LOAN AGREEMENT
BETWEEN
LIBERTY PROPERTY LIMITED PARTNERSHIP
and
LIBERTY PROPERTY TRUST
AND
THE FIRST NATIONAL BANK OF BOSTON
TABLE OF CONTENTS
PAGE
1. DEFINITIONS OF RULES OF INTERPRETATION..................... 1
1.1. Definitions......................................... 1
1.2. Rules of Interpretation............................. 14
2. REVOLVING CREDIT FACILITY.................................. 15
2.1. Commitment to Lend; Limitation on Total Commitment.. 15
2.2. Reduction of Commitment............................. 16
2.3. The Notes........................................... 16
2.4. Interest on Loans................................... 17
2.5. Requests for Loans.................................. 17
2.6. Conversion Options.................................. 17
2.7. Funds for Loans..................................... 18
3. REPAYMENT OF THE LOANS..................................... 19
3.1. Maturity; Term Extension Option..................... 19
3.2. Mandatory Repayments of Loan........................ 20
3.3. Option Repayments of Loans.......................... 20
4. CERTAIN GENERAL PROVISIONS................................. 21
4.1. Revolving Credit Facility Fees and Agent's Fee...... 21
4.2. Commitment Fee...................................... 21
4.3. Funds for Payments.................................. 21
4.4. Computations........................................ 22
4.5. Additional Costs, Etc............................... 22
4.6. Capital Adequacy.................................... 23
4.7. Certificate......................................... 24
4.8. Indemnity........................................... 24
4.9. Interest or Overdue Amounts......................... 24
4.10. Inability to Determine Eurodollar Rate.............. 24
4.11. Illegality.......................................... 25
4.12. Replacement of Banks................................ 25
5. COLLATERAL SECURITY; NO LIMITATION ON RECOURSE.............. 25
5.1. Collateral Security.................................. 25
5.2. No Limitation on Recourse............................ 25
5.3. Additional Properties................................ 26
5.4. Conditions to Approval of Additional Properties...... 26
5.5. Release of Mortgaged Properties...................... 27
6. REPRESENTATION AND WARRANTIES............................... 26
6.1. Authority, Etc....................................... 27
6.2. Governmental Approval................................ 28
6.4. Financial Statements................................. 29
6.5. No Material Changes, Etc............................. 30
6.6. Franchises, patents, Copyrights, Etc................. 30
6.7. Litigation........................................... 30
6.8. No Materially Adverse Contracts, Etc................. 30
6.9. Compliance With Other Instruments, Laws, Etc......... 31
6.10. Tax Status........................................... 31
6.11. Event of Default..................................... 31
6.12. Investment Company Act............................... 31
6.13. Absence of Financing Statements, Etc................. 31
6.14. Setoff, Etc.......................................... 31
6.15. Certain Transactions................................. 31
6.16. Benefit Plans: Multiemployer Plans: Guaranteed
Pension Plans...................................... 32
6.17. Regulations U and X.................................. 32
6.18. Environmental Compliance............................. 32
6.19. Subsidiaries and Affiliates.......................... 34
6.20. Major Leases......................................... 34
6.21. Loan Documents....................................... 34
6.22. Mortgaged Properties................................. 34
7. AFFIRMATIVE COVENANTS OF THE BORROWER....................... 37
7.1. Punctual Payment..................................... 37
7.2. Maintenance of Office................................ 37
7.3. Records and Accounts................................. 37
7.4. Financial Statements, Certificates and Information... 37
7.5. Notices.............................................. 39
7.6. Existence; Maintenance of REIT Status; Maintenance
Properties......................................... 40
7.7. Insurance............................................ 41
7.8. Taxes................................................ 41
7.9. Inspection of Properties and Books................... 41
7.10. Compliance with Laws, Contracts, Licenses,
and Permits........................................ 42
7.11. Use of Proceeds...................................... 42
7.12. Appraisals........................................... 42
7.13. Leases; Lease Approvals.............................. 42
7.14. Further Assurance.................................... 43
7.15. Environmental Indemnification........................ 43
7.16. Response Actions..................................... 43
7.17. Environmental Assessments............................ 43
7.18. Employee Benefit Plans............................... 44
7.19. Required Interest Rate Contracts..................... 45
8. CERTAIN NEGATIVE COVENANTS OF THE BORROWER.................. 45
8.1. Restrictions on Indebtedness......................... 45
8.2. Restrictions on Liens, Etc........................... 45
8.3. Restrictions on Investments.......................... 46
8.4. Merger, Consolidation and Disposition of Properties.. 47
8.5. Sale and Leaseback................................... 48
8.6. Compliance with Environmental Laws................... 48
8.7. Distributions........................................ 48
8.8. Leases............................................... 48
9. FINANCIAL COVENANTS OF THE BORROWER......................... 48
9.1. Appraised Value...................................... 49
9.2. Minimum Debt Service Coverage........................ 49
9.3. Total Liabilities to Total Assets.................... 49
9.4. Minimum Tangible Net Worth........................... 49
9.5. Total Operating Cash Flow to Interest Expense........ 49
9.6. Total Operating Cash Flow to Senior Interest Expense. 49
9.7. EBITDA to Fixed Charges.............................. 49
10. CONDITIONS TO EFFECTIVENESS................................. 49
10.1 Loan Documents....................................... 49
10.2. Certified Copies of Organization Documents; Good
Standing Certificates.............................. 49
10.3. By-laws; Resolutions................................. 50
10.4. Incumbency Certificate; Authorized Signers........... 50
10.5. Opinions of Counsel Concerning Organization and
Loan Documents..................................... 50
10.6. Payment of Fees...................................... 50
10.7. Validity of Liens.................................... 50
10.8. Survey............................................... 50
10.9. Title Insurance; Title Exception Documents........... 51
10.10. Major Leases......................................... 51
10.11. Estoppel Agreements.................................. 51
10.12. Certificates of Insurance............................ 51
10.13. Hazardous Substance Assessments...................... 51
10.14. Evidence of Compliance with Laws and Permits......... 51
10.15. Appraisals........................................... 51
10.16. Inspecting Engineers' Reports........................ 51
10.17. UCC Lien Searches.................................... 52
11. CONDITIONS TO ALL BORROWINGS................................ 52
11.1 Representations True; No Event of Default;
Compliance Certificate............................. 52
11.2. No Legal Impediment.................................. 52
11.3. Governmental Regulation.............................. 52
11.4. Proceedings and Documents............................ 52
12. EVENTS OF DEFAULT; ACCELERATION; ETC........................ 53
12.1. Events of Default and Acceleration................... 53
12.2. Termination of Commitments........................... 55
12.3. Remedies............................................. 55
12.4. Distribution of Collateral Proceeds.................. 56
12.5. Addition of Real Estate Assets to Cure Default....... 56
13. SETOFFS.................................................... 57
14. THE AGENT.................................................. 58
14.1. Authorization....................................... 58
14.2. Employees and Agents................................ 58
14.3. No Liability........................................ 58
14.4. No Representations.................................. 58
14.5. Payments............................................ 59
14.6. Holders of Notes.................................... 60
14.7. Indemnity........................................... 60
14.8. Agent as Bank....................................... 60
14.9. Resignation......................................... 60
14.10. Notification of Defaults and Events of Default...... 60
14.11. Duties in the Case of Enforcement................... 61
15. EXPENSES................................................... 61
16. INDEMNIFICATION............................................ 62
17. SURVIVAL OF COVENANTS, ETC. ............................... 63
18. ASSIGNMENT; PARTICIPATIONS; ETC. .......................... 63
18.1. Conditions to Assignment by Banks................... 63
18.2. Certain Representations and Warranties; Limitations;
Covenants......................................... 63
18.3. Register............................................ 64
18.4. New Notes........................................... 64
18.5. Participations...................................... 65
18.6. Pledge by Lender.................................... 65
18.7. No Assignment by Borrower........................... 66
18.8. Disclosure.......................................... 66
19. NOTICES, ETC............................................... 66
20. GOVERNING LAW; CONSENT TO JURISDICTION AND SERVICES........ 66
21. HEADINGS................................................... 67
22. COUNTERPARTS............................................... 67
23. ENTIRE AGREEMENT........................................... 67
24. WAIVER OF JURY TRIAL AND CERTAIN DAMAGE CLAIMS............. 67
25. CONSENTS, AMENDMENTS, WAIVERS, ETC......................... 68
26. SEVERABILITY............................................... 68
Exhibit A..........Form of Note
Exhibit B..........Form of Loan Request
Exhibit C..........Form of Compliance Certificate
Exhibit D..........Form of Estoppel Agreement
Exhibit E..........Opinion Requirements
Exhibit F..........Form of Assignment and Acceptance
Schedule 1.........Banks; Domestic and Eurodollar Lending Offices
Schedule 1.1.......Mortgaged Properties and Allocated Loan Amounts
Schedule 1.2.......Commitments and Commitment Percentages
Schedule 1.3.......Related Companies, Guarantor Subsidiaries and
Permitted Joint Ventures
Schedule 6.3.......Title to Properties
Schedule 6.7.......Litigation
Schedule 6.15......Insider Transactions
Schedule 6.18......Environmental Reports
Schedule 6.22(d)...Engineering Reports
Schedule 6.22(l)...Rent Rolls
Schedule 6.22(m)...Service Agreements
Schedule 6.22(n)...Other Material Agreements
Schedule 8.3(d)....Investments
LOAN AGREEMENT
This LOAN AGREEMENT is made as of the __ day of December, 1996, by and
among LIBERTY PROPERTY LIMITED PARTNERSHIP, a Pennsylvania limited
partnership (the "Borrower"), LIBERTY PROPERTY TRUST, a Maryland trust
(the "Company") and THE FIRST NATIONAL BANK OF BOSTON, a national
banking association ("FNBB"), the other lending institutions which are
listed on Schedule 1, (the "Banks") and THE FIRST NATIONAL BANK OF
BOSTON, as agent for itself and such other lending institutions (the
"Agent").
WHEREAS, the Borrower has requested and FNBB has agreed to provide a
revolving credit facility, and to attempt to syndicate such facility to
other lending institutions, and Borrower has agreed to provide real
property collateral and other collateral to FNBB and such other lending
institutions;
NOW, THEREFORE, to accomplish these purposes, the Agent, the Borrower
and the Banks hereby agree as follows:
1. DEFINITIONS OF RULES OF INTERPRETATION
1.1. Definitions. The following terms shall have the meanings set
forth in this l or elsewhere in the provisions of this Agreement
referred to below:
Additional Properties. Real Estate Assets which hereafter become
Mortgaged Properties pursuant to 5.3.
Affiliated Banks. Any commercial bank which is (i) the parent
corporation of any of the Banks, (ii) a wholly-owned subsidiary of any
of the Banks or (iii) a wholly-owned subsidiary of the parent
corporation of any of the Banks.
Agent. The First National Bank of Boston acting as agent for the
Banks or any successor agent.
Agent's Head Office. The Agent's head office located at 100
Federal Street, Boston, Massachusetts 02110, or at such other location
as the Agent may designate from time to time.
Agreement. This Loan Agreement, including the Schedules and
Exhibits hereto.
Allocated Loan Amount. With respect to each Mortgaged Property
the amount set forth on Schedule 1.1 hereto as such schedule may be
subsequently revised by the Agent to reflect the addition of Mortgaged
Properties pursuant to 5.3, the release of Mortgaged Properties pursuant
to 5.5 and any updated Appraisals which may be obtained pursuant to
7.12.
Appraisals. Appraisals of the value of the Mortgaged Properties
determined on an "as is" market value basis, prepared in writing
independently and impartially by qualified MAI appraisers selected and
retained by the Agent and paid for by Borrower, the form and substance
of such appraisals and final determination of market value of the
Mortgaged Properties thereunder to be reviewed and subject to approval
by the Requisite Banks based on their respective reviews of such
appraisals pursuant to their internal appraisal review policies and
procedures. All appraisals shall be prepared in accordance with the
Uniform Standards of Professional Appraisal Practice, Supplemental
Standards Applicable To Federally Related Transactions, as further
described in Title XI of the "Financial Institutions Reform, Recovery
and Enforcement Act of 1989" ("FIRREA"), and any additional standards
and conditions required for appraisals prepared for the Requisite Banks.
All Appraisals shall disregard any value associated with any unimproved
land or unoccupied building expansion projects located on the applicable
Mortgaged Property.
Appraised Value. The market value of each of the Mortgaged
Properties, determined by the Requisite Banks based upon the most recent
Appraisals obtained pursuant to 5.4(b), 7.12 or 10.14.
Assignment and Acceptance. See 18.
Assignments of Leases and Rents. The assignments of rents and
leases from the Mortgagor to the Agent pursuant to which the Mortgagor
shall grant and assign to the Agent as agent for the Banks a security
interest in and assignment of the Mortgagor's interest as lessor with
respect to all Leases and rents thereunder of all or any part of the
Mortgaged Properties as security for the Obligations.
Balance Sheet Date. September 30, 1996.
Banks. FNBB and the other lending institutions listed from time to
time on Schedule 1 hereto and any other Person who becomes an assignee
of any rights of a Bank pursuant to 18 or a Person who acquires all or
substantially all of the stock or assets of a Bank.
Base Rate. The higher of (a) the annual rate of interest announced
from time to time by FNBB at the Agent's Head Office as its "base rate",
and (b) one half of one percent (1/2%) above the overnight federal funds
effective rate as published by the Board of Governors of the Federal
Reserve System, as in effect from time to time.
Base Rate Loans. Those Loans bearing interest calculated by
reference to the Base Rate.
Borrower. As defined in the preamble hereto.
Buildings. The buildings, structures and other improvements now
or hereafter located on the Mortgaged Properties.
Building Service Equipment. All apparatus, fixtures and articles
of personal property owned by the Mortgagor now or hereafter attached to
or used or procured for use in connection with the operation or
maintenance of any Building located on or included in the Mortgaged
Properties, including, but without limiting the generality of the
foregoing, all engines, furnaces, boilers, stokers, pumps, heaters,
tanks, dynamos, motors, generators, switchboards, electrical equipment,
heating, plumbing, lifting and ventilating apparatus, air-cooling and
air-conditioning apparatus, gas and electric fixtures, elevators,
escalators, fittings, and machinery and all other equipment of every
kind and description, used or procured for use in the operation of the
Buildings (except apparatus, fixtures or articles of personal property
belonging to lessees or other occupants of such building or to persons
other than the Mortgagor unless the same be abandoned by any such lessee
or other occupant or person), together with any and all replacements
thereof and additions thereto.
Business Day. Any day on which banking institutions in Boston,
Massachusetts, are open for the transaction of banking business and, in
the case of Eurodollar Rate Loans, also a day which is a Eurodollar
Business Day.
Capitalized Leases. Leases under which the Borrower is the lessee
or obligor, the discounted future rental payment obligations under which
are required to be capitalized on the balance sheet of the Borrower in
accordance with generally accepted accounting principles.
CERCLA. See 6.18.
Code. The Internal Revenue Code of 1986, as amended and in effect
from time to time.
Collateral. All of the properties of the Borrower or of any
Guarantor that are or are intended to be subject to the security
interests, liens and mortgages created by the Security Documents,
including, without limitation, the Mortgaged Properties, the Leases, the
Permits and the Service Agreements.
Commitment. With respect to each Bank, the amount set forth from
time to time on Schedule 1.2 hereto as the amount of such Bank's
commitment to make Loans to the Borrower.
Commitment Percentage. With respect to each Bank, the percentage
set forth from time to time on Schedule 1.2 hereto as such Bank's
percentage of the Total Commitment.
Conversion Request. A notice given by the Borrower to the Agent
of its election to convert or continue a Loan in accordance with 2.6.
Default. See 12.1.
Distribution. The declaration or payment of any dividend or
distribution of cash or cash equivalents to the shareholders of the
Company or the limited partners of the Borrower, or any distribution to
any officer, employee or director of the Borrower or the Company, other
than employee compensation consistent with past practices.
Dollars or $. Dollars in lawful currency of the United States of
America.
Domestic Lending Office. Initially, the office of each Bank
designated as such in Schedule 1 hereto; thereafter, such other office
of such Bank, if any, located within the United States that will be
making or maintaining Base Rate Loans.
Drawdown Date. The date on which any Loan is made or is to be
made, and the date on which any Loan is converted or continued in
accordance with 2.6.
EBITDA. The Borrower's earnings before interest, taxes,
depreciation and amortization, as determined in accordance with
generally accepted accounting principles.
Effective Date. The date upon which this Agreement shall become
effective pursuant to 10.
Eligible Assignee. Any of (a) a commercial bank organized under
the laws of the United States, or any State thereof or the District of
Columbia, and having total assets in excess of $1,000,000,000; (b) a
savings and loan association or savings bank organized under the laws of
the United States, or any State thereof or the District of Columbia, and
having a net worth of at least $100,000,000, calculated in accordance
with generally accepted accounting principles; (c) a commercial bank
organized under the laws of any other country which is a member of the
Organization for Economic Cooperation and Development (the "OECD"), and
having total assets in excess of $1,000,000,000, provided that such bank
is acting through a branch or agency located in the country in which it
is organized or another country which is also a member of the OECD; and
(d) the central bank of any country which is a member of the OECD.
Employee Benefit Plan. Any employee benefit plan within the
meaning of 3 (3) of ERISA maintained or contributed to by the Borrower
or any ERISA Affiliate, other than a Multiemployer Plan.
Environmental Laws. See 6.18(a).
Environmental Reports. Reports addressed to the Agent (or
addressed to the Borrower with an acceptable reliance letter addressed
to the Agent) prepared by environmental engineering firms acceptable to
the Agent relating to environmental site assessments conducted with
respect to the Mortgaged Properties described in Schedule 6.18 hereto
and conducted with respect to prospective Additional Properties pursuant
to 5.3.
ERISA. The Employee Retirement Income Security Act of 1974, as
amended and in effect from time to time.
ERISA Affiliate. Any Person which is treated as a single employer
with the Borrower under 414 of the Code.
ERISA Reportable Event. A reportable event with respect to a
Guaranteed Pension Plan within the meaning of 4043 of ERISA and the
regulations promulgated thereunder as to which the requirement of notice
has not been waived.
Eurocurrency Reserve Rate. For any day with respect to a
Eurodollar Rate Loan, the maximum rate (expressed as a decimal) at which
any of the Banks would be required to maintain reserves under Regulation
D of the Board of Governors of the Federal Reserve System (or any
successor or similar regulations relating to such reserve requirements)
against "Eurocurrency Liabilities" (as that term is used in Regulation
D) , if such liabilities were outstanding. The Eurocurrency Reserve Rate
shall be adjusted automatically on and as of the effective date of any
change in the Eurocurrency Reserve Rate.
Eurodollar Business Day. Any day on which commercial banks are
open for international business (including dealings in Dollar deposits)
in London or such other eurodollar interbank market as may be selected
by the Agent in its sole discretion acting in good faith.
Eurodollar Lending Office. Initially, the office of each Bank
designated as such in Schedule 1 hereto; thereafter, such other office
of such Bank, if any, that shall be making or maintaining Eurodollar
Rate Loans.
Eurodollar Rate. For any Interest Period with respect to a
Eurodollar Rate Loan, the rate per annum equal to the quotient (rounded
upwards to the nearest 1/16 of one percent) of (a) the rate at which the
Agent is offered Dollar deposits two Eurodollar Business Days prior to
the beginning of such Interest Period in an interbank eurodollar market
where the eurodollar and foreign currency and exchange operations of the
Agent are customarily conducted for delivery on the first day of such
Interest Period for the number of days comprised therein and in an
amount comparable to the amount of the Eurodollar Rate Loan to which
such Interest Period applies, divided by (b) a number equal to 1.00
minus the Eurocurrency Reserve Rate.
Eurodollar Rate Loans. Loans bearing interest calculated by
reference to the Eurodollar Rate.
Event of Default. See 12.1.
Fixed Charges. With respect to any fiscal period of the Borrower,
an amount equal to the sum of (i) Interest Expense, (ii) capitalized
interest determined in accordance with generally accepted accounting
principles, (iii) regularly scheduled installments of principal payable
and (except to the extent refinanced with replacement Indebtedness)
current maturities with respect to all Indebtedness of Borrower, plus
(iv) all dividend payments due to the holders of any preferred stock of
the Company or any limited partnership interests in the Borrower.
Fixed Rate Prepayment Fee. See 3.3.
FNBB. See preamble.
Funds From Operations. With respect to any fiscal period of the
Borrower, an amount equal to the Borrower's Funds From Operations
determined in accordance with the definition approved by the National
Association of Real Estate Investment Trusts.
Generally Accepted Accounting Principles. Principles that are (a)
consistent with the principles promulgated or adopted by the Financial
Accounting Standards Board and its predecessors, as in effect from time
to time and (b) consistently applied with past financial statements of
the Borrower adopting the same principles; provided that a certified
public accountant would, insofar as the use of such accounting
principles is pertinent, be in a position to deliver an unqualified
opinion (other than a qualification regarding changes in generally
accepted accounting principles) as to financial statements in which such
principles have been properly applied.
Guaranteed Pension Plan. Any employee pension benefit plan within
the meaning of 3(2) of ERISA maintained or contributed to by the
Borrower or any ERISA Affiliate the benefits of which are guaranteed on
termination in full or in part by the PBGC pursuant to Title IV of
ERISA, other than a Multiemployer Plan.
Guarantor. Each of the Company and the Guarantor Subsidiaries.
Guarantor Subsidiaries. The partnerships and corporations
designated as Guarantor Subsidiaries on Schedule 1.3 hereto and any
other partnerships or corporations hereafter approved by the Requisite
Banks which are at least 89% owned by Borrower and which execute and
deliver a Guaranty.
Guaranty. The Unconditional Guaranty of Payment and Performance
from each Guarantor to the Agent pursuant to which such Guarantor has
guaranteed the Obligations.
Hazardous Substances. See 6.18(b).
Indebtedness. All obligations, contingent and otherwise, that in
accordance with generally accepted accounting principles should be
classified upon the obligor's balance sheet as liabilities, or to which
reference should be made by footnotes thereto, including in any event
the following whether or not so classified: (a) the Obligations, (b)
all debt and similar monetary obligations for borrowed money, whether
direct or indirect; (c) all liabilities secured by any mortgage, pledge,
negative pledge, security interest, lien, negative lien, charge, or
other encumbrance existing on property owned or acquired subject
thereto, whether or not the liability secured thereby shall have been
assumed; (d) all guarantees, endorsements and other contingent
obligations whether direct or indirect in respect of indebtedness or
obligations of others, including any obligation to supply funds to or in
any manner to invest in, directly or indirectly, the debtor, to purchase
indebtedness, or to assure the owner of indebtedness against loss,
through an agreement to purchase goods, supplies, or services for the
purpose of enabling the debtor to make payment of the indebtedness held
by such owner or otherwise, and the obligations to reimburse the issuer
in respect of any letters of credit; and (e) joint venture and
partnership obligations, contingent or otherwise of the type set forth
in (a) through (d) above.
Interest Expense. With respect to any fiscal period of the
Borrower, an amount equal to the sum of the following with respect to
all Indebtedness (including without limitation Subordinated
Indebtedness) of the Borrower and the Related Companies: (i) total
interest expense, accrued in accordance with generally accepted
accounting principles plus (ii) the amortization of loan acquisition
costs.
Interest Payment Date. As to any Base Rate Loan or Eurodollar Rate
Loan, the first day of each calendar month.
