Exhibit 99.2
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$100,000,000.00
SENIOR UNSECURED REVOLVING CREDIT AGREEMENT
among
LEXINGTON CORPORATE PROPERTIES TRUST,
LEPERCQ CORPORATE INCOME FUND, L.P.,
LEPERCQ CORPORATE INCOME FUND II L.P., and
NET 3 ACQUISITION L.P.,
JOINTLY AND SEVERALLY;
THE INSTITUTIONS FROM TIME TO TIME PARTY
HERETO AS LENDERS;
THE INSTITUTIONS FROM TIME TO TIME PARTY
HERETO AS ISSUING BANKS;
and
FLEET NATIONAL BANK, as Administrative Agent
WACHOVIA BANK, NATIONAL ASSOCIATION, as Syndication Agent
Dated as of August 19, 2003
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TABLE OF CONTENTS
SECTION 1. DEFINITIONS..................................................................................1
1.1 DEFINED TERMS.........................................................................................1
1.2 COMPUTATION OF TIME PERIODS...........................................................................1
1.3 ACCOUNTING TERMS......................................................................................2
1.4 OTHER TERMS...........................................................................................2
SECTION 2. AMOUNT AND TERMS OF LOANS....................................................................2
2.1 REVOLVING CREDIT FACILITY.............................................................................2
2.2 PROMISE TO REPAY; EVIDENCE OF INDEBTEDNESS............................................................3
2.3 JOINT AND SEVERAL LIABILITY OF THE BORROWERS AND GUARANTORS...........................................5
2.4 PROCEDURE FOR BORROWING UNDER THE REVOLVING CREDIT FACILITY...........................................7
2.5 INTEREST ON THE LOANS AND OTHER OBLIGATIONS...........................................................9
2.6 DURATION AND DETERMINATION OF INTEREST PERIOD; DETERMINATION OF INTEREST RATE;
CONTINUATION/CONVERSION OF LOANS.....................................................................11
2.7 OPTIONAL PREPAYMENTS; MANDATORY REPAYMENTS...........................................................13
2.8 COMPUTATION OF INTEREST AND FEES.....................................................................13
2.9 PAYMENTS.............................................................................................13
2.10 USE OF PROCEEDS AND LETTERS OF CREDIT................................................................18
2.11 INCREASED COSTS......................................................................................18
2.12 CHANGE IN LAW RENDERING LIBOR RATE LOANS UNLAWFUL....................................................20
2.13 LIBOR RATE AVAILABILITY..............................................................................20
2.14 INDEMNITIES..........................................................................................21
2.15 FEES.................................................................................................21
2.16 USURY................................................................................................22
2.17 ELIGIBLE PROPERTIES..................................................................................23
2.18 ADDITION OR WITHDRAWAL OF ELIGIBLE PROPERTY..........................................................26
2.19 EXCLUSION OF ELIGIBLE PROPERTIES.....................................................................27
SECTION 3. LETTERS OF CREDIT...........................................................................27
3.1 LETTERS OF CREDIT....................................................................................27
SECTION 4. REPRESENTATIONS AND WARRANTIES..............................................................32
4.1 FINANCIAL CONDITION..................................................................................32
4.2 NO MATERIAL ADVERSE EFFECT...........................................................................33
4.3 EXISTENCE; BORROWERS' AND GUARANTORS' COMPLIANCE WITH LAW............................................33
4.4 POWER; AUTHORIZATION; ENFORCEABLE OBLIGATIONS........................................................33
4.5 NO LEGAL BAR.........................................................................................33
4.6 NO MATERIAL LITIGATION...............................................................................34
4.7 NO DEFAULT...........................................................................................34
4.8 OWNERSHIP OF PROPERTY; LIENS.........................................................................34
4.9 TAXES................................................................................................35
4.10 FEDERAL REGULATIONS..................................................................................36
4.11 ERISA................................................................................................36
4.12 STATUS AS REIT.......................................................................................36
4.13 INVESTMENT COMPANY ACT...............................................................................37
4.14 SUBSIDIARIES; OWNERSHIP OF CAPITAL STOCK AND PARTNERSHIP INTERESTS...................................37
4.15 POLLUTION; HAZARDOUS MATERIALS.......................................................................37
4.16 DECLARATION OF TRUST, PARTNERSHIP AGREEMENT, ETC.....................................................37
4.17 DISCLOSURES..........................................................................................38
4.18 GUARANTORS...........................................................................................38
SECTION 5. CONDITIONS PRECEDENT........................................................................38
5.1 CONDITIONS TO INITIAL LOANS..........................................................................38
5.2 CONDITIONS PRECEDENT TO ALL SUBSEQUENT LOANS.........................................................40
SECTION 6. AFFIRMATIVE COVENANTS.......................................................................41
6.1 FINANCIAL STATEMENTS.................................................................................41
6.2 CERTIFICATES; OTHER INFORMATION......................................................................42
6.3 PAYMENT OF OBLIGATIONS...............................................................................43
6.4 CONDUCT OF BUSINESS AND MAINTENANCE OF EXISTENCE.....................................................43
6.5 MAINTENANCE OF PROPERTY, INSURANCE...................................................................43
6.6 INSPECTION OF PROPERTY; BOOKS AND RECORDS; DISCUSSIONS...............................................44
6.7 NOTICES..............................................................................................44
6.9 REIT REQUIREMENTS....................................................................................45
6.10 ENVIRONMENTAL ACTIONS................................................................................45
6.11 CHANGES IN GAAP......................................................................................46
6.12 NYSE LISTING.........................................................................................46
6.13 MANAGEMENT OF BORROWER AND PROPERTY..................................................................47
6.14 SUBORDINATION OF PAYABLES TO AFFILIATES..............................................................47
6.15 ERISA NOTICES........................................................................................47
6.16 ERISA COMPLIANCE....................................................................................48
6.17 PAYMENT OF TAXES AND CLAIMS..........................................................................48
6.18 INTER-BORROWER OR GUARANTOR ADVANCES OF LOAN PROCEEDS................................................48
6.19. SOLVENCY OF GUARANTORS...............................................................................49
6.20. NO AMENDMENTS TO CERTAIN DOCUMENTS...................................................................49
6.21 NO ADDITIONAL OFFERINGS..............................................................................49
SECTION 7. NEGATIVE COVENANTS..........................................................................49
7.1 FINANCIAL COVENANTS..................................................................................49
7.2 COVENANT CALCULATIONS................................................................................51
7.3 RESTRICTED PAYMENTS..................................................................................51
7.4 DISSOLUTION; MERGER; SALE OF ASSETS; TERMINATION AND OTHER ACTIONS...................................51
7.5 TRANSACTIONS WITH AFFILIATES.........................................................................51
7.6 ACCOUNTING CHANGES...................................................................................51
7.7 NO LIENS.............................................................................................52
7.8 FISCAL YEAR..........................................................................................52
7.9 CHIEF EXECUTIVE OFFICE...............................................................................52
7.10 SELF-DIRECTED REIT...................................................................................52
7.10 LIMITATIONS ON CERTAIN ACTIVITIES....................................................................52
7.13 ERISA................................................................................................52
7.14 COMPLIANCE WITH ENVIRONMENTAL LAWS...................................................................53
7.15. LIMITATION ON DEBT AND ACTION........................................................................53
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SECTION 8. EVENTS OF DEFAULT...........................................................................53
8.1 EVENTS OF DEFAULT....................................................................................53
8.2 REMEDIES.............................................................................................55
8.3 ANNULMENT OF ACCELERATION............................................................................56
8.4 COOPERATION BY EACH BORROWER AND GUARANTOR...........................................................56
SECTION 9. THE AGENT...................................................................................56
9.1 APPOINTMENT..........................................................................................56
9.2 NATURE OF DUTIES.....................................................................................57
9.3 RIGHT TO REQUEST INSTRUCTIONS........................................................................57
9.4 RIGHTS, EXCULPATION, ETC.............................................................................57
9.5 RELIANCE.............................................................................................58
9.6 INDEMNIFICATION......................................................................................58
9.7 AGENT INDIVIDUALLY...................................................................................58
9.8 SUCCESSOR AGENTS.....................................................................................59
9.9 RELATIONS AMONG THE LENDERS..........................................................................59
9.10 CONSENT AND APPROVALS................................................................................59
9.11 NOTICE OF EVENTS OF DEFAULT..........................................................................61
9.12 RATABLE SHARING......................................................................................61
9.13 DEFAULTING LENDERS...................................................................................61
9.14 PURCHASING OF DEFAULTING LENDER'S PRO RATA SHARE.....................................................62
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SECTION 10. GENERAL.....................................................................................63
10.1 ASSIGNMENTS AND PARTICIPATIONS.......................................................................63
10.2 AMENDMENTS AND WAIVERS...............................................................................65
10.3 MARSHALLING; PAYMENTS SET ASIDE......................................................................67
10.4 LIMITATION OF LIABILITY..............................................................................67
10.5 COUNTERPARTS; EFFECTIVENESS; INCONSISTENCIES.........................................................68
10.6 DISCLAIMER BY AGENT AND EACH LENDER..................................................................68
10.7 CHOICE OF LAW........................................................................................68
10.8 SUBMISSION TO JURISDICTION; WAIVER OF JURY TRIAL; ETC................................................68
10.9 NOTICES; CERTAIN PAYMENTS............................................................................69
10.10 NO WAIVERS; CUMULATIVE REMEDIES; ENTIRE AGREEMENT; HEADINGS...........................................70
10.11 SURVIVAL..............................................................................................70
10.12 PAYMENT OF EXPENSES AND TAXES.........................................................................71
10.13 FURTHER ASSURANCES....................................................................................71
10.14 NO BROKERS............................................................................................72
10.15 CONFIDENTIALITY.......................................................................................72
10.16 CAPTIONS..............................................................................................72
10.17 GENDER................................................................................................72
10.18 SUCCESSORS............................................................................................72
10.19 ENTIRE AGREEMENT......................................................................................72
10.20 DELAY NOT WAIVER......................................................................................72
10.21 SET-OFF...............................................................................................73
10.22 SEVERABILITY..........................................................................................73
10.23 LOST OR DAMAGED LOAN DOCUMENTS........................................................................73
10.24 CLAIMS AGAINST AGENT OR ANY LENDER....................................................................73
10.25 TIME OF THE ESSENCE...................................................................................74
10.26 PLACE OF DELIVERY.....................................................................................74
10.27 USE OF PROCEEDS (REGULATION U)........................................................................74
10.28 INTEGRATION...........................................................................................74
10.29 LENDER'S RIGHT TO PLEDGE..............................................................................74
SECTION 11. THE BORROWERS' REPRESENTATIVE...............................................................74
11.1. APPOINTMENT OF BORROWER REPRESENTATIVE...............................................................74
EXHIBITS
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EXHIBIT A - DEFINITIONS
EXHIBIT B - FORM OF NOTE
EXHIBIT C - FORM OF NOTICE OF BORROWING
EXHIBIT D - FORM OF CERTIFICATE OF ELIGIBLE PROPERTIES AND
PREFERRED INTEREST RATE CALCULATION
EXHIBIT E - FORM OF NOTICE OF CONTINUATION/CONVERSION
EXHIBIT F - ORGANIZATIONAL STRUCTURE AND RELATED MATTERS
EXHIBIT G - CERTIFICATE OF COVENANT COMPLIANCE
EXHIBIT H - FORM OF ASSIGNMENT AND ACCEPTANCE
EXHIBIT I - FORM OF GUARANTY
SCHEDULES
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SCHEDULE 1 LIST OF INITIAL APPROVED ELIGIBLE PROPERTIES
AND THEIR OWNERS
SCHEDULE 2 LIST OF LETTERS OF CREDIT DEEMED TO BE
OUTSTANDING UNDER THE REVOLVING CREDIT
FACILITY
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SENIOR UNSECURED REVOLVING CREDIT AGREEMENT
DATED AS OF AUGUST 19, 2003
This SENIOR UNSECURED REVOLVING CREDIT AGREEMENT (the "Agreement") is
dated as of August 19, 2003, by and among LEXINGTON CORPORATE PROPERTIES TRUST
("Lexington"), LEPERCQ CORPORATE INCOME FUND L.P. ("LCIF"), LEPERCQ CORPORATE
INCOME FUND II L.P. ("LCIFII"), and NET 3 ACQUISITION, L.P. ("Net 3"), jointly
and severally (collectively, the "Borrowers" and individually, a "Borrower")
acting by and through LEXINGTON CORPORATE PROPERTIES TRUST ("Borrowers'
Representative"); the institutions from time to time who are a party hereto as
Lenders, (whether by execution of this Agreement or an Assignment and Acceptance
Agreement), the Lenders from time to time who are or become Issuing Banks and
FLEET NATIONAL BANK, a national banking association ("Fleet"), as administrative
agent for the Lenders and the Issuing Banks (in such capacity, together with its
successors and assigns in such capacity, the "Agent").
WHEREAS, the Borrowers desire to obtain a separate Revolving Credit
Commitment from each Lender pursuant to which such Lender will make Loans (as
hereinafter defined) to and for the benefit of one or more of the Borrowers in
an amount not to exceed such Lender's Pro Rata Share pursuant to the terms and
conditions of this Agreement in a maximum aggregate outstanding principal amount
not to exceed $100,000,000.00 (minus any Outstanding Amount) at any one time
(the "Revolving Credit Facility"); and
WHEREAS, each Lender is willing, on the terms and conditions
hereinafter set forth, to extend a Revolving Credit Commitment and to severally
make Loans to and for the benefit of the Borrowers.
NOW, THEREFORE, the parties hereto hereby agree as follows:
SECTION 1. DEFINITIONS
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1.1. Defined Terms. As used in this Agreement all capitalized terms not
otherwise defined shall have the meanings set forth on Exhibit A, applicable
both to the singular and the plural forms of the terms defined.
1.2. Computation of Time Periods. In this Agreement, in the computation of
periods of time from a specified date to a later specified date, the word "from"
means "from and including" and the words "to" and "until" each mean "to but
excluding". Periods of days referred to in this Agreement shall be counted in
calendar days unless Business Days are expressly prescribed. Any period
determined hereunder by reference to a month or months or year or years shall
end on the day in the relevant calendar month in the relevant year, if
applicable, immediately preceding the date numerically corresponding to the
first day of such subsequent period, provided that if such period commences on
the last day of a calendar month (or on a day for which there is no numerically
corresponding day in the calendar month during which such period is to end),
such period shall, unless otherwise expressly required by the other provisions
of this Agreement, end on the last day of the calendar month.
1.3. Accounting Terms. Subject to Section 6.10, for purposes of this
Agreement, all accounting terms not otherwise defined herein shall have the
meanings assigned to them in conformity with GAAP.
1.4. Other Terms. All other terms contained in this Agreement shall, unless
the context indicates otherwise, have the meanings assigned to such terms by the
Uniform Commercial Code to the extent the same are defined therein.
SECTION 2. AMOUNT AND TERMS OF LOANS
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2.1. Revolving Credit Facility.
(a) Availability. Subject to the terms and conditions set forth in
this Agreement, each Lender hereby severally and not jointly agrees to make
revolving loans in Dollars (each individually, a "Loan" and, collectively, the
"Loans") to any Borrower from time to time during the period from the Initial
Funding Date to the Business Day next preceding the Revolving Credit Termination
Date, in an amount not to exceed such Lender's Pro Rata Share of its Revolving
Credit Commitment at such time. All Loans comprising the same Borrowing under
this Agreement shall be made by the Lenders simultaneously and proportionately
to their then respective Pro Rata Shares, it being understood that no Lender
shall be responsible for any failure by any other Lender to perform its
obligation to make a Loan hereunder nor shall the Revolving Credit Commitment of
any Lender be increased or decreased as a result of any such failure. Subject to
the provisions of this Agreement (including, but not limited to, Sections 2.7
and 2.14), any Borrower may repay any outstanding Loan on any day which is a
Business Day and any amounts so repaid may be reborrowed by any Borrower, up to
the amount available under this Section 2.1(a), at the time of such Borrowing,
until the Business Day next preceding the Revolving Credit Termination Date.
(b) Revolving Credit Termination Date. The Revolving Credit
Commitments shall terminate, and all outstanding Obligations shall be paid in
full (or, in the case of unmatured Letter of Credit Obligations, provision for
cash collateralization shall be made to the reasonable satisfaction of the
Issuing Banks and the Requisite Lenders but in any event not to exceed 100% of
the stated amounts of all unmatured Letter of Credit Obligations), on the
Revolving Credit Termination Date (whether this occurs by acceleration or
otherwise). Each Lender's obligation to make Loans shall terminate on the
Business Day next preceding the Revolving Credit Termination Date.
(c) Extension of Revolving Credit Termination Date. If no Default or
Event of Default then exists, Borrowers' Representative may request a one year
extension of the Revolving Credit Termination Date by making such request in
writing (an "Extension Request") to Agent no earlier than March 1st and no later
than May 1st of the calendar year in which the Revolving Credit Termination Date
occurs. The Revolving Credit Termination Date shall be extended for one (1) year
only if (i) no Default or Event of Default exists on the date of such extension
and (ii) Borrowers' Representative pays to Agent for the account of each Lender
on a Pro Rata Basis, the extension fee set forth in Section 2.15(e) no later
than ten (10) Business Days prior to the then existing Revolving Credit
Termination Date.
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(d) Authorized Agents. On the Closing Date and from time to time
thereafter, the Borrowers' Representative shall deliver to the Agent a
certificate from a Responsible Officer setting forth the names of the employees
and agents authorized to request Loans and Letters of Credit for each Borrower
and to request a conversion/continuation of any Loan and containing a specimen
signature of each such employee or agent. The employees and agents so authorized
shall also be authorized to act for any Borrower in respect of all other matters
relating to the Loan Documents. The Agent, Lenders and Issuing Banks shall be
entitled to rely conclusively on such employee's or agent's authority to request
such Loan or Letter of Credit or such conversion/continuation until the Agent
receives written notice to the contrary. None of the Agent, the Lenders, or the
Issuing Banks shall have any duty to verify the authenticity of the signature
appearing on any written Notice of Borrowing or Notice of
Conversion/Continuation or any other document, and, with respect to an oral
request for such a Loan or Letter of Credit or such conversion/continuation, the
Agent shall have no duty to verify the identity of any person representing
himself or herself as one of the employees or agents authorized to make such
request or otherwise to act on behalf of such Borrower. None of the Agent, any
Lender or any Issuing Bank shall incur any liability to any Borrower or any
other Person in acting upon any telephonic or facsimile notice referred to above
which the Agent, such Lender, or such Issuing Bank believes to have been given
by a person duly authorized to act on behalf of such Borrower and such Borrower
hereby indemnifies and holds harmless the Agent, each Lender and each Issuing
Bank from any loss or expense Agent, Lenders and/or the Issuing Banks might
incur in acting in good faith as provided in this Section 2.1.
2.2. Promise to Repay; Evidence of Indebtedness.
(a) Promise to Repay. Each Borrower hereby, jointly and severally,
agrees to pay when due the principal amount of each Loan, and further agrees to
pay all unpaid interest accrued thereon, in accordance with the terms of this
Agreement and the Notes. Each Borrower shall execute and deliver to each Lender
on the Closing Date (if requested by such Lender), a joint and several
promissory note, substantially in the form of Exhibit B, with appropriate
insertions, evidencing the Loans and thereafter shall execute and deliver such
other promissory notes substantially in the form of Exhibit B as are necessary
to evidence the Loans owing to the Lenders after giving effect to any assignment
thereof pursuant to Section 10.1 (all such promissory notes and all amendments
thereto, replacements thereof and substitutions therefor being collectively
referred to as the "Notes"; and "Note" means any one of the Notes).
(b) Loan Records. Each Lender shall maintain in accordance with its
usual practice a record (a "Loan Account") evidencing the Indebtedness of the
Borrowers to such Lender resulting from each Loan owing to such Lender from time
to time, including the amount of principal and interest payable and paid to such
Lender from time to time hereunder and under the Notes.
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(c) Entries Binding. The entries made in the Loan Account shall be
conclusive and binding for all purposes, absent manifest error and shall
evidence the Loans in the same manner as any promissory notes issued pursuant to
Section 2.2(a).
(d) Borrowers' Obligations.
(i) Upon any Event of Default each Borrower jointly, severally
and unconditionally promises to pay to the Agent such amounts as are necessary
to cure the Event of Default or, at the option of the Agent, as provided in
Section 8.2, such Borrower agrees to pay the outstanding Obligations in full.
(ii) Each Borrower's Obligation is unconditional except as
expressly set forth herein, and each Borrower agrees that the Agent, upon the
occurrence of an Event of Default, shall not be required to assert any claim or
cause of action against the Borrowers' Representative or any other Borrower or
Guarantor before asserting any claim or cause of action against a specific
Borrower under this Agreement.
(iii) Except as otherwise expressly provided herein or in the
Loan Documents, presentment, protest, demand, and notice of protest and demand
are hereby waived.
(iv) No Borrower's Obligation under this Agreement shall be
affected, modified, or impaired by the voluntary or involuntary liquidation,
dissolution, sale, or other disposition of all or substantially all of the
assets, marshalling of assets and liabilities, receivership, insolvency,
bankruptcy, assignment for the benefit of creditors, reorganization,
arrangements, composition with creditors or readjustment of, or other similar
proceedings affecting any other Borrower or Guarantor or the Borrowers'
Representative, or any of the assets belonging to any of them, nor shall this
Agreement be affected, modified, or impaired by the invalidity of any Note or
any of the other Loan Documents.
(v) Without notice to any other Borrower or Guarantor or the
Borrower's Representative, without the consent of a specific Borrower or
Guarantor or Borrowers' Representative, but subject to the provisions of
Sections 9 and 10.2 hereof, the Agent may:
(a) grant a specific Borrower or Guarantor extensions of the
time for payment of the Obligations or any part hereof;
(b) renew any of the Obligations;
(c) grant a specific Borrower or Guarantor extensions of
time for performance of agreements or other indulgences;
(d) compromise, settle, release, or terminate any or all of
the obligations, covenants, or agreements of any specific Borrower or Guarantor
under the Note or other Loan Documents;
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(e) at any time release any Guarantor from its Guaranty of
any of the Obligations; and
(f) with a specific Borrower's written consent, modify or
amend any obligation, covenant, or agreement of such Borrower as set forth in
its Note or any of the other Loan Documents (and such amendments shall
nevertheless be binding upon the other Borrowers).
(vi) This Agreement shall continue to be effective, or be
reinstated, as the case may be, if at any time whole or partial payment or
performance of any Obligations is or is sought to be rescinded or must otherwise
be restored or returned by the Agent or any Lender upon the insolvency,
bankruptcy, dissolution, liquidation or reorganization of any Borrower or
Guarantor upon or as a result of the appointment of a receiver, intervenor, or
conservator of, or trustee or similar officer for, any Borrower or Guarantor or
for any substantial part of its property, or otherwise, all as though such
payments and performance had not been made, in any case to the extent of the
performance rescinded or payments restored or returned.
(vii) Notwithstanding any provision contained in this Agreement
to the contrary, in the event of any bankruptcy or insolvency proceeding
involving LCIF, LCIFII or Net 3 or any Guarantor or in the event of any
challenge to the full enforceability of all or any of the Loan Documents by any
creditor of LCIF, LCIFII or Net 3 or any Guarantor or a trustee, receiver or
debtor-in-possession of, for or in respect of LCIF, LCIFII or Net 3 or any
Guarantor, the liability of LCIF, LCIFII or Net 3 or any Guarantor Under the
Loan Documents shall be limited to the lesser of the following amounts minus, in
either case, one dollar ($1.00):
(a) the lowest amount which would render LCIF, LCIFII or Net
3's or any Guarantor's undertakings under the Loan Documents a fraudulent
conveyance under the laws of the State of New York or other similar or analogous
law or statute of the state having jurisdiction over the subject matter; or
(b) the lowest amount which would render LCIF, LCIFII or Net
3's or any Guarantor's undertakings under the Loan Documents a fraudulent
transfer under Section 548 of the Bankruptcy Code of 1978, as amended.
Section 2.2 (d) (viii) shall control every other provision of the Loan
Documents except, however, this provision shall not be construed to prohibit a
valuation of the assets of LCIF, LCIFII or Net 3 or any Guarantor for an amount
exceeding (a) or (b) above, minus $1.00, at a date subsequent to the date
hereof, whereupon the individual liability of LCIF, LCIFII or Net 3 or any
Guarantor under the Loan Documents shall increase with the value of such assets
up to a maximum of $100,000,000.
2.3. Joint and Several Liability of the Borrowers and Guarantors.
(a) Each of the Borrowers and Guarantors is or will be accepting joint
and several liability hereunder and under the other Loan Documents in
consideration of the financial accommodations to be provided by the Lenders
under this Agreement, for the mutual benefit, directly and indirectly, of each
of the Borrowers and Guarantors and in consideration of the undertakings of each
other Borrower and Guarantor to accept joint and several liability for the
Obligations.
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(b) Each of the Borrowers and Guarantors, jointly and severally,
hereby irrevocably and unconditionally accepts, not merely as a surety but also
as a co-debtor, joint and several liability with the other Borrowers, with
respect to the payment and performance of all of the Obligations (including,
without limitation, any Obligations arising under this Section 2.3), it being
the intention of the parties hereto that all the Obligations shall be the joint
and several Obligations of each of the Borrowers and Guarantors without
preferences or distinction among them.
(c) If and to the extent that any of the Borrowers or Guarantors shall
fail to make any payment with respect to any of the Obligations as and when due
or to perform any of the Obligations in accordance with the terms thereof, then
in each such event, subject to the grace periods set forth therein, the other
Borrowers and Guarantors will make such payment with respect to, or perform,
such Obligation.
(d) The Obligations of each of the Borrowers and Guarantors under the
provisions of this Section 2.3 constitute full recourse Obligations of each of
the Borrowers and Guarantors enforceable against each such Person to the full
extent of its properties and assets, irrespective of the validity, regularity or
enforceability of this Agreement or any other circumstance whatsoever.
(e) Except as otherwise expressly provided in this Agreement or the
other Loan Documents, each of the Borrowers and Guarantors hereby waives notice
of acceptance of its joint and several liability, notice of any Loans made under
this Agreement, notice of any action at any time taken or omitted by the Agent
or any Lender under or in respect of any of the Obligations, and, generally, to
the extent permitted by applicable law, all demands, notices and other
formalities of every kind in connection with this Agreement. Except as otherwise
expressly provided in this Agreement or the other Loan Documents, each of the
Borrowers and Guarantors hereby assents to, and waives notice of, any extension
or postponement of the time for the payment of any of the Obligations, the
acceptance of any payment of any of the Obligations, the acceptance of any
partial payment thereon, any waiver, consent or other action or acquiescence by
Agent or any Lender at any time or times in respect of any default by any of the
Borrowers or Guarantors in the performance or satisfaction of any term,
covenant, condition or provision of this Agreement or the other Loan Documents,
any and all other indulgences whatsoever by the Agent or any Lender in respect
of any of the Obligations, and the taking, addition, substitution or release, in
whole or in part, at any time or times, of any security for any of the
Obligations or the addition, substitution or release, in whole or in part, of
any of the Borrowers or Guarantors. Without limiting the generality of the
foregoing, each of the Borrowers and Guarantors assents to any other action or
delay in acting or failure to act on the part of the Agent or any Lender with
respect to the failure by any of the Borrowers or Guarantors to comply with any
of its respective Obligations, including, without limitation, any failure
strictly or diligently to assert any right or to pursue any remedy or to comply
fully with applicable laws or regulations thereunder, which might, but for the
provisions of this Section 2.3, afford grounds for terminating, discharging or
relieving any of the Borrowers or Guarantors, in whole or in part, from any of
its Obligations under this Section 2.3, it being the intention of each of the
Borrowers and Guarantors that, so long as any of the Obligations hereunder
remain unsatisfied, the Obligations of such Borrowers and Guarantors under this
Section 2.3 shall not be discharged except by performance and then only to the
extent of such performance. The Obligations of each of the Borrowers and
Guarantors under this Section 2.3 shall not be diminished or rendered
unenforceable by any winding up, reorganization, arrangement, liquidation,
re-construction or similar proceeding with respect to any of the Borrowers and
Guarantors or any the Agent or any Lender. The joint and several liability of
the Borrowers and Guarantors hereunder shall continue in full force and effect
notwithstanding any absorption, merger, amalgamation or any other change
whatsoever in the name, membership, constitution or place of formation of any of
the Borrowers and Guarantors or the Agent or any Lender.
