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CREDIT AGREEMENT
Dated: As of May 30, 1997
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This Instrument Prepared by:
Dean A. Stiffle, Esq.
Battle Fowler LLP
75 East 55th Street
New York, New York 10022
TABLE OF CONTENTS
Page
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1. Definitions........................................................... 1
2. Credit Facility....................................................... 1
3. Maturity Date......................................................... 2
4. Use of Proceeds and Maximum Amount Available.......................... 3
5. Advance of the Credit Facility........................................ 3
6. Condition to Advances................................................. 3
7. Collateral............................................................ 4
8. New Debt or Equity Offering........................................... 4
9. Restrictions on Transfer and Further Encumbrance...................... 4
10. Commitment Fee........................................................ 5
11. Loan to Value Requirement............................................. 5
12. Representations and Warranties........................................ 5
13. Covenants.............................................................12
14. Recourse Obligations..................................................18
15. Right of Entry........................................................18
16. Books and Records.....................................................18
17. Taxes.................................................................19
18. Insurance Coverage....................................................19
19. Condemnation..........................................................21
20. Environmental Provisions..............................................21
21. Estoppel Certificates.................................................24
22. Non-Waiver............................................................24
23. Sole Discretion.......................................................25
24. Absolute and Unconditional Obligation.................................25
25. Relationship..........................................................26
26. Anti-Forfeiture.......................................................26
27. Deposits..............................................................26
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28. Submission to Jurisdiction............................................27
29. Retention of Counsel and Consultants..................................27
30. Waiver of Notice......................................................27
31. Events of Default.....................................................27
32. Application of Moneys.................................................30
33. Right to Cure Defaults................................................31
34. Further Assurances....................................................31
35. Costs and Expenses....................................................31
36. Indemnification of Agent and Co-Lenders...............................31
37. Construction of Agreement.............................................31
38. Parties Bound, etc....................................................32
39. Complete Agreement....................................................32
40. Governing Law.........................................................32
41. Severability..........................................................32
42. Notices...............................................................32
43. Modification..........................................................33
44. Waivers...............................................................33
45. WAIVER OF TRIAL BY JURY...............................................33
46. Borrowers' Reliance on Agent's Authority..............................33
47. Authorized Representatives of BRT.....................................34
48. Exculpation...........................................................34
Exhibit A Definition if Certain Terms
Exhibit B Credit Facility Payment Provisions
Exhibits C-1
and C-2 Form of Credit Facility Notes
Exhibit D Form of Request for Advance under Credit Facility
Exhibit D-1 Conditions for Inclusion of Additional Properties
Exhibit E Properties
Exhibit F Form of Pennsylvania Mortgage
Exhibit G Form of New Jersey Mortgage
Exhibit H Form of Assignment of Leases and Rents
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Exhibit I Form of Guaranty of Payment
Exhibit J Form of Hazardous Material Guaranty and Indemnification
Agreement
Exhibit K Insurance Requirements
Schedule 1 Litigation
Schedule 2 Space Leases
Schedule 3 Other Leases
Schedule 4 Environmental Reports for Properties
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CREDIT AGREEMENT
THIS CREDIT AGREEMENT made as of the 30th day of May,
1997, among Smith Barney Mortgage Capital Group, Inc. ("Smith Barney"), a
Delaware corporation having an office at 390 Greenwich Street, New York, New
York; NationsBank, N.A. ("NationsBank"), a national banking corporation having
an office at 8300 Greensboro Drive, McLean, Virginia, acting in its individual
capacity (Smith Barney and NationsBank are hereinafter collectively referred to
as "Co-Lenders"); Brandywine Realty Trust ("BRT"), a Maryland real estate
investment trust having an office at Newtown Square Corporate Campus, 16 Campus
Boulevard, Suite 150, Newtown Square, Pennsylvania; Brandywine Operating
Partnership, L.P. ("BOP"), a Delaware limited partnership having an office at
Newtown Square Corporate Campus, 16 Campus Boulevard, Suite 150, Newtown Square,
Pennsylvania (BRT and BOP are hereinafter collectively referred to as
"Borrowers"); and NationsBank, N.A., a national banking association having an
office at 8300 Greensboro Drive, McLean, Virginia, acting in its capacity as
administrative and documentation agent (NationsBank, N.A., acting in its
capacity as administrative and documentation agent, or any successor
administrative and documentation agent being so designated being hereinafter
referred to as "Agent").
PRELIMINARY STATEMENT
Co-Lenders have agreed on the terms, covenants and
provisions of this Agreement hereinafter set forth to extend to Borrowers a
credit facility in the principal sum of up to, but not in excess of, $70,000,000
(the "Credit Facility").
NOW, THEREFORE, in consideration of Ten Dollars
($10.00) and other good and valuable consideration, the receipt of which is
hereby acknowledged, and to induce Co-Lenders to extend the Credit Facility,
Borrowers hereby represent and warrant to and covenant and agree with Co-Lenders
as follows:
1. Definitions. All capitalized terms as used in this
Agreement shall, unless otherwise defined in this Agreement, have the meanings
given to such terms in Exhibit A attached hereto.
2. Credit Facility. The Credit Facility shall be
advanced by Co-Lenders to Borrowers in accordance with the provisions of this
Agreement hereinafter set forth, and shall be evidenced by, and payable,
together with interest thereon, in accordance with the provisions of the Credit
Facility Notes and Exhibit B attached hereto. Except as specifically provided
for to
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the contrary in the Co-Lenders Agreement from time to time, the Credit Facility
Notes (the forms of which are attached hereto as Exhibits C-1 and C- 2) shall be
secured on a pari passu basis with each other inter alia by the Mortgages and
the Assignments of Leases and Rents. Payments under the Credit Facility must be
received by Agent prior to 12:00 noon, Charlotte, North Carolina time, for
Borrowers to receive credit for such payment that day. The respective undivided
percentage interests (the "Credit Facility Percentage Interests") held by
Co-Lenders in the Credit Facility on the date of this Agreement are as follows:
Percentage
Amount Interest
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Smith Barney $35,000,000 50%
NationsBank $35,000,000 50%
Each Co-Lender shall be obligated to fund a portion of each advance made under
the Credit Facility in accordance with the provisions of this Agreement which is
equal to the amount of each such advance multiplied by such Co-Lender's
undivided Credit Facility Percentage Interest. Borrowers expressly acknowledge
and agree that (i) each Co-Lender directly assumes the obligation to fund, and
shall have the sole obligation to fund, its Credit Facility Percentage Interest
in each advance of the Credit Facility which is made, or required to be made, by
Co-Lenders in accordance with the provisions of this Agreement, (ii) the
obligations and liabilities of Co-Lenders in respect of the Credit Facility are
several obligations and liabilities and not joint and several obligations and
liabilities of Co-Lenders, (iii) Borrowers shall not have the right under any
fact or circumstance to look to any other party, including, without limitation,
any other Co-Lender, for the funding of the portion of the Credit Facility which
is required to be funded by a particular Co-Lender in accordance with the
provisions of this Agreement if such Co-Lender shall default in doing so, all
risk of such default being assumed in all respects by Borrowers, (iv) the
respective rights and obligations of Co-Lenders vis-a-vis one another
(including, without limitation, voting and approval rights), shall be as set
forth in the Co-Lenders Agreement, and (v) Borrowers shall not have the right to
examine or receive a copy of the Co-Lenders Agreement. Subject to the terms and
provisions contained therein, the Co-Lenders Agreement provides, among other
things, that without the unanimous consent of Co-Lenders, (i) no Collateral may
be released other than in accordance with the express provisions of the Credit
Facility Documents, (ii) neither Borrowers nor any Guarantor may be released
from liability under the Credit Facility Documents, (iii) neither the interest
rate nor any other fees or charges payable under the Credit Facility Documents
may be changed or modified. Borrowers acknowledge and agree that (i) the voting
and approval rights of Co-Lenders are for illustrative purposes only and do not
constitute a complete or exhaustive list of decisions upon which Co-Lenders may
exercise voting and approval rights, or of the authority of Agent, in respect of
the
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Credit Facility; provided, however, that Borrowers shall have the right to rely
on the advice of Agent as to any action taken or not taken by Co-Lenders or as
to any approval given or not given by Co-Lenders or as to the authority of
Agent, all as more particularly set forth in paragraph 46 of this Agreement,
(ii) the aforesaid voting and approval rights of Co-Lenders and authority of
Agent may at any time subsequent to the closing of the Credit Facility (and
without prior notice to or approval by Borrowers) be modified by Co-Lenders
either (x) in accordance with the provisions of the Co-Lenders Agreement, or (y)
otherwise in the sole and absolute discretion of Co-Lenders, and to the extent
pertaining to Agent, with the approval of Agent, and (iii) Borrowers shall in no
event or under any circumstances have any right to review, approve or consent to
any modification or amendment to the Co-Lenders Agreement, all of which may be
made without any notice to or approval by Borrowers, in the sole and absolute
discretion of Co-Lenders. Agent shall promptly inform Borrowers of any such
change in the voting and approval rights of Co-Lenders or in the authority of
Agent, it being agreed that (i) any failure by Agent to so notify Borrowers
shall not prevent any such change in voting and approval rights of Co-Lenders or
in the authority of Agent from becoming effective, and (ii) neither Agent nor
Co-Lenders shall in any event have any liability of any nature whatsoever to
Borrowers for any failure by Agent to so notify Borrowers.
3. Maturity Date. The Credit Facility shall mature and
shall be payable in full on July 30, 1997 (the "Maturity Date"). Co-Lenders
shall have no obligation to make any advance under the Credit Facility
subsequent to July 30, 1997.
4. Use of Proceeds and Maximum Amount Available. The
Credit Facility shall be available solely to finance the acquisition by
Borrowers of the Pending Properties and Additional Properties. The inclusion of
Additional Properties in the collateral pool for the Credit Facility shall be at
the option of Borrowers, and the acceptance of the same for inclusion in the
Credit Facility shall be subject to satisfaction of the conditions set forth in
paragraph 6A of this Agreement. Each time there is a change in the maximum
amount available under the Credit Facility as a result of the acceptance and
inclusion of a Pending Property or an Additional Property as part of the
collateral pool for the Credit Facility in accordance with the provisions of
paragraph 6A of this Agreement, a reduction in the outstanding Principal Balance
of the Credit Facility in order to restore compliance with one or more of the
financial covenants set forth in paragraph 11 and paragraph 13 of this
Agreement, or as a result of any other fact or circumstance or the application
of any other provisions set forth in this Agreement or the other Credit Facility
Documents, Agent shall prepare (on behalf of Co-Lenders) and shall deliver to
Co-Lenders and Borrowers a statement setting forth the change in the maximum
amount available under the Credit Facility and the manner in which such change
and such adjusted maximum amount available under the Credit Facility were
calculated, which statement shall be promptly acknowledged and confirmed by
Borrowers and Co-Lenders, shall be conclusive and binding upon Borrowers absent
manifest error, and shall remain in effect until the next such statement is
prepared and circulated by Agent.
5. Advance of the Credit Facility. Co-Lenders shall not
be obligated to make an advance under the Credit Facility unless Co-Lenders are
satisfied that the conditions precedent for the making of such advance under the
Credit Facility as set forth in this Agreement and the other Credit
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Facility Documents have been satisfied. Borrowers shall not have the right
(other than as provided in the next sentence) to obtain more than one advance
per month under the Credit Facility. Notwithstanding the foregoing, Borrowers
shall have the right to obtain more than one advance under the Credit Facility
per month if such additional advance is being made solely in connection with the
acquisition of a Pending Property or an Additional Property. Each request by
Borrowers for an advance under the Credit Facility shall be in writing to Agent,
shall be for an amount not less than $3,000,000 (except with respect to the last
remaining available advance under the Credit Facility), shall specify the
purposes for which such advance is requested (which purposes shall be limited to
the permitted purposes set forth in paragraph 4 of this Agreement), shall in
each case be signed by a duly authorized representative of Borrowers and shall
be in the form attached hereto as Exhibit D (a "Request for Advance"). Each
Request for Advance shall be delivered to Agent not less than five (5) business
days prior to the date upon which such advance is requested. Co-Lenders shall
not be obligated to make an advance under the Credit Facility unless Borrowers
have delivered, or caused to be delivered, to Agent a Request for Advance at
least five (5) business days prior to the date upon which such advance is
requested. Co-Lenders shall not readvance any portion of the Credit Facility
which is paid.
6. Condition to Advances. Co-Lenders' obligation to
make each advance under the Credit Facility shall be subject to satisfaction of
each of the following additional conditions:
(i) No default shall have occurred and shall be
continuing under the Credit Facility Documents.
(ii) All affirmative and negative covenants and
representations and warranties contained in this
Agreement and the other Credit Facility Documents and
all of the other terms, covenants and conditions
contained in the Credit Facility Documents shall
continue to be complied with both before and after the
making of each advance under the Credit Facility.
(iii) Agent shall be satisfied that each of the title
insurance policies insuring the respective liens of the
Mortgages will subsequent to the making of each advance
under the Credit Facility continue to insure the
respective liens of the Mortgages as first liens
(subject only to the Permitted Title Exceptions) on
each of the Properties constituting part of the
collateral pool for the Credit Facility for an amount
equal to the Credit Facility Outstanding after the
making of each such advance under the Credit Facility,
it being the intent that the respective liens of the
Mortgages will at all times be insured as first liens
on the Properties from time to time constituting part
of the collateral pool for the Credit Facility for an
amount which is at all times at least equal to the
Credit Facility Outstanding from time to time and
subject only to the Permitted Title Exceptions. In this
regard, Borrowers shall be obligated as a condition
precedent to each advance under the Credit Facility to
deliver to Agent such continuations of title and
endorsement to the title insurance policies insuring
the respective liens of the Mortgages as may be
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reasonably required by Co-Lenders to evidence
compliance with the provisions of this subparagraph.
(iv) All of the other terms and conditions set forth in
this Agreement and the other Credit Facility Documents
pertaining to advances of the Credit Facility shall
have been satisfied.
6A. Additional Properties. From time to time after the
date hereof, Borrowers shall have the right to request that one or more
Additional Properties be included in the collateral pool for the Credit
Facility. If Borrowers wish to submit an Additional Property for inclusion in
the collateral pool for the Credit Facility, Borrowers shall notify Agent in
writing of their desire to do so at least forty five (45) days prior to the date
upon which Borrowers wish to include such Additional Property in the collateral
pool for the Credit Facility, and shall at Borrowers' sole cost and expense
cause all of the terms and conditions more particularly set forth in Exhibit D-1
attached hereto to be satisfied with respect to the Additional Property, all
with the same force and effect as if the Additional Property had constituted
part of the original collateral pool for the Credit Facility. An Additional
Property shall not be included in the collateral pool for the Credit Facility
unless (i) all of the aforesaid terms and conditions are met to the satisfaction
of Co-Lenders, (ii) the Additional Property shall in the opinion of Co-Lenders
be at least comparable in quality to the Initial Properties, (iii) all of the
affirmative and negative covenants and all of the representations and warranties
contained in this Agreement and the other Credit Facility Documents and all of
the other terms, covenants and provisions of the Credit Facility Documents shall
continue to be complied with after the inclusion of the Additional Property in
the collateral pool for the Credit Facility, and (iv) the inclusion of the
Additional Property in the collateral pool for the Credit Facility is otherwise
unanimously approved by Co-Lenders, it being agreed that Co-Lenders shall in no
event or under any circumstance have any liability to Borrowers or any other
person, party or entity as the result of their decision not to accept an
Additional Property for inclusion in the collateral pool for the Credit
Facility. Agent shall inform Borrowers within fifteen (15) days after submission
by Borrowers of all of the Required Due Diligence Materials for an Additional
Property as to whether the Additional Property has been approved for inclusion
in the collateral pool for the Credit Facility by Co-Lenders.
7. Collateral. The Credit Facility Notes shall be
secured on a pari passu basis with each other inter alia by the Mortgages and
the Assignments of Leases and Rents. The Owned Properties which will constitute
the initial collateral pool for the Credit Facility and the Pending Properties
which will be added to the collateral pool for the Credit Facility simultaneous
with BOP's acquisition thereof are described in Exhibit E attached hereto. Each
Mortgage covering a Property located in Pennsylvania shall be substantially in
the form of the mortgage attached hereto as Exhibit F, each mortgage covering
Property located in New Jersey shall be substantially in the form of the
mortgage attached hereto as Exhibit G, and each Assignment of Leases and Rents
shall be substantially in the form attached hereto as Exhibit H, with such
changes therein as may be necessary (i) to reflect the interests in the Property
or other Collateral to be encumbered thereby and the ownership thereof, and (ii)
to reflect the specific terms and conditions which are applicable thereto,
including, without limitation, any necessary changes as may be reasonably
required by Co-Lenders. In addition to the foregoing, and as a condition
precedent to the closing of
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the Credit Facility, (i) Guarantors shall execute and deliver the Guaranty of
Payment in the form of Exhibit I attached hereto, and (ii) Borrowers and
Guarantors shall execute and deliver the Hazardous Material Guaranty and
Indemnification Agreement in the form of Exhibit J attached hereto.
8. New Debt or Equity Offering. The net cash proceeds
of any new debt or equity offering by Borrowers or their respective subsidiaries
or Affiliates shall (unless otherwise agreed to by Co-Lenders in the exercise of
their sole and absolute discretion) be applied first to the reduction of the
outstanding Principal Balance of the Credit Facility, and next to the reduction
of the outstanding principal balance of the Existing Credit Facility in
accordance with the provisions of the Existing Credit Agreement. The net
proceeds of any new debt or equity offering by BRT may first be contributed by
BRT to BOP so long as the full amount of such net proceeds shall immediately
upon receipt by BOP be applied in accordance with the preceding sentence.
9. Restrictions on Transfer and Further Encumbrance.
Except as otherwise expressly provided to the contrary in the Credit Facility
Documents, no part of the Properties nor any interest of any nature whatsoever
therein (whether legal or beneficial or whether held directly or indirectly),
nor any interest of any nature whatsoever in Borrowers (whether partnership,
stock, equity, beneficial, profit, loss or otherwise or whether held directly or
indirectly, other than stock of BRT and limited partnership interests in BOP
issued to transferring persons, parties or entities as partial or total
consideration for the transfer of properties to BOP and irrespective of whether
constituting part of the collateral pool for the Credit Facility), shall in any
manner be further encumbered, sold, transferred, assigned or conveyed, or
permitted to be further encumbered, sold, transferred, assigned or conveyed
without the prior consent of Co-Lenders, which consent in any and all
circumstances may be withheld in the sole and absolute discretion of Co-Lenders.
The provisions of the foregoing sentence of this paragraph shall apply to each
and every such further encumbrance, sale, transfer, assignment or conveyance,
regardless of whether or not Co-Lenders have consented to, or waived by their
action or inaction their rights hereunder with respect to, any such previous
further encumbrance, sale, transfer, assignment or conveyance, and irrespective
of whether such further encumbrance, sale, transfer, assignment or conveyance is
voluntary, by reason of operation of law or is otherwise made. Until the Debt
has been paid in full, and unless otherwise consented to the contrary by
Co-Lenders in the exercise of their sole and absolute discretion, (i) not less
than a 75% interest in BOP shall at all times be owned and controlled by BRT,
and which interest shall at all times remain unencumbered other than by the
Credit Facility Documents and the Existing Credit Facility Documents, (ii) the
sole general partner of BOP shall at all times be BRT and BRT shall not
encumber, sell, transfer, assign or convey its general partner interest in the
BOP, other than by the Credit Facility Documents, and (iii) the management and
day to day operations of BRT and BOP shall at all times be under the active
control of BRSC, or another management company of comparable experience and
credentials and which is otherwise reasonably acceptable to Co-Lenders. Nothing
contained in this paragraph or elsewhere in this Agreement or the other Credit
Facility Documents shall be deemed or construed to restrict in any manner
whatsoever BRT's ability to issue any common stock or beneficial shares of
beneficial interests in BRT, or the transferability of shares in BRT or limited
partnership units in BOP, or BOP's ability to issue additional limited
partnership units in accordance with the provisions of its agreement of limited
partnership, it being agreed that additional partnership units in BOP
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will only be issued as consideration in whole or in part for properties being
acquired by Borrowers in compliance with the provisions of the Existing Credit
Agreement. In addition, and upon prior notice to Co-Lenders, WOP and the
ownership of its assets may be consolidated into BOP pursuant to documents and
procedures which are in form and substance reasonably satisfactory to
Co-Lenders.
