UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1997
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
-------------- -------------------
Commission file number 0-22139
------------------ --------------------
BEACON PROPERTIES, L.P.
-----------------------
(Exact name of Registrant as specified in its charter)
Delaware 04-3224259
(State or other jurisdiction of incorporation (IRS Employer Identification No.)
or organization)
50 Rowes Wharf, Boston, Massachusetts 02110
-------------------------------------------
(Address of principal executive offices)
(Zip Code)
(617) 330-1400
--------------
(Registrant's telephone number, including area code)
-------------------------------------------------------
(Former name, former address and former fiscal year,
if changed since last report)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes No X
--- ---
1
<PAGE>
BEACON PROPERTIES, L.P.
FORM 10-Q
INDEX
-----
Page
----
Part I - Financial Information
Item 1. Financial Statements
Consolidated Balance Sheets at June 30, 1997
and December 31, 1996 3
Consolidated Statements of Operations for the three
and six months ended June 30, 1997 and 1996 4
Consolidated Statements of Cash Flows for the six
months ended June 30, 1997 and 1996 5
Notes to Consolidated Financial Statements 6-9
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 10-18
Part II - Other Information
Item 1. Legal Proceedings 19
Item 2. Changes in Securities 19
Item 3. Defaults Upon Senior Securities 19
Item 4. Submission of Matters to a Vote of Security Holders 20
Item 5. Other Information 20
Item 6. Exhibits and Reports on Form 8-K 20
Signature 21
2
<PAGE>
BEACON PROPERTIES, L.P.
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
June 30, December 31,
1997 1996
------------- ----------
(Unaudited)
(in thousands)
<S> <C> <C>
ASSETS
Real Estate:
Land $ 297,735 $ 213,858
Buildings, improvements and equipment 1,998,180 1,477,672
---------- ----------
2,295,915 1,691,530
Less accumulated depreciation 121,987 97,535
---------- ----------
2,173,928 1,593,995
Deferred financing and leasing costs, net of accumulated
amortization of $18,716 and $16,370 16,725 17,287
Cash and cash equivalents 49,098 35,896
Restricted cash 5,064 2,599
Accounts receivable 15,222 11,596
Accrued rent 20,717 13,065
Prepaid expenses and other assets 2,447 808
Mortgage notes receivable 51,507 51,491
Investments in and advance to joint ventures and corporations 51,438 52,176
---------- ----------
Total assets $2,386,146 $1,778,913
========== ==========
LIABILITIES AND PARTNER'S CAPITAL
Liabilities:
Mortgage notes payable $ 587,503 $ 452,212
Note payable, Credit Facility 149,000 153,000
Accounts payable, accrued expenses and other liabilities 66,768 41,336
Investment in joint venture 24,458 24,735
---------- ----------
Total liabilities 827,729 671,283
---------- ----------
Commitments and contingencies -- ---
Limited partners' capital interest, 7,343,451 units
outstanding, at redemption value 244,629 229,783
---------- ----------
Partner's capital:
Operating Partnership units issued and outstanding
63,375,143 and 48,116,480:
General partner - outstanding 553,751 and 543,904 13,210 10,530
Limited partner - outstanding 54,821,392 and 47,572,576 1,106,330 867,317
Series A Preferred partner - outstanding
8,000,000 and -0- 194,248 ---
---------- ----------
Total partner's capital 1,313,788 877,847
---------- ----------
Total liabilities and partner's capital $2,386,146 $1,778,913
========== ==========
</TABLE>
The accompanying notes are an integral part of
these consolidated financial statements.
3
<PAGE>
BEACON PROPERTIES, L.P.
CONSOLIDATED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
----------------------------- ------------------------------
1997 1996 1997 1996
------------ ---------- ----------- -----------
(Unaudited and in thousands, except per share amounts and
shares outstanding)
<S> <C> <C> <C> <C>
Revenues:
Rental income $ 71,086 $ 33,130 $ 134,688 $ 60,051
Management fees 758 768 1,579 1,517
Recoveries from tenants 9,246 3,538 17,598 6,782
Mortgage interest income 1,387 1,207 2,759 2,165
Other income 3,557 2,795 6,121 4,590
----------- ----------- ----------- -----------
86,034 41,438 162,745 75,105
----------- ----------- ----------- -----------
Expenses:
Property expenses 16,785 7,874 31,316 14,770
Real estate taxes 9,146 4,313 17,480 7,831
General and administrative 9,070 3,737 17,681 7,281
Mortgage interest expense 11,641 7,317 22,663 13,661
Interest - amortization of financing costs 260 623 737 1,184
Depreciation and amortization 17,606 7,480 31,816 13,349
----------- ----------- ----------- -----------
64,508 31,344 121,693 58,076
----------- ----------- ----------- -----------
Income from operations 21,526 10,094 41,052 17,029
Equity in net income of joint ventures and corporations 1,843 1,204 3,271 2,575
----------- ----------- ----------- -----------
Income from continuing operations 23,369 11,298 44,323 19,604
Discontinued operations - Construction Company
Loss from operations (887) (663) (1,473) (1,070)
Gain on sale of property 16,736 ---- 16,736 ----
----------- ----------- ----------- -----------
Income before extraordinary items 39,218 10,635 59,586 18,534
Extraordinary items (2,635) (1,890) (2,635) (3,876)
----------- ----------- ----------- -----------
Net income $ 36,583 $ 8,745 $ 56,951 $ 14,658
=========== =========== =========== ===========
Net income per unit before extraordinary items $ 0.62 $ 0.34 $ 1.02 $ 0.64
Extraordinary items (0.04) (0.06) (0.05) (0.13)
----------- ----------- ----------- -----------
Net income per unit $ 0.58 $ 0.28 $ 0.97 $ 0.51
=========== =========== =========== ===========
Weighted average units outstanding 60,995,703 31,608,746 57,731,389 28,872,503
=========== =========== =========== ===========
</TABLE>
The accompanying notes are an integral part of these
consolidated financial statements.
4
<PAGE>
BEACON PROPERTIES, L.P.
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Six Months Ended June 30,
-------------------------
1997 1996
-------- ----------
(Unaudited in thousands)
<S> <C> <C>
Cash flows from operating activities:
Net income $ 56,951 $ 14,658
-------- ----------
Adjustments to reconcile net income to net cash
provided by operating activities:
Increase in accrued rent (7,652) (2,581)
Depreciation, amortization and amortization
of financing costs 32,553 14,533
Equity in net income of joint ventures
and corporations (1,798) (1,505)
Gain on sale of property (16,736) --
Extraordinary items 2,635 3,876
Increase in accounts receivable (3,626) (2,151)
Increase in prepaid expenses and other assets (281) (217)
Increase in accounts payable and
accrued expenses 30,144 8,546
---------- -----------
Total adjustments 35,239 20,501
---------- -----------
Net cash provided by operating activities 92,190 35,159
---------- -----------
Cash flows from investing activities:
Property additions (499,643) (342,276)
Proceeds from sale of property 72,500 --
Payment of deferred leasing costs (4,330) (2,751)
(Increase) decrease in prepaid expenses
and other assets (1,358) 3,000
Purchase of mortgage notes receivable (16) (16,708)
Capital distributions from joint ventures 2,236 2,759
Increase in restricted cash (2,465) (2,274)
---------- -----------
Net cash used by investing activities (433,076) (358,250)
---------- -----------
Cash flows from financing activities:
Capital contributions 412,920 175,024
Payment of deferred financing costs (1,019) (5,051)
Borrowings on Credit Facility 348,000 75,000
Payments on Credit Facility (352,000) (205,500)
Borrowings on mortgage notes -- 593,000
Payments on mortgage notes (709) (260,318)
Decrease in prepaid expenses and other assets -- 2,300
Distributions (53,104) (23,243)
---------- -----------
Net cash provided by financing activities 354,088 351,212
---------- -----------
Net increase in cash and cash equivalents 13,202 28,121
Cash and cash equivalents, beginning of period 35,896 4,481
---------- -----------
Cash and cash equivalents, end of period $ 49,098 $ 32,602
========= ==========
Supplemental disclosures:
Cash paid during the period of interest $ 21,004 $ 12,364
========== ===========
Non cash activities:
Increase in partners' capital as a result
of acquisition of properties $ 33,417 $ 13,758
========= ==========
Liabilities assumed in connection with contributions
and acquisitions of properties $ 136,000 $ --
========= ==========
</TABLE>
The accompanying notes are an integral part of these
consolidated financial statements.
5
<PAGE>
BEACON PROPERTIES, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
--------
1. Organization and Basis of Presentation:
---------------------------------------
Organization
------------
Beacon Properties, L.P. (the "Operating Partnership") was organized as a
Delaware limited partnership in April 1994 and commenced operations
effective on May 26, 1994. Simultaneously with the closing of the Initial
Public Offering (the "IPO") of Beacon Properties Corporation (the
"Company"), which is the sole general partner and a limited partner of the
Operating Partnership, the Company contributed its interest in two
properties and approximately $173.4 million, the net proceeds of the IPO,
to the Operating Partnership in exchange for partnership interests
("Units"). The Operating Partnership was formed to continue and expand the
commercial real estate business of The Beacon Group (the "Predecessor").
The Operating Partnership specializes in property ownership, management,
leasing, design and development and currently owns or has an interest in
118 properties totaling approximately 18.8 million square feet (the
"Properties").
Basis of Presentation
---------------------
The financial statements of the Operating Partnership are consolidated and
include all the accounts of the Operating Partnership and its subsidiaries.
All significant intercompany balances and transactions have been
eliminated.
The accompanying financial statements are unaudited; however, they have
been prepared in accordance with generally accepted accounting principles
for interim financial information and in conjunction with the rules and
regulations of the Securities and Exchange Commission. Accordingly, they do
not include all of the disclosures required by generally accepted
accounting principles for complete financial statements. In the opinion of
management, all adjustments (consisting solely of normal recurring matters)
necessary for a fair presentation of the financial statements for these
interim periods have been included. The results for the six months ended
June 30, 1997 are not necessarily indicative of the results to be obtained
for the full fiscal year. These financial statements should be read in
conjunction with the December 31, 1996 audited financial statements and
notes thereto of the Operating Partnership, included in its annual report
on Form 10 (as amended by Form 10/A-1, Form 10/A-2, and Form 10/A-3) for
the fiscal year ended December 31, 1996. Certain reclassifications have
been made to previously reported amounts to conform with current reporting.
6
<PAGE>
BEACON PROPERTIES, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
--------
2. Equity Investments in Real Estate:
----------------------------------
The Operating Partnership reports its share of income and losses based on
its ownership interest in the respective equity investments. Losses in
excess of investments are not recorded where the Operating Partnership has
not guaranteed or does not intend to provide any future financial support.
The following summarized information has been presented for the property
joint ventures and property corporation for which the Operating Partnership
has recorded its share of the earnings for the six months ended June 30,
1997.
<TABLE>
<CAPTION>
One Post Polk & 75-101 Federal
Office Square Taylor Street
------------- -------- -------------
(in thousands)
<S> <C> <C> <C>
Balance sheets at June 30, 1997
Real estate, net $ 40,433 $89,800 $ 155,251
Cash 1,631 986 9,640
Other assets 10,438 2,052 2,444
--------- ------- ---------
$ 52,502 $92,838 $ 167,335
========= ======= =========
Mortgage notes payable $ 92,273 $ -- $ 90,000
Other liabilities 1,581 477 2,420
Equity (deficiency) (41,352) 92,361 74,915
--------- ------- ---------
$ 52,502 $92,838 $ 167,335
========= ======= =========
Summary of operations for the six months
ended June 30, 1997
Revenues $ 11,369 $11,580 $ 14,569
Other income 240 401 676
--------- ------- ---------
Total revenues 11,609 11,981 15,245
--------- ------- ---------
Operating expenses 4,503 3,100 5,938
Mortgage interest expense 3,399 -- 3,460
Depreciation and amortization 1,785 1,715 2,367
--------- ------- ---------
Total expenses 9,687 4,815 11,765
--------- ------- ---------
Net income $ 1,922 $ 7,166 $ 3,480
========= ======= =========
Share of properties:
Depreciation and amortization $ 712 $ 172 $ 1,192
Interest - amortization of financing costs 419 -- $ 29
</TABLE>
7
<PAGE>
BEACON PROPERTIES, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
-------
3. Mortgage Notes Payable:
-----------------------
On April 30, 1997, in connection with the acquisition of Centerpointe I and
II located in Fairfax County, Virginia, the Operating Partnership assumed
$30 million of mortgage debt secured by the properties. The mortgage has a
remaining term of 3.9 years, bears interest at 7.32% and requires monthly
installments of interest only until December 1, 1999 and principal and
interest during the remaining term based on a 25-year amortization
schedule.
On May 23, 1997, in connection with the acquisition of Westbrook Corporate
Center located in suburban Chicago, the Operating Partnership assumed
approximately $82 million of mortgage debt and borrowed $24 million of
additional mortgage debt secured by the properties. The mortgage has a term
of ten years, bears interest at 8.00% and requires monthly installments of
principal and interest based on a 26-year amortization schedule.
4. Note Payable, Credit Facility:
------------------------------
On April 8, 1997, the Operating Partnership replaced its $300 million
secured floating-rate credit facility (the "Credit Facility") to an
unsecured facility and decreased the interest rate on the Credit Facility
from the Eurodollar rate plus 175 basis points (1.75%) to the Eurodollar
rate plus 120 basis points (1.20%). Additionally, on April 30, 1997, the
maximum loan amount available under the Credit Facility was increased to
$350 million.
As a result of new unsecured Credit Facility, the Operating Partnership
recorded an extraordinary item of $2.6 million in connection with the
write-off of fees and costs to acquire the secured Credit Facility.
5. Commitments and Contingencies:
------------------------------
In connection with the acquisition of the Westbrook Corporate Center, the
Operating Partnership has agreed to maintain non-recourse financing assumed
from the sellers for a 10 year period and not to sell or otherwise transfer
any portion of the property prior to the tenth anniversary of the closing
date. If the Operating Partnership should choose not to maintain the
non-recourse provisions of the existing or new debt, or should choose to
sell the property, within the 10 year period it shall be required to make
payments to the sellers.
6. Environmental issue:
--------------------
Site assessments at 175 Wyman Street have identified the presence of
trichloroethylene and tetrachloroethylene in the groundwater (the "Existing
Groundwater Condition"). The chemicals in the groundwater are believed to
be associated with former manufacturing use of the Property. Prior to the
acquisition of the Property by the Operating Partnership, the former owner
of the Property, Hewlett-Packard Company, reported the Existing Groundwater
Condition to the Massachusetts Department of Environmental Protection (the
"DEP). Hewlett-Packard Company sought and obtained approval from DEP of an
Immediate Response Action which involves installation of a system to
extract and treat contaminated groundwater (the "System). According to its
submissions to DEP, Hewlett-Packard Company is in the process of installing
the System. In its purchase and sale agreement with the Operating
Partnership, Hewlett-Packard Company agreed to indemnify the Operating
Partnership against costs of remediating the Existing Groundwater Condition
and claims by off-site parties for property damage, personal injury, and
natural resource damages related to the Existing Groundwater Condition (the
"Indemnity"). Any claim under the Indemnity is subject to the risk that the
indemnifying party will lack sufficient assets to satisfy the claim.