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(f) The provisions of this Section 2.3 are made for the benefit of the
Agent and each Lender and their permitted successors and assigns, and may be
enforced against any or all of the Borrowers and Guarantors as often as occasion
therefor may arise and without requirement on the part of the Agent or any
Lender first to marshal any of its claims or to exercise any of its rights
against any other Borrower or Guarantor or to exhaust any remedies available to
them against any other Borrower or Guarantor or to resort to any other source or
means of obtaining payment of any of the Obligations hereunder or to elect any
other remedy. The provisions of this Section 2.3 shall remain in effect until
all of the Obligations shall have been paid in full or otherwise fully
satisfied. If at any time, any payment, or any part thereof, made in respect of
any of the Obligations, is rescinded or must otherwise be restored or returned
by the Agent or any Lender upon the insolvency, bankruptcy or reorganization of
any of the Borrowers or Guarantor or otherwise, the provisions of this Section
2.3 will forthwith be reinstated in effect, as though such payment had not been
made.
2.4. Procedure for Borrowing Under the Revolving Credit Facility
(a) Notice of Borrowing. Whenever any Borrower desires to obtain a
Loan under Section 2.1, Borrowers' Representative shall deliver to Agent a
notice of borrowing (a "Notice of Borrowing") substantially in the form of
Exhibit C accompanied by a Certificate of Eligible Properties and Preferred
Interest Rate Calculation, substantially in the form of Exhibit D no later than
10:00 A.M. (New York time) at least three (3) Business Days in advance of the
proposed Funding Date for any Libor Rate Loan and no later than the Business Day
immediately preceding the proposed Funding Date for any Base Rate Loan. The
Notice of Borrowing shall specify and include (as appropriate):
(i) the Borrower and proposed Funding Date (which shall be a
Business Day);
(ii) the amount of the proposed Loan (which amount shall be in a
minimum aggregate amount of $1,000,000 and integral multiples of $100,000 in
excess of that amount);
7
(iii) whether such Loans will be Base Rate Loans or Libor Rate
Loans and, if Libor Rate Loans are specified, the initial Interest Period
requested for such Libor Rate Loans;
(iv) the account into which the net proceeds of the requested
Loan is to be credited;
(v) a statement as to whether the representations and warranties
contained in the Loan Documents are true, correct and accurate in all material
respects to the same extent as though made on and as of the date of such Notice
of Borrowing;
(vi) a statement as to whether any Default or Event of Default
has occurred and is continuing or would result from the proposed Borrowing;
(vii) In the event that any Lender shall fail to fund its Pro
Rata Share of any Loan on or prior to the applicable Funding Date (together with
any Lender described in Section 9.13, a "Defaulting Lender") and the Agent
and/or the other Lenders shall fail to advance the defaulted amount, Borrowers'
Representative may (but shall not be obligated to) cancel such Notice of
Borrowing upon notice to Agent given no later than 2:00 p.m. (EST) on the
Funding Date. Agent shall give Borrowers' Representative notice of any Lender's
default as soon as practicable after Agent becomes aware of such default. Except
as also provided in Sections 2.12 and 2.13, a Notice of Borrowing shall be
irrevocable, and the Borrowers shall be bound to make the borrowing specified in
such Notice of Borrowing in accordance therewith; and
(viii) a statement as to whether or not the Borrowers have met
and maintained the Preferred Interest Rate Standard and if so for what period of
time.
If Borrowers' Representative fails to specify the type of Loan (i.e. Base
Rate Loan or Libor Rate Loan) or an initial Interest Period, Borrowers'
Representative will be deemed, in each case, to have requested a one (1) month
Libor Rate Loan.
(b) Making of Loans.
(i) Promptly after receipt of a Notice of Borrowing under Section
2.4(a), the Agent shall notify each Lender by facsimile transmission of the
proposed Borrowing and send each Lender a copy of the Notice of Borrowing
including exhibits. Each Lender shall deposit an amount equal to its Pro Rata
Share of the Borrowing requested by the Borrowers' Representative with the Agent
at its office in Boston, Massachusetts or such other office as Agent shall
designate from time to time, in immediately available funds, not later than
11:00 a.m. (New York time) on the respective Funding Date therefor. Subject to
the fulfillment of the conditions precedent set forth in Section 5.1 (only in
respect of the Initial Funding Date) or Section 5.2, as applicable, the Agent
shall make the proceeds of such amounts received by it available to the
Borrowers' Representative at the Agent's office in Boston, Massachusetts on such
Funding Date (or on the date received if later than such Funding Date) and shall
disburse such proceeds in accordance with the Borrowers' Representative's
disbursement instructions set forth in the applicable Notice of Borrowing. The
failure of any Lender to deposit the amount described above with the Agent on
the applicable Funding Date shall not relieve any other Lender of its
obligations hereunder to make its Loan on such Funding Date. In the event the
conditions precedent set forth in Section 5.1 or Section 5.2 are not fulfilled
as of the proposed Funding Date for any Borrowing, the Agent shall promptly
return, by wire transfer of immediately available funds, the amount deposited by
each Lender to such Lender.
8
(ii) Unless the Agent shall have been notified by any Lender in
writing on the Business Day immediately preceding the applicable Funding Date in
respect of any Borrowing that such Lender does not intend to fund its Loan
requested to be made on such Funding Date, the Agent may assume that such Lender
has funded or will fund its Loan and is depositing the proceeds thereof with the
Agent on the Funding Date therefor, and the Agent in its sole discretion may,
but shall not be obligated to, disburse a corresponding amount to the Borrowers'
Representative on the applicable Funding Date. If the Loan proceeds
corresponding to that amount are advanced to the Borrowers' Representative by
the Agent but are not in fact deposited with the Agent by such Lender on or
prior to the applicable Funding Date, such Lender agrees to pay to the Agent
forthwith on demand such corresponding amount, together with interest thereon,
for each day from the date such amount is disbursed to or for the benefit of the
Borrowers until the date such amount is paid or repaid to the Agent at the
Federal Funds Rate for the first three (3) Business Days, and thereafter at the
interest rate applicable to such Borrowing. If such Lender shall pay to the
Agent the corresponding amount, the amount so paid shall constitute such
Lender's Loan. This Section 2.4(b)(ii) does not relieve any Lender of its
obligation to make its Loan on any applicable Funding Date.
2.5. Interest on the Loans and other Obligations.
(a) Generally. Each Loan shall be (i) a Libor Rate Loan or a Base Rate
Loan as selected or deemed to have been selected by Borrowers' Representative
initially at the time a Notice of Borrowing is given pursuant to Section 2.4(a);
or (ii) as selected pursuant to Section 2.6(c); except in each case for any
portion of a Libor Rate Loan which is converted to a Base Rate Loan pursuant to
Section 2.12 or 2.13. All Loans and the outstanding amount of all other
Obligations shall bear interest on the unpaid principal amount thereof from the
date such Loans are made and such other Obligations are due and payable until
paid in full but excluding the date of repayment (whether by acceleration or
otherwise), at the interest rates (such interest rate(s) as may be in effect
from time to time, the "Applicable Rate(s)") specified as follows:
(i) in the case of a Libor Rate Loan, at an interest rate per
annum for and during each Interest Period equal to the Libor Rate for such
Interest Period; and
(ii) in the case of the Base Rate Loan or such other Obligation,
at an interest rate per annum equal to the Base Rate in effect from time to time
plus the Applicable Base Rate Margin.
The applicable basis for determining the rate of interest on the Loans shall be
selected by the Borrowers' Representative at the time a Notice of Borrowing or a
Notice of Conversion/Continuation is delivered by the Borrowers' Representative
to the Agent; provided, however, the Borrowers' Representative may not select
the Libor Rate as the applicable basis for determining the rate of interest on
such a Loan if at the time of such selection a Default or Event of Default would
occur from such Borrowing or conversion or continuation or has occurred and is
continuing and further provided that, from and after the occurrence and during
the continuance of an Event of Default, each Libor Rate Loan then outstanding
may, at the Agent's option, be converted by the Agent to a Base Rate Loan. If on
any day any Loan is outstanding with respect to which a Notice of
Continuation/Conversion has not been delivered to the Agent in accordance with
the terms of this Agreement specifying the basis for determining the rate of
interest on that day, then for that day interest on that Loan shall be
determined by reference to the Libor Rate.
9
(b) Interest Payments.
(i) Interest accrued on each Loan shall be calculated on the 1st
day of each calendar month and shall be payable in arrears (A) on the first day
of each calendar month, commencing on the first such day following the making of
such Loan, (B) upon the payment or prepayment thereof in full or in part, and
(C) if not theretofore paid in full, at maturity (whether by acceleration or
otherwise) of such Loan. Whenever any payment to be made hereunder or under any
Loan Document, including, without limitation, any principal of or interest on
any Loan, shall become due and payable, or whenever the last day of any Interest
Period would otherwise occur, on a day which is not a Business Day, such payment
shall be made and the last day of such Interest Period shall occur on the next
succeeding Business Day and such extension of time shall in such case be
included in computing interest on such payment.
(ii) Interest accrued on the principal balance of any outstanding
Reimbursement Obligations shall be calculated on the last day of each calendar
month and shall be payable in arrears (A) on the first day of the calendar
month, commencing on the first such day following the incurrence of such
Reimbursement Obligations, (B) upon repayment thereof in full or in part, and
(C) if not theretofore paid in full, at the time such other Reimbursement
Obligations become due and payable (whether by acceleration or otherwise).
(c) Late Charge; Default Interest. If any Borrower shall fail to make
any payment of principal or interest on any portion of a Loan or any other
Obligation becoming due hereunder or under any of the Loan Documents within ten
(10) days of the date such payment is due Borrowers shall be subject to a late
charge of five percent (5%) of the amount of such payment. Borrowers shall be
entitled to a one-time waiver of the late charge prior to the Revolving Credit
Termination Date. Subsequent waivers during the term of the Facility shall be at
Agent's discretion. Upon the occurrence and during the continuance of an Event
of Default, Borrowers shall pay interest (to the extent permitted by law in the
case of interest on overdue interest) on such defaulted amount accruing from and
including the date of such Event of Default up to but excluding the date of
actual payment (after as well as before judgment) at a rate per annum which is
the sum of (i) four percent (4%) plus (ii) the Applicable Rate otherwise
payable. All payments due under this Section 2.5(c) shall be payable upon
demand.
(d) Interest Rate Determination. Upon determining the Applicable Rate
for each Interest Period, Agent shall promptly notify Borrowers' Representative.
10
2.6. Duration and Determination of Interest Period; Determination of
Interest Rate; Continuation/Conversion of Loans
(a) Duration and Determination of Interest Period. By giving notice as
set forth in Section 2.4(a) (with respect to a Borrowing of Libor Rate Loans) or
Section 2.6(c) (with respect to a conversion into or continuation of Libor Rate
Loans), Borrowers' Representative shall have the option, subject to the other
provisions of this Section 2.6, to select an interest period (each, an "Interest
Period") to apply to the Loans described in such notice, subject to the
following provisions:
(i) Subject to Sections 2.12 and 2.13, the Borrowers'
Representative may select, as to a particular Borrowing of Libor Rate Loans, an
Interest Period of either one (1), two (2), three (3), or six (6) months in
duration;
(ii) In the case of immediately successive Interest Periods
applicable to a Borrowing of Libor Rate Loans, each successive Interest Period
shall commence on the day on which the next preceding Interest Period expires;
(iii) If any Interest Period would otherwise expire on a day
which is not a Business Day, such Interest Period shall be extended to expire on
the next succeeding Business Day if the next succeeding Business Day occurs in
the same calendar month, and if there will be no succeeding Business Day in such
calendar month, the Interest Period shall expire on the immediately preceding
Business Day and such extension of time shall be included in computing interest
on such payment;
(iv) Borrowers' Representative may not select an Interest Period
as to any Loan if such Interest Period terminates later than the Revolving
Credit Termination Date;
(v) Borrowers' Representative may not select an Interest Period
with respect to any portion of principal of a Loan which extends beyond a date
on which any Borrower is required to make a scheduled payment of such portion of
principal; and
(vi) There shall be no more than six (6) Interest Periods in
effect at any one time for any Libor Rate Loans.
Notwithstanding the foregoing, Borrowers' Representative shall be entitled
to select an Interest Period of less than one (1) month in the event it wishes
to combine one or more Libor Rate Loans into a single Interest Period.
If Borrowers' Representative fails to specify an Interest Period in any
Notice of Borrowing, Borrowers' Representative shall be deemed to have selected
a one (1) month Libor Rate Loan; provided that if Borrowers' Representative
subsequently provides Agent with a new Notice of Borrowing properly specifying
an Interest Period for a Base Rate Loan, such Libor Rate Loan shall be converted
into a Base Rate Loan in accordance with the requirements for a
continuation/conversion under Section 2.6 (c) and subject to the provisions of
Section 2.14.
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(b) Determination of Interest Rate. As soon as practicable on the
second Business Day prior to the first day of each Interest Period (the
"Interest Rate Determination Date"), the Agent shall determine (pursuant to the
procedures set forth in the definition of "Libor Rate" in the case of a Libor
Rate Loan) the interest rate which shall apply to the Libor Rate Loans for which
an interest rate is then being determined for the applicable Interest Period and
shall promptly give notice thereof (in writing or by telephone confirmed in
writing) to the Borrowers' Representative and to each Lender. The Agent's
determination shall be presumed to be correct, absent manifest error, and shall
be binding upon each Borrower. Any failure by any Lender to take into account
the Libor Rate Reserve Percentage when calculating interest due on Libor Rate
Loans shall not constitute, whether by course of dealing or otherwise, a waiver
by such Lender of its right to collect such amount for any future period.
(c) Conversion/Continuation of Loans.
(i) Subject to the provisions of Sections 2.12 and 2.13,
Borrowers' Representative shall have the option (A) to convert at any time all
or any part of outstanding Base Rate Loans to Libor Rate Loans or (B) to convert
all or any part of outstanding Libor Rate Loans having Interest Periods which
expire on the same date to Base Rate Loans on such expiration date; or (C) to
continue all or any part of outstanding Libor Rate Loans having Interest Periods
which expire on the same date as Libor Rate Loans, and the succeeding Interest
Period of such continued Loans shall commence on such expiration date; provided,
however, no such outstanding Loan may be continued as, or be converted into, a
Libor Rate Loan (i) if the continuation of, or the conversion into, would
violate any of the provisions of Section 2.12 or 2.13 or (ii) if a Default or
Event of Default would occur as a result thereof or has occurred and is
continuing. Any conversion into or continuation of Libor Rate Loans under this
Section 2.6(c) shall be in a minimum amount of $1,000,000 and in integral
multiples of $100,000 in excess of that amount, except in the case of a
conversion into or a continuation of an entire Borrowing of Non Pro Rata Loans.
(ii) To convert or continue a Loan, Borrowers' Representative
shall deliver a Notice of Continuation/Conversion substantially in the form of
Exhibit E to Agent no later than 10:00 A.M. (New York City time) at least three
(3) Business Days in advance of the proposed continuation/conversion date in the
case of a conversion to, or a continuation of, Libor Rate Loans or at least one
(1) Business Day in advance of the proposed continuation/conversion date in the
case of a conversion to a Base Rate Loan. A Notice of Continuation/Conversion
shall specify (A) the proposed continuation/conversion date (which shall be a
Business Day), (B) the principal amount of the Loans to be continued/converted,
(C) whether such Loan shall be converted and/or continued, (D) in the case of a
continuation of, or conversion to, a Libor Rate Loan, the requested Interest
Period, (E) that the representations and warranties contained in the Loan
Documents are true, correct and accurate in all material respects to the same
extent as though made on and as of the date of such Notice of
Continuation/Conversion, (F) that no Default or Event of Default has occurred
and is continuing or would result from the proposed continuation/conversion; and
(G) a statement as to whether the Borrowers have met and maintained the
Preferred Interest Rate Standard and if so for what period of time.
12
Promptly after receipt of a Notice of Conversion/Continuation the Agent
shall notify each Lender by facsimile transmission of the proposed
conversion/continuation. Except as otherwise provided in Sections 2.12 and 2.13,
a Notice of Continuation/Conversion shall be irrevocable on and after the
related Interest Rate Determination Date, and Borrowers shall be bound to effect
a continuation and/or conversion (as applicable) in accordance therewith.
If Borrowers' Representative fails to give a valid Notice of
Continuation/Conversion in respect of any portion of a Libor Rate Loan which is
not repaid in accordance with the terms hereof at the end of the relevant
Interest Period, such portion shall be converted automatically into a one (1)
month Libor Rate Loan; provided that if Borrowers' Representative subsequently
gives a valid Notice of Continuation/Conversion in respect of such Libor Rate
Loan, it shall be converted into a Base Rate Loan in accordance with the
requirements for a continuation/conversion under this Section 2.6, subject to
Section 2.14.
2.7. Optional Prepayments; Mandatory Repayments.
(a) Borrowers may, at their option, prepay any Libor Rate Loans on the
last day of the applicable Interest Period, in whole or in part, without premium
or penalty, upon at least three Business Days' prior written notice to Agent,
specifying the amount of prepayment. Base Rate Loans may be prepaid on one
Business Days' prior written notice to Agent. Each notice of prepayment pursuant
to this clause (a) shall be irrevocable and the payment amount specified in such
notice shall be due and payable on the date specified, together with accrued
interest to such date on the Loans and all amounts (if any) payable pursuant to
Section 2.14. Partial prepayments of the Loans pursuant to this clause (a) shall
be in an aggregate principal amount of $100,000 or an integral multiple thereof.
(b) The Loans shall be subject to certain mandatory repricing pursuant
to and upon the occurrence of the events described in the provisions of Sections
2.12 and 2.13.
(c) Subject to the application of the provisions of Section 2.9,
Borrowers' Representative may designate the application of any prepayments to be
applied to principal on the Loans to the Libor Rate Loans, and/or Base Rate
Loans, as it may select, provided that if Borrowers' Representative does not
designate such application, such prepayments shall be applied (i) first to
outstanding Base Rate Loans, and (ii) second to outstanding Libor Rate Loans.
2.8. Computation of Interest and Fees. Interest, fees and other amounts
calculated on the basis of a rate per annum shall be computed on the basis of a
360-day year for the actual number of days elapsed. In computing interest on any
Loan, the date of the making of the Loan or the first day of an Interest Period,
as the case may be, shall be included and the date of payment or the expiration
date of an Interest Period, as the case may be, shall be excluded; provided,
however, if a Loan is repaid on the same day on which it is made, one (1) day's
interest shall be paid on such Loan.
13
2.9. Payments.
(a) Manner and Time of Payment. All payments of principal of and
interest on the Loans and Reimbursement Obligations and other Obligations
(including, without limitation, fees and expenses) which are payable to the
Agent, the Lenders or any Issuing Bank shall be made without condition or
reservation of right, in immediately available funds, delivered to the Agent
(or, in the case of Reimbursement Obligations, to the pertinent Issuing Bank)
not later than 1:00 p.m. (New York time) on the date and at the place due, to
such account of the Agent (or such Issuing Bank) as it may designate, for the
account of the Agent, the Lenders or such Issuing Bank, as the case may be; and
funds received by the Agent, including, without limitation, funds in respect of
any Loans to be made on that date, not later than 1:00 p.m. (New York time) on
any given Business Day shall be credited against payment to be made that day
and, for purposes of calculation of interest, funds received by the Agent after
that time shall be deemed to have been paid on the next succeeding Business Day.
Payments actually received by the Agent for the account of the Lenders or the
Issuing Banks, or any of them, not later than 1:00 p.m. (New York time) on a
Business Day shall be forwarded to such Lenders or Issuing Banks by the Agent on
the day of receipt. Payments received after 1:00 p.m. (New York time) shall be
forwarded to such parties not later than the next Business Day.
(b) Apportionment of Payments.
(i) Subject to the provisions of Section 2.9(b)(v) and Section
2.9(b)(vi), all payments of principal and interest in respect of outstanding
Loans, all payments in respect of Reimbursement Obligations, all payments of
fees and all other payments in respect of any other Obligations, shall be
allocated among such of the Lenders and Issuing Banks as are entitled thereto,
in proportion to their respective Pro Rata Shares or otherwise as provided
herein. Subject to the provisions of Section 2.9(b)(ii), all such payments and
any other amounts received by the Agent from or for the benefit of the Borrowers
shall be applied in the following order:
(A) to pay principal of and interest on any portion of the
Loans which the Agent may have advanced on behalf of any Lender for which the
Agent has not then been reimbursed by such Lender or any Borrower;
(B) to pay all other Obligations then due and payable; and
(C) as the Borrowers' Representative so designates.
Unless otherwise designated by the Borrowers' Representative, all principal
payments in respect of Loans shall be applied first, to repay outstanding Base
Rate Loans, and then to repay outstanding Libor Rate Loans with those Libor Rate
Loans which have earlier expiring Libor Rate Interest Periods being repaid prior
to those which have later expiring Libor Rate Interest Periods.
(ii) After the occurrence of an Event of Default and while the
same is continuing, the Agent shall apply all payments in respect of any
Obligations in the following order:
14
(A) first, to pay principal of and interest on any portion
of the Loans which the Agent may have advanced on behalf of any Lender for which
the Agent has not then been reimbursed by such Lender or any Borrower;
(B) second, to pay Obligations in respect of any reasonable
fees, expense reimbursements or indemnities then due to the Agent;
(C) third, to pay Obligations in respect of any fees,
expenses reimbursements or indemnities then due to the Lenders and the Issuing
Banks;
(D) fourth, to pay principal of and interest on Letter of
Credit Obligations (or, to the extent such Obligations are contingent, deposited
with the Agent to provide cash collateral in respect of such Obligations which
cash collateral shall be released and applied in accordance with the provisions
of this Section 2.9(b) in the event such Letter of Credit shall expire undrawn
upon);
(E) fifth, to the ratable payment of interest due in respect
of Loans;
(F) sixth, to the ratable payment or prepayment of principal
outstanding on Loans; and
(G) seventh, to the ratable payment of all other
Obligations.
The order of priority set forth in this Section 2.9(b)(ii) and the related
provisions of this Agreement are set forth solely to determine the rights and
priorities of the Agent, the Lenders, the Issuing Banks and other Holders as
among themselves; provided, however, if such application is other than in
accordance with the express designation of Borrowers' Representative, Agent
shall give prompt notice thereof to Borrowers' Representative. The order of
priority set forth in clauses (C) through (G) of this Section 2.9(b)(ii) may at
any time and from time to time be changed by the Requisite Lenders without
necessity consent of or approval by any Borrower (but with notice to the
Borrower's Representative), and Holder which is not a Lender, or any other
Person. The order of priority set forth in clauses (A) and (B) of this Section
2.9(b)(ii) may be changed only with the prior written consent of the Agent.
(iii) The Agent, in its sole discretion subject only to the terms
of this Section 2.9(b)(iii), may pay from the proceeds of Loans made to any
Borrower hereunder if made pursuant to a deemed request as provided in this
Section 2.9(b)(iii), all amounts payable by any Borrower hereunder, including,
without limitation, amounts payable with respect to payments of principal,
interest, Reimbursement Obligations and fees and all reimbursements for expenses
pursuant to Section 10.12 in any case, after the occurrence and during the
continuance of an Event of Default with respect to nonpayment of such amounts.
Each Borrower hereby irrevocably authorizes the Lenders to make Loans, which
Loans shall be Base Rate Loans, in each case, upon notice from the Agent as
described in the following sentence for the purpose of paying principal,
interest, Reimbursement Obligations and fees due from any Borrower, reimbursing
expenses pursuant to Section 10.12 and paying any and all other amounts due and
payable by any Borrower hereunder, under the Notes or under any other Loan
Document, from and after the occurrence and during the continuance of an Event
of Default with respect to nonpayment of such amounts, and agrees that all such
Loans so made shall be deemed to have been requested by it pursuant to Section
2.1 as of the date of the aforementioned notice. The Agent shall request Loans
on behalf of the Borrowers as described in the preceding sentence by notifying
the Lenders by facsimile transmission or other similar form of transmission
(which notice the Agent shall thereafter promptly transmit to the Borrowers'
Representative), of the amount and Funding Date of the proposed Borrowing and
that such Borrowing is being requested on the Borrowers' behalf pursuant to this
Section 2.9(b)(iii). On the proposed Funding Date, the Lenders shall make the
requested Loans in accordance with the procedures and subject to the conditions
specified in Section 2.1. Any Loans made under this Section 2.9(b)(iii) shall
cure the Event of Default for which such Loans were advanced to the extent such
Event of Default can be cured by the payment of money and the making of such a
Loan does not create a Default or Event of Default.
15
(iv) Subject to Section 2.9(b)(v), the Agent shall promptly
distribute to each Lender and Issuing Bank at its primary address set forth on
the appropriate signature page hereof or the signature page to the Assignment
and Acceptance by which it became a Lender or Issuing Bank, or at such other
address as a Lender, an Issuing Bank or other Holder may request in writing,
such funds as such Person may be entitled to receive, subject to the provisions
of Section 9; provided that the Agent shall under no circumstances be bound to
inquire into or determine the validity, scope or priority of any interest or
entitlement of any Holder and may suspend all payments or seek appropriate
relief (including, without limitation, instructions from the Requisite Lenders
or an action in the nature of interpleader) in the event of any doubt or dispute
as to any apportionment or distribution contemplated hereby.
(v) In the event that any Lender fails to fund its Pro Rata Share
of any Loan requested by any Borrower (hereinafter referred to as a "Non Pro
Rata Loan"), the proceeds of all amounts thereafter repaid to the Agent by the
Borrowers and otherwise required to be applied to such Defaulting Lender's share
of all other Obligations pursuant to the terms of this Agreement, shall be
advanced to the non-defaulting Lenders on a pro rata basis in respect of any Non
Pro Rata Loan made by them. If there are no outstanding Non Pro Rata Loans such
amounts shall be credited by the Agent as a payment from the Borrowers and
readvanced to the Borrowers if a Notice of Borrowing is outstanding and
partially unfunded to cure, in full or in part, such failure by the Defaulting
Lender. Notwithstanding anything in this Agreement to the contrary:
(A) the foregoing provisions of this Section 2.9(b)(v) shall
apply only with respect to the proceeds of payments of Obligations and shall not
affect the conversion or continuation of Loans pursuant to Section 2.6(c);
(B) a Lender shall be deemed to have cured its failure to
fund its Pro Rata Share of any Loan at such time as an amount equal to such
Lender's original Pro Rata Share of the requested principal portion of such Loan
is fully funded to the Borrower, whether made by such Lender itself or by
operation of the terms of this Section 2.9(b)(v), and whether or not the Non Pro
Rata Loan with respect thereto has been repaid, converted or continued;
16
(C) amounts advanced to any Borrower to cure, in full or in
part, any such Lender's failure to fund its Pro Rata Share of any Loan ("Cure
Loans") shall, at the election of Borrowers' Representative (made on the dates
such amounts are advanced pursuant to this Section 2.9(b)(v), either bear
interest at the Base Rate or shall be Libor Rate Loans with Interest Periods of
either one (1), three (3) or six (6) months in effect from time to time, and for
all other purposes of this Agreement shall be treated as if they were Base Rate
Loans or Libor Rate Loans; and
(D) regardless of whether or not an Event of Default has
occurred or is continuing, and notwithstanding the instructions of the
Borrowers' Representative as to its desired application, all repayments of
principal which, in accordance with the other terms of this Section 2.9, would
be applied to the outstanding Base Rate Loans shall be applied first, ratably to
all Base Rate Loans constituting Non Pro Rata Loans, second, ratably to Base
Rate Loans other than those constituting Non Pro Rata Loans or Cure Loans and,
third, ratably to Base Rate Loans constituting Cure Loans.