10. Commitment Fee. In consideration of Co-Lenders
extending to Borrowers the Credit Facility in accordance with the provisions of
the Credit Facility Documents, Borrowers shall pay to Co-Lenders on the date of
execution and delivery of this Agreement, and as a condition precedent to the
first advance of the Credit Facility, a commitment fee (the "Commitment Fee") of
$87,500, which Commitment Fee shall be divided pro rata between Co-Lenders,
shall be deemed earned in full by Co-Lenders upon payment by Borrowers, and
shall in no event be refundable in whole or in part.
11. Loan to Value Requirement. In no event will the
aggregate Credit Facility Outstanding at any given time during the term of the
Credit Facility exceed sixty percent (60%) of the aggregate Approved Value of
the Properties from time to time constituting part of the collateral for the
Credit Facility (the "Loan to Value Requirement"). If at any time the Loan to
Value Requirement shall cease to be satisfied, Borrowers shall within ten (10)
business days after demand by Agent either (i) pay the outstanding Principal
Balance of the Credit Facility down by an amount sufficient to restore
compliance with the Loan to Value Requirement, or (ii) deliver to Agent
additional collateral for the Credit Facility consisting of unencumbered
improved property which is satisfactory in all respects to Co-Lenders and
sufficient in the opinion of Co-Lenders to restore compliance with the Loan to
Value Requirement.
12. Representations and Warranties. Borrowers hereby
represent and warrant to Co-Lenders as follows:
(a) BOP is and will continue to be a limited
partnership duly organized, validly existing and in
good standing under the laws of the State of Delaware;
BRT is and will continue to be a real estate investment
trust duly organized, validly existing and in good
standing under the laws of the State of Maryland and is
and will at all times continue to maintain its tax
status as a REIT under Section 856 of the Internal
Revenue Code; WOP is and will continue to be a limited
partnership duly formed, validly existing and in good
standing under the laws of the State of Delaware; BRP
is and will continue to be a general partnership duly
formed, validly existing and in good standing under the
laws of the Commonwealth of Pennsylvania; BRSC and BHI
are and will continue to be corporations duly
organized, validly existing and in good standing under
the laws of the Commonwealth of Pennsylvania; each
Borrower and each Guarantor is and will continue to be
duly licensed and qualified as a foreign partnership,
corporation or otherwise in each jurisdiction in which
a Property is located or failure to be qualified or
licensed would have a materially adverse effect on any
Borrower, any Guarantor, any Property or other
Collateral or
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on the business, assets, operations, property or
financial or other condition of any Borrower or
Guarantor; each Borrower has and will continue to have
all requisite power and authority to borrow under the
Credit Facility and to execute and deliver, and to
observe and perform all of its obligations under, this
Agreement and the other Credit Facility Documents; each
Guarantor has and will continue to have all requisite
power and authority to execute and deliver, and to
observe and perform all of its obligations under the
Credit Facility Documents; BRT has and will continue to
have all requisite power and authority to be the sole
general partner of BOP and a general partner of BRP
(unless and until such general partnership interest is
transferred by BRT to BOP) and to execute and deliver
on behalf of BOP, as its sole general partner, and on
behalf of BRP, as one of its general partners, all of
the Credit Facility Documents, and to observe and
perform all of its obligations, as the sole general
partner of BOP and as one of the general partners of
BRP (unless and until such general partnership interest
is transferred by BRT to BOP), under the Credit
Facility Documents; BHI has and will continue to have
all requisite power and authority to be the sole
general partner of WOP and to execute and deliver on
behalf of WOP, as its sole general partner, all of the
Credit Facility Documents, and to observe all of its
obligations, as the sole general partner of WOP under
the Credit Facility Documents; and each Borrower and
each Guarantor has and will continue to have all
requisite power and authority to own their respective
assets and property and to carry on the business in
which they are engaged.
(b) The execution, delivery and performance by
Borrowers of this Agreement and the other Credit
Facility Document, the borrowings by the Borrowers
under the Agreement and the other Credit Facility
Documents, and the execution, delivery and performance
by Borrowers, and by BRT, individually and as the sole
general partner of BOP and as a general partner of BRP,
and by BHI, as the sole general partner of WOP, and by
BOP, individually, and by WOP individually, and by
Guarantors of all other agreements and instruments (not
mentioned above) to be executed and delivered by them
pursuant hereto or thereto or in connection herewith or
therewith, have been or will be duly authorized by all
necessary corporate action (including any necessary
stockholder action), partnership action or other action
on the part of each of them, and do not and will not
(i) violate (A) any provision of any law, rule,
regulation, order, writ, judgment, decree,
determination or award presently in effect having
applicability to any Borrower or Guarantor of any of
the organizational documents of any Borrower or
Guarantor, or (B) any indenture, agreement or other
instrument to which any Borrower or Guarantor is a
party, or by which any Borrower or Guarantor or any of
their respective property or assets is bound, except in
cases where such violation will not have a materially
adverse effect on any Property, any other Collateral or
on the business, assets, operations, property or
financial or other condition of any Borrowers or
Guarantor, or (ii) be in conflict with, result in a
breach of or constitute (with due notice or lapse
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of time or both) a default under any such indenture,
agreement or other instrument, except in cases where
such conflict, breach or default will not have a
materially adverse effect on any Property, any other
Collateral or on the business, assets, operations,
property or financial or other condition of any
Borrower or Guarantor, or (iii) result in or require
(except as specifically contemplated by this Agreement)
the creation or imposition of any lien of any nature
upon any of the assets or property of any Borrower or
Guarantor. This Agreement has been duly executed and
constitutes, and (when executed and delivered by
Borrowers and/or Guarantors, as applicable) each other
Credit Facility Document now or hereafter executed and
delivered by Borrowers and/or the Guarantors pursuant
hereto or thereto or in connection herewith, or
therewith, will each constitute the legal, valid and
binding obligation of Borrowers and/or Guarantors
respectively, enforceable against them in accordance
with their terms, except as enforcement may be limited
by bankruptcy, insolvency and other similar laws
affecting the enforcement of creditors' rights
generally and by moratorium laws from time to time in
effect. No authorization, consent, approval, license or
formal exemption from, nor any filing, declaration or
registration with, any court, governmental agency or
regulatory authority (Federal, state, local or
foreign), including, without limitation, the Securities
and Exchange Commission, or with any securities
exchange, is required by Borrowers or Guarantor in
connection with the making and performance by Borrowers
of this Agreement or the Credit Facility Notes or with
respect to the borrowings hereunder or for the
execution, delivery and performance by Borrowers and
Guarantors of the other Credit Facility Documents,
except for those already obtained or completed.
(c) When duly recorded or filed in the appropriate
public records, the Mortgages and the Financing
Statements shall each create in the Co-Lenders, valid
and perfected first liens upon the property subject
thereto and no further action will be required to
perfect such liens. The representations in this
subparagraph are limited to Borrowers' review of the
title policies insuring the respective liens of the
Mortgages and their own actual knowledge.
(d) The December 31, 1996, audited consolidated
financial statements and the December 31, 1996 annual
unaudited consolidating financial statements of
Borrowers previously delivered by Borrowers to
Co-Lenders are correct in all material respects and
fairly set forth the financial condition of Borrowers,
respectively, as of December 31, 1996, and the results
of Borrowers' respective operations and changes in
respective financial position for the period then
ended, all in accordance with GAAP. Since December 31,
1996, there has not occurred any material adverse
change in the business, assets, operations, property or
financial or other condition of Borrowers.
(e) All quarterly consolidated and consolidating
unaudited financial statements for the calendar quarter
ending
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March 31, 1997 of Borrowers previously delivered by
Borrowers to Co-Lenders are correct in all material
respects and fairly set forth the financial condition
of Borrowers, as of the dates set forth therein, and
the results of Borrowers' operations and changes in
Borrowers' respective financial position for the period
then ended, all in accordance with GAAP. Since the date
of such statements delivered by Borrowers, there has
not occurred any material adverse change in the
business, assets, operations, property or financial or
other condition of Borrowers.
(f) All quarterly unaudited individual and consolidated
operating statements and all annual individual and
consolidated operating statements previously delivered
by Borrowers to Co-Lenders with respect to the Initial
Properties are correct in all material respects and
fairly set forth the operating results of the Initial
Properties as of the dates set forth therein, and the
results of each Initial Property's respective
operations and changes in each Initial Property's
operating activities for the period then ended. Since
the date of such statements, there has not occurred any
material adverse change in the operations of any
Initial Property.
(g) Except as set forth on Schedule 1 attached to this
Agreement, there are no actions, suits or proceedings
pending or, to the best knowledge of Borrowers,
threatened against any Borrower, any Guarantor or any
of their respective properties or assets by or before
any court or any Federal, state, local, foreign or
other governmental agency or regulatory authority
which, in the reasonable judgment of Borrowers, after
consultation with counsel, would have or could
reasonably be expected to have a materially adverse
effect on any Property or any other Collateral or on
the business, assets, operations, property or financial
or other condition of any Borrower or Guarantor or
would or could reasonably be expected to materially
impair the ability of any Borrower or Guarantor to
perform their respective obligations under this
Agreement, the Credit Facility Notes and the other
Credit Facility Documents, or would otherwise be
required to be reported under applicable Federal or
state securities laws.
(h) Borrowers own fee title to, or a leasehold estate
in, or other title or ownership interest in all their
respective properties and assets including, without
limitation, the properties and assets reflected on the
audited consolidated financial statements referred to
in subparagraph (d) above and assets and properties
acquired since December 31, 1996.
(i) BOP owns fee title to all of the Owned Properties
and will, upon the acquisition of title thereto, own
fee title to the Pending Properties. Subject to the
preceding sentence, fee title to the Properties is and
will continue to be owned and held by BOP free and
clear of all liens and monetary encumbrances of any
nature whatsoever (except for the Permitted Title
Exceptions). All non-monetary encumbrances affecting
the Properties either benefit the Properties or
-10-
enhance the integrated use, operation and management of
the Properties or do not otherwise have a materially
adverse effect on the title, ownership, value, use or
operation of any of the Properties.
(j) Each Borrower and Guarantor has filed or caused to
be filed all United States and state income tax returns
which are required to be filed and has paid or caused
to be paid all taxes shown on such returns or on any
assessment made against it, except in cases where such
a failure to file or to pay would not have a materially
adverse effect on any Property, any other Collateral or
on the business, assets, operations, property or
financial or other condition of any Borrower or
Guarantor. Each Borrower and Guarantor has filed or
caused to be filed all United States, state, local and
foreign tax returns (other than income tax returns)
which are required to be filed and has paid or caused
to be paid all taxes shown on such returns or on any
assessment made against it and all other taxes, fees or
other charges imposed on it by any governmental
authority, agency or instrumentality which have become
due and payable (other than taxes, assessments, fees
and other charges the validity or amount of which is
being contested in good faith by appropriate proceeding
[and otherwise in compliance with the general
requirements for contesting Taxes, as more specifically
set forth in paragraph 17 of this Agreement] or the
failure to pay which would not have a materially
adverse effect on any Property, any other Collateral or
on the business, assets, operations, property or
financial or other condition of any Borrower or
Guarantor). No tax liens have been filed against any
Borrower or Guarantor or against their respective
assets and property (other than those the validity or
amount of which is being contested in good faith by
appropriate proceedings [and otherwise in compliance
with the general requirements for contesting Taxes, as
more specifically set forth in paragraph 17 of this
Agreement] or the foreclosure of which would not have a
materially adverse effect on any Property, any other
Collateral or on the business, assets, operations,
property or financial or other condition of any
Borrower or Guarantor), and no material claims are
being asserted in respect of any taxes (other than
those being contested as aforesaid or those that are
not material as aforesaid).
(k) Neither any Borrower, nor any Guarantor is in
default in any respect under or in respect of any
contract, agreement or other instrument to which it is
a party or by which it or its property or assets may be
bound, except in cases where such default has no
materially adverse effect on any Property, any other
Collateral or on the business, assets, operations,
property or financial or other condition of any
Borrower or Guarantor. No Event of Default described in
paragraph 31 hereof has occurred and is continuing and
no event has occurred which but for notice, lapse of
time, or both, would constitute an Event of Default.
Neither any Borrower, nor any Guarantor is in default
under any order, judgment, award or decree of any
court, arbitrator or other governmental authority
binding upon or affecting it or by which any of its
-11-
property or assets may be bound or affected, except in
cases where such default has no materially adverse
effect on any Property, any other Collateral or on the
business, assets, operations, property or financial or
other condition of any Borrower or Guarantor, and no
such order, judgment, award or decree materially
adversely affects the ability of any Borrower or
Guarantor to carry on its business as now conducted or
the ability of any Borrower or Guarantor to perform
their respective obligations under this Agreement, the
Credit Facility Notes and the other Credit Facility
Documents.
(l) Each Borrower and Guarantor maintains with
financially sound and reputable insurance companies,
with premiums at all times currently paid, property and
casualty insurance upon fixed assets and inventories,
public liability insurance, fidelity bond coverage,
business interruption insurance, and all insurance
required by law, all in form and amounts required by
law and customary to the respective natures of their
businesses and properties, and including, without
limitation, the Insurance Policies required pursuant to
paragraph 18 of this Agreement, except in cases where
failure to maintain such insurance will not have or
potentially have a materially adverse effect on any
Property, any other Collateral or on the business,
assets, operations, property or financial or other
condition of any Borrower or Guarantor.
(m) Neither this Agreement, any other Credit Facility
Document nor any document, financial statement, report,
notice, schedule, certificate, statement or other
writing furnished to or to be furnished to Co-Lender by
any Borrower or Guarantor in connection with the Credit
Facility or otherwise in connection with the
transaction contemplated hereby, contains or will
contain any untrue or misleading statement of, or
omission of, any material fact as of the date upon
which the same is so furnished.
(n) All of the Properties and their use comply and will
continue to comply in all material respects with all
applicable zoning resolutions, building codes, fire
safety, subdivision and other applicable laws, rules
and regulations including, without limitation, and to
the best knowledge of Borrowers (which knowledge is
based solely upon reports of the inspecting engineers
who have prepared structural and engineering reports
with respect to Properties) the Americans with
Disabilities Act.
(o) No portion of any Property nor any improvements
located on any Premises which are material to the
operation, use or value of a Property are damaged or
injured in any material respect as a result of any
fire, explosion, accident, flood or other casualty.
(p) Except for the Leases described on Schedule 2
attached to this Agreement and the other leases
described on Schedule 3 attached to this Agreement,
there are no other leases, management and/or leasing
agreements for, concerning or with
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respect to any of the Properties or any portions
thereof, including any personal property located
thereon.
(q) No condemnation or eminent domain proceeding has
been commenced or to the knowledge of Borrowers is
threatened against any Property.
(r) Borrowers have no knowledge of any notices of any
violation of Federal law or municipal ordinances or
orders or requirements of the States in which the
Properties are located or any municipal department or
other governmental authority which remain uncured.
(s) There exists no default by any Borrower under any
deed of trust, mortgage, pledge or other security
agreement affecting any Property or any other
Collateral, or any portion thereof, or under any
Material Agreement pertaining to any Property, or by
which any portion of any of the Properties or the other
Collateral may be bound, except where such default does
not and will not have a material adverse effect on any
Property, or any other Collateral or on the business,
assets, operations, property or financial or other
condition of any Borrower or Guarantor.
(t) Neither any Borrower nor any Guarantor is engaged
in the business of extending credit for the purpose of
purchasing or carrying any margin stock (within the
meaning of Regulation G or U of the Board of Governors
of the Federal Reserve System of the United States). No
part of the proceeds of any advance made under the
Credit Facility will be used to purchase or carry any
such margin stock or to extend credit to others for the
purpose of purchasing or carrying any such margin stock
or for the purpose of repaying any loan the pro ceeds
of which were used for such purpose. If requested by
Agent, Borrowers will furnish to Agent a statement in
conformity with the requirements of Federal Reserve
Form U-1 referred to in said Regulation U. No part of
the proceeds of any advance made under the Credit
Facility will be used for any purpose that violates, or
which is inconsistent with, the provisions of
Regulation G, T, U or X or any other regulation of the
Board of Governors of the Federal Reserve System of the
United States.
(u) Neither any Borrower nor any Guarantor has taken
any action which would cause it to become an "employee
benefit plan" as defined in Section 3(3) of the
Employee Retirement Income Security Act of 1974, as
amended from time to time ("ERISA"), or a "governmental
plan" as defined in Section 3(32) of ERISA, or a "plan"
as defined in Section 4975(e)(1) of the Internal
Revenue Code, or which would cause its assets to become
"plan assets" as defined in 29 C.F.R. Section
2510.3-101.
(v) The proceeds of any and all advances under the
Credit Facility shall be used for the purposes set
forth in paragraph 4 of this Agreement and for no other
purposes.
-13-
(w) BRT and BOP taken as a whole are each, and after
giving effect to all of the transactions contemplated
by this Agreement and the other Credit Facility
Documents, will each continue to be, in a solvent
condition. As used herein, "solvent" means, when used
with respect to any Person, that (i) the present fair
saleable value of such Person's assets is in excess of
the total amount of its liabilities (including
contingent liabilities); (ii) such Person is able to
pay its debts as they become due; and (iii) such Person
does not have unreasonably small capital to carry on
such Person's business as theretofore operated and all
businesses in which such Person is about to engage.
(x) Each Borrower is not, and will by such acts as may
be necessary, continue not to be, an investment company
within the meaning of the Investment Company Act of
1940.
(y) No Borrower is a "holding company" or a "subsidiary
company" of a "holding company," or an "affiliate" of a
"holding company," or of a "subsidiary company" of a
"holding company," within the definitions of the Public
Utility Holding Company Act of 1935, as amended.
(z) Borrowers have dealt with no brokers in connection
with the Credit Facility, and no brokerage fees or
commissions are payable by or to any Person in
connection with this Agreement or the Credit Facility.
Co-Lenders shall not be responsible for the payment of
any fees or commissions to any broker and Borrowers
shall indemnify, defend and hold Co-Lenders harmless
from and against any claims, liabilities, obligations,
damages, costs and expenses (including reasonable
attorneys' fees and disbursements) made against or
incurred by Co-Lenders as a result of claims made or
actions instituted by any broker or Person claiming by,
through or under Borrowers in connection with the
Credit Facility.
(aa) No aspect of any of the transactions contemplated
herein violate or will violate any usury laws or laws
regarding the validity of agreements to pay interest in
effect on the date hereof.
(bb) No Borrower is a "foreign person" within the
meaning of Section 1445 or 7701 of the Internal Revenue
Code.
(cc) No Borrower uses a trade name and no Borrower has
conducted or presently conducts business under any name
other than its actual name set forth herein. The
principal place of business of each Borrower is as
stated in the recitals hereto.
The representations and warranties of Borrowers under this paragraph shall be
deemed to be continuing representations and warranties which may at all times
during the term of the Credit Facility be relied upon by Co-Lenders (and each
Participant) unless Agent shall have been informed by Borrowers of any change in
fact or circumstance which would affect the continuing accuracy of the
representations and warranties set forth in this paragraph. Borrowers shall
promptly inform Agent (but in no event later than five (5) business days after
Borrowers shall have actual knowledge thereof) of the occurrence of any fact,
-14-
circumstance or event which would change or materially affect in any way the
continuing accuracy of the representations and warranties set forth in this
paragraph or which would render any such representation or warranty inaccurate
or false in any material respect.
13. Covenants. Borrowers shall observe and perform and
shall cause Guarantors to observe and perform, as applicable, at all times
during the term of the Credit Facility the following covenants:
(a) BRT and BOP shall at all times during the term of
the Credit Facility maintain a net worth (i.e. value of
total assets less total liabilities, as determined on
the basis of generally accepted accounting principles
consistently applied) of at least the aggregate of
$100,000,000 plus ninety (90%) percent of the net
proceeds (i.e., after the expenses incurred in
connection with such offerings) of all equity offerings
by BRT or BOP after the date of this Agreement. In
determining the aforesaid net worth, Co-Lenders shall
give credit to the issued and outstanding Series A
Convertible Preferred Stock held by the Voting Trust
dated November 6, 1996 for the benefit of the
Commonwealth of Pennsylvania State Employees Retirement
System.
