
the
amount of such Revolving Loan.
2.4 REVOLVING CREDIT NOTE. The
Revolving Loans shall be evidenced by the
Revolving Credit Note, executed by
the Borrower, dated the date of
this
Agreement, payable to the Bank on the Termination Date (or
such earlier date as
the Indebtedness is due under the terms of this
Agreement whether by reason of
acceleration or otherwise), and in
the principal amount of the
original
Commitment Amount. The date and amount of each
Revolving Loan made by the Bank
and of each repayment of principal
thereon received by the Bank shall be
recorded by the Bank in its records. The aggregate
unpaid principal amount so
recorded by the Bank shall constitute the best evidence of
the principal amount
owing and unpaid on the Revolving Credit
Note, provided, however, that the
failure by the Bank so to record any such amount or any
error in so recording
any such amount shall not limit or
otherwise affect the obligations of the
Borrower under this Agreement or the
Revolving Credit Note to repay the
principal amount of all the Revolving Loans together with all
interest accrued
or accruing thereon.
<PAGE>
2.5 DEFAULT INTEREST. Upon
the occurrence of an Event of Default,
all
amounts due and owing by Borrower to the Bank shall bear interest
at the Default
Rate.
2.6 INTEREST PAYMENTS. Interest
shall be payable by Borrower to the extent
then accrued on the first day of each consecutive
calendar month beginning on
April 1, 2008, with all remaining interest due and
payable on the Termination
Date (or such earlier date as the Indebtedness is
due under the terms of this
Agreement whether by reason of acceleration or otherwise). Any
interest not paid
when due shall become part of the principal and
bear interest as provided in
this Agreement.
2.7 MAXIMUM RATE. At no
time shall the rate of interest payable on the
Revolving Loans or pursuant to the Revolving Credit
Note pursuant to the terms
of this Agreement be deemed to exceed the Legal Rate. In the
event any interest
is charged or received by the Bank in excess of the
Legal Rate, the Borrower
acknowledges that any such excess interest shall be the
result of an accidental
and bona fide error, and such excess
shall first be applied to reduce the
principal then unpaid hereunder (in
inverse order of their maturities if
principal amounts are due in installments);
second, applied to reduce any
obligation for other indebtedness of the Borrower to
the Bank; and third, any
remaining excess returned to the Borrower.
2.8 TERM. The Indebtedness and
the outstanding balance of all Revolving
Loans and all other accrued and unpaid interest, charges and
expenses hereunder
and under the Note shall be payable in full on
the Termination Date or such
earlier date as the Indebtedness is due
under the terms of this Agreement
whether by reason of acceleration pursuant to Section 7.2 or
otherwise.
2.9 FEES. Borrower shall pay
to Bank the fees described in this Section
2.9. All fees described herein are earned as of the date they are
accrued.
2.9.1
MINIMUM ANNUAL FEE. The Borrower shall pay to the Bank a
minimum
annual fee of Ten Thousand Dollars and no
cents ($10,000.00) (the "Minimum
Annual Fee"). The Minimum
Annual Fee shall be payable in advance, in the
manner provided in Section 2.11 herein, on
the Effective Date for the first
year hereunder, and on
each anniversary of the Effective Date for
each
subsequent year. The Minimum Annual
Fee shall be pro-rated for any partial
year.
2.9.2 NO FEE
AFTER TERMINATION OF BANK OBLIGATIONS.
Notwithstanding
Section 2.9.1, the
Borrower shall not be obligated to pay any
Minimum
Annual Fee earned by the Bank
after the date which is ten (10) days after
Borrower has: (i) given written notice to
the Bank terminating the Bank's
Commitment and any further obligation by
the Bank under this Agreement; and
(ii) paid the Indebtedness in full.
2.9.3
PREPARATION FEES. Simultaneously with the
execution of this
Agreement and as a
condition to the Bank's obligations
hereunder, the
Borrower shall pay to the Bank
the amount of the out of pocket expenses
(including without limit
reasonable attorneys' fees, whether of inside or
outside counsel, and disbursements)
incurred by the Bank in connection with
the preparation of this
Agreement and the Loan Documents in the amount of
Nine Thousand Sixty-One Dollars
($9,061.00).