(E) any Defaulting Lender shall not receive any additional
compensation from any Borrower under Sections 2.11, 2.12 or 2.13.
(vi) In the case of a Defaulting Lender or in the event a Lender
(a "Designated Lender") shall have requested additional compensation from any
Borrower under Sections 2.11, 2.12 or 2.13, the Borrowers' Representative may,
at its sole election, (a) make written demand on such Defaulting Lender or
Designated Lender (with a copy to the Agent) for the Defaulting Lender or
Designated Lender to assign, and such Defaulting Lender or Designated Lender
shall assign pursuant to one or more duly executed Assignment and Acceptances to
one or more Eligible Assignees which the Borrowers' Representative shall have
identified for such purpose, all of such Defaulting Lender's or Designated
Lender's rights and obligations under this Agreement and the Notes (including,
without limitation, its Revolving Credit Commitment, all Loans owing to it, and
all of its participation interests in Letters of Credit) in accordance with
Section 10.1; provided such Eligible Assignee has agreed to accept such an
assignment or (b) repay all Loans owing to the Defaulting Lender or Designated
Lender together with interest accrued with respect thereto the date of such
repayment and all fees and other charges accrued or payable under the terms of
this Agreement for the benefit of the Defaulting Lender or Designated Lender to
the date of such repayment and remit to the Agent to be held as cash collateral
an amount equal to the participation interest of the Defaulting Lender or
Designated Lender in Letters of Credit. Any such repayment and remittance shall
be for the sole credit of the Defaulting Lender or Designated Lender and not for
any other Lender. All reasonable expenses incurred by the Agent in connection
with the foregoing shall be for the sole account of the Borrowers and shall
constitute Obligations hereunder. In no event shall Borrowers' Representative's
election under the provisions of this Section 2.9(b)(vi) affect any Borrower's
obligation to pay the additional compensation required under either Sections
2.11, 2.12 or Section 2.13.
17
(c) Payments on Non-Business Days. Whenever any payment to be made by
any Borrower hereunder or under the Notes is stated to be due on a day which is
not a Business Day, the payment shall instead be due on the next succeeding
Business Day (or, as set forth in Section 2.5(b), the next preceding Business
Day), and any such extension of time shall be included in the computation of the
payment of interest and fees hereunder.
2.10. Use of Proceeds and Letters of Credit Except for any amounts advanced
by Agent under Section 2.9(b)(iii), the proceeds of the Loans and the Letters of
Credit issued for the account of any Borrower hereunder shall be used directly
(or indirectly in the case of Letters of Credit) only (i) to refinance existing
indebtedness (ii) to provide financing for the acquisition, renovation,
expansion, construction and improvement of income-producing properties; and
(iii) for general working capital purposes.
2.11. Increased Costs.
(a) If any change in existing law or future applicable law, which
expression, as used herein, includes statutes, rules and regulations thereunder
and interpretations thereof by any competent court or by any governmental or
other regulatory body or official charged with the administration or the
interpretation thereof and requests, directives, instructions and notices at any
time or from time to time hereafter made upon or otherwise issued to any Lender
by any central bank or other fiscal, monetary or other authority (whether or not
having the force of law), shall:
(i) subject such Lender to any tax, levy, impost, duty, charge,
fee, deduction or withholding of any nature with respect to this Agreement, the
Loan Documents, Revolving Credit Commitment or the Loans (other than Excluded
Taxes); or
(ii) (materially change the basis of taxation (except for changes
in taxes on income or profits) of payments to such Lender of the principal of or
the interest on any Loans or any other amounts payable to such Lender under this
Agreement or the other Loan Documents; or
(iii) impose or increase or render applicable (other than to the
extent specifically provided for elsewhere in this Agreement) any special
deposit, reserve, assessment, liquidity, capital adequacy or other similar
requirements (whether or not having the force of law) against assets held by, or
deposits in or for the account of, or loans by, or commitments of such Lender;
or
(iv) impose on any party any other conditions or requirements
with respect to this Agreement, the Loan Documents, the Loans, the Revolving
Credit Commitment, or any class of loans or commitments of which any of the
Loans or the Revolving Credit Commitment forms a part;
and the result of any of the foregoing is:
(A) to increase the cost to such Lender of making, funding,
issuing, renewing, extending or maintaining any of the Loans or its Pro Rata
Share thereof; or
18
(B) to reduce the amount of principal, interest or other
amount payable to such Lender hereunder on account of its Pro Rata Share of any
of the Loans; or
(C) to require such Lender to make any payment or to forgo
any interest or other sum payable hereunder, the amount of which payment or
foregone interest or other sum is calculated by reference to the gross amount of
any sum receivable or deemed received by such Lender from the Borrowers
hereunder, then, and in each such case, the Borrowers will, within thirty (30)
days after demand made by such Lender at any time and from time to time and as
often as the occasion therefor may arise, pay to such Lender, such additional
amounts as such Lender shall determine in good faith will be sufficient to
compensate such Lender for such additional cost, reduction, payment or foregone
interest or other sum. It is agreed that such Lender shall make a reasonable
allocation of additional costs, reductions, payments or foregone interest
amounts or other sums among its Loans made hereunder and loans to other
borrowers affected thereby; shall treat the Borrowers hereunder in a manner
substantially the same as its treatment of its other customers under other loan
facilities affected thereby and shall notify Borrowers' Representative and Agent
of any such event as soon as reasonably possible after such Lender's discovery
thereof.
(b) If any change in existing law or future law, governmental
rule, regulation, policy, guideline or directive (whether or not having the
force of law) or the interpretation thereof by a court or governmental authority
with appropriate jurisdiction affects the amount of capital required or expected
to be maintained by banks or bank holding companies and as a result thereof a
Lender determines in good faith that the amount of capital required to be
maintained by it must be increased as a result of the Loans made or deemed to be
made pursuant hereto, then such Lender shall notify the Borrowers'
Representative of such fact as soon as reasonably possible after the discovery
thereof, and the Borrowers' Representative shall pay to such Lender from time to
time within 30 days after written demand, as an additional fee payable
hereunder, such amount as such Lender shall determine in good faith and certify
in a notice to the Borrowers' Representative to be an amount that will
adequately compensate such Lender in light of these circumstances for its
increased costs of maintaining such capital.
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2.12. Change in Law Rendering Libor Rate Loans Unlawful. Notwithstanding
anything to the contrary herein contained, in the event that any Requirements of
Law or any change in any existing Requirements of Law or in the interpretation
thereof by any Governmental Authority charged with the administration thereof,
in any case adopted, issued or effective after the date hereof, shall make it
unlawful for any Lender to fund any portion of the Libor Rate Loans, or to give
effect to its obligations as contemplated hereby with respect to its making
Libor Rate Loans Agent shall, upon the happening of such event, notify
Borrowers' Representative thereof in writing stating the reason therefor and the
effective date of such event, and upon the effectiveness of any such event the
obligation of such Lender to make or maintain its Libor Rate Loans to any
Borrower shall forthwith be suspended for the duration of such illegality and
during such illegality such Lender shall, upon payment of any amounts owing
under Section 2.14 with respect to such conversion, convert its share of the
Libor Rate Loans to (upon effectiveness of any such event and during the
continuance of such event) Base Rate Loans. If and when such illegality with
respect thereto ceases to exist, such suspension shall cease and Agent shall
notify Borrowers' Representative that the Base Rate Loan into which such share
of the Libor Rate Loans was converted pursuant to this Section 2.12 was
converted to a Libor Rate Loan, respectively, on the first day of the next
succeeding Interest Period.
2.13. Libor Rate Availability. In the event, and on each occasion, that on
the Business Day two Business Days prior to the commencement of any Interest
Period for the Libor Rate Loans, Agent shall have determined in good faith
(which determination shall, in the absence of manifest error, be conclusive and
binding upon Borrowers) that U.S. Dollar deposits in the amount of the principal
amount of the Libor Rate Loans which is to have such Interest Period are not
generally available in the London interbank market, or that the rate at which
such U.S. Dollar deposits are being offered will not accurately reflect the cost
to any Lender making or funding such principal amount of such Libor Rate Loans
during such Interest Period, or that reasonable means do not exist for
ascertaining the Libor Rate, Agent shall, as soon as practicable thereafter,
give written or telephonic notice of such determination to Borrowers'
Representative and (i) such principal amount of such Libor Rate Loans shall
automatically be converted, as of the last day of the Interest Period during
which such determination is made, to Base Rate Loans and (ii) any request by
Borrowers' Representative for such Libor Rate Loans pursuant to Section 2.4
hereof shall thereupon, and until the circumstances giving rise to such notice
no longer exist (as notified by Agent to Borrowers' Representative) be deemed a
request for the making of Base Rate Loans. If at any time Agent shall have
determined in good faith (which determination shall, in the absence of manifest
error, be conclusive and binding upon Borrowers) that any contingency has
occurred which adversely affects the London interbank market or that any
Requirement of Law or any change in any existing Requirement of Law or in the
interpretation thereof, in any case adopted, issued or effective after the date
hereof, or other circumstance affecting any Lender or the London interbank
market makes the funding of the Libor Rate Loans impracticable, Agent shall, as
soon as practicable thereafter, give written or telephonic notice of such
determination to Borrowers' Representative and (i) the Libor Rate Loans shall
automatically be converted, as of the last day of each Interest Period during
which such determination is made and in each case in respect of the principal
amount of the Libor Rate Loans having an Interest Period ending on such date, to
Base Rate Loans and (ii) any request by Borrowers' Representative for the Libor
Rate Loans pursuant to Section 2.4 hereof shall thereupon, and until the
circumstances giving rise to such notice no longer exist (as notified by Agent
to Borrowers' Representative), be deemed a request for the making of Base Rate
Loans. Upon such circumstances no longer existing, Borrowers' Representative may
thereafter request Libor Rate Loans in accordance with the terms hereof.
20
2.14. Indemnities. Each Borrower hereby jointly and severally agrees to
indemnify Agent and each Lender and each Issuing Bank on demand against any
actual loss or expense (including but not limited to any loss or expense
sustained or incurred in liquidating or employing or redeploying deposits from
third parties acquired to effect or maintain any Loan or any portion thereof
other than loss of profit or margin) and reasonable administrative costs which
any Lender or its branch or Affiliate may sustain or incur as a consequence of
(i) any default in payment or prepayment of the principal amount of any Loan or
any portion thereof or interest accrued thereon, as and when due and payable (at
the due date thereof, by irrevocable notice of payment or prepayment, or
otherwise), (ii) the effect of the occurrence of any Event of Default upon any
Loan, (iii) the payment or prepayment of any principal amount of any Loan or the
conversion of any portion of any Libor Rate Loan to Base Rate Loans on any day
other than the last day of an Interest Period or the payment of any interest on
such Loan, or portion thereof, on a day other than an Interest Payment Date for
the Loan or (iv) any failure of any Borrower to accept or make a Borrowing of
the Loans or continue or convert a Loan after delivery of a notice requesting a
Loan under Section 2.4 or, as the case may be, a notice requesting a
continuation or conversion under Section 2.6(c) or any failure by any Borrower
to satisfy any of the conditions precedent to the making of Loans hereunder
after it has requested the borrowing thereof (other than any such conditions
that are waived in accordance with the provisions hereof). The determination of
Agent of any amount payable under this Section 2.14 shall, in the absence of
manifest error, be conclusive and binding upon each Borrower.
2.15. Fees
(a) Standby Fee. The Borrowers' Representative shall pay to the Agent,
for the account of the Lenders based on their respective Pro Rata Shares, a fee
(the "Standby Fee"), on the daily amount by which the Revolving Credit
Commitment exceeds the Outstanding Amount for the period commencing on the
Closing Date and ending on the Revolving Credit Termination Date, such fee being
payable quarterly, in arrears, commencing on the first day of the calendar
quarter next succeeding the Closing Date. If the Outstanding Amount exceeds 50%
of the Revolving Credit Commitments the Standby Fee shall be fifteen (15) basis
points (.15%) per annum on the daily unused portion of the Revolving Credit
Commitments. If the Outstanding Amount is equal to or less than 50% of the
Revolving Credit Commitments, the Standby Fee shall be twenty five (25) basis
points (.25%) per annum of the daily unused portion of the Revolving Credit
Commitments. Notwithstanding the foregoing, in the event that any Lender fails
to fund its Pro Rata Share of any Loan requested by any Borrower which such
Lender is obligated to fund under the terms of this Agreement, (A) such Lender
shall not be entitled to any Standby Fees with respect to its Revolving Credit
Commitment until such failure has been cured in accordance with Section
2.9(b)(v)(B) and (B) until such time, the Standby Fee shall accrue in favor of
the Lenders which have funded their respective Pro Rata Shares of such requested
Loan, shall be allocated among such performing Lenders ratably based upon their
relative Revolving Credit Commitments, and shall be calculated based upon the
average amount by which the aggregate Revolving Credit Commitments of such
performing Lenders exceeds the sum of (I) the outstanding principal amount of
the Loans owing to such performing Lenders, plus (II) the outstanding
Reimbursement Obligations owing to such performing Lenders, plus (III) the
aggregate participation interests of such performing Lenders arising pursuant to
Section 3.1(e) with respect to undrawn and outstanding Letters of Credit. The
Standby Fee shall be calculated on the basis of the actual number of days
elapsed in a 360-day year.
21
(b) Letter of Credit Fee. In addition to any charges paid pursuant to
Section 3.1(g), the Borrowers' Representative shall pay to the Agent, for the
account of the Lenders based on their respective Pro Rata Shares, a fee for each
Letter of Credit (the "Letter of Credit Fee") accruing at a per annum rate equal
to the Applicable Libor Margin multiplied by the undrawn face amount of each
outstanding Letter of Credit and payable quarterly, in arrears, on the first day
of each calendar quarter after such Letter of Credit is issued, provided,
however, upon the occurrence of an Event of Default and for so long thereafter
as such Event of Default shall be continuing, the rate at which the Letter of
Credit Fee shall accrue and be payable shall be equal to the Default Rate.
(c) Structuring Fee. Borrowers jointly and severally agree to pay to
the Agent a structuring fee (the "Structuring Fee") as set forth in that certain
letter agreement dated as of the date hereof between the Borrowers'
Representative and the Agent.
(d) Upfront Fee. The Borrower's Representative shall pay to the Agent,
on or before the date hereof for the account of the Lenders based on their
respective Pro Rata Shares, a fee (the "Upfront Fee") equal to one-half of one
percent (.5%) of the Revolving Credit Commitments.
(e) Extension Fee. Upon the extension of the Revolving Credit
Termination Date, as provided in Section 2.1(c), Borrowers' Representative
agrees to pay Agent on or before the date specified in Section 2.1(c) for the
account of Lenders based on their respective Pro Rata Shares, an extension fee
(the "Extension Fee") equal to one-quarter of one percent (0.25%) of the
Revolving Credit Commitments.
(f) Calculation and Payment of Fees. All such fees shall be payable in
addition to, and not in lieu of, interest, expense reimbursements,
indemnification and other Obligations. Fees shall be payable to the Agent in
immediately available funds. All fees shall be fully earned and nonrefundable
when paid. All fees specified or referred to in this Agreement due to the Agent,
any Issuing Bank or any Lender, including, without limitation, those referred to
in this Section 2.15, shall bear interest at the interest rate specified in
Section 2.5(c) upon the occurrence and during the continuance of an Event of
Default with respect to the nonpayment thereof and shall constitute Obligations.
2.16. Usury. All agreements between Borrower, each Guarantor and each
Lender are hereby expressly limited so that in no contingency or event
whatsoever, whether by reason of acceleration of maturity of the indebtedness
evidenced hereby or otherwise, shall the amount paid or agreed to be paid to any
Lender for the use of the forbearance of the indebtedness evidenced hereby
exceed the maximum permissible under applicable law. As used herein, the term
"applicable law" shall mean the law in effect as of the date hereof, provided
however, that in the event there is a change in the law which results in a
higher permissible rate of interest, then the Notes shall be governed by such
new law as of its effective date. In this regard, it is expressly agreed that it
is the intent of each Borrower and each Lender in the execution, delivery and
acceptance of the Notes to contract in strict compliance with the laws of the
State of New York from time to time in effect. If, under or from any
circumstances whatsoever, fulfillment of any provision hereof or of any of the
Loan Documents at the time performance of such provision shall be due, shall
involve transcending the limit of validity prescribed by applicable law, then
the obligation to be fulfilled shall automatically be reduced to the limit of
such validity, and if under or from any circumstances whatsoever any Lender
should ever receive as interest an amount which would exceed the highest lawful
rate, such amount which would be excessive interest shall be applied to the
reduction of the principal debt balance evidenced hereby and not to the payment
of interest. This provision shall control every other provision of all
agreements between each Borrower, each Guarantor and each Lender.
22
2.17. Eligible Properties.
(A) "Eligible Property" means real estate which is and continues to be
at all times:
(i) wholly owned and operated by a Borrower or Guarantor pursuant
to a Fee Interest or Financeable Ground Lease; and
(ii) unencumbered except for Customary Permitted Liens;
(iii) leased pursuant to an Approved Lease to an Approved Tenant;
(iv) not used for the following purposes: restaurants, hotels,
movie theaters, parking facilities (except for on-site parking made available to
tenants and visitors of the Property), car dealerships, gambling enterprises,
convenience stores or gas stations or any other purpose which is not acceptable
to the Requisite Lenders; it being acknowledged and agreed by the Requisite
Lenders that the following uses shall be permitted uses hereunder: office,
retail, industrial, warehouse, distribution, research and development or data
processing; and
(B) In addition, no Property shall qualify or continue to qualify as
an Eligible Property unless the following are true, correct and accurate in all
material respects:
(i) Ownership and Condition of Eligible Property; Liens.
(a) Title. The Borrower or Guarantor owning or operating an Eligible
Property has good record, marketable and indefeasible title in such Eligible
Property pursuant to a Fee Interest or Financeable Ground Lease. Such title
shall be free and clear of all Liens and other matters affecting title except
for Customary Permitted Liens.
23
(b) Leases. Each of the Approved Leases and each Financeable Ground
Lease is in full force and effect and is a legally valid and binding obligation
of the Borrower or Guarantor who owns or ground leases the Eligible Property and
the other parties thereto. None of the Approved Leases or any Financeable Ground
Lease has been amended, modified or terminated, nor has there been any material
change in or waiver of any obligation contained in any such Approved Lease or
Financeable Ground Lease nor any set-off or counterclaim asserted by any tenant
(or landlord) that in any such case could result in a MAC. Such Borrower or
Guarantor has not mortgaged, pledged or otherwise encumbered any of the Approved
Leases or any Financeable Ground Lease or its right to obtain rental, interest
or other payments under any Approved Lease. Rent has not been collected more
than 30 days in advance (except for security deposits in an amount not in excess
of one month's installment of rent). No material default beyond any applicable
grace period or notice of termination under any Approved Lease or Financeable
Ground Lease is outstanding. Such Borrower or Guarantor has performed all of its
material repair and maintenance obligations (if any) and each tenant under each
Approved Lease and each ground lessor under any Financeable Ground Lease has
performed all of its material repair, maintenance or other obligations.
(c) Off-Site Utilities. All water, sewer, electric, gas, telephone and
other utilities are available to be installed or installed to the property lines
of such Eligible Property and, except in the case of drainage facilities, are
connected to the Buildings located thereon with valid permits and are adequate
to service the Buildings in material compliance with applicable law; and the
Buildings are properly and legally connected directly to, and served exclusively
by, public water and sewer systems.
(d) Access; Etc. The streets abutting such Eligible Property are
public roads, to which the Eligible Property has direct access by trucks and
other motor vehicles and by foot, or are private ways (with direct access by
trucks and other motor vehicles and by foot to public roads) to which the
Eligible Property has direct access without charge or liability for maintenance
or repair except as required in connection with the payment of association or
owner's fees pursuant to recorded instruments
(e) Independent Buildings. The Buildings are fully independent in all
respects from any other buildings or improvements not located on the Eligible
Property including, without limitation, in respect of structural integrity,
heating, ventilating and air conditioning, plumbing, mechanical and other
operating and mechanical systems, all of which are connected directly to
off-site utilities located in recorded easements or public streets or ways. The
Buildings are located on lots which are separately assessed for purposes of real
estate tax assessment and payment. The Buildings, all Building Service Equipment
and all paved or landscaped areas related to or used in connection with the
Buildings are located wholly within the perimeter lines of the lot or lots on
which the Eligible Properties are located except any real property covered by
any easement benefiting the Eligible Property.
(f) Condition of Building; No Asbestos. There are no material defects
in the roof, foundation, structural elements and masonry walls of the Buildings
or their heating, ventilating and air conditioning, electrical, sprinkler,
plumbing or other mechanical systems or their Building Service Equipment; the
Buildings are fully sprinklered; and no friable asbestos is located in or on the
Buildings.
24
(g) Building Compliance with Law; Permits. The Buildings as presently
constructed and used do not materially violate any applicable federal or state
law or governmental regulation, or any local ordinance, order or regulation,
including but not limited to laws, regulations, or ordinances relating to
zoning, building use and occupancy, subdivision control, fire protection, health
and sanitation; zoning laws permit use of the Buildings for their current use;
there is a sufficient number of parking spaces on the lot or lots on which the
Eligible Property is located or on any real property covered by any easement
benefiting the Eligible Property or to permit the Buildings to be used under the
zoning laws for their current use; and all private ways providing access to the
Eligible Property are zoned in a manner which will permit access to the
Buildings over such ways by trucks and other commercial and industrial vehicles.
All permits (collectively, the "Permits") required for the operation and
maintenance of the Property, including without limitation, building permits,
curb-cut permits, water connection permits, sewer extension or connection
permits and other permits (if any) required under the Federal Clean Air Act, as
amended, the Federal Clean Water Act, as amended (including, without limitation
a so-called "404 Permit"), and by state law or regulations consistent with the
requirements of said Acts, have been validly issued by the appropriate
Governmental Authority and are now in full force and effect.
(h) No Required Real Property Consents, Permits, Etc. All Permits,
utility installations and connections (including, without limitation, drainage
facilities, curb cuts and street openings), and private consents required for
the maintenance, operation, servicing and use of any Eligible Property for its
current use have been granted, effected, or performed and completed (as the case
may be) and any fees or charges therefor have been fully paid.
(i) Suits; Judgments. There are no outstanding notices, suits, orders,
decrees or judgments relating to zoning, building use and occupancy, subdivision
control, fire protection, health, sanitation, or other violations affecting,
against, or with respect to, any Eligible Property or any part thereof.
(j) Insurance. No notices from any insurer or its agent requiring
performance of any work with respect to any Eligible Property have been issued.
(k) Real Property Taxes; Special Assessments. There are no unpaid or
outstanding real estate or other taxes or assessments on or against any Eligible
Property or any part thereof (except only real estate taxes not yet due and
payable). There are no betterment assessments or other special assessments
presently pending with respect to any portion of any Eligible Property and no
Borrower or Guarantor has received any notice of any such special assessment
being contemplated.
(l) Historic Status. No Building is a historic structure or landmark,
and no Eligible Property is within any historic district pursuant to any
federal, state or local law or governmental regulations.
(m) Eminent Domain. There are no pending eminent domain proceedings
against the Eligible Property or any part thereof, and no such proceedings are
presently threatened or contemplated by any taking authority.
25
(n) Compliance with Environmental Laws. Each tenant is in compliance
with all applicable statutes, laws, rules, regulations and orders of all
Governmental Authorities relating to environmental protection, pollution control
and Hazardous Materials and with respect to the conduct of its business and the
ownership of its properties, except for such noncompliance which would not
result in imposition of Liens, fines, penalties, injunctive relief or other
civil or criminal liabilities or which, in the aggregate, could not have a MAC.
(o) Pollution; Hazardous Materials. Each Borrower or Guarantor who
owns such Eligible Property has made and will continue to make such inquiries,
and has and will continue to cause such testing, surveying, inspection or other
action, with respect to such Eligible Property as is necessary or desirable in
connection with Hazardous Materials which might be present in the air, soil,
surface water or groundwater at such Eligible Property. There are no Hazardous
Materials present in the air, soil, surface water or groundwater at such
Eligible Property and no Hazardous Materials (except (i) Hazardous Materials
maintained in accordance with all Requirements of Law and necessary for the
business operations of any such Eligible Property, including, without
limitation, petroleum used for heating oil and (ii) Hazardous Materials that are
not reasonably likely to result in a MAC in respect of such Eligible Property
and which are used in the operation of such Eligible Property).
(C) Eligible Property Designation. In order to achieve or maintain the
Preferred Interest Rate Standard any Borrower or Guarantor may submit to Lender
from time to time a Certificate of Eligible Properties and Preferred Interest
Rate Calculation identifying one or more Properties that such Borrower or
Guarantor represents qualifies under the terms of this Agreement to be an
Eligible Property.
(D) Guaranties. In the event a Property is submitted as an Eligible
Property that is not owned by a Borrower or existing Guarantor, such Property
shall only qualify as an Eligible Property pursuant to this Section 2.17 if a
Guaranty has been executed by the owner of such Eligible Property and delivered
to the Agent.
(E) Approved Eligible Properties. Subject to the continued
requirements of Sections 2.17(a) and (b), the Properties identified on Schedule
1 hereto are hereby designated as Eligible Properties as of the Closing Date.
2.18. Addition or Withdrawal of Eligible Property. Borrowers'
Representative shall have the ability to add or withdraw any Eligible Property
from the terms of this Agreement at any time upon written notice to the Agent
accompanied by an updated Certificate of Eligible Properties and Preferred
Interest Rate Calculation. Any Eligible Property that is no longer listed on
such certificate or that Agent reasonably determines does not meet the
requirements of an Eligible Property shall no longer be considered in
determining whether the Preferred Interest Rate Standard has been met. Any owner
of a withdrawn Eligible Property that was a Guarantor under the Facility shall
be released from its Guaranty with respect to such withdrawn Eligible Property.
26
2.19. Exclusion of Eligible Properties. If any Eligible Property fails to
meet all of the requirements of Sections 2.17(a) and (b) at any time, then such
Eligible Property shall no longer constitute an Eligible Property for the
purposes of determining whether Borrowers qualify for the Preferred Interest
Rate Standard. Within two (2) Business Days after an Eligible Property fails to
meet all of the requirements of Section 2.17(a) or (b), the Borrowers'
Representative shall (i) notify the Agent of the date on which such event
occurred and the reason why such Property no longer qualifies as an Eligible
Property; and (ii) submit an updated Certificate of Eligible Property and
Preferred Interest Rate Calculation to the Agent.