Interest Period. With respect to each Loan, (a) initially, the
period commencing on the Drawdown Date of such Loan and ending on the
last day of one of the periods set forth below, as selected by the
Borrower in a Loan Request (i) for any Base Rate Loan, the last day of
the calendar month; and (ii) for any Eurodollar Rate Loan, 1, 2, 3 or 6
months; and (b) thereafter, each period commencing on the last day of
the next preceding Interest Period applicable to such Loan and ending on
the last day of one of the periods set forth above, as selected by the
Borrower in a Conversion Request; provided that all of the foregoing
provisions relating to Interest Periods are subject to the following:
(A) if any Interest Period with respect to a Eurodollar Rate
Loan would otherwise end on a day that is not a Eurodollar Business Day,
that Interest Period shall be extended to the next succeeding Eurodollar
Business Day unless the result of such extension would be to carry such
Interest Period into another calendar month, in which event such
Interest Period shall end on the immediately preceding Eurodollar
Business Day;
(B) if any Interest Period with respect to a Base Rate Loan
would end on a day that is not a Business Day, that Interest Period
shall end on the next succeeding Business Day;
(C) if the Borrower shall fail to give notice as provided in
2.6, the Borrower shall be deemed to have requested a conversion of the
affected Eurodollar Rate Loan to a Base Rate Loan on the last day of the
then current Interest Period with respect thereto;
(D) any Interest Period relating to any Eurodollar Rate Loan
that begins on the last Eurodollar 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
Eurodollar Business Day of a calendar month; and
(E) the Borrower may not select any Interest Period relating
to any Eurodollar Rate Loan that would extend beyond the Maturity Date,
or if the Term Extension Option is exercised, the Term Extension
Maturity Date.
Investments. All expenditures made and all liabilities incurred
(contingently or otherwise) for the acquisition of stock, partnership or
membership interests or Indebtedness of, or for loans, advances, capital
contributions or transfers of property to, or in respect of any
guaranties (or other commitments as described under Indebtedness), or
obligations of, any Person. In determining the aggregate amount of
Investments outstanding at any particular time: (a) the amount of any
Investment represented by a guaranty shall be taken at not less than the
principal amount of the obligations guaranteed and still outstanding;
(b) there shall be included as an Investment all interest accrued with
respect to Indebtedness constituting an Investment unless and until such
interest is paid; (c) there shall be deducted in respect of each such
Investment any amount received as a return of capital (but only by
repurchase, redemption, retirement, repayment, liquidating dividend or
liquidating distribution) ; (d) there shall not be deducted in respect
of any Investment any amounts received as earnings on such Investment,
whether as dividends, interest or otherwise, except that accrued
interest included as provided in the foregoing clause (b) may be
deducted when paid; and (e) there shall not be deducted from the
aggregate amount of Investments any decrease in the value thereof.
Leases. Leases, licenses and agreements whether written or oral,
relating to the use or occupation of space in or on the Buildings or on
the Mortgaged Properties by persons other than Mortgagor, including but
not limited to the leases listed on Schedule 6.22(1).
Loan Documents. This Agreement, the Notes, the Guaranties, the
Security Documents, and any and all other agreements, documents and
instruments now or hereafter evidencing, securing or otherwise relating
to the Loans.
Loan Request. See 2.5.
Loans. Loans made or to be made by the Banks to the Borrower
pursuant to 2.
Major Lease. A Lease of 25,000 square feet or more of the gross
leasable area of a Building located on a Mortgaged Property and any
guaranty of such Lease.
Major Tenants. As to any Major Lease, those tenants that are
parties to that Major Lease and any guarantors of those tenants.
Material Adverse Effect means a material adverse effect on (i) the
business, Mortgaged Properties, results of operations or financial
condition of the Borrower and the Related Companies taken as a whole or
(ii) the ability of the Borrower or any Guarantor to perform its
obligations under the Loan Documents, or (iii) the validity or
enforceability of any of the Loan Documents or the remedies or material
rights of the Agent or the Banks thereunder.
Maturity Date. December 13, 1997, or such earlier date on which
the Loans shall become due and payable pursuant to the terms hereof.
Maximum Loan Amount. Maximum Loan Amount shall mean the least of
the following: (i) the maximum amount of Loans which may be outstanding
without causing a violation of Section 9.1; (ii) the maximum amount of
Loans which may be outstanding without causing a violation of Section
9.2; and (iii) the Total Commitment.
Mortgaged Properties. The (a) Real Estate Assets described on
Schedule 1.1 hereto and such other Real Estate Assets which may be
subsequently conveyed to the Agent as Additional Properties to secure
the Obligations in accordance with 5.3 hereof, excluding from the
foregoing any Real Estate Assets which the Agent may release pursuant to
5.5 hereof, as such Real Estate Assets are more particularly described
in the Security Deeds; (b) the Buildings and Building Service Equipment
located thereon and (to the extent assignable) all Permits relating
thereto; and (c) all other property incident to any of same described in
any Security Document or other Loan Document.
Mortgagor. With respect to each of the Mortgaged Properties, the
owner thereof.
Multi-employer Plan. Any multiemployer plan within the meaning of
3(37) of ERISA maintained or contributed to by the Borrower or any ERISA
Affiliate.
Net Offering Proceeds. All cash proceeds received after the date
hereof by the Borrower or the Company as a result of the sale of common,
preferred or other classes of stock of the Company or the issuance of
limited partnership interests in the Borrower less customary costs and
discounts of issuance paid by Company or Borrower in connection
therewith.
Net Operating Income. With respect to any fiscal period of the
Borrower and with respect to any one or more of the Real Estate Assets,
the total rental and other operating income from the operation of such
Real Estate Assets after deducting all expenses and other proper charges
incurred by the Borrower in connection with the operation of the
Mortgaged Properties during such fiscal period, including, without
limitation, real estate taxes and bad debt expenses, but before payment
or provision for Fixed Charges, income taxes, and depreciation,
amortization, and other non-cash expenses, all as determined in
accordance with generally accepted accounting principles.
Notes. See 2.3.
Obligations. All indebtedness, obligations and liabilities of the
Borrower or any Guarantor to any of the Banks and the Agent,
individually or collectively, under this Agreement or any of the other
Loan Documents or in respect of any of the Loans or the Notes or other
instruments at any time evidencing any thereof, whether existing on the
date of this Agreement or arising or incurred hereafter, direct or
indirect, joint or several, absolute or contingent, matured or
unmatured, liquidated or unliquidated, secured or unsecured, arising by
contract, operation of law of otherwise.
Outstanding. With respect to the Loans, the aggregate unpaid
principal thereof as of any date of determination.
PBGC. The Pension Benefit Guaranty Corporation created by 4002 of
ERISA and any successor entity or entities having similar
responsibilities.
Permits. All governmental permits, licenses, and approvals
necessary for the lawful operation and maintenance of the Mortgaged
Properties.
Permitted Acquisition. The acquisition by Borrower or any
Guarantor of Real Estate Assets which, in the aggregate, are primarily
leased or intended to be leased primarily for industrial or office
purposes (including "flex" and warehouse uses)..
Permitted Joint Ventures. Any entity in which Borrower has any
direct or indirect ownership interest, except the Company and the
Related Companies, including general partnerships, corporations, trusts
and limited liability companies, which own or propose to develop
industrial or office properties provided that neither Borrower or any
Guarantor shall have any recourse liability for the Indebtedness of such
entity. Permitted Joint Ventures existing on the date hereof are set
forth in Schedule 1.3.
Permitted Build-To-Suit Developments. Permitted Developments with
respect to which, prior to the start of construction, at least sixty
percent (60%) of the gross leasable area of the buildings to be
constructed pursuant thereto are subject to executed Leases having an
average term of not less than four (4) years and which obligate the
tenants named therein to accept occupancy and commence paying rent
promptly upon the issuance of a certificate of occupancy with respect
thereto.
Permitted Developments. The construction of any new buildings or
the construction of additions expanding existing buildings or the
rehabilitation of the existing buildings (other than normal refurbishing
and tenant fit up work when one tenant leases space previously occupied
by another tenant) relating to any Real Estate Assets of the Borrower or
any of the Related Companies and each Permitted Development shall be
counted for purposes of 8.3 from the time of commencement of the
applicable construction work until a final certificate of occupancy has
been issued with respect to such project.
Permitted Liens. Liens, security interests and other encumbrances
permitted by 8.2.
Person. Any individual, corporation, partnership, trust,
unincorporated association, business, or other legal entity, and any
government or any governmental agency or political subdivision thereof.
Prepayment Date. See 3.3.
Pro Forma Debt Service Charges for the Mortgaged Properties. For
any fiscal quarter of the Borrower, an amount determined by the Agent
based on a twenty (20) year mortgage style amortization schedule,
calculated on the Pro Forma Principal Amount and an interest rate equal
to the greater of (i) ten percent (10%) per annum or (ii) the then
current ten (10) year U.S. Treasury bill yield plus two percent (2%).
Pro Forma Principal Amount. (a) With respect to Compliance
Certificates delivered pursuant to 7.4(e), the maximum principal amount
outstanding at any time during the applicable fiscal quarter; (b) with
respect to Compliance Certificates delivered pursuant to 2.5(a) or 11.1,
the principal amount outstanding after giving effect to the requested
Loan; (c) with respect to Compliance Certificates delivered pursuant to
5.5(a) or 8.4(b), the principal amount outstanding after giving effect
to any proposed sale or transfer including any payments on the Loans to
be made in connection therewith.
Properties. All Real Estate Assets, Real Estate, and all other
assets, including, without limitation, intangibles and personalty owned
by the Borrower.
Real Estate. All real property at any time owned, leased (as
lessee or sublessee) or operated by the Borrower, any Guarantor, or any
of the Related Companies or any Permitted Joint Venture.
Real Estate Assets. Those fixed and tangible properties
consisting of land, buildings and/or other improvements owned by the
Borrower, by any Guarantor, by any of the Related Companies or by any
Permitted Joint Venture at the relevant time of reference thereto,
including without limitation, the Mortgaged Properties, but excluding
all leaseholds other than leaseholds under ground leases having an
unexpired term of 30 years.
Record. The grid attached to any Note, or the continuation of
such grid, or any other similar record, including computer records,
maintained by any Bank with respect to any Loan referred to in such
Note.
Recourse Indebtedness. All Indebtedness except Indebtedness with
respect to which recourse for payment is contractually limited (except
for customary exclusions) to specific assets encumbered by a lien
securing such Indebtedness.
Related Companies. The entities listed and described on Schedule
1.3 hereto, or thereafter, any entity whose financial statements are
consolidated or combined with the Borrower's pursuant to generally
accepted accounting principles, or any ERISA Affiliate.
Release. See 6.18(c)(iii).
Required Interest Rate Contracts. Interest rate swap, cap or
similar agreements providing for interest rate protection, at an all-in
rate not higher than one percent (1%) per annum above the average
interest rate applicable to Eurodollar Rate Loans hereunder at the time
such interest rate protection agreements are acquired, covering that
portion of Borrower's Variable Rate Indebtedness equal to the lesser of
(i) the Total Commitment or (ii) the amount by which Borrower's Variable
Rate Indebtedness exceeds 20% of Total Assets.
Requisite Banks. As of any date, the Banks whose aggregate
Commitments constitute at least sixty-six percent (66%) of the Total
Commitment provided that the Agent must always be among the Requisite
Banks and provided that the Commitments of any Delinquent Banks shall be
disregarded when determining the Requisite Banks.
Responsible Officer. With respect to the Company, any one of its
Chief Financial Officer, Treasurer, Executive Vice Presidents or Senior
Vice Presidents.
Security Deeds. The mortgages and deeds of trust from the
Mortgagor to the Agent pursuant to which the Mortgagor shall convey the
Mortgaged Properties as security for the Obligations.
Security Documents. The Security Deeds, the Assignments of Rents
and Leases and the UCC-1 financing statements.
Senior Interest Expense. With respect to any fiscal period of the
Borrower, an amount equal to Interest Expense minus the portion thereof
relating to Subordinated Indebtedness plus all capitalized interest
determined in accordance with generally accepted accounting principles.
Service Agreements. All service agreements between the Borrower
and third parties, whether written or oral, relating to the operation,
maintenance, security, finance or insurance of the Mortgaged Properties.
Subordinated Indebtedness. All Indebtedness of Borrower which is
expressly subordinated and junior in right of payment to the prior
payment in full of the Obligations provided that the subordination
provisions applicable to such Indebtedness are satisfactory to the
Agent. On the date hereof Subordinated Indebtedness consists of the
Indebtedness of Borrower with respect to its Exchangeable Subordinated
Debentures due 2001 issued and outstanding pursuant to the Subordinated
Debenture Indenture.
Subordinated Debenture Indenture. The Indenture dated as of June
23, 1994 among the Borrower, the Company and The First National Bank of
Boston as Trustee relating to the Borrower's Exchangeable Subordinated
Debentures due 2001.
Subsidiary. Any corporation, association, trust, or other
business entity of which the designated parent or other controlling
Person shall at any time own directly or indirectly through a Subsidiary
or Subsidiaries at least a majority (by number of votes) of the
outstanding Voting Interests.
Surveys shall mean instrument surveys of the Mortgaged Properties,
which shall show the location of all Buildings, easements and utility
lines on the Mortgaged Properties, shall be sufficient to remove the
survey exception from the Title Policy, shall show that all Buildings
are within the lot lines of the Mortgaged Properties, shall not show any
material encroachments by others, and shall show whether or not the
Mortgaged Properties are located in any flood hazard district as
established by the Federal Emergency Management Agency or any successor
agency or are located in any flood plain, flood hazard or wetland
protection district established under federal, state or local law and in
addition shall meet the then applicable standards of the Agent.
Tangible Net Worth. Total Assets minus Total Liabilities minus
all intangibles determined in accordance with generally accepted
accounting principles.
Term Extension Maturity Date. December 13, 1998.
Term Extension Option. See 3.1.
Title Insurance Company shall mean Commonwealth Land Title
Insurance Company.
Title Policy shall mean for each Mortgaged Property an ALTA
standard form title insurance policy issued by the Title Insurance
Company (with such reinsurance or co-insurance as the Agent may require,
any such reinsurance to be with direct access endorsements) insuring the
priority of the Security Deed and Assignment of Leases and Rents and
that the Mortgagor holds good and clear record marketable fee simple
title to the Mortgaged Property, subject only to the encumbrances
permitted by the Security Deed and which shall not contain exceptions
for mechanics liens, persons in occupancy (other than Leases listed on
Schedule 6.22(1)) or matters which would be shown by a survey (other
than matters approved by the Agent in its reasonable discretion), shall
not insure over any matter except to the extent that any such
affirmative insurance is acceptable to the Agent in its sole discretion,
and shall contain such endorsements and affirmative insurance as the
Agent in its reasonable discretion may require, including but not
limited to (a) comprehensive endorsement, (b) variable rate of interest
endorsement, (c) usury endorsement, (d) revolving credit endorsement,
(e) doing business endorsement, (f) ALTA form 3.1 zoning endorsement (g)
survey(same-as) endorsement (h) access endorsement, (i) tie-in
endorsement and (j) a first loss endorsement, to the extent that such
endorsements are available in the state where the applicable Mortgaged
Property is located. The Title Policies with tie-in endorsements
referencing all other Title Policies shall have a face amount equal to
the Allocated Loan Amount of the applicable Mortgaged Properties. The
Title Policies without tie-in endorsements referencing all other Title
Policies shall have a face amount equal to the Appraised Value of the
applicable Mortgaged Properties.
Total Assets. The aggregate book value of all assets of the
Borrower and the Related Companies consolidated and determined in
accordance with generally accepted accounting principles plus
accumulated depreciation and amortization related to Real Estate Assets.
Total Commitment. The sum of the Commitments of the Banks, as in
effect from time to time.
Total Liabilities. The sum of the following (without duplication):
(i) all liabilities of the Borrower and the Related Companies
consolidated and determined in accordance with generally accepted
accounting principles, (ii) all Indebtedness of the Borrower and the
Related Companies whether or not so classified, including, without
limitation, all outstanding Loans under this Agreement, and (iii) the
balance available for drawing under letters of credit issued for the
account of the Borrower or any of the Related Companies.
Total Operating Cash Flow. With respect to any fiscal period of
the Borrower the sum of (i) Funds From Operations plus (ii) Interest
Expense minus (iii) a reserve for capital expenditures and leasing costs
equal to fifteen cents ($0.15) per year per square foot of the gross
leasable area of all Real Estate Assets owned by the Borrower or any of
the Related Companies, all as determined in accordance with generally
accepted accounting principles except that any rent leveling adjustments
shall be deducted from Funds From Operations.
Type. As to any Loan its nature as a Base Rate Loan or a
Eurodollar Rate Loan.
Unused Amount. See 4.2
Variable Rate Indebtedness. The Loans and all other Indebtedness
of the Borrower which bears interest at a rate which is not fixed
through the maturity of such Indebtedness.
Voting Interests. Stock or similar ownership interests, of any
class or classes (however designated), the holders of which are at the
time entitled, as such holders, (a) to vote for the election of a
majority of the directors (or persons performing similar functions) of
the corporation, association, partnership, trust or other business
entity involved, or (b) to control, manage or conduct the business of
the corporation, partnership, association, trust or other business
entity involved.
1.2. Rules of Interpretation.
(a) A reference to any document or agreement shall include such
document or agreement as amended, modified or supplemented from time to
time in accordance with its terms and the terms of this Agreement.
(b) The singular includes the plural and the plural includes the
singular.
(c) A reference to any law includes any amendment or modification
to such law.
(d) A reference to any Person includes its permitted
successors and permitted assigns.
(e) Accounting terms not otherwise defined herein have the
meanings assigned to them by generally accepted accounting principles
applied on a consistent basis by the accounting entity to which they
refer and, except as otherwise expressly stated, all use of accounting
terms with respect to the Borrower shall reflect the consolidation of
the financial statements of Borrower and the Related Companies.
(f) The words "include", "includes" and "including" are not
limiting.
(g) All terms not specifically defined herein or by
generally accepted accounting principles, which terms are defined in the
Uniform Commercial Code as in effect in Massachusetts, have the meanings
assigned to them therein.
(h) Reference to a particular "" refers to that section of
this Agreement unless otherwise indicated.
(i) The words "herein", "hereof", "hereunder" and words of
like import shall refer to this Agreement as a whole and not to any
particular section or subdivision of this Agreement.
(j) The words "so long as any Loan or Note is outstanding"
shall mean so long as such Loan or Note is not indefeasibly paid in full
in cash.
2. REVOLVING CREDIT FACILITY.
2.1. Commitment to Lend; Limitation on Total Commitment. Subject
to the provisions of 2.5 and the other terms and conditions set forth in
this Agreement, each of the Banks severally agrees to lend to the
Borrower and the Borrower may borrow, repay, and reborrow from time to
time between the Effective Date and the Maturity Date (or, if the Term
Extension Option is exercised, the Term Extension Maturity Date) upon
notice by the Borrower to the Agent given and approved by the Agent in
accordance with 2.5, such sums as are requested by the Borrower up to a
maximum aggregate principal amount outstanding (after giving effect to
all amounts requested) at any one time equal to such Bank's Commitment,
provided that the sum of the outstanding amount of the Loans (after
giving effect to all amounts requested) shall not at any time exceed the
Maximum Loan Amount. The Loans shall be made pro rata in accordance with
each Bank's Commitment Percentage and the Banks shall at all times
immediately adjust inter se any inconsistency between each Bank's
outstanding principal amount and each Bank's Commitment. Each request
for a Loan hereunder shall constitute a representation and warranty by
the Borrower that the conditions set forth in 10 or 11 (whichever is
applicable) have been satisfied on the date of such request and will be
satisfied on the proposed Drawdown Date of the requested Loan, provided
that the making of such representation and warranty by Borrower shall
not limit the right of any Bank not to lend upon a determination by the
Requisite Banks that such conditions have not been satisfied.
2.2. Reduction of Commitment. The Borrower shall have the right
effective upon the extension of the Maturity Date pursuant to 3.1, upon
at least ten (10) Business Days' prior written notice to the Agent, to
reduce by $1,000,000 or an integral multiple of $100,000 in excess
thereof the unborrowed portion of the then Total Commitment, provided
that the Total Commitment shall not be reduced to less than $50,000,000,
whereupon the Commitments of the Banks shall be reduced pro rata in
accordance with their respective Commitment Percentages by the amount
specified in such notice. Upon the effective date of any such reduction,
the Borrower shall pay to the Agent for the respective accounts of the
Banks the full amount of any commitment fee then accrued on the amount
of the reduction. No reduction of the Commitments may be reinstated.
2.3. The Notes. The Loans shall be evidenced by separate
promissory notes of the Borrower in substantially the form of Exhibit A
hereto (each a "Note"), and completed with appropriate insertions. A
Note shall be payable to the order of each Bank in a principal amount
equal to such Bank's Commitment. The Borrower irrevocably authorizes
each Bank to make or cause to be made, at or about the time of the
Drawdown Date of any Loan or at the time of receipt of any payment of
principal on such Bank's Note, an appropriate notation on such Bank's
Record reflecting the making of such Loan or (as the case may be) the
receipt of such payment. The outstanding amount of the Loans set forth
on such Bank's Record shall (absent manifest error) be prima facie
evidence of the principal amount thereof owing and unpaid to such Bank,
but the failure to record, or any error in so recording, any such amount
on the Record shall not limit or otherwise affect the obligations of the
Borrower hereunder or under any Note to make payments of principal of or
interest on any Note when due.
2.4. Interest on Loans.
(a) Each Base Rate Loan shall bear interest for the period
commencing with the Drawdown Date thereof and ending on the last day of
the Interest Period with respect thereto at the Base Rate.
(b) Each Eurodollar Rate Loan shall bear interest for the
period commencing with the Drawdown Date thereof and ending on the last
day of the Interest Period with respect thereto at the rate of 160 basis
points per annum above the Eurodollar Rate determined for such Interest
Period.
(c) The Borrower unconditionally promises to pay interest
on each Loan in arrears on each Interest Payment Date with respect
thereto.
2.5. Requests for Loans.
(a) The Borrower shall give to the Agent written notice in
the form of Exhibit B hereto of each Loan requested hereunder (a "Loan
Request") no less than (a) two (2) Business Days prior to the proposed
Drawdown Date of any Base Rate Loan and (b) four (4) Eurodollar Business
Days prior to the proposed Drawdown Date of any Eurodollar Rate Loan.
Each such notice shall specify (i) the principal amount of the Loan
requested, (ii) the proposed Drawdown Date of such Loan, (iii) the
Interest Period for such Loan, and (iv) the Type of such Loan, and shall
be accompanied by a statement in the form of Exhibit C hereto signed by
a Responsible Officer setting forth in reasonable detail computations
evidencing compliance with the covenants contained in 9.1 through 9.7
hereof after giving effect to such requested Loan (a "Compliance
Certificate"). Promptly upon receipt of a Loan Request, the Agent shall
notify each of the Banks thereof and each Bank shall immediately notify
the Agent if it believes that any of the conditions contained in 11 of
this Agreement has not been met or waived. If such a notice is given
the Requisite Banks shall promptly determine whether all of the
conditions contained in 11 of this Agreement have been met or waived.
If no such notice is given by any Bank or if following such notice the
Requisite Banks determine that the conditions contained in 11 have been
met or waived, each of the Banks shall be obligated to fund its
Commitment Percentage of the requested Loans. Each such Loan Request
shall be irrevocable and binding on the Borrower and the Borrower shall
be obligated to accept the Loan requested from the Banks on the proposed
Drawdown Date. Each Loan Request shall be in a minimum aggregate amount
of $3,000,000 or an integral multiple of $1,000,000 in excess thereof.