2.9.4
BASIS OF COMPUTATION. The amount of
all interest and fees
hereunder shall be computed
for the actual number of days elapsed in the
period in which interest accrues on the
basis of a year consisting of three
hundred sixty (360) days.
2.10 MANDATORY PAYMENTS AND
PREPAYMENTS.
2.10.1
MANDATORY PAYMENTS. In addition to all other payments
required
to be made under the Loan
Documents, Borrower shall pay to the Bank the
amount, if any, by which
the aggregate unpaid principal amount of
all
Revolving Loans from time to time exceeds
the Commitment Amount, together
with all interest accrued and
unpaid on the amount of such excess. Such
payment shall be immediately
due and owing without notice or demand upon
the occurrence of any such excess,
provided, however, that any mandatory
payment made under this
Section 2.10.1 shall not reduce the
Commitment
Amount.
2.10.2
OPTIONAL PREPAYMENTS AND CONVERSIONS. The Borrower, at any time
and from time to time,
may prepay the unpaid principal
amount of the
Revolving Loans. Any
optional prepayment made under this Section 2.10.2
shall not reduce the Commitment
Amount.
2.11 BASIS OF PAYMENTS. All sums
payable by the Borrower to the Bank under
this Agreement or the Loan Documents shall be paid
immediately by Borrower when
due directly to the Bank at its principal
office set forth in Section 8.12
hereof in immediately available United States funds, without
condition, set off,
deduction or counterclaim. In its sole discretion, the
Bank may charge any and
all deposit or other accounts (including without limit an account
evidenced by a
certificate of deposit) of the Borrower with the Bank
for all or a part of any
Indebtedness when due; provided, however, that
this authorization shall not
affect the Borrower's obligation to pay, when due, any
Indebtedness whether or
not account balances are sufficient to pay amounts due.
Whenever any payment to
be made by Borrower hereunder shall be stated to be due on a
day which is not a
Business Day, payments shall be made on the next
succeeding Business Day and
such extension of time shall be included in the
computation of the payment of
interest hereunder and of any of the fees
specified in Section 2.9. Borrower
acknowledges and agrees that the fees
described in Section 2.9 represent
compensation for services rendered and to be
rendered separate and apart from
the lending of money or the
provision of credit and do
<PAGE>
not constitute compensation for the use, detention or
forbearance of money, and
the obligation of Borrower to pay the fees described herein shall
be in addition
to, and not in lieu of, the obligation of Borrower to pay
interest, other fees
and expenses otherwise described in this
Agreement. If Borrower fails to make
any payment of fees or expenses specified or referred to in this
Agreement owing
to Bank, including without limitation
those referred to in Section 2.9, or
otherwise under this Agreement, or any separate fee
agreement between Borrower
or Bank relating to this Agreement, when due, the
amount shall bear interest
until paid at the Default Rate.
2.12 RECEIPT OF PAYMENTS. Any payment of
the Indebtedness made by mail will
be deemed tendered and received only upon
actual receipt by the Bank at the
address designated for such payment,
whether or not the Bank has authorized
payment by mail or any other manner, and shall not be
deemed to have been made
in a timely manner unless received on the date due for such
payment, time being
of the essence. Borrower expressly
assumes all risks of loss or liability
resulting from non-delivery or delay
of delivery of any item of payment
transmitted by mail or in any other
manner. Acceptance by the Bank of any
payment in an amount less than the amount then due shall be deemed
an acceptance
on account only, and the failure to pay the entire amount
then due shall be and
continue to be a Default or Event of Default as provided in
Section 7.1, and at
any time thereafter and until the entire amount then due has been
paid, the Bank
shall be entitled to exercise any and all rights
conferred upon it herein upon
the occurrence of a Default or Event of Default
as provided in Section 7.1.