(b) In the case of BRT, do or cause to be done all
things necessary to preserve, renew and keep in full
force and effect its existence as a real estate
investment trust and its tax status as a REIT under
Section 856 of the Internal Revenue Code.
(c) Comply in all material respects with, and do or
cause to be done all things necessary to preserve,
renew and keep in full force and effect, its material
rights, licenses, permits and franchises and the rights
and franchises, pertaining to or comprising part of the
Properties or the other Collateral unless the failure
to do so does not have a material adverse effect on any
Property or any other Collateral or on the business,
assets, operations, property or financial or other
condition of any Borrower or Guarantor; comply with all
laws, rules and regulations applicable to it except
where the failure to do so does not have a material
adverse effect on any Property or any other Collateral
or on the business, assets, operations, property or
financial or other condition of any Borrower or
Guarantor; at all times maintain and preserve all
property used or useful in the conduct of its business
and keep the same in good repair, working order and
condition, and from time to time make, or cause to be
made, all repairs, renewals and replacements thereto,
so that the business carried on in connection therewith
may be properly conducted at all times except where the
failure to do so does not have a material adverse
effect on any Property or any other Collateral or on
the business, assets, operations, property or financial
or other condition of any Borrower or Guarantor;
(d) Keep its insurable properties adequately insured at
all times; maintain such other insurance, to such
extent and against such risks, including fire and other
risks insured
-15-
against by extended coverage, as is customary with
companies in the same or similar businesses; maintain
in full force and effect public liability insurance
against claims for personal injury or death or property
damage occurring upon, in, about or in connection with
the use of any properties owned, occupied or controlled
by it in such amount as it shall reasonably deem
necessary; and maintain such other insurance as may be
required by law.
(e) Borrowers (i) shall comply in all material respects
with the requirements of, and to the extent within
Borrowers' control, maintain, preserve, enforce and
renew rights of way, easements, grants, privileges,
licenses and restrictive covenants which from time to
time affect or pertain to the whole or any portion of a
Property, (ii) shall not modify, amend or terminate any
rights of way, easements, grants, privileges, licenses
or restrictive covenants which from time to time affect
or pertain to the whole or any portion of a Property,
and (iii) shall not without obtaining the prior consent
of Co-Lenders (which consent shall not be unreasonably
withheld or delayed) modify, amend or terminate, or
surrender any of its rights under, any of such rights
of way, easements, grants, privileges, licenses or
restrictive covenants, unless, with respect to a
modification or amendment referred to in clauses (ii)
and (iii) only, such modification or amendment would
not have an adverse effect on any Property, any other
Collateral or on the business, assets, operations,
property or financial or other condition of any
Borrower or Guarantor.
(f) Borrowers shall at all times comply with and shall
cause the Properties to continue to comply with all
existing and future governmental laws, orders,
ordinances, rules and regulations affecting the
Properties, or any portion thereof or the use thereof,
except where the failure to do so does not have a
material adverse effect on any Property or any other
Collateral or on the business assets, operations,
property, financial or other condition of any Borrower
or Guarantor.
(g) Promptly repair, replace or rebuild any part of a
Property which may be damaged or destroyed by fire or
other property hazard or casualty (including any fire
or other property hazard or casualty for which
insurance was not obtained or obtainable) or which may
be affected by any taking by any public or quasi-public
authority through eminent domain or otherwise, and
shall complete and pay for, within a reasonable time,
any portion of any Property which is at any time in the
process of renovation or repair.
(h) Observe and perform each and every term to be
observed or performed by Borrowers pursuant to the
terms of any agreement or recorded instrument affecting
or pertaining to the Properties, except where the
failure to do so does not have a material adverse
effect on any Property or any other Collateral or on
the business, assets, operations, property or financial
or other condition of any Borrower or any Guarantor.
-16-
(i) Observe and perform, and cause to be observed and
performed, all of the terms, covenants and provisions
contained in the Credit Facility Documents and in the
Existing Credit Facility Documents.
(j) Borrowers will not, without obtaining the prior
consent of Co-Lenders, initiate, join in or consent to
any private restrictive covenant, zoning ordinance, or
other public or private restrictions, limiting or
adversely affecting the uses which may be made of the
Properties or any part thereof.
(k) Pay all of its indebtedness and obligations
promptly and in accordance with their terms (other than
such indebtedness and obligations, the validity or
amount of which is being contested in good faith by
appropriate proceeding [and otherwise in compliance
with the general requirements for contesting Taxes, as
more specifically set forth in paragraph 17 of this
Agreement] or where the failure to pay would not have a
materially adverse effect on any Property, any other
Collateral or on the business, assets, operations,
property or financial or other condition of any
Borrower or Guarantor) and pay and discharge promptly
all taxes, assessments and governmental charges or
levies imposed upon it or upon its income or profits or
in respect of its property, before the same shall
become in default, as well as all lawful claims for
labor, materials and supplies or otherwise which, if
unpaid, might become a lien upon such properties or any
part thereof (except for such taxes, assessments,
governmental charges or levies, or such claims, the
validity or amount of which is being contested in good
faith by appropriate proceeding [and otherwise in
compliance with the general requirements for contesting
Taxes, as more specifically set forth in paragraph 17
of this Agreement] or where the failure to pay would
not have a materially adverse effect on any Property,
any other Collateral or on the business, assets,
operations, property or financial or other condition of
any Borrower or Guarantor).
(l) Furnish to Co-Lenders all financial statements and
information required pursuant to the provisions of this
Agreement and the other Credit Facility Documents, it
being understood that such financial information shall
be delivered by Borrowers to Agent for distribution by
Agent to Co-Lenders.
(m) Give Agent prompt written notice of (i) the
occurrence and nature of any Event of Default; (ii) the
occurrence and nature of any event which has resulted
in, or which Borrowers believes will result in, a
materially adverse change in any Property or any other
Collateral or in the condition or operations of any
Property or in the financial condition or operations of
any Borrower or Guarantor; or (iii) any matter (other
than those specified above as to which Co-Lenders have
received due notice) which has resulted in, or which
Borrowers reasonably believe will result in, a
materially adverse change in any Property or any
Collateral or in the condition or operations of any
Property or in the financial condition or operations of
any Borrower or Guarantor.
-17-
(n) Unless Co-Lenders shall have previously consented
in writing, neither any Borrower nor any Guarantor (i)
will take any action which would cause it to become an
"employee benefit plan" as defined in Section 3(3) of
ERISA, or a "governmental plan" as defined in Section
3(32) of ERISA, or a "plan" as defined in Section
4975(e)(1) of the Internal Revenue Code, or its assets
to become "plan assets" as defined in 29 C.F.R. Section
2510.3-101, or (ii) will sell, assign or transfer its
respective property, or any portion thereof or interest
therein (other than a lease entered into in conformity
with the provisions of this Agreement), to any
transferee which does not execute and deliver to
Co-Lenders its written assumption of the obligations of
this covenant. Each Borrower further covenants and
agrees to protect, defend, indemnify and hold
Co-Lenders harmless from and against all loss, cost,
damage and expense (including without limitation, all
excise taxes, costs of correcting any prohibited
transaction or obtaining an appropriate exemption and
reasonable attorneys' fees) which Co-Lenders may incur
as a result of breach of this covenant by any Borrowers
or Guarantor. This indemnity shall survive the
repayment or retirement of the Credit Facility.
(o) Borrowers shall not without the prior consent and
approval of Co-Lenders enter into, modify, amend or
terminate (in whole or in part) any Lease covering
20,000 square feet or more of space located in any
Property from time to time constituting part of the
collateral pool for the Credit Facility. Borrowers
shall not enter into any Lease covering less than
20,000 square feet of space located in the Improvements
unless such Lease is in a form approved by Co-Lenders
(with such changes therein as may be consistent with
normal and prudent business practices pertaining to
comparable leases of space in properties which are
similar to the Property in question and otherwise
consistent with Borrowers' usual business practices),
and at rents and otherwise on terms which are
consistent with prevailing market conditions, as
reasonably determined by Borrowers, and Borrowers shall
not terminate any such Leases other than in accordance
with normal and prudent business practices. Co-Lenders
shall within ten (10) business days after delivery by
Borrowers to Agent of a term sheet setting forth in
detail the proposed terms for any Lease in excess of
20,000 square feet indicate to Borrowers whether such
terms have been approved (subject to review and
approval of the final draft of such Lease by
Co-Lenders). Co-Lenders shall indicate to Borrowers
within ten (10) business days after delivery by
Borrowers to Agent of the final draft of any Lease
covering in excess of 10,000 square feet (and
irrespective of whether a term sheet has first been
submitted to Co-Lenders for approval with respect
thereto) whether Co-Lenders have approved such Lease,
such approval not to be unreasonably withheld or
delayed. If Co-Lenders do not indicate to Borrowers
within ten (10) business days after receipt by Agent of
any such term sheet or any such Lease pursuant to the
provisions of this subparagraph, as the case may be,
either their approval or disapproval of the same, such
approval shall be deemed to have been granted so long
as the
-18-
request for such approval indicates in bold type that
failure to approve or disapprove such term sheet or
Lease, as the case may be, within ten (10) business
days after receipt shall be deemed to constitute the
approval of Co-Lenders. Borrowers shall enforce the
obligation of the tenants under the Leases and shall
observe and perform the terms, covenants and provisions
of the Leases on Borrowers' respective parts to be
observed and performed.
(p) Cause all taxes, assessments, water rates, sewer
rates and other charges with respect to the Properties
to be paid prior to the date upon which any fine,
penalty, interest or cost may be added thereto or
imposed by law for the non-payment thereof (other than
those the validity or amount of which is being
contested in good faith by appropriate proceedings [and
otherwise in compliance with the general requirements
for contesting Taxes, as more specifically set forth in
paragraph 17 of this Agreement] or the non-payment of
which would not have a materially adverse effect on any
Property, any other Collateral or on the business,
assets, operations, property or financial or other
condition of any Borrower or Guarantor).
(q) Cause all income taxes, corporate franchise taxes
and other fees payable by each Borrower and Guarantor
or otherwise pertaining to the Properties or the
Collateral to be paid as and when the same become due
and payable (other than those the validity or amount of
which is being contested in good faith by appropriate
proceedings [and otherwise in compliance with the
general requirements for contesting Taxes, as more
specifically set forth in paragraph 17 of this
Agreement] or the non-payment of which would not have a
materially adverse effect on any Property, any other
Collat eral or on the business, assets, operations,
property or financial or other condition of any
Borrower or Guarantor).
(r) Cause to be observed and performed each and every
term, covenant and provision of any partnership
agreement, joint venture agreement, tenancy-in-common
agreement, condominium agreement, Lease and property
agreement relating to any Property or any other
Collateral on the part of a Borrower, a Guarantor or
any Person under their control to be observed and
performed and cause to be taken all steps (short of the
termination of any Lease) necessary to enforce their
respective rights thereunder. No such partnership
agreement, joint venture or tenancy-in-common
agreement, condominium agreement or property agreement
shall be in any manner modified, amended or terminated
without the prior consent of Co-Lenders unless such
agreement would not have a materially adverse effect on
any Property, any other Collateral or on the business
assets, operations, property or financial or other
condition of any Borrower or any Guarantor.
Notwithstanding the provisions of the foregoing
sentence, no such partnership agreement pertaining to
BOP, BRP or WOP shall be modified, amended or
terminated in any respect without the prior consent of
Co-Lenders in each and every case.
-19-
(s) Each request for an advance under the Credit
Facility without further act or instrument shall
constitute a reaffirmation by Borrowers, of each of the
representations and warranties set forth in this
Agreement and in each of the other Credit Facility
Documents, which reaffirmation shall be a condition
precedent to Co-Lenders' obligation to make advances
under the Credit Facility.
(t) Take all necessary action to maintain the
Properties and the other Collateral in good condition
and repair and will not commit or suffer to be
committed any waste with respect thereto. The failure
of Borrowers to pay any Taxes or any installment
thereof (other than those the validity or amount of
which is being contested in good faith by appropriate
proceedings [and otherwise in compliance with the
general requirements for contesting Taxes, as more
specifically set forth in paragraph 17 of this
Agreement] or the non-payment of which would not have a
materially adverse effect on any Property, any other
Collateral or on the business, assets, operations,
property or financial or other condition of any
Borrower or Guarantor), or any Insurance Premiums
payable with respect to any of the Insurance Policies
covering the Properties or any portion thereof, or to
use and apply the Rents strictly in accordance with the
provisions of the Credit Facility Documents, shall be
deemed for all purposes to constitute waste, regardless
of whether the same would, in the absence of this
provision, otherwise constitute waste under applicable
law.
(u) Except as expressly permitted in accordance with
the provisions of this Agreement or the other Credit
Facility Documents, neither the Properties nor the
other Collateral nor any portion thereof nor any
interest therein or in any Borrower shall in any manner
be further encumbered, sold, transferred or conveyed or
permitted to be further encumbered, sold, transferred
or conveyed without the prior consent of Co-Lenders,
which consent may be withheld in the sole and absolute
discretion of Co-Lenders; provided, however, that
nothing contained herein shall prohibit the issuance of
partnership interests in BOP or equity shares in BRT
(subject to the provisions of paragraph 9 of this
Agreement) to an entity which conveys a Property to
Borrowers as partial or total consideration for the
conveyance of such Property.
(v) Cause the Debt to be paid in accordance with the
provisions of this Agreement and the other Credit
Facility Documents.
(w) At all times continue to satisfy the Financial
Covenants.
(x) Neither any Borrowers nor any Guarantor nor any of
their respective Affiliates or subsidiaries shall
engage in any business or activity which is not
directly related to the ownership, operation or
management of the Properties constituting part of the
Collateral for the Credit Facility or other properties
not constituting part of the Collateral
-20-
for the Credit Facility which are otherwise generally
comparable in nature to the Properties constituting
part of the Collateral for the Credit Facility.
(y) Neither Borrowers nor any of the respective
Affiliates or subsidiaries of Borrowers will incur
either directly or as a guarantor any liability
(whether recourse or non-recourse) for the payment of
any indebtedness other than the Debt and the
indebtedness evidenced and secured by the Existing
Credit Facility Documents. The incurrence of any other
debt (other than the retention of currently existing
debt) shall constitute an immediate "Event of Default"
under this Agreement.
(z) BRT will at all times maintain (i) its REIT status
under the Internal Revenue Code, and (ii) its status as
a public company whose stock is listed on a
nationally-recognized exchange or is a NASDAQ security.
(aa) The dividend payout ratio of BRT (dividends paid
divided by funds from operations, as defined by
NAREIT), and as determined on a trailing twelve month
basis, shall at all times be less than 90%.
Notwithstanding the foregoing, the actual dividend
payout may exceed the foregoing dividend payout ratio
restriction if required in order to maintain BRT's
status as a REIT under the Internal Revenue Code.
(bb) Borrowers will not without the prior consent of
Co-Lenders assume, guaranty, endorse or otherwise
become directly or contingently liable for the debts or
obligations of any other person, party or entity,
except by reason of endorsement of negotiable
instruments for deposit or collection in the ordinary
course of business.
(cc) Borrowers shall pay all fees, commissions, costs,
charges, taxes and other expenses incurred by
Co-Lenders in the extension of the Credit Facility and
in connection with the preparation, execution and
delivery of this Agreement and the other Credit
Facility Documents, including, without limitation,
reasonable attorneys' fees, appraisal fees, fees and
expenses incurred in accounting review and fees and
expenses relating to examination of title, title
insurance premiums, surveys, hazard insurance and
mortgage recording, documentary, intangible, transfer
or other similar taxes, revenue stamps and all
recording fees and charges. Co-Lenders shall cooperate
with Borrowers in an attempt to minimize the
aforementioned costs and expenses, provided, however,
that nothing contained herein shall require Co-Lenders
to compromise their respective underwriting standards
and requirements.
(dd) Co-Lenders shall not be required to pay any
brokerage fees or commissions or other remuneration of
any nature whatsoever arising from the extension of the
Credit Facility or the funding of the Credit Facility
and Borrowers agree to defend, indemnify and hold
Co-Lenders harmless, from and against any and all such
claims in connection therewith which
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are asserted by any broker with whom Borrowers have or
are alleged to have dealt in connection with the Credit
Facility.
(ee) Borrowers shall not assign this Agreement by
agreement, operation of law or otherwise, or the moneys
to be advanced and disbursed hereunder without the
prior written consent of Co-Lenders, which consent may
be withheld by Co-Lenders in the exercise of their sole
and absolute discretion.
(ff) The aggregate Approved Value of all Properties
from time to time constituting part of the collateral
pool for the Credit Facility shall at all times be
equal to or in excess of $100,000,000.
14. Recourse Obligations. Borrowers' obligations in
respect of the Credit Facility shall constitute the full joint and several
recourse obligations of Borrowers.
15. Right of Entry. Agent, Co-Lenders and their
respective employees and agents shall have the right, upon reasonable prior
notice to Borrowers and subject to the rights of lessee and tenants to enter and
inspect the Properties at all reasonable times.
16. Books and Records. Borrowers will keep and maintain
or will cause to be kept and maintained on a fiscal year basis in accordance
with generally accepted accounting practices consistently applied proper and
accurate books, records and accounts reflecting all of the financial affairs of
Borrowers, and all items of income and expense in connection with the operation
of the Properties or in connection with any services, equipment or furnishings
provided in connection with the operation of the Properties, whether such income
or expense be realized by Borrowers or any other Person excepting lessees
unrelated to and unaffiliated with Borrowers who have leased from Borrowers
portions of any Properties for the purpose of occupying the same. Co-Lenders and
their respective employees and agents shall have the right from time to time
upon not less than one (1) business day's prior notice and at all times during
normal business hours to examine such books, records and accounts at the offices
of Borrowers or other Person maintaining such books, records and accounts and to
make copies or extracts thereof as Co-Lenders, or their respective employees or
agents shall desire. Co-Lenders shall also have the right upon reasonable notice
and during normal business hours to conduct an audit of the books and records of
Borrowers, which audit may be performed by an independent certified public
accountant selected and retained by Co-Lenders.
17. Taxes. Borrowers shall pay, or cause to be paid,
all taxes, assessments, water rates, sewer rents and other charges, including
vault charges and license fees for the use of vaults, chutes and similar areas
adjoining the Premises, now or hereafter levied or assessed against the
Properties (the "Taxes") prior to the date upon which any fine, penalty,
interest or cost may be added thereto or imposed by law for non-payment thereof.
Borrowers shall deliver to Co-Lenders, upon request, receipted bills, cancelled
checks, and other evidence satisfactory to Co-Lenders evidencing the payment of
the Taxes prior to the date upon which any fine,
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penalty, interest or cost may be added thereto or imposed by law for the
non-payment thereof. Co-Lenders shall have the right in their discretion to
maintain a tax services contract with respect to the Properties with a tax
reporting agency satisfactory to Co-Lenders. Borrowers shall reimburse
Co-Lenders upon demand for the cost of maintaining such tax service contract
during the term of the Credit Facility. After prior notice to Co-Lenders, in the
case of any material item, Borrowers, at their own expense, may contest by
appropriate legal proceeding, promptly initiated and conducted in good faith and
with due diligence, the amount or validity or application in whole or in part of
any of the Taxes, provided that (i) no default shall have occurred and shall be
continuing under the Credit Facility Notes, the Mortgages, this Agreement or any
of the other Credit Facility Documents, (ii) Borrowers are permitted to do so
under the provisions of any mortgage or deed of trust superior in lien to the
Mortgages, if any, (iii) such proceeding shall suspend the collection of the
contested Taxes from Borrowers and from the Properties, (iv) such proceeding
shall be permitted under and be conducted in accordance with the provisions of
any other instrument to which Borrowers is, or the Properties are, subject and
shall not constitute a default thereunder, (v) neither the Properties nor any
part thereof nor any interest therein will in the opinion of Co-Lenders be in
danger of being sold, forfeited, terminated, cancelled or lost, and (vi)
Borrowers shall have set aside in a manner satisfactory to Co-Lenders adequate
cash reserves for the payment of the contested Taxes, together with all interest
and penalties thereon, or in the alternative Borrowers shall have furnished such
security as may be required in the proceeding, or as may otherwise be requested
or required by Co-Lenders to insure the payment of the contested Taxes, together
with all interest and penalties thereon.