Moreover, any claim under the Indemnity may be subject to substantial
defenses, including but not limited to the defense that the claim was
exacerbated by the Operating Partnership's development or redevelopment of
the Property, as to which matters to the Operating Partnership has
indemnified Hewlett-Packard Company. However, the Operating Partnership
does not believe that any such liability would have a material adverse
effect on its financial condition, results of operations and liquidity.
8
<PAGE>
BEACON PROPERTIES, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
-------
7. Pro Forma Results (unaudited):
------------------------------
The following unaudited pro forma operating results for the Operating
Partnership have been prepared as if the 1996 and 1997 Unit issuances and
the 1996 and 1997 property acquisitions and dispositions had occurred on
January 1, 1996. Unaudited pro forma financial information is presented for
informational purposes only and may not be indicative of what the actual
results of operations of the Operating Partnership would have been had the
events occurred as of January 1, 1996, nor does it purport to represent the
results of operations for future periods.
Six Months ended June 30, 1997 and 1996 1997 1996
--------------------------------------- -------- ---------
Revenue $191,057 $179,939
Income before extraordinary items 38,760 33,911
Net income per unit
before extraordinary items and gain on sale $ .70 $ .61
8. Subsequent Events:
------------------
On July 1, 1997, the Operating Partnership acquired Sunnyvale Business
Center located in Sunnyvale, California for aggregate consideration of
approximately $33.8 million.
On July 31, 1997, the Operating Partnership declared a quarterly
distribution of $31.1 million payable on August 22, 1997 to partners of
record on August 8, 1997.
On August 8, 1997, the Operating Partnership amended the Credit Facility to
provide for a competitive bid option and a decrease in the interest rate on
the Credit Facility from the Eurodollar rate plus 120 basis points (1.20%)
to the Eurodollar rate plus 90 basis points (.90%).
9
<PAGE>
BEACON PROPERTIES, L.P.
PART I - ITEM 2
-------
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations.
This Form 10-Q contains forward looking statements within the meaning of Section
27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act
of 1934. The words "believe", "expect", "anticipate", "intend", "estimate" and
other expressions which are predictions of or indicate future events and trends
and which do not relate to historical matters identify forward-looking
statements. The Operating Partnership's actual results could differ materially
from those set forth in the forward-looking statements. Certain factors that
might cause such a difference include the following: Real estate investment
considerations, such as the effect of economic and other conditions in the
market area on cash flows and values; the need to renew leases or relet space
upon the expiration of current leases, and the ability of a property to generate
revenues sufficient to meet debt service payments and other operating expenses;
and risks associated with borrowing, such as the possibility that the Operating
Partnership will not have sufficient funds available to make principal payments
on outstanding debt, outstanding debt may be refinanced at higher interest rates
or otherwise on terms less favorable to the Operating Partnership and interest
rates under the Credit Facility may increase.
The following discussion and analysis of the financial condition and results of
operations should be read in conjunction with the accompanying financial
statements and notes thereto.
Results of Operations
Comparison of Three and Six Months Ended June 30, 1997 and June 30, 1996
The Operating Partnership's gross revenues increased by 117% for the six months
ended June 30, 1997 compared to the corresponding period in 1996. The growth in
gross revenues was primarily the result of the acquisition of 87 Properties (the
"Acquisition Properties") comprising 12.0 million square feet during 1996 and
1997 offset by the sale of the Westlakes Office Park Property in May 1997. The
Operating Partnership's proportionate share of weighted average square feet of
office properties increased by 97% to 14.6 million square feet for the six
months ended June 30, 1997 compared to 7.4 million square feet for the
corresponding period in 1996.
The Acquisition Properties increased revenues from rental operations, which
includes rental income, recoveries from tenants and other income, by $44.1 and
$85.2 million for the three and six months ended June 30, 1997, respectively,
compared to the corresponding periods in 1996. The remaining balance of the
increase was primarily due to increases in occupancy and rental rates and
completion of the redevelopment and achievement of 88% occupancy at the Crosby
Corporate Center in 1996 offset by the decrease in revenues as a result of the
sale of Westlakes Office Park.
The impact of the straight-line rent adjustment increased consolidated revenues
for the Operating Partnership by $7.7 million for the six months ended June 30,
1997 and $2.6 million for the corresponding period in 1996. The impact of the
straight-line rent adjustment decreased the Operating Partnership's equity in
net income of property joint ventures and corporations by $0.1 million for the
six months ended June 30, 1997 and increased the Operating Partnership's equity
in net income of property joint ventures and corporations by $0.1 million for
the corresponding period in 1996.
The impact of the straight-line rent adjustment increased consolidated revenues
for the Operating Partnership by $4.1 million for the three months ended June
30, 1997 and $1.5 million for the corresponding period in 1996. The impact of
the straight-line rent adjustment decreased the Operating Partnership's equity
in net income of property joint ventures and corporations by $0.1 million for
the three months ended June 30, 1997 and increased the Operating Partnership's
equity in net income of property joint ventures and corporations by $0.1 million
for the corresponding period in 1996.
10
<PAGE>
BEACON PROPERTIES, L.P.
PART I - ITEM 2
-------
Mortgage interest income for the three and six months ended June 30, 1997 was
$1.4 and $2.8 million, respectively, compared to $1.2 and $2.2 million for
corresponding periods in 1996. The increase is the result of the Operating
Partnership's acquisition of the remaining portions of the outstanding first
mortgage indebtedness on the Rowes Wharf Property in April and June 1996.
The Acquisition Properties increased property expenses, real estate taxes and
depreciation and amortization by $21.8 and $41.7 million for the three and six
months ended June 30, 1997, respectively, compared to the corresponding periods
in 1996. The remaining balance of the increase was primarily due to additional
operating expenses as a result of an increase in occupancy and the completion of
the redevelopment and achievement of 88% occupancy at the Crosby Corporate
Center in 1996 offset by the decrease in expenses as a result of the sale of the
Westlakes Office Park.
General and administrative expenses were $9.1 and $17.7 million for the three
and six months ended June 30, 1997, respectively, compared to $3.7 and $7.3
million for the corresponding periods in 1996. The Acquisition Properties
increased general and administrative expenses by $1.4 and $2.5 million for the
three and six month periods, respectively. The remaining balance of the increase
was primarily due to an increase in corporate management and administrative
costs. In 1996, the Operating Partnership established its first regional offices
in the Southeast and Mid-Atlantic and in the first quarter of 1997 regional
offices in the Midwest and West were established. As a result, payroll expense
increased by $4.1 million for the six months ended June 30, 1997 along with an
increase in other corporate and regional general and administrative expenses.
General and administrative expenses as a percentage of total revenue were 10.9%
for the six months ended June 30, 1997 compared to 9.7% for the corresponding
period in 1996.
Net operating income (excluding the effect of straight-line rents) for
properties owned for at least a full year (all properties except the Acquisition
Properties ) increased 7.2% and 6.2% for the three and six months ended June 30,
1997, respectively, compared to the corresponding periods in 1996.
Mortgage interest expense was $11.6 and $22.7 million for the three and six
months ended June 30, 1997, respectively, compared to $7.3 and $13.7 million for
the corresponding periods in 1996. The increase in both periods was primarily
the result of debt incurred or assumed in connection with several of the
Acquisition Properties and an increase in the weighted average outstanding
balance of the Credit Facility.
Interest-amortization of financing costs was $0.3 and $0.7 million for the three
and six months ended June 30, 1997, respectively, compared to $0.6 and $1.2
million for the corresponding periods in 1996. The decrease was primarily the
result of the reduction in amortization of financing costs of the Credit
Facility as a result of the write-off of fees and costs of the Credit Facility
which was substantially modified in both June 1996 and April 1997.
Equity in net income of joint ventures and corporations was $1.8 and $3.3
million for the three and six months ended June 30, 1997, respectively, compared
to $1.2 and $2.6 million for the corresponding periods in 1996. The increase in
both periods was primarily the result of an increase in equity in net income
from 75-101 Federal Street as a result of a termination fee recognized in 1997.
Loss from discontinued operations from the Construction Operating Partnership
was $0.9 and $1.5 million for the three and six months ended June 30, 1997,
respectively, compared to $0.7 and $1.1 million for the corresponding periods in
1996. In December 1996, substantially all of the assets of the Construction
Operating Partnership were sold to Skanska AB, a Swedish construction firm. The
Construction Operating Partnership's new business plan involves the completion
of certain contracts not transferred to the purchaser and the liquidation of its
remaining assets.
11
<PAGE>
BEACON PROPERTIES, L.P.
PART I - ITEM 2
-------
In May 1997, the Operating Partnership sold the Westlakes Office Park property,
its sole property located in Berwyn (suburban Philadelphia), Pennsylvania for
approximately $72.5 million and recorded a gain on the sale of the property of
$16.7 million.
Extraordinary items was $2.6 million for the three and six months ended June 30,
1997, compared to $1.9 and $3.9 million for the corresponding periods in 1996.
In 1997, the Operating Partnership recorded an extraordinary item in connection
with the write-off of fees and costs of the secured Credit Facility which was
replaced with an unsecured facility in April 1997. In March 1996, the Operating
Partnership recorded an extraordinary item of $2.2 million in connection with
the write-off of fees and costs to acquire a $260 million mortgage loan provided
by Paine Webber Real Estate Securities, Inc. used to acquire the Perimeter
Center Portfolio (the "Paine Webber Acquisition Loan"). The Paine Webber
Acquisition Loan was repaid in March 1996, approximately three years prior to
its maturity. Also in 1996, an extraordinary item of $1.7 million was recorded
in connection the write-off of fees and costs of the Credit Facility which was
substantially modified in June 1996.
12
<PAGE>
BEACON PROPERTIES, L.P.
PART I - ITEM 2
-------
As of June 30, 1997, the Operating Partnership owned or had an interest in 116
income producing commercial properties. The percent leased calculation includes
all leases executed as of June 30, 1997.
<TABLE>
<CAPTION>
Average
Rentable Percent Base Net Effective
Square Feet Leased Rent(1) Rent(2)
----------- -------- -------- -------------
<S> <C> <C> <C> <C>
Downtown Boston Office Market:
Center Plaza 649,000 97% $22.66 $12.83
75-101 Federal Street 813,000 92% 30.52 20.04
225 Franklin Street 930,000 100% 36.61 32.67
One Post Office Square 764,000 99% 24.54 15.70
150 Federal Street 530,000 100% 25.15 21.25
Russia Wharf 311,000 100% 14.58 8.28
Rowes Wharf 344,000 100% 30.22 18.74
Two Oliver-147 Milk Street 270,000 99% 18.33 11.67
175 Federal Street 203,000 99% 25.61 15.62
South Station 149,000 100% 30.85 20.89
---------------------------------------------------------------------------------------------------------------
Subtotal 4,963,000 98% 27.26 19.49
---------------------------------------------------------------------------------------------------------------
North Central Atlanta Office Market:
Perimeter Center Portfolio 3,302,000 98% 16.85 11.61
---------------------------------------------------------------------------------------------------------------
Greater Boston Suburban Office Market:
Wellesley Office Park Buildings 1-8 633,000 99% 24.70 17.29
Crosby Corporate Center 336,000 98% 13.91 10.02
Westwood Business Centre 160,000 96% 19.57 11.33
New England Executive Park 817,000 96% 19.40 12.44
---------------------------------------------------------------------------------------------------------------
Subtotal 1,946,000 98% 20.19 13.51
---------------------------------------------------------------------------------------------------------------
Cambridge Office Market:
One Canal Park 100,000 100% 22.05 13.99
Ten Canal Park 111,000 100% 19.00 12.16
The Riverview Building 263,000 100% 22.34 17.46
---------------------------------------------------------------------------------------------------------------
Subtotal 474,000 98% 21.49 15.49
---------------------------------------------------------------------------------------------------------------
Arlington County, Virginia Office Market:
Polk and Taylor Buildings 890,000 100% 23.77 19.23
1300 North 17th Street 373,000 99% 24.14 17.09
1616 North Fort Myer Drive 293,000 100% 23.38 15.47
---------------------------------------------------------------------------------------------------------------
Subtotal 1,556,000 100% 23.78 18.01
---------------------------------------------------------------------------------------------------------------
Fairfax County, Virginia Office Market:
E.J. Randolph 165,000 99% 21.08 15.24
John Marshall I 261,000 100% 18.26 15.85
Northridge I 124,000 100% 25.96 19.34
Centerpointe I & II 408,000 99% 16.42 12.72
---------------------------------------------------------------------------------------------------------------
Subtotal 958,000 99% 18.96 14.87
---------------------------------------------------------------------------------------------------------------
Washington, D.C. Office Market:
---------------------------------------------------------------------------------------------------------------
1333 H Street 239,000 91% 27.34 20.11
---------------------------------------------------------------------------------------------------------------
</TABLE>
13
<PAGE>
BEACON PROPERTIES, L.P.
PART I - ITEM 2
<TABLE>
<CAPTION>
Average
Rentable Percent Base Net Effective
Square Feet Leased Rent(1) Rent(2)
----------- ------- -------- ------------
<S> <C> <C> <C> <C>
Suburban Chicago Office Market:
AT&T Plaza 225,000 98% 21.02 14.19
Tri-State International 548,000 81% 22.41 15.55
Presidents Plaza 791,000 95% 19.64 11.73
Westbrook Corporate Center 1,106,000 92% 24.23 18.83
---------------------------------------------------------------------------------------------------------------
Subtotal 2,670,000 91% 22.23 15.66
---------------------------------------------------------------------------------------------------------------
West Los Angeles Office Market:
10960 Wilshire Boulevard 544,000 89% 24.70 18.52
10880 Wilshire Boulevard 531,000 85% 20.32 16.40
---------------------------------------------------------------------------------------------------------------
Subtotal 1,075,000 87% 22.53 17.48
---------------------------------------------------------------------------------------------------------------
Silicon Valley Office Market: (NNN)
Shoreline Technology Park 727,000 100% 17.88 18.77
Lake Marriott Business Park 400,000 100% 10.29 10.78
---------------------------------------------------------------------------------------------------------------
Subtotal 1,127,000 100% 15.18 15.94
---------------------------------------------------------------------------------------------------------------
Total Weighted Average Properties 18,312,000 97% $22.00 $16.07
---------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Base rent is gross rent excluding payments by tenants on account of real
estate tax and operating expense escalation.
(2) Net Effective Rent is Base Rent adjusted on a straight-line basis for
contractual rent step-ups and free rent periods, plus tenant payments on
account of real estate tax and operating expense escalation, less total
operating expenses and real estate taxes.
The following table reflects the lease expiration schedule of the 116 income
producing commercial properties the Operating Partnership owned or had an
interest in as of June 30, 1997.