(b) Notwithstanding anything contained in 2.5 (a) to the
contrary, in the event that the making of a requested Loan would cause
non-compliance with any of the covenants contained in 9.1 through 9.7
hereof, the Agent may, in its sole discretion, reduce the amount of the
Loan Request to an amount which would enable the Borrower to maintain
compliance with such otherwise defaulted covenant or covenants and
Borrower shall accept the Loan made pursuant to such reduced Loan
Request.
2.6. Conversion Options.
(a) The Borrower may elect from time to time to convert any
outstanding Loan to a Loan of another Type, provided that (i) with
respect to any such conversion of a Eurodollar Rate Loan to a Base Rate
Loan, the Borrower shall give the Agent at least three (3) Business
Days, prior written notice of such election; (ii) with respect to any
such conversion of a Eurodollar Rate Loan into a Base Rate Loan, such
conversion shall only be made on the last day of the Interest Period
with respect thereto; (iii) subject to the further proviso at the end of
this section and subject to 2.6(b) and 2.6(d) hereof with respect to any
such conversion of a Base Rate Loan to a Eurodollar Rate Loan, the
Borrower shall give the Agent at least four (4) Eurodollar Business
Days, prior written notice of such election and (iv) no Loan may be
converted into a Eurodollar Rate Loan when any Default or Event of
Default has occurred and is continuing. On the date on which such
conversion is being made, each Bank shall take such action as is
necessary to transfer its Commitment Percentage of such Loans to its
Domestic Lending Office or its Eurodollar Lending Office, as the case
may be. All or any part of outstanding Loans of any Type may be
converted as provided herein, provided further that each Conversion
Request relating to the conversion of a Base Rate Loan to a Eurodollar
Rate Loan shall be for an amount equal to $3,000,000 or an integral
multiple of $1,000,000 in excess thereof and shall be irrevocable by the
Borrower.
(b) Any Loans of any Type may be continued as such upon the
expiration of an Interest Period with respect thereto by compliance by
the Borrower with the notice provisions contained in 2.6 (a) ; provided
that no Eurodollar Rate Loan may be continued as such when any Default
or Event of Default has occurred and is continuing but shall be
automatically converted to a Base Rate Loan on the last day of the first
Interest Period relating thereto ending during the continuance of any
Default or Event of Default of which the officers of the Agent active
upon the Borrower's account have actual knowledge.
(c) In the event that the Borrower does not notify the
Agent of its election hereunder with respect to any Loan, such Loan
shall be automatically converted to a Base Rate Loan at the end of the
applicable Interest Period.
(d) The Borrower may not request a Eurodollar Rate Loan
pursuant to 2.5, elect to convert a Base Rate Loan to a Eurodollar Rate
Loan pursuant to 2.5(a) or elect to continue a Eurodollar Rate Loan
pursuant to 2.6(b) if, after giving effect thereto, there would be
greater than six (6) Eurodollar Rate Loans outstanding. Any Loan Request
for a Eurodollar Rate Loan that would create greater than six (6)
Eurodollar Rate Loans outstanding shall be deemed to be a Loan Request
for a Base Rate Loan.
2.7. Funds for Loans.
(a) Subject to 2.5 and other provisions of this Agreement,
not later than 11:00 a.m. (Boston time) on the proposed Drawdown Date of
any Loans, each of the Banks will make available to the Agent, at the
Agent's Head office, in immediately available funds, the amount of such
Bank's Commitment Percentage of the amount of the requested Loans. Upon
receipt from each Bank of such amount, and upon receipt of the documents
required by 10 or 11 (whichever is applicable) and the satisfaction of
the other conditions set forth therein, to the extent applicable, the
Agent will make available to the Borrower the aggregate amount of such
Loans made available to the Agent by the Banks. The failure or refusal
of any Bank to make available to the Agent at the aforesaid time and
place on any Drawdown Date the amount of its Commitment Percentage of
the requested Loans shall not relieve any other Bank from its several
obligation hereunder to make available to the Agent the amount of such
other Bank's Commitment Percentage of any requested Loans but shall not
obligate any other Bank or Agent to fund more than its Commitment
Percentage of the requested Loans or to increase its Commitment
Percentage.
(b) The Agent may, unless notified to the contrary by any
Bank prior to a Drawdown Date, assume that such Bank has made available
to the Agent on such Drawdown Date the amount of such Bank's Commitment
Percentage of the Loans to be made on such Drawdown Date, and the Agent
may (but it shall not be required to), in reliance upon such assumption,
make available to the Borrower a corresponding amount. If any Bank makes
available to the Agent such amount on a date after such Drawdown Date,
such Bank shall pay to the Agent on demand an amount equal to the
product of (i) the average computed for the period referred to in clause
(iii) below, of the weighted average interest rate paid by the Agent for
federal funds acquired by the Agent during each day included in such
period, times (ii) the amount of such Bank's Commitment Percentage of
such Loans, times (iii) a fraction, the numerator of which is the number
of days or portion thereof that elapsed from and including such Drawdown
Date to the date on which the amount of such Bank's Commitment
Percentage of such Loans shall become immediately available to the
Agent, and the denominator of which is 365. A statement of the Agent
submitted to such Bank with respect to any amounts owing under this
paragraph shall be prima facie evidence of the amount due and owing to
the Agent by such Bank.
3. REPAYMENT OF THE LOANS.
3.1. Maturity; Term Extension Option. (a) The Borrower
unconditionally promises to pay on the Maturity Date, and there shall
become absolutely due and payable on the Maturity Date, all of the Loans
outstanding on such date, together with any and all accrued and unpaid
interest and charges thereon unless prior to the Maturity Date the
Borrower elects the Term Extension Option pursuant to this 3.1.
(b) At any time prior to the Maturity Date, provided that
no Default or Event of Default has occurred and is continuing, the
Borrower shall have the option to extend the Maturity Date for one (1)
year subject to satisfaction of the following conditions: (a) the
Borrower shall acquire the Required Interest Rate Contracts, and (b) not
more than an aggregate of $10,000,000 of other Recourse Indebtedness of
Borrower has a maturity which is sooner than ninety days after the
extended Maturity Date. The Term Extension Option shall be exercised by
written notice to the Agent at least ten (10) Business Days prior to the
Maturity Date. Such written notice must be accompanied by payment of a
Term Extension option fee equal to twenty-five basis points (0.25%) of
the Total Commitment to be in effect after such extension taking into
account any reduction pursuant to 2.2.
3.2. Mandatory Repayments of Loan. If at any time the sum of the
outstanding amount of the Loans exceeds the Maximum Loan Balance, then
the Borrower shall immediately pay the amount of such excess to the
Agent for the respective accounts of the Banks for application to the
Loans.
3.3. Optional Repayments of Loans. The Borrower shall have the
right, at its election, to repay the outstanding amount of the Loans, as
a whole or in part, on any Business Day, without penalty or premium;
provided that the full or partial prepayment of the outstanding amount
of any Eurodollar Rate Loans made pursuant to this 3.3 may be made only
on the last day of the Interest Period relating thereto, except as set
forth below in this 3.3. The Borrower shall give the Agent no later than
10:00 a.m., Boston time, at least three (3) Business Days' prior written
notice of any prepayment pursuant to this 3.3 of any Base Rate Loans and
four (4) Eurodollar Business Days, notice of any proposed repayment
pursuant to this 3.3 of any Eurodollar Rate Loans, specifying the
proposed date of payment of Loans and the principal amount to be paid.
Each such partial prepayment of the Loans shall be in an integral
multiple of $100,000 and shall be accompanied by the payment of all
charges outstanding on all Loans and of accrued interest on the
principal repaid to the date of payment and shall be applied, in the
absence of instruction by the Borrower, first to the principal of Base
Rate Loans and then to the principal of Eurodollar Rate Loans.
Notwithstanding anything contained herein to the contrary, the Borrower
may make a full or partial prepayment of a Eurodollar Rate Loan on a
date other than the last day of the Interest Period relating thereto, if
all optional prepayments (in whole or in part) on such Loans shall be
accompanied by, and the Borrower hereby promises to pay, a prepayment
fee in an amount determined by the Agent in the following manner:
(i) Fixed Rate Prepayment Fee. Borrower acknowledges
that prepayment or acceleration of a Eurodollar Loan during an Interest
Period shall result in the Banks incurring additional costs, expenses
and/or liabilities and that it is extremely difficult and impractical to
ascertain the extent of such costs, expenses and/or liabilities. (For
all purposes of this Section, any Loan not being made as a Eurodollar
Rate Loan in accordance with the Loan Request therefor, as a result of
Borrower's cancellation thereof, shall be treated as if such Eurodollar
Rate Loan had been prepaid.) Therefore, on the date a Eurodollar Rate
Loan is prepaid or the date all sums payable hereunder become due and
payable, by acceleration or otherwise ("Prepayment Date"), Borrower will
pay to Agent, for the account of each Bank, (in addition to all other
sums then owing), an amount ("Fixed Rate Prepayment Fee") determined by
the Agent to be the amount, if any, by which (i) the amount of interest
which would have accrued on the prepaid Eurodollar Rate Loan for the
remainder of the Interest Period at the rate applicable to such
Eurodollar Rate Loan exceeds (ii) the amount of interest that would
accrue on a Eurodollar Rate Loan in the same amount for the same period
if the Eurodollar Rate were set on the Prepayment Date.
(ii) Upon the written notice to Borrower from Agent,
Borrower shall immediately pay to Agent, for the account of the Banks,
the Fixed Rate Prepayment Fee. Such written notice (which shall include
calculations in reasonable detail) shall, in the absence of manifest
error, be conclusive and binding on the parties hereto.
(iii) Borrower understands, agrees and acknowledges the
following: (i) no Bank has any obligation to purchase, sell and/or
match funds in connection with the use of the Eurodollar Rate as a basis
for calculating the rate of interest on a Eurodollar Rate Loan; (ii) the
Eurodollar Rate is used merely as a reference in determining such rate;
and (iii) Borrower has accepted the Eurodollar Rate as a reasonable and
fair basis for calculating such rate and a Fixed Rate Prepayment Fee.
Borrower further agrees to pay the Fixed Rate Prepayment Fee, if any,
whether or not a Bank elects to purchase, sell and/or match funds.
4. CERTAIN GENERAL PROVISIONS.
4.1. Revolving Credit Facility Fees and Agent's Fee. The
Borrower agrees to pay to the Agent a revolving credit facility fee and
agency fees in the amounts specified in the agreement regarding fees
between the Agent and the Borrower and the Agent shall be responsible
for any facility fees which it may agree to pay to the other Banks which
become a party to this Agreement.
4.2. Commitment Fee. The Borrower shall pay to the Agent for
the accounts of the Banks in accordance with their respective Commitment
Percentages a commitment fee calculated at the rates set forth below per
annum on the daily amount by which the Total Commitment (as it may have
been reduced pursuant to 2.2) exceeds the outstanding amount of Loans
(the "Unused Amount"):
Unused Amount Fee Rate
less than 1/3 of Total Commitment 15 basis points
at least 1/3 of Total Commitment
but less than 2/3 of Total Commitment 20 basis points
at least 2/3 of Total Commitment 25 basis points
The commitment fee shall not accrue until March 1, 1997. Thereafter,
the commitment fee shall be payable on the basis of the applicable
annual rate quarterly in arrears on the first day of each calendar
quarter for the immediately preceding calendar quarter commencing on the
first such date following the date hereof, with a final payment on the
Maturity Date or, if the Term Extension Option is exercised, the Term
Extension Maturity Date or any earlier date on which the Commitments
shall terminate.
4.3. Funds for Payments.
(a) All payments of principal, interest, closing fees,
commitment fees and any other amounts due hereunder (other than as
provided in 4.1, 4.5 and 4.6) or under any of the other Loan Documents,
and all prepayments, shall be made to the Agent, for the respective
accounts of the Banks, at the Agent's Head Office, in each case in
Dollars in immediately available funds.
(b) All payments by the Borrower hereunder and under any
of the other Loan Documents shall be made without setoff or counterclaim
and free and clear of and without deduction for any taxes, levies,
imposts, duties, charges, fees, deductions, withholdings, compulsory
liens, restrictions or conditions of any nature now or hereafter imposed
or levied by any jurisdiction or any political subdivision thereof or
taxing or other authority therein unless the Borrower is compelled by
law to make such deduction or withholding. If any such obligation is
imposed upon the Borrower with respect to any amount payable by it
hereunder or under any of the other Loan Documents, the Borrower shall
pay to the Agent, for the account of the Banks or (as the case may be)
the Agent, on the date on which such amount is due and payable hereunder
or under such other Loan Document, such additional amount in Dollars as
shall be necessary to enable the Banks or the Agent to receive the same
net amount which the Banks or the Agent would have received on such due
date had no such obligation been imposed upon the Borrower. The Borrower
will deliver promptly to the Agent certificates or other valid vouchers
for all taxes or other charges deducted from or paid with respect to
payments made by the Borrower hereunder or under such other Loan
Document.
4.4. Computations. All computations of interest on the Loans and of
other fees to the extent applicable shall be based on a 360-day year and
paid for the actual number of days elapsed. Except as otherwise provided
in the definition of the term "Interest Period" with respect to
Eurodollar Rate Loans, whenever a payment hereunder or under any of the
other Loan Documents becomes due on a day that is not a Business Day,
the due date for such payment shall be extended to the next succeeding
Business Day, and interest shall accrue during such extension. The
outstanding amount of the Loans as reflected on the Records from time to
time shall (absent manifest error) be considered correct and binding on
the Borrower unless within thirty (30) Business Days after receipt by
the Agent or any of the Banks from Borrower of any notice by the
Borrower of such outstanding amount, the Agent or such Bank shall notify
the Borrower to the contrary.
4.5. Additional Costs, Etc. If any present or future applicable law
which expression, as used herein, includes statutes, rules and
regulations thereunder and interpretations thereof by any competent
court or by any governmental or other regulatory body or official
charged with the administration or the interpretation thereof and
requests, directives, instructions and notices at any time or from time
to time hereafter made upon or otherwise issued to any Bank or the Agent
by any central bank or other fiscal, monetary or other authority
(whether or not having the force of law), shall:
(a) subject any Bank or the Agent to any tax, levy,
impost, duty, charge, fee, deduction or withholding of any nature with
respect to this Agreement, the other Loan Documents, such Bank's
Commitment or the Loans (other than taxes based upon or measured by the
income or profits of such Bank or the Agent), or
(b) materially change the basis of taxation (except for
changes in taxes on income or profits) of payments to any Bank of the
principal of or the interest on any Loans or any other amounts payable
to any Bank under this Agreement or the other Loan Documents, or
(c) impose or increase or render applicable (other than to
the extent specifically provided for elsewhere in this Agreement) any
special deposit, reserve, assessment, liquidity, capital adequacy or
other similar requirements (whether or not having the force of law)
against assets held by, or deposits in or for the account of, or loans
by, or commitments of an office of any Bank, or
(d) impose on any Bank any other conditions or
requirements with respect to this Agreement, the other Loan Documents,
the Loans, the Commitment, or any class of loans or commitments of which
any of the Loans or the Commitment forms a part;
and the result of any of the foregoing is
(i) to increase the cost to such Bank of making,
funding, issuing, renewing, extending or maintaining any of the Loans or
such Bank's Commitment, or
(ii) to reduce the amount of principal, interest or
other amount payable to such Bank or the Agent hereunder on account of
the Commitments or any of the Loans, or
(iii) to require such Bank or the Agent to make any
payment or to forego any interest or other sum payable hereunder, the
amount of which payment or foregone interest or other sum is calculated
by reference to the gross amount of any sum receivable or deemed
received by such Bank or the Agent from the Borrower hereunder, then,
and in each such case, the Borrower will, upon demand made by such Bank
or (as the case may be) the Agent at any time and from time to time and
as often as the occasion therefor may arise, pay to such Bank or the
Agent, to the extent permitted by law, such additional amounts as will
be sufficient to compensate such Bank or the Agent for such additional
cost, reduction, payment or foregone interest or other sum.
4.6. Capital Adequacy. If any present or future law,
governmental rule, regulation, policy, guideline or directive (whether
or not having the force of law) or the interpretation thereof by a court
or governmental authority with appropriate jurisdiction affects the
amount of capital required or expected to be maintained by banks or bank
holding companies and any Bank or the Agent determines that the amount
of capital required to be maintained by it is increased by or based upon
the existence of the Loans made or deemed to be made pursuant hereto,
then such Bank or the Agent may notify the Borrower of such fact, and
the Borrower shall pay to such Bank or the Agent from time to time on
demand, as an additional fee payable hereunder, such amount as such Bank
or the Agent shall determine in good faith and certify in a notice to
the Borrower to be an amount that will adequately compensate such Bank
or the Agent in light of these circumstances for its increased costs of
maintaining such capital. Each Bank and the Agent shall allocate such
cost increases among its customers in good faith and on an equitable
basis.
4.7. Certificate. A certificate setting forth any additional
amounts payable pursuant to 4.5 or 4.6 and a brief explanation of such
amounts which are due, submitted by any Bank or the Agent to the
Borrower, shall be prima facie evidence that such amounts are due and
owing.
4.8. Indemnity. In addition to the other provisions of this
Agreement regarding any such matters, the Borrower agrees to indemnify
each Bank and to hold each Bank harmless from and against any loss, cost
or reasonable expense (including loss of anticipated profits) that such
Bank may sustain or incur as a consequence of (a) a default by the
Borrower in payment of the principal amount of or any interest on any
Eurodollar Rate Loans as and when due and payable, including any such
loss or expense caused by Borrower's breach or other default and arising
from interest or fees payable by such Bank to lenders of funds obtained
by it in order to maintain its Eurodollar Rate Loans, (b) a default by
the Borrower in making a borrowing or conversion after the Borrower has
given (or is deemed to have given) a Loan Request or a Conversion
Request, and (c) the making of any payment of a Eurodollar Rate Loan or
the making of any conversion of a Eurodollar Rate Loan to a Base Rate
Loan on a day that is not the last day of the applicable Interest Period
with respect thereto, including interest or fees payable by such Bank to
lenders of funds obtained by it in order to maintain any such Eurodollar
Rate Loan.
4.9. Interest or Overdue Amounts. Overdue principal and (to the
extent permitted by applicable law) interest on the Loans and all other
overdue amounts payable hereunder or under any of the other Loan
Documents shall bear interest compounded monthly and payable on demand
at a rate per annum equal to four percent (4%) above the rate of
interest otherwise payable hereunder until such amount shall be paid in
full (after as well as before judgment) . In addition, the Borrower
shall pay to the Agent a late charge equal to three percent (3%) of any
amount of principal and/or interest and/or charges on the Loans which is
not paid within ten (10) days of the date when due.
4.10. Inability to Determine Eurodollar Rate. In the event,
prior to the commencement of any Interest Period relating to any
Eurodollar Rate Loan, the Agent shall determine that adequate and
reasonable methods do not exist for ascertaining the Eurodollar Rate
that would otherwise determine the rate of interest to be applicable to
any Eurodollar Rate Loan during any Interest Period, the Agent shall
forthwith give notice of such determination (which shall be conclusive
and binding on the Borrower) to the Borrower. In such event (a) any Loan
Request with respect to Eurodollar Rate Loans shall be automatically
withdrawn and shall be deemed a request for Base Rate Loans, (b) each
Eurodollar Rate Loan will automatically, on the last day of the then
current Interest Period thereof, become a Base Rate Loan, and (c) the
obligations of the Banks to make Eurodollar Rate Loans shall be
suspended until the Agent determines that the circumstances giving rise
to such suspension no longer exist, whereupon the Agent shall so notify
the Borrower.
4.11. Illegality. Notwithstanding any other provisions herein,
if any present or future law, regulation, treaty or directive or in the
interpretation or application thereof shall make it unlawful for any
Bank to make or maintain Eurodollar Rate Loans, such Bank shall
forthwith give notice of such circumstances to the Borrower and
thereupon (a) the Commitment of such Bank to make Eurodollar Rate Loans
or convert Loans of another Type to Eurodollar Rate Loans shall
forthwith be suspended and (b) the Eurodollar Rate Loans then
outstanding shall be converted automatically to Base Rate Loans on the
last day of each Interest Period applicable to such Eurodollar Rate
Loans or within such earlier period as may be required by law. The
Borrower hereby agrees promptly to pay to the Agent for the account of
such Bank, upon demand, any additional amounts necessary to compensate
such Bank for any costs incurred by such Bank in making any conversion
in accordance with this 4.11, including any interest or fees payable by
such Bank to lenders of funds obtained by it in order to make or
maintain its Eurodollar Rate Loans hereunder.
4.12. Replacement of Banks. If any of the Banks shall make a
notice or demand upon the Borrower pursuant to 4.5, 4.6, or 4.11 based
on circumstances or laws which are not generally applicable to the Banks
organized under the laws of the United States or any State thereof, the
Borrower shall have the right to replace such Bank with an Eligible
Assignee selected by the Borrower and approved by the Agent. In such
event the assignment shall take place on a date set by the Agent at
which time the assigning Bank and the Eligible Assignee shall enter into
an Assignment and Acceptance as contemplated by 18.1 (and clause (d)
thereof shall not be applicable) and the assigning Bank shall receive
from the Eligible Assignee or the Borrower a sum equal to the
outstanding principal amount of the Loans owed to the assigning Bank
together with accrued interest thereon plus the accrued commitment fee
under 4.2 allocated to the assigning Bank.
5. COLLATERAL SECURITY; NO LIMITATION ON RECOURSE.
5.1. Collateral Security. The Obligations shall be secured by
(i) a perfected first priority lien and security interest to be held by
the Agent (subject only to Permitted Liens) in the Mortgaged Properties,
pursuant to the terms of the Security Documents, (ii) a perfected first
priority lien and security interest to he held by the Agent in the
Leases and rents pursuant to the Assignments of Leases and Rents, and
(iii) the Guaranties. Each of the Security Documents shall secure all
of the Obligations and Allocated Loan Amounts shall not be deemed to in
any way limit the amount of the Obligations secured pursuant to any
Security Documents.
5.2. No Limitation on Recourse. Notwithstanding the foregoing
Collateral, the Obligations are full recourse obligations of the
Borrower and, to the extent provided in the applicable Guaranty, of the
Guarantors, and all of their respective Real Estate Assets and other
properties shall be available for the indefeasible payment in full in
cash and performance of the Obligations. Notwithstanding anything to
the contrary contained herein, the trustees of Liberty Property Trust
shall have no personal liability of any nature under this document. The
Agent and the Banks shall look solely to the assets of Liberty Property
Trust to satisfy any liability or recourse against Liberty Property
Trust hereunder.
5.3. Additional Properties.
(a) Additional Real Estate Assets owned by the Borrower may
become Mortgaged Properties with the approval of the Requisite Banks
provided that such Real Estate Assets satisfy the conditions set forth
in 5.4. In the event that the Requisite Banks grant such approval and
all of the conditions set forth in 5.4 are satisfied, the Agent shall
notify the Borrower and within ten (10) days thereafter the Mortgagor
shall execute and deliver to the Agent a Security Deed, an Assignment of
Rents and Leases and UCC-1 Financing Statements, which Security
Documents shall be in substantially the form of the Security Documents
executed and delivered herewith with such changes as the Agent may deem
desirable to address the laws of the State where the Additional Property
is located or the factual circumstances of the Additional Property. Such
Additional Properties shall be deemed to be Mortgaged Properties upon
the recording and filing of such Security Documents and the Agent's
receipt of satisfactory evidence thereof.