Borrower waives the right to direct the application of
any and all payments at
any time or times hereafter received by the
Bank from or on behalf of the
Borrower. Borrower agrees that the Bank shall
have the continuing exclusive
right to apply and to reapply any and all payments received at any
time or times
hereafter against the Indebtedness in
such manner as the Bank may deem
advisable, notwithstanding any entry by the
Bank upon any of its books and
records. Borrower expressly agrees that to the extent that the Bank
receives any
payment of benefit and such payment
or benefit, or any part thereof, is
subsequently invalidated, declared to be fraudulent or
preferential, set aside
or is required to be repaid to a trustee, receiver, or any other
party under any
bankruptcy act, state or federal law, common law or equitable
cause, then to the
extent of such payment or benefit, the Indebtedness or part
thereof intended to
be satisfied shall be revived and continued in full force and
effect as if such
payment or benefit had not been made and, further
any such repayment by the
Bank, to the extent that the Bank did not directly receive a
corresponding cash
payment, shall be added to and be additional Indebtedness payable
upon demand by
the Bank.
2.13 LIBOR UNLAWFUL OR UNAVAILABLE.
Should the Bank in its sole discretion
binding on Borrower determine that the introduction of or any
change in any law
or the interpretation of any law makes
it unlawful for the Bank to make or
maintain Revolving Loans bearing
interest based on LIBOR or that LIBOR has
become unavailable as an index, then, at the Bank's option and upon
its exercise
of such option, the interest rate on any
outstanding Revolving Loans shall
thenceforth bear interest at the Prime Variable Rate.
3. CONDITIONS TO OBLIGATIONS OF BANK.
3.1 Conditions Precedent to
Effectiveness of Agreement and Obligations of
Bank. At Bank's sole and absolute option and for its benefit,
the effectiveness
of this Agreement and Bank's obligations
hereunder are conditioned upon the
satisfaction of each and all of the following
conditions on or before March 4,
2008:
3.1.1
BORROWER DOCUMENTS EXECUTED AND FILED
AND FEES PAID. The
Borrower shall have executed
(or caused to be executed) and delivered to
the Bank the following in form and
substance acceptable to Bank:
3.1.1.1 This Agreement;
3.1.1.2 The Revolving Credit Note;
3.1.1.3 Copy of Borrower's Bylaws,
including all amendments
thereto and
restatements thereof, which shall have been certified
by
the
Secretary or Assistant Secretary of the Borrower as of the
Funding
Date first
occurring as being complete, accurate and in effect; and
3.1.1.4 A copy of resolutions of the Board of
Directors of the
Borrower authorizing the execution, delivery and
performance of this
Agreement, the borrowing hereunder, the Revolving Credit Note
and any
other
documents contemplated by this Agreement, which shall have
been
certified by
the Secretary or Assistant Secretary of the Borrower
as
of the
Funding Date first occurring as being complete, accurate and in
effect.
3.1.2
PAYMENT OF FEES. Borrower shall have paid the Minimum Annual
Fee
and the Preparation Fees in accordance
with Sections 2.9.1 and 2.9.3.
3.1.3
APPROVAL OF BANK COUNSEL. All actions, proceedings,
instruments
and documents required to carry out
the transactions contemplated by this
Agreement or incidental
thereto and all other related legal matters shall
have been satisfactory to and
approved by legal counsel for the Bank, and
said counsel shall have
been furnished with such certified copies
of
actions and proceedings and
such other instruments and documents as they
shall have reasonably requested.
<PAGE>
3.2
CONDITIONS PRECEDENT TO ALL DISBURSEMENTS. The obligations of
the
Bank to make any Revolving
Loan on any Funding Date, including, but not
limited to, the
Funding Date first occurring,
are subject to the
occurrence, prior to or on the Funding
Date related to such Revolving Loan,
of each of the following conditions
as well as other conditions set forth
in this Agreement:
3.2.1 BANK SATISFACTION. The Bank
shall not know or have any
reason to
believe that, as of such Funding Date:
3.2.1.1 Any Default or Event of Default has occurred and
is
continuing;
3.2.1.2 Any warranty or representation set forth in
Section
4 of this Agreement shall not be true and correct; or
3.2.1.3 Any provision of law, any order of any court or
any
regulation, rule or interpretation thereof
shall have had any
Material Adverse Effect on Borrower's financial condition, or
on
the validity or enforceability of this Agreement, the
Revolving
Credit Note or any other Loan Document.