<TABLE>
<CAPTION>
Year or period of Square % of Annual Annual Rent
Expiration Feet Square feet Rent (1) per Square Foot # of tenants
- -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
7/1-12/31/97 1,894,980 10% $38,710,783 $20.43 152
1998 1,198,783 7% 28,682,704 23.93 209
1999 1,649,559 9% 36,607,256 22.19 206
2000 2,472,518 14% 59,129,659 23.91 230
2001 3,084,082 17% 77,053,697 24.98 200
2002 1,679,963 9% 47,309,329 28.16 127
2003 659,376 4% 17,635,744 26.75 42
2004 814,326 4% 17,911,161 22.00 36
2005 & beyond 4,248,303 23% 131,437,074 30.94 76
--------------------------------------------------------------------------------
Total leased 17,701,889 97% $454,477,407 $25.67 1,278
--------------------------------------------------------------------------------
</TABLE>
(1) Annualized expiring base rental income represented by such leases plus 1996
tenant payments on account of real estate tax and operating expense
escalations.
14
<PAGE>
BEACON PROPERTIES, L.P.
PART I - ITEM 2
-------
The following schedule summarizes the scheduled amortization of principal and
maturities of mortgage loans outstanding and the related weighted average
interest rate. The schedule includes the Operating Partnership's share of
unconsolidated debt of joint ventures.
Scheduled Weighted Average
Year Amortization Maturities Total Interest Rate
- ------------------------------------------------------------------------------
7/1-12/31/97 $1,625,000 $1,625,000 7.77%
1998 5,514,000 $68,683,000 74,197,000 6.96%
1999 9,036,000 9,036,000 7.46%
2000 9,663,000 42,746,000 52,409,000 7.35%
2001 8,986,000 29,012,000 37,998,000 7.35%
2002 9,414,000 44,002,000 53,416,000 7.58%
2003 7,920,000 108,517,000 116,436,000 7.25%
2004 7,869,000 16,744,000 24,614,000 8.25%
2005 8,170,000 8,170,000 7.42%
2006 4,514,000 184,282,000 188,796,000 7.10%
2007 876,000 112,507,000 113,384,000 8.04%
---------------------------------------------------------
Total $73,587,000 $606,493,000 $680,080,000 7.39%
---------------------------------------------------------
15
<PAGE>
BEACON PROPERTIES, L.P.
PART I - ITEM 2
-------
Liquidity and Capital Resources
Cash and cash equivalents were $49.1 million at June 30, 1997 compared to $35.9
million at December 31, 1996. On July 1, 1997, $33.8 million of cash was used to
acquire Sunnyvale Business Center located in Sunnyvale, California.
Investing Activities
On April 23, 1997, the Operating Partnership acquired 10880 Wilshire Boulevard
located in Westwood, California for aggregate consideration of approximately $99
million. The Operating Partnership used proceeds contributed by the Company from
the April 1997 Offering to purchase the property.
On April 30, 1997, the Operating Partnership acquired Centerpointe I and II,
located in Fairfax County, Virginia, for aggregate consideration of
approximately $55 million consisting of approximately $25 million in cash and
assumption of $30 million of mortgage debt. The Operating Partnership used
proceeds contributed by the Company from the April 1997 Offering for the cash
portion of the acquisition.
On May 8, 1997, the Operating Partnership sold the Westlakes Office Park
property, its sole property located in Berwyn (suburban Philadelphia),
Pennsylvania for approximately $72.5 million. The transaction was structured as
a like-kind exchange, with the proceeds from the sale used in connection with
the acquisition of 255 Franklin Street located in Boston, Massachusetts.
On May 13 1997, the Operating Partnership acquired 26.7 acres of land and a
335,000 square foot building located at 175 Wyman Street, Waltham, Massachusetts
for approximately $24.0 million. The Operating Partnership plans to begin
development on a 400,000 square foot office property in late 1997 or early 1998.
The Operating Partnership used proceeds contributed by the Company from the
April 1997 Offering to purchase the property.
On May 23, 1997, the Operating Partnership acquired Westbrook Corporate Center
located in suburban Chicago, for aggregate consideration of approximately $182.1
million consisting of assumption of $82 million of mortgage debt, the borrowing
of approximately $24 million of additional mortgage debt, approximately $42.7
million in cash and the issuance of $33.4 million of units of limited
partnership interest in the Operating Partnership ("Units"). The Operating
Partnership used proceeds contributed by the Company from the April 1997
Offering for the cash portion of the acquisition.
On June 4, 1997, the Operating Partnership acquired 225 Franklin Street located
in Boston, Massachusetts, for approximately $280 million. The Operating
Partnership used proceeds contributed by the Company from the Preferred Offering
and proceeds from the sale of the Westlakes Office park property to purchase the
property.
Financing Activities
On April 16, 1997, the Company sold 7,000,000 shares of common stock, $.01 par
value, to the public at $32.125 per share and contributed the net proceeds of
approximately $211.4 million to the Operating Partnership in exchange for a like
number of Units. The net proceeds of the April 1997 Offering were used to
purchase 10880 Wilshire Boulevard, the cash portions of the acquisition of
Centerpointe I and II and Westbrook Corporate Center properties, 175 Wyman
Street with the remaining balance used to pay down the Credit Facility.
On June 13, 1997, the Company sold 8,000,000 shares of cumulative redeemable
preferred stock, $.01 par value, to the public at $25.00 per share at a yield of
8.98% (the "Preferred Offering" ) and contributed the net proceeds of
approximately $193.4 million to the Operating Partnership in exchange for a like
number of Units. The proceeds of the Preferred Offering were used to acquire the
225 Franklin Street property.
On July 31, 1997, the Operating Partnership declared a quarterly distribution of
$31.4 million payable on August 22, 1997 to partners of record on August 8,
1997.
16
<PAGE>
BEACON PROPERTIES, L.P.
PART I - ITEM 2
-------
Capitalization
At June 30, 1997, the Operating Partnership's total consolidated debt was
approximately $736.5 million, and its total consolidated debt plus its
proportionate share of total unconsolidated debt (other than the Rowes Wharf
Property debt) was approximately $829.1 million. At June 30, 1997, the Operating
Partnership's outstanding consolidated debt consisted of approximately $149.0
million under its floating-rate Credit Facility and approximately $587.5 million
of fixed rate mortgage indebtedness with an weighted average rate of 7.38%,
collateralized by properties owned 100% by the Operating Partnership. The
Operating Partnership's proportionate share of its current total unconsolidated
debt (excluding the Rowes Wharf Property debt) consists of approximately $46.1
million on the One Post Office Square Property (in which the Operating
Partnership has a 50% general partner interest) and approximately $46.4 million
on the 75-101 Federal Street Property (in which the Operating Partnership owns
approximately 52% of the common stock of a private REIT that owns the property
).The weighted average rate of the Operating Partnership's unconsolidated fixed
rate mortgage indebtedness is 7.47%. The weighted average rate of the Operating
Partnership's consolidated and unconsolidated fixed rate mortgage indebtedness
is 7.39% and the weighted average maturity is approximately 6.8 years.
Based on the Operating Partnership's total market capitalization of $3,118.4
million at June 30, 1997 (equating the value at one Unit to one share of common
stock at June 30, 1997 closing stock price of $33.313 ), the Operating
Partnership's consolidated debt plus its proportionate share of total
unconsolidated debt (other than the Rowes Wharf property debt) represented
approximately 27% of its total market capitalization.
Funds from Operations
The Operating Partnership believes that to facilitate a clear understanding of
the operating results of the Operating Partnership, Funds from Operations
("FFO") should be examined in conjunction with net income. The definition of FFO
was clarified in the National Association of Real Estate Investment Trusts, Inc.
("NAREIT") White Paper, adopted by the NAREIT Board of Governors on March 3,
1995, as net income (computed in accordance with generally accepted accounting
principles), excluding gains (or losses) from debt restructuring and sales of
property, plus depreciation and amortization (in each case only real estate
related assets), and after adjustments for unconsolidated partnerships and joint
ventures. Adjustments for unconsolidated partnerships and joint ventures will be
calculated to reflect FFO on the same basis. FFO should not be considered as a
substitute for net income as an indication of the Operating Partnership's
performance or as a substitute for cash flow as a measure of its liquidity. The
following table presents the calculations for FFO for the periods ended June 30,
1997 and June 30, 1996.
<TABLE>
<CAPTION>
For the three months For six months ended
ended June 30, June 30,
----------------------------------------------
1997 1996 1997 1996
---- ---- ---- ----
(in thousands)
<S> <C> <C> <C> <C>
Income before extraordinary items $ 39,218 $ 10,635 $ 59,586 $ 18,534
Add consolidated properties:
Depreciation and amortization 17,609 7,484 31,823 13,346
Add joint venture properties:
Depreciation and amortization 1,070 1,040 2,076 1,994
Less gain on sale of property (16,736) ----- (16,736) -----
-------- ------- --------- --------
Funds from operations 41,161 19,159 76,749 33,874
Less Series A Preferred Distributions (898) ----- (898) -----
======== ======= ========= ========
Available for allocation $ 40,263 $ 19,159 $ 75,851 $ 33,874
======== ======= ========= ========
Weighted average units outstanding 60,996 31,609 57,731 28,873
======== ======= ========= ========
</TABLE>
17
<PAGE>
<PAGE>
BEACON PROPERTIES, L.P.
PART I - ITEM 2
-------
Short and Long Term Liquidity
The Operating Partnership has considered its short-term (up to 12 months)
liquidity needs and the adequacy of expected liquidity sources to meet these
needs. The Operating Partnership believes that its principal short-term
liquidity needs are to fund normal recurring expenses, debt service requirements
and the minimum distribution required to maintain the Company's REIT
qualifications under the Internal Revenue Code of 1986, as amended. The
Operating Partnership believes that these needs will be fully funded from cash
flows provided by operating activities.
The Operating Partnership expects to meet long-term (greater than 12 months)
liquidity requirements for the costs of development, property acquisitions,
scheduled debt maturities, major renovations, expansions and other non-recurring
capital improvements through long-term secured and unsecured indebtedness and
the issuance of additional Operating Partnership Units and equity securities.
The Operating Partnership may finance the redevelopment or acquisition of
additional properties by using its Credit Facility.
18
<PAGE>
BEACON PROPERTIES, L.P.
PART II
OTHER INFORMATION
- -----------------
Item 1. Legal Proceedings
On April 3, 1997, the Commonwealth of Massachusetts (the "Commonwealth")
filed a claim against the Beacon Construction Company, Inc. and certain
other parties relating to the construction of the Registry of Motor
Vehicles Building (the "RMV Building"), located at Ruggles Center, Boston,
Massachusetts, which seeks to recover damages from the Beacon Construction
Company, Inc. as a result of its alleged negligence in connection with the
construction of the RMV Building. The Operating Partnership is unable to
quantify the claims of the Commonwealth but does not believe that the
proceedings will have a material adverse effect on the Operating
Partnership's financial condition, results of operations and liquidity.
Item 2. Changes in Securities
(a) None.
(b) On June 13, 1997, the Company issued 8,000,000 shares of 8.98% Series
A Preferred Stock, $.01 par value per share. The 8.98% Series A
Preferred Stock ranks senior to the Company's Common Stock. In
connection therewith, the Operating Partnership issued to the Company
8,000,000 Series A Preferred Units in return for the contribution of
the proceeds from the Preferred Offering. The Series A Preferred Units
rank senior to the Operating Partnership's Units.
(c) Recent Sales of Unregistered Securities:
During the three months ended June 30, 1997, the Operating Partnership
issued Units in private placements in reliance on an exemption from
registration under Section 4(2) of the Securities Act of 1933, as amended,
in the amount and for the consideration set forth below. Each Unit, other
than Series A Preferred Units, are redeemable for cash, or, at the option
of the Company, for shares of the Company's common stock, on a one-for-one
basis.
On April 16, 1997, the Operating Partnership issued 7,000,000 Units to the
Company in exchange for the contribution of the net proceeds of
approximately $211.4 million from the Company's public offering of a like
number of shares of common stock.
On May 23, 1997, the Operating Partnership issued 1,374,006 Units to the
contributors of the Westbrook Corporate Center in exchange for their
interests in the property.
Item 3. Defaults Upon Senior Securities
None
19
<PAGE>
BEACON PROPERTIES, L.P.
PART II
Item 4. Submission of Matters to a Vote of Security Holders
None
Item 5. Other Information
None
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits:
10.1 Revolving Credit Agreement between Beacon Properties, L.P. and
BankBoston, as agent, dated March 31, 1997.
10.2 Amendment No. 1 to Revolving Credit Agreement between Beacon
Properties, L.P. and BankBoston, as agent, dated April 30, 1997.
27.1 Financial Data Schedule
(b) Reports on Form 8-K.
A report on Form 8-K dated June 4, 1997 (as amended by Form 8-K/A) was
filed which included information regarding Items 5 and 7 on the Form 8-K.
Included in Item 7 were financial statements, pro forma information and
exhibits. The reports were filed in connection with the Operating Partnership's
pending acquisition of 225 Franklin Street and the Preferred Offering.
20
<PAGE>
BEACON PROPERTIES, L.P.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
BEACON PROPERTIES, L.P.
By Beacon Properties Corporation
General Partner
/s/ Robert J. Perriello
-----------------------------
Robert J. Perriello,
Senior Vice President,
and Chief Financial Officer
Date: August 14, 1997
21
REVOLVING CREDIT AGREEMENT
among
BEACON PROPERTIES, L.P.
and
THE FIRST NATIONAL BANK OF BOSTON
MELLON BANK, N.A.
PNC BANK, NATIONAL ASSOCIATION
US TRUST
UNION BANK OF CALIFORNIA, N.A.
and
OTHER BANKS WHICH MAY BECOME
PARTIES TO THIS AGREEMENT
and
THE FIRST NATIONAL BANK OF BOSTON,
AS AGENT
with
BANCBOSTON SECURITIES INC.
