EXHIBIT 10.10
TERM LOAN AGREEMENT
AMONG
LIBERTY PROPERTY LIMITED PARTNERSHIP
and
LIBERTY PROPERTY TRUST
and
BANKBOSTON, N.A., AS ADMINISTRATIVE AGENT AND LEAD ARRANGER
and
FIRST UNION NATIONAL BANK, AS SYNDICATION AGENT
and
THE CHASE MANHATTAN BANK, AS DOCUMENTATION AGENT
and
THE BANKS PARTY HERETO
TABLE OF CONTENTS
PAGE
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1. DEFINITIONS OF RULES OF INTERPRETATION 1
1.1. Definitions 1
1.2. Rules of Interpretation 15
2. TERM LOAN FACILITY 16
2.1. Commitment to Lend 16
2.2. The Notes 16
2.3. Interest on Loans 16
2.4. Interest Options 17
2.5. Funds for Loans 17
3. REPAYMENT OF THE LOANS
3.1. Maturity 18
3.2. Optional Repayments of Loans 18
4. CERTAIN GENERAL PROVISIONS 20
4.1. Facility Fees, Arrangement Fee and Agent's Fee 20
4.2. Funds for Payments 20
4.3. Computations 20
4.4. Additional Costs, Etc. 21
4.5. Capital Adequacy 22
4.6. Certificate 22
4.7. Indemnity 22
4.8. Interest on Overdue Amounts 22
4.9. Inability to Determine Eurodollar Rate 22
4.10. Illegality 23
4.11. Replacement of Banks 23
5. UNENCUMBERED PROPERTIES; NO LIMITATION ON RECOURSE 23
5.1. Listing of Unencumbered Properties 23
5.2. Waivers of Requisite Banks 24
5.3. Rejection of Unencumbered Properties 24
5.4. Change in Circumstances 24
5.5. No Limitation on Recourse 24
5.6. Additional Guarantor Subsidiaries 24
6. REPRESENTATIONS AND WARRANTIES 25
6.1. Authority; Etc. 25
6.2. Governmental Approvals 26
6.4. Financial Statements 26
6.5. No Material Changes, Etc. 27
6.6. Franchises, Patents, Copyrights, Etc. 27
6.7. Litigation 27
6.8. No Materially Adverse Contracts, Etc. 28
6.9. Compliance With Other Instruments, Laws, Etc. 28
6.10. Tax Status 28
6.11. Event of Default 28
6.12. Investment Company Act 28
6.13. Absence of Financing Statements, Etc. 28
6.14. Status of the Company 28
6.15. Certain Transactions 29
6.16. Benefit Plans: Multiemployer Plans: Guaranteed
Pension Plans 29
6.17. Regulations U and X 29
6.18. Environmental Compliance 29
6.19. Subsidiaries and Affiliates 31
6.20. Loan Documents 31
6.21. Buildings on the Unencumbered Properties 31
6.22. Year 2000 Compliance 31
7. AFFIRMATIVE COVENANTS OF THE BORROWER 31
7.1. Punctual Payment 31
7.2. Maintenance of Office 32
7.3. Records and Accounts 32
7.4. Financial Statements, Certificates and Information
7.5. Notices 32
7.6. Existence; Maintenance of REIT Status; Maintenance
of Properties 34
7.7. Insurance 35
7.8. Taxes 35
7.9. Inspection of Properties and Books 35
7.10. Compliance with Laws, Contracts, Licenses, and Permits 35
7.11. Use of Proceeds 36
7.12. Notices of Significant Transactions 36
7.13. Further Assurance 36
7.14. Environmental Indemnification 36
7.15. Response Actions 37
7.16. Employee Benefit Plans 37
7.17. Required Interest Rate Contracts 38
8. CERTAIN NEGATIVE COVENANTS OF THE BORROWER 38
8.1. Restrictions on Recourse Indebtedness 38
8.2. Restrictions on Investments 39
8.3. Merger, Consolidation and Other Fundamental Changes 40
8.4. Sale and Leaseback 40
8.5. Compliance with Environmental Laws 40
8.6. Distributions 41
9. FINANCIAL COVENANTS OF THE BORROWER 41
9.1. Value of All Unencumbered Properties 41
9.2. Minimum Debt Service Coverage 41
9.3. Total Liabilities to Total Assets 41
9.4. Total Liabilities minus Subordinated Indebtedness to
Total Assets 41
9.5. Maximum Secured Debt 41
9.6. Minimum Tangible Net Worth 41
9.7. Total Operating Cash Flow to Interest Expense 42
9.8. Total Operating Cash Flow to Senior Interest Expense 42
9.9. EBITDA to Fixed Charges 42
9.10. Aggregate Occupancy Rate 42
10.0 CONDITIONS TO EFFECTIVENESS 42
10.1 Loan Documents 42
10.2 Certified Copies of Organization Documents; Good
Standing Certificates 42
10.3 By-laws; Resolutions 42
10.4 Incumbency Certificate; Authorized Signers 42
10.5 Opinions of Counsel Concerning Organization and
Loan Documents 43
10.6 Payment of Fees 43
10.7 Conditions of Disbursement 43
11. CONDITIONS OF DISBURSEMENT OF LOANS 43
11.1. Representations True; No Event of Default;
Compliance Certificate 43
11.2. No Legal Impediment 43
11.3. Governmental Regulation 44
11.4. Proceedings and Documents 44
12. EVENTS OF DEFAULT; ACCELERATION; ETC. 44
12.1. Events of Default and Acceleration 44
12.2. Remedies 46
12.3. Distribution of Enforcement Proceeds 47
13. SETOFF 47
14. THE AGENT 48
14.1. Authorization 48
14.2. Employees and Agents 48
14.3. No Liability 48
14.4. No Representations 48
14.5. Payments 49
14.6. Holders of Notes 50
14.7. Indemnity 50
14.8. Agent as Bank 50
14.9. Resignation 50
14.10. Notification of Defaults and Events of Default 51
14.11. Duties in the Case of Enforcement 51
15. EXPENSES 51
16. INDEMNIFICATION 52
17. SURVIVAL OF COVENANTS, ETC. 53
18. ASSIGNMENT; PARTICIPATIONS; ETC. 53
18.1. Conditions to Assignment by Banks 53
18.2. Certain Representations and Warranties; Limitations;
Covenants 54
18.3. Register 55
18.4. New Notes 55
18.5. Participations 56
18.6. Pledge by Lender 56
18.7. No Assignment by Borrower 56
18.8. Disclosure 56
19. NOTICES, ETC. 56
20. GOVERNING LAW; CONSENT TO JURISDICTION AND SERVICE 57
21. HEADINGS 57
22. COUNTERPARTS 58
23. ENTIRE AGREEMENT 58
24. WAIVER OF JURY TRIAL AND CERTAIN DAMAGE CLAIMS 58
25. CONSENTS, AMENDMENTS, WAIVERS, ETC. 58
26. SEVERABILITY 59
27. ACKNOWLEDGMENTS 59
Exhibit A Form of Note
Exhibit B Form of Conversion Request
Exhibit C Form of Compliance Certificate
Exhibit D Opinion Requirements
Exhibit E Form of Assignment and Acceptance
Schedule 1 Banks; Domestic and Eurodollar Lending Offices
Schedule 1.1 Unencumbered Properties
Schedule 1.2 Commitments and Facility 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 6.16 Employee Benefit Plans
Schedule 6.18 Environmental Matters
Schedule 6.19 Company Assets
Schedule 6.21 Building Structural Defects, etc.