5.4. Conditions to Approval of Additional Properties. Prior to
acceptance of any Real Estate Asset to become an Additional Property
pursuant to 5.3, such property must satisfy the following conditions,
which may be modified or waived only by the written agreement of the
Requisite Banks:
(a) At least sixty percent (60%) of the gross leasable
area of the Buildings located on the Mortgaged Properties following the
addition of the Additional Property must be occupied pursuant to Leases
with respect to which the Agent shall have received an Estoppel
Agreement reasonably satisfactory to the Agent.
(b) An Appraisal of the Additional Property ordered by the
Agent and paid for by the Borrower shall have been approved by the
Requisite Banks.
(c) The Agent shall have received all of the items
relating to the Additional Property described in 10.8, 10.9, 10.10,
10.12, 10.13, 10.14, 10.16 and 10.17 and such items shall have been
approved by the Agent or the Requisite Banks as required by such
Sections.
(d) The Agent shall have received a Certificate executed
on behalf of the Borrower containing the representations and warranties
with respect to the Additional Property as are set forth in 6.18 and
6.22.
(e) The Agent shall have received updated certificates and
other items relating to the Borrower and the General Partner as
described in 10.2, 10.3 and 10.4 and a favorable opinion addressed to
the Banks and the Agent, in form and substance satisfactory to the Banks
and the Agent as to the matters described on Exhibit E relating to the
Loan Documents executed by Borrower with respect to the Additional
Property and relating to the laws of the state where the Additional
Property is located.
5.5. Release of Mortgaged Properties. The Borrower may request
that the Agent release any Mortgaged Property from the lien of the
Security Documents and the Agent shall approve any such request provided
that there is then no continuing Default or Event of Default under this
Agreement and the requested release will not result in any Default or
Event of Default under this Agreement and the Borrower delivers to the
Agent a pro-forma Compliance Certificate reasonably satisfactory to the
Agent demonstrating that the requested release will not result in a
violation of any of the covenants in 9.1 through 9.7. The Borrower may
request releases of a portion of a Mortgaged Property consisting of
undeveloped land to be developed by Borrower or sold provided that in
addition to the requirements set forth above, the Borrower shall also
submit such additional information as may be requested by the Agent
including, without limitation, (i) an updated survey and endorsements to
the Title Policy; (ii) an updated Appraisal of the remaining portion of
the Mortgaged Property and (iii) evidence that the division of the
Mortgaged Property pursuant to the requested release will not result in
violation of any zoning ordinance or other applicable laws and
ordinances. If the Borrower shall request the release of any Mortgaged
Property which is adjacent to any other Mortgaged Property which is not
to be simultaneously released, the Agent may require the establishment
of appropriate easements and maintenance agreements satisfactory to the
Agent relating to any shared utilities, drainage facilities, access
drives or walks, parking areas or other shared facilities.
6. REPRESENTATIONS AND WARRANTIES. The Borrower represents and
warrants to the Agent and each of the Banks as follows.
6.1. Authority; Etc.
(a) Organization; Good Standing. The Company (i) is a
Maryland real estate investment trust duly organized, validly existing
and in good standing under the laws of the State of Maryland, (ii) has
all requisite power to own its properties and conduct its business as
now conducted and as presently contemplated, and (iii) to the extent
required by law is in good standing as a foreign entity and is duly
authorized to do business in the States in which the Mortgaged
Properties are located and in each other jurisdiction where such
qualification is necessary except where a failure to be so qualified in
such other jurisdiction would not have a Materially Adverse Effect. The
Borrower is a Pennsylvania limited partnership, and each Guarantor
Subsidiary is a Pennsylvania limited partnership or a Pennsylvania
corporation, and each such entity is duly organized, validly existing
and in good standing under the laws of the State of its formation, has
all requisite power to own its properties and conduct its business as
presently contemplated and is duly authorized to do business in the
States in which the Mortgaged Properties owned by it are located and in
each other jurisdiction where such qualification is necessary except
where a failure to be so qualified in such other jurisdiction would not
have a Material Adverse Effect.
(b) Authorization. The execution, delivery and
performance of this Agreement and the other Loan Documents to which the
Borrower is to become a party and the transactions contemplated hereby
and thereby (i) are within the authority of the Borrower, (ii) have been
duly authorized by all necessary proceedings on the part of the Borrower
and the Company as general partner of Borrower, (iii) do not conflict
with or result in any breach or contravention of any provision of law,
statute, rule or regulation to which the Borrower or the Company is
subject or any judgment, order, writ, injunction, license or permit
applicable to the Borrower or the Company and (iv) do not conflict with
any provision of the Borrower's partnership agreement or Company's
declaration of trust, charter documents or bylaws, or any agreement
(except agreements as to which such a conflict would not result in a
Material Adverse Effect) or other instrument binding upon, the Borrower
or the Company or to which any of their properties are subject. The
execution, delivery and performance of the Guaranty and the other Loan
Documents to which any Guarantor is to become a party and the
transactions contemplated hereby and thereby (i) are within the
authority of such Guarantor, (ii) have been duly authorized by all
necessary proceedings on the part of such Guarantor, (iii) do not
conflict with or result in any breach or contravention of any provision
of law, statute, rule or regulation to which such Guarantor is subject
or any judgment, order, writ, injunction, license or permit applicable
to such Guarantor and (iv) do not conflict with any provision of such
Guarantor's charter documents or bylaws, partnership agreement,
declaration of trust, or any agreement (except agreements as to which
such a conflict would not result in a Material Adverse Effect) or other
instrument binding upon such Guarantor or to which any of such
Guarantor's properties are subject.
(c) Enforceability. The execution and delivery of this
Agreement and the other Loan Documents to which the Borrower is or is to
become a party will result in valid and legally binding obligations of
the Borrower enforceable against it in accordance with the respective
terms and provisions hereof and thereof, except as enforceability is
limited by bankruptcy, insolvency, reorganization, moratorium or other
laws relating to or affecting generally the enforcement of creditors'
rights and except to the extent that availability of the remedy of
specific performance or injunctive relief is subject to the discretion
of the court before which any proceeding therefor may be brought. The
execution and delivery of the Guaranty and the other Loan Documents to
which any Guarantor is or is to become a party will result in valid and
legally binding obligations of such Guarantor enforceable against such
Guarantor in accordance with the respective terms and provisions hereof
and thereof, except as enforceability is limited by bankruptcy,
insolvency, reorganization, moratorium or other laws relating to or
affecting generally the enforcement of creditors, rights and except to
the extent that availability of the remedy of specific performance or
injunctive relief is subject to the discretion of the court before which
any proceeding therefor may be brought.
6.2. Governmental Approvals. The execution, delivery and
performance by the Borrower and each Guarantor of this Agreement and the
other Loan Documents to which the Borrower or such Guarantor is or is to
become a party and the transactions contemplated hereby and thereby do
not require the approval or consent of, or filing with, any governmental
agency or authority other than those already obtained and the filing of
the Security Documents in the appropriate records office with respect
thereto.
6.3. Title to Properties.
(a) The Borrower holds good and clear record and
marketable fee simple title to the Mortgaged Properties, subject to no
rights of others, including any mortgages, leases, conditional sales
agreements, title retention agreements, liens or encumbrances except for
the Permitted Liens.
(b) Except as indicated on Schedule 6.3 hereto, the
Borrower owns all of the properties reflected in the balance sheet of
the Borrower as at the Balance Sheet Date or acquired since that date
(except properties sold or otherwise disposed of in the ordinary course
of business since that date), subject to no rights of others, including
any mortgages, leases, conditional sales agreements, title retention
agreements, liens or other encumbrances except Permitted Liens.
6.4. Financial Statements. The following financial statements
have been furnished to each of the Banks.
(a) A balance sheet of the Company as of the Balance Sheet
Date, and a statement of income, statement of changes in shareholders'
equity and statement of cash flows for the fiscal year then ended,
accompanied by an auditor's report prepared without qualification by
Ernst & Young. Such balance sheet and statements of income, of changes
in shareholders' equity and of cash flows have been prepared in
accordance with generally accepted accounting principles and fairly
present the financial condition of the Borrower and the Company as at
the close of business on the date thereof and the results of operations,
changes in shareholders' equity and cash flows for the fiscal year then
ended. There are no contingent liabilities of the Borrower or the
Company as of such date involving material amounts, known to the
officers of the Company not disclosed in said balance sheet and the
related notes thereto.
(b) A balance sheet and a statement of income, statement
of changes in shareholders' equity and statement of cash flows of the
Company for each of the fiscal quarters of the Company ended since the
Balance Sheet Date which by the Company's Responsible Officer certifies
has been prepared in accordance with generally accepted accounting
principles consistent with those used in the preparation of the annual
audited statements delivered pursuant to paragraph (a) above and fairly
represents the financial condition of the Borrower as at the close of
business on the dates thereof and the results of operations, of changes
in shareholders' equity and of cash flows for the fiscal quarters then
ended (subject to year-end adjustments). There are no contingent
liabilities of the Borrower or the Company as of such dates involving
material amounts, known to the officers of the Company, not disclosed in
such balance sheets and the related notes thereto.
(c) With respect to each Mortgaged Property, a statement
prepared by the Borrower of the rental and other income of the Borrower
from the operation of such Mortgaged Property for each of the fiscal
quarters of the Borrower ended since the Balance Sheet Date, and all
operating and other costs and expenses incurred by the Borrower in
connection with such Mortgaged Property during such fiscal quarters,
certified by a Responsible Officer of the Company as fairly presenting
the results of operation of the Borrower with respect to such Mortgaged
Property for such fiscal period.
(d) With respect to each Mortgaged Property acquired by
Borrower since October 1, 1996 or to be acquired by Borrower, copies of
all financial statements, copies of all material financial information
which any Guarantor or Borrower has obtained from the prior owners.
6.5. No Material Changes, Etc. Since the Balance Sheet Date,
there has occurred no material adverse change in the financial condition
or assets or business of the Borrower as shown on or reflected in the
balance sheet of the Borrower as of the Balance Sheet Date, or the
statement of income for the fiscal year then ended, other than changes
in the ordinary course of business that have not had any Material
Adverse Effect either individually or in the aggregate.
6.6. Franchises, Patents, Copyrights, Etc. The Borrower
possesses all franchises, patents, copyrights, trademarks, trade names,
licenses and permits, and rights in respect of the foregoing, adequate
for the conduct of its business substantially as now conducted without
known conflict with any rights of others, including all Permits except
to the extent the Borrower's failure to possess the same does not have a
Material Adverse Effect.
6.7. Litigation. Except as listed and described on Schedule 6.7
hereto, there are no actions, suits, proceedings or investigations of
any kind pending or, to Borrower's knowledge, threatened against the
Borrower, any Guarantor or any of the Related Companies before any
court, tribunal or administrative agency or board that, if adversely
determined, might, either in any case or in the aggregate, have a
Material Adverse Effect or materially impair the right of the Borrower,
any Guarantor or any of the Related Companies to carry on business
substantially as now conducted by it, or which question the validity of
this Agreement or any of the other Loan Documents, any action taken or
to be taken pursuant hereto or thereto, or any lien or security interest
created or intended to be created pursuant hereto or thereto, or which
will materially adversely affect the ability of the Borrower or any
Guarantor to pay and perform the Obligations in the manner contemplated
by this Agreement and the other Loan Documents.
6.8. No Materially Adverse Contracts, Etc. The Borrower is not
subject to any charter, trust or other legal restriction, or any
judgment, decree, order, rule or regulation that has or is expected in
the future to have a Material Adverse Effect. The Borrower is not a
party to any contract or agreement that has or is expected, in the
judgment of the Borrower's officers, to have any Material Adverse
Effect.
6.9. Compliance With Other Instruments, Laws, Etc. The Borrower
is not in violation of any provision of the Borrower's partnership
agreement or of the Company's charter documents, by-laws, or any
agreement or instrument to which it may be subject or by which it or any
of its properties may be bound or any decree, order, judgment, statute,
license, rule or regulation, in any of the foregoing cases in a manner
that could result in the imposition of substantial penalties or have a
Material Adverse Effect.
6.10. Tax Status. The Borrower (a) has made or filed all federal
and state income and all other tax returns, reports and declarations
required by any jurisdiction to which it is subject, and (b) has paid
all taxes and other governmental assessments and charges shown or
determined to be due on such returns, reports and declarations, except
those being contested in good faith and by appropriate proceedings.
There are no unpaid taxes in any material amount claimed to be due by
the taxing authority of any jurisdiction, and the officers of the
Borrower know of no basis for any such claim.
6.11. Event of Default. No Default or Event of Default has
occurred and is continuing.
6.12. Investment Company Act. The Borrower is not an "investment
company", or an "affiliated company" or a "principal underwriter" of an
"investment company", as such terms are defined in the Investment
Company Act of 1940.
6.13. Absence of Financing Statements, Etc. There is no financing
statement, security agreement, chattel mortgage, real estate mortgage,
equipment lease, financing lease, option, encumbrance or other document
existing, filed or recorded with any filing records, registry, or other
public office, that purports to cover, affect or give notice of any
present or possible future lien or encumbrance on, or security interest
in, any Collateral, except those in favor of the Agent or Permitted
Liens.
6.14. Setoff, Etc. The Collateral and the Agent's rights with
respect to the Collateral are not subject to any setoff, claims,
withholdings or other defenses. Either the Borrower or a Guarantor is
the owner of the Collateral free from any lien, security interest,
encumbrance and any other claim or demand, except for the Permitted
Liens.
6.15. Certain Transactions. Except as set forth on Schedule 6. 15
hereto, none of the officers or employees of the Borrower or any
Guarantor are presently a party to any transaction with the Borrower or
any Guarantor (other than for services as employees, officers and
trustees), including any contract, agreement or other arrangement
providing for the furnishing of services to or by, providing for rental
of real or personal property to or from, or otherwise requiring payments
to or from any officer, trustee or such employee or, to the knowledge of
the Borrower and the Company, any corporation, partnership, trust or
other entity in which any officer, trustee or any such employee or
natural Person related to such officer, trustee or employee or other
Person in which such officer, trustee or employee has a direct or
indirect beneficial interest has a substantial interest or is an officer
or trustee.
6.16. Benefit Plans: Multiemployer Plans: Guaranteed Pension
Plans. As of the date hereof as to any Employee Benefit Plan,
Multiemployer Plan or Guaranteed Pension Plan, neither the Borrower nor
any ERISA Affiliate maintains or contributes to any Employee Benefit
Plan, Multiemployer Plan or Guaranteed Pension Plan. To the extent that
Borrower or any ERISA Affiliate hereafter maintains or contributes to
any Employee Benefit Plan or Guaranteed Pension Plan, it shall at all
times do so in compliance with 7.20 hereof.
6.17. Regulations U and X. No portion of any Loan is to be used
for the purpose of purchasing or carrying any "margin security" or
"margin stock" as such terms are used in Regulations U and X of the
Board of Governors of the Federal Reserve System, 12 C.F.R. Parts 221
and 224.
6.18. Environmental Compliance. The Borrower has caused Phase I
environmental assessments to be conducted with respect to the Mortgaged
Properties and which reports are listed on Schedule 6.18, the results of
which are set forth in those certain environmental reports delivered
previously to the Agent (collectively, the "Environmental Reports"). As
used in this 6.18 only the term "Real Estate" shall mean any of the
Mortgaged Properties and any other Real Estate if the existence of any
of the facts, events or circumstances described in this 6.18 with
respect to such other Real Estate would have a Material Adverse Effect.
Based on the information contained in the Environmental Reports,
Borrower makes the following representations and warranties:
(a) Except as may be set forth in the Environmental
Reports or otherwise on Schedule 6.18, to the best of Borrower's
knowledge none of the Borrower, any Guarantor, any of the Related
Companies or any operator of the Real Estate or any portion thereof, or
any operations thereon is in violation, or alleged material violation,
of any judgment, decree, order, law, license, rule or regulation
pertaining to environmental matters (hereinafter collectively referred
to as the "Environmental Laws"), including without limitation, those
arising under the Resource Conservation and Recovery Act ("RCRA"), the
Comprehensive Environmental Response, Compensation and Liability Act of
1980 as amended ("CERCLA"), the Superfund Amendments and Reauthorization
Act of 1986 ("SARA"), the Federal Clean Water Act, the Federal Clean Air
Act, the Toxic Substances Control Act, or any state or local statute,
regulation, ordinance, order or decree relating to health, safety or the
environment, including, without limitation, the environmental statutes,
regulations, orders and decrees of the States in which any of the
Mortgaged Properties may be located, which violation involves the
Mortgaged Properties or would have a Material Adverse Effect.
(b) Except as set forth on Schedule 6.18 attached hereto,
none of the Borrower, the Guarantors or the Related Companies has
received written notice from any third party including, without
limitation any federal, state or local governmental authority with
respect to any of the Mortgaged Properties or otherwise if the same
would have a Material Adverse Effect, (i) that it has been identified by
the United States Environmental Protection Agency ("EPA") as a
potentially responsible party under CERCLA with respect to a site listed
on the National Priorities List, 40 C.F.R. Part 300 Appendix B (1986) ;
(ii) that any hazardous waste, as defined by 42 U.S.C. 9601(5), any
hazardous substances as defined by 42 U.S.C. 9601(14), any pollutant or
contaminant as defined by 42 U.S.C. 9601(33) or any toxic substances,
oil or hazardous materials or other chemicals or substances regulated by
any Environmental Laws ("Hazardous Materials") which it has generated,
transported or disposed of have been found at any site at which a
federal, state or local agency or other third party has conducted or has
ordered that the Borrower, any Guarantor or any of the Related Companies
conduct a remedial investigation, removal or other response action
pursuant to any Environmental Law; or (iii) that it is or shall be a
named party to any claim, action, cause of action, complaint, or legal
or administrative proceeding (in each case, contingent or otherwise)
arising out of any third party's incurrence of costs, expenses, losses
or damages of any kind whatsoever in connection with the release of
Hazardous Materials.
(c) Except as set forth on Schedule 6.18 attached hereto
and/or in the Environmental Reports, (i) to the best of Borrower's
knowledge no portion of the Real Estate has been used for the handling,
processing, storage or disposal of Hazardous Materials except in
material compliance with applicable Environmental Laws; and except as
set forth on Schedule 6.18, no underground tank or other underground
storage receptacle for Hazardous Materials is located on any portion of
the Real Estate; (ii) in the course of any activities conducted by the
Borrower, any Guarantor, any of the Related Companies or the operators
of any Real Estate, or to the best of Borrower's knowledge, any ground
or space tenants on any Real Estate, no Hazardous Materials have been
generated or are being used on the Real Estate except in material
compliance with applicable Environmental Laws; (iii) there has been no
present, or to the best of Borrower's knowledge past, releasing,
spilling, leaking, pumping, pouring, emitting, emptying, discharging,
injecting, escaping, disposing or dumping (a "Release") or threatened
Release of Hazardous Materials on, upon, into or from the Mortgaged
Properties or the other Real Estate, which Release in the case of Real
Estate other than the Mortgaged Properties would have a material adverse
effect on the value of any of such Real Estate or adjacent real property
or the environment; (iv) to the best of Borrower's knowledge, there have
been no Releases on, upon, from or into any real property in the
vicinity of any of the Real Estate which, through soil or groundwater
contamination, may have come to be located on, and which would have a
material adverse effect on the value of, the Real Estate; and (v) to the
best of Borrower's knowledge, any Hazardous Materials that have been
generated on any of the Real Estate have been transported off-site only
by carriers having an identification number issued by the EPA, treated
or disposed of only by treatment or disposal facilities maintaining
valid permits as required under applicable Environmental Laws, which
transporters and facilities have been and are, to the best of the
Borrower's knowledge, operating in material compliance with such permits
and applicable Environmental Laws. Notwithstanding that any
representation contained herein may be limited to the knowledge of the
Borrower, any such limitation shall not affect the covenants specified
in 7.10 or elsewhere in this Agreement.
(d) None of the Real Estate is or shall be subject to any
applicable environmental clean-up responsibility law or environmental
restrictive transfer law or regulation, solely by virtue of the
transactions set forth herein and contemplated hereby.
6.19. Subsidiaries and Affiliates. The Borrower has no
Subsidiaries except for the Related Companies listed on Schedule 1.3 and
does not have an ownership interest in any entity whose financial
statements are not consolidated with the Borrower's except for the
Permitted Joint Ventures listed on Schedule 1.3. The Company is not a
partner in any partnership other than Borrower and is not a member of
any limited liability company. The Company owns no material assets
other than its partnership interest in Borrower.
6.20. Major Leases. The Borrower has delivered to the Agent
copies of the Major Leases.
6.21. Loan Documents. All of the representations and warranties
of the Borrower or any Guarantor made in the other Loan Documents or any
document or instrument delivered or to be delivered to the Agent or the
Banks pursuant to or in connection with any of such Loan Documents are
true and correct in all material respects.
6.22. Mortgaged Properties. The Borrower makes the following
additional representations and warranties concerning the Mortgaged
Properties:
(a) Off-Site Utilities. All water, sewer, electric, gas,
telephone and other utilities are installed to the property lines of the
Mortgaged Properties and, except in the case of drainage facilities, are
connected to the Buildings located thereon with valid permits and are
adequate to service the Buildings in full compliance with applicable
law; and the Buildings are properly and legally connected directly to,
and served exclusively by, public water and sewer systems. No easements
over land of others not yet obtained are required for any such
utilities, and no drainage of surface or other water across land of
others is required except as disclosed in the Surveys.
(b) Surveys, Access; Etc. Since the date of the most
recent Survey delivered to the Agent with respect to each Mortgaged
Property, there has been no construction of additional Buildings or
additions to Buildings on such Mortgaged Property, no takings by eminent
domain affecting such Mortgaged Property or other changes which may have
caused such Survey to be no longer accurate. The streets abutting the
Mortgaged Properties are public roads, to which each of the Mortgaged
Properties has direct access by trucks and other motor vehicles and by
foot, or are private ways (with direct access by trucks and other motor
vehicles and by foot to public roads) to which each of the Mortgaged
Properties has direct access without charge or liability for maintenance
or repair. No easements over land of others not yet obtained are
required for such means of access and egress except as disclosed in the
Surveys.
(c) Independent Building. The Buildings on each Mortgaged
Property are fully independent from any other real estate in all
respects including, without limitation, in respect of structural
integrity, heating, ventilating and air conditioning, plumbing,
mechanical and other operating and mechanical systems, and electrical,
sanitation and water systems, all of which are connected directly to
off-site utilities located in public streets or ways. The Buildings are
located on lots which are separately assessed for purposes of real
estate tax assessment and payment. The Buildings, all Building Service
Equipment and all paved or landscaped areas related to or used in
connection with the Buildings are located wholly within the perimeter
lines of the lot or lots on which the Mortgaged Properties are located
except as disclosed in the Surveys.
(d) Condition of Building; No Asbestos. Except as set
forth in the engineering reports provided to the Agent and listed on
Schedule 6.22(d), to the best of Borrower's knowledge there are no
material defects in the roof, foundation, structural elements and
masonry walls of the Buildings or their heating, ventilating and air
conditioning, electrical, sprinkler, plumbing or other mechanical
systems or their Building Service Equipment; the Buildings are fully
sprinkled; and no asbestos is located in or on the Buildings except as
may be disclosed in the Environmental Reports.