ACTING AS LOAN ARRANGER
Dated as of March 31, 1997
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Section Page
- ------- ----
<S> <C> <C>
ss.1. DEFINITIONS AND RULES OF INTERPRETATION.........................................................1
ss.1.1. Definitions.........................................................................1
ss.1.2. Rules of Interpretation............................................................25
ss.2. THE REVOLVING CREDIT FACILITY..................................................................26
ss.2.1. Commitment to Lend.................................................................26
ss.2.2. [Intentionally Omitted]............................................................26
ss.2.3. Reduction of Commitment............................................................27
ss.2.4. The Revolving Credit Notes.........................................................27
ss.2.5. Interest on Revolving Credit Loans; Fees...........................................27
ss.2.6. Requests for Revolving Credit Loans................................................28
ss.2.7. Conversion Options.................................................................30
ss.2.8. Funds for Revolving Credit Loans...................................................31
ss.2A. LETTERS OF CREDIT..............................................................................32
ss.2A.1. Letter of Credit Commitments......................................................32
ss.2A.2. Reimbursement Obligation of the Borrower..........................................33
ss.2A.3. Letter of Credit Payments; Funding of a Loan......................................34
ss.2A.4. Obligations Absolute..............................................................35
ss.2A.5. Reliance by Issuer................................................................35
ss.2A.6. Letter of Credit Fee..............................................................36
ss.2A.7. Existing Letter of Credit.........................................................36
ss.3. REPAYMENT OF THE REVOLVING CREDIT LOANS........................................................36
ss.3.1. Maturity..........................................................................36
ss.3.2. Optional Repayments of Revolving Credit Loans.....................................36
ss.4. CERTAIN GENERAL PROVISIONS.....................................................................37
ss.4.1. Funds for Payments................................................................37
ss.4.2. Computations......................................................................37
ss.4.3. Inability to Determine Eurodollar Rate............................................38
ss.4.4. Illegality........................................................................38
ss.4.5. Additional Costs, Etc.............................................................38
ss.4.6. Capital Adequacy..................................................................40
ss.4.7. Certificate.......................................................................40
<PAGE>
<CAPTION>
Section Page
- ------- ----
<S> <C> <C>
ss.4.8. Indemnity.........................................................................40
ss.4.9. Interest on Overdue Amounts.......................................................41
ss.4.10. HLT Classification................................................................41
ss.5. GUARANTIES 42
ss.6. REPRESENTATIONS AND WARRANTIES.................................................................42
ss.6.1. Authority; Etc....................................................................42
ss.6.2. Governmental Approvals............................................................47
ss.6.3. Title to Properties; Leases.......................................................47
ss.6.4. Financial Statements..............................................................48
ss.6.5. [Intentionally Omitted]...........................................................49
ss.6.6. Franchises, Patents, Copyrights, Etc..............................................49
ss.6.7. Litigation........................................................................49
ss.6.8. No Materially Adverse Contracts, Etc..............................................49
ss.6.9. Compliance With Other Instruments, Laws, Etc......................................50
ss.6.10. Tax Status........................................................................50
ss.6.11. No Event of Default...............................................................51
ss.6.12. Investment Company Acts...........................................................51
ss.6.13. Absence of UCC Financing Statements, Etc..........................................51
ss.6.14. Absence of Liens..................................................................51
ss.6.15. Certain Transactions..............................................................51
ss.6.16. Employee Benefit Plans; Multiemployer Plans;
Guaranteed Pension Plans..........................................................51
ss.6.17. Regulations U and X...............................................................52
ss.6.18. Environmental Compliance..........................................................52
ss.6.19. Subsidiaries......................................................................54
ss.6.20. Loan Documents....................................................................54
ss.6.21. REIT Status.......................................................................54
ss.6.22. Subsequent Guarantors.............................................................54
ss.7. AFFIRMATIVE COVENANTS OF THE BORROWER AND THE GUARANTOR .......................................54
ss.7.1. Punctual Payment..................................................................54
ss.7.2. Maintenance of Office.............................................................55
ss.7.3. Records and Accounts..............................................................55
ss.7.4. Financial Statements, Certificates and Information................................55
ss.7.5. Notices...........................................................................58
ss.7.6. Existence of Borrower and Subsidiary Guarantors; Maintenance of Properties........60
ss.7.7. Existence of BPC; Maintenance of REIT Status of BPC; Maintenance of Properties....61
ss.7.8. Insurance.........................................................................61
(ii)
<PAGE>
<CAPTION>
Section Page
- ------- ----
<S> <C> <C>
ss.7.9. Taxes.............................................................................62
ss.7.10. Inspection of Properties and Books................................................62
ss.7.11. Compliance with Laws, Contracts, Licenses, and Permit.............................63
ss.7.12. Use of Proceeds...................................................................63
ss.7.13. Acquisition of Unencumbered Assets................................................63
ss.7.14. Additional Guarantors; Solvency of Guarantors.....................................63
ss.7.15. Further Assurances................................................................64
ss.7.16. Interest Rate Protection..........................................................64
ss.7.17. Environmental Indemnification.....................................................64
ss.7.18. Response Actions..................................................................65
ss.7.19. Environmental Assessments.........................................................65
ss.7.20. Employee Benefit Plans............................................................66
ss.7.21. [Intentionally Omitted]...........................................................66
ss.7.22. No Amendments to Certain Documents................................................66
ss.7.23. [Intentionally Omitted]...........................................................67
ss.7.24. [Intentionally Omitted]...........................................................67
ss.7.25. Management........................................................................67
ss.7.26. [Intentionally Omitted]...........................................................67
ss.7.27. Location and Class of Real Estate Assets..........................................67
ss.8. CERTAIN NEGATIVE COVENANTS OF THE BORROWER AND THE GUARANTOR...................................68
ss.8.1. Restrictions on Indebtedness......................................................68
ss.8.2. Restrictions on Liens, Etc........................................................69
ss.8.3. Restrictions on Investments.......................................................71
ss.8.4. Merger, Consolidation and Disposition of Assets...................................72
ss.8.5. [Intentionally Omitted]...........................................................74
ss.8.6. Compliance with Environmental Laws................................................74
ss.8.7. Distributions.....................................................................75
ss.9. FINANCIAL COVENANTS OF THE BORROWER............................................................75
ss.9.1. Consolidated Outstanding Indebtedness.............................................75
ss.9.2. Consolidated Secured Indebtedness.................................................76
ss.9.3. Net Worth.........................................................................76
ss.9.4. Unencumbered Assets...............................................................76
ss.9.5 Cash Flow.........................................................................77
ss.9.6 Unencumbered Asset Debt Service Coverage..........................................77
ss.9.7 Assets Under Development..........................................................77
ss.9.9 Covenant Calculations.............................................................78
(iii)
<PAGE>
<CAPTION>
Section Page
- ------- ----
<S> <C> <C>
ss.10. [INTENTIONALLY OMITTED]........................................................................79
ss.11 CONDITIONS TO THE CLOSING DATE.................................................................79
ss.11.1. Loan Documents....................................................................79
ss.11.2. Certified Copies of Organization Documents........................................79
ss.11.3. By-laws; Resolutions..............................................................80
ss.11.4. Incumbency Certificate; Authorized Signers........................................80
ss.11.5. Title Policies....................................................................80
ss.11.6. Certificates of Insurance.........................................................80
ss.11.7. Opinion of Counsel Concerning Organization
and Loan Documents................................................................81
ss.11.8. [Intentionally Omitted]...........................................................81
ss.11.9. Tax and Securities Law Compliance.................................................81
ss.11.10. Guaranties........................................................................81
ss.11.11. Interest Rate Protection..........................................................81
ss.11.12. Financial Analysis of Properties..................................................81
ss.11.13. Inspection of Unencumbered Assets.................................................82
ss.11.14 Certifications from Government Officials; UCC-11 Reports..........................82
ss.11.15 Proceedings and Documents.........................................................82
ss.11.16 Fees..............................................................................82
ss.11.17 Closing Certificate; Compliance Certificate.......................................82
ss.11.18 Capital Reserves..................................................................82
ss.11.19 Partnership Documents.............................................................82
ss.11.20 Existing Indebtedness.............................................................82
ss.11.21 Release Documents.................................................................83
ss.11.22 Subsequent Guarantors.............................................................83
ss.12. CONDITIONS TO ALL BORROWINGS...................................................................83
ss.12.1 Representations True; No Event of Default; Compliance Certificate.................83
ss.12.2 No Legal Impediment...............................................................84
ss.12.3 Governmental Regulation...........................................................84
ss.13. EVENTS OF DEFAULT; ACCELERATION; ETC...........................................................84
ss.13.1. Events of Default and Acceleration................................................84
ss.13.2. Termination of Commitments........................................................88
ss.13.3. Remedies..........................................................................89
(iv)
<PAGE>
<CAPTION>
Section Page
- ------- ----
<S> <C> <C>
ss.14. SETOFF .......................................................................................89
ss.15. THE AGENT ....................................................................................90
ss.15.1. Authorization.....................................................................90
ss.15.2. Employees and Agents..............................................................91
ss.15.3. No Liability......................................................................91
ss.15.4. No Representations................................................................91
ss.15.5. Payments..........................................................................91
ss.15.6. Holders of Revolving Credit Notes.................................................93
ss.15.7. Indemnity.........................................................................93
ss.15.8. Agent as Bank.....................................................................93
ss.15.9. Notification of Defaults and Events of Default....................................93
ss.15.10. Duties in the Case of Enforcement.................................................93
ss.15.11. Successor Agent...................................................................94
ss.15.12. Notices...........................................................................94
ss.16. EXPENSES ......................................................................................94
ss.17. INDEMNIFICATION................................................................................95
ss.18. SURVIVAL OF COVENANTS, ETC.....................................................................96
ss.19. ASSIGNMENT; PARTICIPATIONS; ETC................................................................97
ss.19.1. Conditions to Assignments by Banks................................................97
ss.19.2. Certain Representations and Warranties; Limitations; Covenants....................97
ss.19.3. Register..........................................................................98
ss.19.4. New Revolving Credit Notes........................................................99
ss.19.5. Participations....................................................................99
ss.19.6. Pledge by Lender..................................................................99
ss.19.7. No Assignment by Borrower........................................................100
ss.19.8 Disclosure.......................................................................100
ss.19.9. Syndication......................................................................100
ss.20. NOTICES, ETC..................................................................................100
ss.21. GOVERNING LAW; CONSENT TO JURISDICTION AND SERVICE ...........................................101
ss.22. HEADINGS .....................................................................................101
ss.23. COUNTERPARTS..................................................................................101
(v)
<PAGE>
<CAPTION>
Section Page
- ------- ----
<S> <C> <C>
ss.24. ENTIRE AGREEMENT, ETC.........................................................................102
ss.25. WAIVER OF JURY TRIAL AND CERTAIN DAMAGE CLAIMS................................................102
ss.26. CONSENTS, AMENDMENTS, WAIVERS, ETC............................................................102
ss.27. SEVERABILITY..................................................................................104
ss.28. LIMITED RECOURSE AGAINST BPC..................................................................104
</TABLE>
(vi)
<PAGE>
EXHIBITS
--------
A Form of Revolving Credit Note
B [Intentionally Omitted]
C Form of Loan Request
D Form of Compliance Certificate
E Form of Closing Certificate
F Form of Assignment and Assumption Agreement
(vii)
<PAGE>
Schedules to Revolving Credit Agreement
---------------------------------------
SCHEDULE 1.2 Capitalization Rate
SCHEDULE 1.3 Banks' Commitments
SCHEDULE 1.4 Rowes Wharf Debt
SCHEDULE 1.5 Russia Wharf Debt
SCHEDULE 1.6 South Station Debt
SCHEDULE 6.1(b) Capitalization; Outstanding Securities, Etc.
SCHEDULE 6.3 Partially Owned Real Estate Holding Entities
SCHEDULE 6.7 Litigation
SCHEDULE 6.15 Certain Transactions
SCHEDULE 6.19 Subsidiaries
<PAGE>
REVOLVING CREDIT AGREEMENT
--------------------------
This REVOLVING CREDIT AGREEMENT is made as of the 31st day of March, 1997,
by and among BEACON PROPERTIES, L.P., a Delaware limited partnership (the
"Borrower"), having its principal place of business at 50 Rowes Wharf, Boston,
Massachusetts 02110, THE FIRST NATIONAL BANK OF BOSTON ("Bank of Boston"), a
national banking association having its principal place of business at 100
Federal Street, Boston, Massachusetts 02110, Mellon Bank, N.A. ("Mellon"), PNC
Bank, National Association ("PNC"), USTrust ("USTrust"), Union Bank of
California, N.A. ("Union Bank"), and the other lending institutions which may
become parties hereto pursuant to ss.19 (individually, a "Bank" and
collectively, the "Banks") and THE FIRST NATIONAL BANK OF BOSTON, as agent for
itself and each other Bank.
RECITALS
--------
A. The Borrower is primarily engaged in the business of owning, purchasing,
developing, constructing, renovating and operating Class A office buildings and
mixed use facilities in the United States.
B. Beacon Properties Corporation, a Maryland corporation ("BPC"), is the
sole general partner of the Borrower, holds in excess of 85% of the partnership
interests in the Borrower, and is qualified to elect REIT status for income tax
purposes and has agreed to guaranty the obligations of the Borrower hereunder on
a limited recourse basis as set forth in ss.28 hereof and in the BPC Guaranty
and to make certain representations, warranties and covenants under said
Guaranty.
C. Each of 1333 H Street, L.P., a Delaware limited partnership ("1333") and
Burlington Holding, L.P., a Delaware limited partnership ("Burlington") is an
Affiliate of the Borrower and has agreed to guaranty the obligations of the
Borrower hereunder and to make certain representations, warranties and covenants
under their respective Guaranties.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
herein contained, the parties hereto agree as follows:
ss.1. DEFINITIONS AND RULES OF INTERPRETATION.
ss.1.1. Definitions. The following terms shall have the meanings set forth
in this ss.1 or elsewhere in the provisions of this Agreement referred to below:
1333. As defined in the recitals hereto.
<PAGE>
-2-
1333 Agreement of Limited Partnership. The Limited Partnership Agreement of
1333 dated August 12, 1996, between Beacon Property Management, L.P., as general
partner, and the Borrower, as limited partner, as the same may be amended from
time to time as permitted by ss.7.22.
1333 Guaranty. The Guaranty dated as of March 31, 1997 made by 1333 in
favor of the Agent and the Banks pursuant to which 1333 guaranties to the Agent
and the Banks the unconditional payment and performance of the Obligations.
Accountants. In each case, independent certified public accountants
reasonably acceptable to the Majority Banks. The Banks hereby acknowledge that
the Accountants may include Coopers & Lybrand L.L.P. and Price Waterhouse LLP.
Affiliate. With reference to any Person, (i) any director or executive
officer of that Person, (ii) any other Person controlling, controlled by or
under direct or indirect common control of that Person, (iii) any other Person
directly or indirectly holding 10% or more of any class of the capital stock or
other equity interests (including options, warrants, convertible securities and
similar rights) of that Person and (iv) any other Person 10% or more of any
class of whose capital stock or other equity interests (including options,
warrants, convertible securities and similar rights) is held directly or
indirectly by that Person.
Agent. The First National Bank of Boston acting as agent for the Banks, or
any successor agent, as permitted by ss.15.
Agent's Head Office. The Agent's head office located at 100 Federal Street,
Boston, Massachusetts 02110, or at such other location as the Agent may
designate from time to time, or the office of any successor Agent permitted
under ss.15 hereof, provided such office (which need not be such successor
Agent's head office) is located in Boston, Massachusetts.
Agreement. This Revolving Credit Agreement, including the Schedules and
Exhibits hereto, as the same may be from time to time amended and in effect.
Agreement of Limited Partnership of the Borrower. The Amended and Restated
Agreement of Limited Partnership of the Borrower, dated May 26, 1994, among BPC
and the limited partners named therein, as amended through the date hereof and
as the same may be further amended from time to time as permitted by ss.7.22.