Schedule 7.18 Interest Rate Contracts
Schedule 8.2(d) Investments
TERM LOAN AGREEMENT
This TERM LOAN AGREEMENT is made as of the 15th day of January,
1999, by and among LIBERTY PROPERTY LIMITED PARTNERSHIP, a Pennsylvania
limited partnership (the "Borrower"), LIBERTY PROPERTY TRUST, a Maryland
trust (the "Company") and BANKBOSTON, N.A., a national banking
association ("BankBoston"), (BankBoston and the other lending
institutions which are listed from time to time on Schedule 1 are
collectively hereinafter, the "Banks"), FIRST UNION NATIONAL BANK, as
syndication agent, THE CHASE MANHATTAN BANK, as documentation agent and
BANKBOSTON, N.A., as administrative agent for itself and such other
lending institutions (the "Agent").
WHEREAS, BankBoston and certain other lenders (collectively, the
"Revolving Credit Lenders") provided an unsecured revolving credit
facility in the maximum amount of $325,000,000 (the "Revolving Credit
Facility") to the Borrower pursuant to an Amended and Restated Loan
Agreement among the Borrower, the Company, the Revolving Credit Lenders
and BankBoston, as Agent, dated as of June 16, 1997, as amended by First
Amendment to Amended and Restated Loan Agreement dated as of March 16,
1998 (as the same may be further amended pursuant to its terms, the
"Revolving Credit Agreement");
WHEREAS, the Borrower has requested and BankBoston and the other
Banks named herein have agreed to provide a term loan facility in the
aggregate principal amount of $135,000,000 (the "Term Loan Facility")
subject to the terms and conditions set forth herein;
NOW, THEREFORE, to accomplish these purposes, the Agent, the
Borrower, the Company 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:
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. BankBoston, N.A. acting in its capacity 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.
Aggregate Occupancy Rate. With respect to the Unencumbered
Properties at any time, the ratio, as of such date, expressed as a
percentage, of (i) the net leasable area of all Unencumbered Properties
leased to tenants paying rent pursuant to Leases other than Leases which
are in material default, to (ii) the aggregate net leasable area of all
Unencumbered Properties, excluding from both (i) and (ii) the net
leasable area of buildings under construction prior to the date of
substantial completion of such construction.
Agreement. This Term Loan Agreement, including the Schedules and
Exhibits hereto.
Applicable Margin. As of any date of determination, 1.35%
Assignment and Acceptance. See 18.
Balance Sheet Date. December 31, 1997.
Banks. BankBoston 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 BankBoston 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.
BankBoston. See preamble.
Borrower. As defined in the preamble hereto.
Buildings. The buildings, structures and other improvements now or
hereafter located on the Unencumbered Properties.
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.
Closing Date. The date upon which this Agreement shall become
effective pursuant to 10 and the Loans are made pursuant to 2.1 and 11.
Code. The Internal Revenue Code of 1986, as amended and in effect
from time to time.
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 a Loan to the Borrower.
Company. See preamble.
Conversion Request. A notice given by the Borrower to the Agent of
its election to convert or continue a Loan in accordance with 2.4.
Default. See 12.1.
Delinquent Bank. See 14.5(c).
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.
EBITDA. The Borrower's earnings before interest, taxes,
depreciation and amortization, as determined in accordance with
generally accepted accounting principles.
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.
Notwithstanding anything to the contrary, the term Eligible Assignee
shall exclude any Person controlling, controlled by or under common
control with, the Borrower or the Company.
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).
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.
Facility 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 Term Loan Facility.
Fixed Charges. With respect to any fiscal period of the Borrower,
an amount equal to the sum of (i) Interest Expense, (ii) regularly
scheduled installments of principal payable with respect to all
Indebtedness of Borrower, (iii) current maturities on Recourse
Indebtedness not refinanced with Loans hereunder or other replacement
Indebtedness or otherwise repaid plus (iv) all dividend payments due to
the holders of any preferred stock of the Company and all distributions
due to the holders of any limited partnership interests in the Borrower
other than limited partner distributions based on the per share dividend
paid on the common stock of the Company.
Fixed Rate Prepayment Fee. See 3.2.
Funding Date. The Closing Date, and the date on which any Loan is
converted or continued in accordance with 2.4.
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 which are at least 85% 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, 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) all capitalized interest determined in
accordance with generally accepted accounting principles, plus (iii) the
amortization of deferred financing 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 Funding 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 Conversion Request (i) for any Base Rate Loan, the day on
which such Base Rate Loan is paid in full or converted to a Eurodollar
Rate Loan; 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
2.4, 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.
Interest Rate Contracts. Interest rate swap, cap or similar
agreements providing for interest rate protection.
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 the Buildings on the
Unencumbered Properties by persons other than the owner thereof.
Lien. Any lien, encumbrance, mortgage, deed of trust, pledge,
restriction or other security interest. If title to any Real Estate
Asset is held by a Subsidiary of Borrower then any pledge or assignment
of Borrower's stock, partnership interest, limited liability company
interest or other ownership interest in such Subsidiary shall be deemed
to be a Lien on the Real Estate Assets owned by such Subsidiary.
Loan Documents. This Agreement, the Notes, the Guaranties and any
and all other agreements, documents and instruments now or hereafter
evidencing, securing or otherwise relating to the Loans.
Loans. Loans to be made by the Banks to the Borrower pursuant to
2.
Material Adverse Effect means a material adverse effect on (i) the
business, Unencumbered 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. January 15, 2001, or such earlier date on which the
Loans shall become due and payable pursuant to the terms hereof.
Moody's Rating. The rating for Borrower's senior long-term
unsecured debt assigned by Moody's Investors Services, Inc. or its
successors.
Multiemployer 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 September
30, 1998 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 such Real
Estate Assets during such fiscal period, including, without limitation,
property operating expenses, 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.
In the case of Real Estate Assets owned by Related Companies which are
not wholly-owned by Borrower, Net Operating Income shall be reduced by
the amount of cash flow of such Related Company allocated for
distribution to the minority owners of such Related Company. With
respect to Real Estate Assets located outside of the United States, Net
Operating Income shall be converted from the currency in which the
applicable income and expenses are paid to Dollars using the currency
exchange rates in effect as of the end of the applicable fiscal period.
Notes. See 2.2.
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.
Permitted Acquisition. The acquisition by Borrower or any Related
Company 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), whether such acquisition
is accomplished by a direct purchase of such Real Estate Assets or by a
merger or acquisition of stock or other ownership interests or debt
securities such that the owner of such Real Estate becomes a Related
Company.
Permitted Build-To-Suit Developments. Permitted Developments with
respect to which, at the date of determination, at least sixty percent
(60%) of the net 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 8.2 from the time of commencement of the
applicable construction work until a final certificate of occupancy has
been issued with respect to such project in the amount of the total
projected cost of such project.