SECTION 3. LETTERS OF CREDIT
-----------------
3.1. Letters of Credit. Subject to the terms and conditions set forth in
this Agreement, each Issuing Bank hereby severally agrees to issue for the
account of any Borrower one or more Letters of Credit having an aggregate
undrawn face amount of up to $10,000,000, subject to the following provisions:
(a) Types and Amounts. An Issuing Bank shall not have any obligation
to issue, amend or extend, and shall not issue, amend or extend, any Letter of
Credit at any time:
(i) if the aggregate Letter of Credit Obligations with respect to
such Issuing Bank, after giving effect to the issuance, amendment or extension
of the Letter of Credit requested hereunder, shall exceed any limit imposed by
law or regulation upon such Issuing Bank;
(ii) if the Issuing Bank receives written notice from the Agent
at or before 1:00 p.m. (New York time) on the date of the proposed issuance,
amendment or extension of such Letter of Credit that (A) immediately after
giving effect to the issuance, amendment or extension of such Letter of Credit,
the Letter of Credit Obligations at such time would exceed $10,000,000, or (B)
one or more of the conditions precedent contained in Section 5.2 would not on
such date be satisfied, unless such conditions are thereafter or have previously
been satisfied and written notice of such satisfaction is given to the Issuing
Bank by the Agent (and an Issuing Bank shall not otherwise be required to
determine that, or take notice whether, the conditions precedent set forth in
Section 5.2, have been satisfied):
(iii) which has an expiration date later than the earlier of (A)
the date one (1) year after the date of issuance or (B) the Business Day next
preceding the scheduled Revolving Credit Termination Date; or
(iv) which is in a currency other than Dollars.
(b) Conditions. In addition to being subject to the satisfaction of
the conditions precedent contained in Sections 5.1 and 5.2, as applicable, the
obligation of an Issuing Bank to issue, amend or extend any Letter of Credit is
subject to the satisfaction in full of the following conditions:
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(i) if the Issuing Bank so requests, the Borrower on whose behalf
the Letter of Credit has been issued and the Borrowers' Representative shall
have executed and delivered to such Issuing Bank and the Agent a Letter of
Credit Reimbursement Agreement and such other documents and materials as may be
required pursuant to the terms thereof; provided, however, that such Letter of
Credit Reimbursement Agreement and other documents and agreements shall in no
event require delivery of any additional security by any Borrower or otherwise
increase the obligations or reduce the rights of the Borrowers hereunder or
otherwise be inconsistent with such rights or obligations; and
(ii) the terms of the proposed Letter of Credit shall otherwise
be satisfactory to the Issuing Bank in its reasonable discretion.
(c) Issuance of Letters of Credit.
(i) The Borrowers' Representative shall give Agent written notice
to issue or cause to be issued a Letter of Credit not later than 10:00 a.m. (New
York time) on the third (3rd) Business Day preceding the requested date for
issuance thereof under this Agreement, or such shorter notice as may be
acceptable to an Issuing Bank and the Agent. Such notice shall be irrevocable
unless and until such request is denied by the Agent and shall include a Notice
of Borrowing which complies with the requirements of Section 2.4(a) (modified as
appropriate) and specify (A) that such Letter of Credit is solely for the
account of and the name of a specific Borrower, (B) the stated amount of the
Letter of Credit requested, (C) the effective date (which shall be a Business
Day) of issuance of such Letter of Credit, (D) the date on which such Letter of
Credit is to expire (which shall be a Business Day and no later than the earlier
of the Business Day immediately preceding the then existing Revolving Credit
Termination Date or one (1) year from the date of issuance), (E) the Person for
whose benefit such Letter of Credit is to be issued, (F) all other relevant
terms of such Letter of Credit, and (G) the amount of the then outstanding
Letter of Credit Obligations.
(ii) Each Issuing Bank shall give the Agent written notice, or
telephonic notice confirmed promptly thereafter in writing, of the issuance,
amendment or extension of a Letter of Credit (which notice the Agent shall
promptly transmit by telegram, facsimile transmission, or similar transmission
to each Lender).
(d) Reimbursement Obligations; Duties of Issuing Banks.
(i) Notwithstanding any provisions to any Letter of Credit
Reimbursement Agreement:
(A) provided that no Event of Default shall be continuing
hereunder and provided that there is then unfunded availability hereunder, the
Agent shall make Loan advances to the Issuing Bank to repay amounts drawn under
such Letter of Credit, or if either of the foregoing conditions are not
satisfied, the Borrowers' Representative shall reimburse the Issuing Bank for
amounts drawn under such Letter of Credit, in Dollars, no later than the date
(the "Reimbursement Date") which is the 10 Business Days after the Borrowers'
Representative receives written notice from the Issuing Bank that payment has
been made under such Letter of Credit by the Issuing Bank; and
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(B) all Reimbursement Obligations with respect to any Letter
of Credit shall bear interest at the rate applicable to Base Rate Loans in
accordance with Section 2.5(a) from the date of the relevant drawing under such
Letter of Credit until the Reimbursement Date and thereafter at the rate
applicable to Base Rate Loans in accordance with Section 2.5(c).
(ii) The Issuing Bank (if not the Agent) shall give the Agent
written notice, or telephonic notice confirmed promptly thereafter in writing,
of all drawings under a Letter of Credit and the payment (or the failure to pay
when due) by the Borrowers' Representative on account of a Reimbursement
Obligation (which notice the Agent shall promptly transmit by telegram,
facsimile transmission or similar transmission to each Lender).
(iii) No action taken or omitted in good faith by an Issuing Bank
under or in connection with any Letter of Credit shall put such Issuing Bank
under any resulting liability to any Lender, any Borrower or, so long as it is
not issued in violation of Section 3.1(a), relieve any Lender of its obligations
hereunder to such Issuing Bank. Solely as between the Issuing Banks and the
Lenders, in determining whether to pay under any Letter of Credit, the
respective Issuing Bank shall have no obligation to the Lenders other than to
confirm that any documents required to be delivered under a respective Letter of
Credit appear to have been delivered and that they appear on their face to
comply with the requirements of such Letter of Credit.
(e) Participations.
(i) Immediately upon issuance by an Issuing Bank of any Letter of
Credit in accordance with the procedures set forth in this Section 3.1, each
Lender shall be deemed to have irrevocably and unconditionally purchased and
received from that Issuing Bank, without recourse or warranty, an undivided
interest and participation in such Letter of Credit to the extent of such
Lender's Pro Rata Share, including, without limitation, all obligations of the
Borrower with respect thereto and any security therefor and guaranty pertaining
thereto.
(ii) If any Issuing Bank makes any payment under any Letter of
Credit and the Borrowers' Representative does not repay such amount to the
Issuing Bank on or before the Reimbursement Date (and such amount is not repaid
with Loan advances as provided above), the Issuing Bank shall promptly notify
the Agent, which shall promptly notify each Lender, and each Lender shall
promptly and unconditionally pay to the Agent for the account of such Issuing
Bank, in immediately available funds, the amount of such Lender's Pro Rata Share
of such payment (net of that portion of such payment, if any, made by such
Lender in its capacity as an Issuing Bank) , and the Agent shall promptly pay to
the Issuing Bank such amounts received by it, and any other amounts received by
the Agent for the Issuing Bank's account, pursuant to this Section 3.1(e). If a
Lender does not make its Pro Rata Share of the amount of such payment available
to the Agent, such Lender agrees to pay to the Agent for the account of the
Issuing Bank, forthwith on demand, such amount together with interest thereon,
for the first three (3) Business Days after the date such payment was first due
at the Federal Funds Rate, and thereafter at the interest rate then applicable
to Base Rate Loans in accordance with Section 2.5(a). The failure of any Lender
to make available to the Agent for the account of an Issuing Bank its Pro Rata
Share of any such payment shall neither relieve any other Lender of its
obligation hereunder to make available to the Agent for the account of such
Issuing Bank such other Lender's Pro Rata Share of any payment on the date such
payment is to be made nor increase the obligation of any other Lender to make
such payment to the Agent.
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(iii) Whenever an Issuing Bank receives a payment on account of a
Reimbursement Obligation, including any interest thereon, as to which the Agent
has previously received payments from any Lender for the account of such Issuing
Bank pursuant to this Section 3.1(e), such Issuing Bank shall promptly pay to
the Agent and the Agent shall promptly pay to such Lender an amount equal to
such Lender's Pro Rata Share thereof. Each such payment shall be made by such
Issuing Bank or the Agent, as the case may be, on the Business Day on which such
Person receives the funds paid to such Person pursuant to the preceding
sentence, if received prior to 11:00 a.m. (New York time) on such Business Day,
and otherwise on the next succeeding Business Day.
(iv) An Issuing Bank shall furnish to the Agent and each Lender
who makes a written request therefor, copies of any Letter of Credit, Letter of
Credit Reimbursement Agreement, and related amendment to which such Issuing Bank
is party and such other documentation as may be requested by Agent or such
Lender.
(v) The obligations of a Lender to make payments to the Agent for
the account of any Issuing Bank with respect to a Letter of Credit shall be
irrevocable, shall not be subject to any qualification or exception whatsoever
except willful misconduct or gross negligence of such Issuing Bank, and shall be
honored in accordance with this entire Section 3 (irrespective of the
satisfaction of the conditions described in Sections 5.1 and 5.2, as applicable)
under all circumstances, including, without limitation, any of the following
circumstances:
(A) any lack of validity or enforceability of this Agreement
or any of the other Loan Documents;
(B) the existence of any claim, setoff, defense or other
right which any Borrower may have at any time against a beneficiary named in a
Letter of Credit or any transferee of a beneficiary named in a Letter of Credit
(or any Person for whom any such transferee may be acting), the Agent, the
Issuing Bank, any Lender, or any other Person, whether in connection with this
Agreement, any Letter of Credit, the transactions contemplated herein or any
unrelated transactions (including any underlying transactions between the
account party and beneficiary named in any Letter of Credit);
(C) any draft, certificate or any other document presented
under the Letter of Credit having been determined to be forged, fraudulent,
invalid or insufficient in any respect or any statement therein being untrue or
inaccurate in any respect;
(D) the surrender or impairment of any security for the
performance or observance of any of the terms of any of the Loan Documents;
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(E) any failure by the Issuing Bank to make any reports
required pursuant to Section 3.1(h) or the inaccuracy of any such report; or
(F) the occurrence of any Default or Event of Default.
(f) Payment of Reimbursement Obligations.
(i) Unless paid with a Loan advance hereunder, each Borrower
unconditionally agrees, on a joint and several basis, to pay to each Issuing
Bank, in Dollars, the amount of all Reimbursement Obligations, interest and
other amounts payable to such Issuing Bank under or in connection with the
Letters of Credit when such amounts are due and payable, irrespective of any
claim, setoff, defense or other right which any Borrower may have at any time
against any Issuing Bank or any other Person.
(ii) In the event any payment by any Borrower received by an
Issuing Bank with respect to a Letter of Credit and distributed by the Agent to
the Lenders on account of their participations is thereafter set aside, avoided
or recovered from such Issuing Bank in connection with any receivership,
liquidation or bankruptcy proceeding, each Lender which received such
distribution shall, upon demand by such Issuing Bank, contribute such Lender's
Pro Rata Share of the amount set aside, avoided or recovered together with
interest at the rate required to be paid by such Issuing Bank upon the amount
required to be repaid by it.
(g) Issuing Bank Charges. Borrowers' Representative shall pay to each
Issuing Bank, solely for its own account, the standard administrative charges
assessed by such Issuing Bank (not to exceed $500 each) in connection with the
issuance, administration, amendment and payment or cancellation of Letters of
Credit and such compensation in respect of such Letters of Credit for the
Borrowers' Representative's account as may be agreed upon by the Borrowers'
Representative and such Issuing Bank from time to time.
(h) Indemnification; Exoneration.
(a) In addition to all other amounts payable to an Issuing Bank,
each Borrower hereby agrees to defend (by counsel selected by Borrowers'
Representative and reasonably acceptable to the Issuing Bank), indemnify, and
save the Agent, each Issuing Bank and each Lender harmless from and against any
and all claims, demands, liabilities, penalties, damages, losses (other than
loss of profits), costs, charges and expenses (including reasonable attorneys'
fees but excluding taxes) which the Agent, such Issuing Bank or such Lender may
incur or be subject to as a consequence, direct or indirect, of (A) the issuance
of any Letter of Credit other than as a result of the gross negligence or
willful misconduct of the Issuing Bank, as determined by a court of competent
jurisdiction, or (B) the failure of the Issuing Bank issuing a Letter of Credit
to honor a drawing under such Letter of Credit as a result of any act or
omission, whether rightful or wrongful, of any present or future de jure or de
facto government or Governmental Authority.
(b) As between each Borrower on the one hand and the Agent, the
Lenders and the Issuing Banks on the other hand, each Borrower assumes all risks
of the acts and omissions of, or misuse of Letters of Credit by, the respective
beneficiaries of the Letters of Credit. In furtherance and not in limitation of
the foregoing, subject to the provisions of the Letter of Credit Reimbursement
Agreements, the Issuing Banks and the Lenders shall not be responsible, for: (A)
the form, validity, legality, sufficiency, accuracy, genuineness or legal effect
of any document submitted by any party in connection with the application for
and issuance of the Letters of Credit, even if it should in fact prove to be in
any or all respects invalid, insufficient, inaccurate, fraudulent or forged; (B)
the validity, legality or sufficiency of any instrument transferring or
assigning or purporting to transfer or assign a Letter of Credit or the rights
or benefits thereunder or proceeds thereof, in whole or in part, which may prove
to be invalid or ineffective for any reason; (C) failure of the beneficiary of a
Letter of Credit to duly comply with conditions required in order to draw upon
such Letter of Credit; provided, however that with respect to any Letter of
Credit, the foregoing subclause (C) shall not relieve the Issuing Bank of any
liability it may have to any Borrower for any actual damages sustained by such
Borrower arising from a wrongful payment under such Letter of Credit made as a
result of the Issuing Bank's gross negligence or willful misconduct; (D) errors,
omissions, interruptions or delays in transmission or delivery of any messages,
by mail, cable, telegraph, telex or otherwise, whether or not they be in cipher;
(E) errors in interpretation of technical terms; (F) any loss or delay in the
transmission or otherwise of any document required in order to make a drawing
under any Letter of Credit or of the proceeds thereof (other than anything for
which an Issuing Bank would be liable under clause (C)); (G) the misapplication
by the beneficiary of a Letter of Credit of the proceeds of any drawing under
such Letter of Credit.
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(i) Obligations Several. The obligations of each Issuing Bank and each
Lender under this entire Section 3 are several and not joint, and no Issuing
Bank or Lender shall be responsible for the obligation of any other Issuing Bank
or Lender to issue Letters of Credit or assume a participation obligation in
connection therewith (as applicable).
(j) Outstanding Letters of Credit. The Letters of Credit identified on
Schedule 2 attached hereto shall be deemed to constitute Letters of Credit
issued under this Revolving Credit Facility and subject to all the terms and
conditions of this Agreement.
SECTION 4. REPRESENTATIONS AND WARRANTIES
------------------------------
In order to induce the Agent and each Lender to enter into this Agreement
and to make the Loans herein provided for, each Borrower hereby covenants,
represents and warrants to Agent and each Lender that:
4.1. Financial Condition. The consolidated balance sheet of Lexington as of
December 31, 2002 and the related statements of income, stockholders' equity and
cash flows for the fiscal years ended on such dates, certified by a "big four"
accounting firm or other certified independent accounting firm of nationally
recognized standing reasonably acceptable to Agent and Lexington's annual report
on Form 10-K for the fiscal year ended 2002 filed with the Commission, copies of
which have heretofore been furnished to Agent, are complete and correct and
present fairly the financial condition and performance of Lexington as at such
dates and fiscal periods in all material respects. The unaudited consolidated
balance sheet of Lexington as of 3/31/03 and the related unaudited statements of
income, for the three month period ended on 3/31/03 and Lexington's report on
Form 10-Q for the applicable calendar quarter certified by a Responsible
Officer, copies of which have heretofore been furnished to Agent, are complete
and correct and present fairly the financial condition of Lexington as at such
date, and the stockholders' equity and cash flows for the three month period
then ended (subject to normal year-end audit adjustment) in all material
respects. All such financial statements, including the related schedules and
notes thereto, have been prepared in accordance with GAAP applied consistently
throughout the periods involved (except as approved by such accountants or
Responsible Officer, as the case may be, and as disclosed therein). Lexington
does not have any material Contingent Obligation, contingent liabilities or
liability for taxes, long-term leases or unusual forward or long-term
commitment, which is not reflected in the foregoing statements, in the notes
thereto, or in Lexington's Form 10-K or 10-Q.
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4.2. No Material Adverse Effect. Since the date of the most recent
financial statements delivered to Agent there has been no Material Adverse
Effect, and no event has occurred and no condition exists which is reasonably
likely to have a Material Adverse Effect on any Borrower.
4.3. Existence; Borrowers' and Guarantors' Compliance with Law. Lexington
is a trust duly organized, validly existing and in good standing under the laws
of the State of Maryland. Each Borrower and Guarantor is a duly organized and
validly existing in its jurisdiction of organization. Each (a) has full power
and authority and the legal right to own and lease its property and to conduct
the business in which it is currently engaged, (b) is duly qualified or licensed
and is in good standing under the laws of each jurisdiction where its ownership
or lease of property or the conduct of its business require such qualification,
and (c) is in compliance with all Requirements of Law except to the extent that
the failure to comply therewith is not reasonably likely to have, in the
aggregate, a Material Adverse Effect.
4.4. Power; Authorization; Enforceable Obligations. Each Borrower and
Guarantor has the power and authority and the legal right to execute, deliver
and perform each of the Loan Documents executed by it and, if applicable, to
borrow hereunder and has taken all necessary action to authorize the borrowings
hereunder, on the terms and conditions of the Loan Documents and to authorize
the execution, delivery and performance of each of the Loan Documents. No
consent or authorization of, filing with, or other act by or in respect of any
Governmental Authority is required to be made or obtained by any Borrower or
Guarantor in connection with the borrowings hereunder or with the execution,
delivery, performance, validity or enforceability of the Loan Documents. The
Agreement has been, and each Loan Document will be, duly executed and delivered
on behalf of each Borrower or Guarantor and this Agreement constitutes, and each
other Loan Document when executed and delivered will constitute, a legal, valid
and binding obligation of each Borrower or Guarantor enforceable against such
Borrower or Guarantor in accordance with its terms subject to the effect of
bankruptcy, reorganization, insolvency and similar laws and general principles
of equity.
4.5. No Legal Bar. The execution, delivery and performance of this
Agreement and the other Loan Documents, the borrowing hereunder and the use of
the proceeds thereof, will not violate any Requirement of Law or any Contractual
Obligation of any Borrower or Guarantor and will not result in, or require, the
creation or imposition of any Lien on any of its properties or revenues pursuant
to any Requirement of Law or Contractual Obligation.
33
4.6. No Material Litigation. No litigation, investigation or proceeding of
or before any arbitrator or Governmental Authority is pending or, to the best
knowledge and belief of each Borrower and Guarantor, threatened against any
Borrower or Guarantor or against any of its properties or revenues (a) with
respect to this Agreement or the other Loan Documents, the Approved Leases, or
any of the transactions contemplated hereby or thereby, or (b) relating to the
Properties, or the ownership or the operation thereof or the conduct of business
thereon as presently conducted, which, in the case of (a) or (b), is reasonably
likely to have, in the aggregate, a Material Adverse Effect.
4.7. No Default. No Default or Event of Default has occurred and is
continuing.
4.8. Ownership of Property; Liens.
(a) Schedule 1 accurately sets forth the ownership of each Eligible
Property. Each Borrower and Guarantor that is shown by Schedule 1 to be the
owner of a Eligible Property, is the sole owner thereof, and has a good record,
marketable and indefeasible Fee Interest or Financeable Ground Lease in each
Eligible Property, in such case free and clear of all Liens and other matters
affecting title except for Customary Permitted Liens.
(b) To the best of each Borrower's and Guarantor's knowledge, the
Buildings located on each Eligible Property are in good operating condition and
repair, free of any material structural or engineering defects known to any
Borrower or Guarantor on the date hereof and are suitable for their present
uses, subject to such exceptions which are not reasonably likely to have, in the
aggregate, a Material Adverse Effect.
(c) To the best of each Borrower's and Guarantor's knowledge, all
water, sewer, gas, electricity, telephone and other utilities serving each
Eligible Property are supplied directly to each Eligible Property by public
utilities and enter such Eligible Property through adjoining public streets or,
if they pass through adjoining private land, do so in accordance with valid
public easements which inure to such Borrower's or Guarantor's benefit subject
to such exceptions which are not reasonably likely to have, in the aggregate, a
Material Adverse Effect. All of such utilities are presently installed and
operating and are in good and safe condition, subject to such exceptions which
are not reasonably likely to have, in the aggregate, a Material Adverse Effect.
All material assessments for public improvements that have been made against any
Eligible Property has been paid or provided for, except that in the case of any
assessments that are payable in installments, all installments due as of the
date hereof have been paid or provided for, subject to such exceptions which are
not reasonably likely to have, in the aggregate, a Material Adverse Effect.
(d) All Permits from all Governmental Authorities having jurisdiction
over any Eligible Property or any portion thereof, the absence of which could
materially impair the use of any Eligible Property for the purposes for which it
is currently used have been issued and are in full force and effect, subject to
such exceptions which are not reasonably likely to have, in the aggregate, a
Material Adverse Effect. No Borrower or Guarantor has received or been informed
by a third party, of the receipt by it of any notice from any Governmental
Authority having jurisdiction over any of the Eligible Properties or any portion
thereof or from any insurance company or fire rating or similar board or
organization threatening a suspension, revocation, modification or cancellation
of any Permit, subject to such exceptions which are not reasonably likely to
have, in the aggregate, a Material Adverse Effect.
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(e) The Approved Leases reflected constitute the sole and complete
agreements and understandings relating to leasing or licensing of space in the
Buildings or otherwise at such Properties. There are no occupancies, rights,
privileges or licenses in or to the Buildings or any other part of the
Properties other than pursuant to the Approved Leases, Financeable Ground Leases
or pursuant to Permitted Exceptions. The Approved Leases and Financeable Ground
Leases reflected on the rent roll are in full force and effect, in accordance
with their respective terms, without any payment default or any other material
default thereunder beyond applicable grace periods, nor to the best of any
Borrower's or Guarantor's knowledge are there any defenses, counterclaims,
offsets, concessions or rebates available to any tenant thereunder except as may
be provided in the Approved Leases, and the landlord has not given or made, or
received, any notice of default, or any claim, which remains uncured or
unsatisfied, with respect to any of the Approved Leases or Financeable Ground
Leases and, to the best of each Borrower's or Guarantor's knowledge there is no
basis for any such claim or notice of default by any tenant which would have a
Material Adverse Effect. No tenant has paid more than one month's rent in
advance. All tenant improvements or work to be done, furnished or paid for by
the landlord, or credited or allowed to a tenant, for, or in connection with,
the Buildings pursuant to any Approved Lease has been completed and paid for or
provided for in a manner satisfactory to the Agent. No leasing, brokerage or
like commissions, fees or payments are due from any Borrower in respect of the
Approved Leases. All tenants under all Approved Leases are in occupancy and
operating the premises covered by Approved Leases within the permitted uses
under such Approved Leases. No Borrower or Guarantor has mortgaged, pledged or
otherwise encumbered any of the Approved Leases or any Financeable Ground Lease
except for Permitted Exceptions or Customary Permitted Liens.
(f) There are no material agreements pertaining to the Eligible
Properties or the operation or maintenance thereof other than as described in
this Agreement or disclosed in writing to the Agent by a Borrower; and no person
or entity has any right or option to acquire any of the Eligible Properties or
any portion thereof or interest therein or lease any portion thereof or
additional portion thereof or provide services thereat except as previously
disclosed to Agent in writing or set forth in the Approved Leases.
4.9. Taxes. Each Borrower and Guarantor has filed or caused to be filed all
tax returns which to the best knowledge and belief of each Borrower and
Guarantor are required to be filed, and has paid or caused to be paid all taxes
shown to be due and payable on said returns or on any assessments made against
it or any of its property and all other taxes, fees or other charges imposed on
it or any of its property by any Governmental Authority (other than Customary
Permitted Liens and those the amount or validity of which is currently being
contested in good faith by appropriate proceedings and with respect to which
reserves in conformity with GAAP have been provided on the books of each).
35
4.10. Federal Regulations. No Borrower or Guarantor is engaged and will not
engage, principally or as one of its important activities, in the business of
extending credit for the purpose of "purchasing" or "carrying" any "margin
stock" within the respective meanings of each of the quoted terms under
Regulation U of the Board of Governors of the Federal Reserve System as now and
from time to time hereafter in effect. No part of the proceeds of the Loans
hereunder will be used for "purchasing" or "carrying" "margin stock" as so
defined or for any purpose which violates, or which would be inconsistent with,
the provisions of the Regulations of such Board of Governors. If requested by
any Lender, each Borrower will furnish to such Lender a statement in conformity
with the requirements of Federal Reserve Form U-1 referred to in said Regulation
U to the foregoing effect.
4.11. ERISA. No Borrower or Guarantor nor any ERISA Affiliate maintains or
contributes to any Plan or Multiemployer Plan. Each such Plan which is intended
to be qualified under Section 401(a) of the Internal Revenue Code as amended by
all of the laws referred to in Section 1 of Revenue Procedure 93-99 has been
determined by the IRS to be so qualified, and each trust related to any such
Plan has been determined to be exempt from federal income tax Section 501(a) of
the Internal Revenue Code so amended. Each Borrower and Guarantor and its
Subsidiaries are in compliance in all material respects with the
responsibilities, obligations and duties imposed on it by ERISA, the Internal
Revenue Code and regulations promulgated thereunder with respect to all Plans.
No Benefit Plan has incurred any accumulated funding deficiency (as defined in
Sections 302 (a) (2) of ERISA and 412 (a) of the Internal Revenue Code) whether
or not waived. No Borrower or Guarantor nor any ERISA Affiliate nor, to the
knowledge of any Borrower or Guarantor, any fiduciary of any Plan which is not a
Multiemployer Plan (i) has engaged in an nonexempt prohibited transaction
described in Sections 406 of ERISA or 4975 of the Internal Revenue Code or (ii)
has taken or failed to take any action which would constitute or result in a
Termination Event. Neither the Borrower nor any ERISA Affiliate is subject to
any liability under Sections 4063, 4064, 4069, 4204 or 4212 (c) or ERISA. No
Borrower or Guarantor nor any ERISA Affiliate has incurred any liability to the
PBGC which remains outstanding other than the payment of premiums. Schedule B to
the most recent annual report filed with the IRS with respect to each Plan is
complete and accurate in all material respects. Since the date of each such
Schedule B, there has, to the knowledge of any Borrower or Guarantor, been no
material adverse change in funding status or financial condition of the Plan
relating to such Schedule B. No Borrower or Guarantor nor any ERISA Affiliate
has made a complete or partial withdrawal under Sections 4203 or 4205 of ERISA
from a Multiemployer Plan. No Borrower or Guarantor nor any ERISA Affiliate has
failed to make a required installment or any other required payment under
Section 412 of the Internal Revenue Code on or before the due date for such
installment or other payment. No Borrower or Guarantor nor any ERISA Affiliate
is required to provide security to a Plan under Section 401 (a) (29) of the
Internal Revenue Code due to a Benefit Plan amendment that results in an
increase in current liability for the plan year. No Borrower or Guarantor or any
of its subsidiaries has, by reason of the transactions contemplated hereby, any
obligation to make any payment to any employee pursuant to any Plan or existing
contract or arrangement.
4.12. Status as REIT. Lexington has been organized in conformity with the
requirements for qualification as a real estate investment trust under the Code
and has met such requirements since 1993. Lexington is in a position to qualify
for its current fiscal year as a real estate investment trust under the Code and
its proposed methods of operation will enable it to so qualify.