<PAGE>
-3-
Annual Unfunded Capital Expenditure Reserve. The amounts determined by the
Borrower, shown on schedules to be submitted to and approved by the Agent in its
reasonable discretion on an annual basis, to be an appropriate reserve for
repairs, replacements, Leasing Costs and other Capital Expenditures for the Real
Estate Assets (including the Unencumbered Assets). The Annual Unfunded Capital
Expenditure Reserve shall be appropriately revised at such time as any Real
Estate Asset (including the Unencumbered Assets) or interest therein is acquired
or sold by the Borrower. The Annual Unfunded Capital Expenditure Reserve for
1997 shall be calculated at the rate of $1.50 per square foot for each now
existing or hereafter acquired Real Estate Asset.
Applicable L/C Percentage. As of any date of determination, a per annum
percentage equal to the Applicable Margin for Eurodollar Rate Loans then in
effect.
Applicable Margin. The applicable margin over the then Base Rate or
Eurodollar Rate, as applicable to the Loan(s) in question, as set forth below
used in calculating the interest rate applicable to Revolving Credit Loans,
which shall vary from time to time in accordance with the Borrower's long term
unsecured debt ratings (or, if applicable, Borrower's Indicative Ratings). The
Applicable Margin to be used in calculating the interest rate applicable to Base
Rate or Eurodollar Rate Loans shall vary from time to time in accordance with
the Borrower's then applicable (x) Moody's debt rating, (y) S&P's debt rating
and (z) any Third Debt Rating, as set forth below in this definition, and the
Applicable Margin shall be adjusted effective on the next Business Day following
any change in Borrower's Moody's debt rating or S&P's debt rating or Third Debt
Rating, as the case may be. The Borrower shall notify the Agent in writing
promptly after becoming aware of any change in any of its debt ratings. The
Borrower shall obtain and maintain debt ratings from both Moody's and S&P;
provided that if Moody's and/or S&P shall discontinue the business of providing
debt ratings for the REIT industry, the Borrower shall obtain and maintain one
or more Third Debt Ratings so that the Borrower shall at all times maintain at
least two debt ratings; and provided further that if Borrower fails to maintain
at least two debt ratings, the Applicable Margin shall be based upon an S&P
rating of less than BBB- in the table below. The Borrower may, at its option,
obtain and maintain three debt ratings (of which two must be from S&P and
Moody's except as set forth in the previous sentence). If at any time of
determination of the Applicable Margin, (a) the Borrower has then current debt
ratings from two (2) rating agencies, then the Applicable Margin shall be based
on the lower of such ratings, or (b) the Borrower has then current debt ratings
from three (3) rating agencies, then the Applicable Margin shall be based on the
lower of the two highest ratings. The applicable debt ratings and the Applicable
Margins are set forth in the following table:
<PAGE>
-4-
- --------------------------------------------------------------------------------
Applicable Applicable
Margin Margin
for Eurodollar for Base
S&P Rating Moody's Rating Third Rating Rate Loans Rate Loans
- --------------------------------------------------------------------------------
BBB+ or higher Baa1 or higher BBB+/Baa1 1.05% 0%
equivalent or higher
- --------------------------------------------------------------------------------
BBB Baa2 BBB/Baa2 equivalent 1.20% 0%
- --------------------------------------------------------------------------------
BBB- Baa3 BBB-/Baa3 equivalent 1.30% 0%
- --------------------------------------------------------------------------------
Less than BBB- Less than Baa3 less than BBB-/ 1.45% 0%
Baa3 equivalent
- --------------------------------------------------------------------------------
If a rating agency downgrade or discontinuance results in an increase in
the Applicable Margin for Base Rate Loans or the Applicable Margin for
Eurodollar Rate Loans and if such downgrade or discontinuance is reversed and
the affected Applicable Margin is restored within ninety (90) days thereafter to
the Applicable Margin in effect immediately prior to such downgrade or
discontinuance, then, upon notice from the Borrower of such reversal, Borrower
shall receive a credit against interest next due the Banks equal to interest
accrued from time to time during such period of downgrade or discontinuance on
the Loans at the differential between such Applicable Margins.
Asset Value. As of any date of determination with respect to a Real Estate
Asset, an amount equal to the Net Operating Income attributable to such Real
Estate Asset for the most recent one (1) completed fiscal quarter of the
Borrower multiplied by four (4), minus that portion of the Annual Unfunded
Capital Expenditure Reserve applicable to such Real Estate Asset in effect for
such quarter, with the difference being divided by the Capitalization Rate;
provided that the Asset Value of any Real Estate Asset owned or ground-leased by
a Partially-Owned Real Estate Holding Entity shall be limited to the Borrower's
pro rata share of the amount as determined above in this definition.
Assignment and Assumption. See ss.19.1.
Average Unused Commitment. For any period of time, the daily average
difference between (a) the Total Commitment in effect for each day during such
period and (b) the sum of the principal amount of Revolving Credit Loans
outstanding plus the Maximum Drawing Amount for each such day hereunder.
Banks. Collectively, the Bank of Boston, Mellon, PNC, USTrust, Union Bank,
any other banks which may provide additional commitments and become parties to
this Agreement, and any other Person who becomes an assignee of any
<PAGE>
-5-
rights of a Bank pursuant to ss.19 or a Person who acquires all or substantially
all of the stock or assets of a Bank.
Base Rate. The higher of (a) the annual rate of interest announced from
time to time by Bank of Boston at its head office in Boston, Massachusetts as
its "base rate" and (b) one half of one percent (1/2%) above the overnight
federal funds effective rate as published by the Board of Governors of the
Federal Reserve System, as in effect from time to time. Any change in the Base
Rate during an Interest Period shall result in a corresponding change on the
same day in the rate of interest accruing from and after such day on the unpaid
balance of principal of the Base Rate Loans, if any, applicable to such Interest
Period, effective on the day of such change in the Base Rate.
Base Rate Loans. Those Revolving Credit Loans bearing interest calculated
by reference to the Base Rate.
BCN Center Plaza. BCN Center Plaza, LLC, a Delaware limited liability
company which is the general partner of Center Plaza Associates.
Beacon Group. Collectively, TBC Holdings Limited Partnership (formerly
known as The Beacon Companies), a Massachusetts limited partnership, and any of
its Affiliates or related entities which were the Borrower's predecessors in
interest in the ownership of any Real Estate Asset.
Borrower. As defined in the preamble hereto.
BPC Guaranty. The Guaranty dated as of March 31, 1997 made by BPC in favor
of the Agent and the Banks pursuant to which BPC guarantees to the Agent and the
Banks the unconditional payment and performance of the Obligations, subject to
the limitations on liability set forth therein.
Budgeted Project Costs. With respect to Real Estate Assets Under
Development, the budgeted project cost of such Real Estate Asset Under
Development shown on schedules submitted to the Agent; provided that for Real
Estate Assets Under Development owned by any Partially-Owned Real Estate Holding
Entity, the Budgeted Project Cost of such Real Estate Asset Under Development
shall be the Borrower's pro-rata share of the budgeted project cost of such Real
Estate Asset Under Development (based on the greater of (x) the Borrower's
percentage equity interest in such Partially-Owned Real Estate Holding Entity or
(y) the Borrower's obligation to provide funds to such Partially-Owned Real
Estate Holding Entity).
Building. Individually and collectively, the buildings, structures and
improvements now or hereafter located on the Real Estate Assets.
<PAGE>
-6-
Burlington. As defined in the recitals hereto.
Burlington Agreement of Limited Partnership. The Limited Partnership
Agreement of Burlington dated as of November 13, 1996, between the Borrower, as
general partner, and BPC, as limited partner, as the same may be amended from
time to time as permitted by ss.7.22.
Burlington Guaranty. The Guaranty dated as of March 31, 1997 made by
Burlington in favor of the Agent and the Banks, pursuant to which Burlington
guarantees to the Agent and the Banks the unconditional payment and performance
of the Obligations, subject to the limitations on the liability of BPC set forth
therein.
Business Day. Any day on which banking institutions in Boston,
Massachusetts, are open for the transaction of banking business and, in the case
of Eurodollar Rate Loans, also a day which is a Eurodollar Business Day.
Capital Expenditures. Any expenditure for any item that would be treated or
defined as a capital expenditure under GAAP or the Code.
Capitalization Rate. The rate set forth on Schedule 1.2 hereto with respect
to each type of Real Estate Asset.
Capitalized Leases. Leases under which the Borrower or any of its
Subsidiaries or any Partially-Owned Real Estate Holding Entity is the lessee or
obligor, the discounted future rental payment obligations under which are
required to be capitalized on the balance sheet of the lessee or obligor in
accordance with GAAP.
Center Plaza. The nine-story office and retail property located in downtown
Boston, Massachusetts, commonly known as One, Two and Three Center Plaza, and
more particularly described in the Center Plaza Subordinate Mortgage.
Center Plaza Associates. Center Plaza Associates Limited Partnership, a
Massachusetts limited partnership, of which the Borrower is a 75% limited
partner, the CPA Trust is a 24% limited partner and BCN Center Plaza is a 1%
sole general partner.
Center Plaza Beacon Note. The Amended and Restated Beacon Note dated as
of June 10, 1993 in the original principal amount of $7,500,000 made by Center
Plaza Associates in favor of Scollay Corp., a Massachusetts
<PAGE>
-7-
corporation, which promissory note has been assigned by Scollay Corp. to the
Borrower, which has in turn assigned said note to CIGNA, as collateral security.
Center Plaza First Tier Notes. Collectively, the thirteen separate
promissory notes evidencing indebtedness incurred by Center Plaza Associates in
connection with Center Plaza in an aggregate original principal amount equal to
$61,000,000, each dated June 10, 1993, made by Center Plaza Associates in favor
of certain lenders, which promissory notes have been assigned by such lenders to
the Borrower, which has in turn assigned said notes to CIGNA, as collateral
security.
Center Plaza Option Agreements. Collectively, (i) the Option Agreement
(Second Tier Notes), dated as of November 30, 1994, between the Center Plaza
Second Tier Trust and the Borrower (the "Center Plaza Option Agreement (Second
Tier Notes)"), pursuant to which the Borrower is granted an option to purchase
the Center Plaza Second Tier Note, and (ii) the Option Agreement (Limited
Partnership Interests), dated as of November 30, 1994, between the CPA Trust and
the Borrower (the "Center Plaza Option Agreement (Limited Partnership
Interest)") pursuant to which the Borrower is granted an option to purchase all
limited partnership interests of the CPA Trust in Center Plaza Associates.
Center Plaza Second Tier Note. The promissory note evidencing indebtedness
on Center Plaza in the original principal amount equal to $48,060,479.50
executed November 30, 1994 and effective as of June 10, 1993, made by Center
Plaza Associates in favor of the Center Plaza Second Tier Trust. The Borrower
has purchased an option to acquire the Center Plaza Second Tier Note from the
Center Plaza Second Tier Trust pursuant to the terms of the Center Plaza Option
Agreement (Second Tier Notes).
Center Plaza Second Tier Trust. The Note Holding Trust, a Massachusetts
common law grantor trust whose trustee is CP Holding Corp., a Massachusetts
corporation of which Lionel P. Fortin is the sole stockholder.
Center Plaza Subordinate Debt. That certain outstanding indebtedness of
Center Plaza Associates which is evidenced by the Center Plaza Beacon Note, the
Center Plaza First Tier Notes and the Center Plaza Second Tier Note.
Center Plaza Subordinate Mortgage. The Mortgage, Security Agreement,
Financing Statement and Assignment of Leases and Rents dated as of December 1,
1986, as amended by First Amendment of Mortgage, Security Agreement, Financing
Statement and Assignment of Leases and Rents dated as of March 15, 1987 and by
Mortgage Amendment, Consolidation and Extension Agreement dated June 10, 1993,
by Center Plaza Associates in favor of The Sakura Bank,
<PAGE>
-8-
Limited, New York Branch, as agent (successor in interest to Center Plaza
Finance Corporation), originally recorded with the Suffolk Registry of Deeds in
Book 13151, Page 65, and filed with the Suffolk Registry District of the Land
Court as Document No. 414822, as amended and assigned. The Center Plaza
Subordinate Mortgage secures the Center Plaza First Tier Notes and the Center
Plaza Second Tier Note.
CERCLA. See ss.6.18.
CIGNA. Connecticut General Life Insurance Company.
Closing Date. The first date on which all of the conditions set forth in
ss.11 have been satisfied.
Code. The Internal Revenue Code of 1986, as amended and in effect from time
to time.
Completed Loan Request. A loan request accompanied by all information
required to be supplied under the applicable provisions of ss.2.6.
Commitment. With respect to each Bank, the amount set forth from time to
time on Schedule 1.3 hereto as the amount of such Bank's Commitment to make
Loans to, and to participate in the issuance, extension and renewal of Letters
of Credit for the account of, the Borrower, as such commitment may be reduced in
accordance with ss.2.3.
Commitment Fee. See ss.2.5(e).
Commitment Percentage. With respect to each Bank, the percentage set forth
on Schedule 1.3 hereto as such Bank's percentage of the Total Commitment and any
changes thereto from time to time.
Consolidated or consolidated. With reference to any term defined herein,
shall mean that term as applied to the accounts of the Borrower and its
subsidiaries, or BPC and its subsidiaries (as the case may be), consolidated in
accordance with GAAP.
Consolidated Capitalization Value. An amount equal to Consolidated Cash
Flow for the most recent one (1) completed fiscal quarter multiplied by 4, with
the product being divided by 9.5%.
Consolidated Cash Flow. For any fiscal quarter, an amount equal to the sum
of (a) Funds From Operations for such quarter plus (b) Consolidated Total
<PAGE>
-9-
Interest Expense for such quarter plus (c) corporate general and administrative
expenses for such quarter.
Consolidated Debt Service. For any fiscal quarter, (a) Consolidated Total
Interest Expense for such quarter plus (b) the aggregate amount of scheduled
principal payments of Indebtedness (excluding (x) optional prepayments and (y)
scheduled principal payments in respect of any Indebtedness which is not
amortized through equal periodic installments of principal and interest over the
term of such Indebtedness, including, without limitation, balloon payments at
maturity) required to be made during such quarter by the Borrower and any of its
Subsidiaries plus (c) the aggregate amount of capitalized interest required in
accordance with GAAP to be paid or accrued by the Borrower or its Subsidiaries
during such quarter.
Consolidated Market Value. As of any date, an amount equal to (a) the sum
of (i) the Consolidated Capitalization Value as of such date, plus (ii) 100% of
the value of Unrestricted Cash and Cash Equivalents (excluding, until forfeited
or otherwise entitled to be retained by the Borrower, the Guarantors or their
respective Subsidiaries, tenant security and other restricted deposits), plus
(iii) 100% of the aggregate costs incurred and paid to date by the Borrower with
respect to Real Estate Assets Under Development, provided that the aggregate of
costs incurred and paid to date by the Borrower with respect to Real Estate
Assets under Development which are less than 50% pre-leased by square footage of
rentable space shall be limited to $100,000,000 for purposes hereof ("Eligible
Real Estate Development Costs"), minus (b) the Value of Nonconforming Assets, if
any.