18. Insurance Coverage. Borrowers will insure the
Properties and other Collateral against such perils and hazards, and in such
amounts and with such limits, as Co-Lenders may from time to time reasonably
require, and in any event will continuously maintain with respect to each of the
Properties and the other Collateral, without cost to Co-Lenders, the insurance
described in Exhibit K of this Agreement (collectively, the "Insurance
Policies"). All Insurance Policies shall be in form, issued by companies, in
amounts and with deductibles satisfactory to Co-Lenders from time to time and
shall be maintained throughout the term of the Credit Facility without cost to
Co-Lenders. An insurance company shall not be satisfactory unless such insurance
company (a) has Best's general policyholder rating of "A-" or better and a
financial rating of "Class VIII" or better; (b) is licensed in the State in
which the insured Property is located; (c) has actively been in business for at
least five (5) years; (d) if it is a mutual company, is a nonassessable company;
and (e) does not provide insurance on any one building in excess of ten (10%)
percent of its policyholders' surplus (including capital). All Insurance
Policies insuring against casualty and business interruption and other
appropriate policies shall include non-contributing mortgagee endorsements in
favor of Co-Lenders with loss payable to Co-Lenders, as well as standard waiver
of subrogation endorsements, and shall provide that the coverage shall not be
terminated or modified, nor a risk changed without thirty (30) days' advance
written notice to Co-Lenders. A verified copy of each Insurance Policy shall be
delivered to Agent. If a blanket policy is issued, a certified copy of said
policy shall be furnished, together with an endorsement indicating that
Co-Lenders, and their respective affiliates, subsidiaries, successors and
assigns are additional insureds under such policy in the designated amount. If
any portion of the insured risks are reinsured, the reinsurance policies shall
contain "cut-through" endorsements in form
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satisfactory to Co-Lenders. Commencing with the calendar quarter which commences
on July 1, 1997, Borrowers will deliver to Co-Lenders, not later than July 1,
1997, and thereafter not later than ten (10) days after the commencement of each
subsequent calendar quarter until the Debt has been paid in full, evidence
satisfactory to Co-Lenders confirming that Borrowers have prepaid all insurance
premiums for the Insurance Policies (the "Insurance Premiums") allocable to the
calendar quarter in question. Borrowers will deliver all Insurance Policies to
Agent and, in case of Insurance Policies about to expire, Borrowers will deliver
renewal or replacement policies to Agent not less than thirty (30) days prior to
the date of expiration. The foregoing requirements of this paragraph shall apply
to any separate policies of insurance taken out by Borrowers concurrent in form
or contributing in the event of loss with the Insurance Policies. If any
Insurance Policy or part thereof shall expire or be withdrawn or become void by
reason of the failure or impairment of the capital of any company in which the
insurance shall be carried, or if at any time Co-Lenders are not in receipt of
written evidence that all insurance required hereunder is in force and effect or
if for any reason whatsoever the insurance shall be unsatisfactory to
Co-Lenders, Co-Lenders shall have the absolute and unconditional right without
prior notice to Borrowers to take such action as Co-Lenders deem necessary to
protect the interest of Co-Lenders in the Properties and other Collateral,
including without limitation, the obtaining of such insurance coverage as
Co-Lenders deem appropriate, and all expenses incurred by Co-Lenders in
connection with such action or by Co-Lenders in obtaining such insurance and
keeping it in effect shall be paid by Borrowers to Co-Lenders upon demand
together with interest thereon at the Default Rate. Co-Lenders will promptly
inform Borrowers of any such action so taken by Co-Lenders. Borrowers shall at
all times comply with and shall cause the Properties, the other Collateral and
the use, occupancy, operation, maintenance, alteration, repair and restoration
thereof to comply with the terms, conditions, stipulations and requirements of
the Insurance Policies. If a Property, or any portion thereof, is located in a
Federally designated "special flood hazard area", in addition to the other
Insurance Policies required under this paragraph, a flood insurance policy shall
be delivered by Borrowers to Agent with respect thereto. If no portion of a
Property is located in a Federally designated "special flood hazard area" such
fact shall be substantiated by a certificate in form satisfactory to Agent from
a licensed surveyor, appraiser or professional engineer or other qualified
individual. If any Property shall be damaged or destroyed, in whole or in part,
by fire or other property hazard or casualty, Borrowers shall give prompt notice
thereof to Co-Lenders and one hundred (100%) percent of the net amount of all
insurance proceeds received by Co-Lenders or Borrowers as a result of such
damage or destruction after deduction of reasonable costs and expenses, if any,
in collecting the same, shall be applied to the payment of the Debt whether or
not then due and payable in such order, priority and proportions as Co-Lenders
in their sole and absolute discretion shall deem proper or, at the sole and
absolute discretion of Co-Lenders, the same may be paid, either in whole or in
part, to Borrowers for such purposes as Co-Lenders shall designate, in their
sole and absolute discretion. If Co-Lenders shall receive and retain insurance
proceeds, the lien of the Mortgages shall be reduced only by the amount thereof
received and retained by Co-Lenders and actually applied by Co-Lenders in
reduction of the Debt.
19. Condemnation. Notwithstanding any taking by any
public or quasi-public authority through eminent domain or otherwise, Borrowers
shall continue to pay the Debt at the time and in the manner provided for its
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payment in the Credit Facility Notes, this Agreement and the Mortgages and the
Debt shall not be reduced until any award or payment therefor shall have been
actually received and applied by Agent to the discharge of the Debt. If all or
any portion of a Property is taken by any public or quasi-public authority
through eminent domain or otherwise, one hundred (100%) percent of the aggregate
award or payment received by Co-Lenders or Borrowers as a result of such taking
after deduction of reasonable costs and expenses, if any, in collecting the same
shall be applied in reduction of outstanding Principal Balance under the Credit
Facility. If any Property is sold, through foreclosure or otherwise, prior to
the receipt by Co-Lenders of such award or payment, Co-Lenders shall have the
right, whether or not a deficiency judgment on the Credit Facility Notes shall
have been sought, recovered or denied, to receive such award or payment, or a
portion thereof sufficient to pay the Debt, whichever is less. Borrowers shall
file and prosecute its claim or claims for any such award or payment in good
faith and with due diligence and cause the same to be collected and paid over to
Co-Lenders. Borrowers hereby irrevocably authorize and empower Co-Lenders, in
the name of Borrowers or otherwise, to collect and receipt for any such award or
payment and, subsequent to the occurrence of a default beyond the expiration of
applicable notice and cure periods, if any under any of the Credit Facility
Documents and during the continuance thereof, to file and prosecute such claim
or claims. Although it is hereby expressly agreed that the same shall not be
necessary in any event, Borrowers shall, upon demand of Co-Lenders, make,
execute and deliver any and all assignments and other instruments sufficient for
the purpose of assigning any such award or payment to Co-Lenders, free and clear
of any encumbrances of any kind or nature whatsoever.
20. Environmental Provisions. For the purposes of this
paragraph the following terms shall have the following meanings: (i) the term
"Hazardous Material" shall mean any material or substance that, whether by its
nature or use, is now or hereafter defined as a hazardous waste, hazardous
substance, pollutant or contaminant under any Environmental Requirement, or
which is toxic, explosive, corrosive, flammable, infectious, radioactive,
carcinogenic, mutagenic or otherwise hazardous and which is now or hereafter
regulated under any Environmental Requirement, or which is or contains
petroleum, gasoline, diesel fuel or another petroleum hydrocarbon product, (ii)
the term "Environmental Requirements" shall collectively mean all present and
future laws, statutes, ordinances, rules, regulations, orders, codes, licenses,
permits, decrees, judgments, directives or the equivalent of or by any
Governmental Authority and relating to or addressing the protection of the
environment or human health, and (iii) the term "Governmental Authority" shall
mean the Federal government, or any state or other political subdivision
thereof, or any agency, court or body of the Federal government, any state or
other political subdivision thereof, exercising executive, legislative,
judicial, regulatory or administrative functions. Borrowers hereby represents
and warrants to Co-Lenders that to the best of Borrowers's knowledge (i) no
Hazardous Material is currently located at, on, in, under or about any Property,
except as specifically set forth in the Environmental Reports, (ii) no Hazardous
Material is currently located at, in, on, under or about any Property in a
manner which violates any Environmental Requirement, or which requires cleanup
or corrective action of any kind under any Environmental Requirement, (iii) no
releasing, emitting, discharging, leaching, dumping or disposing of any
Hazardous Material from any Property onto or into any other property or from any
other property onto or into any Property has occurred or is occurring in
violation of any Environmental Requirement, (iv) no notice of violation, lien,
complaint, suit, order or other notice with respect to any
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Property is presently outstanding under any Environmental Requirement, and (v)
each Property and the operation thereof are in compliance with all Environmental
Requirements. Borrowers shall comply, and shall cause all tenants or other
occupants of the Properties to comply, in all respects with all Environmental
Requirements, and will not generate, store, handle, process, dispose of or
otherwise use, and will not permit any tenant or other occupant of any Property
to generate, store, handle, process, dispose of or otherwise use, Hazardous
Materials at, in, on, under or about any Property in a manner that could lead or
potentially lead to the imposition on Borrowers, any Co-Lender or any Property
of any liability or lien of any nature whatsoever under any Environmental
Requirement. Borrowers shall notify Co-Lenders promptly in the event of any
spill or other release of any Hazardous Material at, in, on, under or about any
Property which is required to be reported to a Governmental Authority under any
Environmental Requirement, will promptly forward Agent copies of any notices
received by Borrowers relating to alleged violations of any Environmental
Requirement and will promptly pay when due any fine or assessment against any
Co-Lender, any Borrowers or any Property relating to any Environmental
Requirement. If at any time it is determined that the operation or use of any
Property violates any applicable Environmental Requirement or that there are
Hazardous Materials located at, in, on, under or about any Property which, under
any Environmental Requirement, require special handling in collection, storage,
treatment or disposal, or any other form of cleanup or corrective action,
Borrowers shall, within thirty (30) days after receipt of notice thereof from
any Governmental Authority or from Agent, take, at its sole cost and expense,
such actions as may be necessary to fully comply in all respects with all
Environmental Requirements, provided, however, that if such compliance cannot
reasonably be completed within such thirty (30) day period, Borrowers shall
commence such necessary action within such thirty (30) day period and shall
thereafter diligently and expeditiously proceed to fully comply in all respects
and in a timely fashion with all Environmental Requirements. If Borrowers fail
to timely take, or to diligently and expeditiously proceed to complete in a
timely fashion, any such action, Co-Lenders may, in their sole and absolute
discretion, make advances or payments towards the performance or satisfaction of
the same, but shall in no event be under any obligation to do so. All sums so
advanced or paid by Co-Lenders (including, without limitation, consultant fees
and expenses, investigation and laboratory fees and expenses, and fines or other
penalty payments and reasonable legal fees) and all sums advanced or paid in
connection with any judicial or administrative investigation or proceeding
relating thereto, will immediately, upon demand, become due and payable from
Borrowers and shall bear interest at the Default Rate from the date any such
sums are so advanced or paid by Co-Lenders until the date any such sums are
repaid by Borrowers to Co-Lenders. Borrowers will execute and deliver, promptly
upon request, such instruments as Co-Lenders may deem useful or necessary to
permit Co-Lenders to take any such action, and such additional notes, as
Co-Lenders may require to secure all sums so advanced or paid by Co-Lenders. If
a lien is filed against any Property by any Governmental Authority resulting
from the need to expend or the actual expending of monies arising from an action
or omission, whether intentional or unintentional, of Borrowers or for which
Borrowers are responsible, resulting in the releasing, spilling, leaking,
leaching, pumping, emitting, pouring, emptying or dumping of any Hazardous
Material into the waters or onto land located within or without the State in
which any Property is located, then Borrowers will, within thirty (30) days from
the date that Borrowers are first given notice that such lien has been placed
against such Property (or within such shorter period of time as may be specified
by Co-Lenders if such Governmental Authority has commenced steps to cause such
Property to be sold pursuant to such lien) either (a) pay the claim and remove
the lien, or (b) furnish a cash
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deposit, bond, or such other security with respect thereto as is satisfactory in
all respects to Co-Lenders and is sufficient to effect a complete discharge of
such lien on such Property. Notwithstanding the foregoing, after prior notice to
Agent, in the case of any material item, Borrowers, at their own expense, may
contest by appropriate legal proceedings, promptly initiated and conducted in
good faith and with due diligence, the validity or enforceability, in whole or
in part, of any Environmental Requirement, provided that (i) no default shall
have occurred and be continuing under the Credit Facility Notes, the Mortgages,
this Agreement or any of the other Credit Facility Documents, (ii) such
proceeding shall suspend the obligation of Borrowers to comply with any such
Environmental Requirement, (iii) such proceeding shall be permitted under and be
conducted in accordance with the provisions of any other instrument to which
Borrowers are, or the Properties are, subject and shall not constitute a default
thereunder, (iv) failure to immediately comply with any such law, order,
ordinance, rule or regulation will not invalidate or vitiate any Insurance
Policies, in whole or in part, and will not in the opinion of Co-Lenders
constitute a present danger to the Properties or any portion thereof, or to the
individuals using and entering upon the Properties, (v) neither the Properties
nor any part thereof nor any interest therein will in the opinion of Co-Lenders
be in danger of being sold, forfeited, confiscated, terminated, cancelled or
lost, (vi) Borrowers shall have furnished such security as may be required in
the proceeding, or as may otherwise be requested or required by Co-Lenders to
insure the payment by Borrowers of all costs of compliance, fines and penalties,
together with interest thereon, as may be incurred by Borrowers in the event of
a determination in such proceeding adverse to Borrowers, and (vii) neither
Borrowers, Agent nor any Co-Lender will in the opinion of Agent and Co-Lenders
be subject to any criminal or civil liability as the result of such contestment
by Borrowers. Co-Lenders may, at their option, at intervals of not less than one
year, or more frequently if Co-Lenders reasonably believe that a Hazardous
Material or other environmental condition violates or threatens to violate any
Environmental Requirement applicable to a Property, cause an environmental audit
of such Property to be conducted to confirm Borrowers's compliance with the
provisions of this paragraph in respect of such Property, and Borrowers shall
cooperate in all reasonable ways with Agent in connection with any such audit.
If such audit discloses that a violation of an Environmental Requirement exists,
Borrowers shall pay all costs and expenses incurred in connection with such
audit, otherwise, the costs and expenses of such audit shall, notwithstanding
anything to the contrary set forth in this paragraph, be paid by Co-Lenders. If
any of the Mortgages is foreclosed, or if any Property is sold pursuant to the
provisions of the Mortgages, or if either Borrower tenders a deed or assignment
in lieu of foreclosure or sale, Borrowers shall deliver such Properties to the
purchaser at foreclosure or sale or to Co-Lenders, their respective nominees, or
wholly owned subsidiaries, as the case may be, in a condition that complies in
all respects with all Environmental Requirements. Borrowers will defend,
indemnify, and hold harmless Agent, Co-Lenders, their respective employees,
agents, officers, and directors, from and against any and all claims, demands,
penalties, causes of action, fines, liabilities, settlements, damages, costs, or
expenses of whatever kind or nature, known or unknown, foreseen or unforeseen,
contingent or otherwise (including, without limitation, consultant fees and
expenses, investigation and laboratory fees and expenses, court costs,
litigation expenses and reasonable attorneys fees) arising out of, or in any way
related to, (i) any breach by Borrowers of any of the provisions of this
paragraph, (ii) the presence, disposal, spillage, discharge, emission, leakage,
release, or threatened release of any Hazardous Material which is at, in, on,
under, about, from or affecting any Property, including, without limitation, any
damage or injury resulting from any such Hazardous Material to
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or affecting any Property or the soil, water, air, vegetation, buildings,
personal property, individuals or animals located on any Property or on any
other property or otherwise, (iii) any personal injury (including wrongful
death) or property damage (real or personal) arising out of or related to any
such Hazardous Material, (iv) any lawsuit brought or threatened, settlement
reached, or order or directive of or by any Governmental Authority relating to
such Hazardous Material, or (v) any violation of any Environmental Requirement.
The aforesaid indemnification shall in all events and under all circumstances
constitute the personal recourse undertakings, obligations and liabilities of
Borrowers. The indemnification by Borrowers in favor of Agent and Co-Lenders
hereinabove set forth in this paragraph shall not be applicable to any claim,
demand, penalty, cause of action, fine, liability, settlement, damage, cost or
other expense of any type whatsoever pertaining to a particular Property (i)
occasioned, arising and caused solely and directly as the result of the
negligence or willful misconduct of Agent, any Co-Lender, any nominee or any
wholly owned subsidiary of Agent or a Co-Lender or their respective employees or
agents and irrespective of whether occurring prior or subsequent to the date
upon which any Co-Lender or any nominee or any wholly owned subsidiary of any
Co-Lender acquires possession of such Property by foreclosure of the Mortgages,
a sale of such Property pursuant to the provisions of the Mortgages, acceptance
of a deed or assignment in lieu of foreclosure or sale or otherwise, or (ii)
occasioned, arising and caused solely and directly as the result of any act of
any Person (other than (A) an act of Borrowers, its employees or agents or
Persons under the control of Borrowers, or (B) an act of Agent, any Co-Lender,
any nominee or any wholly owned subsidiary of any Co-Lender or their respective
employees or agents which does not constitute negligence or willful misconduct,
or (C) an act of any Governmental Authority, including, without limitation, any
change in any Environmental Requirement) and occurring subsequent to the earlier
to occur of (x) the date of payment to Co-Lenders in cash of the entire Debt,
and (y) the date upon which any Co-Lender, any nominee or any wholly owned
subsidiary of any Co-Lender acquires possession of such Property by foreclosure
of the Mortgages, a sale of such Property pursuant to the provisions of the
Mortgages, acceptance of a deed or assignment in lieu of foreclosure or sale or
otherwise. Except as hereinabove specifically provided to the contrary in this
paragraph, the obligations and liabilities of Borrowers under this paragraph
shall survive and continue in full force and effect and shall not be terminated,
discharged or released, in whole or in part, irrespective of whether the Debt
has been paid in full and irrespective of any foreclosure of any of the
Mortgages, sale of any one or more of the Properties pursuant to the provisions
of the Mortgages or acceptance by Co-Lenders, their nominees or wholly owned
subsidiaries of one or more deeds or assignments in lieu of foreclosure or sale
and irrespective of any other fact or circumstance of any nature whatsoever.
21. Estoppel Certificates. Borrowers, within ten (10)
days after request by Co-Lenders and at its expense, will furnish Co-Lenders
with a statement, duly certified, setting forth the amount of the Debt and the
offsets or defenses thereto, if any. Co-Lenders, within ten (10) days after
request by Borrowers and at Borrowers' expense, and provided that no Event of
Default has occurred and is continuing under the Credit Facility Documents, will
furnish Borrowers with a statement setting forth the then outstanding principal
balance of the Credit Facility Notes and the interest, if any, accrued and
unpaid thereon.
22. Non-Waiver. The failure of Co-Lenders or Agent to
insist upon strict performance of any term of this Agreement shall not be deemed
to be a waiver of any term of this Agreement. Borrowers shall not be relieved of
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Borrowers' obligation to pay the Debt at the time and in the manner provided for
its payment in the Credit Facility Notes, the Mortgages and this Agreement by
reason of (i) failure of Co-Lenders to comply with any request of Borrowers to
take any action to foreclose any one or more of the Mortgages or otherwise
enforce any of the provisions of this Agreement, the Mortgages, the Credit
Facility Notes or any of the other Credit Facility Documents, and (ii) the
release, regardless of consideration, of the whole or any part of the Properties
or any other Collateral or security for the Debt. Regardless of consideration,
and without the necessity for any notice to or consent by the holder of any
subordinate lien, encumbrance, right, title or interest in or to the Properties,
Co-Lenders may release any Person at any time liable for the payment of the Debt
or any portion thereof or any part of the security held for the Debt and may
extend the time of payment or otherwise modify the terms of the Credit Facility
Notes, the Mortgages, this Agreement or any of the other Credit Facility
Documents, including, without limitation, a modification of the interest rate
payable on the principal balance of the Credit Facility Notes, without in any
manner impairing or affecting the Mortgages or the respective liens thereof or
the priority of the Mortgages, as so extended and modified, as security for the
Debt over any such subordinate lien, encumbrance, right, title or interest.