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 Liens. The following Liens, security interests and other
encumbrances:
(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 which are either covered by a full
indemnity from a creditworthy indemnitor or have been 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,
Leases, 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 Unencumbered Property and (xx) do not make title to such
property unmarketable by the conveyancing standards in effect where such
property is located;
(vi) mortgages held by Borrower or a Guarantor securing
Indebtedness described in 8.1(j).
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 3.2.
Pro Forma Unsecured Debt Service Charges. For any fiscal quarter
of the Borrower, the sum of (a) an amount determined by the Agent based
on a twenty-five (25) year mortgage style amortization schedule,
calculated on the Pro Forma Unsecured Principal Amount and an interest
rate equal to the greater of (i) the weighted average annual interest
rate actually applicable to the Unsecured Indebtedness during such
fiscal quarter or (ii) the then current ten (10) year U.S. Treasury bill
yield plus one and three-quarters percent (1.75%) plus (b) one-quarter
of the actual debt service charges due during the current fiscal year
pursuant to the Subordinated Debenture Indenture.
Pro Forma Unsecured Principal Amount. (a) With respect to
Compliance Certificates delivered pursuant to 7.4(d), the maximum
principal amount of Unsecured Indebtedness (excluding the Subordinated
Debentures) outstanding at any time during the applicable fiscal
quarter; (b) with respect to Compliance Certificates delivered pursuant
to 11.1, the principal amount of Unsecured Indebtedness (excluding the
Subordinated Debentures) outstanding after giving effect to the
requested Loan; (c) with respect to Compliance Certificates delivered
pursuant to 7.12, the principal amount of Unsecured Indebtedness
(excluding the Subordinated Debentures) outstanding after giving effect
to the proposed transaction 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 or any of the Related Companies or any Permitted Joint
Venture.
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 Unencumbered Properties, but excluding all leaseholds
other than leaseholds under ground leases having an unexpired term of at
least 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.
Register. See 18.3.
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).
Requisite Banks. As of any date, the Banks whose aggregate
Facility Percentages constitute at least sixty-six percent (66%) of the
total of all Facility Percentages provided that the Facility Percentages
of any Delinquent Banks shall be disregarded when determining the
Requisite Banks.
Reserve Amount. With respect to any Real Estate Assets or group of
Real Estate Assets, a normalized annual reserve for capital
expenditures, replacement reserves and leasing costs at the rate of
$0.10 per year per square foot of net leasable area contained in all
buildings on such Real Estate Assets. When the Reserve Amount is used
in computing an amount with respect to a fiscal period which is shorter
than a year, said amount shall be appropriately prorated.
Responsible Officer. With respect to the Company, any one of its
Chairman, President, Chief Executive Officer, Chief Operating Officer,
Chief Financial Officer, Treasurer, Executive Vice Presidents or Senior
Vice Presidents.
Revolving Credit Agreement. See recitals.
Revolving Credit Facility. See recitals.
Revolving Credit Lenders. The lending institutions which are from
time to time lenders under the Revolving Credit Agreement.
S&P Rating. The rating for Borrower's senior long-term unsecured
debt assigned by Standard & Poor's, a division of The McGraw-Hill
Companies, Inc., or its successors.
Secured Indebtedness. All Indebtedness of the Borrower and any of
the Related Companies which is secured by a Lien on any Properties.
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.
Subordinated Debentures. Indebtedness of Borrower with respect to
its Exchangeable Subordinated Debentures due July 1, 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 July 1, 2001.
Subordinated Indebtedness. All Unsecured 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
Subordinated Debentures.
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.
Syndication Banks. See recitals.
Tangible Net Worth. Total Assets minus Total Liabilities minus all
intangibles determined in accordance with generally accepted accounting
principles.
Term Loan Facility. The term loan facility provided to the
Borrower pursuant to this Agreement.
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 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 (excluding capitalized interest and any other portions of
Interest Expense which are not deducted in the computation of Funds From
Operations) minus (iii) the Reserve Amount for all Real Estate Assets
owned by the Borrower or any of the Related Companies, all as determined
in accordance with the applicable definitions set forth herein 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.
Unencumbered Net Operating Income. With respect to any fiscal
period of the Borrower, the sum of the Net Operating Income of all Real
Estate Assets which were Unencumbered Properties hereunder during such
fiscal period, provided, however, there shall be excluded therefrom
(i) the amount necessary so that the Net Operating Income of any one
Unencumbered Property does not exceed fifteen percent (15%) of
Unencumbered Net Operating Income and (ii) the amount necessary so that
the aggregate Net Operating Income of all Unencumbered Properties
located in the United Kingdom does not exceed four percent (4%) of
Unencumbered Net Operating Income.
Unencumbered Property. A Real Estate Asset which at the date of
determination, (i) is owned in fee by Borrower or one of the Guarantor
Subsidiaries, (ii) is improved with one or more completed industrial or
office buildings (including "flex" and warehouse buildings) of a type
consistent with the Borrower's business strategy; (iii) is not directly
or indirectly subject to any Lien (other than Permitted Liens) or to any
negative pledge agreement or other agreement that prohibits the creation
of any Lien thereon; (iv) is a Real Estate Asset with respect to which
each of the representations contained in 6.18 and 6.21 hereof is true
and accurate as of such date of determination; (v) may be legally
conveyed separately from any other Real Estate without the need to
obtain any subdivision approval, zoning variance or other consent or
approval from an unrelated Person; (vi) is located in the United States,
Canada or the United Kingdom, and (vii) to the extent requested by the
Agent, the Borrower has delivered to the Agent historical operating and
leasing information relating to such Unencumbered Property, in form and
substance satisfactory to the Agent. Each Real Estate Asset which
satisfies the conditions set forth in this definition or with respect to
which the Requisite Banks have granted the necessary waivers pursuant to
5.2 shall be deemed to be an Unencumbered Property only during such
periods of time as Borrower has included the same on the list of
Unencumbered Properties attached to the most recent Compliance
Certificate delivered hereunder.
Unencumbered Property Value. With respect to any Unencumbered
Property at any time, an amount computed as follows: (a) the Net
Operating Income of such Unencumbered Property for the most recent
fiscal quarter of the Borrower for which financial statements have been
delivered to the Agent pursuant to 7.4; (b) then multiplying by four
(4); (c) then subtracting from such annualized Net Operating Income the
Reserve Amount for such Unencumbered Property; and (d) dividing such
difference by 0.095. In the event that the Unencumbered Property Value
of any Unencumbered Property computed pursuant to the preceding sentence
exceeds fifteen percent (15%) of the Value of All Unencumbered
Properties as of the end of the most recent fiscal quarter of the
Borrower for which financial statements have been delivered to the Agent
pursuant to 7.4 then the amount in excess of said 15% level will be
excluded when computing the Unencumbered Property Value for such
Unencumbered Property. With respect to any Unencumbered Property which,
during the applicable fiscal quarter, has been acquired by Borrower or
has had the building or buildings being constructed thereon completed
and occupied by tenants, Borrower may compute the Unencumbered Property
Value for such Unencumbered Property based on a pro forma Net Operating
Income for such fiscal quarter, which computation must be approved by
the Agent.