Consolidated Net Worth. As of any date of determination, the Consolidated
Market Value minus Consolidated Outstanding Indebtedness.
Consolidated Outstanding Indebtedness. As of any date of determination, all
Indebtedness of the Borrower and its Subsidiaries as of such date determined on
a consolidated basis in accordance with GAAP.
Consolidated Outstanding Recourse Indebtedness. As of any date of
determination, all Consolidated Outstanding Indebtedness that is Recourse to any
of the Credit Parties (including, without limitation, the outstanding amount of
the Revolving Credit Loans and the Maximum Drawing Amount).
Consolidated Secured Indebtedness. As of any date of determination, the
aggregate principal amount of all Indebtedness of the Borrower and its
Subsidiaries outstanding at such date secured by a Lien on properties or other
assets of the Borrower or its Subsidiaries, without regard to recourse.
<PAGE>
-10-
Consolidated Total Interest Expense. For any fiscal quarter of the
Borrower, the aggregate amount of interest required in accordance with GAAP to
be paid or accrued (but excluding interest reserves funded from the proceeds of
any construction loan), without double-counting, by the Borrower and its
Subsidiaries during such quarter on: (i) all Indebtedness of the Borrower and
its Subsidiaries (including the Loans and including original issue discount and
amortization of prepaid interest, if any) and (ii) all amounts available for
borrowing, or for drawing under letters of credit, if any, issued for the
account of the Borrower or its Subsidiaries, but only if such interest was or is
required to be reflected as an item of expense, including commitment fees,
agency fees, facility fees (other than the Facility Fee payable pursuant to
ss.2.5(d) hereof), balance deficiency fees and similar fees and expenses in
connection with the borrowing of money.
Consolidated Unencumbered Asset Cash Flow. For any fiscal quarter, Net
Operating Income for each Unencumbered Asset for such quarter minus the Annual
Unfunded Capital Expenditure Reserve for such Unencumbered Asset in effect for
such quarter.
Consolidated Unsecured Debt Service Charges. For any fiscal quarter, an
amount determined by the Agent to be the payments which would be required during
such quarter to amortize the average amount of Consolidated Unsecured
Indebtedness outstanding during such quarter using a twenty-five (25) year
mortgage style amortization schedule, and using an annual interest rate equal to
the higher of (i) the actual annual interest rate applicable to the Revolving
Credit Loans outstanding during such fiscal quarter, and (ii) the sum of two
percent (2%) plus the imputed seven (7) year United States Treasury notes annual
yield as of the last day of such fiscal quarter based upon published quotes for
Treasury notes having seven (7) years to maturity.
Consolidated Unsecured Indebtedness. As of any date of determination, the
aggregate principal amount of all Unsecured Indebtedness of the Borrower and its
Subsidiaries outstanding at such date, including without limitation all the
Obligations under this Agreement as of such date, determined on a consolidated
basis in accordance with GAAP.
Conversion Request. A notice given by the Borrower to the Agent of its
election to convert or continue a Loan in accordance with ss.2.7.
CP Holding Corp. CP Holding Corp., a Massachusetts corporation which is the
trustee of the CPA Trust.
CPA Trust. The Partnership Holding Trust, a Massachusetts common law
grantor trust, the stock of the trustee of which, CP Holding Corp., is owned by
<PAGE>
-11-
Lionel P. Fortin, which trust is a 24% limited partner of Center Plaza
Associates.
Credit Parties. Collectively, the Borrower, the Operating Subsidiaries,
BPC, the other Guarantors and any other wholly-owned Subsidiary for which the
Borrower or BPC has legal liability for such wholly-owned Subsidiary's
obligations and liabilities, directly or indirectly.
default. When used with reference to this Agreement or any other Loan
Document, any of the events or conditions specified in ss.13.1, whether or not
any requirement for the giving of notice, the lapse of time or both, has been
satisfied.
Default. As of the relevant time of determination, an event or occurrence
which:
(i) requires notice and time to cure to become an Event of Default and
as to which notice has been given to the Borrower by the Agent; or
(ii) has occurred and will become an Event of Default (without notice)
if such event remains uncured after any grace period specified in ss.13.1
or, in the case of matters referred to in ss.13.1(m), in the other
applicable Loan Document(s).
Disqualifying Environmental Event. Any Release or threatened Release of
Hazardous Substances, any violation of Environmental Laws or any other similar
environmental event with respect to a Real Estate Asset that causes (x) such
Real Estate Asset (in the case of an office building) to no longer be a Class A
or Class B office building or such Real Estate Asset (if a Real Estate Asset
other than a Class A or Class B office building) to be no longer in the same
asset class, (y) the occupancy or rent of such Real Estate Asset to be adversely
affected, as compared to what otherwise would have been the occupancy or rent of
such Real Estate Asset in the absence of such environmental event (provided that
an environmental event that reduces a Class A to a Class B office building at
Class B occupancy and rent which are standard in the relevant market shall not
constitute a Disqualifying Environmental Event under this clause (y) or clause
(x) above) or (z) such Real Estate Asset to no longer be financeable on a
non-recourse (with customary exceptions) long-term debt basis under the then
generally accepted underwriting standards of national insurance company or
pension fund real estate institutional lenders.
<PAGE>
-12-
Distribution. With respect to:
(i) the Borrower, any distribution of cash or other cash equivalent,
directly or indirectly, to the partners of the Borrower; or any other
distribution on or in respect of any partnership interests of the Borrower;
and
(ii) BPC, the declaration or payment of any dividend on or in respect
of any shares of any class of capital stock of BPC, other than dividends
payable solely in shares of common stock by BPC; the purchase, redemption,
or other retirement of any shares of any class of capital stock of BPC,
directly or indirectly through a Subsidiary of BPC or otherwise; the return
of capital by BPC to its shareholders as such; or any other distribution on
or in respect of any shares of any class of capital stock of BPC.
Dollars or $. Dollars in lawful currency of the United States of America.
Drawdown Date. The date on which any Revolving Credit Loan is made or is to
be made, and the date on which any Revolving Credit Loan is converted or
continued in accordance with ss.2.7.
Duff & Phelps. Duff & Phelps, and its successors.
Eligible Assignee. Any of (a) a commercial bank organized under the laws of
the United States, or any State thereof or the District of Columbia, and having
total assets in excess of $1,000,000,000; (b) a savings and loan association or
savings bank organized under the laws of the United States, or any State thereof
or the District of Columbia, and having a net worth of at least $100,000,000,
calculated in accordance with GAAP; and (c) a commercial bank organized under
the laws of any other country (including the central bank of such country) which
is a member of the Organization for Economic Cooperation and Development (the
"OECD"), or a political subdivision of any such country, and having total assets
in excess of $1,000,000,000, provided that such bank is acting through a branch
or agency located in the United States of America.
Eligible Real Estate Development Costs. See definition of "Consolidated
Market Value".
Employee Benefit Plan. Any employee benefit plan within the meaning of
ss.3(3) of ERISA maintained or contributed to by the Borrower or any ERISA
Affiliate, other than a Multiemployer Plan.
<PAGE>
-13-
Environmental Laws. See ss.6.18(a).
ERISA. The Employee Retirement Income Security Act of 1974, as amended and
in effect from time to time.
ERISA Affiliate. Any Person which is treated as a single employer with the
Borrower under ss.414 of the Code.
ERISA Reportable Event. A reportable event with respect to a Guaranteed
Pension Plan within the meaning of ss.4043 of ERISA and the regulations
promulgated thereunder as to which the requirement of notice has not been
waived.
Eurocurrency Reserve Rate. For any day with respect to a Eurodollar Rate
Loan, the weighted average of the rates (expressed as a decimal) at which all of
the Banks subject thereto would be required to maintain reserves under
Regulation D of the Board of Governors of the Federal Reserve System (or any
successor or similar regulations relating to such reserve requirements) against
"Eurocurrency Liabilities" (as that term is used in Regulation D), if such
liabilities were outstanding. The Eurocurrency Reserve Rate shall be adjusted
automatically on and as of the effective date of any change in the Eurocurrency
Reserve Rate.
Eurodollar Breakage Costs. With respect to any Eurodollar Rate Loan to be
prepaid or not drawn after elected, a prepayment "breakage" fee in an amount
determined by the Agent in the following manner:
(i) First, the Agent shall determine the amount by which (a) the total
amount of interest which would have otherwise accrued hereunder on each
installment of principal prepaid or not so drawn, during the period
beginning on the date of such prepayment or failure to draw and ending on
the last day of the applicable Eurodollar Rate Loan Interest Period (the
"Reemployment Period"), exceeds (b) the total amount of interest which
would accrue, during the Reemployment Period, on any readily marketable
bond or other obligation of the United States of America designated by the
Agent in its sole discretion at or about the time of such payment, such
bond or other obligation of the United States of America to be in an amount
equal (as nearly as may be) to the amount of principal so paid or not drawn
after elected and to have maturity at the end of the Reemployment Period,
and the interest to accrue thereon to take account of amortization
<PAGE>
-14-
of any discount from par or accretion of premium above par at which the
same is selling at the time of designation. Each such amount is hereinafter
referred to as an "Installment Amount".
(ii) Second, each Installment Amount shall be treated as payable on
the last day of the Eurodollar Rate Loan Interest Period which would have
been applicable had such principal installment not been prepaid or not
borrowed.
(iii) Third, the amount to be paid on each such date shall be the
present value of the Installment Amount determined by discounting the
amount thereof from the date on which such Installment Amount is to be
treated as payable, at the same yield to maturity as that payable upon the
bond or other obligation of the United States of America designated as
aforesaid by the Agent.
Eurodollar Business Day. Any day on which commercial banks are open for
international business (including dealings in Dollar deposits) in London or such
other eurodollar interbank market as may be selected by the Agent in its sole
discretion acting in good faith.
Eurodollar Rate. For any Interest Period with respect to a Eurodollar Rate
Loan, the rate per annum equal to the quotient of (a) the rate at which the
Agent is offered Dollar deposits two Eurodollar Business Days prior to the
beginning of such Interest Period in an interbank eurodollar market where the
eurodollar and foreign currency and exchange operations of the Agent are
customarily conducted for delivery on the first day of such Interest Period for
the number of days comprised therein and in an amount comparable to the amount
of the Eurodollar Rate Loan to which such Interest Period applies, divided by
(b) a number equal to 1.00 minus the Eurocurrency Reserve Rate.
Eurodollar Rate Loan(s). Revolving Credit Loans bearing interest calculated
by reference to the Eurodollar Rate.
Event of Default. See ss.13.1.
Financial Statement Date. With respect to (i) the Borrower, December 31,
1996, and (ii) with respect to BPC, December 31, 1996.
Fitch. Fitch Investors Service, Inc., and its successors.
Fronting Bank. Bank of Boston.
<PAGE>
-15-
Funds from Operations. With respect to any fiscal period of the Borrower,
an amount, without double-counting, equal to the net income of the Borrower and
its Subsidiaries, as determined in accordance with GAAP, before deduction of
depreciation and amortization, and excluding gains (or losses) from the sale of
real property or interests therein, debt restructurings or other extraordinary
items, and after adjustments for unconsolidated partnerships, joint ventures or
other entities (such adjustments to be calculated to reflect Funds from
Operations on the same basis, to the extent that such Funds from Operations
attributable to unconsolidated partnerships, joint ventures and other entities
are not subject to the claims of any other Person); plus amortization of
pre-paid deferred financing costs to the extent deducted in calculating Funds
from Operations.
"funds from operations". As defined in accordance with resolutions adopted
by the Board of Governors of the National Association of Real Estate Investment
Trusts from time to time.
GAAP. Generally accepted accounting principles, consistently applied.
Guaranteed Pension Plan. Any employee pension benefit plan within the
meaning of ss.3(2) of ERISA maintained or contributed to by the Borrower or any
Guarantor, as the case may be, or any ERISA Affiliate of any of them the
benefits of which are guaranteed on termination in full or in part by the PBGC
pursuant to Title IV of ERISA, other than a Multiemployer Plan.
Guaranties. Collectively, the BPC Guaranty, the 1333 Guaranty, the
Burlington Guaranty and any other guaranty of the Obligations made by an
Affiliate of the Borrower in favor of the Agent and the Banks.
Guarantor. Collectively, BPC, 1333, Burlington and any other Affiliate of
the Borrower executing a Guaranty, provided, however, when the context so
requires, Guarantor shall refer to BPC, 1333, Burlington or such Affiliate, as
appropriate. Any Guarantor that is the owner or ground lessee of an Unencumbered
Asset shall be a wholly-owned Subsidiary. Provided further, however, from and
after the release of the Guaranty of any Subsidiary Guarantor pursuant to ss.5
below, such Subsidiary Guarantor shall no longer be considered a "Guarantor" for
purposes of this Agreement.
Hazardous Substances. See ss.6.18(b).
Indebtedness. All obligations, contingent and otherwise, that in accordance
with GAAP should be classified upon the obligor's balance sheet as liabilities,
or to which reference should be made by footnotes thereto, including
<PAGE>
-16-
in any event and whether or not so classified: (a) all debt and similar monetary
obligations, whether direct or indirect; (b) all liabilities secured by any
mortgage, pledge, security interest, lien, charge, or other encumbrance existing
on property owned or acquired subject thereto, whether or not the liability
secured thereby shall have been assumed; and (c) all guarantees for borrowed
money, endorsements and other contingent obligations, whether direct or
indirect, in respect of indebtedness or obligations of others, including any
obligation to supply funds (including partnership obligations and capital
requirements) to or in any manner to invest in, directly or indirectly, the
debtor, to purchase indebtedness, or to assure the owner of indebtedness against
loss, through an agreement to purchase goods, supplies, or services for the
purpose of enabling the debtor to make payment of the indebtedness held by such
owner or otherwise, and the obligations to reimburse the issuer in respect of
any letters of credit.
Indicative Rating. An unissued long-term unsecured debt rating provided to
the Borrower in writing by Moody's, S&P or a Third Rating Agency, which rating
has not been revised or withdrawn and is no older than twelve (12) months.
Interest Payment Date. As to any Loan, the last day of any calendar month
in which such Loan is outstanding.
Interest Period. With respect to each Revolving Credit Loan, (a) initially,
the period commencing on the Drawdown Date of such Loan and ending on the last
day of one of the following periods (as selected by the Borrower in a Completed
Loan Request): (i) for any Base Rate Loan, the last day of the calendar month,
and (ii) for any Eurodollar Rate Loan, 1, 2, 3, 6 or 12 months; and (b)
thereafter, each period commencing at the end of the last day of the immediately
preceding Interest Period applicable to such Revolving Credit Loan and ending on
the last day of the applicable period set forth in (a)(i) and (ii) above
selected by the Borrower in a Conversion Request; provided that all of the
foregoing provisions relating to Interest Periods are subject to the following:
(A) if any Interest Period with respect to a Base Rate Loan would end
on a day that is not a Business Day, that Interest Period shall end on the
next succeeding Business Day;
(B) if any Interest Period with respect to a Eurodollar Rate Loan
would otherwise end on a day that is not a Business Day, that Interest
Period shall be extended to the next succeeding Business Day unless the
result of such extension would be to carry such Interest Period into
another calendar month, in which event such Interest Period shall end on
the immediately preceding Business Day;
<PAGE>
-17-
(C) if the Borrower shall fail to give notice of conversion as
provided in ss.2.7, the Borrower shall be deemed to have requested a
conversion of the affected Eurodollar Rate Loan to a Base Rate Loan on the
last day of the then current Interest Period with respect thereto;
(D) any Interest Period relating to any Eurodollar Rate Loan that
begins on the last Business Day of a calendar month (or on a day for which
there is no numerically corresponding day in the calendar month at the end
of such Interest Period) shall, subject to subparagraph (E) below, end on
the last Business Day of a calendar month; and
(E) any Interest Period that would otherwise extend beyond the
Maturity Date shall end on the Maturity Date.