Co-Lenders may resort for the payment of the Debt to any other security held by
Co-Lenders in such order and manner as Co-Lenders in their discretion, may
elect. Co-Lenders may take action to recover the Debt, or any portion thereof,
or to enforce any covenant hereof without prejudice to the right of Co-Lenders
thereafter to foreclose any one or more of the Mortgages. Co-Lenders shall not
be limited exclusively to the rights and remedies herein stated but shall be
entitled to every additional right and remedy set forth in the Credit Facility
Documents or now or hereafter afforded by law. The rights of Co-Lenders under
this Agreement and the other Credit Facility Documents shall be separate,
distinct and cumulative and none shall be given effect to the exclusion of the
others. No act of Co-Lenders shall be construed as an election to proceed under
any one provision of this Agreement or of the other Credit Facility Documents to
the exclusion of any other provision set forth in this Agreement or the other
Credit Facility Documents.
23. Sole Discretion. Except as may otherwise be
expressly provided to the contrary, wherever pursuant to the Credit Facility
Notes, the Mortgages, this Agreement, or any of the other Credit Facility
Documents, Agent or any Co-Lender exercises any right given to it to consent or
not consent, or to approve or disapprove, or any arrangement or term is to be
satisfactory to Agent or such Co-Lender the decision of Agent or such Co-Lender,
as the case may be, shall be in the sole and absolute discretion of Agent or
such Co-Lender, as the case may be, and shall be final and conclusive.
24. Absolute and Unconditional Obligation. Borrowers
acknowledge that Borrowers' obligation to pay the Debt in accordance with the
provisions of the Credit Facility Notes, the Mortgages and this Agreement is and
shall at all times continue to be absolute and unconditional in all respects,
and shall at all times be valid and enforceable irrespective of any other
agreements or circumstances of any nature whatsoever which might otherwise
constitute a defense to the Credit Facility Notes, the Mortgages or this
Agreement or the obligation of Borrowers thereunder to pay the Debt or the
obligations of any other Person relating to the Credit Facility Notes, the
Mortgages or this Agreement or the obligations of Borrowers under the Credit
Facility Notes, the Mortgages or this Agreement or otherwise with respect to the
Credit Facility, and Borrowers absolutely, unconditionally and irrevocably waive
any and all right to assert any defense, setoff, counterclaim or
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crossclaim of any nature whatsoever with respect to the obligation of Borrowers
to pay the Debt in accordance with the provisions of the Credit Facility Notes,
the Mortgages and this Agreement or the obligations of any other Person relating
to the Credit Facility Notes, the Mortgages or this Agreement or obligations of
Borrowers under the Credit Facility Notes, the Mortgages or this Agreement or
otherwise with respect to the Credit Facility in any action, case or proceeding
brought by Agent or Co-Lenders to collect the Debt, or any portion thereof, or
to enforce, foreclose and realize upon the lien and security interest created by
the Mortgages or any other document or instrument securing repayment of the
Debt, in whole or in part (provided, however, that the foregoing provisions of
this sentence shall not be deemed a waiver of the right of Borrowers to assert
any compulsory counterclaim in any such action, case or proceeding brought by
Agent or Co-Lenders in any state court if such counterclaim is compelled under
local law or rule or procedure, or in any such action, case or proceeding
brought by Agent or Co-Lenders in a court of the United States, nor shall the
foregoing provisions of this sentence be deemed a waiver of the right of
Borrowers to assert any claim which would otherwise constitute a defense,
setoff, counterclaim or crossclaim of any nature whatsoever against Agent or
Co-Lenders in any separate action, case or proceeding brought by Borrowers
against Agent or Co-Lenders).
25. Relationship. The relationship of Co-Lenders to
Borrowers hereunder is strictly and solely that of lender and borrower and
nothing contained in the Credit Facility Notes, the Mortgages, this Agreement or
any of the other Credit Facility Documents is intended to create, or shall in
any event or under any circumstance be construed as creating, a partnership,
joint venture, tenancy-in-common, joint tenancy or other relationship of any
nature whatsoever between Co-Lenders and Borrowers other than as lender and
borrower.
26. Anti-Forfeiture. Borrowers hereby covenant and
agree not to commit, permit or suffer to exist any act or omission affording the
Federal government or any state or local government the right of forfeiture
under any Federal or state RICO or similar law as against the Properties or any
part thereof or interest therein or any monies paid in performance of Borrowers'
obligations under this Agreement, the Mortgages, the Credit Facility Notes or
any of the other Credit Facility Documents. In furtherance thereof, Borrowers
hereby indemnify Agent and Co-Lenders and agree to defend and hold Agent and
Co-Lenders harmless from and against any loss, damage or injury by reason of the
breach of the covenants and agreements set forth in this paragraph, which
indemnity shall constitute the personal recourse obligation of Borrowers.
Without limiting the generality of the foregoing, the filing of formal charges
or the commencement of proceedings against Borrowers or against the Properties
or any part thereof or interest therein under any Federal or state law for which
forfeiture of the Properties or any part thereof or of any monies paid in
performance of Borrowers' obligations under the Credit Facility Documents is a
potential result, shall, at the election of Co-Lenders, but otherwise subject to
the immediately following sentence, constitute an Event of Default hereunder
without notice or opportunity to cure. Notwithstanding the foregoing, after
prior notice to Co-Lenders, Borrowers, at their own cost and expense, may
contest the validity of or application of any such law affording such
forfeiture, provided that (i) no default shall have occurred and shall be
continuing under the Credit Facility Notes, the Mortgages, this Agreement or any
of the other Credit Facility Documents, (ii) such proceeding shall be permitted
under and be conducted in accordance with the provisions of any other instrument
to which Borrowers are or the Properties are subject and shall not constitute a
default thereunder, (iii) neither the Properties nor any portion thereof nor any
interest therein will in the opinion of Co-Lenders be in danger of being sold,
forfeited, terminated, cancelled or lost, and
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(iv) Borrowers shall have deposited with Agent cash or other cash equivalent or
letter of credit satisfactory to Co-Lenders in an amount sufficient to discharge
any lien together with interest and penalties thereon arising out of such law.
Notwithstanding the foregoing, Borrowers shall not be required to make any
deposit with Agent pursuant to clause (iii) of the preceding sentence, if
Co-Lenders are reasonably satisfied that (a) the act or omission affording such
forfeiture was committed by a Person other than Borrowers or an Affiliate or
subsidiary of Borrowers, (b) Borrowers are diligently pursuing their rights and
remedies against such Person, (c) neither the Properties nor any portion thereof
or interest therein will be in danger of being sold, forfeited, terminated,
cancelled or lost, and (d) the respective liens and priorities of the Mortgages
will not be in danger of being primed, diminished or forfeited.
27. Deposits. Whenever in this Agreement, Borrowers are
required to deposit monies with Agent or Co-Lenders to secure obligations of
Borrowers under this Agreement or as a condition precedent to Borrowers' right
to contest certain obligations, such monies shall (unless otherwise specifically
provided to the contrary in this Agreement) be held in an interest bearing
account selected by Agent or Co-Lenders, as the case may be. All such accrued
interest shall be held, disbursed and applied in accordance with the provisions
applicable to such deposits. In order to secure the payment of the Debt and the
performance by Borrowers of its obligations under the Credit Facility Documents,
Borrowers hereby grant and assign to Agent and Co-Lenders a security interest in
and to all monies from time to time on deposit in any such account. Upon the
occurrence of an Event of Default and for so long as such Event of Default shall
continue, Co-Lenders shall have the absolute right to apply all or any portion
of the balances held in any such accounts to the payment of the Debt whether or
not due and payable in such order, priority and proportions as Co-Lenders in
their discretion shall deem appropriate.
28. Submission to Jurisdiction. Borrowers agree to
submit to personal jurisdiction in the State of New York in any action, case or
proceeding arising out of the Credit Facility Notes, this Agreement or the other
Credit Facility Documents (other than the Mortgages and the Assignments of
Leases and Rents), and, in furtherance of such agreement, Borrowers hereby agree
and consent that without limiting other methods of obtaining jurisdiction,
personal jurisdiction over Borrowers in any such action, case or proceeding may
be obtained within or without the jurisdiction of any court located in the State
of New York and that any process or notice of motion or other application to any
such court in connection with any such action, case or proceeding may be served
upon Borrowers by registered or certified mail to or by personal service at the
last known address of Borrowers, as the case may be, whether such address be
within or without the jurisdiction of any such court. Borrowers also agree that
the venue of any litigation arising in connection with the Debt or in respect of
any of the obligations of Borrowers under the Credit Facility Notes, this
Agreement or the other Credit Facility Document (other than the Mortgages and
the Assignments of Leases and Rents) shall, to the extent permitted by law, be
in New York County, New York.
29. Retention of Counsel and Consultants. If,
subsequent to the occurrence of a default under any of the Credit Facility
Documents or otherwise in connection with the protection, preservation, addition
or release of Collateral, Agent or Co-Lenders deem it to be in the best interest
of Co-Lenders to retain the assistance of any Person (including, but not limited
to, attorneys, title insurance companies, third party escrow agents, appraisers,
accountants engineers and surveyors) with respect to any request for consent or
approval by Agent or Co-Lenders under the Credit Facility
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Documents, Borrowers shall reimburse Co-Lenders within ten (10) days of demand
by Agent for all reasonable costs incurred by Co-Lenders in connection with the
employment of such Persons.
30. Waiver of Notice. Borrowers shall not be entitled
to any notices of any nature whatsoever from Agent or any Co-Lender except with
respect to matters for which this Agreement specifically and expressly provides
for the giving of notice by Agent or a Co-Lender to Borrowers, and Borrowers
hereby expressly waive (to the full extent Borrowers may lawfully do so) the
right to receive any notice from Agent or any Co-Lender with respect to any
matter for which this Agreement does not specifically and expressly provide for
the giving of notice by Agent or a Co-Lender to Borrowers.
31. Events of Default. The Debt shall become due at the
option of Co-Lenders upon the occurrence of any one or more of the following
events (collectively, "Events of Default"):
(a) if any portion of the Debt is not paid
when due;
(b) if any of the covenants contained in
paragraph 9 of this Agreement shall be breached;
(c) if any fact, circumstance or event shall
occur which is specifically characterized under any
provision of any Credit Facility Document as an "Event
of Default" within the meaning given to such term
pursuant to the provisions of this Agreement;
(d) if any representation or warranty of any
Borrower or any Guarantor made in this Agreement or any
of the other Credit Facility Documents, or in any
certificate, report, financial statement or other
instrument furnished in connection with the making of
the Credit Facility Notes, the Mortgages, this
Agreement or any other Credit Facility Document or the
extension of the Credit Facility by Co-Lenders to
Borrowers, shall prove false or misleading in any
material respect;
(e) if any Federal tax lien is filed against
Borrowers, or any Property and the same is not
discharged of record within thirty (30) days after the
same is filed (unless the same is being contested in
good faith by appropriate proceeding and otherwise in
compliance with the general requirements for contesting
Taxes, as more specifically set forth in paragraph 17
of this Agreement);
(f) if without the consent of Co-Lenders any
FF&E (except for normal replacement of the FF&E) is
removed, or if without the consent of Co-Lenders any
Property is demolished or materially altered (other
than for tenant improvements being made under Leases
entered into in conformity with the provisions of this
Agreement);
(g) if the Insurance Policies are not kept
in full force and effect, or if the Insurance Policies
are not delivered to Agent upon request;
(h) if without the consent of Co-Lenders any
Lease is made, cancelled or modified (other than in
compliance with the
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provisions of this Agreement and the other Credit
Facility Documents) or if any portion of the Rents is
paid for a period of more than one (1) month in advance
or if any of the Rents are further assigned;
(i) if any "Event of Default" as defined in
the Existing Credit Agreement shall occur;
(j) if any Borrower or other Person shall be
in default (beyond any applicable grace and cure
period) under any mortgage, deed of trust, pledge or
other security agreement (including, without
limitation, any such agreement now or hereafter held by
Co-Lenders) affecting or relating to any Property, or
any other Collateral or any portion thereof or under
any Material Agreement affecting or relating to any
Property or any other Collateral, or any portion
thereof;
(k) if any Property shall become subject (i)
to any tax lien, other than a lien for local real
estate taxes and assessments not due and payable, or
(ii) to any lis pendens, notice of pendency, stop
order, notice of intention to file mechanic's or
materialman's lien, mechanic's or materialman's lien or
other lien of any nature whatsoever, and the same shall
not either be discharged of record or in the
alternative insured over to the satisfaction of
Co-Lenders by the title company insuring the lien of
the Mortgage pertaining to the Property in question
within a period of forty five (45) days after the date
upon which Borrower shall be notified, or shall
otherwise have actual knowledge, that the same is filed
or recorded, and irrespective of whether the same is
superior or subordinate in lien or other priority to
the lien of the Mortgages and irrespective of whether
the same constitutes a perfected or inchoate lien or
encumbrance on the Properties or any portion thereof or
is only a matter of record or notice;
(l) if for any reason any of the covenants
set forth in paragraph 11 or paragraph 13 of this
Agreement shall at any time during the term of the
Credit Facility cease to be satisfied and complied with
in all respects or if any representation or warranty
set forth in paragraph 12 of this Agreement or
elsewhere in the Credit Facility Documents shall at any
time cease to be true and accurate in all material
respects;
(m) if any Borrower or Guarantor shall make
an assignment for the benefit of creditors;
(n) (1) if a court of competent jurisdiction
enters a decree or order for relief with respect to any
Borrower or Guarantor under Title 11 of the United
States Code as now consti tuted or hereafter amended or
under any other applicable Federal or state bankruptcy,
insolvency or other similar law, rule or regulation; or
(2) if such court enters a decree or order appointing a
receiver, liquidator, assignee, trustee, custodian,
examiner, magistrate, arbitrator, sequestrator (or
similar official) of any Borrowers or Guarantor or of
any substantial part of their respective properties; or
(3) if such court decrees or orders the winding up or
liquidation of the affairs of any Borrower or Guarantor
and such order or decree is not dismissed,
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discharged or vacated of record within sixty (60) days
after the same has been entered;
(o) if any Borrower or Guarantor files a
petition for relief or answer or consent seeking relief
under Title 11 of the United States Code as now
constituted or hereafter amended, or under any other
applicable Federal or state bankruptcy, insolvency or
other similar law, rule or regulation, or if any
Borrower or Guarantor fails to diligently oppose or
shall otherwise consent to the commencement or
prosecution of an involuntary case under Title 11 of
the United States Code as now constituted or hereafter
amended, or under any other applicable Federal or state
bankruptcy, insolvency or similar law, rule or
regulation, or to the appointment of or taking
possession by a receiver, liquidator, assignee,
trustee, custodian, examiner, magistrate, arbitrator,
sequestrator (or other similar official) of any
Borrower or Guarantor or of any substantial part of
their respective properties, or if any Borrower or
Guarantor fails generally to pay its respective debts
as such debts become due, or if any Borrower or
Guarantor takes any action in furtherance of any action
described in this subparagraph;
(p) if any Borrower, Guarantor or other
Person shall be in default beyond the expiration of any
applicable notice and cure periods under the Credit
Facility Notes, the Mortgages, this Agreement or any
other Credit Facility Document or any other docu ment
or instrument otherwise executed and delivered in
connection therewith or in connection with the
extension of the Credit Facility by Co-Lenders to
Borrowers;
(q) if (except as otherwise specifically
provided to the contrary in paragraph 9 of this
Agreement with respect to WOP) there shall occur a
complete or partial suspension or liquidation of all or
substantially all of any business of any Borrower or
any Guarantor and such occurrence in the opinion of
Co-Lenders has or may have a materially adverse impact
on any Property or any other Collateral or on the
business, assets, operations, property, financial or
other condition of any Borrower or Guarantor;
(r) if Borrowers shall fail to furnish or
cause to be furnished to each Co-Lender, any financial
or other information required to be provided in
accordance with the provisions of this Agreement or the
other Credit Facility Documents or otherwise reasonably
requested by Co-Lenders or shall fail to permit, or to
arrange for, the inspection by Co-Lenders (or their
respective employees and agents) of any books or
records of Borrowers or any Guarantor and such default
shall continue for twenty (20) days after notice by
Agent to Borrowers; or
(s) if Borrowers shall continue to be in
default under any of the other terms, covenants or
conditions of this Agreement for five (5) days after
notice from Agent in the case of any default which can
be cured by the payment of a sum of money, or for
twenty (20) days after notice from Agent in the case of
any other default, provided that if such default cannot
reasonably be cured within such twenty (20) day period
and Borrowers, as the case may be, shall have commenced
to cure such default within such twenty (20) day period
and thereafter diligently and expeditiously
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proceeds to cure the same, such twenty (20) day period
shall be extended for so long as it shall require
Borrowers, as the case may be, in the exercise of due
diligence to cure such default, it being agreed,
however, that no such extension shall be for a period
in excess of sixty (60) days.
Upon the occurrence of an Event of Default, and for so long as any such Event of
Default continues, Co-Lenders (subject to the terms and provisions of the
Co-Lenders Agreement) (i) shall have no obligation to make any further advances
under the Credit Facility, (ii) shall have the absolute and unconditional right
in their sole and absolute discretion to declare the Debt or any portion thereof
immediately due and payable, (iii) shall have the right to pursue any and all
remedies provided for in this Agreement, the Credit Facility Notes, the
Mortgages, or any of the other Credit Facility Documents or otherwise available
to Co-Lenders, at law or in equity or otherwise, and (iv) shall have the
absolute and unconditional right in their sole and absolute discretion to
terminate the Credit Facility and their obligations with respect thereto under
this Agreement. All remedies afforded to Co-Lenders under this Agreement or
under any of the other Credit Facility Documents are separate and cumulative
remedies and it is agreed that none of such remedies shall be deemed to be in
exclusion of any other remedies available to Co-Lenders and shall not in any
manner limit or prejudice any other legal or equitable remedies which Co-Lenders
may have.
32. Application of Moneys. All moneys received or
collected by Co-Lenders in respect of the Credit Facility after an Event of
Default shall be applied by Co-Lenders first to the payment of all costs
incurred in the collection of such moneys (including reasonable attorneys' fees
and legal expenses) and second, to the payment of the Debt in such order,
priority and proportions as Co-Lenders may in its sole and absolute discretion
determine. The balance, if any, of such moneys remaining after payment in full
of such costs and the Debt shall be remitted to Borrowers or as otherwise
directed by a court of competent jurisdiction.
33. Right to Cure Defaults. If default beyond any
applicable notice and cure period in the performance of any of the covenants of
Borrowers, shall occur, Co-Lenders may, at their discretion, remedy the same and
for such purpose shall have the right to enter upon the Properties or any
portion thereof without thereby being liable to Borrowers (except in connection
with its gross negligence or willful misconduct) or any Person in possession
thereof holding under Borrowers, and to pay all sums as may be necessary to cure
any such default (including, without limitation any default by Borrowers in the
payment of any Insurance Premiums or any Taxes or other liens or encumbrances
covering the Properties or any part thereof). If Co-Lenders shall remedy such a
default (including, without limitation, any default by Borrowers in the payment
of any Insurance Premiums or any Taxes or other liens or encumbrances covering
the Properties or any part thereof) or appear in, defend or bring any action or
proceeding to protect the interest of Co-Lenders in the Properties, or any
portion thereof, or to foreclose any of the Mortgages or collect the Debt, the
costs and expenses thereof (including reasonable attorneys' fees to the extent
permitted by law) with interest as provided in this paragraph, shall be paid by
Borrowers to Agent upon demand, and shall be added to and constitute part of the
Debt secured by the Mortgages. All such costs and expenses incurred by
Co-Lenders in remedying such default or in appearing in, defending or bringing
any such action or proceeding, shall be paid by Borrowers to Agent upon demand,
with interest at a rate per annum equal to the Default Rate.