Unsecured Indebtedness. All Indebtedness of Borrower or of any of
the Related Companies which is not secured by a Lien on any Properties
including, without limitation, the Loans, the loans under the Revolving
Credit Facility, the Subordinated Indebtedness and any Indebtedness
evidenced by any bonds, debentures, notes or other debt securities
presently outstanding or which may be hereafter issued by Borrower or by
the Company. Unsecured Indebtedness shall not include accrued ordinary
operating expenses payable on a current basis.
Value of All Unencumbered Properties. When determined as of the end
of a fiscal quarter, an amount computed as follows: (a) Unencumbered Net
Operating Income; (b) then multiplying by four (4); (c) then
subtracting from such annualized Net Operating Income the Reserve Amount
for all Unencumbered Properties; and (d) dividing such difference by
0.095. When determined as of a date which is during a fiscal quarter
based on an updated list of Unencumbered Properties attached to the
applicable Compliance Certificate, the Value of All Unencumbered
Properties most recently computed as provided in the preceding sentence
of this definition will be adjusted by subtracting the Unencumbered
Property Value of the previous Unencumbered Properties which have been
deleted from such list and by adding the Unencumbered Property Value of
the Unencumbered Properties which have been added to such list;
provided, however, that to the extent the addition of Unencumbered
Properties located in the United Kingdom causes the aggregate
Unencumbered Property Values of the Unencumbered Properties located in
the United Kingdom to exceed four percent (4%) of the Value of All
Encumbered Properties, the amount in excess of said 4% level will be
excluded when computing the Value of All Unencumbered Properties.
Variable Rate Indebtedness. The Loans and all other Indebtedness
of the Borrower which bears interest at a rate which is not fixed either
through maturity or for a term of at least thirty-six (36) months from
the date that such fixed rate became effective.
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. TERM LOAN FACILITY.
2.1. Commitment to Lend. Subject to the provisions of 10 and
the other terms and conditions set forth in this Agreement, each of the
Banks severally agrees to lend to the Borrower on the Closing Date the
principal amount equal to such Bank's Commitment. Any amounts repaid
pursuant to 3 may not be reborrowed.
2.2. 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. One
or more Notes shall be payable to the order of each Bank in an aggregate
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 Funding 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.
2.3. Interest on Loans.
(a) Each Base Rate Loan shall bear interest for the period
commencing with the Funding 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 Funding Date thereof and ending on the last
day of the Interest Period with respect thereto at the rate equal to the
Applicable Margin 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.
2.4. Interest Options . The Loans advanced on the Closing
Date shall be Eurodollar Rate Loans with an Interest Period of 6 months.
After the expiration of such initial Interest Period, Outstanding Loans
may be converted or continued as follows:
(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 2.4(b) and 2.4(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 Facility 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 $5,000,000 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 2.4 (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 elect to convert a Base Rate Loan to
a Eurodollar Rate Loan pursuant to 2.4(a) or elect to continue a
Eurodollar Rate Loan pursuant to 2.4(b) if, after giving effect thereto,
there would be greater than four (4) Eurodollar Rate Loans Outstanding.
Any request for a Eurodollar Rate Loan that would create greater than
four (4) Eurodollar Rate Loans Outstanding shall be deemed to be a
request for a Base Rate Loan.
2.5. Funds for Loans .
(a) Subject to 10 and other provisions of this Agreement, not
later than 11:00 a.m. (Boston time) on the Closing Date, 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. Upon
receipt from each Bank of such amount, and upon receipt of the documents
required by 10 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 the Closing Date the amount
of its Commitment 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 but shall not obligate any other Bank or Agent
to fund more than its Commitment or to increase its Commitment.
(b) The Agent may, unless notified to the contrary by any Bank
prior to the Closing Date, assume that such Bank has made available to
the Agent on such Closing Date the amount of such Bank's Facility
Percentage of the Loans to be made on such Closing 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 Closing 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, times (iii) a
fraction, the numerator of which is the number of days or portion
thereof that elapsed from and including such Closing Date to the date on
which the amount of such Bank's Commitment 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 . 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.
3.2. 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 3.2 may be
made only on the last day of the Interest Period relating thereto,
except as set forth below in this 3.2. 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 3.2 of any Base
Rate Loans and four (4) Eurodollar Business Days, notice of any proposed
repayment pursuant to this 3.2 of any Eurodollar Rate Loans, specifying
the proposed date of payment of Loans and the principal amount to be
paid. The Agent shall promptly notify each Bank of the principal amount
of such payment to be received by such Bank. Each such partial
prepayment of the Loans shall be in an integral multiple of $1,000,000
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:
(a) 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.
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 for the same
period on any readily marketable bond or other obligation of the United
States of America designated by the Agent in its sole discretion at or
about the time of such payment, such bond or other obligation of the
United States of America to be in an amount equal (as nearly as may be)
to the amount of principal so paid and to have a maturity comparable to
the remainder of such Interest Period, and the interest to accrue
thereon to take account of amortization of any discount from par or
accretion of premium above par at which the same is selling at the time
of designation.
(b) 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.
(c) 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. Facility Fees, Arrangement Fee and Agent's Fee . The
Borrower shall pay to the Agent for the account of each of the Banks
facility fees in the amount of 50 basis points of such Bank's
Commitment. The Borrower shall pay to BankBoston arrangement fees and
agency fees in the amounts specified in the fee agreement between
BankBoston and the Borrower dated January 12, 1999.
4.2. 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, 4.4 and 4.5) 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.
4.3. 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.
4.4. 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.
4.5. 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.
4.6. Certificate. A certificate setting forth any additional
amounts payable pursuant to 4.4 or 4.5 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.
4.7. 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 conversion after the Borrower has given (or is
deemed to have given) 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.
4.8. Interest on 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 Base Rate 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.
4.9 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
Conversion 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.
4.10. 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 4.10, 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.
4.11. Replacement of Banks. If any of the Banks shall make a
notice or demand upon the Borrower pursuant to 4.4, 4.5, or 4.10 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 allocated to the assigning Bank.
5. UNENCUMBERED PROPERTIES; NO LIMITATION ON RECOURSE.
5.1. Listing of Unencumbered Properties . The Borrower
represents and warrants that each of the Real Estate Assets listed on
Schedule 1.1 will on the Closing Date satisfy all of the conditions set
forth in the definition of Unencumbered Property. From time to time
during the term of this Agreement additional Real Estate Assets may
become Unencumbered Properties and certain Real Estate Assets which
previously satisfied the conditions set forth in the definition of
Unencumbered Property may cease to be Unencumbered Properties by virtue
of property dispositions, creation of Liens or other reasons. There
shall be attached to each Compliance Certificate delivered pursuant to
7.4(d) or 7.12 an updated listing of the Unencumbered Properties relied
upon by the Borrower in computing the Value of All Unencumbered
Properties and the Unencumbered Net Operating Income stated in such
Compliance Certificate.