(e) Building Compliance with Law; Permits. The Buildings
as presently constructed and used do not materially violate any
applicable federal or state law or governmental regulation, or any local
ordinance, order or regulation the violation of which may materially
affect the use or the value of the applicable Mortgaged Property,
including but not limited to laws, regulations, or ordinances relating
to zoning, building use and occupancy, subdivision control, fire
protection, health and sanitation; and the zoning laws permit use of the
Buildings for their current use; there is such number of parking spaces
on the lot or lots on which the Mortgaged Properties are located as is
adequate under the zoning laws to permit use of the Buildings for their
current use; and all private ways providing access to the Mortgaged
Properties are zoned in a manner which will permit access to the
Buildings over such ways by trucks and other commercial and industrial
vehicles. All Permits required for the operation and maintenance of the
Mortgaged Properties, including without limitation, building permits,
curb-cut permits, water connection permits, sewer extension or
connection permits and other permits relating to the use of utilities,
and permits required under the Federal Clean Air Act, as amended, the
Federal Clean Water Act, as amended (including, without limitation a
so-called Section 404 Permit"), and by state law or regulations
consistent with the requirements of said Acts, have been validly issued
by the appropriate governmental Persons and are now in full force and
effect.
(f) No Required Real Property Consents, Permits, Etc. The
Borrower has received no notices of, nor has any knowledge of, any
Permits, utility installations and connections (including, without
limitation, drainage facilities, curb cuts and street openings), or
private consents required for the maintenance, operation, servicing and
use of the Mortgaged Properties for their current use which have not
been granted, effected, or performed and completed (as the case may be)
or any fees or charges therefor which have not been fully paid.
(g) Suits; Judgments. There are no outstanding material
notices, suits, orders, decrees or judgments relating to zoning,
building use and occupancy, subdivision control, fire protection,
health, sanitation, or other violations affecting, against, or with
respect to, the Mortgaged Properties or any part thereof.
(h) Insurance. The Borrower has not received any notices
from any insurer or its agent requiring performance of any work with
respect to the Mortgaged Properties or canceling or threatening to
cancel any policy of insurance.
(i) Real Property Taxes; Special Assessments. There are
no unpaid or outstanding real estate or other taxes or assessments on or
against the Mortgaged Properties or any part thereof which are payable
by Borrower or tenants (except only real estate taxes not yet due and
payable). There are no betterment assessments or other special
assessments presently pending with respect to any portion of the
Mortgaged Properties, and Borrower has received no notice of any such
special assessment being contemplated.
(j) Historic Status. The Buildings are not historic
structures or landmarks, and the Mortgaged Properties are not within any
historic district pursuant to any federal, state or local law or
governmental regulation.
(k) Domain. There are no pending eminent domain
proceedings against the Mortgaged Properties or any part thereof, and,
to the Borrower's knowledge, no such proceedings are presently
threatened or contemplated by any taking authority.
(l) Leases. A rent roll with respect to all Leases of any
portion of the Mortgaged Properties (current as of the date set forth
thereon) is accurate and completely set forth in Schedule 6.22(1) as the
same shall be supplemented each fiscal quarter by a certificate signed
by an authorized officer of Borrower. The Leases reflected on such rent
roll constitute the sole and complete agreements and understandings
relating to leasing or licensing of space in the Buildings or otherwise
at the Mortgaged Properties. The Borrower has delivered to the Agent a
true and complete copy of all Major Leases. There are no occupancies,
rights, privileges or licenses in or to the Buildings or any other part
of the Mortgaged Properties other than pursuant to the Leases reflected
on the rent roll set forth in Schedule 6. 22(1). Except as set forth in
Schedule 6.22(1) the Leases reflected on the Schedule 6.22(1) rent roll
are in full force and effect, in accordance with their respective terms,
without any payment default or any other material default thereunder,
nor are there any defenses, counterclaims, offsets, concessions or
rebates available to any tenant thereunder, and the Mortgagor has not
given or made, or received, any notice of default, or any material
claim, which remains uncured or unsatisfied, with respect to any of the
Major Leases and, to the best of the Borrower's knowledge there is no
basis for any such claim or notice of default by any tenant. The
Schedule 6.22(1) rent roll accurately and completely sets forth all
rents payable by tenants, no tenant having paid more than one month's
rent in advance. All tenant improvements or work to be done, furnished
or paid for by the landlord, or credited or allowed to a tenant, for, or
in connection with, the Buildings pursuant to any Lease has been
completed and paid for, or provided for in a manner satisfactory to the
Agent, or will be paid for by the Borrower in the ordinary course of the
Borrower's business. No leasing, brokerage or like commissions, fees or
payments are due from the Borrower in respect of the Leases, or will be
paid for by the Borrower in the ordinary course of the Borrower's
business. Except as set forth on the Schedule 6.22(1) rent roll, all
tenants under all Leases are in occupancy and operating the premises
covered by such Leases within the permitted uses under such Leases.
(m) Service Agreements. Except as listed on Schedule 6.22
(m), there are no Service Agreements relating to the operation and
maintenance of the Mortgaged Properties or any part thereof except
Service Agreements which may be terminated at the owner's option upon
not more than 60 days advance notice. To the best of Borrower's
knowledge, there are no claims or any bases for claims in respect of the
Mortgaged Properties or their operation by any party to any Service
Agreement.
(n) Other Material Real Property Agreements; No Options.
Except as listed on Schedule 6.22(n), there are no material agreements
pertaining to the Mortgaged Properties or the operation or maintenance
thereof other than as described in this Agreement (including the
Schedules hereto) or otherwise disclosed in writing to the Agent by the
Borrower, and no person or entity has any right or option to acquire any
of the Mortgaged Properties or any portion thereof or interest therein
or lease any portion thereof or additional portion thereof or provide
services thereat.
7. AFFIRMATIVE COVENANTS OF THE BORROWER. Borrower covenants and
agrees as follows, so long as any Loan or Note is outstanding or the
Banks have any obligations to make Loans:
7.1. Punctual Payment. The Borrower will unconditionally duly
and punctually pay the principal and interest on the Loans and all other
amounts provided for in the Note, this Agreement, and the other Loan
Documents all in accordance with the terms of the Note, this Agreement
and the other Loan Documents.
7.2. Maintenance of Office. The Borrower will maintain its
chief executive office in Malvern, Pennsylvania or at such other place
in the United States Of America as the Borrower shall designate upon
written notice to the Agent to be delivered within fifteen (15) days of
such change, where notices, presentations and demands to or upon the
Borrower in respect of the Loan Documents may be given or made.
7.3. Records and Accounts. The Borrower will keep true and
accurate records and books of account in which full, true and correct
entries will be made in accordance with generally accepted accounting
principles.
7.4. Financial Statements, Certificates and Information. The
Borrower will deliver to each of the Banks:
(a) as soon as practicable, but in any event not later
than ninety (90) days after the end of each fiscal year of the Borrower,
the audited balance sheet of the Company at the end of such year, and
the related audited statement of income, statement of changes in
shareholders, equity and statement of Funds From Operations and taxable
income for such year, each setting forth in comparative form the figures
for the previous fiscal year and all such statements to be in reasonable
detail, prepared in accordance with generally accepted accounting
principles on a consolidated basis including the Borrower and the
Related Companies, and accompanied by an auditor's report prepared
without qualification by Ernst & Young or by another independent
certified public accountant reasonably acceptable to the Agent;
(b) as soon as practicable, but in any event not later
than forty-five (45) days after the end of each of the first three (3)
fiscal quarters of the Borrower, copies of the unaudited balance sheets
of the Borrower and of the Company as at the end of such quarter, and
the related unaudited statement of income, statement of changes in
shareholders' equity and statement of Funds From Operations and
estimated taxable income for the portion of the Borrower's fiscal year
then elapsed, all in reasonable detail and prepared in accordance with
generally accepted accounting principles, together with a certification
by the principal financial or accounting officer of the Company that the
information contained in such financial statements fairly presents the
financial position of the Borrower and of the Company on the date
thereof (subject to year-end adjustments); provided, however, that for
so long as the Borrower and the Company are filing form 10-Q with the
SEC, the delivery of a copy thereof pursuant to paragraph (f) of this
7.4 shall be deemed to satisfy this paragraph (b);
(c) as soon as practicable, but in any event not later
than forty-five (45) days after the end of each of the fiscal quarters
of the Borrower, copies of a statement of the Net Operating Income for
such fiscal quarter for each Mortgaged Property, prepared on a basis
consistent with the statements furnished pursuant to 6.4 (c) , and
certified by a Responsible Officer of the Company;
(d) as soon as practicable, but in any event no later than
forty-five (45) days after the end of each fiscal quarter of the
Borrower, the Borrower will provide the Agent with , for each of the
Mortgaged Properties a rent roll dated as of the end of such fiscal
quarter in form reasonably satisfactory to the Agent;
(e) simultaneously with the delivery of the financial
statements referred to in subsections (a) and (b) above, a statement in
the form of Exhibit C hereto signed by a Responsible Officer of the
Company and setting forth in reasonable detail computations evidencing
compliance with the covenants contained herein and (if applicable)
reconciliations to reflect changes in generally accepted accounting
principles since the Balance Sheet Date;
(f) as soon as practicable, but in any event not later
than ninety (90) days after the end of each fiscal year of the Company,
copies of the Form 10-K statement filed with the Securities and Exchange
Commission ("SEC") for such fiscal year, and as soon as practicable, but
in any event not later than forty-five (45) days after the end of each
fiscal quarter, copies of the Form 10-Q statement filed with the SEC for
such fiscal quarter, provided that in either case if the SEC has granted
an extension for the filing of such statements, Borrower shall deliver
such statements to the Agent simultaneously with the filing thereof with
the SEC;
(g) promptly following the filing or mailing thereof,
copies of all other material of a financial nature filed with the SEC or
sent to the shareholders of the Company or to the limited partners of
the Borrower and copies of all press releases promptly upon the issuance
thereof;
(h) from time to time such other financial data and
information (including accountants' management letters) as the Agent may
reasonably request;
7.5. Notices.
(a) Defaults. The Borrower will promptly notify the Agent
in writing of the occurrence of any Default or Event of Default. If any
Person shall give any notice or take any other action in respect of a
claimed default (whether or not constituting a Default or an Event of
Default under this Agreement) under any note, evidence of Indebtedness,
indenture or other obligation to which or with respect to which the
Borrower, Guarantor or any of the Related Companies is a party or
obligor, whether as principal or surety, and if the principal amount
thereof exceeds $5,000,000, and such default would permit the holder of
such note or obligation or other evidence of Indebtedness to accelerate
the maturity thereof, the Borrower shall forthwith give written notice
thereof to the Agent and each of the Banks, describing the notice or
action and the nature of the claimed default.
(b) Environmental Events. The Borrower will promptly
notify the Agent in writing of any of the following events: (i) upon
Borrower's obtaining knowledge of any violation of any Environmental Law
regarding a Mortgaged Property or any Real Estate or Borrower's
operations which violation could have a Material Adverse Effect; (ii)
upon Borrower's obtaining knowledge of any potential or known Release,
or threat of Release, of any Hazardous Substance at, from, or into a
Mortgaged Property or any Real Estate which it reports in writing or is
reportable by it in writing to any governmental authority and which is
material in amount or nature or which could materially affect the value
of such Mortgaged Property or which could have a Material Adverse
Effect; (iii) upon Borrower's receipt of any notice of violation of any
Environmental Laws or of any Release or threatened Release of Hazardous
Substances, including a notice or claim of liability or potential
responsibility from any third party (including without limitation any
federal, state or local governmental officials) and including notice of
any formal inquiry, proceeding, demand, investigation or other action
with regard to (A) Borrower's or any Person's operation of a Mortgaged
Property or any Real Estate if the same would have a Material Adverse
Effect, (3) contamination on, from or into a Mortgaged Property or any
Real Estate if the same would have a Material Adverse Effect, or (C)
investigation or remediation of off-site locations at which Borrower or
any of its predecessors are alleged to have directly or indirectly
disposed of Hazardous Substances; or (iv) upon Borrower's obtaining
knowledge that any expense or loss has been incurred by such
governmental authority in connection with the assessment, containment,
removal or remediation of any Hazardous Substances with respect to which
Borrower, Guarantor or any of the Related Companies may be liable or for
which a lien may be imposed on a Mortgaged Property.
(c) Notification of Claims Against Collateral. The
Borrower will, immediately upon becoming aware thereof, notify the Agent
in writing of any setoff, claims (including, with respect to any of the
Mortgaged Properties, environmental claims), withholdings or other
defenses which could have a Material Adverse Effect.
(d) Notice of Litigation and Judgments. The Borrower will
give notice to the Agent in writing within fifteen (15) days of becoming
aware of any litigation or proceedings threatened in writing or any
pending litigation and proceedings affecting any of the Mortgaged
Properties or affecting the Borrower, Guarantor or any of the Related
Companies or to which the Borrower, Guarantor or any of the Related
Companies is or is to become a party involving an uninsured claim (or as
to which the insurer reserves rights) against the Borrower, Guarantor or
any of the Related Companies that at the time of giving of notice could
reasonably be expected to have a Materially Adverse Effect, and stating
the nature and status of such litigation or proceedings. The Borrower
will give notice to the Agent, in writing, in form and detail
satisfactory to the Agent, within ten (10) days of any judgment not
covered by insurance, final or otherwise, against the Borrower in an
amount in excess of $1,000,000.
(e) Notice of Default under Major Leases. The Borrower
will immediately notify the Agent in writing of the occurrence of any
failure of any of the Major Tenants to materially comply with any of the
material terms, covenants, conditions or agreements under any of the
Major Leases.
7.6. Existence; Maintenance of REIT Status; Maintenance of
Properties. The Company will do or cause to be done all things
necessary to preserve and keep in full force and effect its existence as
a Maryland trust and its status as a self administered real estate
investment trust under the Code and the existence of Borrower as a
Pennsylvania limited partnership. The Borrower will do or cause to be
done all things necessary to preserve and keep in full force all of its
rights and franchises which in the judgment of the Borrower may be
necessary to properly and advantageously conduct the businesses being
conducted by it, the Company or any of the Related Companies. The
Borrower (a) will cause all of the properties used or useful in the
conduct of the business of Borrower, the Company or any of the Related
Companies to be maintained and kept in good condition, repair and
working order and supplied with all necessary equipment, (b) will cause
to be made all necessary repairs, renewals, replacements, betterments
and improvements thereof, all as in the judgment of the Borrower may be
necessary so that the business carried on in connection therewith may be
properly and advantageously conducted at all times, and (c) will
continue to engage primarily in the businesses now conducted by it and
in related businesses.
7.7. Insurance. The Borrower will maintain insurance on the
Mortgaged Properties as required by the Security Deeds. With respect to
other properties and businesses of Borrower, the Guarantors and the
Related Companies, the Borrower will maintain or cause to be maintained
insurance with financially sound and reputable insurers against such
casualties and contingencies as shall be in accordance with the general
practices of businesses engaged in similar activities in similar
geographic areas and in amounts, containing such terms, in such forms
and for such periods as may be reasonable and prudent.
7.8. Taxes. The Borrower will pay real estate taxes, other
taxes, assessments and other governmental charges against the Mortgaged
Properties before the same become delinquent, and will duly pay and
discharge, or cause to be paid and discharged, before the same shall
become overdue, all taxes, assessments and other governmental charges
imposed upon it and its other properties, sales and activities, or any
part thereof, or upon the income or profits therefrom, as well as all
claims for labor, materials, or supplies that if unpaid might by law
become a lien or charge upon any of its properties; provided that any
such tax, assessment, charge, levy or claim with respect to properties
other than the Mortgaged Properties need not be paid if the validity or
amount thereof shall currently be contested in good faith by appropriate
proceedings and if the Borrower shall have set aside on its books
adequate reserves with respect thereto; and provided further that the
Borrower will pay all such taxes, assessments, charges, levies or claims
forthwith upon the commencement of proceedings to foreclose any lien
that may have attached as security therefor. Promptly after payment of
real estate taxes, other taxes, assessments and other governmental
charges against the Mortgaged Properties, Borrower will provide evidence
of such payments to the Agent, in the form of receipted tax bills or
other form reasonably acceptable to the Agent. Notwithstanding anything
contained herein to the contrary, with respect to the Mortgaged
Properties, Borrower, after receipt of notice from the Agent (which
notice may be given by the Agent at any time after the occurrence of an
Event of Default) , shall deposit with Agent, on the first day of each
month thereafter, a sum determined by Agent to be sufficient to provide,
in the aggregate, a fund adequate to pay all real estate taxes, other
taxes, assessments and other governmental charges against the Mortgaged
Properties at least ten (10) days before the same becomes delinquent;
and whenever the Agent determines sums accumulated under such escrow to
be insufficient to meet the obligations for which such deposits were
made, the Borrower shall pay, on the demand of the Agent, any amount
required to cover the deficiency therein.
7.9. Inspection of Properties and Books. The Borrower shall
permit the Banks, through the Agent or any of the Banks' other
designated representatives, to visit and inspect any of the Mortgaged
Properties, to examine the books of account of the Borrower, the Company
and the Related Companies (and to make copies thereof and extracts
therefrom) and to discuss the affairs, finances and accounts of the
Borrower with, and to be advised as to the same by, its officers, all at
such reasonable times and intervals as the Agent or any Bank may
reasonably request.
7.10. Compliance with Laws, Contracts, Licenses, and Permits.
The Borrower will comply, and will cause each Guarantor and all Related
Companies to comply, with (a) all applicable laws and regulations now or
hereafter in effect wherever its business is conducted, including all
Environmental Laws, (b) the provisions of all applicable partnership
agreements, charter documents and by-laws, (c) all agreements and
instruments to which it is a party or by which it or any of its Real
Estate Assets may be bound including the Leases, and (d) all applicable
decrees, orders, and judgments except (with respect to (a) through (d)
above) to the extent such non-compliance would not have a Material
Adverse Effect. If at any time any Permit from any governmental Person
shall become necessary or required in order that the Borrower or any
Guarantor may fulfill or be in compliance with any of its obligations
hereunder or under any of the Loan Documents, the Borrower will
immediately take or cause to be taken all reasonable steps within the
power of the Borrower to obtain such authorization, consent, approval,
permit or license and furnish the Agent and the Banks with evidence
thereof.
7.11. Use of Proceeds. Subject to the provisions of 2.5 hereof,
the proceeds of the Loans shall be used by the Borrower for Permitted
Acquisitions, Permitted Build-to-Suit Developments and Permitted
Developments, working capital and other purposes consistent with the
covenants contained herein.
7.12. Appraisals. The Appraised Values of the Mortgaged
Properties, including the Appraised Values of Additional Properties
determined pursuant to Appraisals approved by the Requisite Banks
pursuant to 10. 14 and 5.4(b), may increase or decrease only upon the
approval by the Requisite Banks of a new or updated Appraisal of such
Mortgaged Property. The Agent shall order a new or updated Appraisal of
a Mortgaged Property (i) promptly following a written request from the
Borrower, (ii) at any time with respect to any Mortgaged Property if the
occupied percentage of the gross leasable area of the Buildings on such
Mortgaged Property for two (2) consecutive fiscal quarters is more than
20 percentage points lower than the occupancy percentage shown on the
rent roll for such Mortgaged Property attached as Schedule 6.22(l)
hereto, (iii) on a date which is approximately 24 months after the date
of the most recent Appraisal of such Mortgaged Property, and (iv)
following an Event of Default, if requested by any Bank. The Borrower
shall provide to the Agent all available information needed to assist in
the preparation of an Appraisal and shall pay to the Agent on demand all
reasonable costs of all such Appraisals.
7.13. Leases; Lease Approvals. The Borrower will at all times
exercise or enforce its material rights under the Leases. The Agent
shall have the right, and the Borrower hereby authorizes the Agent, to
communicate directly with any of the tenants or guarantors solely for
the purpose of verifying any information delivered to the Agent by the
Borrower concerning the tenants or guarantors, the Buildings, or the
Leases provided that during the continuance of a Default or Event of
Default the Agent may contact any tenant or guarantor for any purpose
contemplated by this Agreement or any of the Security Documents. In the
event that any of the Leases is terminated, the Borrower will take or
cause to be taken all steps within the power of the Borrower to market
and lease the untenanted rentable area of the Buildings. Any proposed
lease which would be a Major Lease shall be submitted to and approved by
the Agent prior to execution, along with the most recent financial
statements of such proposed tenant and any guarantor. The Borrower will
not materially adversely amend, terminate, or accept a surrender of any
Major Lease or release any Major Tenant or waive the material
performance of a Major Lease by a Major Tenant, in each case without
prior approval of the Agent.
7.14. Further Assurance. The Borrower will cooperate with the
Agent and the Banks and execute such further instruments and documents
and perform such further acts as the Agent and the Banks shall
reasonably request to carry out to their satisfaction the transactions
contemplated by this Agreement and the other Loan Documents and the
granting and perfecting of all liens in the Collateral for the benefit
of the Agent as agent for the Banks.
7.15. Environmental Indemnification. The Borrower covenants and
agrees that it will indemnify and hold the Agent and each Bank harmless
from and against any and all claims, expense, damage, loss or liability
incurred by the Agent or any Bank (including all reasonable costs of
legal representation incurred by the Agent or any Bank, but excluding,
as applicable, for the Agent or a Bank any claim, expense, damage, loss
or liability as a result of the gross negligence or willful misconduct
of the Agent or such Bank) relating to (a) any Release or threatened
Release of Hazardous Substances on any Mortgaged Property or any Real
Estate; (b) any violation of any Environmental Laws with respect to
conditions at any Mortgaged Property or any Real Estate or the
operations conducted thereon; or (c) the investigation or remediation of
off-site locations at which the Borrower or its predecessors are alleged
to have directly or indirectly disposed of Hazardous Substances. It is
expressly acknowledged by the Borrower that this covenant of
indemnification shall survive any foreclosure or any modification,
release or discharge of any or all of the Security Documents or the
payment of the Loans and shall inure to the benefit of the Agent and the
Banks, and their successors and assigns.
7.16. Response Actions. The Borrower covenants and agrees that
if any Release or disposal of Hazardous Substances shall occur or shall
have occurred on any Mortgaged Property or any other Real Estate if the
same would have a Material Adverse Effect, the Borrower will cause the
prompt containment and removal of such Hazardous Substances and
remediation of such Mortgaged Property or Real Estate as necessary to
comply with all Environmental Laws or to preserve the value of such
Mortgaged Property or Real Estate to the extent necessary to avoid a
Material Adverse Effect.
7.17. Environmental Assessments. The Borrower shall diligently
and continuously comply with all recommendations set forth in the
Environmental Reports to the extent the Borrower's failure to do so
would result in a Material Adverse Effect. If the Agent in its good
faith judgment, after discussion with the Borrower, has reason to
believe that the environmental condition of any Mortgaged Property has
deteriorated, after reasonable notice by the Agent, whether or not a
Default or an Event of Default shall have occurred, the Agent may, from
time to time, for the purpose of assessing and ensuring the value of
such Mortgaged Property, obtain one or more environmental assessments or
audits of such Mortgaged Property prepared by a hydrogeologist, an
independent engineer or other qualified consultant or expert approved by
the Agent to evaluate or confirm (i) whether any Hazardous Substances
are present in the soil or water at such Mortgaged Property and (ii)
whether the use and operation of such Mortgaged Property complies with
all Environmental Laws. Environmental assessments may include without
limitation detailed visual inspections of such Mortgaged Property
including, without limitation, any and all storage areas, storage tanks,
drains, dry wells and leaching areas, and the taking of soil samples,
surface water samples and ground water samples, as well as such other
investigations or analyses as the Agent deems appropriate. All such
environmental assessments shall be at the sole cost and expense of the
Borrower; provided, however, the Agent may not require environmental
assessments at the Borrower's expense, with respect to any Mortgaged
Property, more frequently than annually except (i) during the
continuance of an Event of Default or (ii) upon the occurrence of a
Release on any Mortgaged Property.