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34. Further Assurances. Borrowers agree to do or cause
to be done all such further reasonable acts and things, and to execute and
deliver or cause to be executed and delivered all such additional conveyances,
assignments, agreements and instruments as Co-Lenders may at any time reasonably
request in connection with the administration or enforcement of this Agreement
and the other Credit Facility Documents or in order better to assure, perfect
and confirm unto Co-Lenders their rights, powers and remedies under this
Agreement and under the other Credit Facility Documents. Nothing contained in
this paragraph shall be construed as obligating Borrowers to provide or to cause
to be provided any collateral or security for the Credit Facility other than as
expressly contemplated by the provisions of this Agreement and the other Credit
Facility Documents.
35. Costs and Expenses. Borrowers shall pay, or cause
to be paid, to Co-Lenders all costs, fees, expenses and charges incurred by
Co-Lenders in connection with the enforcement of this Agreement and the other
Credit Facility Documents (including without limitation all reasonable fees and
disbursements of Agent's New York City and local legal counsel).
36. Indemnification of Agent and Co-Lenders. Borrowers
shall indemnify Agent, Co-Lenders, their affiliates, subsidiaries, directors,
officers and employees against all losses, claims, damages, penalties,
judgments, liabilities and reasonable expenses (including, without limitation,
all expenses of litigation or preparation therefor whether or not Agent or
Co-Lenders are a party thereto) which any of them may pay or incur arising out
of or relating to this Agreement, the other Credit Facility Documents, the
transactions contemplated hereby or the direct or indirect application or
proposed application of the proceeds of any advance hereunder, provided,
however, that the aforesaid indemnification shall not apply to any such loss,
claim, damage, penalty, judgment, liability or expense which is incurred by
Agent or a Co-Lender as a result of its gross negligence or willful misconduct.
The obligations of Borrowers under this paragraph shall survive the termination
of this Agreement.
37. Construction of Agreement. The titles and headings
preceding the paragraphs of this Agreement have been inserted for convenience of
reference only and are not intended to summarize or otherwise describe the
subject matter of such paragraphs and shall not be given any consideration in
the construction of this Agreement.
38. Parties Bound, etc. All of the terms, covenants and
provisions of this Agreement shall be binding upon and inure to the benefit of
Borrowers, Co-Lenders and Agent and their respective successors and assigns.
Borrowers shall not have the right without the prior consent of Co-Lenders
(which consent may be withheld in the sole and absolute discretion of
Co-Lenders) to assign or transfer their respective rights under this Agreement
or under any of the other Credit Facility Documents, in whole or in part, by
agreement, operation of law or otherwise to any other Person, it being agreed
that any such assignment or transfer without the prior consent of Co-Lenders
shall be void and of no force and effect and shall constitute an immediate Event
of Default under this Agreement.
39. Complete Agreement. NO STATEMENTS, AGREEMENTS OR
REPRESENTATIONS, ORAL OR WRITTEN, WHICH MAY HAVE BEEN MADE BY ANY CO-LENDER, OR
BY ANY EMPLOYEE, AGENT OR BROKER ACTING ON BEHALF OF ANY CO-LENDER, WITH RESPECT
TO THIS AGREEMENT OR THE CREDIT FACILITY SHALL BE OF ANY FURTHER FORCE OR
EFFECT, EXCEPT TO THE EXTENT SPECIFICALLY SET FORTH IN THIS AGREEMENT OR IN THE
OTHER CREDIT FACILITY DOCUMENTS, AND ALL PRIOR AGREEMENTS AND
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REPRESENTATIONS IN RESPECT OF THIS AGREEMENT AND THE CREDIT FACILITY ARE MERGED
IN THIS AGREEMENT SO THAT THIS AGREEMENT SHALL CONSTITUTE THE ENTIRE AGREEMENT
BETWEEN CO-LENDERS AND BORROWERS WITH RESPECT TO THE CREDIT FACILITY.
40. Governing Law. This Agreement shall in all respects
be gov erned, construed, applied and enforced in accordance with the laws of the
State of New York.
41. Severability. If any term, covenant, provision or
condition of this Agreement shall be held to be invalid, illegal or
unenforceable in any respect, this Agreement shall be construed without such
term, covenant, provi sion or condition.
42. Notices. Any notice, request, demand, statement,
authoriza tion, direction, approval or consent made under this Agreement or
under the other Credit Facility Documents shall be in writing and shall be sent
by Federal Express or other reputable national courier service, or by postage
prepaid registered or certified mail, return receipt requested, and shall be
deemed given (i) when received at the following addresses if sent by Federal
Express, or other reputable national courier service, and (ii) three (3)
business days after being postmarked and addressed as follows if sent by postage
prepaid registered or certified mail, return receipt requested:
If to Smith Barney:
Smith Barney Mortgage Capital Group, Inc.
390 Greenwich Street, 5th Floor
New York, New York 10013
Attention: Clive Bull
With a copy to:
Battle Fowler LLP
Park Avenue Tower
75 East 55th Street
New York, New York 10022
Attention: Dean A. Stiffle, Esq.
If to NationsBank, in its individual capacity or as
Agent:
NationsBank, N.A.
Real Estate Banking
8300 Greensboro Drive
McLean, Virginia 22102-3604
Attention: Cheryl D. Fitzgerald
Vice President
With a copy to:
Cadwalader, Wickersham & Taft
201 South College Street, Suite 1510
Charlotte, North Carolina 28244
Attention: James P. Carroll, Esq.
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If to Borrowers:
c/o Brandywine Realty Trust
Newtown Square Corporate Campus
16 Campus Boulevard, Suite 150
Newtown Square, Pennsylvania 19073
Attention: Gerard H. Sweeney
President and Chief Executive Officer
With a copy to:
Pepper, Hamilton & Scheetz
3000 Two Logan Square
Eighteenth and Arch Streets
Philadelphia, Pennsylvania 19103-2799
Attention: Michael H. Friedman, Esq.
Each party may designate a change of address by notice to the other parties,
given at least fifteen (15) days before such change of address is to become
effective.
43. Modification. This Agreement may not be modified,
amended or terminated, in whole or in part, except by an agreement in writing
executed by the parties hereto.
44. Waivers. Co-Lenders may at any time and from time
to time waive any one or more of the terms, covenants, provisions or conditions
contained in this Agreement or in the other Credit Facility Documents, but any
such waiver shall be deemed made in pursuance hereof or thereof and not in
modification thereof, and any such waiver in any particular instance or
circumstance shall in no event or under any circumstance be considered a waiver
of any such term, covenant, provision or condition in any other instance or any
other circumstance.
45. WAIVER OF TRIAL BY JURY. BORROWERS AND CO-LENDERS
HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE ANY AND ALL RIGHTS TO TRIAL BY JURY
IN ANY ACTION, SUIT OR COUNTERCLAIM ARISING IN CONNECTION WITH, OUT OF OR
OTHERWISE RELATING TO THE CREDIT FACILITY NOTES, THE MORTGAGES, THIS AGREEMENT
OR ANY OTHER DOCUMENT OR INSTRUMENT NOW OR HEREAFTER EXECUTED AND DELIVERED IN
CONNECTION THEREWITH OR WITH THE CREDIT FACILITY.
46. Borrowers' Reliance on Agent's Authority. Unless
otherwise notified by Co-Lenders to the contrary, Borrowers shall have the right
to rely upon any advice they receive from Agent as to any action taken or not
taken by Co-Lenders, or as to any consent or approval given or not given by
Co-Lenders, or as to any other action taken or not taken by Co-Lenders, or as to
any decision otherwise made by Co-Lenders, in respect of the Credit Facility or
under or pursuant to the provisions of the Credit Facility Documents, it being
understood that all communication between Borrowers and Co-Lenders in respect of
day to day matters concerning the Credit Facility shall be done through the
offices of Agent.
47. Authorized Representatives of BRT. The Chief
Financial Officer or the Chief Executive Officer of BRT shall from time to time
notify and advise Agent and Co-Lenders in writing of the officers of BRT who are
authorized and designated to act on behalf of BRT in respect of the Credit
Facility and under and pursuant to the provisions of the Credit Facility
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Documents, which notice and advise may be conclusively relied upon by Agent and
Co-Lenders.
48. Exculpation. No recourse shall be had for any
obligation of BRT under this Agreement or any of the other Credit Facility
Documents or for any claim based thereon or otherwise in respect thereof,
against any past, present or future trustee, shareholder, officer or employee of
BRT, whether by virtue of any statute or rule of law, or by the enforcement of
any assessment or penalty or otherwise, all such liability being expressly
waived and released by each other party to this Agreement and the other Credit
Facility Documents.
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IN WITNESS WHEREOF, Co-Lenders, Borrowers and Agent
have duly executed this Agreement as of the day and year first above written.
SMITH BARNEY MORTGAGE CAPITAL GROUP, INC.,
a Delaware corporation
By: /s/ Clive Bull
---------------------------------
Name: Clive Bull
Title: Vice President
NATIONSBANK, N.A., a national banking
association, acting in its individual
capacity
By: /s/ Douglas B. Cochrane
----------------------------------
Name: Douglas B. Cochrane
Title: Senior Vice President
BRANDYWINE REALTY TRUST, a Maryland real
estate investment trust
By: /s/ Gerard H. Sweeney
----------------------------------
Name: Gerard H. Sweeney
Title: President and Chief
Executive Officer
BRANDYWINE OPERATING PARTNERSHIP, L.P.
By: Brandywine Realty Trust, a Maryland
real estate investment trust, its
general partner
By: /s/ Gerard H. Sweeney
----------------------------------
Name: Gerard H. Sweeney
Title: President and Chief
Executive Officer
NATIONSBANK, N.A., a national banking
association, acting in its capacity as
administrative and documentation agent
By: /s/ Douglas B. Cochrane
----------------------------------
Name: Douglas B. Cochrane
Title: Senior Vice President
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EXHIBIT A
(Definition of Certain Terms)
Additional Property: The term "Additional Property" as used in this Agreement
shall mean any property acquired by Borrowers subsequent to the date of this
Agreement.
Affiliate: The term "Affiliate" as used in this Agreement shall mean any Person
directly or indirectly controlling, controlled by or under direct or indirect
common control with any other Person. A Person shall be deemed to control
another Person if the controlling Person owns fifty-one (51%) percent or more of
any class of voting securities of the controlled Person or possesses, directly
or indirectly, the power to direct or cause the direction of the management or
policies of the controlled Person, whether through ownership of stock by
contract or otherwise.
Agent: The term "Agent" as used in this Agreement shall have the meaning given
to such term in the preamble to this Agreement.
Agreement: The term "Agreement" as used in this Agreement shall mean this
Agreement.
Alternate Credit Rate: The term "Alternate Credit Rate" as used in this
Agreement shall have the meaning given to such term in paragraph 1(ii) of
Exhibit B to this Agreement.
Approved Value: The term "Approved Value" as used in this Agreement shall mean,
with respect to any of the Properties, either (y) the "as is" appraised value of
any such Property, as set forth in the appraisal prepared in connection with its
inclusion in the collateral pool for the Credit Facility, if the fair market
value of such Property, as set forth in such appraisal, is approved without
adjustment by Co-Lenders or (z) the adjusted appraised value of such Property,
if the fair market value of such Property, as set forth in such appraisal, is
approved with adjustment in value by Co-Lenders.
Assignments of Leases and Rents: The term "Assignments of Leases and Rents" as
used in this Agreement shall mean the Assignments of Leases and Rents to be
given by Borrowers to Agent, as security for the payment of the Debt and
constituting a first lien on all of Borrowers's right, title and interest now
owned or hereafter acquired in and to all Leases and Rents pertaining to or
derived from the Properties, the form of which is attached to this Agreement as
Exhibit H.
Base LIBOR Rate: The term "Base LIBOR Rate" as used in this Agreement shall have
the meaning given to such term in paragraph 1(v) of Exhibit B to this Agreement.
Borrowers: The term "Borrowers" as used this Agreement shall have the meaning
given to such term in the preamble to this Agreement.
BOP: The term "BOP" as used in this Agreement shall have the meaning given to
such term in the preamble to the main body of this Agreement.
BRP: The term "BRP" as used in this Agreement shall mean Brandywine Realty
Partners, a Pennsylvania general partnership.
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BRSC: The term "BRSC" as used in this Agreement shall mean Brandywine Realty
Services Corporation, a Pennsylvania corporation.
BHI: The term "BHI" as used in this Agreement shall mean Brandywine Holdings I,
Inc., a Pennsylvania corporation.
BRT: The term "BRT" as used in this Agreement shall have the meaning given to
such term in the preamble to the main body of this Agreement.
business day: The term "business day" shall have the meaning given to such terms
in paragraph 1(ii) of Exhibit B to this Agreement.
Business Day: The term "Business Day" as used in this Agreement shall have the
meaning given to such term in paragraph 1(i) of Exhibit B to this Agreement.
Co-Lenders: The term "Co-Lenders" as used in this Agreement shall have the
meaning given to such term in the preamble to the main body of this Agreement.
Co-Lenders Agreement: The term "Co-Lenders Agreement" as used in this Agreement
shall mean that certain Co-Lender and Servicing Agreement dated the date hereof
by and among Smith Barney and NationsBank, in its individual capacity and as
Agent, as the same may be amended from time to time.
Collateral: The term "Collateral" as used in this Agreement shall mean all of
the now existing or hereafter acquired right, title and interest of Borrowers in
and to (a) the Initial Properties, (b) the Additional Properties which are
included in the collateral pool for the Credit Facility, (c) all Leases, Rents,
easements, options, personal property and other rights or property related to
the ownership or operation of the Properties which are included from time to
time in the collateral pool for the Credit Facility, (d) any other collateral
now or hereafter delivered to Co-Lenders pursuant to the provisions of this
Agreement or the other Credit Facility Documents as collateral for the Credit
Facility and (e) all proceeds of the foregoing.
Commitment Fee: The term "Commitment" as used in this Agreement shall have the
meaning given to such term in paragraph 10 of the main body of this Agreement.
Credit Facility: The term "Credit Facility" as used in this Agreement shall have
the meaning given to such term in the Preliminary Statement on the first page of
the main body of this Agreement.
Credit Facility Documents: The term "Credit Facility Documents" as used in this
Agreement shall collectively mean this Agreement, the Credit Facility Notes, the
Mortgages, the Assignments of Leases and Rents, the Guaranty of Payment, the
Hazardous Material Guaranty and Indemnification Agreement and all other
documents and instruments of any nature whatsoever now or hereafter executed and
delivered in connection with this Agreement or the Credit Facility, as any of
the same may from time to time be amended, modified, extended, supplemented,
renewed, replaced or restated.
Credit Facility Notes: The term "Credit Facility Notes" as used in this
Agreement shall mean, collectively, the following: (i) that certain Note dated
the date hereof in the original principal amount of $35,000,000.00 given by
Borrowers to Smith Barney, and (ii) that certain Note dated the date hereof in
the original principal amount of $35,000,000.00 given by Borrowers to
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NationsBank, as such Notes may from time to time be amended, modified, extended,
supplemented, renewed, replaced or restated.
Credit Facility Outstanding: The term "Credit Facility Outstanding" as used in
this Agreement shall mean the outstanding principal balance of the Credit
Facility from time to time.
Credit Facility Percentage Interests: The term "Credit Facility Percentage
Interests" as used in this Agreement shall have the meaning given to such term
in paragraph 2 of the main body of this Agreement.
Debt: The term "Debt" as used in this Agreement shall mean all principal,
interest, additional interest and other sums of any nature whatsoever which may
or shall become due and payable to Co-Lenders in accordance with the provisions
of the Credit Facility Documents.
default: The term "default" as used in this Agreement shall mean the occurrence
of any default by Borrowers or any other Person in the observance or performance
of any of the terms, covenants or provisions of this Agreement, the Credit
Facility Notes, the Mortgages or the other Credit Facility Documents on the part
of Borrowers or such other Person to be observed or performed without regard to
whether such default constitutes or would upon notice or lapse of time, or both,
constitute an Event of Default under this Agreement, the Credit Facility Notes,
the Mortgages or the other Credit Facility Documents.
Default Rate: The term "Default Rate" as used in this Agreement shall, to the
extent necessary, be determined on a daily basis and shall be equal to four (4%)
percent plus the greater on a daily basis of (i) the weighted average of the
LIBOR Rates, if any, from time to time, applicable to the Credit Facility Notes,
and (ii) the Floating Rate, provided, however, that the Default Rate shall in no
event exceed the maximum interest rate permitted by applicable law. The Default
Rate shall be calculated for the actual number of days elapsed on the basis of a
360-day calendar year.
Emmes Properties: The term "Emmes Properties" as used in this Agreement shall
collectively mean (A) the premises located in Mt. Laurel, Burlington County, New
Jersey together with the improvements erected thereon and commonly known as (i)
2000-4000 Midlantic Drive, (ii) 9000 Midlantic Drive, (iii) 10000 Midlantic
Drive, and (iv) 15,000 Midlantic Drive, and (B) the premises located in Upper
Merion Township, Montgomery County, Pennsylvania together with the improvements
erected thereon and commonly known as 7000 Geerdes Boulevard.
Environmental Requirements: The term "Environmental Requirements" as used in
this Agreement shall have the meaning given to such term in paragraph 20 of the
main body of this Agreement.
Environmental Reports: The term "Environmental Reports" as used in this
Agreement shall mean (i) in respect of the Initial Properties, the environmental
reports listed on Schedule 4 attached hereto, and (ii) in respect of any
Additional Property which is added to the collateral pool for the Credit
Facility from time to time, the environmental reports delivered to and approved
by Co-Lenders, in accordance with the provisions of paragraph 1(1) of Exhibit
D-1 attached hereto.
ERISA: The term "ERISA" as used in this Agreement shall have the meaning given
to such term in paragraph 12(u) of the main body of this Agreement.
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Events of Default: The term "Events of Default" as used in this Agreement shall
have the meaning given to such term in paragraph 31 of the main body of this
Agreement.
Existing Credit Agreement: The term "Existing Credit Agreement" as used in this
Agreement shall mean a certain Revolving Credit Facility dated as of November
25, 1996 among Smith Barney Mortgage Capital Group, Inc.; NationsBank, N.A.,
acting in its individual capacity; Brandywine Realty Trust; Brandywine Operating
Partnership, L.P.; LC/N Horsham Limited Partnership; LC/N Keith Valley Limited
Partnership I; Nichols Lansdale Limited Partnership III; Newtech III Limited
Partnership; Newtech IV Limited Partnership; C/N Oaklands Limited Partnership I;
Fifteen Horsham, L.P.; C/N Leedom Limited Partnership II; C/N Iron Run Limited
Partnership III; and NationsBank, N.A., acting in its capacity as administrative
and documentation agent.
Existing Credit Facility: The term "Existing Credit Facility" as used in this
Agreement shall mean the $80,000,000 revolving credit facility extended to
Borrowers and certain of their Affiliates in accordance with the terms of the
Existing Credit Agreement.
Existing Credit Facility Documents: The term "Existing Credit Facility
Documents" as used in this Agreement shall mean the "Credit Facility Documents"
as defined and described in the Existing Credit Agreement.
Federal Funds Effective Rate: The term "Federal Funds Effective Rate" as used in
this Agreement shall have the meaning given to such term in paragraph 1(ii) of
Exhibit B to this Agreement.
FF&E: The term "FF&E" as used in this Agreement shall mean, collectively, all
goods (as such term is defined in the Uniform Commercial Code), now owned or
hereafter acquired by Borrowers, located at or used in connection with the
Properties and the operation of the Properties, including, without limitation,
(i) all furniture and furnishings and all other items of personal property
(including inventory now owned or hereafter acquired by Borrowers but excluding
inventory and personal property owned by Lessee or any Other Lessee) located on,
or used in connection with the operation of the Properties, together with all
replacements, modifications, alterations and additions thereto; and (ii) all
equipment, machinery, fixtures and other items of property required or
incidental to the use of the Properties, including all components thereof, now
and hereafter permanently affixed to or incorporated into the Properties,
including, without limitation, all furnaces, boilers, heaters, electrical
equipment, heating, plumbing, lighting, ventilating, refrigerating,
incineration, air and water pollution control, waste, disposal, air-cooling and
air conditioning systems and apparatus, sprinkler systems and fire and theft
protection equipment, all of which to the greatest extent permitted by law are
deemed by the parties hereto to constitute real estate, together with all
replacements, modifications, alterations and additions thereto.