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4.13. Investment Company Act. No Borrower or Guarantor is an "investment
company" or a company "controlled" by an "investment company," within the
meaning of the Investment Company Act of 1940, as amended.
4.14. Subsidiaries; Ownership of Capital Stock and Partnership Interests.
(i) Exhibit F (A) contains diagrams and schedules indicating the
corporate structure of Lexington, each Borrower, each Guarantor and any other
Person in which Lexington or any Borrower or Guarantor holds a direct or
indirect partnership, joint venture or other equity interest indicating the
percentage and nature of such interest with respect to each Person included in
such diagram; and (B) accurately sets forth the correct legal name of such
Person, the jurisdiction of its incorporation or organization and the
jurisdictions in which it is qualified to transact business as a foreign
corporation, or otherwise.
(ii) Except where any failure or breach would not have a Material
Adverse Effect on the Borrowers or Guarantors, each Subsidiary: (A) is a
corporation or partnership, as indicated on Exhibit F, duly organized, validly
existing and, if applicable, in good standing under the laws of the jurisdiction
of its organization, (B) is duly qualified to do business and, if applicable, is
in good standing under the laws of each jurisdiction required to conduct its
business as presently conducted and (C) has all requisite power and authority to
own, operate and encumber its Eligible Property and to conduct its business as
presently conducted.
4.15. Pollution; Hazardous Materials. In connection with the acquisition
and ownership of their interests in the Eligible Properties, the Borrowers and
Guarantors have made and will continue to make such inquiries, and has and will
continue to cause such testing, surveying, inspection or other action, with
respect to the Eligible Properties as is necessary or desirable in connection
with Hazardous Materials which might be present in the air, soil, surface water
or groundwater at such Eligible Property. Except for such exceptions which are
not reasonably likely to have, in the aggregate, a Material Adverse Effect, to
the best of any Borrower's or Guarantor's knowledge, there are no Hazardous
Materials present in the air, soil, surface water or groundwater at any Eligible
Property and no Hazardous Materials (except Hazardous Materials maintained in
accordance with all Requirements of Law and necessary for the business
operations of any such Eligible Property, including, without limitation,
petroleum used for heating oil) are used in the operation of any Eligible
Property.
4.16. Declaration of Trust, Partnership Agreement, etc. The copies of the
Declaration of Trust of Lexington and the organizational documents of each
Borrower and Guarantor which have been furnished to Agent are true, correct and
complete copies thereof as in effect on the date of this Agreement and will be
true, correct and complete in the case of each Borrower and Guarantor when
submitted to Agent under Sections 5.1 or 5.2 (as applicable).
37
4.17. Disclosures. The financial statements referred to in Section 4.1 and
Lexington's filings with the Commission do not, nor does this Agreement, the
other Loan Documents, or any other written statement (other than projections)
furnished by or on behalf of any Borrower or Guarantor to Agent or any Lender in
connection with the transactions contemplated hereby or thereby, contain any
untrue statement of a material fact or omit a material fact necessary to make
the statement contained therein or herein not misleading. All projections by
Borrowers or Guarantors (i) disclose all material assumptions made with respect
to costs and financial and market conditions underlying such projections and
(ii) reflect as of the date proposed, the reasonable estimate of the Borrowers
and Guarantors of results of operations.
4.18. Guarantors. The representations and warranties in Sections 4.2
through 4.11, 4.13, 4.15 through 4.17, shall be true, correct and complete with
respect to each Guarantor.
SECTION 5. CONDITIONS PRECEDENT
--------------------
5.1. Conditions to Initial Loans. The obligation of any Lender to make a
Loan hereunder on the Initial Funding Date or to accept any new property as an
Eligible Property is subject to the satisfaction of the following conditions
precedent in addition to those set forth in Section 2.17 in the case of a new
Eligible Property):
(a) Note. On or before the Closing Date (and any subsequent Funding
Date in the case of a new Lender) each Lender shall have received a Note
executed by a Responsible Officer of each Borrower and each of the other Loan
Documents shall have been duly executed and delivered by the respective parties
thereto and all shall be in full force and effect.
(b) Representations and Warranties. The representations and warranties
made by each Borrower or Guarantor herein or in the other Loan Documents or
which are contained in any certificate, document or financial or other statement
furnished at any time under or in connection with any of the Loan Documents,
shall be true, correct and accurate on and as of the Funding Date for the Loan
as if made on and as of such date unless stated to relate to a specific earlier
date, in which case such representations and warranties shall have been true,
correct and complete in all material respects as of such earlier dates.
(c) No Default or Event of Default. No Default or Event of Default
shall have occurred and be continuing on such date either before or after giving
effect to the Loan to be made on the Funding Date.
(d) Legal Opinion. Agent shall have received a favorable opinion of
counsel to each Borrower and Guarantor addressed to Agent as of the Closing Date
and covering such other matters as are customarily required by Agent in similar
transactions, all in form and substance reasonably satisfactory to Agent.
(e) Organizational Documents; Resolutions; Incumbency Certificate;
Authorized Signers. Agent shall have received certified copies of the
Declaration of Trust of Lexington and a copy of the Partnership Agreement and
Certificate of Limited Partnership or other organizational documents of each
Borrower and Guarantor (as appropriate) and all resolutions of the Board of
Trustees of Lexington and a certificate of partnership, corporate or limited
liability company action of each Borrower authorizing the transactions described
herein and evidencing the due authorization, execution and delivery of and this
Agreement and the other Loan Documents, and all required approvals, if any, of
Governmental Authorities with respect to this Agreement and the other Loan
Documents. Agent shall have received from each of the Borrowers and the
Guarantors an incumbency certificate, dated as of the Closing Date, signed by a
duly authorized offer of such Person and giving the name of each individual who
shall be authorized: (a) to sign, in the name and on behalf of such Person, each
of the Loan Documents to which such person is or is to be come a party; (b) in
the case of the Borrowers' Representative, to submit Notices of Borrowings on
behalf of the Borrowers; and (c) in the case of the Borrowers' Representative,
to give notices to take other action on behalf of the Borrowers or Guarantors
under the Loan Documents.
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(f) Certifications from Government Officials; UCC Searches. Agent
shall have received (i) certifications from government officials evidencing the
legal existence and good standing of each Borrower and any Guarantor in its
state of organization and as to the foreign qualification of each Borrower or
Guarantor in the respective states in which it owns Eligible Properties as of
the most recent practicable date; and (ii) UCC Searches from the appropriate
jurisdictions for each Borrower and Guarantor with respect to the Eligible
Properties.
(g) Eligible Properties.
(i) To the extent a Borrower requests Loans which meet the
Preferred Interest Standard, Agent shall have received and approved a completed
Certificate of Eligible Properties and Preferred Interest Rate Calculation.
(ii) Agent and each Lender shall have received such information
and access to each of the Eligible Properties as it shall have reasonably
requested and shall be reasonably satisfied with such information and access.
(h) No Material Adverse Effect. No Material Adverse Effect shall have
occurred.
(i) Solvency of Each Borrower and Guarantor. Both after and
immediately before the making of the Loan on any Funding Date, each Borrower and
Guarantor shall be Solvent.
(j) Fees. All obligations of Borrowers and Guarantors to pay fees
and provide compensation and reimbursement of costs and expenses to Agent or
their designees as of the Funding Date hereunder or otherwise in connection with
the financing contemplated hereby shall have been satisfied.
(k) Legality of Loans. The making of the Loans hereunder by each
Lender and the acquisition of the Notes shall be permitted as of the Funding
Date by all applicable Requirements of Law and shall not subject any Lender to
any penalty or other onerous condition in or pursuant to any such Requirement of
Law or result in a Material Adverse Effect.
39
(l) Notice of Borrowing. Agent shall have received a Notice of
Borrowing, at least three or more days prior to the Funding Date, and each other
certificate or document required under Section 2.4 with appropriate insertions
and attachments reasonably satisfactory in form and substance to Agent and its
counsel, executed by a Responsible Officer of Borrowers' Representative.
(m) Certificate of Covenant Compliance. Agent shall have received
a Certificate of Covenant Compliance in the form attached as Exhibit G to this
Agreement.
(n) Pay-off of Existing Loans. Upon the initial funding of the
Loans the Borrowers shall payoff and terminate that certain $60,000,000
Unsecured Revolving Credit Agreement, dated as of March 30, 2001, as amended on
November 28, 2001 (the "Fleet Revolving Loan") between the Borrowers and Fleet,
as Lender. Once such indebtedness under the Fleet Revolving Loan has been paid
in full Borrowers' original promissory notes for such loan facility shall be
marked "canceled" or "paid in full" and returned to Borrowers' Representative.
(o) No Change. No material adverse change has occurred in the
financial, real estate or capital markets in the reasonable opinion of the
Agent.
5.2. Conditions Precedent to All Subsequent Loans. The obligation of each
Lender to make any Loan requested to be made by it on any date after the Initial
Funding Date is subject to the following conditions precedent as of each such
date:
(a) Representations and Warranties. As of such date, both before
and after giving effect to the Loans to be made on such date, all of the
representations and warranties of each Borrower or and Guarantor contained in
this Loan Agreement and in any other Loan Document (other than representations
and warranties which expressly speak as of a different date) shall be true and
correct in all material respects.
(b) No Defaults. No Default or Event of Default shall have
occurred and be continuing or would result from the making of the requested
Loan.
(c) No Legal Impediments. No law, regulation, order, judgment or
decree of any Governmental Authority shall, and no Lender shall have received
notice that, in the reasonable judgment of such Lender, litigation is pending or
threatened which is likely to, enjoin, prohibit or restrain, or impose or result
in the imposition of any material adverse condition upon, such Lender's making
of the requested Loan.
(d) No Material Adverse Effect. No Borrower or Guarantor shall
have received written notice that an event has occurred since the date of this
Agreement which has had and continues to have, or is reasonably likely to have,
a Material Adverse Effect.
40
(e) Solvency of Each Borrower and Guarantor. Both after and
immediately before the making of the Loan on any Funding Date, each Borrower and
Guarantor shall be Solvent.
(f) Fees. All obligations of Borrowers and Guarantors to pay fees
and provide compensation and reimbursement of costs and expenses to Agent or its
designees as of the Funding Date hereunder or otherwise in connection with the
financing contemplated hereby shall have been satisfied.
(g) Notice of Borrowing. Agent shall have received a Notice of
Borrowing, and each other certificate or document required under Section 2.4
with appropriate insertions and attachments reasonably satisfactory in form and
substance to Agent and its counsel, executed by a Responsible Officer of
Borrowers' Representative.
(h) Guarantors. Each Guarantor shall deliver the documents,
agreements, instruments and opinions as the Agent shall require as to such
Guarantor and the Eligible Property owned by such Guarantor that are required to
be delivered by the Borrowers as of the Closing Date pursuant to Sections 5.1.
(i) New Eligible Properties. To the extent a Borrower requests
Loans which meet the Preferred Interest Rate Standard, Borrower's Representative
shall have complied with Section 5.1 for any Eligible Property submitted after
the Closing Date.
(j) Certificate of Eligible Properties and Preferred Interest
Rate Calculation. To the extent a Borrower requests Loans which meet the
Preferred Interest Rate Standard, Borrower's Representative shall have delivered
to Agent an updated Certificate of Eligible Properties and Preferred Interest
Rate Calculation.
Each submission of a Notice of Borrowing or a Notice of Conversion/Continuation
with respect to any Loan, each acceptance by a Borrower of the proceeds of each
Loan made, converted or continued hereunder, shall constitute a representation
and warranty by each Borrower as of the date of funding in respect of such Loan,
the date of conversion or continuation, that all the conditions contained in
this Section 5.2 have been satisfied or waived in accordance with Section 10.2
and that no MAC has occurred and is continuing as of the relevant date in
respect of the facts, circumstances or laws relevant to the conditions precedent
set forth in Section 5.1.
SECTION 6. AFFIRMATIVE COVENANTS
---------------------
Each Borrower hereby agrees that, so long as the Revolving Credit
Commitment remains in effect, any Note remains outstanding and unpaid or any
other amount is owing to any Lender, such Borrower shall:
6.1. Financial Statements. Furnish to Agent or cause Borrowers'
Representative to furnish to Agent:
41
(a) Annual. As soon as available, but in any event within ninety (90)
days after the end of each fiscal year (A) audited consolidated financial
statements of Lexington consisting of (i) a balance sheet; (ii) an income
statement; (iii) a statement of cash flow; (iv) a statement of retained
earnings; and (v) changes in stockholders' equity, for such year, setting forth
in each case in comparative form the figures for the previous year, certified
without a "going concern" or like qualification or exception, or qualification
arising out of the scope of the audit, by a "big four" accounting firm or other
independent certified public accountants of nationally recognized standing
reasonably acceptable to the Agent and (B) unaudited consolidating financial
statements of Lexington certified by a Responsible Officer of Lexington; and
(b) Quarterly. As soon as available, but in any event not later than
sixty (60) days after the end of each fiscal quarter of Lexington (other than
the last fiscal quarter of each fiscal year), copies of each of the following
for Lexington: (i) an unaudited balance sheet prepared on a consolidated and
consolidating basis as at the end of each such quarter and the related unaudited
statements of income for the fiscal quarter; (ii) stockholders' equity and cash
flows for such quarterly period, and the portion of the fiscal year through such
date; (iii) operating statements and a rent roll certified by Lexington
(including a schedule of the aging of all rent payments and indicating whether
any tenant is no longer in occupancy) for each Eligible Property for such
quarterly period, the portion of the fiscal year through such date, setting
forth in each case in comparative form the figures for the previous year,
certified by a Responsible Officer of such entity (subject to normal year-end
audit adjustments); all such financial statements referred to in Section 6.1 (a)
and (b) to be complete and correct in all material respects and be prepared in
reasonable detail and in accordance with GAAP applied consistently throughout
the periods reflected therein (except as approved by such accountants or
officer, as the case may be, and disclosed therein and for normal year end
adjustments).
6.2. Certificates; Other Information. Furnish to Agent or cause Borrowers'
Representative to furnish to each Agent:
(a) concurrently with the delivery of Lexington's financial statements
referred to in Section 6.1(a) and (b) above, (i) a certificate of a Responsible
Officer stating that he or she has no knowledge of any Default or Event of
Default except as specified in such certificate, (ii) a Certificate of Covenant
Compliance, (iii) a Certificate of Eligible Properties and Preferred Interest
Rate Calculation; and (iv) that the representations and warranties contained in
the Loan Documents are true, correct and accurate in all material respects to
the same extent as though made on and as of the date of such delivery;
(b) (i) whenever additional debt in excess of $10,000,000 is incurred
by any Borrower or Guarantor, a Certificate of Covenant Compliance; (ii) upon
the sale of any Property owned by a Borrower or Guarantor or any Subsidiary
thereof, a Certificate of Covenant Compliance and an updated Certificate of
Eligible Properties and Preferred Interest Rate Calculation; and (iii) at any
other time as Borrowers' Representative wishes to submit an updated Certificate
of Covenant Compliance or Certificate of Eligible Properties and Preferred
Interest Rate Calculation;
42
(c) on an annual basis, a copy of a one year projected operating
statement of Lexington including a projected operating budget and cash flow of
Lexington;
(d) promptly after the same are sent, copies of all financial
statements and reports which Lexington sends to its holders of Common Shares or
other equity securities, and promptly after the same are filed by Lexington,
copies of all financial statements and reports which Lexington may make to, or
file with, the NYSE and the Commission or any successor or analogous
Governmental Authority;
(e) no later than thirty (30) days after the same are filed with the
Internal Revenue Service ("IRS") and other applicable taxing authorities, copies
of its income tax returns and all correspondence to or from the IRS;
(f) Within ten (10) days after the filing thereof, evidence indicating
that Lexington has maintained its status as a real estate investment trust
("REIT") under the applicable provisions of the Code such evidence to consist of
annual tax returns certified by a "big four" accounting firm or such other
independent public accounting firm of nationally recognized standing as is
reasonably acceptable to Agent; and
(g) promptly thereafter, such additional financial and other
information respecting the financial or other condition of any Borrower or
Guarantor or the status or condition of the Eligible Properties or the operation
thereof which such Borrower or Guarantor is entitled to or can otherwise
reasonably obtain and as Agent may from time to time reasonably request.
6.3. Payment of Obligations. Discharge or otherwise satisfy at or before
maturity or before they become delinquent, as the case may be, all its
Indebtedness and other obligations of whatever nature except when the amount or
validity thereof is currently being contested in good faith by appropriate
proceedings, and reserves in conformity with GAAP with respect thereto have been
provided on the books of such Borrower or where the failure to do so does not
violate Section 8.1(e).
6.4. Conduct of Business and Maintenance of Existence. Continue to engage
in business of the same general type as now conducted by it, and preserve, renew
and keep in full force and effect its existence and take all reasonable action
to maintain all rights, privileges and franchises necessary or desirable in the
normal conduct of its business; and comply with all Contractual Obligations and
Requirements of Law except to the extent that the failure to comply therewith
could not, in the aggregate, have a Material Adverse Effect.
6.5. Maintenance of Property, Insurance. Keep or cause the tenants to keep
all Property of the Borrower, each Guarantor and each of their Subsidiaries in
good working order and condition; maintain or cause the tenants of its
Properties to maintain with financially sound and reputable insurance companies,
such hazard, liability and other insurance with respect to its Property and its
business against such casualties and contingencies in amounts and minimum scope
of coverage as shall be in accordance with the general practices of businesses
having similar operations in similar geographic location; and furnish to Agent,
upon written request, full information as to the insurance carried.
43
6.6. Inspection of Property; Books and Records; Discussions. Keep proper
books of record and account in which full, true and correct entries in
conformity with GAAP and all Requirements of Law shall be made of all dealings
and transactions in relation to its and each Guarantor's business and
activities; and permit representatives of Agent and any Lender to visit and
inspect any of its properties for any purpose and make abstracts from any of its
books and records (i) prior to the occurrence of an Event of Default, no more
than twice annually and (ii) upon the occurrence or continuance of an Event of
Default, at any reasonable time and on reasonable notice and as often as may
reasonably be desired (subject to applicable provisions of any lease affecting
any Property), and to discuss the business, operations, properties, prospects
and financial and other condition of such Borrower or Guarantor with officers
and employees of such Borrower or Guarantor and with its independent certified
public accountants.
6.7. Notices. Promptly, and in any event within ten Business Days after an
officer of any Borrower or Guarantor obtains knowledge thereof (except as set
forth below) give notice to Agent:
(a) of the occurrence of any Default or Event of Default;
(b) of (i) any default or event of default or termination under any
(a) Approved Lease or any other Contractual Obligation of or in favor of any
Borrower or Guarantor which is reasonably likely to have a Material Adverse
Effect or (b) Financeable Ground Lease as to which any Borrower or Guarantor has
received notice from the ground lessor and which remains uncured and (ii) any
litigation, investigation or proceeding which may exist at any time between any
Borrower or Guarantor or any tenant and any Governmental Authority or other
Person, which if adversely determined is reasonably likely to have a Material
Adverse Effect;
(c) of any litigation or proceeding pending or any judgment against
any Borrower, Guarantor or Eligible Property in which the amount involved which
is not covered by insurance is $100,000 or more or in which injunctive or
similar relief is sought;
(d) of the occurrence or existence of any event or condition which
would cause any of the representations and warranties set forth in Section 4.8
to be untrue.
(e) of any setoff, claims, withholdings or other defenses to which any
of the Eligible Properties are subject, which (i) would have a Material Adverse
Effect on (x) the business, assets or financial condition of any Borrower, any
Guarantor or any of their respective Subsidiaries, or (y) the value of such
Eligible Property, or (ii) with respect to such Eligible Property, which is not
a Permitted Exception or a Customary Permitted Lien.
(f) The failure of any Eligible Property to continue to meet all
requirements of Section 2.17.
44
Each notice pursuant to this Section shall be accompanied by a statement of a
Responsible Officer setting forth details of the occurrence referred to therein
and stating what action a Borrower proposes to take with respect thereto.
6.8. REIT Requirements. Cause Lexington to operate its business at all
times so as to satisfy or be deemed to have satisfied all requirements necessary
to qualify as a real estate investment trust under the Code. Lexington shall
maintain adequate records so as to comply with all record-keeping requirements
relating to the qualification of Lexington as a real estate investment trust as
required by the Code and applicable regulations of the Department of the
Treasury promulgated thereunder and will properly prepare and timely file with
the IRS all returns and reports required thereby. Lexington shall request from
its shareholders all shareholder information required by the Code and applicable
regulations of the Department of Treasury promulgated thereunder.
6.9. Environmental Actions.
(a) Indemnification. On a joint and several basis, indemnify, defend
(with counsel reasonably acceptable to the indemnified party) and hold Agent and
each Lender and Issuing Bank, and the directors, officers, shareholders,
employees and agents of Agent and each Lender and Issuing Bank harmless from any
claims (including without limitation third party claims for personal injury or
real or personal property damage), actions, administrative proceedings,
judgments, damages, punitive damages, penalties, fines, reasonable costs,
liabilities (including sums paid in settlements of claims), interest or losses,
including reasonable attorneys' fees, consultant fees and expert fees, that
arise directly or indirectly from or in connection with the presence, suspected
presence, release or suspected release of any Hazardous Material in the air,
soil, surface water or groundwater at or from the real property or any portion
thereof with respect to a Property, or any other real property in which any
Borrower has any interest (all of the foregoing real property shall be referred
to collectively as the "Real Property"). Without limiting the generality of the
foregoing, the indemnification provided by this Section shall specifically cover
(i) costs, including capital, operating and maintenance costs, incurred in
connection with any investigation or monitoring of site conditions or any
clean-up, remedial, removal or restoration work required or performed by any
federal, state or local governmental agency or political subdivision or
performed by any non-governmental Person, including any tenant of a Property,
because of the presence, suspected presence, release or suspected release of
Hazardous Material in the air, soil, surface water or groundwater at or from the
Real Property; and (ii) costs incurred in connection with (A) Hazardous Material
present or suspected to be present in the air, soil, surface water or
groundwater at the Real Property before the date of this Agreement, or (B)
Hazardous Material that migrates, flows, percolates, diffuses or in any way
moves onto or under or from the Real Property, or (C) Hazardous Material present
at the Real Property as a result of any release, discharge, disposal, dumping,
spilling or leaking (accidental or otherwise) (any of the foregoing, a
"Release") onto or from the Property before or after the date of this Agreement
by any Person; provided, however, that the indemnification provided by this
Section shall not include claims to the extent arising from the gross negligence
or willful misconduct of any party seeking indemnification. The indemnification
provided in this Section 6.9 shall survive the termination of this Agreement;
provided, however, that no Borrower shall have any liability under the foregoing
indemnity in connection with any Release of any Hazardous Materials on, under or
about any Property which occurs after the date of any transfer of the Property
to Agent and/or any of the Lenders, or its or their designee or any other
Person(s), by foreclosure deed-in-lieu thereof or otherwise which was not
present on the Property prior to such date.
45
(b) Response Actions. Each Borrower and Guarantor covenants and agrees
that if any Release or disposal of Hazardous Material shall occur or shall have
occurred on any Real Property owned by it, such Borrower or Guarantor will cause
the prompt containment and removal of such Hazardous Material and remediation of
such Real Property as necessary to comply with all Environmental Laws or to
preserve the value of such Real Property.
(c) Environmental Assessments. If Agent has reasonable grounds to
believe that an adverse environmental event which could have a Material Adverse
Effect has occurred with respect to any Eligible Property, after reasonable
notice by the Agent, whether or not a Default or an Event of Default shall have
occurred, the Agent may determine that the affected Eligible Property no longer
qualifies as an Eligible Property; provided that prior to making such
determination, the Agent shall give Borrowers' Representative (i) reasonable
notice and the opportunity to obtain one or more environmental assessments or
audits of such Eligible Property prepared by a hydrogeologist, an independent
engineer or other qualified consultant or expert approved by the Lender, which
approval will not be unreasonably withheld, to evaluate or confirm (A) whether
any Release of Hazardous Materials has occurred in the soil or water at such
Eligible Property and (B) whether the use and operation of such Eligible
Property materially complies with all Environmental Laws (including not being
subject to a matter that is a material environmental event) and (ii) if such
assessments or audits discloses that a Release has occurred, a reasonable period
to clean up or remediate such condition in accordance with applicable
Environmental Laws unless such Release could reasonably be expected to have a
Material Adverse Effect on the operation, value or financeability of such
Property, in which event the consent of the Agent must be obtained. Such
assessments and audits will then be used by the Agent to determine whether a
Material Adverse Effect has in fact occurred with respect to such Eligible
Property. All such environmental assessments shall be at the sole cost and
expense of the Borrowers.
6.10. Changes in GAAP. In the event of a change in GAAP which would cause
the financial covenants set forth in Section 7.1 to provide less protection to
any Lender, cause such financial covenants to be reset, in good faith, by Agent
and the Borrowers to maintain the protection to each Lender equivalent to that
in place prior to such change and Agent, each Lender and each Borrower shall
execute one or more amendments to this Agreement to effect such reset.
6.11. NYSE Listing. Cause Lexington at all times to keep its common stock
duly listed on the NYSE and to file all reports on a timely basis required by
the NYSE.
46
6.12. Management of Borrower and Property. Insure that the management of
Lexington shall be self-directed and self-administered.
6.13. Subordination of Payables to Affiliates. After the occurrence and
continuance of a Default or Event of Default, make no payments on any account
payable or other debt owed by any Borrower to any Affiliate or Subsidiary and
all such amounts shall be fully subordinated to the Loans pursuant to the terms
of an agreement in form and substance satisfactory to the Agent.
6.14. ERISA Notices. Deliver or cause to be delivered to the Agent, at such
Borrower's expense, the following information and notices as soon as reasonably
possible, and in any event:
(a) within thirty (30) Business Days after any Borrower, Guarantor or
any ERISA Affiliate knows or has reason to know that a Termination Event has
occurred, a written statement of the chief financial officer of such Borrower or
Guarantor describing such Termination Event and the action, if any, which such
Borrower, Guarantor or any ERISA Affiliate has taken, is taking or proposes to
take with respect thereto, and when known, any action taken or threatened by the
IRS, DOL or PBGC with respect thereto;
(b) within thirty (30) Business Days after the Borrower knows or has
reason to know that a prohibited transaction (defined in Sections 406 of ERISA
and Section 4975 of Code) has occurred, a statement of the chief financial
officer of the Borrower describing such transaction and the action which the
Borrower or any ERISA Affiliate has taken, is taking or proposes to take with
respect thereto;
(c) within thirty (30) Business Days after the filing of the same with
the DOL, IRS or PBGC, copies of each annual report (form 5500 series), including
Schedule B thereto, filed with respect to each Plan;
(d) within thirty (30) Business Days after receipt by such Borrower,
Guarantor or any ERISA Affiliate of each actuarial report for any Plan or
Multiemployer Plan and each annual report for any Multiemployer Plan, copies of
each such report;
(e) within thirty (30) Business Days after the filing of the same with
the IRS, a copy of each funding waiver request filed with respect to any Plan
and all communications received by such Borrower, Guarantor or any ERISA
Affiliate with respect to such request;
(f) within thirty (30) Business Days after the occurrence any material
increase in the benefits of any existing Plan or Multiemployer Plan or the
establishment of any new Plan or the commencement of contributions to any Plan
or Multiemployer Plan to which such Borrower, Guarantor or any ERISA Affiliate
to which such Borrower, Guarantor or any ERISA Affiliate was not previously
contributing, notification of such increase, establishment or commencement, but
only if the increase (either individually or in the aggregate with any other
increases for which notification has not been given hereunder) either has a
Material Adverse Effect or is such that any Borrower or any ERISA Affiliate is
required to provide security to such Plan under Section 401(a)(29) of the Code;
47
(g) within thirty (30) Business Days after such Borrower, Guarantor or
any ERISA Affiliate receives notice of the PBGC's intention to terminate a Plan
or to have a trustee appointed to administer a Plan, copies of each such notice;
(h) within thirty (30) Business Days after such Borrower, Guarantor or
any of its Subsidiaries receives notice of any unfavorable determination letter
from the IRS regarding the qualification of a Plan under Section 401(a) of the
Code, copies of each such letter;
(i) within thirty (30) Business Days after such Borrower, Guarantor or
any ERISA Affiliate receives notice from a Multiemployer Plan regarding the
imposition of withdrawal liability, copies of each such notice;
(j) within thirty (30) Business Days after such Borrower, Guarantor or
any ERISA Affiliate fails to make a required installment or any other required
payment under Section 412 of Code on or before the due date for such installment
or payment, a notification of such failure; and
(k) within thirty (30) Business Days after such Borrower, Guarantor or
any ERISA Affiliate knows or has reason to know (i) a Multiemployer Plan has
been terminated, (ii) the administrator or plan sponsor of a Multiemployer Plan
intends to terminate a Multiemployer Plan, or (iii) the PBGC has instituted or
will institute proceedings under Section 4042 of ERISA to terminate a
Multiemployer Plan, notification of such termination, intention to terminate or
institution of proceedings.