5.2. Waivers by Requisite Banks. If any Real Estate Asset
fails to satisfy any of the requirements contained in the definition of
Unencumbered Property then the applicable Real Estate Asset may
nevertheless be deemed to be Unencumbered Property hereunder if the
Requisite Banks grant the necessary waivers and vote to accept such Real
Estate Asset as an Unencumbered Property.
5.3. Rejection of Unencumbered Properties. If at any time the
Agent determines that any Real Estate Asset listed as an Unencumbered
Property by the Borrower does not satisfy all of the requirements of the
definition of Unencumbered Property (to the extent not waived by the
Requisite Banks pursuant to 5.2) it may reject an Unencumbered Property
by notice to the Borrower and if the Agent so requests the Borrower
shall revise the applicable Compliance Certificate to reflect the
resulting change in the Value of All Unencumbered Properties and the
Unencumbered Net Operating Income.
5.4. Change in Circumstances. If at any time during the term
of this Agreement Borrower becomes aware that any of the representations
contained in 6 are no longer accurate with respect to any Unencumbered
Property, it will promptly so notify the Agent and either request a
waiver pursuant to 5.2 or confirm that such Real Estate Asset is no
longer an Unencumbered Property. If any waiver so requested is not
granted by the Requisite Banks within ten (10) Business Days the Agent
shall reject the applicable Unencumbered Property pursuant to 5.3.
5.5. No Limitation on Recourse. 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.
5.6. Additional Guarantor Subsidiaries. If Borrower desires
that a Real Estate Asset owned by a Related Company which is not
previously a Guarantor Subsidiary become an Unencumbered Property, then
provided that the applicable Related Company is at least 85% owned by
Borrower, such Related Company may become a Guarantor Subsidiary upon
delivery to the Agent the following, all in form and substance
satisfactory to the Agent: (a) a Guaranty in substantially the form of
the Guaranty executed and delivered by the Guarantor Subsidiaries prior
to the Closing Date, (b) good standing certificates, general partner
certificates, secretary certificates, opinions of counsel and such other
documents as may be reasonably requested by the Agent. The Agent shall
provide copies of said documents to the Banks.
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 Unencumbered
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 Unencumbered 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.
6.3. Title to Properties.
(a) Either the Borrower or a Guarantor holds good and clear
record and marketable fee simple title to the Unencumbered Properties,
subject to no liens 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 operations and statement of cash flows of the
Company for the fiscal year then ended, a balance sheet of the Borrower
as of the Balance Sheet Date, and a statement of operations and
statement of cash flows of the Borrower for the fiscal year then ended,
all accompanied by an auditor's report prepared without qualification by
Ernst & Young LLP. Such balance sheets and statements of operations 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, respectively as at the close of business on
the date thereof and the results of operations and cash flows for the
fiscal year then ended. There are no contingent liabilities of the
Borrower or the Company, respectively, 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 operations and
statement of cash flows of the Company and a balance sheet and a
statement of operations and statement of cash flows of the Borrower for
each of the fiscal quarters of the Company ended since the Balance Sheet
Date which 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 Company and the Borrower, respectively, as at
the close of business on the dates thereof and the results of operations
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) A statement prepared by the Borrower which sets forth the
total Net Operating Income of the Unencumbered Properties for the fiscal
quarter of the Borrower ended September 30, 1998.
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, 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 which would result in a Lien
on any Unencumbered Property, 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. Neither the
Borrower nor the Company is 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. Neither
the Borrower nor the Company is a party to any contract or agreement
that has or is expected, in the judgment of the Company's officers, to
have any Material Adverse Effect.
6.9. Compliance With Other Instruments, Laws, Etc. Neither the
Borrower nor the Company is 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. Each of the Borrower and the Company (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 Company 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. Neither the Borrower nor the
Company is 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 Unencumbered Property, except Permitted Liens.
6.14. Status of the Company. The Company (i) is a real estate
investment trust as defined in Section 856 of the Code (or any successor
provision thereto), (ii) has not revoked its election to be a real
estate investment trust, (iii) has not engaged in any "prohibited
transactions" as defined in Section 856(b)(6)(iii) of the Code (or any
successor provision thereto), and (iv) for its current "tax year" (as
defined in the Code) is, and for all prior tax years subsequent to its
election to be a real estate investment trust has been, entitled to a
dividends paid deduction which meets the requirements of Section 857 of
the Internal Revenue Code. The common stock of the Company is listed
for trading on the New York Stock Exchange.
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, except as may be
set forth on Schedule 6.16. 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 7.16 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 Real
Estate Assets. Based on the information contained in the reports
received by Borrower with respect to said environmental assessments,
Borrower makes the following representations and warranties:
(a) Except as may be set forth 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 Unencumbered Properties may be located, which violation
would have a Material Adverse Effect or would materially decrease the
value of an Unencumbered Property.
(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 Unencumbered 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
except to the extent the same would neither have a Material Adverse
Effect nor materially decrease the value of an Unencumbered Property,
(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 any Real Estate; (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 (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. Except as set forth on
Schedule 6.19: (a) the Company is not a partner in any partnership other
than Borrower and is not a member of any limited liability company; and
(b) the Company owns no material assets other than its partnership
interest in Borrower.
6.20. 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.
6.21. Buildings on the Unencumbered Properties. Except as set
forth on Schedule 6.21, to the best of Borrower's knowledge there are no
material defects in the roof, foundation, structural elements and
masonry walls of the Buildings on the Unencumbered Properties or their
heating, ventilating and air conditioning, electrical, sprinkler,
plumbing or other mechanical systems which would materially decrease the
value of such Unencumbered Property.
6.22. Year 2000 Compliance. The Borrower has (i) reviewed the
areas within its business and operations which could be adversely
affected by failure to become "Year 2000 Compliant" (that is that
computer application, imbedded microchips and other systems used by the
Borrower or its material vendors or property managers, will be able
properly to recognize and perform date sensitive functions involving
certain dates prior to and any date after December 31, 1999; (ii)
developed a detailed plan and timetable to become Year 2000 Compliant in
a timely manner; and (iii) committed adequate resources to support its
Year 2000 plan. Based on such review and plan the Borrower reasonably
believes that it will become Year 2000 Compliant on a timely basis
except to the extent that a failure to do so will not have a Material
Adverse Effect.
7. AFFIRMATIVE COVENANTS OF THE BORROWER. Borrower covenants
and agrees as follows, so long as any Loan or Note is Outstanding:
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 Notes, this Agreement, and the other Loan
Documents all in accordance with the terms of the Notes, 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 sheets of the Borrower and of the Company at the end of
such year, and the related audited statements of operations and
statements of cash flows and 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 LLP 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 statements of operations and statements 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 (e) 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 the Unencumbered Properties, prepared on a basis
consistent with the statements furnished pursuant to 6.4 (c) , and
certified by a Responsible Officer of the Company and, at the time of
the annual financial statements referred to in subsection (a) above and
at the time of quarterly financial statements referred to in subsection
(b) above if requested by the Agent, a consolidating statement setting
forth the Net Operating Income for such fiscal quarter for each
Unencumbered Property listed by address;
(d) 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;
(e) 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;
(f) 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 corporate press releases promptly upon the
issuance thereof;
(g) from time to time such other financial data and
information 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
an Unencumbered 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 an
Unencumbered 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 Unencumbered 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 an Unencumbered Property or any Real Estate if the
same would have a Material Adverse Effect, (3) contamination on, from or
into an Unencumbered 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 an
Unencumbered Property.