3.3
OTHER DOCUMENTS TO BE PROVIDED BY BORROWER. No later
than thirty
(30) days after the Effective
Date, Borrower shall provide to Bank the
following documents:
3.3.1 Copy of Borrower's Articles of Incorporation including
all
amendments thereto and restatements
thereof, and all other charter
documents of
the Borrower, all of which shall have been certified
by
the
Maryland Department of Corporations
or similar governmental
authority in the state in
which Borrower is
organized and
incorporated, as of a date within thirty days of
the Funding Date
first
occurring;
3.3.2 Certified copy of Borrower's Good Standing certificate
from
the
California Secretary of State, dated as of a date
within thirty
days of the
Funding Date first occurring.
4. WARRANTIES AND REPRESENTATIONS.
On a continuing basis from the date
of this Agreement until the later of
(a) the Termination Date or (b) the date on which
the Indebtedness is paid in
full and the Borrower has performed all of its
other obligations hereunder,
Borrower represents and warrants to the Bank that:
4.1 CORPORATE EXISTENCE
AND POWER. (a) Borrower is a corporation duly
organized, validly existing and in good standing under the
laws of the State of
Maryland and in good standing under the
laws of, and is authorized to do
business in, the State of California, (b) Borrower has
the power and authority
to own its properties and assets and to carry out
its business as now being
conducted and is qualified to do
business and in good standing in
every
jurisdiction wherein such qualification is necessary, (c) Borrower
has the power
and authority to execute, deliver and perform this Agreement, to
borrow money in
accordance with its terms, to execute, deliver and perform
the Revolving Credit
Note and other documents contemplated hereby, and to do any and all
other things
required of it hereunder, (d) Borrower is a
qualified real estate investment
trust as defined in Section 856 of the Internal Revenue Code
(or any successor
provision thereto) and has no knowledge of any
circumstance that is likely to
lead to its failure to qualify as such a real estate
investment trust; (e) the
execution, delivery and performance of the
Loan Documents will not result in
Borrower being disqualified as such a real estate
investment trust; and (f)
Borrower has made and will timely make
all filings with and obtained all
consents of the Securities and Exchange Commission required under
the Securities
Act of 1933 (as amended from time to time) or the Security
Exchange Act of 1934
(as amended from time to time) in connection with the
execution, delivery and
performance by Borrower of the Loan Documents.
4.2 AUTHORIZATION AND APPROVALS. The
execution, delivery and performance of
this Agreement, the borrowings
hereunder and the execution, delivery
and
performance of the Revolving Credit Note,
and other documents contemplated
hereby (a) have been duly authorized by all requisite
corporate action of the
Borrower, (b) do not require registration with or
consent or approval of, or
other action by, any federal,
state or other governmental authority
or
regulatory body, or, if such registration, consent or
approval is required, the
same has been obtained and disclosed
in writing to the Bank, (c) will not
violate any provision of law, any
order of any court or other agency of
government, the Articles of Incorporation and Bylaws of
Borrower, any provision
of any indenture, note, agreement or other instrument to which the
Borrower is a
party, or by which it or any of its properties or assets are bound,
(d) will not
be in conflict with, result in a breach of or constitute (with or
without notice
or passage of time) a default under any such indenture, note,
agreement or other
instrument, and (e) will not result in the creation or
imposition of any lien,
charge or encumbrance of any nature
whatsoever upon any of the properties or
assets of the Borrower (other than in favor
of the Bank and as contemplated
hereby).
4.3 VALID AND BINDING
AGREEMENT. This Agreement is, and the
Revolving
Credit Note, and all other
documents contemplated hereby will
be, when
delivered, valid, binding, and
enforceable obligations of the Borrower, in
accordance with their terms.
<PAGE>
4.4 ACTIONS, SUITS
OR PROCEEDINGS. There are no
actions, suits or
proceedings, at law or in equity, and no proceedings before any
arbitrator or by
or before any governmental commission, board,
bureau, or other administrative
agency, pending, or, to the best knowledge of the
Borrower, threatened against
or affecting the Borrower or any of its Subsidiaries or any
properties or rights
of the Borrower or any of its Subsidiaries,
which, if adversely determined,
could materially impair the right of the Borrower or any of
its Subsidiaries to
carry on business substantially as now
conducted or could have a Material
Adverse Effect upo