6.15. ERISA Compliance. Cause, and shall cause each of its Subsidiaries and
ERISA Affiliates to, establish, maintain and operate all Plans to comply in all
material respects with the provisions of ERISA, the Code, all other applicable
laws, and the regulations and interpretations thereunder and the respective
requirements of the governing documents for such Plans.
6.16. Payment of Taxes and Claims. (a) Pay or cause to be paid, and cause
each of its Subsidiaries to pay or cause to be paid, (i) all taxes, assessments
and other governmental charges imposed upon it or on any of its property or
assets or in respect of any of its franchises, licenses, receipts, sales, use,
payroll, employment, business, income or property before any penalty or interest
accrues thereon, and (ii) all claims (including, without limitation, claims for
labor, services, materials and supplies) for sums which have become due and
payable and which by law have or may become a Lien (other than a Permitted
Exception or a Customary Permitted Lien); provided, however, that no such taxes,
assessments, fees and governmental charges referred to in clause (i) above or
claims referred to in clause (ii) above need be paid if being contested in good
faith by appropriate proceedings diligently instituted and conducted and if such
reserve or other appropriate provision, if any, as shall be required in
conformity with GAAP shall have been made therefor.
6.17. Inter-Borrower or Guarantor Advances of Loan Proceeds Cause all
transfers of Loan proceeds from one Borrower or Guarantor to another or any
Affiliate or Subsidiary thereof to be documented and treated for all purposes by
the lending and receiving Borrower or Guarantor, Affiliate or Subsidiary as an
intercorporate loan transaction.
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6.18. Solvency of Guarantors. Lexington, LCIF, LCIFII or Net 3 shall cause
each of the Guarantors to remain Solvent and shall provide each of the
Guarantors with such funds and assets as such Guarantor shall require in the
operation of its business, all in consideration of such Guarantor's execution
and delivery of its Guaranty.
6.19. No Amendments to Certain Documents. The Borrowers will not, and will
not permit any Guarantor to, at any time cause or permit its certificate of
limited partnership, agreement of limited partnership, trust documents or other
charter documents, as the case may be, to be modified, amended or supplemented
in any respect whatever, without (in each case) the express prior written
consent or approval of the Requisite Lenders, if such changes would adversely
affect Lexington's REIT status or otherwise materially adversely affect the
rights of any Lender hereunder or under any other Loan Document.
6.20. No Additional Offerings. The Borrowers will not permit the offering,
placement, or arrangement of any issues of debt securities or commercial bank
facilities for any Borrower which would compete with the syndication of the
Revolving Credit Facility, until the earlier of (a) ninety (90) days following
the Closing Date, or (b) receipt of notice from the Agent that the syndication
has been completed.
SECTION 7. NEGATIVE COVENANTS
------------------
Each Borrower hereby agrees that, so long as the Revolving Credit
Commitment remains in effect or any Note remains outstanding and unpaid or any
other amount is owing to any Lender hereunder or under any other Loan Document,
such Borrower shall not directly or indirectly:
7.1. Financial Covenants. Fail to comply with the covenants set forth in
this Section 7.1 on a consolidated basis as of the end of each fiscal quarter.
(a) Minimum Net Worth of Borrowers. Suffer or permit the Minimum Net
Worth of the Borrowers on a consolidated basis to be less than the aggregate of
(i) $585,000,000, plus (ii) 75% of the Net Securities Proceeds of all issues of
any Common Shares, Preferred Shares or other equity securities by Lexington in
one or more transactions received after the date hereof, excluding Net
Securities Proceeds used to redeem Preferred Shares or other equity securities
of Lexington.
(b) Debt Service Coverage. Suffer or permit the ratio of EBITDA less
non-incremental revenue generating capital expenditures to Debt Service
obligations (including principal and interest on the Loans) for the two (2) most
recent fiscal quarters to be less than 1.60:1.0 from the date of closing through
the Revolving Credit Termination Date.
(c) Maximum Total Debt to Capitalized Value. Suffer or permit Total
Debt to Capitalized Value to exceed 60%.
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(d) Minimum Unencumbered Liquidity. Suffer or permit the total sum of
(i) unrestricted cash, (ii) unrestricted Cash Equivalents and (iii) current
availability under the Revolving Credit Commitments, to be less than $2,500,000
on a consolidated basis.
(e) Maximum Secured Recourse Debt to Capitalized Value. Suffer or
permit secured Recourse debt in respect of money borrowed or guarantees in
respect thereof by the Borrowers and Guarantors on a consolidated basis to (i)
exceed 5% of Capitalized Value or (ii) have a scheduled maturity date prior to
the Revolving Credit Termination Date. The maximum Loan to Value of secured
Recourse debt for any Property as of the date such secured Recourse debt is
incurred, (excluding the Regency Debt or any renewal or replacement thereof up
to $12,500,000), shall not exceed 75%. Such net operating income shall be
adjusted for any newly acquired Property or any Property as to which two (2)
fiscal quarters of earnings information is not available in accordance with the
last two (2) sentences of Section 7.2 below.
(f) Maximum Permitted Investments. Suffer or permit investments in
notes, mortgages and unimproved real estate to exceed 5% of Capitalized Value in
the aggregate.
(g) Limitation on Construction Activity. Have construction in process
(defined as total budgeted cost of new construction, expansions and
redevelopment in process, excluding tenant improvements and property renovation
and refurbishment) whose value exceeds 10% of Capitalized Value.
(h) Joint Venture Ownership Interest. Suffer or permit Joint Venture
Ownership Interest Value to exceed 20% of Capitalized Value at the end of any
fiscal quarter.
(i) Maximum Joint Venture Leverage. Suffer or permit the aggregate Pro
Rata Share of Debt to exceed 65% of the aggregate Pro Rata Share of Value.
(j) Overall Investment Restriction. Suffer or permit the amounts
determined under Sections 7.1(f)(g) and (h) to exceed in the aggregate 25% of
Capitalized Value.
(k) Minimum Fixed Charge Coverage. Suffer or permit the ratio of
EBITDA less non-incremental revenue generating capital expenditures to Debt
Service plus dividends on Preferred Stock or other preferred securities for the
two (2) most recent fiscal quarters to be less than 1.50 to 1.0.
(l) Interest Rate Protection. Fail to maintain in effect interest rate
protection arrangements, in form and substance reasonably satisfactory to Agent,
for all variable rate Indebtedness in excess of 20% of Capitalized Value,
providing for the rate of interest applicable to such indebtedness to be capped
at a rate satisfactory to Agent. Such arrangements shall be maintained in full
force and effect until all Obligations are repaid in full or until and so long
as variable rate Indebtedness shall be less than 20% of Capitalized Value.
(m) Limitations on Distributions to FFO. Suffer or permit
distributions to any shareholders of Lexington (common, preferred or otherwise)
to exceed 85% of Lexington's funds from operations (adjusted for non-recurring
items) over the four (4) most recent fiscal quarters. Notwithstanding the
foregoing, Lexington may make distributions in excess of the foregoing
restriction that are necessary to preserve its REIT status.
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7.2. Covenant Calculations. For purposes of Section 7(j) hereof (with the
exception of subsections 7.1(b) and 7.1(j)), EBITDA and Eligible Property NOI
(and all defined terms and calculations using such terms) shall be adjusted to
(i) deduct the actual results of any Property disposed of by a Borrower or
Guarantor during the relevant fiscal period, and (ii) include the pro forma
results of any Eligible Property (including sale/leasebacks) acquired by a
Borrower or Guarantor or any existing Eligible Property on which new
construction is completed, in each case during the relevant fiscal period, with
such pro forma results being calculated by (x) using the Borrower's or
Guarantor's pro forma projections for such acquired Eligible Property, subject
to the Agent's reasonable approval, if such Eligible Property has been owned by
a Borrower or Guarantor for less than the relevant fiscal period or (y) using
the actual results for such acquired Eligible Property and adjusting such
results for the appropriate period of time required by the applicable financial
covenant, if such Eligible Property has been owned by a Borrower or a Guarantor
for at least one complete fiscal quarter.
7.3. Restricted Payments.
(a) Declare, make or pay any Restricted Payment while any Event of
Default is continuing either before or after giving effect to such Restricted
Payment, unless Borrowers have sufficient funds or availability under its credit
facilities (including this Agreement) to pay the next installment of principal
or interest payable in respect of the Obligations and except for minimum
distributions necessary to maintain Lexington's REIT status; or
(b) While any Event of Default is continuing, make any payment of
Indebtedness of Borrowers in contravention of the terms of any agreement or
instrument subordinating or purporting to subordinate any rights to receive
payments in respect of any Indebtedness of Borrowers to any rights to receive
payments under this Agreement.
7.4. Dissolution; Merger; Sale of Assets; Termination and Other Actions.
(a) Become a party to any dissolution, merger, consolidation or reorganization
(except to the extent it remains the surviving entity) without the approval of
the Requisite Lender; or (b) convey, sell, lease or otherwise dispose of (i) any
Eligible Property unless withdrawn under Section 2.18 or (ii) any substantial
part of its property or assets (other than an Eligible Property) unless, in the
case of this clause (b), no Default or Event of Default results therefrom.
7.5. Transactions with Affiliates. Enter into or be a party to any
transaction directly or indirectly with or for the benefit of any Affiliate of
any Borrower or Guarantor, other than (i) in the ordinary course of business and
(ii) for fair consideration and on terms no less favorable to any Borrower or
Guarantor than are available in an arm's-length transaction from unaffiliated
third parties.
7.6. Accounting Changes. Make any significant change in accounting
treatment and reporting practices, except as required by GAAP or with which
Borrowers' or Guarantor's independent certified public accountants have agreed.
Such Borrower or Guarantor shall advise Agent sufficiently in advance of any
change to permit representatives of Agent to discuss the proposed change with
the officers of such Borrower or Guarantor.
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7.7. No Liens. Until withdrawal under Section 2.18, suffer or permit after
the date hereof any Lien on any Eligible Property other than Permitted
Exceptions or Customary Permitted Liens.
7.8. Fiscal Year. Change the fiscal year end of any Borrower or Guarantor
from December 31 to any other date without the prior written consent of Agent.
7.9. Chief Executive Office. Change the name of any Borrower or Guarantor
or the chief executive office of such Borrower or Guarantor or the address where
such Borrower's books and records are maintained unless such Borrower or
Guarantor has given Agent prior written notice of any such change.
7.10. Self-Directed REIT. Suffer or permit Lexington to be other than
self-directed and self-administered or fail to obtain the consent of Agent prior
to any change to third-party management or leasing.
7.11. Limitations on Certain Activities. Except in connection with the
withdrawal of an Eligible Property in accordance with Section 2.18 or sales,
transfers or encumbrances to another Borrower or Guarantor (i) no sale,
transfer, pledge or assignment of more than 49% of the ownership interests in
any of the Borrowers or Guarantors excluding Lexington; and (ii) no material
changes in any Borrower's or Guarantor's business of owning, managing and
investing in predominantly (75% or more by value) net-lease, office, industrial
and retail properties.
7.12. ERISA. No Borrower or Guarantor nor any of its Subsidiaries or ERISA
Affiliates shall:
(a) engage in any prohibited transaction described in Sections 406 of
ERISA or 4975 of the Code for which a statutory or class exemption is not
available or a private exemption has not been previously obtained from the DOL;
(b) permit to exist any accumulated funding deficiency (as defined in
Sections 302 of ERISA and 412 of the Code), with respect to any Plan, whether or
not waived;
(c) fail to pay timely required contributions or annual installments
due with respect to any waived funding deficiency to any Plan;
(d) terminate any Plan which would result in any liability of any
Borrower, Guarantor or any ERISA Affiliate under Title IV of ERISA;
(e) fail to make any contribution or payment to any Multiemployer Plan
which any Borrower, Guarantor or any ERISA Affiliate may be required to make
under any agreement relating to such Multiemployer Plan, or any law pertaining
thereto;
52
(f) fail to pay any required installment or any other payment required
under Section 412 of the Internal Revenue Code on or before the due date for
such installment or other payment; or
(g) amend a Benefit Plan resulting in an increase in current liability
for the plan year such that any Borrower or any ERISA Affiliate is required to
provide security to such Plan under Section 401 (a) (29) of the Code.
7.13. Compliance with Environmental Laws. Do any of the following: (a) use
any of its Real Property or any portion thereof as a facility for the handling,
processing, storage or disposal of Hazardous Materials except for quantities of
Hazardous Materials used in the ordinary course of business and in compliance
with all applicable Environmental Laws, (b) cause or permit to be located on any
of its Real Property any underground tank or other underground storage
receptacle for Hazardous Materials except in full compliance with Environmental
Laws, (c) generate any Hazardous Materials on any of its Real Property except in
full compliance with Environmental Laws, or (d) conduct any activity at any Real
Property or use any Real Property in any manner so as to cause a Release or a
violation of any Environmental Law; provided that a breach of this covenant
shall result in the exclusion of the affected Real Property as an Eligible
Property, but shall only constitute an Event of Default hereof if such breach
has a Material Adverse Effect on the Borrowers or Guarantors, taken as a whole,
or materially impairs the ability of any Borrower or Guarantor to fulfill their
obligations to the Agent under the Loan Documents.
7.14. Limitation on Debt and Action. Without the prior written consent of
the Requisite Lenders (a) incur any Recourse debt other than (i) the Loans, (ii)
secured Recourse debt permitted in Section 7.1(e) herein, or (iii) subordinated
debt provided that the terms, conditions and level of subordination of such
subordinated debt are approved by the Agent (such approval in this instance not
to be unreasonably withheld) or (b) dissolve, terminate, merge, or consolidate
any Borrower and/or Guarantor except as otherwise provided herein.
SECTION 8. EVENTS OF DEFAULT
-----------------
8.1. Events of Default. Upon the occurrence of any of the following events
(each an "Event of Default"):
(a) Payments. Any Borrower shall fail to pay any principal of or
interest on any Note within ten (10) days after the due date thereof (except
principal and interest due on the Revolving Credit Termination Date where there
shall be no grace period), or any other amount payable hereunder shall not be
paid within ten (10) days after notice from Lender; or
(b) Representations and Warranties. Any representation or warranty
made or deemed made by any Borrower or Guarantor herein or in any other Loan
Document or which is contained in any certificate, document or financial or
other statement furnished at any time under or in connection with this Agreement
or any other Loan Document shall prove to have been incorrect in any material
respect on or as of the date made or deemed made, provided that in the case of
any representation or warranty made or deemed made or any certificate, document
or financial or other statement furnished in connection with an Eligible
Property, such Borrower or Guarantor also knew or should have known in the
exercise of reasonable diligence that such representation, warranty,
certification, document or statement was incorrect in any material respect; or
53
(c) Certain Covenant Defaults. Any Borrower shall default in the
observance or performance of any agreement contained in Section 7.1 of this
Agreement and such default shall continue unremedied for a period of 45 days
after notice to Borrowers' Representative by Agent; or
(d) Certain Other Covenant Defaults. Any Borrower or Guarantor shall
default in the observance or performance of any other covenant or provision of
this Agreement or any of the other Loan Documents, and such default shall
continue unremedied for the period of time set forth in such covenant or
provision, if any, or, if not, for a period of 30 days after notice from Agent
or such longer period as may be reasonably necessary to cure such default (but
in no event more than ninety (90) days in total) provided such Borrower or
Guarantor commences such cure within said thirty (30) day period and diligently
prosecutes same to completion; or
(e) Cross-Acceleration. Any Borrower or Guarantor or their respective
Subsidiaries, individually or together, shall (i) default in any payment of
principal of or interest on any Recourse Indebtedness, other than the Regency
Debt, beyond any applicable grace period, which, individually or together,
exceeds $10,000,000; or (ii) default beyond applicable grace periods in the
observance or performance of any other agreement or condition relating to any
Non-Recourse Indebtedness or contained in any instrument or agreement
evidencing, securing or relating thereto, or any other event shall occur, the
effect of which is to cause, or to permit the holder or holders of (individually
or together) $25,000,000 or more of Non-Recourse Indebtedness to become due
prior to its stated maturity, other than $25,000,000 loan maturing October 1,
2007 secured by a first mortgage on the Ohio Property; or (iii) cause or permit
an acceleration, foreclosure or deed in lieu transaction to take place in
connection with the Regency Debt; or
(f) Qualification as REIT. Agent shall have determined in good faith,
and shall have so given notice to Borrowers' Representative that Lexington has
at any time ceased to qualify, or has not qualified, as a real estate investment
trust for any of the purposes of the provisions of the Code applicable to real
estate investment trusts; provided, however, that no Event of Default under this
Section (f) shall be deemed to have occurred and be continuing if, within thirty
(30) days after notice of any such determination is given Borrowers'
Representative shall have furnished Agent with an opinion of Borrowers'
Representative's tax counsel (who shall be reasonably satisfactory to Agent
provided that the Agent may not unreasonably withhold its approval) to the
effect that the Lexington is then in a position to so qualify, or has so
qualified, as the case may be, which opinion shall not contain any material
qualification unsatisfactory to the Agent; or
(g) Insolvency, Etc. There shall be an Insolvency Event with respect
to any Borrower or Guarantor; or
(h) ERISA. (i) Any Borrower or Guarantor or ERISA Affiliate shall
engage in any "prohibited transaction" (as defined in Section 406 of ERISA or
Section 4975 of the Code) involving any Plan, (ii) any "accumulated funding
deficiency" (as defined in Section 302 of ERISA), whether or not waived, shall
exist with respect to any Plan, (iii) a Termination Event shall occur or (iv)
any other event or condition shall occur or exist with respect to a Plan or a
Multiemployer Plan; and in each case in clauses (i) through (iv) above, such
event or condition, together with all other such events or conditions, if any,
could subject any Borrower to any tax, penalty or other liabilities in the
aggregate material in relation to the business, operations, property or
financial or other condition of any Borrower and any of the foregoing are not
corrected or cured within 30 days after notice to such Borrower; or
54
(i) Certain Judgments. One or more judgments or decrees shall be
entered against any Borrower or Guarantor involving in the aggregate a liability
(not paid or fully covered by insurance) of $10,000,000 or more and all such
judgments or decrees shall not have been vacated, discharged, or stayed or
bonded pending appeal within 60 days from the entry thereof; or
(j) Management. Prior to the Revolving Credit Termination Date any
change in the identity of the persons holding a majority of the Board of
Trustees of Lexington (other than due to death, retirement, disability or
similar causes and so long as the replacement trustee is approved by the
remaining trustees who were trustees prior to such change in the composition of
the Board of Trustees) without Requisite Lender approval.
(k) Loan Documents. From and after the Closing Date, any Loan Document
shall be terminated or otherwise shall cease to be in full force and effect
except in accordance with this Agreement or any party thereto other than a
Lender shall cease to be, or shall assert that it is not, bound thereby in
accordance with its terms, Borrowers' Representative shall not have taken such
steps as may be reasonably necessary to enforce such Loan Document promptly
after notice thereof by Agent.
8.2. Remedies. In the event that one or more Events of Default shall have
occurred and be continuing, then (i) if such event is an Event of Default that
relates to a Property's qualification or continued qualification as an Eligible
Property, then the only consequence shall be that the Outstanding Amount may not
be entitled to the Preferred Interest Rate Standard and the Applicable Rate
shall be recalculated as of the date such Property no longer qualified as an
Eligible Property; (ii) if such event is an Event of Default that relates to any
representation or warranty made or deemed to be made or any certificate,
document or financial or other statement furnished in connection with an
Eligible Property, which a Borrower or Guarantor knew or should have known in
the exercise of reasonable diligence was incorrect in any material respect,
Agent shall be entitled to exercise the remedies set forth in Section 8.2(iv);
(iii) if such event is an Event of Default specified in paragraph 8.1 (g) above,
the Revolving Credit Commitments shall automatically and immediately terminate
and the Obligations hereunder (with accrued interest thereon) and all other
amounts owing under this Agreement, any Note and any other Loan Documents shall
immediately become due and payable, and (iv) if such event is any other Event of
Default, any of the following actions may (and at the direction of the Requisite
Lenders shall) be taken by the Agent: (a) by written notice to Borrowers'
Representative, declare the Revolving Credit Commitments to be terminated
forthwith, whereupon the Revolving Credit Commitments shall immediately
terminate; (b) by written notice of default to Borrowers' Representative,
declare the Loans hereunder (with accrued interest thereon) and all other
amounts owing under this Agreement, any Note and any other Loan Document to be
due and payable forthwith, whereupon the same shall immediately become due and
payable and/or (c) exercise any other right or remedy available at law or in
equity or by statute. Except as expressly provided above in Section 8.1,
presentment, demand, protest and all other notices of any kind are hereby
expressly waived.
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8.3. Annulment of Acceleration. If payment on the Loans and any Note is
accelerated in accordance with Section 8.2 of this Agreement, then and in every
such case, the Agent may (but only upon the written instructions of the
Requisite Lenders), by an instrument delivered to Borrowers' Representative
annul such acceleration and the consequences thereof, provided, that at the time
such acceleration is annulled:
(a) all arrears of interest on the Loans and any Note and all other
sums payable in respect of the Loans and pursuant to this Agreement, any Note
and each other Loan Document (except any principal of or interest or premium on
the Loans and any Note and other sums which have become due and payable only by
reason of such acceleration) shall have been duly paid; and
(b) every other Default or Event of Default shall have been duly
waived or otherwise cured;
provided, further, that no such annulment shall extend to or affect any
subsequent Default or Event of Default or impair any right consequent thereon.
The provisions of this Section 8.3 is for the sole benefit of the Agent and is
not intended to benefit any Borrower and does not give any Borrower the right to
require Agent or any Lender to rescind or annul any acceleration hereunder, even
if the conditions set forth herein are met. No Lender may exercise any right or
remedy hereunder except through the Agent.
8.4. Cooperation by Each Borrower and Guarantor. To the extent that it
lawfully may, each Borrower and Guarantor agrees that it will not at any time
insist upon or plead, or in any manner whatever claim or take any benefit or
advantage of any applicable present or future stay, extension or moratorium law,
which may affect observance or performance of the provisions of this Agreement
or of any Note or any other Loan Document.
SECTION 9. THE AGENT
---------
9.1. Appointment.
(a) Each Lender and each Issuing Bank hereby designates and appoints
Fleet as the Agent of such Lender or such Issuing Bank under this Agreement, and
each Lender and each Issuing Bank hereby irrevocably authorizes the Agent to
take such action on its behalf under the provisions of this Agreement and the
Loan Documents and to exercise such powers as are set forth herein or therein
together with such other powers as are reasonably incidental thereto. The Agent
agrees to act as such on the express conditions contained in this entire Section
9.
(b) The provisions of this entire Section 9 (other than Sections 9.8
and 9.10(a)) are solely for the benefit of the Agent, the Lenders and Issuing
Banks, and no Borrower or Guarantor shall have any right to rely on or enforce
any of the provisions hereof. In performing its functions and duties under this
Agreement, the Agent shall act solely as agent of the Lenders and the Issuing
Banks and does not assume and shall not be deemed to have assumed any obligation
or relationship of agency, trustee or fiduciary with or for any Borrower. The
Agent may perform any of its duties hereunder, or under the Loan Documents, by
or through its agents or employees.
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9.2. Nature of Duties. The Agent shall not have any duties or
responsibilities except those expressly set forth in this Agreement or in the
Loan Documents. The duties of the Agent shall be mechanical and administrative
in nature. The Agent shall not have by reason of this Agreement a fiduciary
relationship in respect of any Lender or Holder. Nothing in this Agreement or
any of the Loan Documents, expressed or implied, is intended to or shall be
construed to impose upon the Agent any obligations in respect of this Agreement
or any of the Loan Documents except as expressly set forth herein or therein.
Each Lender shall make its own independent investigation of the financial
condition and affairs of each Borrower in connection with the making and the
continuance of the Loans hereunder and shall make its own appraisal of the
creditworthiness of each Borrower, and, except as specifically provided herein,
Agent shall not have any duty or responsibility, either initially or on a
continuing basis, to provide any Lender with any credit or other information
with respect thereto, whether coming into its possession before the Closing Date
or at any time or times thereafter.
9.3. Right to Request Instructions. The Agent may at any time request
instructions from the Lenders with respect to any actions or approvals which by
the terms of any of the Loan Documents the Agent is permitted or required to
take or to grant, and the Agent shall be absolutely entitled to refrain from
taking any action or to withhold any approval and shall not be under any
liability whatsoever to any Person for refraining from any action or withholding
any approval under any of the Loan Documents until it shall have received such
instructions from those Lenders from whom the Agent is required to obtain such
instructions for the pertinent matter in accordance with the Loan Documents.
Without limiting the generality of the foregoing, no Lender or Holder shall have
any right of action whatsoever against the Agent as a result of the Agent acting
or refraining from acting under the Loan Documents in accordance with the
instructions of the Requisite Lenders or, where required by the express terms of
this Agreement, a greater proportion of the Lenders.
9.4. Rights, Exculpation, Etc. Neither Agent, any Affiliate of Agent, nor
any of their respective officers, directors, employees, agents, attorneys or
consultants, shall be liable to any Lender for any action taken or omitted by
them hereunder or under any of the Loan Documents, or in connection herewith or
therewith, except that Agent shall be liable for its gross negligence or willful
misconduct in the performance of its express obligations hereunder. In the
absence of gross negligence, Agent shall not be liable for any apportionment or
distribution of payments made by it in good faith pursuant to Section 2.9, and
if any such apportionment or distribution is subsequently determined to have
been made in error the sole recourse of any Person to whom payment was due, but
not made, shall be to recover from the recipients of such payments any payment
in excess of the amount to which they are determined to have been entitled.