(c) Notification of Liens Against Unencumbered Properties or
Other Material Claims. The Borrower will, immediately upon becoming
aware thereof, notify the Agent in writing of any Liens (except
Permitted Liens) placed upon or attaching to any Unencumbered Properties
or of any other setoff, claims (including 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 Unencumbered
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 Rating Changes. The Borrower will immediately
notify the Agent in writing of the occurrence of any change in the
Moody's Rating or in the S&P Rating.
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 common stock of the Company will
at all times be listed for trading on either the New York Stock Exchange
or the American Stock Exchange. 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. With respect to the Real Estate Assets and
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. With respect to
the Unencumbered Properties, such insurance will include all risk
casualty insurance for the replacement cost of all Buildings including
loss of rents for 12 months and, to the extent available, flood
insurance. Commercial general liability insurance shall include an
excess liability policy with limits of at least $50,000,000.
7.8. Taxes. The Borrower will pay real estate taxes, other
taxes, assessments and other governmental charges against the Real
Estate Assets 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 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.
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 Unencumbered
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 or authorization 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. The proceeds of the Loans shall be used
by the Borrower for repayment of loans outstanding under the Revolving
Facility on the Closing Date, for making Investments permitted by 8.2,
and for working capital and other purposes consistent with the covenants
contained herein.
7.12 Notices of Significant Transactions. The Borrower will
notify the Agent in writing prior to the closing of any of the following
transactions pursuant to a single transaction or a series of related
transactions:
(a) The sale or transfer of one or more Real Estate Assets for
an aggregate sales price or other consideration of $10,000,000 or more.
(b) The creation of a Lien on any one or more Real Estate
Assets which, if the same were an Unencumbered Property, would have an
aggregate Unencumbered Property Value (based on the most recently ended
fiscal quarter for which financial statements have been provided
pursuant to 7.4) of $10,000,000 or more.
(c) The creation of Indebtedness of Borrower exceeding
$10,000,000.
(d) The sale or transfer of the ownership interest of Borrower
or any of the Related Companies in any of the Related Companies or the
Permitted Joint Ventures if the aggregate consideration received by the
Borrower or the Related Companies in connection with such transaction
exceeds $10,000,000.
Each notice given pursuant to this 7.12 shall be accompanied by a
Compliance Certificate including an updated list of Unencumbered
Properties and demonstrating in reasonable detail compliance, after
giving effect to the proposed transaction, with the covenants contained
in 9.1 through 9.10.
7.13. 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.
7.14. 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 Unencumbered Property
or any Real Estate; (b) any violation of any Environmental Laws with
respect to conditions at any Unencumbered 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 the payment of the Loans
and shall inure to the benefit of the Agent and the Banks, and their
successors and assigns.
7.15. Response Actions. The Borrower covenants and agrees that
if any Release or disposal of Hazardous Substances shall occur or shall
have occurred on any Unencumbered 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 Unencumbered Property or Real Estate as necessary to
comply with all Environmental Laws or to preserve the value of such
Unencumbered Property or Real Estate to the extent necessary to avoid a
Material Adverse Effect.
7.16. 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 except as set forth on
Schedule 6.16.
(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.
7.17 Required Interest Rate Contracts. Commencing on the
Closing Date and thereafter until all Loans are paid in full, the
Borrower shall maintain in effect Interest Rate Contracts in form
reasonably satisfactory to the Agent covering that portion of Borrower's
Variable Rate Indebtedness equal to the amount by which Borrower's
Variable Rate Indebtedness exceeds 20% of Total Assets. Except as may
otherwise be approved by the Requisite Banks, Interest Rate Contracts
required hereby shall have the effect of fixing the interest rate on the
applicable Variable Rate Indebtedness at an all-in rate not higher than
ten percent (10%) per annum.
8. CERTAIN NEGATIVE COVENANTS OF THE BORROWER. The Borrower
covenants and agrees as follows, so long as any Loan or Note is
Outstanding:
8.1 Restrictions on Recourse 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 Recourse 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 presently outstanding under the Subordinated
Debenture Indenture consisting of the Subordinated Debentures in the
aggregate amount of approximately $104,000,000 as of September 30, 1998;
(g) Indebtedness under unsecured term notes presently
outstanding or which may be hereafter issued by Borrower provided that
the weighted average maturity date of all such term notes (including the
Notes under this Facility) outstanding at any time shall not be earlier
than May 20, 2001. If more than one issue or series of such unsecured
term notes is outstanding at any time, the foregoing weighted average
maturity date shall be computed on an aggregate basis including all
issues or series of such notes;
(h) Indebtedness under the Revolving Credit Agreement in the
maximum amount of $325,000,000;
(i) Recourse Indebtedness other than that described in other
paragraphs of this
8.1 up to a maximum principal amount outstanding at any time equal to
four percent (4%) of Total Assets at such time.
(j) Indebtedness of the Borrower or a Related Company to the
Borrower or a Related Company provided that any such Indebtedness to a
Related Company that is not a Guarantor must be fully subordinated to
the Obligations.
8.2. 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, money market
accounts, bankers acceptances and time deposits of United States banks
having total assets in excess of $1,000,000,000 or repurchase
obligations with a term of not more than 7 days with such banks for
underlying securities of the type described in clause (a) of this 8.2;
(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 and participations in short term commercial loans
made to such corporations by a commercial bank which provides cash
management services to the Borrower;
(d) Investments existing or contemplated on the date hereof
and listed on Schedule 8.2(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 8.3), (iii) Interest Rate
Contracts, or (iv) undeveloped land provided that aggregate Investments
in undeveloped land shall not at any time exceed 8% of Total Assets;
(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.
8.3. Merger, Consolidation and Other Fundamental Changes. 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 8.3 shall exceed 15% of Total Assets,
the Borrower shall have obtained the prior consent of the Requisite
Banks provided , however, that this 8.3 shall not be applicable to (A)
any merger, consolidation or transfer among the Borrower's wholly-owned
subsidiaries other than Guarantors, (B) any merger or consolidation of a
Guarantor Subsidiary into the Borrower or any transfer from a Guarantor
Subsidiary to the Borrower, or (C) any merger or consolidation with
respect to which all of the following are satisfied: (1) the surviving
entity is Borrower, the Company or any Guarantor Subsidiary, (2) the
other entity or entities involved in such merger or consolidation are
engaged in the same line of business as Borrower, and (3) following such
transaction, the Borrower and the Company will not be in breach of any
of the covenants, representations or warranties of this Agreement.
Except as set forth on Schedule 6.19, the Company will not own or
acquire any material assets other than its partnership interest in the
Borrower. If the Company is the surviving entity in a merger, the assets
acquired pursuant thereto will be immediately transferred to the
Borrower.
8.4. 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.
8.5. 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.