7.18. Employee Benefit Plans.
(a) Representation. The Borrower and its ERISA Affiliates
do not currently maintain or contribute to any Employee Benefit Plan,
Guaranteed Pension Plan or Multiemployer Plan.
(b) Notice. The Borrower will obtain the consent of the
Agent prior to the establishment of any Employee Benefit Plan or
Guaranteed Pension Plan by the Borrower or any ERISA Affiliate.
(c) In General. Each Employee Benefit Plan maintained by
the Borrower or any ERISA Affiliate will be operated in compliance in
all material respects with the provisions of ERISA and, to the extent
applicable, the Code, including but not limited to the provisions
thereunder respecting prohibited transactions.
(d) Terminability of Welfare Plans. With respect to each
Employee Benefit Plan maintained by the Borrower or an ERISA Affiliate
which is an employee welfare benefit plan within the meaning of 3(1) or
3(2)(B) of ERISA, the Borrower, or the ERISA Affiliate, as the case may
be, has the right to terminate each such plan at any time (or at any
time subsequent to the expiration of any applicable bargaining
agreement) without liability other than liability to pay claims incurred
prior to the date of termination.
(e) Multiemployer Plans. Without the consent of the
Agent, the Borrower will not enter into, maintain or contribute to, any
multiemployer Plan.
(f) Unfunded or Underfunded Liabilities. The Borrower
will not, at any time, have accruing unfunded or underfunded liabilities
with respect to any Employee Benefit Plan, Guaranteed Pension Plan or
Multiemployer Plan, or permit any condition to exist under any
Multiemployer Plan that would create a withdrawal liability.
7.19 Required Interest Rate Contracts. If the Maturity Date is
extended pursuant to 3.1(b) commencing on December 13, 1997 and
thereafter until all Loans are paid in full and the Banks have no
further obligation to make Loans hereunder, the Borrower shall maintain
in effect the Required Interest Rate Contracts in form reasonably
satisfactory to the Agent.
8. CERTAIN NEGATIVE COVENANTS OF THE BORROWER. The Borrower
covenants and agrees as follows, so long as any Loan or Note is
outstanding or the Banks have any obligation to make any Loans:
8.1 Restrictions on Indebtedness. Except with the prior
written consent of the Requisite Banks, the Borrower will not, and the
Borrower will not permit any Guarantor, any of the Related Companies or
any Permitted Joint Venture to create, incur, assume, guarantee or
become or remain liable, contingently or otherwise, or agree not to do
any of same with respect to any Indebtedness other than:
(a) Indebtedness to the Banks arising under any of the
Loan Documents;
(b) current liabilities of the Borrower incurred in the
ordinary course of business but not incurred through (i) the borrowing
of money, or (ii) the obtaining of credit except for credit on an open
account basis customarily extended and in fact extended in connection
with normal purchases of goods and services;
(c) Indebtedness in respect of taxes, assessments,
governmental charges or levies and claims for labor, materials and
supplies to the extent that payment therefor shall not at the time be
required to be made in accordance with the provisions of 7.8;
(d) Indebtedness in respect of judgments or awards that
have been in force for less than the applicable period for taking an
appeal so long as execution is not levied thereunder or in respect of
which the Borrower shall at the time in good faith be prosecuting an
appeal or proceedings for review and in respect of which a stay of
execution shall have been obtained pending such appeal or review;
(e) endorsements for collection, deposit or negotiation
and warranties of products or services, in each case incurred in the
ordinary course of business;
(f) Indebtedness of Borrower, the Company or the Related
Companies to the extent the same does not create a violation of 9.3,
9.5, 9.6 or 9.7.
8.2. Restrictions on Liens, Etc. The Borrower will not, and
will not permit Guarantor, any of the Related Companies or any Permitted
Joint Venture to, (a) create or incur or agree not to create or incur or
suffer to be created or incurred or to exist any lien, encumbrance,
mortgage, pledge, charge, restriction or other security interest of any
kind upon any of the Mortgaged Property of any character whether now
owned or hereafter acquired, or upon the rents, income or profits
therefrom; (b) suffer to exist for a period of more than thirty (30)
days after the same shall have been incurred any Indebtedness (not
permitted by 8.1(c)) or claim or demand against it that if unpaid might
by law or upon bankruptcy or insolvency, or otherwise, be given any
priority whatsoever over the Security Documents; or (c) sell, assign,
pledge or otherwise transfer any rents, issues, profits, accounts,
contract rights or general intangibles relating to any of the Mortgaged
Premises; provided that the Borrower may create or incur or suffer to be
created or incurred or to exist:
(i) liens to secure taxes, assessments and other
governmental charges in respect of obligations not overdue, the
Indebtedness with respect to which is permitted by 8.1(c);
(ii) deposits or pledges made in connection with, or to
secure payment of, workmen's compensation, unemployment insurance, old
age pensions or other social security obligations;
(iii) liens in respect of judgments or awards, the
Indebtedness with respect to which is permitted by 8.1(d);
(iv) liens of carriers, warehousemen, mechanics and
materialmen, and other like liens on properties other than the Mortgaged
Properties in existence less than 120 days from the date of creation
thereof in respect of obligations not overdue, the Indebtedness with
respect to which is permitted by 8.1(c);
(v) encumbrances consisting of easements, rights of way,
covenants, restrictions on the use of real property and defects and
irregularities in the title thereto; and other minor liens or
encumbrances none of which in the opinion of the Borrower interferes
materially with the use of the property affected in the ordinary conduct
of the business of the Borrower, and which matters (x) do not
individually or in the aggregate have a materially adverse effect on the
value of the Mortgaged Property and (xx) do not make title to such
property unmarketable by the conveyancing standards in effect where such
property is located;
(vi) any Leases permitted by this Agreement or otherwise
approved by the Agent;
(vii) presently outstanding liens and other encumbrances
on the Mortgaged Properties listed on Schedule B to the Title Policies;
and
(viii) liens in favor of the Agent and/or any of the Banks
granted pursuant to the Security Documents.
8.3. Restrictions on Investments. The Borrower will not, and
will not permit Guarantor, any of the Related Companies or any Permitted
Joint Venture to make or permit to exist or to remain outstanding any
Investment except Investments in:
(a) marketable direct or guaranteed obligations of the
United States of America that mature within one (1) year from the date
of purchase by the Borrower;
(b) demand deposits, certificates of deposit, bankers
acceptances and time deposits of United States banks having total assets
in excess of $1,000,000,000;
(c) securities commonly known as "commercial paper" issued
by a corporation organized and existing under the laws of the United
States of America or any state thereof that at the time of purchase have
been rated and the ratings for which are not less than " P 1 " if rated
by Moody's Investors Services, Inc. , and not less than "A 1" if rated
by Standard and Poor's;
(d) Investments existing or contemplated on the date
hereof and listed on Schedule 8.3(d) hereto;
(e) Investments made in the ordinary course of the
Borrower's business, in (i) mortgages and notes receivable, (ii)
Permitted Joint Ventures (to the extent permitted by 8.4(a)), or (iii)
undeveloped land;
(f) Investments in Permitted Acquisitions;
(g) Investments in Permitted Developments which shall not
exceed 25% of Total Assets; provided that within said aggregate limit
Investments in Permitted Developments which are not Permitted Build-to-
Suit Developments shall not exceed 15% of Total Assets.
8.4. Merger, Consolidation and Disposition of Properties.
(a) The Borrower will not, and will not permit the
Company, any of the Related Companies or any Permitted Joint Venture to
(i) become a party to any merger or consolidation, or (ii) agree to or
effect any property acquisition or stock acquisition (other than
Permitted Acquisitions in compliance with the other terms of this
Agreement) , or (iii) enter into any joint venture or invest in any
Permitted Joint Venture unless prior to such transaction the Borrower
has provided the Agent with a notice describing such transaction and, if
the reasonably expected financial impact on the Borrower as reflected on
its balance sheet arising from all transactions described in this 8.4(a)
shall exceed 15% of Total Assets, the Borrower shall have obtained the
prior consent of the Agent provided, however, that this paragraph shall
not be applicable to mergers or transfers among the Borrower's wholly-
owned subsidiaries other than Guarantors. The Company will not acquire
or own any material assets other than its partnership interest in
Borrower.
(b) Neither the Borrower nor any Guarantor will become a
party to or agree to or effect any disposition of the Collateral without
obtaining the prior written consent of the Agent. Real Estate Assets
other than the Mortgaged Properties may be sold or transferred except
that to the extent the aggregate sales price of all such dispositions
during any fiscal quarter shall exceed $30,000,000, prior to such sale
or transfer, the Borrower shall provide a statement in the form of
Exhibit C hereto signed by a Responsible Officer of the Company and
setting forth in reasonable detail computations evidencing compliance
with the financial covenants contained in 9 after giving effect to such
proposed transfer and all liabilities, fixed or contingent, pursuant
thereto.
8.5. Sale and Leaseback. The Borrower will not enter into any
arrangement, directly or indirectly, whereby the Borrower shall sell or
transfer any property owned by it in order then or thereafter to lease
such property or lease other property that the Borrower intends to use
for substantially the same purpose as the property being sold or
transferred. The Borrower will not permit the Company, any of the
Related Companies or any Permitted Joint Venture to enter into any such
arrangement.
8.6. Compliance with Environmental Laws. The Borrower will not
do, and will not permit the Company, any of the Related Companies or any
Permitted Joint Venture to do, any of the following: (a) use any of the
Real Estate or any portion thereof as a facility for the handling,
processing, storage or disposal of Hazardous Materials except for
immaterial amounts of Hazardous Materials used in the routine
maintenance and operation of the Real Estate and in compliance with
applicable law, (b) cause or permit to be located on any of the Real
Estate any underground tank or other underground storage receptacle for
Hazardous Materials except in material compliance with Environmental
Laws, (c) generate any Hazardous Materials on any of the Real Estate
except in material compliance with Environmental Laws, or (d) conduct
any activity at any Real Estate or use any Real Estate in any manner so
as to cause a Release.
8.7. Distributions. Borrower shall not permit the total
Distributions by it and the Company during any fiscal year to exceed the
Funds from Operations for such year except that such limitation may be
exceeded to the extent necessary for the Company to maintain its REIT
status provided that the Company provides the Agent with a letter from
its accountants or attorneys setting forth the basis for computation of
the amount of such necessary excess Distributions. During any period
when any Default or Event of Default has occurred and is continuing
total Distributions by the Borrower and the Company will not exceed the
minimum amount necessary for the Company to maintain its REIT status.
8.8. Leases. The Borrower will not materially amend, supplement
or otherwise materially modify, or terminate or cancel, or accept the
surrender of, or grant any material concessions to or waive the material
performance of any of the Major Tenants under the Major Leases without
the prior approval of the Agent.
9. FINANCIAL COVENANTS OF THE BORROWER. The Borrower covenants and
agrees as follows, so long as any Loan or Note is outstanding or any
Bank has any obligation to make any Loan:
9.1. Appraised Value. The Borrower will not at any time permit
the outstanding principal amount of the Loans to exceed seventy percent
(70%) of the Appraised Value of the Mortgaged Properties.
9.2. Minimum Debt Service Coverage. The Borrower will not at
any time permit the outstanding principal amount of the Loans to exceed
an amount such that: (a) the aggregate of the Net Operating Income for
all of the Mortgaged Properties, divided by (b) Pro Forma Debt Service
Charges for the Mortgaged Properties would be less than 1.25 for any
fiscal quarter of Borrower.
9.3. Total Liabilities to Total Assets. The Borrower will not
at any time permit Total Liabilities at the end of any fiscal quarter to
exceed sixty percent (60%) of Total Assets.
9.4. Minimum Tangible Net Worth. The Borrower will not at any
time permit the Tangible Net Worth of either the Borrower or Guarantor
to be less than $300,000,000 plus 75% of Net Offering Proceeds.
9.5. Total Operating Cash Flow to Interest Expense. The
Borrower will not permit the ratio of its Total Operating Cash Flow to
Interest Expense to be less than 1.7 to 1.0 for any fiscal quarter.
9.6. Total Operating Cash Flow to Senior Interest Expense. The
Borrower will not permit the ratio of its Total Operating Cash Flow to
Senior Interest Expense to be less than 2.5 to 1.0 for any fiscal
quarter.
9.7. EBITDA to Fixed Charges. The Borrower will not permit the
ratio of its EBITDA to Fixed Charges to be less than 1.6 to 1.0 for any
fiscal quarter.
10. CONDITIONS TO EFFECTIVENESS. This Agreement shall become
effective when each of the following conditions precedent have been
satisfied:
10.1. Loan Documents. Each of the Loan Documents shall have been
duly executed and delivered by the respective parties thereto, shall be
in full force and effect and shall be in form and substance satisfactory
to each of the Banks. Each Bank shall have received a fully executed
copy of each such document prior to or on the Effective Date.
10.2. Certified Copies of Organization Documents; Good Standing
Certificates. The Agent shall have received (i) a Certificate of the
Company to which there shall be attached complete copies of the
Borrower's Limited Partnership Agreement and its Certificate of Limited
Partnership, certified as of a recent date by the Secretary of State of
Pennsylvania, (ii) Certificates of Good Standing for the Borrower from
the State of Pennsylvania and each State in which a Mortgaged Property
is located, (iii) a copy of the Company's Declaration of Trust certified
by the Maryland Secretary of State, (iv) Certificates of Good Standing
for the Company from the State of Maryland and each State in which a
Mortgaged Property is located, and (v) certificates of good standing and
certified copies of partnership agreements and certificates of limited
partnership with respect to each of the Guarantor Subsidiaries.
10.3. By-laws; Resolutions. All action on the part of the
Borrower and each Guarantor necessary for the valid execution, delivery
and performance by the Borrower and each Guarantor of this Agreement and
the other Loan Documents to which it is or is to become a party shall
have been duly and effectively taken, and evidence thereof satisfactory
to the Agent shall have been provided to the Agent. The Agent shall have
received from the Company true copies of its by-laws and the resolutions
adopted by its Board of Directors authorizing the transactions described
herein, each certified by its secretary to be true and complete and in
effect on the Effective Date.
10.4. Incumbency Certificate; Authorized Signers. The Agent
shall have received from the Company an incumbency certificate, dated as
of the Effective Date, signed by a duly authorized officer of the
Company and giving the name and bearing a specimen signature of each
individual who shall be authorized: (a) to sign, in the name and on
behalf of the Company (in its own capacity and as general partner on
behalf of Borrower and on behalf of each Guarantor Subsidiary which is a
partnership), each of the Loan Documents to which the Borrower or any
Guarantor is or is to become a party; (b) to make Loan Requests and
Conversion Requests; and (c) to give notices and to take other action on
behalf of the Borrower under the Loan Documents.
10.5. Opinions of Counsel Concerning Organization and Loan
Documents. Each of the Banks and the Agent shall have received
favorable opinions addressed to the Banks and the Agent and dated as of
the Effective Date, in form and substance satisfactory to the Banks and
the Agent from Borrower's counsel, as to the matters described on
Exhibit E, which opinion may rely on opinions from other law firms
approved by the Agent as to matters of law applicable in the various
states where the Mortgaged Properties are located.
10.6. Payment of Fees. The Borrower shall have paid to the Agent
the fees pursuant to 4.1 and shall have paid all other expenses as
provided in 15 hereof then outstanding.
10.7. Validity of Liens. The Security Documents shall be
effective to create in favor of the Agent legal, valid and enforceable
first priority, perfected liens and security interests in the Collateral
covered thereby, subject only to the Permitted Liens. All filings,
recordings, deliveries of instruments and other actions or consents
necessary or desirable in the opinion of the Agent to grant, perfect,
protect and preserve such liens and security interests shall have been
duly effected. The Agent shall have received evidence thereof in form
and substance satisfactory to the Agent.
10.8. Survey. The Agent shall have received Surveys of the
Mortgaged Properties, bearing dates acceptable to the Agent, and in form
and substance acceptable to the Agent.
10.9. Title Insurance; Title Exception Documents. The Agent
shall have received the Title Policies satisfactory to the Agent,
together with proof of payment of all fees and premiums for such
policies. The Agent shall have received true and accurate copies of all
documents listed as exceptions under such policies.
10.10. Major Leases. The Agent shall have received true copies of
the Major Leases.
10.11. Estoppel Agreements. The Agent shall have received
Estoppel Agreements substantially in the form of Exhibit D attached
hereto from Tenants who lease and occupy at least 60% of the aggregate
occupied gross leasable area of the Mortgaged Properties.
10.12. Certificates of Insurance. The Agent shall have received
(a) a certificate of insurance as to the insurance maintained by
Borrower on the Mortgaged Properties (including flood insurance if
necessary) from the insurer or an independent insurance broker dated as
of the Effective Date, identifying insurers, types of insurance,
insurance limits, and policy terms; (b) certified copies of all policies
evidencing such insurance (or certificates therefor signed by tile
insurer or an agent authorized to bind the insurer); and (c) such
further information and certificates from Borrower, its insurers and
insurance brokers as the Agent may reasonably request.
10.13. Hazardous Substance Assessments. The Agent shall have
received a hazardous waste site assessment report concerning absence of
Hazardous Substances and asbestos on the Mortgaged Properties, dated as
of a recent date, from environmental engineers acceptable to the Agent
which report shall have been approved by the Agent and the Requisite
Banks.
10.14. Evidence of Compliance with Laws and Permits. The Agent
shall have received final Certificates of occupancy for those portions
of the Buildings occupied by tenants, legal opinions, certifications
from engineers or architects and/or other evidence satisfactory to the
Agent that all activities being conducted on the Mortgaged Properties
which require federal, state or local Permits have been duly licensed
and that such Permits are in full force and effect.
10.15. Appraisals. The Agent and each of the Banks shall have
received Appraisals dated as of a recent date in form and substance
satisfactory to the Agent and the Requisite Banks (including
satisfaction as to determination of Appraised Value).
10.16. Inspecting Engineers' Reports. The Agent shall have
received reports, addressed to Agent and the Banks or accompanied by
reliance letters in favor of the Agent and the Banks, from third party
inspecting engineers dated as of a date acceptable to the Agent as to
the good structural condition of the Buildings located on the Mortgaged
Properties, which reports shall be in form and substance satisfactory to
the Agent provided that with respect to Mortgaged Properties constructed
by the Borrower, in lieu of such engineers' reports the Borrower may
provide (i) a certificate from its architect or construction project
manager confirming that the project has been completed in accordance
with the applicable plans, specifications and permits, (ii) a
certificate of occupancy and (iii) an estoppel certificate from all
tenants who have occupied such construction project confirming their
satisfaction with the completion thereof.
10.17. UCC Lien Searches. The Agent shall have received UCC lien
searches of the applicable public records disclosing no conditional
sales contracts, security agreements, chattel mortgages, leases of
personalty, financing statements or other encumbrances which affect any
of the Collateral other than those relating to any liens permitted
hereby and by the Security Documents.
11. CONDITIONS TO ALL BORROWINGS. The obligations of the Banks to
make any Loan, whether on or after the Effective Date, shall also be
subject to the satisfaction of the following conditions precedent:
11.1. Representations True; No Event of Default; Compliance
Certificate. Each of the representations and warranties of the Borrower
and the Company contained in this Agreement, the other Loan Documents or
in any document or instrument delivered pursuant to or in connection
with this Agreement shall be true as of the date as of which they were
made and shall also be true at and as of the time of the making of such
Loan, with the same effect as if made at and as of that time (except to
the extent of changes resulting from transactions contemplated or
permitted by this Agreement and the other Loan Documents and changes
occurring in the ordinary course of business that singly or in the
aggregate are not materially adverse, and except to the extent that such
representations and warranties relate expressly to an earlier date); the
Borrower shall have performed and complied with all terms and conditions
herein required to be performed by it or prior to the Drawdown Date of
Such Loan; and no Default or Event of Default shall have occurred and be
continuing on the date of any Loan Request or on the Drawdown Date of
such Loan. Each of the Banks shall have received a Compliance
Certificate of the Borrower signed by a Responsible Officer to such
effect, which certificate will include, without limitation, computations
evidencing compliance with the covenants contained in 9.1 through 9.7
hereof after giving effect to such requested Loan.
11.2. No Legal Impediment. No change shall have occurred in any
law or regulations thereunder or interpretations thereof that in the
reasonable opinion of any Bank would make it illegal for such Bank to
make such Loan.
11.3. Governmental Regulation. Each Bank shall have received
such statements in substance and form reasonably satisfactory to such
Bank as such Bank shall require for the purpose of compliance with any
applicable regulations of the Comptroller of the Currency or the Board
of Governors of the Federal Reserve System.
11.4. Proceedings and Documents. All proceedings in connection
with the transactions contemplated by this Agreement, the other Loan
Documents and all other documents incident thereto shall be reasonably
satisfactory in substance and in form to the Agent, and the Banks shall
have received all information and such counterpart originals or
certified or other copies of such documents as the Agent may reasonably
request.