Agent shall not be responsible to any Lender for any recitals, statements,
representations or warranties herein or for the execution, effectiveness,
genuineness, validity, enforceability, collectibility or sufficiency of this
Agreement, the Notes or any of the other Loan Documents, or any of the
transactions contemplated hereby and thereby; or for the financial condition of
any Borrower, or any of its Subsidiaries or Affiliates. Agent shall not be
required to make any inquiry concerning either the performance or observance of
any of the terms, provisions or conditions of this Agreement or any of the Loan
Documents or the financial condition of any Borrower or any of its Subsidiaries
or Affiliates, or the existence or possible existence of any Default or Event of
Default. Agent may at any time request instructions from Lenders with respect to
any actions or approvals which, by the terms of this Agreement or of any of the
Loan Documents, Agent is permitted or required to take or to grant without
instructions from any Lenders, and if such instructions are promptly requested,
Agent shall be absolutely entitled to refrain from taking any action or to
withhold any approval and shall not be under any liability whatsoever to any
Person for refraining from taking any action or withholding any approval under
any of the Loan Documents until it shall have received such instructions from
Requisite Lenders or, where applicable, all Lenders. Without limiting the
foregoing, no Lender shall have any right of action whatsoever against Agent as
a result of Agent acting or refraining from acting under this Agreement, the
Notes or any of the other Loan Documents in accordance with the instructions of
Requisite Lenders or, where applicable, all Lenders. Agent shall promptly notify
each Lender at any time that the Requisite Lenders have instructed Agent to act
or refrain from acting pursuant hereto.
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9.5. Reliance. The Agent shall be entitled to rely upon any written
notices, statements, certificates, orders or other documents or any telephone
message believed by it in good faith to be genuine and correct and to have been
signed, sent or made by the proper Person, and with respect to all matters
pertaining to this Agreement or any of the Loan Documents and its duties
hereunder or thereunder, upon advice of legal counsel (including counsel for any
Borrower), independent public accountants and other experts selected by it.
9.6. Indemnification. To the extent that the Agent is not reimbursed and
indemnified by any Borrower, the Lenders will reimburse, within fifteen (15)
days after notice from Agent, and indemnify the Agent for and against any and
all liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements of any kind or nature whatsoever which
may be imposed on, incurred by, or asserted against it in any way relating to or
arising out of the Loan Documents or any action taken or omitted by the Agent
under the Loan Documents, in proportion to each Lender's Pro Rata Share. The
obligations of the Lenders under this Section 9.6 shall survive the payment in
full of the Loans, the Reimbursement Obligations and all other Obligations and
the termination of this Agreement. In the event that after payment and
distribution of any amount by Agent to Lenders, any Lender or third party,
including Borrower, any creditor of Borrower or a trustee in bankruptcy,
recovers from Agent any amount found to have been wrongfully paid to Agent or
disbursed by Agent to Lenders, then Lenders, in proportion to their respective
Pro Rata Shares, shall reimburse Agent for all such amounts.
9.7. Agent Individually. With respect to its Pro Rata Share of the
Revolving Credit Commitment hereunder, and the Loans made by it, Agent shall
have and may exercise the same rights and powers hereunder and is subject to the
same obligations and liabilities as and to the extent set forth herein for any
other Lender. The terms "Lenders" or "Requisite Lenders" or any similar terms
shall, unless the context clearly otherwise indicates, include Agent in its
individual capacity as a Lender or one of the Requisite Lenders. Agent and its
Affiliates may accept deposits from, lend money to, and generally engage in any
kind of banking, trust or other business with any Borrower as if it were not
acting as the Agent pursuant hereto.
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9.8. Successor Agents.
(a) Resignation. The Agent may resign from the performance of its
functions and duties as agent hereunder at any time by giving at least thirty
(30) Business Days' prior written notice to the Borrowers' Representative and
the Lenders. Such resignation shall take effect upon the acceptance by a
successor Agent of appointment pursuant to this Section 9.8.
(b) Appointment by Requisite Lenders. Upon any such resignation
becoming effective, (i) if a co-agent shall then be acting with respect to this
Agreement, such co-agent shall become the Agent or (ii) if no co-agent shall
then be acting with respect to this Agreement, the Requisite Lenders shall have
the right to appoint a successor Agent selected from among the Lenders, provided
that the Requisite Lenders shall have received the prior written consent of
Borrowers' Representative to such successor Agent if no Default or Event of
Default then exists, which consent shall not be unreasonably withheld or
delayed.
(c) Appointment by Retiring Agent. If a successor Agent shall not have
been appointed within the thirty (30) Business Day or shorter period provided in
paragraph (a) of this Section 9.8, the retiring Agent shall then appoint a
successor Agent which successor Agent shall be reasonably acceptable to
Borrowers' Representative if no Default or Event of Default then exists who
shall serve as Agent until such time, if any, as the Lenders appoint a successor
Agent as provided above.
(d) Rights of the Successor and Retiring Agents. Upon the acceptance
of any appointment as Agent hereunder by a successor Agent (which shall have
been approved by Borrowers' Representative as provided above), such successor
Agent shall thereupon succeed to and become vested with all the rights, powers,
privileges and duties of the retiring Agent, and the retiring Agent shall be
discharged from its duties and obligations as Agent under this Agreement (but
not as Lender). After any retiring Agent's resignation hereunder as Agent, the
provisions of this entire Section 9 shall inure to its benefit as to any actions
taken or omitted to be taken by it while it was the Agent under this Agreement.
9.9. Relations Among the Lenders. Each Lender and each Issuing Bank agrees
that it will not take any legal action, nor institute any actions or
proceedings, against any Borrower or any other obligor hereunder, without the
prior written consent of the Agent. Without limiting the generality of the
foregoing, no Lender may accelerate or otherwise enforce its portion of the
Obligations, or unilaterally terminate its Revolving Credit Commitment except in
accordance with Section 8.2.
9.10. Consent and Approvals.
(a) Each Lender authorizes and directs Agent to enter into the Loan
Documents other than this Agreement for the benefit of Lenders. Each Lender
agrees that any action taken by Agent at the direction or with the consent of
Requisite Lenders, in accordance with the provisions of this Agreement or any
Loan Document, and the exercise by Agent at the direction or with the consent of
Requisite Lenders of the powers set forth herein or therein, together with such
other powers as are reasonably incidental thereto, shall be authorized and
binding upon all Lenders, except for actions specifically requiring the approval
of all Lenders. All communications from Agent to Lenders requesting Lenders
determination, consent, approval or disapproval (i) shall be given in the form
of a written notice to each Lender, (ii) shall be accompanied by a description
of the matter or thing as to which such determination, approval, consent or
disapproval is requested, or shall advise each Lender where such matter or thing
may be inspected, or shall otherwise describe the matter or issue to be
resolved, and (iii) shall include, if reasonably requested by a Lender and to
the extent not previously provided to such Lender, any written materials
provided to Agent by Borrowers' Representative in respect of the matter or issue
to be resolved. Each Lender shall reply promptly, but in any event (x) within
fifteen (15) Business Days for those matters requiring the consent by all
Lenders, and (y) within ten (10) Business Days for those matters requiring the
consent by Requisite Lenders in each instance, after receipt of the request
therefor by Agent (in either event, the "Lender Reply Period"). Unless a Lender
shall give written notice to Agent that it objects to the recommendation or
determination of Agent (together with a written explanation of the reasons
behind such objection) within the Lender Reply Period, such Lender shall be
deemed to have approved of or consented to such recommendation or determination.
With respect to decisions requiring the approval of Requisite Lenders or all
Lenders, Agent shall submit its recommendation or determination for approval of
or consent to such recommendation or determination to all Lenders and upon
receiving the required approval or consent shall follow the course of action or
determination recommended to Lenders by Agent or such other course of action
recommended by Requisite Lenders and each non-responding Lender shall be deemed
to have concurred with such recommended course of action.
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(b) Lenders hereby irrevocably authorize Agent, at its option and in
its discretion, to release any Guaranty held by Agent in connection with the
withdrawal of any Eligible Property pursuant to Section 2.18.
(c) Should Agent commence any proceeding or in any way seek to enforce
its rights or remedies under the Loan Documents, each Lender, upon demand
therefor from time to time, shall contribute its share (based on its Pro Rata
Share) of the reasonable costs and/or expenses of any such enforcement or
acquisition, including, but not limited to, fees of receivers or trustees, court
costs, title company charges, filing and recording fees, appraisers' fees and
fees and expenses of attorneys to the extent not otherwise reimbursed by any
Borrower. Without limiting the generality of the foregoing, each Lender shall
contribute its share (based on its Pro Rata Share) of all reasonable costs and
expenses incurred by Agent (including reasonable attorneys' fees and expenses)
if Agent employs counsel for advice or other representation (whether or not any
suit has been or shall be filed) with respect to any of the Loan Documents, or
to enforce any rights of Agent or any Borrower's or any other party's
obligations under any of the Loan Documents, but not with respect to any dispute
between Agent and any other Lender(s). Any loss of principal and interest
resulting from any Event of Default shall be shared by Lenders in accordance
with their respective Pro Rata Shares. It is understood and agreed that in the
event Agent determines it is necessary to engage counsel for Lenders from and
after the occurrence of an Event of Default, said counsel shall be selected by
Agent.
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9.11. Notice of Events of Default. Agent shall not be deemed to have
knowledge or notice of the occurrence of any Default or Event of Default (other
than nonpayment of principal of or interest on the Loans) unless Agent has
received notice in writing from a Lender or a Borrower referring to this
Agreement or the other Loan Documents, describing such event or condition and
expressly stating that such notice is a notice of a Default or Event of Default.
Should Agent receive such notice of the occurrence of a Default or Event of
Default, or should Agent send any Borrower a notice of Default or Event of
Default, Agent shall promptly give notice thereof to each Lender. Each Lender
(including the Agent as Lender) shall be obligated to notify Agent of any
Default or Event of Default of which it has actual knowledge.
9.12. Ratable Sharing. The Lenders agree among themselves that (i) with
respect to all amounts received by them which are applicable to the payment of
the Obligations (excluding the fees described in Sections 3.1(g), 2.11, 2.14 and
2.15) equitable adjustment will be made so that, in effect, all such amounts
will be shared among them ratably in accordance with their Pro Rata Shares,
whether received by voluntary payment, by the exercise of the right of setoff or
banker's lien, by counterclaim or crossaction or by the enforcement of any or
all of the Obligations (excluding the fees described in Sections 3.1(g), 2.11,
2.14 and 2.15), (ii) if any of them shall by voluntary payment or by the
exercise of any right of counterclaim, setoff, banker's lien or otherwise,
receive payment of a proportion of the aggregate amount of the Obligations held
by it, which is greater than the amount which such Lender is entitled to receive
hereunder, the Lender receiving such excess payment shall purchase, without
recourse or warranty, an undivided interest and participation (which it shall be
deemed to have done simultaneously upon the receipt of such payment) in such
Obligations owed to the others that all such recoveries with respect to such
Obligations shall be applied ratably in accordance with their Pro Rata Shares;
provided, however, that if all or part of such excess payment received by the
purchasing party is thereafter recovered from it, those purchases shall be
rescinded and the purchase prices paid for such participations shall be returned
to such party to the extent necessary to adjust for such recovery, but without
interest except to the extent the purchasing party is required to pay interest
in connection with such recovery. Each Borrower agrees that, except as otherwise
expressly provided herein, any Lender so purchasing a participation from another
Lender pursuant to this Section 9.12 may, to the fullest extent permitted by
law, exercise all its rights of payment (including the right of setoff) with
respect to such participation as fully as if such Lender were the direct
creditor of such Borrower in the amount of such participation.
9.13. Defaulting Lenders. If for any reason any Lender (together with any
lender described in Section 2.4(a)(vii), a "Defaulting Lender") shall fail or
refuse to perform its obligations under this Agreement or any other Loan
Document to which it is a party within the time period specified for performance
of such obligation or, if no time period is specified, if such failure or
refusal continues for a period of ten (10) Business Days after notice from
Agent, then, in addition to the rights and remedies that may be available to
Agent or any Borrower under this Agreement or applicable law, notwithstanding
anything to the contrary contained herein, such Defaulting Lender's right to
participate in the administration of the Loans, this Agreement and the other
Loan Documents, including without limitation, any right to vote in respect of,
to consent to or to direct any action or inaction of Agent or to be taken into
account in the calculation of Requisite Lenders, shall be suspended during the
pendency of such failure or refusal. If for any reason a Lender fails to make
timely payment to Agent of any amount required to be paid to Agent hereunder
(without giving effect to any notice or cure periods), in addition to other
rights and remedies which Agent or any Borrower may have under the immediately
preceding provisions or otherwise, Agent shall be entitled (i) to collect
interest from such Defaulting Lender on such delinquent payment for the period
from the date on which the payment was due until the date on which the payment
is made at the Federal Funds Effective Rate, (ii) to withhold or setoff and to
apply in satisfaction of the defaulted payment and any related interest, any
amounts otherwise payable to such Lender under this Agreement or any other Loan
Document, (iii) to bring an action or suit against such Lender in a court of
competent jurisdiction to recover the defaulted amount and any related interest
or (iv) cause the Defaulting Lender to assign its Pro Rata Share of the Loans to
an Eligible Assignee designated by Agent upon the terms set forth in Section
9.14(b). Any amounts received by Agent in respect of a Defaulting Lender's Pro
Rata Share of the Loans shall not be paid to such Defaulting Lender and shall be
held by Agent and either applied against the purchase price of such Pro Rata
Share of the Loans under Section 9.14 or Section 2.9(b)(v) or paid to such
Defaulting Lender upon the Defaulting Lender's curing of its default.
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9.14. Purchasing of Defaulting Lender's Pro Rata Share.
(a) Any Lender who is not a Defaulting Lender shall have the right,
but not the obligation, in its sole discretion, to acquire all of a Defaulting
Lender's Pro Rata Share of the Loans. If more than one Lender exercises such
right, each such Lender shall have the right to acquire such proportion of such
Defaulting Lender's Pro Rata Share of the Loans as they may mutually agree. Upon
any such purchase of the Pro Rata Share of the Loans of a Defaulting Lender, the
Defaulting Lender's interest in the Loans and its rights hereunder (but not its
liability in respect thereof or under the Loan Documents or this Agreement to
the extent the same relate to the period prior to the effective date of the
purchase) shall terminate on the date of purchase, and the Defaulting Lender
shall promptly execute all documents reasonably requested to surrender and
transfer such interest to the purchaser thereof, including an appropriate
Assignment and Acceptance Agreement and, notwithstanding Section 10.1(d), shall
pay to Agent an assignment fee in the amount of $6,000. Notwithstanding the
foregoing, if no Lender exercises the right to acquire the Defaulting Lender's
Pro Rata Share of the Loans within thirty (30) days after the expiration of the
cure period set forth in Section 9.13, Borrowers' Representative shall have the
right to require the Agent to cause the Defaulting Lender to assign its Pro Rata
Share of the Loans to an Eligible Assignee designated by the Borrowers'
Representative who has agreed to accept such an assignment in accordance with
the terms of Section 9.14(b), provided however, that Borrowers' Representative
shall be entitled to exercise this right only if the Agent has not located an
Eligible Assignee of its own and there is no dispute with the Defaulting Lender
concerning such Default.
(b) The purchase price for the Pro Rata Share of the Loans of a
Defaulting Lender shall be equal to the amount of the principal balance of the
Loans outstanding and owed by Borrowers to the Defaulting Lender. Prior to
payment of such purchase price to Defaulting Lender, Agent shall apply against
such purchase price any amounts payable in respect of such Pro Rata Share of the
Loans as contemplated by the last sentence of Section 9.13. The Defaulting
Lender shall be entitled to receive amounts owed to it by any Borrower under the
Loans Documents which accrued prior to the date of the default by the Defaulting
Lender, to the extent the same are received by Agent from or on behalf of
Borrower. There shall be no recourse against any Lender or Agent for the payment
of such sums except to the extent of the receipt of payments from any other
party or in respect of the Loans.
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SECTION 10. GENERAL
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10.1. Assignments and Participations.
(a) Assignments. No assignments or participation's of any Lender's
rights or obligations under this Agreement shall be made except in accordance
with this Section 10.1. Each Lender may assign to one or more Eligible Assignees
all or a portion of its rights and obligations under this Agreement (including
all of its rights and obligations with respect to the Loans and the Letters of
Credit) in accordance with the provisions of this Section 10.1.
(b) Limitations on Assignments. Each assignment shall be subject to
the following conditions: (i) each assignment shall be of a constant, and not a
varying, ratable percentage of all of the assigning Lender's right and
obligations under this Agreement and, in the case of a partial assignment, shall
be in a minimum principal amount of $5,000,000, (ii) each such assignment shall
be to an Eligible Assignee, and (iii) the parties to each such assignment shall
execute and deliver to the Agent, for its acceptance and recording in the
Register, an Assignment and Acceptance. Upon such execution, delivery,
acceptance and recording in the Register, from and after the effective date
specified in each Assignment and Acceptance and agreed to by the Agent, (A) the
assignee thereunder shall, in addition to any rights and obligations hereunder
held by it immediately prior to such effective date, if any, have the right to
and obligations hereunder that have been assigned to it pursuant to such
Assignment and Acceptance and shall, to the fullest extent permitted by law,
have the same rights and benefits hereunder as if it were an original Lender
hereunder, (B) the assigning Lender shall, to the extent that rights and
obligations hereunder have been assigned by it and assumed by the Eligible
Assignee pursuant to such Assignment and Acceptance, relinquish its rights and
be released from its obligations under this Agreement (and, in the case of an
Assignment and Acceptance covering all or the remaining portion of such
assigning Lender's rights and obligations under this Agreement, the assigning
Lender shall cease to be a party hereto) and (C) each Borrower shall execute and
deliver to the assignee thereunder a Note evidencing its obligations to such
assignee with respect to the Loans and, if applicable, a new Note to the
Assignor evidencing its remaining obligations to the Assignor. Notwithstanding
the foregoing, the Agent hereunder shall be required to maintain a minimum
Revolving Credit Commitment of at least $20,000,000.
(c) The Register. The Agent shall maintain at its address referred to
in Section 10.9 a copy of each Assignment and Acceptance delivered to and
accepted by it and a register (the "Register") for the recordation of the names
and addresses of the Lenders, the Revolving Credit Commitment of, and the
principal amount of the Loans under the Revolving Credit Commitment owing to,
each Lender from time to time and whether such Lender is an original Lender or
the assignee of another Lender pursuant to an Assignment and Acceptance. The
entries in the Register shall be conclusive and binding for all purposes, absent
manifest error, and each Borrower, the Agent and the Lenders may treat each
Person whose name is recorded in the Register as a Lender hereunder for all
purposes of this Agreement. The Register shall be available for inspection by
Borrowers' Representative or any Lender at any reasonable time and from time to
time upon reasonable prior notice.
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(d) Fee. Upon its receipt of an Assignment and Acceptance executed by
the assigning Lender and an Eligible Assignee and a processing and recordation
fee of $2,500 (payable by the assigning Lender or the assignee, as shall be
agreed between them), the Agent shall, if such Assignment and Acceptance has
been completed and is in compliance with this Agreement and in substantially the
form of Exhibit H hereto, (i) accept such Assignment and Acceptance, (ii) record
the information contained therein in the Register and (iii) give prompt notice
thereof to the Borrowers' Representatives and the other Lenders.
(e) Participations. Each Lender may sell participation's to one or
more other financial institutions in or to all or a portion of its rights and
obligations under and in respect of any and all facilities under this Agreement
(including, without limitation, all or a portion of any or all of its Revolving
Credit Commitment hereunder and the Loans owing to it and its undivided interest
in the Letters of Credit); provided, however, that (i) such Lender's obligations
under this Agreement (including, without limitation, its Revolving Credit
Commitment hereunder) shall remain unchanged, (ii) such Lender shall remain
solely responsible to the other parties hereto for the performance of such
obligations, (iii) each Borrower, the Agent and the other Lenders shall continue
to deal solely and directly with such Lender in connection with such Lender's
rights and obligations under this Agreement, and (iv) such participant's rights
to agree or to restrict such Lender's ability to agree to the modification,
waiver or release of any of the terms of the Loan Documents, to consent to any
action or failure to act by any party to any of the Loan Documents or any of
their respective Affiliates or to exercise or refrain from exercising any powers
or rights which any Lender may have under or in respect of the Loan Documents,
shall be limited to the right to consent to (A) increase in the Revolving Credit
Commitment of the Lender from whom such participant purchased a participation,
(B) reduction of the principal of, or rate or amount of interest on the Loans
subject to such participation (other than by the payment or prepayment thereof),
and (C) postponement of the Revolving Credit Termination Date (other than
pursuant to Section 2.1(c) hereof).
(f) Information Regarding Borrowers and Guarantors. Any Lender may, in
connection with any assignment or participation pursuant to this Section 10.1,
disclose to the assignee or participant or proposed assignee or participant, any
information relating to any Borrower or Guarantor furnished to such Lender by
the Agent or by or on behalf of such Borrower or Guarantor; provided that, prior
to any such disclosure, such assignee or participant, or proposed assignee or
participant, shall agree to preserve in accordance with Section 10.15 the
confidentiality of any confidential information described therein.
(g) Payment to Participants. Anything in this Agreement to the
contrary notwithstanding, in the case of any participation, all amounts payable
by any Borrower or Guarantor under the Loan Documents shall be calculated and
made in the manner and to the parties required hereby as if no such
participation had been sold.
(h) Lenders' Creation of Security Interests. Notwithstanding any other
provision set forth in this Agreement, any Lender may at any time create a
security interest in all or any portion of its rights under this Agreement
(including, without limitation, Obligations owing to it and any Note held by it)
in favor of any Federal Reserve bank in accordance with Regulation A of the
Federal Reserve Board.
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(i) Assignments by Fleet. If Fleet ceases to be a Lender under this
Agreement by virtue of any assignment made pursuant to this Section 10.1, then,
as of the effective date of such cessation, Fleet's obligations to issue Letters
of Credit pursuant to Section 3.01 shall terminate and Fleet shall be an Issuing
Bank hereunder only with respect to outstanding Letters of Credit issued prior
to such date.
(j) Foreign Banks. Any assignee or participant that is not created or
organized under the laws of the United States or a political subdivision thereof
shall deliver to the Borrowers' Representative a true and accurate certificate
executed by a duly authorized officer to the effect that such party is subject
to tax review and eligible to receive payments hereunder and under any Note
without deduction or withholding of United States federal income tax (i) under
the provisions of an applicable tax treaty concluded by the United States (in
which case the certificate shall be accompanied by two duly completed copies of
IRS Form 1001 (or any successor or substitute form or forms)) or (ii) under
Sections 1442(c)(1) and 1442 (a) of the Internal Revenue Code (in which case the
certificate shall be accompanied by two duly completed copies of IRS Form 4224
(or any successor or substitute form or forms).
(k) Borrowers' Rights and Obligations Unaffected. Notwithstanding
anything to the contrary contained herein, no assignment or participation by any
Lender shall result in any change in any of the Loan Documents, any additional
or increased cost or obligation to Borrowers or reduce the rights or benefits of
the Borrowers hereunder without the prior written consent of the Borrowers'
Representative.
10.2. Amendments and Waivers.
(a) General Provisions. Unless otherwise provided for or required in
this Agreement, no amendment or modification of any provision of this Agreement
or any of the other Loan Documents shall be effective without the written
agreement of the Requisite Lenders (which the Requisite Lenders shall have the
right to grant or withhold in their sole discretion) and the Borrowers'
Representative; provided, however, that no Borrower's approval shall be required
for any amendment or modification of Sections 9.1 through 9.14. No termination
or waiver of any provision of this Agreement or any of the other Loan Documents,
or consent to any departure by any Borrower therefrom, shall be effective
without the written concurrence of the Requisite Lenders, which the Requisite
Lenders shall have the right to grant or withhold in their sole discretion. Any
waiver or consent shall be effective only in the specific instance and for the
specific purpose for which it was given. No notice to or demand on any Borrower
in any specific instance shall entitle such Borrower to any other or further
notice or demand in similar or other circumstances.
(b) Amendments, Consents and Waivers by All Lenders. Any amendment,
modification, termination, waiver or consent with respect to any of the
following provisions of this Agreement shall be effective only by a written
agreement, signed by each Lender affected thereby as described below (except as
otherwise indicated):
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(i) increase in the amount of such Lender's Revolving Credit
Commitment,
(ii) reduction of the rate or change in the amount or method of
computation of interest on the Loans, the Reimbursement Obligations, or any fees
or other amounts payable to such Lender (other than by the payment or prepayment
thereof),
(iii) reduction of the principal amount of any Loans (other than
by the payment or prepayment thereof),
(iv) postponement of any date (including the Revolving Credit
Termination Date except as permitted by Section 2.1(c)) fixed for any payment of
principal of, or interest on, the Loans, the Reimbursement Obligations or any
fees or other amounts payable to such Lender,
(v) change in the definition of Requisite Lenders or in the
aggregate Pro Rata Share of the Lenders which shall be required for the Lenders
or any of them to take action hereunder or under the other Loan Documents,
(vi) amendment of Section 9.12 or this Section 10.2,
(vii) assignment of any right or interest in or under this
Agreement or any of the other Loan Documents by any Borrower,
(viii) release any Borrower from liability hereunder or waiver of
any Event of Default described in Sections 8.1(a) or (g), and
(ix) release any Guarantor or cash collateral except as permitted
under this Agreement.
(c) Agent's Right to Purchase. Agent shall have the right, at its sole
and exclusive option, to purchase any Lender's Note evidencing such Lender's
Revolving Credit Commitment (the "Selling Lender") if any of the following shall
occur: (i) the Selling Lender consents to such purchase; (ii) Agent has
requested the Lenders' consent for any action pursuant to Section 10.2, the
Selling Lender has not consented, and the consent of Selling Lender is required
in order to approve the contemplated action (if more than one Selling Lender has
not consented then the Agent shall be required to purchase all the
non-consenting Selling Lenders' Revolving Credit Commitments); (iii) Selling
Lender fails to timely perform or observe any term, covenant or condition of
this Agreement (including, without limitation, the obligation to make its Pro
Rata Share of Loans) or the Loan Documents, or breaches any representation or
warranty contained herein; or (iv) Selling Lender shall become insolvent, shall
close for business or liquidate, or a receiver shall be appointed for the
Selling Lender. The purchase price shall be equal to the outstanding principal
balance of Selling Lender's Note, plus Selling Lender's Pro Rata Share of (i)
accrued and unpaid interest at the rates set forth in such Note through the date
of purchase, and (ii) fees and charges owing to Lenders under the Loan
Documents. Upon payment of such purchase price, Selling Lender shall endorse and
deliver its Note to Agent without recourse. Nothing under this Section shall be
construed as obligating Agent to purchase any Lender's Note, and nothing
hereunder shall be construed as granting any Lender the right to demand that
Agent purchase such Note.
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(d) Agent Authority. The Agent may, but shall have no obligation to,
with the written concurrence of any Lender, execute amendments, modifications,
waivers or consents on behalf of that Lender. Notwithstanding anything to the
contrary contained in this Section 10.2, no amendment, modification, waiver or
consent shall affect the rights or duties of the Agent under this Agreement and
the other Loan Documents, unless made in writing and signed by the Agent in
addition to the Lenders required above to take such action. Notwithstanding
anything herein to the contrary, in the event that any Borrower shall have
requested, in writing, that any Lender agree to an amendment, modification,
waiver or consent with respect to any particular provision or provisions of this
Agreement or the other Loan Documents, and such Lender shall have failed to
state, in writing, that it either agrees or disagrees (in full or in part) with
all such requests (in the case of its statement of agreement, subject to
satisfactory documentation and such other conditions it may specify) within ten
(10) days after such request, then such Lender hereby irrevocably authorizes the
Agent to agree or disagree, in full or in part, and in the Agent's sole
discretion, to such requests on behalf of such Lender as such Lenders'
attorney-in-fact and to execute and deliver any writing approved by the Agent
which evidences such agreement as such Lender's duly authorized agent for such
purposes.