Financial Covenants: The term "Financial Covenants" as used in this Agreement
shall mean all of the financial covenants contained in this Agreement and the
Existing Credit Facility Agreement and including, without limitation, the
financial covenant set forth in paragraphs 11 and 13 of this Agreement and the
Debt-to-Tangible Net Worth Requirement, the Fixed Charge Coverage Ratio, the
Loan to Value Requirement, the Minimum Debt Service Coverage Ratio and the
Supplemental Debt Service Coverage Ratio (all as defined and more particularly
described in the Existing Credit Agreement and as in effect on the date of this
Agreement and without regard to any amendment of the Existing Credit
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Agreement made after the date of this Agreement unless otherwise agreed to by
Co-Lenders in the exercise of their sole and absolute discretion).
Financing Statements: The term "Financing Statements" as used in this Agreement
shall mean Uniform Commercial Code Financing Statements, in form and content
acceptable to Co-Lenders.
FIRREA: The term "FIRREA" as used in this Agreement shall mean the Financial
Institutions Reform, Recovery and Enforcement Act.
Floating Rate: The term "Floating Rate" as used in this Agreement shall have the
meaning given to such term in paragraph 1(ii) of Exhibit B to this Agreement.
GAAP: The term "GAAP" shall mean generally accepted accounting practices
consistently applied.
Governmental Authority: The term "Governmental Authority" as used in this
Agreement shall have the meaning given to such term in paragraph 20 of the main
body of this Agreement.
Guarantor: The term "Guarantor" as used in this Agreement shall collectively
mean WOP, BRP and BRSC.
Guaranty of Payment: The term "Guaranty of Payment" as used in this Agreement
shall mean that certain Guaranty of Payment dated the date hereof given by
Guarantors to Agent, the form of which is attached hereto as Exhibit I.
Hazardous Material: The term "Hazardous Material" as used in this Agreement
shall have the meaning given to such term in paragraph 20 of the main body of
this Agreement.
Hazardous Material Guaranty and Indemnification Agreement: The term "Hazardous
Material Guaranty and Indemnification Agreement" as used in this Agreement shall
mean that certain Hazardous Material Guaranty and Indemnification Agreement
dated the date hereof given by Guarantors to Agent, the form of which is
attached hereto as Exhibit J.
Initial Properties: The term "Initial Properties" as used in this Agreement
shall mean the Owned Properties constituting part of the original collateral
pool for the Credit Facility and, to the extent accepted for inclusion in the
collateral pool, the Pending Properties, all as more particularly described in
Exhibit E attached hereto.
Insurance Policies: The term "Insurance Policies" as used in this Agreement
shall have the meaning given to such term in paragraph 18 of the main body of
this Agreement.
Insurance Premiums: The term "Insurance Premiums" as used in this Agreement
shall have the meaning given to such term in paragraph 18 of the main body of
this Agreement.
Interest Payment Date: The term "Interest Payment Date" as used in this
Agreement shall have the meaning given to such term in paragraph 1(iii) of
Exhibit B to this Agreement.
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Interest Period: The term "Interest Period" as used in this Agreement shall have
the meaning given to such term in paragraph 1(iv) of Exhibit B to this
Agreement.
Internal Revenue Code: The term "Internal Revenue Code" as used in this
Agreement shall mean the Internal Revenue Code of 1986, as amended, or any
successor statute.
Leases: The term "Leases" as used in this Agreement shall mean collectively mean
all leases, licenses and other agreements now or hereafter entered into and
affecting or relating to the use or occupancy of the Properties from time to
time constituting part of the collateral pool for the Credit Facility.
LIBOR Rate: The term "LIBOR Rate" as used in this Agreement shall have the
meaning given to such term in paragraph 1(v) of Exhibit B to this Agreement.
Material Agreements: The term "Material Agreements" as used in this Agreement
shall mean all REAs, condominium declarations and related documents and all
other agreements which in the judgment of Co-Lenders are material to the value,
use, operation or management of any Property from time to time constituting part
of the collateral pool for the Credit Facility, or the modification, amendment
or termination of which could or would in the judgment of Co-Lenders have a
material adverse effect on the value, use, operation or management of any
Property from time to time constituting part of the collateral pool for the
Credit Facility.
Maturity Date: The term "Maturity Date" shall have the meaning given to such
term in paragraph 3 of the main body of this Agreement.
Mortgages: The term "Mortgages" as used in this Agreement shall mean fully cross
defaulted and cross collateralized blanket mortgages constituting first liens on
the fee estate of BOP in the Properties to be executed and delivered by BOP to
Agent and securing payment in full of the Debt, the forms of which are attached
hereto as Exhibits F and G.
NAREIT: The term "NAREIT" as used in this Agreement shall mean the National
Association of Real Estate Investment Trusts.
NationsBank: The term "NationsBank" as used in this Agreement shall have the
meaning given to such term in the preamble to the main body of this Agreement.
Owned Properties: The term "Owned Properties" as used in this Agreement shall
mean the Properties which, as of the date hereof, are owned by BOP and which are
so identified on Exhibit E attached hereto.
Pending Properties: The term "Pending Properties" as used in this Agreement
shall mean the Properties whose owner is identified as "Pending" on Exhibit E
attached hereto, all to which Properties Borrowers have contracted to acquire
but none of which are owned by Borrowers as of the date hereof.
Permitted Title Exceptions: The term "Permitted Title Exceptions" as used in
this Agreement shall mean those matters set forth in the title insurance
policies insuring the respective liens of the Mortgages on the date hereof and
those matters otherwise approved in writing by Co-Lenders.
Person: The term "Person" as used in this Agreement shall mean an individual, a
corporation, a firm, a limited or general partnership, an association, a joint
venture or any other entity or organization, including a governmental or
political subdivision or an agent or instrumentality thereof.
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Properties: The term "Properties" as used in this Agreement shall mean the
properties (including, without limitation, the Owned Properties) from time to
time constituting part of the collateral pool for the Credit Facility.
Prime Rate: The term "Prime Rate" as used in this Agreement shall have the
meaning given to such term in paragraph 1(ii) of Exhibit B to this Agreement.
Principal Balance: The term "Principal Balance" as used in this Agreement shall
have the meaning given to such term in paragraph 1(vii) of Exhibit B to this
Agreement.
REA: The term "REA" as used in this Agreement shall mean, with respect to any
individual Property, any executed and delivered comprehensive reciprocal
easement and operating agreement which encumbers a Property and which either
benefits such Property or will enhance the integrated use, operation and
management of such Property.
Rents: The term "Rents" as used in this Agreement shall mean all rents,
royalties, issues, profits, rent equivalent income, security deposits, insurance
proceeds, tax refunds, any other revenues, income benefits or proceeds of any
nature whatsoever generated by, arising from or otherwise relating to the
Properties.
Request for Advance: The term "Request for Advance" as used in this Agreement
shall have the meaning given to such term in paragraph 5 of the main body of
this Agreement.
Required Due Diligence Materials: The term "Required Due Diligence Materials" as
used in this Agreement shall mean all materials required by paragraph 1 of
Exhibit D-1 of this Agreement.
Re-Set Date: The term "Re-Set Date" as used in this Agreement shall have the
meaning given to such term in paragraph 1(viii) of Exhibit B to this Agreement.
Re-Set Date A: The term "Re-Set Date A" as used in this Agreement shall have the
meaning given to such term in paragraph 1(ix) of Exhibit B to this Agreement.
Re-Set Date B: The term "Re-Set Date B" as used in this Agreement shall have the
meaning given to such term in paragraph 1(x) of Exhibit B to this Agreement.
Re-Set Date C: The term "Re-Set Date C" as used in this Agreement shall have the
meaning given to such term in paragraph 1(xi) of Exhibit B to this Agreement.
Re-Set Date D: The term "Re-Set Date D" as used in this Agreement shall have the
meaning given to such term in paragraph 1(xii) of Exhibit B to this Agreement.
Roll Over Date: The term "Roll Over Date" as used in this Agreement shall have
the meaning given to such term in paragraph 1(xiii) of Exhibit B to this
Agreement.
Smith Barney: The term "Smith Barney" as used in this Agreement shall have the
meaning given to such term in preamble to the main body of this Agreement.
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Springdale: The term "Springdale" as used in this Agreement shall mean the
premises located in Whiteland Township, Chester County, Pennsylvania together
with the improvements erected thereon and commonly known as 748 and 855
Springdale Drive.
Sproul Road: The term "Sproul Road" as used in this Agreement shall mean the
premises located in Marple Township, Delaware County, Pennsylvania together with
the improvements erected thereon and commonly known as 974 Sproul Road.
Taxes: The term "Taxes" as used in this Agreement shall have the meaning given
to such term in paragraph 17 of the main body of this Agreement.
Telerate Page 3750: The term "Telerate Page 3750" as used in this Agreement
shall have the meaning given to such term in paragraph 1(v) of Exhibit B to this
Agreement.
Title Company: The term "Title Company" as used in this Agreement shall
collectively mean Commonwealth Land Title Insurance Company, a Pennsylvania
corporation.
WOP: The term "WOP" as used in this Agreement shall mean Witmer Operating
Partnership, L.P., a Delaware limited partnership.
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EXHIBIT B
(Credit Facility Payment Provisions)
1. The following terms as used in this Exhibit shall have the following
meanings:
(i) The term "Business Day" shall mean any day on which Agent is
open for business in the city in which its principal office is located and
on which commercial banks in the City of London, England are open for
dealings in U.S. dollar deposits in the London Interbank Market, provided,
however, that during any period of time during which the entire Principal
Balance is bearing interest at the Floating Rate in accordance with the
provisions of this Note hereinafter set forth, the term "Business Day"
shall mean any day on which Agent is open for business in the city in
which its principal office is located.
(ii) The term "Floating Rate" shall mean a rate per annum equal to
25 basis points plus the greater on a daily basis of (a) the Prime Rate,
or (b) the Alternate Credit Rate. The term "Prime Rate" shall mean such
rate of interest as is publicly announced by NationsBank or other
comparable bank designated by Agent at its principal office from time to
time as its prime rate. Any change in the Prime Rate shall be effective on
the date such change is announced by NationsBank or other comparable bank
designated by Agent. The term "Alternate Credit Rate" shall mean a rate
per annum equal to 50 basis points plus the Federal Funds Effective Rate
from time to time. The "Federal Funds Effective Rate" shall to the extent
necessary be determined by Agent separately for each day during the term
of the Credit Facility and shall for each such day be a rate per annum
equal to the weighted average of the rates on overnight Federal funds
transactions with members of the Federal Reserve System arranged by
Federal funds brokers, as published for each such day (or if any such day
is not a business day, for the next immediately preceding business day) by
the Federal Reserve Bank of New York, or if the weighted average of such
rates is not so published for any such day which is a business day, the
average of the quotations for any such day on such transactions received
by Agent from three Federal funds brokers of recognized standing selected
by Agent. The term "business day" as used in the preceding sentence of
this subparagraph shall mean any day on which the Federal Reserve Bank of
New York is open for business. Any change in the Floating Rate as a result
of a change in the Prime Rate or the Federal Funds Effective Rate shall be
effective on the effective date of any such change in the Prime Rate or
the Federal Funds Effective Rate, as the case may be. If for any reason
Agent shall have determined (which determination shall be conclusive and
binding on Borrowers) that Agent is unable to ascertain the Federal Funds
Effective Rate for any reason, including, without limitation, the
inability or failure of Agent to obtain sufficient bids for the purposes
of determining the Federal Funds Effective Rate in accordance with the
provisions of this subparagraph, the Floating Rate shall be determined on
the basis of the Prime Rate until the circumstances giving rise to such
inability no longer exist. The Floating Rate shall be calculated for the
actual number of days elapsed on the basis of a 360-day year. Each
determination of the Floating Rate shall be made by Agent and shall be
conclusive and binding upon Borrowers absent manifest error.
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(iii) The term "Interest Payment Date" shall mean July 1, 1997 and
the first day of each month thereafter during the term of the Credit
Facility, provided, however, that if the first day of any such month shall
not be a Business Day, the Interest Payment Date for such month shall be
the next succeeding Business Day.
(iv) The term "Interest Period" shall mean the period of time during
which a particular LIBOR Rate will be applicable to all or any particular
portion of the Principal Balance in accordance with the provisions of this
Exhibit, it being agreed that (a) each Interest Period (I) which commences
on a Re-Set Date A shall terminate on a ReSet Date A, (II) which commences
on a Re-Set Date B shall terminate on a Re-Set Date B, (III) which
commences on a Re-Set Date C shall terminate on a Re-Set Date C, and (IV)
which commences on a Re-Set Date D shall terminate on a Re-Set Date D, (b)
each Interest Period shall, except as specifically provided to the
contrary in this subparagraph (iv) and in paragraph 4 below, be of a
duration of one month, (c) no Interest Period shall extend beyond the
Maturity Date, and (d) the portion of the Principal Balance with respect
to which a particular Interest Period is applicable will bear interest at
the LIBOR Rate pertaining to such Interest Period from and including the
first day of such Interest Period to, but not including, the last day of
such Interest Period.
(v) The "LIBOR Rate" applicable to a particular Interest Period
shall mean a rate per annum equal to 175 basis points plus the Base LIBOR
Rate applicable to such Interest Period. The "Base LIBOR Rate" applicable
to a particular Interest Period shall mean a rate per annum equal to the
rate for U.S. dollar deposits with maturities comparable to such Interest
Period which appears on Telerate Page 3750 as of 11:00 a.m., London time,
two (2) Business Days prior to the commencement of such Interest Period,
provided, however, that if such rate does not appear on Telerate Page
3750, the "Base LIBOR Rate" applicable to such Interest Period shall mean
a rate per annum equal to the rate at which U.S. dollar deposits in an
amount approximately equal to the Principal Balance (or the portion
thereof which will bear interest at a LIBOR Rate during the Interest
Period to which such Base LIBOR Rate is applicable in accordance with the
provisions of this Exhibit), and with maturities comparable to the last
day of the Interest Period with respect to which such Base LIBOR Rate is
applicable, are offered in immediately available funds in the London
Interbank Market to the London office of NationsBank or other comparable
bank designated by Agent by leading banks in the Eurodollar market at
11:00 a.m., London time, two (2) Business Days prior to the commencement
of the Interest Period to which such Base LIBOR Rate is applicable. The
term "Telerate Page 3750" means the display designated as "Page 3750" on
the Associated Press-Dow Jones Telerate Service (or such other page as may
replace Page 3750 on the Associated Press-Dow Jones Telerate Service or
such other service as may be nominated by the British Bankers' Association
as the information vendor for the purpose of displaying British Bankers'
Association interest settlement rates for U.S. dollar deposits). Any Base
LIBOR Rate determined on the basis of the rate displayed on Telerate Page
3750 in accordance with the foregoing provisions of this subparagraph
shall be subject to corrections, if any, made in such rate and displayed
by the Associated Press-Dow Jones Telerate Service within one hour of the
time when such rate is first displayed by such Service. Each determination
of the LIBOR Rate and the Base LIBOR Rate applicable to a particular
Interest Period shall be made by Agent and shall be conclusive and binding
upon Borrowers absent manifest error. Interest
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at the applicable LIBOR Rate from time to time shall be calculated for the
actual number of days elapsed on the basis of a 360-day year.
(vi) The term "Maturity Date" shall mean July 30, 1997.
(vii) The term "Principal Balance" shall mean the outstanding
principal balance of the Credit Facility from time to time.
(viii) The term "Re-Set Date" shall mean, as applicable, a Re-Set
Date A, a Re-Set Date B, a Re-Set Date C or a Re-Set Date D.
(ix) The term "Re-Set Date A" shall mean May 30, 1997 and thereafter
the 30th day of each subsequent calendar month during the term of the
Credit Facility, provided, however, that if the 30th day of any such
subsequent calendar month during the term of the Credit Facility shall not
be a Business Day, the Re-Set Date A for such calendar month shall be the
next succeeding Business Day, unless the next such succeeding Business Day
would fall in the next calendar month, in which event the Re-Set Date A
for such calendar month shall be the next preceding Business Day. For the
purposes of this Exhibit the period of time between any two consecutive
Re-Set Dates As during the term of the Credit Facility shall be deemed to
be a period of one month.
(x) The term "Re-Set Date B" shall mean the date set forth in
Borrowers' Request for Advance (which date must be a Business Day) and
thereafter the numerically corresponding day of each subsequent calendar
month during the term of the Credit Facility, provided, however, that if
the numerically corresponding day of any such subsequent calendar month
during the term of the Credit Facility shall not be a Business Day, the
Re-Set Date B for such calendar month shall be the next succeeding
Business Day, unless the next such succeeding Business Day would fall in
the next calendar month, in which event the Re-Set Date B for such
calendar month shall be the next preceding Business Day. For the purposes
of this Exhibit the period of time between any two consecutive Re-Set Date
Bs during the term of the Credit Facility shall be deemed to be a period
of one month.
(xi) The term "Re-Set Date C" shall mean the date set forth in
Borrowers' Request for Advance (which date must be a Business Day) and
thereafter the numerically corresponding day of each subsequent calendar
month during the term of the Credit Facility, provided, however, that if
the numerically corresponding day of any such subsequent calendar month
during the term of the Credit Facility shall not be a Business Day, the
Re-Set Date C for such calendar month shall be the next succeeding
Business Day, unless the next such succeeding Business Day would fall in
the next calendar month, in which event the Re-Set Date C for such
calendar month shall be the next preceding Business Day. For the purposes
of this Exhibit the period of time between any two consecutive Re-Set Date
Cs during the term of the Credit Facility shall be deemed to be a period
of one month.
(xii) The term "Re-Set Date D" shall mean the date set forth in
Borrowers' Request for Advance (which date must be a Business Day) and
thereafter the numerically corresponding day of each subsequent calendar
month during the term of the Credit Facility, provided, however, that if
the numerically corresponding day of any such subsequent calendar month
during the term of the Credit Facility shall not be a Business Day, the
Re-Set Date D for such calendar month shall be the next succeeding
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Business Day, unless the next such succeeding Business Day would fall in
the next calendar month, in which event the Re-Set Date D for such
calendar month shall be the next preceding Business Day. For the purposes
of this Exhibit the period of time between any two consecutive Re-Set Date
Ds during the term of the Credit Facility shall be deemed to be a period
of one month.
(xiii) The "Roll Over Date" applicable to a particular Interest
Period shall mean the last day of such Interest Period.
2. Borrower shall pay to Agent, for the equal and
ratable benefit of Co-Lenders, the Principal Balance or so much thereof as may
be advanced by Co-Lenders to Borrowers and be outstanding from time to time in
accordance with the provisions of this Agreement, with interest thereon from and
including the date of this Agreement to, but not including, the date the
Principal Balance is paid in full calculated in the manner hereinafter set
forth, as follows:
(i) interest on the Principal Balance calculated in the
manner hereinafter set forth shall be due and payable in Federal funds or
other immediately available funds on each Interest Payment Date during the
term of the Credit Facility; and
(ii) the entire Principal Balance, together with all
interest accrued and unpaid thereon calculated in the manner hereinafter
set forth and all other sums due in respect of the Credit Facility in
accordance with the Credit Facility Documents, shall be due and payable on
the Maturity Date.
3. All payment in respect of the Principal Balance,
interest on the Principal Balance and all other sums which may or shall become
due and payable in respect of the Credit Facility in accordance with the
provisions of the Credit Facility Notes, this Agreement and the other Credit
Facility Documents shall (except to the extent otherwise specifically provided
to the contrary in the Credit Facility Documents) be paid to Agent for the equal
and ratable benefit of Co-Lenders.