12. EVENTS OF DEFAULT; ACCELERATION; ETC.
12.1. Events of Default and Acceleration. If any of the
following events ("Events of Default" or, if the giving of notice or the
lapse of time or both is required, then, prior to such notice or lapse
of time, "Defaults") shall occur:
(a) the Borrower shall fail to pay any principal of the
Loans within five (5) days after the same shall become due and payable;
(b) the Borrower shall fail to pay any interest on the
Loans or any other sums due hereunder or under any of the other Loan
Documents when the same shall become due and payable;
(c) the Borrower or the Company shall fail to comply with
any of its covenants contained in 7.5, the first sentence of 7.6, 7.7, 8
or 9 hereof;
(d) the Borrower or any Guarantor shall fail to perform
any other term, covenant or agreement contained herein or in any of the
other Loan Documents (other than those specified elsewhere in this 12)
for thirty (30) days after written notice of such failure from Agent to
the Borrower;
(e) any representation or warranty of the Borrower in this
Agreement or any of the other Loan Documents or in any other document or
instrument delivered pursuant to or in connection with this Agreement,
shall prove to have been false in any material respect upon the date
when made or deemed to have been made or repeated, provided, however,
that with respect to the representations and warranties of the Borrower
contained in 6.2, 6.3, 6.13, 6.18 and in paragraphs (a), (c), (d), (e)
and (f) of 6.22, if the condition or event making the representation and
warranty false is capable of being cured by the Borrower, no enforcement
action has been commenced against the Borrower or the applicable
Mortgaged Property on account of such condition or event nor is the
applicable Mortgaged Property subject to risk of forfeiture due to such
condition or event, and the Borrower promptly commences the cure thereof
after the Borrower's first obtaining knowledge of such condition or
event, the Borrower shall have a period of thirty (30) days after the
date that the Borrower first obtained knowledge of such condition or
event during which the Borrower may cure such condition or event (or, if
such condition or event is not reasonably capable of being cured within
such thirty (30) day period, such additional period of time as may be
reasonably required in order to cure such condition or event but in any
event such period shall not exceed six (6) months from the date that the
Borrower first obtained knowledge of such condition or event), and no
Event of Default shall exist hereunder during such thirty (30) day or
additional period so long as the Borrower continuously and diligently
pursues the cure of such condition or event and the other conditions to
such cure period have not changed;
(f) the Borrower, the Company, any of the Related
Companies or any Permitted Joint Venture shall fail to pay at maturity,
or within any applicable period of grace, any Recourse Indebtedness, or
shall fail to observe or perform any material term, covenant or
agreement contained in any agreement by which it is bound, evidencing or
securing Indebtedness for such period of time as would permit (assuming
the giving of appropriate notice if required) the holder or holders
thereof or of any obligations issued thereunder to accelerate the
maturity thereof, and in any event, such failure shall continue for
thirty (30) days, unless the aggregate amount of all such defaulted
Recourse Indebtedness plus the amount of any unsatisfied judgments
described in paragraph (i) of this 12.1 is less than $30,000,000.00;
(g) any of the Borrower, the Company or any Guarantor
shall make an assignment for the benefit of creditors, or admit in
writing its inability to pay or generally fail to pay its debts as they
mature or become due, or shall petition or apply for the appointment of
a trustee or other custodian, liquidator or receiver of any substantial
part of its properties or shall commence any case or other proceeding
under any bankruptcy, reorganization, arrangement, insolvency,
readjustment of debt, dissolution or liquidation or similar law of any
jurisdiction, now or hereafter in effect, or shall take any action to
authorize or in furtherance of any of the foregoing, or if any such
petition or application shall be filed or any such case or other
proceeding shall be commenced against any such Person and such Person
shall indicate its approval thereof, consent thereto or acquiescence
therein or any of the events described in this paragraph shall occur
with respect to any other Related Company or any Permitted Joint Venture
and such event shall have a Material Adverse Effect;
(h) a decree or order is entered appointing any such
trustee, custodian, liquidator or receiver or adjudicating the Borrower,
the Company, or any Guarantor bankrupt or insolvent, or approving a
petition in any such case or other proceeding, or a decree or order for
relief is entered in respect of the Borrower, the Company, or any
Guarantor in an involuntary case under federal bankruptcy laws as now or
hereafter constituted or any of the events described in this paragraph
shall occur with respect to any other Related Company or any Permitted
Joint Venture and such event shall have a Material Adverse Effect;
(i) there shall remain in force, undischarged, unsatisfied
and unstayed, for more than thirty days, whether or not consecutive, any
uninsured final judgment against the Borrower that, with other
outstanding uninsured final judgments, undischarged, against the
Borrower, the Company or any of the Related Companies plus the amount of
any defaulted Recourse Indebtedness under paragraph (f) of this 12.1,
exceeds in the aggregate $30,000,000.00;
(j) if any of the Loan Documents or any material provision
of any Loan Documents shall be unenforceable, cancelled, terminated,
revoked or rescinded otherwise than in accordance with the terms thereof
or with the express prior written agreement, consent or approval of the
Agent, or any action at law, suit or in equity or other legal proceeding
to make unenforceable, cancel, revoke or rescind any of the Loan
Documents shall be commenced by or on behalf of the Borrower or any
Guarantor, or any court or any other governmental or regulatory
authority or agency of competent jurisdiction shall make a determination
that, or issue a judgment, order, decree or ruling to the effect that,
any one or more of the Loan Documents is illegal, invalid or
unenforceable in accordance with the terms thereof;
(k) the Borrower or any Guarantor shall be indicted for a
federal crime, a punishment for which could include the forfeiture of
any assets of the Borrower;
(l) the Borrower shall fail to pay, observe or perform any
term, covenant, condition or agreement contained in any agreement,
document or instrument evidencing, securing or otherwise relating to any
Indebtedness of the Borrower to any Bank (other than the Obligations)
and/or relating to any Permitted Lien (other than the Obligations)
within any applicable period of grace provided for in such agreement,
document or instrument;
(m) any "Event of Default", as defined in any of the other
Loan Documents or in the Subordinated Debenture Indenture, shall occur;
then, and in any such event, so long as the same may be continuing, the
Agent may, and upon the request of the Requisite Banks shall, by notice
in writing to the Borrower declare all amounts owing with respect to
this Agreement, the Notes and the other Loan Documents to be, and they
shall thereupon forthwith become, immediately due and payable without
presentment, demand, protest or other notice of any kind, all of which
are hereby expressly waived by the Borrower; provided that in the event
of any Event of Default specified in 12.1(g) or 12.1(h), all such
amounts shall become immediately due and payable automatically and
without any requirement of notice from the Agent or action by the
Requisite Banks.
12.2. Termination of Commitments. If any one or more Events of
Default specified in 12.1(g) or 12.1(h) shall occur, any unused portion
of the Commitments hereunder shall forthwith terminate and the Banks
shall be :relieved of all obligations to make Loans to the Borrower. If
any other Event of Default shall have occurred and be continuing, any
Bank may by notice to the Borrower terminate the unused portion of its
Commitment hereunder, and upon such notice being given such unused
portion of its Commitment hereunder shall terminate immediately and such
Bank shall be relieved of all further obligations to make Loans. No
termination of such Bank's Commitment hereunder shall relieve the
Borrower of any of the Obligations or any of its existing obligations to
such Bank arising under other agreements or instruments.
12.3. Remedies. In case any one or more of the Events of Default
shall have occurred, and whether or not the Requisite Banks shall have
accelerated the maturity of the Loans pursuant to 12.1, each Bank, if
owed any amount with respect to the Loans, may, with the consent of the
Requisite Banks, direct the Agent to proceed to protect and enforce the
rights and remedies of the Agent and the Banks under this Agreement, the
Notes or any of the other Loan Documents by suit in equity, action at
law or other appropriate proceeding, whether for the specific
performance of any covenant or agreement contained in this Agreement and
the other Loan Documents or any instrument pursuant to which the
Obligations are evidenced, including to the full extent permitted by
applicable law the obtaining of the ex parte appointment of a
receiverand, if any amount shall have become due, by declaration or
otherwise, to proceed to enforce the payment thereof or any other legal
or equitable right of such Bank. No remedy herein conferred upon any
Bank or the Agent or the holder of any Note is intended to be exclusive
of any other remedy and each and every remedy shall be cumulative and
shall be in addition to every other remedy given hereunder or now or
hereafter existing at law or in equity or by statute or any other
provision of law.
12.4. Distribution of Collateral Proceeds. In the event that,
following the occurrence or during the continuance of any Default or
Event of Default, the Agent or any Bank as the case may be, receives any
monies in connection with the enforcement of any of the Security
Documents, or otherwise with respect to the realization upon any of the
Collateral, such monies shall be distributed for application as follows:
(a) First, to the payment of, or (as the case may be) the
reimbursement of the Agent for or in respect of all reasonable costs,
expenses, disbursements and losses which shall have been incurred or
sustained by the Agent in connection with the collection of such monies
by the Agent, for the exercise, protection or enforcement by the Agent
of all or any of the rights, remedies, powers and privileges of the
Agent or the Banks under this Agreement or any of the other Loan
Documents or in respect of the Collateral or in support of any provision
of adequate indemnity to the Agent against any taxes or liens which by
law shall have, or may have, priority over the rights of the Agent to
such monies;
(b) Second, to all other Obligations in such order or
preference as the Requisite Banks may determine; provided, however, that
distribution in respect of such Obligations shall be made among the
Banks pro rata in accordance with each Bank's respective Commitment
Percentage; and provided, further, that the Agent may in its discretion
make proper allowance to take into account any Obligations not then due
and payable;
(c) Third, upon payment and satisfaction in full or other
provisions for payment in full satisfactory to the Requisite Banks and
the Agent of all of the obligations, and to the payment of any
obligations required to be paid pursuant to 9-504(1)(c) of the Uniform
Commercial Code of the Commonwealth of Massachusetts; and
(d) Fourth, the excess, if any, shall be returned to the
Borrower or to such other Persons as are legally entitled thereto.
12.5. Addition of Real Estate Assets to Cure Default. As an
alternative to the payment of cash to cure a Default under 9.1 or 9.2
hereof, the Borrower shall have the right to offer to provide additional
Collateral to the Agent in the form of Additional Properties pursuant to
5.3 and 5.4, for the purpose of curing a Default under 9.1 or 9.2
hereof, if the Borrower designates such Collateral for addition within
fifteen (15) days after the occurrence of such Default and the Borrower
executes and delivers to the Agent a Security Deed, an Assignment of
Leases and Rents, an Indemnity Agreement and UCC-1 Financing Statements
relating to the Additional Property together with the Certificates and
opinion described in 5.4(d) and 5.4(e) within thirty (30) days after the
occurrence of such Default. The Agent and the Banks shall accept and
approve the addition of such Collateral as a cure for such Default if
such Collateral shall cure the Default and satisfies the due diligence
requirements of the Agent and the Requisite Banks, including, without
limitation, the conditions set forth in 5.4 and those requirements with
respect to the Mortgaged Properties specified in 10 hereof, within
ninety (90) days after the occurrence of the subject Default, and at the
time that such due diligence requirements are so satisfied, no other
Defaults or Events of Default are continuing. If any such additional
Collateral is provided to the Agent in accordance with this 12.5, such
additional Collateral shall, for all purposes hereof, be deemed to be a
"Mortgaged Property." Until the Agent and Requisite Banks have
acknowledged in writing the cure of such Default, all consequences of
such Default hereunder shall be effective (except as provided in 8.7)
and the Agent may exercise all available remedies except that the
maturity of the Loans shall not be accelerated based solely on the
Default which Borrower is diligently attempting to cure hereunder, prior
to the expiration of said ninety (90) day period.
13. SETOFF. Regardless of the adequacy of any Collateral, during the
continuance of any Event of Default, any deposits (general or specific,
time or demand, provisional or final, regardless of currency, maturity,
or the branch of where such deposits are held) or other sums credited by
or due from any of the Banks to the Borrower and any securities or other
property of the Borrower in the possession of such Bank may WITH THE
PRIOR APPROVAL OF THE AGENT be applied to or set off against the payment
of Obligations and any and all other liabilities, direct, or indirect,
absolute or contingent, due or to become due, now existing or hereafter
arising, of the Borrower to such Bank. Each of the Banks agrees with
each other Bank that (a) if an amount to be set off is to be applied to
Indebtedness of the Borrower to such Bank, other than Indebtedness
evidenced by the Notes held by such Bank, such amount shall be applied
ratably to such other Indebtedness and to the Indebtedness evidenced by
all such Notes held by such Bank, and (b) if such Bank shall receive
from the Borrower, whether by voluntary payment, exercise of the right
of setoff, counterclaim, cross action, enforcement of the claim
evidenced by the Notes held by such Bank by proceedings against the
Borrower at law or in equity or by proof thereof in bankruptcy,
reorganization, liquidation, receivership or similar proceedings, or
otherwise, and shall retain and apply to the payment of the Note or
Notes held by such Bank any amount in excess of its ratable portion of
the payments received by all of the Banks with respect to the Notes held
by all of the Banks, such Bank will make such disposition and
arrangements with the other Banks with respect to such excess, either by
way of distribution, pro tanto assignment of claims, subrogation or
otherwise as shall result in each Bank receiving in respect of the Notes
held by it its proportionate payment as contemplated by this Agreement;
provided that if all or any part of such excess payment is thereafter
recovered from such Bank, such disposition and arrangements shall be
rescinded and the amount restored to the extent of such recovery, but
without interest. Notwithstanding the foregoing, no Bank shall exercise
a right of setoff if such exercise would limit or prevent the exercise
of any other remedy, right to Collateral or other recourse against the
Borrower.
14. THE AGENT.
14.1. Authorization. The Agent is authorized to take such action
on behalf of each of the Banks and to exercise all such powers as are
hereunder and under any of the other Loan Documents and any related
documents delegated to the Agent, together with such powers as are
reasonably incident thereto, provided that no duties or responsibilities
not expressly assumed herein or therein shall be implied to have been
assumed by the Agent. The relationship between the Agent and the Banks
is and shall be that of agent and principal only, and nothing contained
in this Agreement or any of the other Loan Documents shall be construed
to constitute the Agent as a trustee for any Bank.
14.2. Employees and Agents. The Agent may exercise its powers
and execute its duties by or through employees or agents and shall be
entitled to take, and to rely on, advice of counsel concerning all
matters pertaining to its rights and duties under this Agreement and the
other Loan Documents. The Agent may utilize the services of such Persons
as the Agent in its sole discretion may reasonably determine, and all
reasonable fees and expenses of any such Persons shall be paid by the
Borrower.
14.3. No Liability. Neither the Agent nor any of its
shareholders, directors, officers or employees nor any other Person
assisting them in their duties nor any agent or employee thereof, shall
be liable for any waiver, consent or approval given or any action taken,
or omitted to be taken, in good faith by it or them hereunder or under
any of the other Loan Documents, or in connection herewith or therewith,
or be responsible for the consequences of any oversight or error of
judgment whatsoever, except that the Agent or such other Person, as the
case may be, may be liable for losses due to its willful misconduct or
gross negligence.
14.4. No Representations. The Agent shall not be responsible for
the execution or validity or enforceability of this Agreement, the
Notes, any of the other Loan Documents or any instrument at any time
constituting, or intended to constitute, collateral security for the
Notes, or for the value of any such collateral security or for the
validity, enforceability or collectability of any such amounts owing
with respect to the Notes, or for any recitals or statements, warranties
or representations made herein or in any of the other Loan Documents or
in any certificate or instrument hereafter furnished to it by or on
behalf of the Borrower, or be bound to ascertain or inquire as to the
performance or observance of any of the terms, conditions, covenants or
agreements herein or in any instrument at any time constituting, or
intended to constitute, collateral security for the Notes. The Agent
shall not be bound to ascertain whether any notice, consent, waiver or
request delivered to it by the Borrower or any holder of any of the
Notes shall have been duly authorized or is true, accurate and complete.
The Agent has not made nor does it now make any representations or
warranties, express or implied, nor does it assume any liability to the
Banks, with respect to the credit worthiness or financial condition of
the Borrower. Each Bank acknowledges that it has, independently and
without reliance upon the Agent or any other Bank, and based upon such
information and documents as it has deemed appropriate, made its own
credit analysis and decision to enter into this Agreement. Each Bank has
been independently represented by separate counsel on all matters
regarding this Agreement.
14.5. Payments.
(a) A payment by the Borrower to the Agent hereunder or
any of the other Loan Documents for the account of any Bank shall
constitute a payment to such Bank subject to the pro rata rights to
repayment based upon the Commitment Percentage of each Bank. The Agent
agrees promptly to distribute to each Bank such Bank's pro rata share of
payments received by the Agent for the account of the Banks except as
otherwise expressly provided herein or in any of the other Loan
Documents.
(b) If in the opinion of the Agent the distribution of any
amount received by it in such capacity hereunder, under the Notes or
under any of the other Loan Documents might involve it in liability, it
may refrain from making distribution until its right to make
distribution shall have been adjudicated by a court of competent
jurisdiction. If a court of competent jurisdiction shall adjudge that
any amount received and distributed by the Agent is to be repaid, each
Person to whom any such distribution shall have been made shall either
repay to the Agent its proportionate share of the amount so adjudged to
be repaid or shall pay over the same in such manner and to such Persons
as shall be determined by such court.
(c) Notwithstanding anything to the contrary contained in
this Agreement or any of the other Loan Documents, any Bank that fails
(i) to make available to the Agent its pro rata share of any Loan or
(ii) to comply with the provisions of 13 with respect to making
dispositions and arrangements with the other Banks, where such Bank's
share of any payment received, whether by setoff or otherwise, is in
excess of its pro rata share of such payments due and payable to all of
the Banks, in each case as, when and to the full extent required by the
provisions of this Agreement, or to adjust promptly such Bank's
outstanding principal and its pro rata Commitment Percentage as provided
in 2.1 hereof, shall be deemed delinquent (a "Delinquent Bank") and
shall be deemed a Delinquent Bank until such time as such delinquency is
satisfied. A Delinquent Bank shall be deemed to have assigned any and
all payments due to it from the Borrower, whether on account of
outstanding Loans, interest, fees or otherwise, to the remaining
nondelinquent Banks for application to, and reduction of, their
respective pro rata shares of all outstanding Loans. The Delinquent
Bank hereby authorizes the Agent to distribute such payments to the
nondelinquent Banks in proportion to their respective pro rata shares of
all outstanding Loans. A Delinquent Bank shall be deemed to have
satisfied in full a delinquency when and if, as a result of application
of the assigned payments to all outstanding Loans of the nondelinquent
Banks, the Banks' respective pro rata shares of all outstanding Loans
have returned to those in effect immediately prior to such delinquency
and without giving effect to the nonpayment causing such delinquency.
14.6. Holders of Notes. The Agent may deem and treat the payee
of any Note as the absolute owner or purchaser thereof for all purposes
hereof until it shall have been furnished in writing with a different
name by such payee or by a subsequent holder assignee or transferee.
14.7. Indemnity. The Banks ratably agree hereby to indemnify and
hold harmless the Agent from and against any and all claims, actions and
suits (whether groundless or otherwise), losses, damages, costs,
expenses (including any expenses for which the Agent has not been
reimbursed by the Borrower as required by 15), and liabilities of every
nature and character arising out of or related to this Agreement, the
Notes, or any of the other Loan Documents or the transactions
contemplated or evidenced hereby or thereby, or the Agent's actions
taken hereunder or thereunder, except to the extent that any of the same
shall be directly caused by the Agent's willful misconduct or gross
negligence.
14.8. Agent as Bank. In its individual capacity, FNBB shall have
the same obligations and the same rights, powers and privileges in
respect to its Commitment and the Loans made by it, and as the holder of
any of the Notes as it would have were it not also the Agent.
14.9. Resignation. The Agent may resign at any time by giving
sixty (60) days, prior written notice thereof to the Banks and the
Borrower. Upon any such resignation, the Requisite Banks shall have the
right to appoint a successor Agent. Unless a Default or Event of
Default shall have occurred and be continuing, appointment of such
successor Agent shall be subject to the reasonable approval of the
Borrower. If no successor Agent shall have been so appointed by the
Requisite Banks and shall have accepted such appointment within thirty
(30) days after the giving of notice of resignation or removal of the
Borrower has disapproved or failed to approve a successor agent within
such period, then the retiring Agent may, on behalf of the Banks,
appoint a successor Agent, which shall be a financial institution having
a rating of not less than A2/P2 or its equivalent by Standard & Poor's
Corporation. Upon the acceptance of any appointment as Agent hereunder
by a successor Agent, such successor Agent shall thereupon succeed to
and become vested with all the rights, powers, privileges and duties of
the retiring Agent, and the retiring Agent shall be discharged from its
duties and obligations as Agent hereunder. After any retiring Agent's
resignation, the provisions of this Agreement and the other Loan
Documents shall continue in effect for its benefit in respect of any
actions taken or omitted to be taken by it while it was acting as Agent.
14.10. Notification of Defaults and Events of Default. Each Bank
hereby agrees that, upon learning of the existence of a Default or an
Event of Default, it shall promptly notify the Agent thereof. The Agent
hereby agrees that upon receipt of any notice under this 14.10 it shall
promptly notify the other Banks of the existence of such Default or
Event of Default.
14.11. Duties in the Case of Enforcement. In case one of more
Events of Default have occurred and shall be continuing, and whether or
not acceleration of the Obligations shall have occurred, the Agent
shall, if (a) so requested by the Requisite Banks and (b) the Banks have
provided to the Agent such additional indemnities and assurances against
expenses and liabilities as the Agent may reasonably request, proceed to
enforce the provisions of the Security Documents authorizing the sale or
other disposition of all or any part of the Collateral and exercise all
or any such other legal and equitable and other rights or remedies as it
may have in respect of such Collateral. The Requisite Banks may direct
the Agent in writing as to the method and the extent of any such sale or
other disposition, the Banks hereby agreeing to indemnify and hold the
Agent harmless from all liabilities incurred in respect of all actions
taken or omitted in accordance with such directions, provided that the
Agent need not comply with any such direction to the extent that the
Agent reasonably believes the Agent's compliance with such direction to
be unlawful or commercially unreasonable in any applicable jurisdiction.
The Agent may take such steps as it reasonably determines for the taking
of possession or title to any Collateral, including the formation of
trusts or corporation with each Bank having a beneficial interest equal
to its pro rata percentage of the outstanding Loans.
15. EXPENSES. The Borrower agrees to pay (a) the reasonable costs of
producing and reproducing this Agreement, the other Loan Documents and
the other agreements and instruments mentioned herein, (b) any taxes
(including any interest and penalties in respect thereto) payable by the
Agent or any of the Banks (other than taxes based upon the Agent's or
any Bank's net income), including any recording, mortgage, documentary
or intangibles taxes in connection with the Security Documents and other
Loan Documents, or other taxes payable on or with respect to the
transactions contemplated by this Agreement, including any taxes payable
by the Agent or any of the Banks after the Effective Date (the Borrower
hereby agreeing to indemnify the Banks with respect thereto), (c) all
title insurance premiums, appraisal fees, engineer's, inspector's and
surveyor's fees, recording costs and the reasonable fees, expenses and
disbursements of the Agent's counsel or any local counsel to the Agent
incurred in connection with the preparation, administration or
interpretation of the Loan Documents and other instruments mentioned
herein, each closing hereunder, and amendments, modifications,
approvals, consents or waivers hereto or hereunder, (d) the fees, costs,
expenses and disbursements of the Agent incurred in connection with the
preparation, administration or interpretation of the Loan Documents and
other instruments mentioned herein including without limitation, the
costs incurred by the Agent in connection with its inspection of the
Mortgaged Properties, and the fees and disbursements of the Agent's
counsel and the Borrower's legal counsel in preparing documentation, (e)
the fees, costs, expenses and disbursements of the Agent incurred in
connection with the syndication and/or participation of the Loans, (f)
all reasonable out-of-pocket expenses (including reasonable attorneys'
fees and costs, which attorneys may be employees of any Bank or the
Agent and the fees and costs of appraisers, engineers, investment
bankers, surveyors or other experts retained by the Agent or any Bank in
connection with any such enforcement proceedings) incurred by any Bank
or the Agent in connection with (i) the enforcement of or preservation
of rights under any of the Loan Documents against the Borrower or the
administration thereof after the occurrence of a Default or Event of
Default (including, without limitation, expenses incurred in any
restructuring and/or "workout" of the Loans), and (ii) any litigation,
proceeding or dispute whether arising hereunder or otherwise, in any way
related to the Agent's or the Bank's relationship with the Borrower, the
Company, any Permitted Joint Venture or any of the Related Companies,
(g) all reasonable fees, expenses and disbursements of the Agent
incurred in connection with UCC searches, UCC filings or mortgage
recordings, (h) all costs incurred by the Agent in the future in
connection with its inspection of the Mortgaged Properties, and (i) the
fees, costs, expenses and disbursements of the Agent incurred in
connection with the granting of additional Collateral by the Borrower
pursuant to 12.5 hereof, including, without limitation, the costs
incurred by the Agent in connection with its inspection of such
additional Collateral, and the fees and disbursements of the Agent's
counsel. The covenants of this 15 shall survive payment or satisfaction
of payment of amounts owing with respect to the Notes.