10.3. Marshalling; Payments Set Aside. None of the Agent, any Lender or any
Issuing Bank shall be under any obligation to marshall any assets in favor of
any Borrower or any other party or against or in payment of any or all of the
Obligations. To the extent that such Borrower makes a payment or payments to the
Agent, the Lenders or the Issuing Banks or any such Person exercise its rights
of setoff, and such payment or payments or the proceeds of such enforcement or
setoff or any part thereof are subsequently invalidated, declared to be
fraudulent or preferential, set aside or required to be repaid to a trustee,
receiver or any other party, then to the extent of such recovery, the obligation
or part thereof originally intended to be satisfied, and all Liens, right and
remedies therefor, shall be revived and continued in full force and effect as if
such payment had not been made or such enforcement or setoff had not occurred.
10.4. Limitation of Liability. No claim may be made by any Lender, any
Issuing Bank, the Agent or any other Person against the Agent, any other Issuing
Bank or any other Lender or the Affiliates, directors, officers, employees,
attorneys or agents of any of them for any consequential or punitive damages in
respect of any claim for breach of contract or any other theory of liability
arising out of or related to the transactions contemplated by this Agreement, or
any act, omission or event occurring in connection therewith; and each Lender,
each Issuing Bank and the Agent hereby waives, releases and agrees not to sue
upon any such claim for any such damages, whether or not accrued and whether or
not known or suspected to exist in its favor.
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10.5. Counterparts; Effectiveness; Inconsistencies. This Agreement and any
amendments, waivers, consents, or supplements hereto may be executed in
counterparts, each of which when so executed and delivered shall be deemed an
original, but all such counterparts together shall constitute but one and the
same instrument. This Agreement shall become effective against each Borrower,
each Lender, each Issuing Bank and the Agent on the Closing Date. This Agreement
and each of the other Loan Documents shall be construed to the extent reasonable
to be consistent one with the other, but to the extent that the terms and
conditions of this Agreement are actually inconsistent with the terms and
conditions of any other Loan Document, this Agreement shall govern.
10.6. Disclaimer by Agent and each Lender. The Agent, the Issuing Banks and
the Lenders shall not be liable to any contractor, subcontractor, supplier,
laborer, architect, engineer, tenant or other party for services performed or
materials supplied in connection with any work performed on any of the
Properties. The Agent, the Issuing Banks and the Lenders shall not be liable for
any debts or claims accruing in favor of any such parties against any Borrower
or others or against any of the Properties. No Borrower is nor shall be an agent
of either the Agent, the Issuing Banks or the Lenders for any purposes and
neither the Lenders, the Issuing Banks nor the Agent shall be deemed partners or
joint venturers with any Borrower or any of its Affiliates. Neither the Agent,
the Issuing Banks nor the Lenders shall be deemed to be in privity of contract
with any contractor or provider of services to any of the Properties, nor shall
any payment of funds directly to a contractor or subcontractor or provider of
services be deemed to create any third party beneficiary status or recognition
of same by either the Agent, the Issuing Banks or the Lenders and each of the
Borrowers agree to hold the Agent, the Issuing Banks and the Lenders harmless
from any of the damages and expenses resulting from such a construction of the
relationship of the parties or any assertion thereof.
10.7. CHOICE OF LAW. THIS AGREEMENT, THE NOTES AND EACH LOAN DOCUMENT SHALL
BE CONTRACTS UNDER AND SHALL BY GOVERNED BY AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
10.8. SUBMISSION TO JURISDICTION; WAIVER OF JURY TRIAL; ETC.
NOTWITHSTANDING ANY OTHER PROVISION IN THIS AGREEMENT, ANY NOTE OR ANY OTHER
LOAN DOCUMENT, EACH BORROWER HEREBY IRREVOCABLY (a) SUBMITS TO THE NON-EXCLUSIVE
PERSONAL JURISDICTION OF ANY STATE OR FEDERAL COURT IN THE STATE OF NEW YORK IN
ANY SUIT, ACTION OR OTHER LEGAL PROCEEDING RELATING TO THIS AGREEMENT OR THE
NOTES OR ANY OF THE OTHER LOAN DOCUMENTS; (b) AGREES THAT ALL CLAIMS IN RESPECT
OF ANY SUCH SUIT, ACTION OR OTHER LEGAL PROCEEDING MAY BE HEARD AND DETERMINED
IN, AND ENFORCED IN AND BY, ANY SUCH COURT; (c) WAIVES ANY OBJECTION THAT IT MAY
NOW OR HEREAFTER HAVE TO VENUE IN ANY SUCH COURT OR THAT SUCH COURT IS AN
INCONVENIENT FORUM; (d) AGREES TO SERVICE OF PROCESS IN ANY SUCH PROCEEDING BY
REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO BORROWERS' REPRESENTATIVE AT
ITS ADDRESS SET FORTH HEREIN OR TO SUCH OTHER ADDRESS OF WHICH LENDER SHALL HAVE
BEEN NOTIFIED IN WRITING (SUCH SERVICE TO BE EFFECTIVE ON THE EARLIER OF RECEIPT
THEREOF OR, IN THE CASE OF SERVICE BY MAIL, THE 5TH DAY AFTER DEPOSIT OF SUCH
SERVICE IN THE MAILS AS AFORESAID), (e) TO THE EXTENT THAT SUCH PARTY HAS
ACQUIRED, OR HEREAFTER MAY ACQUIRE, ANY IMMUNITY FROM JURISDICTION OF ANY SUCH
COURT OR FROM LEGAL PROCESS THEREIN, WAIVES, TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW, SUCH IMMUNITY; (f) WAIVES, TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW, IN CONNECTION WITH, OR WITH RESPECT TO, ANY SUIT, ACTION OR
OTHER LEGAL PROCEEDING RELATING TO THIS AGREEMENT OR THE NOTES OR ANY OF THE
OTHER LOAN DOCUMENTS, ANY RIGHT TO A JURY TRIAL; AND (g) AGREES THAT AGENT SHALL
HAVE THE RIGHT TO BRING ANY LEGAL PROCEEDINGS (INCLUDING A PROCEEDING FOR
ENFORCEMENT OF A JUDGMENT ENTERED BY ANY OF THE AFOREMENTIONED COURTS) AGAINST
ANY BORROWER IN ANY OTHER COURT OR JURISDICTION IN ACCORDANCE WITH APPLICABLE
LAW. NOTWITHSTANDING THE FOREGOING, NOTHING IN THIS SECTION SHALL AFFECT THE
RIGHT OF AGENT IN CONNECTION WITH ANY LEGAL ACTION OR PROCEEDING WHATSOEVER, TO
SERVE LEGAL PROCESS IN ANY OTHER MANNER PERMITTED BY LAW. EACH BORROWER HEREBY
IRREVOCABLY DESIGNATES BORROWERS' REPRESENTATIVE AS ITS PROCESS AGENT TO RECEIVE
SERVICE OF ANY AND ALL PROCESS AND DOCUMENTS ON ITS BEHALF IN ANY LEGAL
PROCEEDING IN THE STATE OF NEW YORK AND BORROWERS' REPRESENTATIVE, BY ITS
ACKNOWLEDGMENT BELOW, IRREVOCABLY AGREES TO SO ACT AS AGENT FOR SERVICE OF
PROCESS. IF SUCH AGENT SHALL FOR ANY REASON FAIL TO ACT, OR BE PREVENTED FROM
ACTING, AS SUCH AGENT, NOTICE THEREOF SHALL IMMEDIATELY BE GIVEN TO SUCH AGENT
BY REGISTERED OR CERTIFIED MAIL AND EACH BORROWER AGREES PROMPTLY TO DESIGNATE
ANOTHER AGENT FOR SERVICE OF PROCESS IN THE CITY OF NEW YORK, NEW YORK,
SATISFACTORY TO AGENT UNDER THIS AGREEMENT, TO SERVE IN PLACE OF BORROWERS'
REPRESENTATIVE AND DELIVER TO AGENT WRITTEN EVIDENCE OF SUCH SUBSTITUTE AGENT'S
ACCEPTANCE OF SUCH DESIGNATION. BORROWERS' AGENT SHALL NEVERTHELESS CONTINUE TO
SERVE AS AGENT FOR SERVICE OF PROCESS UNTIL ITS SUCCESSOR IS DULY APPOINTED.
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10.9. Notices; Certain Payments.
(a) All notices, consents and other communications to Borrowers,
Guarantors, Agent or any Lender relating hereto to be effective shall be in
writing and shall be deemed made (i) if by certified mail, return receipt
requested, four (4) Business Days after deposit in the United States mail, or if
by facsimile, when received (in each case unless otherwise specified in this
Agreement), (ii) if delivered by hand or overnight courier, when receipted for,
in each case addressed to them as follows or at such other address as either of
them may designate by written notice to the other in the manner set forth in
this Section 10.9; (x) any Borrower: c/o Lexington Corporate Properties, Inc.,
355 Lexington Avenue, New York, New York, Attention : Patrick Carroll with a
copy to Katherine B. Lipton, Esq., Paul, Hastings, Janofsky & Walker LLP, 75
East 55th Street, New York, NY 10022; or to (y) Agent: Fleet National Bank, 100
Federal Street, Boston, Massachusetts 02110, Attention: James B. McLaughlin,
with a copy to Lorne W. McDougall, Esq., Edwards & Angell, LLP 101 Federal
Street, Boston, MA 02110; or to (z) any Lender: at the address set forth below
each Lender's name on the signature pages hereof or the signature page of any
applicable Assignment and Acceptance.
69
(b) All payments on account of the Loans and the Note pursuant hereto
or pursuant to the other Loan Documents shall be made for the account of Lender
at: By mail: Fleet National Bank, 100 Federal Street, Boston, Massachusetts
02110, Mail Code MA DE 10009A, Attn: Dwayne Nelson. By wire: Fleet National
Bank, ABA #011-000-138, Credit Account #15103566156, Re: Lexington Attn: Dwayne
Nelson (617) 434-2098.
(c) Notices to the Agent pursuant to Section 2 or 9 shall not be
effective until received by the Agent.
Any Lender may by written notice to Agent and Borrowers' Representative specify
or change its account and address for payment instructions hereunder.
10.10. No Waivers; Cumulative Remedies; Entire Agreement; Headings. No
action, failure, delay or omission by, Agent or any Lender in exercising any
rights and remedies under this Agreement, any Note or any other Loan Document,
or otherwise, shall constitute a waiver of, or impair, any of the rights or
privileges of Agent or any Lender hereunder or thereunder. No single or partial
exercise of any such right or remedy shall preclude any other or further
exercise thereof or the exercises of any other right or remedy. Such rights and
remedies are cumulative and not exclusive of any rights and remedies provided by
law or otherwise available, including, but not limited to, rights to specific
performance (to the extent permitted by law) or any covenant or agreement
contained in this Agreement or any of the Loan Documents. No waiver of any such
right or remedy shall be effective unless given in writing or as otherwise
provided in Section 10.2. No waiver of any such right or remedy shall be deemed
a waiver of any other right or remedy hereunder or thereunder. Except as
otherwise specifically provided in this Agreement, every right and remedy given
by this Agreement or by applicable law to Agent or any Lender may be exercised
from time to time and as often as may be deemed expedient by Agent or any
Lender. This Agreement, each Note and the other Loan Documents constitute the
entire agreement of the parties relating to the subject matter hereof and
thereof and there are no verbal agreements relating hereto or thereto. Section
headings herein shall have no legal effect. This Agreement, each Note and the
other Loan Documents (including all covenants, representations, warranties,
privileges, rights, and remedies made or granted herein or therein) shall inure
to the benefit of, and be enforceable by Agent or any Lender and its respective
successors and assigns, except as otherwise expressly provided in this
Agreement. Borrowers may not directly or indirectly assign or transfer (whether
by agreement, by operation of law or otherwise) any of their rights or
obligations and liabilities hereunder without the prior written consent of Agent
or any Lender affected thereby. Subject to the provisions of Section 10.1, each
Lender may make, carry or transfer the Loans at, to or for the account of, any
of its branch offices or the office of one or more of its Affiliates.
10.11. Survival. The obligations of each Borrower under Sections 2.11,
2.14, 2.15, 2.16, 6.10, 10.12 and 10.14 (and all other indemnification and
expense reimbursement obligations of any Borrower under this Agreement) shall
survive the repayment of the Loans and the cancellation of the Notes and the
termination of the other obligations of such Borrower hereunder and under the
other Loan Documents for a period of three (3) years after the date of such
payment, except in the case of Section 6.10 and any other indemnification
obligations which shall survive for a period of five (5) years; provided,
however, that the Borrowers shall not be liable for any liability, claim, loss,
cost or expense arising from any act or omission of any Lender or other
indemnified party after the transfer of any Property by foreclosure,
deed-in-lieu thereof or otherwise which doesn't arise from or deal with
pre-existing conditions. The receipt by Borrowers' Representative, prior to the
expiration of the above three (3) and five (5) year limitation periods, of a
notice, in good faith, of any liability, claim, loss, cost or expense arising
from the obligations of Borrowers referenced above shall toll the running of the
above limitation periods with regard to such liability, claim, loss, cost or
expense.
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10.12. Payment of Expenses and Taxes. Each Borrower agrees (a) to pay or
reimburse Agent within fifteen (15) Business Days after demand for all its
out-of-pocket costs and expenses incurred in connection with the development,
preparation and execution of, and any amendment, supplement or modification to,
this Agreement, the Notes and any other Loan Documents or other documents
prepared in connection herewith, and the consummation of the transactions
contemplated hereby and thereby, including, without limitation, the reasonable
fees and disbursements of counsel to Agent, (b) to pay or reimburse Agent and
Lenders, within fifteen (15) Business Days after demand for all its costs and
expenses incurred in connection with the enforcement or preservation of any
rights under this Agreement, the Note and any Loan Documents, (c) to pay or
reimburse Agent, within fifteen (15) Business Days after demand for all its
costs and expenses incurred in connection with the satisfaction or review of
conditions precedent to any borrowing other than that occurring on the Closing
Date, including, without limitation, reasonable fees and disbursements of
counsel to Agent, (d) to pay, indemnify, and to hold Agent and each Lender, and
their respective officers, directors, employees and agents harmless from, any
and all recording and filing fees and any and all liabilities with respect to,
or resulting from any delay in paying, stamp, excise and other taxes, if any,
which may be payable or determined to be payable in connection with the
execution and delivery of, or consummation of any of the transactions
contemplated by, or any amendment, supplement or modification of, or any waiver
or consent under or in respect of, or any enforcement action taken under this
Agreement, the Notes, the Loan Documents and any such other documents, and (e)
to pay, indemnify, and hold Agent, and its officers, directors, employees and
agents harmless from and against any and all other liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind or nature whatsoever with respect to the execution,
delivery, enforcement, performance and administration of this Agreement or the
other Loan Documents except to the extent resulting from the gross negligence or
willful misconduct of such parties (all the foregoing, collectively, the
"indemnified liabilities").
10.13. Further Assurances. Each Borrower and Guarantor will, on request of
Agent, (a) promptly correct any defect, error or omission in any Loan Document;
(b) execute, acknowledge, deliver, procure, record or file such further
instruments and do such further acts deemed reasonably necessary, desirable or
proper by Agent to carry out the purposes of the Loan Documents and to identify
and subject to the liens and security interests of the Loan Documents any
property intended to be covered thereby, including any renewals, additions,
substitutions, replacements, or appurtenances to any such Property; and (c)
provide such certificates, documents, reports, information, affidavits and other
instruments and do such further acts deemed reasonably necessary, desirable or
proper by Agent to comply with the requirements of any agency having
jurisdiction over Agent.
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10.14. No Brokers. Each Borrower hereby agrees to indemnify Agent and each
Lender from any liability, claim or loss arising by reason of claims for any
brokerage commission made by any Person claiming to have dealt with and Borrower
or any Affiliate of such Borrower in connection with the Loans. Agent and each
Lender agree to indemnify each Borrower from any liability, claim or loss
arising by reason of claims for any brokerage commission made by any Person
claiming to have dealt with Agent or any Lender in connection with the Loans.
The provisions of this Section shall survive the repayment of the Loan and shall
continue in full force and effect so long as the possibility of such liability
(including attorneys' fees), claim or loss exists.
10.15. Confidentiality. Agent and each Lender shall hold all confidential
information obtained pursuant to the requirements of this Agreement in
accordance with such party's customary procedures for handling confidential
information of this nature and in accordance with safe and sound banking
practices and in any event may make disclosure reasonably required by a bona
fide offeree, transferee or participant in connection with the contemplated
transfer or participation or as required or requested by any Governmental
Authority or representative thereof or pursuant to legal process and shall
require any such offeree, transferee or participant to agree (and require any of
its offerees, transferees or participants to agree) to comply with this Section
10.15. In no event shall Agent or any Lender be obligated or required to return
any materials furnished by any Borrower.
10.16. Captions. The captions in this instrument are for convenience and
reference only and do not define, limit or describe the scope of the provisions
hereof.
10.17. Gender. Whenever the context so requires, reference herein to the
neuter gender shall include the masculine and/or feminine gender, and the
singular number shall include the plural and, in each case, vice versa.
10.18. Successors. The terms, covenants, agreements and conditions
contained herein shall extend to, include, and inure to the benefit of and be
binding upon the respective successors and assigns of each Borrower and the
successors and assigns of Lender.
10.19. Entire Agreement. This Agreement, the Note, the Guaranties and the
other documents being executed in connection herewith express the entire
understanding of the parties with respect to the transactions contemplated
thereby. No modification or waiver of any provision of this Agreement, the Note,
or any related documents nor consent to any departure by any Borrower or
Guarantor therefrom, shall in any event be effective unless the same shall be in
writing, and then such waiver of consent shall be effective only in the specific
instance, and for the purpose, for which given. No notice to, or demand on any
Borrower or Guarantor, in any case, shall entitle such Borrower or Guarantor to
any other or future notice of demand in the same, similar or other
circumstances.
10.20. Delay Not Waiver. Neither any failure nor any delay on the part of
Agent in exercising any right, power or privilege hereunder, or under the Note,
or any other instrument given as security therefor, shall operate as a waiver
thereof, nor shall a single or partial exercise thereof preclude any other or
future exercise, or the exercise of any other right, power or privilege.
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10.21. Set-Off. Each Borrower and Guarantor hereby grants to Agent, a
continuing lien, security interest and right of setoff as security for all
liabilities and obligations to Agent, whether now existing or hereafter arising,
upon and against all deposits, credits, collateral and property, now existing or
hereafter arising, upon and against all deposits, credits, collateral and
property, now or hereafter in the possession, custody, safekeeping or control of
Lender or any entity under the control of FleetBoston Financial Corporation and
its successors or assigns or in transit to any of them. At any time, without
demand or notice (any such notice being expressly waived by each Borrower and
Guarantor), Agent may set off the same or any part thereof and apply the same to
any liability or obligation of such Borrower and any Guarantor even though
unmatured and regardless of the adequacy of any other collateral securing the
Loan. ANY AND ALL RIGHTS TO REQUIRE LENDER TO EXERCISE ITS RIGHTS TO REMEDIES
WITH RESPECT TO ANY OTHER COLLATERAL WHICH SECURES THE LOAN, PRIOR TO EXERCISING
ITS RIGHT OF SETOFF WITH RESPECT TO SUCH DEPOSITS, CREDITS OR OTHER PROPERTY OF
BORROWER OR ANY GUARANTOR, ARE HEREBY KNOWINGLY, VOLUNTARILY AND IRREVOCABLY
WAIVED.
10.22. Severability. In case any one or more of the provisions contained in
this Agreement or any related document shall for any reason be held to be
invalid, illegal or unenforceable in any respect, such invalidity, illegality or
unenforceability shall not affect any other provision hereof or thereof, and
this Agreement or any such related document shall be construed as if such
invalid, illegal or unenforceable provision had never been included.
10.23. Lost or Damaged Loan Documents. Upon receipt of an affidavit of an
officer of Lender as to the loss, theft, destruction or mutilation of the Note
or any other Loan Document which is not of public record, and, in the case of
any such loss, theft, destruction or mutilation, upon surrender and cancellation
of such Note or other Loan Document, each Borrower will issue, in lieu thereof,
a replacement Note or other Loan Document in the same principal amount thereof
and otherwise of like tenor.
10.24. Claims Against Agent or any Lender.
10.24.1 Borrowers Must Notify. Neither Agent nor any Lender shall be
in default under this Agreement, or under any other Loan Document, unless a
written notice specifically setting forth the claim of any Borrower shall have
been given to Agent and such Lender within six (6) months after such Borrower
first had knowledge or notice of the occurrence of the event which such Borrower
alleges gave rise to such claim and Agent or such Lender do not remedy or cure
the default, if any there be, with reasonable promptness thereafter.
10.24.2 Remedies. If it is determined by the final order of a court of
competent jurisdiction, which is not subject to further appeal, that Agent or
any Lender has breached any of its obligations under the Loan Documents and has
not remedied or cured the same with reasonable promptness following notice
thereof, Agent's or such Lender's responsibilities shall be limited to: (i)
where the breach consists of the failure to grant consent or give approval in
violation of the terms and requirements of a Loan Document, the obligation to
grant such consent or give such approval and to pay such Borrower's reasonable
costs and expenses including, without limitation, reasonable attorneys' fees and
disbursements in connection with such court proceedings; and (ii) the case of
any such failure to grant such consent or give such approval, or in the case of
any other such default by Agent or any Lender, where it is also so determined
that Agent or such Lender acted in bad faith, the payment of any actual, direct,
compensatory damages sustained by such Borrower as a result thereof plus such
Borrower's reasonable costs and expenses, including, without limitation,
reasonable attorneys' fees and disbursements in connection with such court
proceedings.
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10.25. Time of the Essence. Time is of the essence for each provision of
this Agreement and each other Loan Document.
10.26. Place of Delivery. Each Borrower agrees to furnish to Lender at the
Lender's office in Boston, Massachusetts all further instruments, certifications
and documents to be furnished hereunder.
10.27. Use of Proceeds (Regulation U). No portion of the proceeds of the
loan shall be used, in whole or in part, for the purpose of the purchasing or
carrying any "margin stock" as such term is defined in Regulation U of the Board
of Governors of the Federal Reserve System.
10.28. Integration. This Agreement is intended by the parties as the final,
complete and exclusive statement of the transactions evidenced by this
Agreement. All prior or contemporaneous promises, agreements and understandings,
whether oral or written, are deemed to be superceded by this Agreement, and no
party is relying on any promise, agreement or understanding not set forth in
this Agreement. This Agreement may not be amended or modified except by Borrower
and Lender.
10.29. Lender's Right to Pledge. Any Lender may at any time pledge or
assign all or any portion of its rights under the Loan Documents including any
portion of its Note to any of the twelve (12) Federal Reserve Lenders organized
under Section 4 of the Federal Reserve Act, 12 U.S.C. Section 341. No such
pledge or assignment or enforcement thereof shall release such Lender from its
obligations under any of the Loan Documents.
SECTION 11. THE BORROWERS' REPRESENTATIVE
-----------------------------
11.1. Appointment of Borrower Representative.
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(a) Each Borrower hereby irrevocably designates and appoints Lexington
(sometimes referred to in this Agreement as Borrowers' Representative), as its
agent under this Agreement and the Loan Documents and the other documents or
instruments delivered pursuant to or in connection herewith or therewith and
each Borrower hereby authorizes Lexington, for such Borrower, to take such
action on behalf of such Borrower under the provisions of the Loan Documents and
to exercise such powers and perform such duties as are expressly delegated to
Lexington or Borrowers' Representative by the terms of the Loan Documents,
together with such other powers as are reasonably incidental thereto.
(b) Agent or any Lender shall be entitled to rely, and shall be fully
protected in relying, upon any note, writing, resolution, notice, consent,
certificate, affidavit, letter, cablegram, telegram, telecopy, telex or teletype
message, statement, order or other document or conversation reasonably believed
by it to be genuine and correct and to have been signed, sent or made by the
Borrowers' Representative in connection with this Agreement or any of the Loan
Documents and upon advice and statements of legal counsel (including, without
limitation, counsel to Borrowers), independent accountants and other experts
selected by Borrowers' Representative in connection with the Loan Documents.
- the next page is the signature page -
75
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their proper and duly authorized officers as of the day and
year first above written.
BORROWERS:
LEXINGTON CORPORATE PROPERTIES TRUST
By: /s/ T. Wilson Eglin
---------------------------------
Its: President
LEPERCQ CORPORATE INCOME FUND L.P.
BY: LEX GP-1 Trust, its general partner
By: /s/ Patrick Carroll
---------------------------------
Its: Vice President
LEPERCQ CORPORATE INCOME FUND II L.P.
BY: LEX GP-1 Trust, its general
By: /s/ Patrick Carroll
---------------------------------
Its: Vice President
NET 3 ACQUISITIONS L.P.
By: /s/ Patrick Carroll
---------------------------------
Name: Patrick Carroll
-------------------------------
Title: Vice President
------------------------------
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LENDERS: ADDRESS: REVOLVING CREDIT
COMMITMENT
FLEET NATIONAL BANK 100 Federal Street $35,000,000
Boston, Massachusetts 02110
By: /s/ James B. McLaughlin
--------------------------
James B. McLaughlin
Director
WACHOVIA BANK, NATIONAL $30,000,000
ASSOCIATION 301 South College Street
NC0172
By: /s/ David B. Hoagland Charlotte, NC 28288
--------------------------
David B. Hoagland
Vice President
SOVEREIGN BANK 75 State Street $20,000,000
Mail Stop: MA1SST04-11
By: /s/ T. Gregory Donohue Boston, MA 02109
--------------------------
T. Gregory Donohue
Vice President
BRANCH BANKING & TRUST COMPANY 200 W. Second Street $15,000,000
16th Floor
By: /s/ Christopher Verwoerdt Winston Salem, NC 27101
--------------------------
Christopher Verwoerdt
Vice President
77
Acknowledgment by Borrowers' Representative
-------------------------------------------
We hereby acknowledge and accept the designation of Borrowers'
Representative and agree to discharge the duties and responsibilities of
Borrowers' Representative as set forth in the Loan Agreement until the Loans are
paid in full.
Lexington Corporate Properties Trust
By: /s/ T. Wilson Eglin
----------------------------------
Its: President
78
SCHEDULE 2
----------
- -----------------------------------------------------------------------------------------------------------------------------------
Letters of Credit Outstanding for Lexington Corporate Properties
Trust
- -----------------------------------------------------------------------------------------------------------------------------------
Applicant Beneficiary Name Amount L/C Issue Date L/C Expiry LC No. Evergreen
Date Yes/No
Lepercq Corporate Income Principal Life $ 114,500.00 20-Dec-01 16-Dec-03 MS1303185 No
Fund II L.P. Insurance Company
Lepercq Corporate Income Principal Life $ 332,500.00 20-Dec-01 16-Dec-03 MS1303186 No
Fund II L.P. and North Tampa Insurance Company
Associates, jointly and
severally
Lepercq Corporate Income John Hancock Life $ 334,675.00 22-May-01 30-Jun-04 MS1271330 Yes
Fund L.P. and Lexington Insurance Company Real
Auburn Hills L.L.C., jointly Estate Investment Group
and severally
Lepercq Corporate Income Key Corporate Capital $2,500,000.00 28-Feb-02 30-Mar-04 MS1312967 No
Fund L.P. c/o Lexington Inc.
Corporate Properties Trust
Lepercq Corporate Income Bear Stearns Commercial $ 300,000.00 28-Aug-02 28-Aug-04 MS1350398 Yes
Fund L. P. and Lexington Mortgage, Inc.
Knoxville LLC
Lepercq Corporate Income Principal Commercial $ 582,705.00 20-Sep-02 20-Sep-04 MS1351586 Yes
Fund LP & Lexington Funding LLC c/o The
Groveport LLC Principal Financial
Group
$4,164,380.00
- -----------------------------------------------------------------------------------------------------------------------------------
79