4. The entire Principal Balance shall, except as
specifically provided to the contrary in this paragraph and in paragraph 6 and
paragraph 11 of this Exhibit, bear interest at one or more of the available
LIBOR Rates. The available LIBOR Rates shall consist of a one-month LIBOR Rate
determined in accordance with the provisions of paragraph 1 (v) and paragraph 6
of this Exhibit, it being agreed that (i) Borrowers shall have the right to
select the LIBOR Rate or Rates from time to time applicable to the Principal
Balance, and (ii) each LIBOR Rate from time to time so selected by Borrowers
shall take effect and shall end on (i) a Re-Set Date A, (ii) a Re-Set Date B,
(iii) a ReSet Date C or (iv) a Re-Set Date D. Except as hereinafter specifically
provided to the contrary in this paragraph, Borrower shall not have the right to
select more than one LIBOR Rate to take effect on any given Re-Set Date. The
LIBOR Rate selected by Borrowers or otherwise designated for a particular Re-Set
Date in accordance with the foregoing provisions of this paragraph, shall be in
effect from and including the first day of the Interest Period to which such
LIBOR Rate pertains to, but not including, the Roll Over Date applicable to such
Interest Period, and shall (subject to the following provisions of this
paragraph) be applicable to the entire portion of the Principal Balance with
respect to which a LIBOR Rate or Rates are due to be re-set on such Re-Set Date,
as well as to any portion of the Principal Balance bearing interest at a
Floating Rate and any advance of the Credit Facility
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scheduled to be made on such Re-Set Date. Borrowers shall have the right to
select up to, but not in excess of, two LIBOR Rates to take effect on any given
Re-Set Date by written notice given to Agent at least five (5) Business Days
prior to the applicable Re-Set Date in which Borrowers shall specify the two
LIBOR Rates so selected by Borrowers and the respective portions of the
Principal Balance (inclusive of any advance of the Credit Facility scheduled to
be made on such Re-Set Date) to which such LIBOR Rates are to respectively
pertain, subject to compliance with the following conditions: 1) the minimum
portion of the Principal Balance to which any such LIBOR Rate may pertain shall
be equal to at least $3,000,000, and 2) each such LIBOR Rate so selected by
Borrowers shall be applicable to the portion of the Principal Balance to which
it pertains from and including the first day of the applicable Interest Period
to, but not including, the Roll Over Date applicable to such Interest Period.
Each portion of the Principal Balance bearing interest at a LIBOR Rate with a
Roll Over Date other than the Maturity Date and which is less than one month
prior to the Maturity Date shall from and after such Roll Over Date at the
election of Agent either bear interest at the Floating Rate or at a one month
LIBOR Rate determined in accordance with the provisions of paragraph 1(v) and
paragraph 6 of this Exhibit from and including such Roll Over Date to, but not
including, the Maturity Date, it being agreed that any such one-month LIBOR Rate
shall be determined on the basis of an assumed Interest Period of one month.
5. Notwithstanding anything to the contrary contained
in this Agreement or the other Credit Facility Documents, Borrowers shall not
have the right (other than as provided in the next sentence) to obtain more than
one advance per month under the Credit Facility. Notwithstanding the foregoing,
Borrowers shall have the right to obtain more than one advance under the Credit
Facility per month if such additional advance is being made pursuant to this
Agreement in connection with the acquisition of a Pending Property or an
Additional Property in accordance with the provisions of this Agreement.
6. Agent shall, as soon as practicable after 9:30 a.m.,
Charlotte, North Carolina time, two (2) Business Days prior to the commencement
of a particular Interest Period, determine the LIBOR Rate which will be in
effect during such Interest Period and inform Borrowers of the LIBOR Rate so
determined (which determination shall be conclusive and binding upon Borrowers
absent manifest error). In the event, and on each occasion, that on the day two
(2) Business Days prior to the commencement of a particular Interest Period,
Agent shall have determined in good faith (which determination shall be
conclusive and binding upon Borrowers) that U.S. dollar deposits in an amount
approximately equal to the portion of the Principal Balance which is to bear
interest at a particular LIBOR Rate during such particular Interest Period in
accordance with the provisions of this Exhibit are not generally available at
such time in the London Interbank Market, or reasonable means do not exist for
ascertaining a LIBOR Rate for such particular Interest Period, Agent shall so
notify Borrowers and the interest rate applicable to the portion of the
Principal Balance with respect to which such LIBOR Rate was to pertain shall
automatically be converted to the Floating Rate as of the date upon which such
particular Interest Period was to have commenced, it being agreed that the
Floating Rate shall remain in effect thereafter with respect to such portion of
the Principal Balance unless and until Agent shall have determined in good faith
(which determination shall be conclusive and binding upon Borrowers) that the
aforesaid circumstances no longer exist, whereupon the interest rate applicable
to such portion of the Principal Balance shall be converted back to a LIBOR Rate
determined in the manner hereinabove set forth in this Exhibit effective as of
the first Re-Set Date which occurs ten (10) Business Days or more after such
good faith
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determination by Agent. If any change in any law or regulation or in the
interpretation thereof by any governmental authority charged with the
administration or interpretation thereof shall make it unlawful for any one or
more of Co-Lenders to make or maintain LIBOR Rates with respect to the Principal
Balance or any portion thereof or to fund the Principal Balance or any portion
thereof at LIBOR Rates in the London Interbank Market or to give effect to their
respective obligations as contemplated by this Exhibit, then, upon notice by
Agent to Borrowers, the interest rate applicable to the entire Principal Balance
shall be automatically converted to the Floating Rate, it being agreed that any
notice given by Agent to Borrowers pursuant to this sentence shall, if lawful,
be effective insofar as it pertains to any particular portion of the Principal
Balance bearing interest at a particular LIBOR Rate on the last day of the then
existing Interest Period pertaining to such particular portion of the Principal
Balance, or if not lawful, shall be effective immediately upon being given by
Agent to Borrowers, and that the Floating Rate shall remain in effect thereafter
with respect to such particular portion of the Principal Balance unless and
until Agent shall have determined in good faith (which determination shall be
conclusive and binding upon Borrowers) that the aforesaid circumstances no
longer exist, whereupon the interest rate applicable to such portion of the
Principal Balance shall be converted to a LIBOR Rate determined in the manner
hereinabove set forth in this Exhibit effective as of the first Re-Set Date
which occurs ten (10) Business Days or more after such good faith determination
by Agent. If the interest rate applicable to any particular portion of the
Principal Balance is converted from a LIBOR Rate to the Floating Rate on a date
other than a Roll Over Date in accordance with the provisions of the preceding
sentence, Borrowers shall pay to Agent on demand an amount equal to the
prepayment premium, if any, which would have been due pursuant to the provisions
of this Exhibit hereinafter set forth if the portion of the Principal Balance
bearing interest at such LIBOR Rate was prepaid in full on the date of such
conversion.
7. Borrowers recognize that the cost to Co-Lenders of
making or maintaining LIBOR Rates with respect to the Principal Balance or any
portion thereof may fluctuate and Borrowers agree to pay Agent within ten (10)
days after demand by Agent an additional amount or amounts as Agent shall
reasonably determine will compensate Co-Lenders for actual costs incurred by
Co-Lenders in maintaining LIBOR Rates on the Principal Balance or any portion
thereof as a result of:
(i) the imposition after the date of this Agreement of,
or changes after the date of this Agreement in, or the actual maintenance
after the date of this Agreement by any Co-Lender of, reserves in
accordance with the reserve requirements now or hereafter promulgated by
the Board of Governors of the Federal Reserve System of the United States,
including, but not limited to, any reserve on Eurocurrency Liabilities as
defined in Regulation D of the Board of Governors of the Federal Reserve
System of the United States at the ratios provided in such Regulation from
time to time, it being agreed that the portion of the Principal Balance
bearing interest at LIBOR Rates from time to time in accordance with the
provisions of this Exhibit shall be deemed to constitute Eurocurrency
Liabilities, as defined by such Regulation; or
(ii) any change, after the date of this Agreement, in
applicable law, rule or regulation or in the interpretation or
administration thereof by any domestic or foreign governmental authority
charged with the interpretation or administration thereof (whether or not
having the force of law) or by any domestic or foreign court changing the
basis of
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taxation of payments to any Co-Lender of the Principal Balance or interest
on the Principal Balance or any portion thereof at a LIBOR Rate or any
other fees or amounts payable in respect of the Credit Facility pursuant
to the provisions of the Credit Facility Documents (other than taxes
imposed on all or any portion of the overall net income of any such
Co-Lender by the Federal government or by the state or country of
incorporation or domicile of any such Co-Lender or by any political
subdivision or taxing authority of the Federal government or any such
state or country), or imposing, modifying or applying any reserve, special
deposit or similar requirement against assets of, deposits with or for the
account of, credit extended by, or any other acquisition of funds for
loans by any such Co-Lender or imposing on any such Co-Lender or on the
London Interbank Market any other condition affecting the Credit Facility,
the Credit Facility Documents or the portion of the Principal Balance
bearing interest at LIBOR Rates so as to increase the cost to any such
Co-Lender of making or maintaining LIBOR Rates with respect to the
Principal Balance or any portion thereof or to reduce the amount of any
sum received or receivable by any such Co-Lender with respect to the
Credit Facility pursuant to the provisions of the Credit Facility
Documents (whether of principal, interest or otherwise), by an amount
deemed by Agent in good faith to be material, but without duplication for
payments required under subparagraph (i) above.
Any amount or amounts payable by Borrowers to
Co-Lenders pursuant to subparagraph (i) or (ii) above shall be paid by Borrowers
to Co-Lenders within ten (10) days of receipt by Borrowers from Agent of a
statement setting forth the amount or amounts due and the basis for the
determination from time to time of such amount or amounts, which statement shall
be conclusive and binding upon Borrowers absent manifest error. Failure on the
part of Co-Lenders to demand compensation for any increased costs in any
Interest Period shall not constitute a waiver of Co-Lenders' right to demand
compensation for any increased costs incurred during any such Interest Period or
in any other subsequent or prior Interest Period. Failure on the part of
Co-Lenders to demand compensation for any increased costs in any Interest Period
shall not constitute a waiver of Agent's right to demand compensation for any
increased costs incurred during any such Interest Period or in any other
subsequent or prior Interest Period.
8. Borrowers shall indemnify each Co-Lender against any
loss or expense that any such Co-Lender may sustain or incur as a consequence of
any failure by Borrowers to take down all or any portion of any advance of the
Credit Facility (including, without limitation, the initial advance of the
Credit Facility) on the date Borrowers requested that such advance be made in
accordance with the provisions of this Agreement or as a consequence of any
default by Borrowers in the payment of any portion of the Principal Balance
bearing interest at a LIBOR Rate, or any part thereof or interest accrued
thereon at a LIBOR Rate, as and when due and payable, or the occurrence of any
Event of Default including, but not limited to, any loss or expense sustained or
incurred by any such Co-Lender in liquidating or reemploying deposits from third
parties acquired to effect or maintain a LIBOR Rate with respect to all or any
portion of the Principal Balance or any advance of the Credit Facility requested
or scheduled to be made pursuant to the provisions of this Agreement. Co-Lenders
shall provide to Borrowers a statement explaining the amount of any such loss or
expense, which statement shall be conclusive and binding upon Borrowers absent
manifest error.
9. If after the date of this Agreement, Agent shall
have determined that the adoption after the date of this Agreement of any law,
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rule, regulation or guideline regarding capital adequacy, or any change therein,
or any change in any of the foregoing or in the interpretation or administration
of any of the foregoing by any domestic or foreign governmental authority,
central bank or comparable agency charged with the interpretation or
administration thereof, or compliance by any Co-Lender (or any lending office of
any Co-Lender) or by any Co-Lender's holding company, as the case may be, with
any request or directive regarding capital adequacy (whether or not having the
force of law) of any such authority, central bank or comparable agency, has or
would have the effect of reducing the rate of return on any Co-Lender's capital
or on the capital of any Co-Lender's holding company, as the case may be, as a
consequence of any Co-Lender's obligations with respect to the Credit Facility
under the terms of the Credit Facility Documents to a level below that which any
such Co-Lender or any such Co-Lender's holding company, as the case may be,
could have achieved but for such adoption, change or compliance (taking into
consideration any such Co-Lender's or any such Co-Lender's holding company's
policies, as the case may be, with respect to capital adequacy) by an amount
deemed by Agent to be material, then from time to time, Borrowers shall pay to
Agent such additional amount or amounts as will compensate any such Co-Lender or
any such Co-Lender's holding company, as the case may be, for such reduction.
Any amount or amounts payable by Borrowers to Co-Lenders in accordance with the
provisions of this paragraph shall be paid by Borrowers to Agent within ten (10)
days of receipt by Borrowers from Agent of a statement setting forth the amount
or amounts due and the basis for the determination from time to time of such
amount or amounts, which statement shall be conclusive and binding upon
Borrowers absent manifest error.
10. Subject to the following provisions of this
paragraph, Borrowers shall have the right to prepay the Principal Balance in
whole, or in part, upon not less than five (5) Business Days' prior written
irrevocable notice to Agent specifying the intended date of prepayment, which
date of prepayment shall not be more than fifteen (15) days after the date of
such notice, and the amount to be prepaid and upon payment of all interest and
other sums then due and payable pursuant to the provisions of the Credit
Facility Documents. The portion of the Principal Balance specified in any such
irrevocable notice of prepayment shall, notwithstanding anything to the contrary
contained in the Credit Facility Documents, be absolutely and unconditionally
due and payable on the date specified in such notice. No prepayment premium
shall be payable if the portion of the Principal Balance being prepaid is
bearing interest on the date of prepayment at the Floating Rate in accordance
with the provisions of paragraph 11 of this Exhibit or otherwise in accordance
with the provisions of this Exhibit, or if such prepayment occurs on the Roll
Over Date pertaining to the portion of the Principal Balance being prepaid. If
any particular portion of the Principal Balance being prepaid is bearing
interest at a particular LIBOR Rate and such prepayment does not occur on the
Roll Over Date pertaining to the portion of the Principal Balance being prepaid,
Borrowers shall pay to Agent contemporaneously with such prepayment a prepayment
premium equal to the portion of the Principal Balance being prepaid, multiplied
by a per annum interest rate equal to the difference between the Base LIBOR Rate
applicable to the portion of the Principal Balance being prepaid and the 360-day
equivalent interest yield, as adjusted to reflect interest payments on a monthly
basis (hereinafter called the "Reinvestment Rate"), on any U.S. Government
Treasury Obligations selected by Agent, in its sole and absolute discretion, in
an aggregate amount comparable to the portion of the Principal Balance being
prepaid, and with maturities comparable to the Roll Over Date applicable to the
portion of the Principal Balance being prepaid, calculated over a period of time
from and including the date of prepayment to, but not
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including, the Roll Over Date applicable to the portion of the Principal Balance
being prepaid. If the Base LIBOR Rate applicable to the portion of the Principal
Balance being prepaid is equal to or less than the Reinvestment Rate no
prepayment premium shall be due. No prepayment premium payable under this
paragraph shall in any event or under any circumstance be deemed or construed to
be a penalty. If a portion of the Principal Balance is bearing interest at a
LIBOR Rate or Rates and a portion of the Principal Balance is bearing interest
at the Floating Rate in accordance with the provisions of this Exhibit on the
date of a partial prepayment of the Principal Balance in accordance with the
provisions of this paragraph, such partial prepayment shall be applied to the
respective portions of the Principal Balance bearing interest at such LIBOR Rate
or Rates and the Floating Rate in such order and manner so as to minimize the
prepayment premium due with respect thereto as calculated pursuant to the
provisions of this paragraph. Any payment of the Principal Balance after the
Debt shall have been declared to be immediately due and payable in accordance
with the provisions of the Credit Facility Documents, or after a foreclosure of
one or more of the Mortgages has commenced as a result of the occurrence of an
Event of Default, shall, to the extent permitted by law, be deemed to be a
voluntary prepayment for all purposes of this paragraph and a prepayment premium
calculated pursuant to the provisions of this paragraph shall be payable with
respect thereto based upon the Base LIBOR Rate or Rates applicable to the
Principal Balance immediately prior to such default, declaration or
commencement. Agent shall deliver to Borrowers a statement setting forth the
amount and basis of determination of the prepayment premium, if any, due in
connection with a prepayment of the Principal Balance in accordance with the
provisions of this paragraph, it being agreed that (a) the calculation of such
prepayment premium may be based on any U.S. Government Treasury Obligations
selected by Agent, in its sole and absolute discretion, (b) Co-Lenders shall not
be obligated or required to have actually reinvested the prepaid portion of the
Principal Balance in any such U.S. Government Treasury Obligations as a
condition precedent to Borrowers being obligated to pay a prepayment premium
calculated in accordance with the provisions of this paragraph, and (c)
Borrowers shall not have the right to question the correctness of any such
statement or the method of calculation set forth therein in the absence of
manifest error. Borrowers shall, upon receipt of such statement and
contemporaneously with any such prepayment of the Principal Balance, remit to
Agent the prepayment premium, if any, due in connection therewith, as calculated
pursuant to the provisions of this paragraph. Payee shall not be obligated to
accept any prepayment of the Principal Balance unless it is accompanied by the
prepayment premium, if any, due in connection therewith as calculated pursuant
to the provisions of this paragraph. Any partial prepayment of the Principal
Balance in accordance with the provisions of this paragraph shall be in a
minimum amount of at least $1,000,000 and shall be in even multiples of
$100,000. The provisions of this paragraph shall be applicable to any prepayment
of the Principal Balance in whole or in part, it being agreed that any payment
of the Principal Balance, in whole or in part, (i) to maintain compliance with
the Financial Covenants, (ii) in connection with any mandatory pay down of the
Principal Balance pursuant to paragraph 8 of this Agreement, or (iii) otherwise
pursuant to or as required by the provisions of the Credit Facility Documents,
shall be deemed to be a voluntary prepayment for the purposes of this paragraph
and a prepayment premium calculated pursuant to the provisions of this paragraph
shall be payable with respect thereto.
11. Borrowers shall have the option upon not less than
fifteen (15) Business Days' prior written notice to Agent given simultaneously
and in conjunction with an irrevocable notice of prepayment given by Borrowers
to Payee pursuant to paragraph 10 of this Exhibit, and provided that such
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prepayment constitutes a mandatory prepayment of the Principal Balance pursuant
to paragraph 8 of this Agreement, to convert the interest rate on the portion of
the Principal Balance which is to be prepaid, as set forth in such notice of
prepayment, to a Floating Rate effective as of the Re-Set Date A, the Re-Set
Date B, the Re-Set Date C or the Re-Set Date D, as the case may be, occurring
immediately prior to the designated date of prepayment, as set forth in such
notice of prepayment, it being agreed that (i) such Re-Set Date A, ReSet Date B,
Re-Set Date C or Re-Set Date D, as the case may be, must be ten (10) Business
Days or more after the date of receipt by Agent from Borrowers of Borrowers'
election to exercise such option pursuant to this paragraph, and (ii) the
interest rate applicable to a particular portion of the Principal Balance may be
converted from a particular LIBOR Rate to the Floating Rate, as of such Re-Set
Date A, Re-Set Date B, Re-Set Date C or ReSet Date D, as the case may be, only
if such Re-Set Date A, Re-Set Date B, ReSet Date C or Re-Set Date D, as the case
may be, constitutes the Roll Over Date pertaining to such LIBOR Rate and such
portion of the Principal Balance. If Borrowers exercise the aforesaid option,
the interest rate on the portion of the Principal Balance with respect to which
Borrowers have exercised such option will automatically convert to and be
calculated at the Floating Rate from and including the Re-Set Date A, the Re-Set
Date B, the Re-Set Date C or the Re-Set Date D, as the case may be, occurring
immediately prior to the specified date of prepayment, as set forth in
Borrowers' notice of prepayment, to, but not including, the earlier to occur of
(i) the date upon which such portion of the Principal Balance is paid in full,
or (ii) the first Re-Set Date A, Re-Set Date B, Re-Set Date C or Re-Set Date D,
as the case may be, occurring five (5) Business Days or more after the
designated date of prepayment whereupon the interest rate on such portion of the
Principal Balance (or so much thereof as may still be outstanding) shall
(subject to the provisions of this Exhibit) thereafter be calculated at a LIBOR
Rate determined in accordance with the provisions of this Exhibit. Nothing
contained in the preceding sentence shall be deemed to qualify, modify or affect
in any manner whatsoever the provisions of paragraph 10 of this Exhibit which
provide that the portion of the Principal Balance specified in any notice of
prepayment given by Borrowers to Agent pursuant to paragraph 10 of this Exhibit
shall be absolutely and unconditionally due and payable on the date designated
for such prepayment in such notice.
12. All sums which may or shall become due and payable
by Borrowers in accordance with the provisions of paragraph 7, 8 or 9 of this
Exhibit shall be evidenced by the Credit Facility Notes, shall be secured by the
Mortgages and shall constitute part of the Debt.
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