Investments. All expenditures made and all liabilities incurred
(contingently or otherwise, but without double-counting): (i) for the
acquisition of stock, partnership or other equity interests or Indebtedness of,
or for loans, advances, capital contributions or transfers of property to, any
Person; and (ii) for the acquisition of any other obligations of any Person. In
determining the aggregate amount of Investments outstanding at any particular
time: (a) there shall be included as an Investment all interest accrued with
respect to Indebtedness constituting an Investment unless and until such
interest is paid; (b) there shall be deducted in respect of each such Investment
any amount received as a return of capital (but only by repurchase, redemption,
retirement, repayment, liquidating dividend or liquidating distribution); (c)
there shall not be deducted in respect of any Investment any amounts received as
earnings on such Investment, whether as dividends, interest or otherwise, except
that accrued interest included as provided in the foregoing clause (a) may be
deducted when paid; and (d) there shall not be deducted from the aggregate
amount of Investments any decrease in the value thereof.
Leases. Leases, licenses and agreements, whether written or oral, relating
to the use or occupation of space in or on the Buildings or on the Real Estate
Assets by persons other than the Borrower, its Subsidiaries or any
Partially-Owned Real Estate Holding Entity.
Leasing Costs. Collectively, leasing commissions, legal fees, design costs,
tenant improvement costs and other costs incurred by the Borrower, its
Subsidiaries or any Partially-Owned Real Estate Holding Entity in connection
with entering into Leases or amendments thereto.
Letter of Credit. See ss.2A.1.1.
<PAGE>
-18-
Letter of Credit Application. See ss.2A.1.1.
Letter of Credit Fee. See ss.2A.6.
Letter of Credit Participation. See ss.2A.1.4.
Lien. See ss.8.2.
Loan Documents. Collectively, this Agreement, the Letter of Credit
Applications, the Letters of Credit, the Revolving Credit Notes, the Guaranties,
and any and all other agreements, instruments or documents now or hereafter
evidencing or otherwise relating to the Revolving Credit Loans and executed or
delivered by or on behalf of the Borrower or its Subsidiaries or any Guarantor
or its Subsidiaries in connection with the Loans, or referred to herein or
therein and delivered to the Agent or the Banks by or on behalf of the Borrower,
any Guarantor or their respective Subsidiaries, and all schedules, exhibits and
annexes hereto or thereto, as the same may from time to time be amended and in
effect.
Loans. The Revolving Credit Loans.
Majority Banks. As of any date, the Banks whose aggregate Commitments
constitute at least fifty-one percent (51%) of the Total Commitment, but in no
event fewer than two Banks.
Maturity Date. March 31, 2000, or such earlier date on which the Revolving
Credit Loans shall become due and payable pursuant to the terms thereof.
Maximum Drawing Amount. The maximum aggregate amount that the beneficiaries
may at any time draw under outstanding Letters of Credit, as such maximum
aggregate amount may be reduced from time to time pursuant to the terms of the
Letters of Credit.
Moody's. Moody's Investors Service, Inc., and its successors.
Multiemployer Plan. Any multiemployer plan within the meaning of ss.3(37)
of ERISA maintained or contributed to by the Borrower or any Guarantor as the
case may be or any ERISA Affiliate.
Net Operating Income. With respect to any fiscal quarter, the total rental
and other income from the operation of all Real Estate Assets of the entity in
question, less all expenses and other proper charges incurred in connection with
the operation of such Real Estate Assets during such fiscal quarter (including,
<PAGE>
-19-
without limitation, real estate taxes, management fees, bad debt expenses and
rent under ground leases), but before payment of or provision for debt service
charges for such fiscal quarter, income taxes for such period, and depreciation,
amortization, and other non-cash expenses for such fiscal quarter, all as
determined in accordance with GAAP (except that any rent leveling adjustments
shall be excluded from rental income).
Obligations. All indebtedness, obligations and liabilities of the Borrower
and its Subsidiaries to any of the Banks and the Agent, individually or
collectively, under this Agreement or any of the other Loan Documents or in
respect of any of the Loans or the Revolving Credit Notes or Reimbursement
Obligations incurred or the Letter of Credit Applications or the Letters of
Credit or other instruments at any time evidencing any thereof, whether existing
on the date of this Agreement or arising or incurred hereafter, direct or
indirect, joint or several, absolute or contingent, matured or unmatured,
liquidated or unliquidated, secured or unsecured, arising by contract, operation
of law or otherwise.
Operating Accounts. Collectively, all deposit or other accounts of the
Borrower relating to each of the Unencumbered Assets other than segregated
accounts that the Borrower is required to maintain with third parties.
Operating Subsidiaries. Those Subsidiaries of the Borrower that, at any
time of reference, provide management, construction, design or other services
(excluding any such Subsidiary which may provide any such services which are
only incidental to that Subsidiary's ownership of one or more Real Estate
Assets) but including, in any case, Beacon Property Management Corporation,
Beacon Design Corporation, Beacon Property Management, L.P., Beacon Design, L.P.
and Beacon Property South Station Management Company, L.P., and any successors
or assigns of their respective businesses and/or assets which are Subsidiaries
of the Borrower or the Guarantors.
Partially-Owned Real Estate Holding Entity(ies). Any of the partnerships,
joint ventures and other entities owning real estate assets in which the
Borrower and/or BPC collectively, directly or indirectly through its full or
partial ownership of another entity, own less than 100% of the equity interests,
whether or not such entity is required in accordance with GAAP to be
consolidated with the Borrower for financial reporting purposes. For purposes of
the calculations to be made under ss.9 of this Agreement, the beneficial
interests of BPC in the other Guarantors, in BeaMetFed, Inc. (the entity which
owns the property at 75-101 Federal Street, Boston, Massachusetts) and in
Crystal Holdings Limited Partnership (the partnership that owns the Polk
Building and the Taylor Building), and the interests of Rowes Wharf Holding,
L.P. in Rowes Wharf Limited Partnership, shall all be treated as if the Borrower
were the
<PAGE>
-20-
owner of such interests; provided, however, that none of the BPC-owned
beneficial interests shall at any time as to any such property exceed 1% of the
entire beneficial interest in such property.
Partnership Documents. Collectively, (i) the Agreement of Limited
Partnership of the Borrower, (ii) the Borrower's Certificate of Limited
Partnership, (iii) all of the partnership or any other related agreements to
which the Borrower or any Guarantor is a party, including, without limitation,
all of the partnership or other related agreements between the Borrower and the
other partner(s) in each Partially-Owned Real Estate Holding Entity (and any
other parties thereto) relating to the Borrower's interests in such Entities,
and (iv) all other agreements, instruments or contracts which shall from time to
time be identified in writing by the Agent, the Banks and the Borrower as
"Partnership Documents" for purposes of this Agreement.
PBGC. The Pension Benefit Guaranty Corporation created by ss.4002 of ERISA
and any successor entity or entities having similar responsibilities.
Permits. All governmental permits, licenses, and approvals necessary or
useful for the lawful operation and maintenance of the Real Estate Assets.
Permitted Liens. Liens, security interests and other encumbrances permitted
by ss.8.2.
Person. Any individual, corporation, partnership, trust, unincorporated
association, business, or other legal entity, and any government (or any
governmental agency or political subdivision thereof).
Protected Interest Rate Agreement. Those three certain agreements, dated as
of April 24, 1995, June 29, 1995, and June 24, 1996, respectively, which
collectively evidence the interest protection arrangements required by ss.7.16
hereof, and all extensions, renewals, modifications, amendments, substitutions
and replacements thereof.
RCRA. See ss.6.18.
Real Estate Assets. The fixed and tangible properties consisting of land,
buildings and/or other improvements owned or ground-leased by the Borrower, by
any Guarantor or by any other entity in which the Borrower is the holder of an
equity interest at the relevant time of reference thereto, including, without
limitation, (i) the Unencumbered Assets at such time of reference, and (ii) the
real estate assets owned or ground-leased by each of the Partially-Owned Real
Estate Holding Entities at such time of reference, but excluding all leaseholds
other than (x) the leasehold under the South Station ground lease, and (y) other
<PAGE>
-21-
leaseholds under ground leases having an unexpired term of not less than thirty
(30) years from the date hereof (which ground lease term will include only
renewal options exercisable solely at the ground lessee's option and, if
exercisable prior to the Maturity Date, so exercised).
Real Estate Assets Under Development. Any Real Estate Assets for which the
Borrower, any Guarantor, any of the Borrower's Subsidiaries or any
Partially-Owned Real Estate Holding Entity is actively pursuing construction of
Buildings or other improvements and for which construction is proceeding to
completion without undue delay from Permit denial, construction delays or
otherwise, all pursuant to such Person's ordinary course of business and not
inconsistent with ss.7.27 hereof; provided that such Real Estate Asset will no
longer be considered a Real Estate Asset Under Development when it achieves and
maintains a fifty percent (50%) occupancy rate for two (2) consecutive fiscal
quarters. Notwithstanding the foregoing, tenant improvements to previously
constructed and/or leased Real Estate Assets shall not be considered Real Estate
Assets Under Development. For purposes of this definition, a tenant shall be
deemed to be in "occupancy" if such tenant or its subtenant(s) is in possession
of the leased premises and such tenant is paying stipulated rent, if any.
Record. The grid attached to any Revolving Credit Note, or the continuation
of such grid, or any other similar record, including computer records,
maintained by any Bank with respect to any Loan.
Recourse. With reference to any obligation or liability, any liability or
obligation that is not Without Recourse to the obligor thereunder, directly or
indirectly. For purposes hereof, a Person shall not be deemed to be "indirectly"
liable for the liabilities or obligations of an obligor solely by reason of the
fact that such Person has an ownership interest in such obligor, provided that
such Person is not otherwise legally liable, directly or indirectly, for such
obligor's liabilities or obligations (e.g., by reason of a guaranty or
contribution obligation, by operation of law or by reason of such Person being a
general partner of such obligor).
Reimbursement Obligation. The Borrower's obligation to reimburse the Banks
and the Agent on account of any drawing under any Letter of Credit as provided
in ss.2A.2. Notwithstanding the foregoing, unless the Borrower shall notify the
Agent of its intent to repay the Reimbursement Obligation on the date of the
related drawing under any Letter of Credit as provided in ss.2A.2, such
Reimbursement Obligation shall simultaneously with such drawing be converted to
and become a Base Rate Loan as set forth in ss.2A.3.
REIT. A "real estate investment trust", as such term is defined in Section
856 of the Code.
<PAGE>
-22-
Release. See ss.6.18(c)(iii).
Revolving Credit Loan(s). Each and every revolving credit loan made or to
be made by the Banks to the Borrower pursuant to ss.2.
Revolving Credit Notes. Collectively, the separate promissory notes of the
Borrower in favor of each Bank in substantially the form of Exhibit A hereto, in
the aggregate principal amount of $300,000,000, dated as of the date hereof or
as of such later date as any Person becomes a Bank under this Agreement, and
completed with appropriate insertions, as each of such notes may be amended
and/or restated from time to time.
Revolving Credit Note Record. A Record with respect to the Revolving Credit
Notes.
Rowes Wharf Debt. The indebtedness described on Schedule 1.4 hereto.
Russia Wharf Debt. The indebtedness described on Schedule 1.5 hereto.
S&P. Standard & Poor's Ratings Group, a division of McGraw-Hill, Inc., and
its successors.
SARA. See ss.6.18.
SEC Filings. Collectively, (a) the BPC's Annual Report on Form 10-K for the
year ended December 31, 1996, filed with the Securities and Exchange Commission
(the "SEC") pursuant to the Securities and Exchange Act of 1934, as amended (the
"Exchange Act"), (b) BPC's Current Report on Form 8-K, dated March 27, 1997,
filed with the SEC pursuant to the Exchange Act, including all amendments
thereto, (c) the description of BPC's Common Stock contained in its Registration
Statement on Form 8-A filed with the SEC pursuant to the Exchange Act, including
all amendments and reports updating such description, (d) the Borrower's Report
on Form 10/A-2 dated March 27, 1997, filed with the SEC pursuant to the Exchange
Act, including all amendments thereto, and (e) BPC's Preliminary Prospectus
dated March 27, 1997 and the Preliminary Prospectus Supplement dated March 27,
1997 (the "March, 1997 Preliminary Prospectus and Preliminary Prospectus
Supplement").
South Station Debt. The indebtedness described on Schedule 1.6 hereto.
subsidiary. Any entity required to be consolidated with its direct or
indirect parent in accordance with GAAP.
<PAGE>
-23-
Subsidiary. Any corporation, association, partnership, trust, or other
business entity of which the designated parent shall at any time own directly or
indirectly through a Subsidiary or Subsidiaries at least a majority (by number
of votes or controlling interests) of the outstanding voting interests or at
least a majority of the economic interests (including, in any case, the
Operating Subsidiaries and any entity required to be consolidated with its
designated parent in accordance with GAAP), provided, however, that (i) in the
case of the Borrower, the term Subsidiary shall always include all Operating
Subsidiaries and exclude the Partially-Owned Real Estate Holding Entities, and
(ii) in the case of BPC, the term Subsidiary shall not include the Borrower or
its Subsidiaries or the Partially-Owned Real Estate Holding Entities.
Subsidiary Guarantor. Any Guarantor other than BPC.
Third Debt Rating. The Borrower's long term unsecured debt rating from a
Third Rating Agency.
Third Rating Agency. Duff & Phelps, Fitch's or another
nationally-recognized rating agency (other than S&P or Moody's) reasonably
satisfactory to the Agent.
Title Insurance Company. Commonwealth Land Title Insurance Company or other
nationally-recognized title insurance company.
Title Policies. For each Unencumbered Asset, an ALTA standard form title
policy (or, if such form is not available, an equivalent form of title insurance
policy) issued by the Title Insurance Company, insuring that the Borrower holds
good and clear marketable fee simple or leasehold title to such Unencumbered
Asset, subject only to Permitted Liens.
Total Commitment. As of any date, the sum of the then-current Commitments
of the Banks, provided that the Total Commitment shall not at any time exceed
the lesser of: (i) $300,000,000 or (ii) the amount that is the maximum amount
that permits compliance with the terms of ss.9.