8.6. Distributions. Borrower shall not permit the total
Distributions by it and the Company during any fiscal year to exceed 90%
of Funds from Operations for such year and shall not permit there to be
more than two consecutive fiscal quarters during which the total
Distributions by Borrower and the Company during each fiscal quarter
exceed 100% of Funds from Operations for such fiscal quarter except that
such limitations 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.
9. FINANCIAL COVENANTS OF THE BORROWER. The Borrower covenants
and agrees as follows, so long as any Loan or Note is Outstanding:
9.1. Value of All Unencumbered Properties. The Borrower will
not at any time permit the Value of All Unencumbered Properties to be
less than one hundred seventy five percent (175%) of the outstanding
balance of Unsecured Indebtedness.
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 Unencumbered Net Operating Income, divided
by (b) Pro Forma Unsecured Debt Service Charges would be less than 1.5
for any fiscal quarter of Borrower.
9.3. Total Liabilities to Total Assets. The Borrower will not
at any time permit Total Liabilities to exceed sixty percent (60%) of
Total Assets.
9.4. Total Liabilities minus Subordinated Indebtedness to Total
Assets. The Borrower will not at any time permit Total Liabilities
minus the outstanding balance of Subordinated Indebtedness to exceed
fifty-five percent (55%) of Total Assets.
9.5. Maximum Secured Debt. The Borrower will not at any time
permit the outstanding balance of Secured Indebtedness to exceed thirty
percent (30%) of Total Assets.
9.6. Minimum Tangible Net Worth. The Borrower will not at any
time permit the Tangible Net Worth of either the Borrower or the Company
to be less than $944,475,000 plus 75% of Net Offering Proceeds.
9.7. 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 1.85 to 1.0 for any fiscal quarter.
9.8. 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 2.2 to 1.0 for any fiscal
quarter.
9.9. EBITDA to Fixed Charges. The Borrower will not permit the
ratio of its EBITDA to Fixed Charges to be less than 1.75 to 1.0 for any
fiscal quarter.
9.10. Aggregate Occupancy Rate. The Borrower will not at any
time permit the Aggregate Occupancy Rate to be less than eighty-five
percent (85%).
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 Closing 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 an Unencumbered
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 an Unencumbered Property is located, and (v) certificates of good
standing and certificates from the Borrower with respect to the
provisions of partnership agreements and certificates of limited
partnership 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 Closing Date.
10.4. Incumbency Certificate; Authorized Signers. The Agent
shall have received from the Company an incumbency certificate, dated as
of the Closing 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 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 from Borrower's counsel addressed to the Banks and
the Agent and dated as of the Closing Date, in substantially the same
form as the opinions delivered in connection with the Revolving Credit
Agreement, copies of which are attached hereto as Exhibit D.
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. Conditions to Disbursement. All Conditions to
Disbursement of the Loans under 11 shall have been satisfied.
11. CONDITIONS TO DISBURSEMENT OF LOANS. The obligations of
the Banks to make the Loans on the Closing 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 the
Loans, 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 Closing Date; and
no Default or Event of Default shall have occurred and be continuing on
the Closing Date. 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 9.10
hereof after giving effect to the making of the Loans.
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, 7.12,
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 6.21, 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 Unencumbered Property on account of such
condition or event nor is the applicable Unencumbered 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, in the Revolving Credit Agreement 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. 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 and, 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.
12.3. Distribution of Enforcement 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 Loan Documents,
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 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 Facility
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.
13. SETOFF. 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 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.
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 Facility 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 Facility 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.
(d) If any amount which the Agent is required to distribute to the
Banks pursuant to this 14.5 is actually distributed to any Bank on a
date which is later than the first Business Day following the Agent's
receipt of the corresponding payment from the Borrower, the Agent shall
pay to such Bank 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 late distribution to such Bank, times (iii) a
fraction, the numerator of which is the number of days or portion
thereof that elapsed from and including the second Business Day after
the Agent's receipt of such corresponding payment from the Borrower to
the date on which the amount so required to be distributed to such Bank
actually is distributed, and the denominator of which is 365.
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, BankBoston
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 and other
Notices. 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, or upon it otherwise learning of the existence of a Default
or an Event of Default, it shall promptly notify the other Banks of the
existence of such Default or Event of Default. The Agent shall also
promptly provide each Bank with a copy of any notices which the Agent
receives from the Borrower pursuant to 7.5 or 7.12.
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 may,
with the consent of the Requisite Banks (which consents may be obtained
orally in emergency situations), and 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 Loan Documents and exercise all or any such other
legal and equitable and other rights or remedies as it may have. The
Requisite Banks may direct the Agent in writing as to the method and the
extent of any such enforcement actions, 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.
14.12. Mandatory Resignation of Agent. In the event that the
Agent enters into one or more Assignments pursuant to 18 having the
effect of reducing the Agent's Facility Percentage to less than 10% then
the Agent shall promptly so notify the Banks. Upon the written request
of any Bank whose Facility Percentage exceeds that of the Agent, which
written request is made within thirty (30) days after the Agent's notice
that its Facility Percentage is below such minimum level, the Agent
shall be obligated to resign pursuant to 14.9. Further, the Agent shall
be obligated to resign pursuant to 14.9 upon the written request made
for cause by Banks whose aggregate Facility Percentages constitute at
least sixty-six percent (66%) of the total Facility Percentages
excluding the Facility Percentage of the Bank which is then the Agent
hereunder.
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 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 Closing Date (the Borrower hereby agreeing
to indemnify the Banks with respect thereto), (c) all title examination
costs, appraisal fees, engineers', inspectors' and surveyors' 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 Unencumbered 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, and (h) all costs incurred by the Agent in the future in
connection with its inspection of the Unencumbered Properties. 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 except to the extent 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, (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. 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 Facility Percentage 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, which consent shall not be unreasonably withheld or
delayed, except that such consent shall not be needed with respect to an
assignment from a Bank to either one of its Affiliated Banks or to
another Bank hereunder, (b) each such assignment shall be of a portion
of the assigning Bank's rights and obligations under this Agreement
relating to a specified Facility Percentage, (c) each assignment shall
be of Loans in an amount of not less than $10,000,000 (which number will
be reduced in proportion to any partial prepayment of the Loans pursuant
to 3.2) that is a whole multiple of $1,000,000, (d) each Bank either
shall assign all of its Loans and cease to be a Bank hereunder or shall
retain, free of any such assignment, an amount of its Outstanding Loans
of not less than $10,000,000 (which number will be reduced in proportion
to any partial prepayment of the Loans pursuant to 3.2), 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 E 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. So long as
no Default or Event of Default has occurred and is continuing,
Borrower's consent shall also be required for any assignment to an
Eligible Assignee which is not at the time a Bank hereunder or one of
such Bank's Affiliated Banks provided that Borrower's consent shall not
be unreasonably withheld or delayed and shall not be withheld unless
Borrower simultaneously designates an alternative Eligible Assignee
(approved by the Agent) who agrees to accept an assignment of the
interest which the assigning Bank proposed to assign and pay to such
assigning Bank a sum equal to the Outstanding balance of principal and
interest of Loans relating to the Facility Percentage being assigned.