16. INDEMNIFICATION. The Borrower agrees to indemnify and hold
harmless the Agent and the Banks and the shareholders, directors,
agents, officers, subsidiaries, and affiliates of the Agent and the
Banks from and against any and all claims, actions or causes of action
and suits whether groundless or otherwise, and from and against any and
all Liabilities, losses, settlement payments, obligations, damages and
expenses of every nature and character arising out of this Agreement or
any of the other Loan Documents or the transactions contemplated hereby
or which otherwise arise in connection with the financing including,
without limitation unless directly caused by the gross negligence or
willful misconduct of a Bank or the Agent (but such limitation on
indemnification shall only apply to the Agent or Bank being grossly
negligent or committing willful misconduct), (a) any actual or proposed
use by the Borrower of the proceeds of any of the Loans, (b) any actual
or alleged infringement of any patent, copyright, trademark, service
mark or similar right of the Borrower comprised in the Collateral, (c)
the Borrower entering into or performing this Agreement or any of the
other Loan Documents or (d) with respect to the Borrower and its
respective properties, the violation of any Environmental Law, the
Release or threatened Release of any Hazardous Substances or any action,
suit, proceeding or investigation brought or threatened with respect to
any Hazardous Substances (including, but not limited to claims with
respect to wrongful death, personal injury or damage to property), (e)
any cost, claim liability, damage or expense in connection with any harm
the Borrower may be found to have caused in the role of a broker, in
each case including, without limitation, the reasonable fees and
disbursements of counsel and allocated costs of internal counsel
incurred in connection with any such investigation, litigation or other
proceeding. In litigation, or the preparation therefor, the Banks and
the Agent shall each be entitled to select their own separate counsel
and, in addition to the foregoing indemnity, the Borrower agrees to pay
promptly the reasonable fees and expenses of such counsel. If, and to
the extent that the obligations of the Borrower under this 16 are
unenforceable for any reason, the Borrower hereby agrees to make the
maximum contribution to the payment in satisfaction of such obligations
which is permissible under applicable law. The provisions of this 16
shall survive the repayment of the Loans and the termination of the
obligations of the Banks hereunder and shall continue in full force and
effect as to the Banks so long as the possibility of any such claim,
action, cause of action or suit exists.
17. SURVIVAL OF COVENANTS, ETC. All covenants, agreements,
representations and warranties made herein, in the Notes, in any of the
other Loan Documents or in any documents or other papers delivered by or
on behalf of the Borrower or any Guarantor pursuant hereto shall be
deemed to have been relied upon by the Banks and the Agent,
notwithstanding any investigation heretofore or hereafter made by it,
and shall survive the making by the Banks of the Loans, as herein
contemplated, and shall continue in full force and effect so long as any
amount due under this Agreement or the Notes or any of the other Loan
Documents remains outstanding or the Banks have any obligation to make
any Loans. The indemnification obligations of the Borrower provided
herein and the other Loan Documents shall survive the full repayment of
amounts due and the termination of the obligations of the Banks
hereunder and thereunder to the extent provided herein and therein. All
statements contained in any certificate or other paper delivered to the
Agent or any Bank at any time by or on behalf of the Borrower pursuant
hereto or in connection with the transactions contemplated hereby shall
constitute representations and warranties by the Borrower hereunder.
18. ASSIGNMENT; PARTICIPATIONS; ETC.
18.1. Conditions to Assignment by Banks. Except as provided
herein, each Bank may assign to one or more Eligible Assignees all or a
portion of its interests, rights and obligations under this Agreement
(including all or a portion of its Commitment Percentage and Commitment
and the same portion of the Loans at the time owing to it, and the Notes
held by it; provided that (a) the Agent shall have given its prior
written consent to such assignment except that such consent shall not be
needed with respect to an assignment from a Bank to one of its
Affiliated Banks, (b) each such assignment shall be of a constant, and
not a varying, percentage of all the assigning Bank's rights and
obligations under this Agreement, (c) each assignment shall be in an
amount of not less than $9,000,000 that is a whole multiple of
$1,000,000, (d) each Bank shall retain, free of any such assignment, an
amount of its Commitment of not less than 51% of its Commitment at the
time it initially became a Bank hereunder and (e) the parties to such
assignment shall execute and deliver to the Agent, for recording in the
Register (as hereinafter defined), an Assignment and Acceptance,
substantially in the form of Exhibit F hereto (an "Assignment and
Acceptance') , together with any Notes subject to such assignment. Upon
such execution, delivery, acceptance and recording, from and after the
effective date specified in each Assignment and Acceptance, which
effective date shall be at least five (5) Business Days after the
execution thereof, (i) the assignee thereunder shall be a party hereto
and, to the extent provided in such Assignment and Acceptance, have the
rights and obligations of a Bank hereunder, and (ii) the assigning Bank
shall, to the extent provided in such assignment and upon payment to the
Agent of the registration fee referred to in 18.3, be released from its
obligations under this Agreement.
18.2. Certain Representations and Warranties; Limitations;
Covenants. By executing and delivering an Assignment and Acceptance,
the parties to the assignment thereunder confirm to and agree with each
other and the other parties hereto as follows: (a) other than the
representation and warranty that it is the legal and beneficial owner of
the interest being assigned thereby free and clear of any adverse claim,
the assigning Bank makes no representation or warranty and assumes no
responsibility with respect to any statements, warranties or
representations made in or in connection with this Agreement or the
execution, legality, validity, enforceability, genuineness, sufficiency
or value of this Agreement, the other Loan Documents or any other
instrument or document furnished pursuant hereto; (b) the assigning Bank
makes no representation or warranty and assumes no responsibility with
respect to the financial condition of the Borrower or any other Person
primarily or secondarily liable in respect of any of the Obligations, or
the performance or observance by the Borrower or any other Person
primarily or secondarily liable in respect of any of the Obligations of
any of their obligations under this Agreement or any of the other Loan
Documents or any other instrument or document furnished pursuant hereto
or thereto or the validity or enforceability or priority of any lien or
any Collateral; (c) such assignee confirms that it has received a copy
of this Agreement, together with copies of the most recent financial
statements referred to in 6.4 and 7.4 and such other documents and
information as it has deemed appropriate to make its own credit analysis
and decision to enter into such Assignment and Acceptance; (d) such
assignee will, independently and without reliance upon the assigning
Bank, the 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 and Collateral decisions in taking or not taking action
under this Agreement, (e) such assignee represents and warrants that it
is an Eligible Assignee; (f) such assignee appoints and authorizes the
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 Agent by the terms hereof or thereof, together with
such powers as are reasonably incidental thereto; (g) such assignee
agrees that it will perform in accordance with their terms all of the
obligations that by the terms of this Agreement are required to be
performed by it as a Bank; and (h) such assignee represents and warrants
that it is legally authorized to enter into such Assignment and
Acceptance.
18.3 Register. The Agent shall maintain a copy of each
Assignment and Acceptance delivered to it and a register or similar list
(the "Register") for the recordation of the names and addresses of the
Banks and the Commitment Percentages of, and principal amount of the
Loans owing to the Banks from time to time. The entries in the Register
shall be conclusive, in the absence of manifest error, and the Borrower,
the Agent and the Banks may treat each Person whose name is recorded in
the Register as a Bank hereunder for all purposes of this Agreement. The
Register shall be available for inspection by the Borrower and the Banks
at any reasonable time and from time to time upon reasonable prior
notice. Upon each such recordation, the assigning Bank agrees to pay to
the Agent a registration fee in the sum of $2,500.00. The Agent may
amend Schedules 1 and 1.2 hereof to reflect the recording of any such
assignments.
18.4. New Notes. Upon its receipt of an Assignment and
Acceptance executed by the parties to such assignment, together with
each Note subject to such assignment, the Agent shall (a) record the
information contained therein in the Register, and (b) give prompt
notice thereof to the Borrower and the Banks (other than the assigning
Bank). Within five (5) Business Days after receipt of such notice, the
Borrower, at its own expense, shall execute and deliver to the Agent, in
exchange for each surrendered Note, a new Note to the order of such
Eligible Assignee in an amount equal to the amount assumed by such
Eligible Assignee pursuant to such Assignment and Acceptance and, if the
assigning Bank has retained some portion of its Loans hereunder, a new
Note to the order of the assigning Bank in an amount equal to the amount
retained by it hereunder. Such new Notes shall provide that they are
replacements for the surrendered Notes and that they do not constitute a
novation, shall be in an aggregate principal amount equal to the
aggregate principal amount of the surrendered Notes, shall be dated the
effective date of such Assignment and Acceptance and shall otherwise be
in substantially the form of the assigned Notes. Within five (S) days of
issuance of any new Notes pursuant to this 18.4, the Borrower shall
deliver an opinion of counsel, addressed to the Banks and the Agent,
relating to the due authorization, execution and delivery of such new
Notes and the legality, validity and binding non-preferential effect
thereof, and that the Obligations evidenced by the new Notes are secured
by the Collateral with the same validity, enforceability and priority as
if given on the Effective Date, in form and substance satisfactory to
the Banks. The surrendered Notes shall be cancelled and returned to the
Borrower.
18.5. Participations. Each Bank may sell participations to one
or more banks or other entities in a portion of such Bank's rights and
obligations under this Agreement and the other Loan Documents not to
exceed forty-nine percent (49%) of its Commitment Percentage; provided
that (a) the Agent shall have given its prior written consent to such
participation, except that any Bank may sell participations to its
Affiliated Banks without such consent, (b) each such participation shall
be in an amount of not less than $9,000,000 that is a whole multiple of
$1,000,000, (c) any such sale or participation shall not affect the
rights and duties of the selling Bank hereunder to the Borrower and the
Bank shall continue to exercise all approvals, disapprovals and other
functions of a Bank, (d) the only rights granted to the participant
pursuant to such participation arrangements with respect to waivers,
amendments or modifications of the Loan Documents shall be the rights to
approve the vote of the Bank as to waivers, amendments or modifications
that would reduce the principal of or the interest rate on any Loans,
extend the term or increase the amount of the Commitment of such Bank as
it relates to such participant, reduce the amount of any fees to which
such participant is entitled or extend any regularly scheduled payment
date for principal or interest, provided that all approvals affecting a
Loan or this Agreement under this clause (d) shall be by a fifty-one
percent (51%) vote of such Bank's Commitment Percentage, and (e) no
participant shall have the right to grant further participations or
assign its rights, obligations or interests under such participation to
other Persons without the prior written consent of the Agent. The Agent
shall promptly advise the Borrower in writing of any such sale or
participation.
18.6. Pledge by Lender. Any Bank may at any time pledge all or
any portion of its interest and rights under this Agreement (including
all or any portion of its Note) to any of the twelve Federal Reserve
Banks organized under 4 of the Federal Reserve Act, 12 U.S.C. 341. No
such pledge or the enforcement thereof shall release the pledgor Bank
from its obligations hereunder or under any of the other Loan Documents.
18.7. No Assignment by Borrower. The Borrower shall not assign
or transfer any of its rights or obligations under any of the Loan
Documents without the prior written consent of each of the Banks.
18.8. Disclosure. The Borrower agrees that in addition to
disclosures made in accordance with standard banking practices any Bank
may disclose information obtained by such Bank pursuant to this
Agreement to assignees or participants and potential assignees or
participants hereunder.
19. NOTICES, ETC. Except as otherwise expressly provided in this
Agreement, all notices and other communications made or required to be
given pursuant to this Agreement or the Notes shall be in writing and
shall be delivered in hand, mailed by United States registered or
certified first class mail, postage prepaid, sent by overnight courier,
or sent by telegraph, telecopy, telefax or telex and confirmed by
delivery via courier or postal service, addressed as follows:
(a) if to the Borrower, at 65 Valley Stream Parkway,
Malvern, PA 19355, Attention: Chief Financial Officer or at such other
address for notice as the Borrower shall last have furnished in writing
to the Agent; and
(b) if to the Agent, at 100 Federal Street, Boston,
Massachusetts 02110, Attention: Real Estate Department, and to 115
Perimeter Center Place, N.E., Suite 500, Atlanta, Georgia 30346, Attn:
Lori Y. Litow, Vice President, or such other address for notice as the
Agent shall last have furnished in writing to the Borrower.
(c) if to any Bank, at such Bank's address set forth on
Schedule 1, hereto, or such other address for notice as such Bank shall
have last furnished in writing to the Person giving the notice.
Any such notice or demand shall be deemed to have been
duly given or made and to have become effective (i) if delivered by
hand, overnight courier or facsimile to a responsible officer of the
party to which it is directed, at the time of the receipt thereof by
such officer or the sending of such facsimile and (ii) if sent by
registered or certified first-class mail, postage prepaid, on the third
Business Day following the mailing thereof.
20. GOVERNING LAW; CONSENT TO JURISDICTION AND SERVICE. THIS
AGREEMENT AND EACH OF THE OTHER LOAN DOCUMENTS, EXCEPT AS
OTHERWISE
SPECIFICALLY PROVIDED THEREIN, ARE CONTRACTS UNDER THE LAWS OF THE
COMMONWEALTH OF MASSACHUSETTS AND SHALL FOR ALL PURPOSES BE
CONSTRUED IN
ACCORDANCE WITH AND GOVERNED BY THE LAWS OF SUCH COMMONWEALTH
(EXCLUDING
THE LAWS APPLICABLE TO CONFLICTS OR CHOICE OF LAW). THE BORROWER
AGREES
THAT ANY SUIT BY IT FOR THE ENFORCEMENT OF THIS AGREEMENT OR ANY OF
THE
OTHER LOAN DOCUMENTS MAY BE BROUGHT ONLY IN THE COURTS OF THE
COMMONWEALTH OF MASSACHUSETTS OR ANY FEDERAL COURT SITTING
THEREIN AND
BORROWER CONSENTS TO THE NONEXCLUSIVE JURISDICTION OF SUCH COURT
FOR ANY
SUIT BY AGENT OR ANY BANK AND THE SERVICE OF PROCESS IN ANY SUCH SUIT
BEING MADE UPON THE BORROWER BY MAIL AT THE ADDRESS SPECIFIED IN 19.
THE
BORROWER HEREBY WAIVES ANY OBJECTION THAT IT MAY NOW OR
HEREAFTER HAVE
TO THE VENUE OF ANY SUCH SUIT OR ANY SUCH COURT OR THAT SUCH SUIT IS
BROUGHT IN AN INCONVENIENT COURT. IN ADDITION TO THE COURTS OF THE
COMMONWEALTH OR ANY FEDERAL COURT SITTING THEREIN, THE AGENT OR
ANY BANK
MAY BRING ACTION(S) FOR ENFORCEMENT ON A NONEXCLUSIVE BASIS WHERE
ANY
COLLATERAL EXISTS AND THE BORROWER CONSENTS TO THE NON-EXCLUSIVE
JURISDICTION OF SUCH COURT AND THE SERVICE OF PROCESS IN ANY SUCH
SUIT
BEING MADE UPON THE BORROWER BY MAIL AT THE ADDRESS SPECIFIED IN 19.
21. HEADINGS. The captions in this Agreement are for convenience of
reference only and shall not define or limit the provisions hereof.
22. COUNTERPARTS. This Agreement and any amendment hereof may be
executed in several counterparts and by each party on a separate
counterpart, each of which when so executed and delivered shall be an
original, and all of which together shall constitute one instrument. In
proving this Agreement it shall not be necessary to produce or account
for more than one such counterpart signed by the party against whom
enforcement is sought.
23. ENTIRE AGREEMENT. The Loan Documents and any other documents
executed in connection herewith or therewith express the entire
understanding of the parties with respect to the transactions
contemplated hereby. Neither this Agreement nor any term hereof may be
changed, waived, discharged or terminated, except as provided in 25.
24. WAIVER OF JURY TRIAL AND CERTAIN DAMAGE CLAIMS. THE BORROWER
HEREBY WAIVES ITS RIGHT TO A JURY TRIAL WITH RESPECT TO ANY ACTION OR
CLAIM ARISING OUT OF ANY DISPUTE IN CONNECTION WITH THIS AGREEMENT, THE
NOTES OR ANY OF THE OTHER LOAN DOCUMENTS, ANY RIGHTS OR OBLIGATIONS
HEREUNDER OR THEREUNDER OR THE PERFORMANCE OF SUCH RIGHTS AND
OBLIGATIONS. EXCEPT TO THE EXTENT EXPRESSLY PROHIBITED BY LAW, THE
BORROWER HEREBY WAIVES ANY RIGHT IT MAY HAVE TO CLAIM OR RECOVER IN ANY
LITIGATION REFERRED TO IN THE PRECEDING SENTENCE ANY SPECIAL, EXEMPLARY,
PUNITIVE OR CONSEQUENTIAL DAMAGES OR ANY DAMAGES OTHER THAN, OR IN
ADDITION TO, ACTUAL DAMAGES, INCLUDING ANY DAMAGES PURSUANT TO M.G.L. C.
93A ET SEQ. THE BORROWER (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR
ATTORNEY OF THE AGENT OR ANY BANK HAD REPRESENTED, EXPRESSLY OR
OTHERWISE, THAT THE AGENT OR SUCH BANK WOULD NOT, IN THE EVENT OF
LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVERS AND (B)
ACKNOWLEDGES THAT THE AGENT AND THE BANKS HAVE BEEN INDUCED TO ENTER INTO
THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS TO WHICH THEY ARE PARTIES BY,
AMONG OTHER THINGS, THE WAIVERS AND CERTIFICATIONS CONTAINED HEREIN.
25. CONSENTS, AMENDMENTS, WAIVERS, ETC. Any consent or approval
required or permitted by this Agreement may be given, and any term of
this Agreement or of any other instrument related hereto or mentioned
herein may be amended, and the performance or observance by the Borrower
of any terms of this Agreement or such other instrument or the
continuance of any Default or Event of Default may be waived (either
generally or in a particular instance and either retroactively or
prospectively) with, but only with, the written consent of the Requisite
Banks, and, in the case of amendments, with the written consent of the
Borrower other than amendments to schedules made in the ordinary course
as contemplated by this Agreement. Notwithstanding the foregoing, (i)
the rate of interest on and the term or amount of the Notes, (ii) the
amount of the Commitments of the Banks, (iii) the amount of any fee
payable to a Bank hereunder, (iv) any provision herein or in any of the
Loan Documents which expressly requires consent of all the Banks, (v)
the funding provisions of 2.4 and 2.5 hereof, and (vi) the rights,
duties and obligations of the Agent specified in 14 hereof, may not be
amended without the written consent of each Bank affected thereby, nor
may the Agent release any obligor from its liability with respect to the
Obligations, without first obtaining the written consent of all the
Banks. No waiver shall extend to or affect any obligation not expressly
waived or impair any right consequent thereon. No course of dealing or
delay or omission on the part of the Agent or any Bank in exercising any
right shall operate as a waiver thereof or otherwise be prejudicial
thereto. No notice to or demand upon the Borrower shall entitle the
Borrower to other or further notice or demand in similar or other
circumstances.
26. SEVERABILITY. The provisions of this Agreement are severable, and
if any one clause or provision hereof shall be held invalid or
unenforceable in whole or in part in any jurisdiction, then such
invalidity or unenforceability shall affect only such clause or
provision, or part thereof, in such jurisdiction, and shall not in any
manner affect such clause or provision in any other jurisdiction, or any
other clause or provision of this Agreement in any jurisdiction.
IN WITNESS WHEREOF, the undersigned have duly executed this Agreement as
a sealed instrument as of the date first set forth above.
WITNESS: THE FIRST NATIONAL BANK OF BOSTON,
as Agent
By:
- -------------------------------- ------------------------------
THE FIRST NATIONAL BANK OF BOSTON
By:
- -------------------------------- ------------------------------
LIBERTY PROPERTY TRUST
By:
- -------------------------------- ------------------------------
LIBERTY PROPERTY LIMITED PARTNERSHIP
By: Liberty Property Trust,
its general partner
By:
- -------------------------------- ------------------------------
NOTE
No. 5 December 27, 1996
$16,666,000.00
FOR VALUE RECEIVED, the undersigned, Liberty Property Limited
Partnership, a Pennsylvania limited partnership (the "Borrower"),
promises to pay to the order of Dresdner Bank AG (hereinafter, together
with its successors in title and assigns, called the "Bank") at the head
office of The First National Bank of Boston, as Agent (the "Agent") at
100 Federal Street, Boston, Massachusetts 02110, the principal sum of
Sixteen Million Six Hundred Sixty-Six Thousand Dollars ($16,666,000.00)
or, if less, the aggregate unpaid principal amount of all Loans made by
the Bank to the Borrower pursuant to the Loan Agreement dated as of
December 13, 1996 among the Bank, the Borrower, Liberty Property Trust,
the other lending institutions named therein and the Agent, as amended
from time to time (the "Loan Agreement"). Capitalized terms used herein
and not otherwise defined herein shall have the meanings assigned to
them in the Loan Agreement. Unless otherwise provided herein, the rules
of interpretation set forth in Section 1.2 of the Loan Agreement shall be
applicable to this Note. This Note replaces, in part, Note No. 2 issued
under the Loan Agreement and does not constitute a novation.
The Borrower also promises to pay (a) principal from time to time at the
times provided in the Loan Agreement and (b) interest from the date
hereof on the principal amount from time to time unpaid at the rates and
times set forth in the Loan Agreement and in all cases in accordance
with the terms of the Loan Agreement. Late charges and other charges
and default rate interest shall be paid by Borrower in accordance with
the terms of the Loan Agreement. The entire outstanding principal
amount of this Note, together with all accrued but unpaid interest
thereon, shall be due and payable in full on the Maturity Date or, if
prior to such Maturity Date Borrower exercises the Term Extension Option
pursuant to Section 3.1 of the Loan Agreement, such outstanding principal and
interest shall be due and payable in full on the Term Extension
Maturity Date. The Bank may endorse the record relating to this Note
with appropriate notations evidencing advances and payments of principal
hereunder as contemplated by the Loan Agreement.
This Note is issued pursuant to, is entitled to the benefits of, and is
subject to the provisions of the Loan Agreement. The principal of this
Note is subject to prepayment in whole or in part in the manner and to
the extent specified in the Loan Agreement. This Note is secured by the
Security Documents. However, the principal of this Note, the interest
accrued on this Note and all other Obligations of the Borrower are full
recourse obligations of the Borrower, and all of its Real Estate Assets,
the Collateral and its other properties shall be available for the
payment and performance of this Note, the interest accrued on this Note,
and all of such other Obligations. Notwithstanding anything to the
contrary contained herein, the trustees of Liberty Property Trust shall
have no personal liability of any nature under this document. The Agent
and the Bank shall look solely to the assets of Liberty Property Trust
to satisfy any liability or recourse against Liberty Property Trust
hereunder.
In case an Event of Default shall occur and be continuing, the entire
unpaid principal amount of this Note and all of the unpaid interest
accrued thereon may become or be declared due and payable in the manner
and with the effect provided in the Loan Agreement.
The Borrower and all endorsers hereby waive presentment, demand, protest
and notice of any kind in connection with the delivery, acceptance,
performance and enforcement of this Note, and also hereby assent to
extensions of time of payment or forebearance or other indulgences
without notice.
THIS NOTE AND THE OBLIGATIONS OF THE BORROWER HEREUNDER SHALL BE
GOVERNED BY AND INTERPRETED AND DETERMINED IN ACCORDANCE WITH
THE LAWS OF THE COMMONWEALTH OF MASSACHUSETTS (EXCLUDING THE LAWS
APPLICABLE TO CONFLICTS OR CHOICE OF LAW).
IN WITNESS WHEREOF, the Borrower has caused this Note to be duly
executed in its name as an instrument under seal on the date first above
written.
ATTEST: LIBERTY PROPERTY LIMITED
PARTNERSHIP
By: LIBERTY PROPERTY TRUST,
Sole general partner
- ------------------------------- -----------------------------------
Assistant Secretary By:
Title