Assignments by BankBoston shall be exempt from the requirement in clause
(c) above that assignments be of Loans in an amount which is a whole
multiple of $1,000,000, the requirement that the effective date be at
least five days after execution of the Assignment and Acceptance and the
requirement for Borrower's consent and there shall be no registration
fee with respect thereto under 18.3.
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; (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 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. Each of the
Syndication Banks shall be subject to the provisions of this 18.2 to the
same extent as though it were becoming a party to this Agreement as an
assignee by entering into an Assignment and Acceptance with BankBoston
effective on the Closing Date.
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 Facility 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,
without action by any other party, 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 (5) 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 effect thereof, and that
the Obligations evidenced by the new Notes have the same validity,
enforceability and priority as if given on the Closing 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 Facility Percentage; provided
that (a) the Agent shall have given its prior written consent to such
participation, which consent shall not be unreasonably withheld or
delayed, except that any Bank may sell participations to its Affiliated
Banks without such consent, (b) each such participation, other than
participations to its Affiliated Banks or to another Bank hereunder,
shall be in an amount of not less than $10,000,000 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 Facility
Percentage, and (e) no participant which is not a Bank hereunder 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, and
any such attempted assignment shall be null and void.
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, AND THIS WAIVER INCLUDES, WITHOUT
LIMITATION, 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 HAS 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 11.1 hereof, (vi) the rights, duties and
obligations of the Agent specified in 14 hereof, and (vii) the
definition of Requisite Banks, may not be amended without the written
consent of each Bank affected thereby, nor may the Agent release the
Borrower or any Guarantor 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.
27. ACKNOWLEDGMENTS. The Borrower hereby acknowledges that:
(i) neither the Agent nor any Bank has any fiduciary relationship with,
or fiduciary duty to, the Borrower arising out of or in connection with
this Agreement or any of the other Loan Documents; (ii) the relationship
in connection herewith between the Agent and the Banks, on the one hand,
and the Borrower, on the other hand, is solely that of debtor and
creditor and (iii) no joint venture or partnership among any of the
parties hereto is created hereby or by the other Loan Documents, or
otherwise exists by virtue of the Facility or the Loans.
IN WITNESS WHEREOF, the undersigned have duly executed this
Agreement as a sealed instrument as of the date first set forth above.
WITNESS: LIBERTY PROPERTY TRUST
- ----------------------------- -------------------------------------
George J. Alburger, Jr.
Its Chief Financial Officer
LIBERTY PROPERTY LIMITED
PARTNERSHIP
By: LIBERTY PROPERTY TRUST,
its general partner
-------------------------------------
George J. Alburger, Jr.
Its Chief Financial Officer
BANKBOSTON, N.A.
as Agent
-------------------------------------
Lori Y. Litow
Its Vice President
BANKBOSTON, N.A.
-------------------------------------
Lori Y. Litow
Its Vice President
Commitment: $20,000,000
Facility Percentage: 14.8148148148%
Notice Address: BankBoston, N.A.
100 Federal Street
Boston, MA 02110
Attn: Real Estate Department
With a copy to:
BankBoston, N.A.
115 Perimeter Center Place, N.E.
Suite 500
Atlanta, GA 30346
Attn: Lori Y. Litow, Vice President
Fax: (770)390-8434 or 391-9811
FIRST UNION NATIONAL BANK
--------------------------------------
Commitment: $20,000,000
Facility Percentage: 14.8148148148%
Notice Address: First Union National Bank
Mail NC0166
One First Union Center
Charlotte, NC 28288-0166
Attn: Daniel J. Sullivan
Fax: (704) 383-6205
THE CHASE MANHATTAN BANK
------------------------------------
Commitment: $20,000,000
Facility Percentage: 14.8148148148%
Notice Address: The Chase Manhattan Bank
380 Madison Avenue
New York, NY 10017
Attn: Alan C. Breindel
Fax: (212) 622-3580
COMMERZBANK AG - NEW YORK BRANCH
-------------------------------------
Commitment: $20,000,000
Facility Percentage: 14.8148148148%
Notice Address: Commerzbank AG - New York Branch
2 World Financial Center
New York, NY 10281-1050
Attn: David Bettner
Fax: (212) 266-7524
THE FIRST NATIONAL BANK OF CHICAGO
--------------------------------------
Commitment: $15,000,000
Facility Percentage: 11.1111111111%
Notice Address: The First National Bank of Chicago
One First National Plaza
Chicago, IL 60670
Attn: Pat Leung
Fax: (312)732-1117
SOUTHTRUST BANK, N.A.
--------------------------------------
Commitment: $10,000,000
Facility Percentage: 7.4074074074%
Notice Address: SouthTrust Bank, N.A.
420 North 20th Street
Birmingham, AL 35203
Attn: Sam Boroughs
Fax: (205)254-5022
PNC BANK, N.A.
--------------------------------------
Commitment: $10,000,000
Facility Percentage: 7.4074074074%
Notice Address: PNC BANK, N.A.
1600 Market Street, 30th Floor
Philadelphia, PA 19103
Attn: David Pioch
Fax: (215)585-5806
LASALLE NATIONAL BANK
--------------------------------------
Commitment: $20,000,000
Facility Percentage: 14.8148148148%
Notice Address: LaSalle National Bank
135 S. LaSalle Street, Suite 1225
Chicago, IL 60603-3499
Attn: John Hein
Fax: (312)904-6691
SCHEDULE 1
Banks; Domestic and Eurodollar Lending Offices
BankBoston, N.A.
100 Federal Street
Boston, MA 02110
(Domestic and Eurodollar)
First Union National Bank
One First Union Center
Charlotte, NC 28288
(Domestic and Eurodollar)
The Chase Manhattan Bank
380 Madison Avenue
New York, NY 10017
(Domestic and Eurodollar)
Commerzbank AG - New York Branch
2 World Financial Center
New York, NY 10281
(Domestic and Eurodollar)
The First National Bank of Chicago
One First National Plaza
Chicago, IL 60670
(Domestic and Eurodollar)
SouthTrust Bank, N.A.
420 North 20th Street
Birmingham, AL 35203
(Domestic and Eurodollar)
PNC Bank, N.A.
1600 Market Street, 30th Floor
Philadelphia, PA 19103
(Domestic and Eurodollar)
LaSalle National Bank
135 S. LaSalle Street
Chicago, IL 60603-3499
(Domestic and Eurodollar)
SCHEDULE 1.2
Commitments and Facility Percentages
Bank Commitment Facility Percentage
- ------------------------------- ------------ -------------------
BankBoston, N.A. $20,000,000 14.8148148148%
First Union National Bank $20,000,000 14.8148148148%
The Chase Manhattan Bank $20,000,000 14.8148148148%
Commerzbank AG-New York Branch $20,000,000 14.8148148148%
LaSalle National Bank $20,000,000 14.8148148148%
The First National Bank
of Chicago $15,000,000 11.1111111111%
South Trust Bank, N.A. $10,000,000 7.4074074074%
PNC Bank, N.A. $10,000,000 7.4074074074%
------------ -------------
Totals $135,000,000 100%
============ =============