Type. As to any Revolving Credit Loan, its nature as a Base Rate Loan or a
Eurodollar Rate Loan.
Unanimous Bank Approval. The written consent of each Bank that is a party
to this Agreement at the time of reference.
Unencumbered Asset. Any Real Estate Asset that on any date of
determination: (a) is not subject to any Liens (including any such Lien imposed
by the organizational documents of the owner of such asset, but excluding
<PAGE>
-24-
Permitted Liens), (b) is not the subject of any matter that materially adversely
affects the value of such Real Estate Asset, (c) is not the subject of a
Disqualifying Environmental Event, (d) has been improved with a Building or
Buildings which (1) have been issued a certificate of occupancy (where
available) or is otherwise lawfully occupied for its intended use, (2) are fully
operational, and (3) have an aggregate average occupancy of all Building(s) in
such Real Estate Asset of not less than 50% for the fiscal quarter most recently
ended, provided that at any date of determination all Real Estate Assets that
are Unencumbered Assets shall have an aggregate average occupancy of not less
than 80% for the fiscal quarter most recently ended, (e) is wholly owned or
ground-leased by the Borrower or a Guarantor and (f) has not been designated by
the Borrower in writing to the Agent as a Real Estate Asset that is not an
Unencumbered Asset, which designation shall not be permitted during the
continuance of a Default or an Event of Default and shall be accompanied by a
compliance certificate in the form of Exhibit D attached hereto. For purposes of
this definition, a tenant shall be deemed to be in "occupancy" if such tenant or
its subtenant(s) is in possession of the leased premises and such tenant is
paying stipulated rent, if any; provided that up to 10% of the actual occupancy
may be comprised of tenants which are not (and do not have subtenants which are)
in possession of the leased premises but continue to pay stipulated rent, if
any.
Uniform Customs. With respect to any Letter of Credit, the Uniform Customs
and Practice for Documentary Credits (1993 Revision), International Chamber of
Commerce Publication No. 500, or any successor version thereof adopted by the
Agent in the ordinary course of its business as a letter of credit issuer and in
effect at the time of issuance of such Letter of Credit.
Unrestricted Cash and Cash Equivalents. As of any date of determination,
the sum of (a) the aggregate amount of unrestricted cash then held by the
Borrower or any of its Subsidiaries and (b) the aggregate amount of unrestricted
cash equivalents (valued at fair market value) then held by the Borrower or any
of its Subsidiaries. As used in this definition, (i) "unrestricted" means the
specified asset is not subject to any Liens in favor of any Person and (ii)
"cash equivalents" means that such asset has a liquid, par value in cash and is
convertible to cash on demand. Notwithstanding anything contained herein to the
contrary, the term Unrestricted Cash and Cash Equivalents shall not include the
Commitments of the Banks to make Loans under this Agreement.
Unsecured Indebtedness. All Indebtedness of any Person that is not secured
by a Lien on any asset of such Person.
Value of Nonconforming Assets. See ss.7.27.
<PAGE>
-25-
wholly-owned Subsidiary. Any Subsidiary of which the Borrower and/or BPC
shall at any time own directly or indirectly through a Subsidiary or
Subsidiaries at least a majority (by number of votes or controlling interests)
of the outstanding voting interests and one hundred percent (100%) of the
economic interests, of which at least ninety-nine percent (99%) of the economic
interests shall be owned by the Borrower.
"Without Recourse" or "without recourse". With reference to any obligation
or liability, any obligation or liability for which the obligor thereunder is
not liable or obligated other than as to its interest in a designated Real
Estate Asset or other specifically identified asset only, subject to such
limited exceptions to the non-recourse nature of such obligation or liability,
such as fraud, misappropriation, misapplication and environmental indemnities,
as are usual and customary in like transactions involving institutional lenders
at the time of the incurrence of such obligation or liability.
ss.1.2. Rules of Interpretation.
(i) A reference to any document or agreement shall include such
document or agreement as amended, modified or supplemented from time to
time in accordance with its terms or the terms of this Agreement.
(ii) The singular includes the plural and the plural includes the
singular.
(iii) A reference to any law includes any amendment or modification to
such law.
(iv) A reference to any Person includes its permitted successors and
permitted assigns.
(v) Accounting terms not otherwise defined herein have the meanings
assigned to them by generally accepted accounting principles applied on a
consistent basis by the accounting entity to which they refer.
(vi) The words "include", "includes" and "including" are not limiting.
(vii) All terms not specifically defined herein or by generally
accepted accounting principles, which terms are defined in the Uniform
Commercial Code as in effect in Massachusetts, have the meanings assigned
to them therein.
<PAGE>
-26-
(viii) Reference to a particular "ss." refers to that section of this
Agreement unless otherwise indicated.
(ix) The words "herein", "hereof", "hereunder" and words of like
import shall refer to this Agreement as a whole and not to any particular
section or subdivision of this Agreement.
ss.2. THE REVOLVING CREDIT FACILITY.
ss.2.1. Commitment to Lend. Subject to the provisions of ss.2.6 and the
other terms and conditions set forth in this Agreement, each of the Banks
severally agrees to lend to the Borrower and the Borrower may borrow, repay, and
reborrow from each Bank from time to time between the Closing Date and the
Maturity Date upon notice by the Borrower to the Agent (with copies for each
Bank) given in accordance with ss.2.6 hereof, such sums as are requested by the
Borrower up to a maximum aggregate principal amount outstanding (after giving
effect to all amounts requested) at any one time equal to such Bank's Commitment
minus such Bank's Commitment Percentage of the Maximum Drawing Amount; provided
that the sum of the outstanding amount of the Revolving Credit Loans (after
giving effect to all amounts requested) plus the Maximum Drawing Amount shall
not at any time exceed the Total Commitment in effect at such time.
The Revolving Credit Loans shall be made pro rata in accordance with each
Bank's Commitment Percentage. Each request for a Revolving Credit Loan made
pursuant to ss.2.6 hereof shall constitute a representation and warranty by the
Borrower that the conditions set forth in ss.11 have been satisfied as of the
Closing Date (to the extent such conditions have not been waived in writing by
the Banks and/or deferred in writing to be a condition to the initial advance)
and that the conditions set forth in ss.12 have been satisfied on the date of
such request and will be satisfied on the proposed Drawdown Date of the
requested Loan, provided that the making of such representation and warranty by
the Borrower shall not limit the right of any Bank not to lend if such
conditions have not been met. No Revolving Credit Loan shall be required to be
made by any Bank unless all of the conditions contained in ss.11 have been
satisfied as of the Closing Date (to the extent such conditions have not been
waived in writing by the Banks and/or deferred in writing to be a condition to
the initial advance) and that the conditions set forth in ss.12 have been met at
the time of any request for a Revolving Credit Loan.
ss.2.2. [Intentionally Omitted.]
<PAGE>
-27-
ss.2.3. Reduction of Commitment. The Borrower shall have the right at any
time and from time to time upon five (5) Business Days' prior written notice to
the Agent (with copies for each Bank) to reduce by $500,000 or an integral
multiple of $100,000 in excess thereof or terminate entirely the unborrowed
portion of the then Total Commitment, whereupon the Commitments of the Banks
shall be reduced pro rata in accordance with their respective Commitment
Percentages by the amount specified in such notice or, as the case may be,
terminated. Upon the effective date of any such reduction or termination, the
Borrower shall pay to the Agent for the respective accounts of the Banks the
full amount of the Commitment Fee then accrued and unpaid on the amount of the
reduction. No reduction or termination of the Commitments may be reinstated.
ss.2.4. The Revolving Credit Notes. The Revolving Credit Loans shall be
evidenced by the Revolving Credit Notes. A Revolving Credit Note shall be
payable to the order of each Bank in an aggregate principal amount equal to such
Bank's Commitment. The Borrower irrevocably authorizes each Bank to make or
cause to be made, at or about the time of the Drawdown Date of any Revolving
Credit Loan or at the time of receipt of any payment of principal on such Bank's
Revolving Credit Notes, an appropriate notation on such Bank's Revolving Credit
Note Record reflecting the making of such Revolving Credit Loan or (as the case
may be) the receipt of such payment. The outstanding amount of the Revolving
Credit Loans set forth on such Bank's Revolving Credit Note Record shall be
prima facie evidence of the principal amount thereof owing and unpaid to such
Bank, but the failure to record, or any error in so recording, any such amount
on such Bank's Revolving Credit Note Record shall not limit or otherwise affect
the obligations of the Borrower hereunder or under any Revolving Credit Note to
make payments of principal of or interest on any Revolving Credit Note when due.
ss.2.5. Interest on Revolving Credit Loans; Fees.
(a) Each Base Rate Loan shall bear interest for the period commencing
with the Drawdown Date thereof and ending on the last day of the Interest Period
with respect thereto (unless earlier paid in accordance with ss.3.2) at a rate
equal to the Base Rate plus the Applicable Margin for Base Rate Loans.
(b) Each Eurodollar Rate Loan shall bear interest for the period
commencing with the Drawdown Date thereof and ending on the last day of the
Interest Period with respect thereto (unless earlier paid in accordance with
ss.3.2) at a rate equal to the Eurodollar Rate determined for such Interest
Period plus the Applicable Margin for Eurodollar Rate Loans.
<PAGE>
-28-
(c) The Borrower unconditionally promises to pay interest on each
Revolving Credit Loan in arrears on each Interest Payment Date with respect
thereto.
(d) The Borrower agrees to pay to the Agent a facility fee (the
"Facility Fee") as set forth in that certain letter agreement of even date
herewith between the Borrower and the Agent.
(e) The Borrower agrees to pay to the Agent, for the accounts of the
Banks in accordance with their respective Commitment Percentages, a commitment
fee calculated at the rate of one-fifth of one percent (1/5%) per annum on the
Average Unused Commitment during each calendar quarter or portion thereof from
the date hereof to the Maturity Date (the "Commitment Fee"). The Commitment Fee
shall be payable quarterly in arrears on the first day of each calendar quarter
for the immediately preceding calendar quarter commencing on the first such date
following the Closing Date, with a final payment on the Maturity Date or any
earlier date on which the Commitments shall terminate.
(f) Agent's Fee. The Borrower shall pay to the Agent an Agent's fee as
set forth in that certain letter agreement of even date herewith between the
Borrower and the Agent.
ss.2.6. Requests for Revolving Credit Loans.
The following provisions shall apply to each request by the Borrower for a
Revolving Credit Loan:
(i) The Borrower shall submit a Completed Loan Request to the Agent,
together with a duplicate copy of such Completed Loan Request for each Bank
which is then a party to this Agreement at the time such loan request is
made. Such Completed Loan Requests shall be delivered in separate envelopes
to the Agent and be addressed to the Agent and each Bank, respectively, and
each such envelope shall be conspicuously marked with the following legend:
"LOAN REQUEST -- TIME SENSITIVE -- MUST RESPOND WITHIN [ ] DAYS" and with
the appropriate period filled in. Except as otherwise provided herein, each
Completed Loan Request shall be in a minimum amount of $500,000 or an
integral multiple thereof. Each Completed Loan Request shall be irrevocable
and binding on the Borrower and shall obligate the Borrower to accept the
Revolving Credit Loans requested from the Banks on the proposed Drawdown
Date, unless such Completed Loan Request is withdrawn (x) in the case of a
request for a Eurodollar Rate Loan, at least four (4) Business Days prior
to the proposed Drawdown Date for such Loan, and (y) in the
<PAGE>
-29-
case of a request for a Base Rate Loan, at least two (2) Business Days
prior to the proposed Drawdown Date for such Loan.
(ii) Each Completed Loan Request may be delivered by the Borrower to
the Agent by 10:00 a.m. on any Business Day, and at least two (2) Business
Days prior to the proposed Drawdown Date of any Base Rate Loan, and at
least four (4) Business Days prior to the proposed Drawdown Date of any
Eurodollar Rate Loan.
(iii) Each Completed Loan Request shall include a completed writing in
the form of Exhibit C hereto specifying: (1) the principal amount of the
Revolving Credit Loan requested, (2) the proposed Drawdown Date of such
Revolving Credit Loan, (3) the Interest Period applicable to such Revolving
Credit Loan, and (4) the Type of such Revolving Credit Loan being
requested.
(iv) No Bank shall be obligated to fund any Revolving Credit Loan
unless:
(a) a Completed Loan Request has been timely received by the
Agent as provided in subsection (i) above; and
(b) both before and after giving effect to the Revolving Credit
Loan to be made pursuant to the Completed Loan Request, all of the
conditions contained in ss.11 shall have been satisfied as of the
Closing Date (to the extent such conditions have not been waived in
writing by the Banks and/or deferred in writing to be a condition to
the initial advance) and all of the conditions set forth in ss.12
shall have been met, including, without limitation, the condition
under ss.12.1 that there be no Default or Event of Default under this
Agreement; and
(c) the Agent shall have received (with copies for each Bank) a
certificate in the form of Exhibit D hereto signed by the chief
financial officer or treasurer of the Borrower setting forth
computations evidencing compliance with the covenants contained in
ss.9 on a pro forma basis after giving effect to such requested
Revolving Credit Loan, and, for purposes of calculating pro forma
compliance under ss.9.6, Consolidated Unsecured Debt Service Charges
shall be calculated, for the quarter in which the loan request is
made, using the higher of (x) the actual annual interest rate
applicable to the Revolving Credit Loans on the date that such
certificate is submitted, and (y) the sum of two percent (2%) plus the
imputed seven (7) year United States Treasury notes yield on such
<PAGE>
-30-
date based upon published quotes for Treasury notes having seven (7)
years to maturity (and attaching a copy of the pro forma analysis used
in determining such compliance), and certifying that, both before and
after giving effect to such requested Revolving Credit Loan, no
Default or Event of Default exists or will exist under this Agreement
or any other Loan Document, and that after taking into account such
requested Revolving Credit Loan, no default will exist as of the
Drawdown Date or thereafter.
(v) The Agent will use best efforts to cause the Completed Loan
Request to be delivered to each Bank on the same day or the Business
Day following the day a Completed Loan Request is received by the
Agent.
ss.2.7. Conversion Options.
(a) The Borrower may elect from time to time to convert any
outstanding Revolving Credit Loan to a Revolving Credit Loan of another Type,
provided that (i) with respect to any such conversion of a Eurodollar Rate Loan
to a Base Rate Loan, such conversion shall take place automatically at the end
of the applicable Interest Period unless the Borrower provides notice to the
Agent of its request to continue such Loan as a Eurodollar Rate Loan as provided
in ss.2.7(b) and ss.2.7(a)(ii); (ii) subject to the further proviso at the end
of this ss.2.7(a) and subject to ss.2.7(b) and 2.7(d), with respect to any
conversion of a Base Rate Loan to a Eurodollar Rate Loan (or a continuation of a
Eurodollar Rate Loan, as provided in ss.2.7(b)), the Borrower shall give the
Agent (with copies for each Bank) at least four (4) Eurodollar Business Days'
prior written notice of such election, which such notice must be received by the
Agent by 10:00 a.m. on any Business Day; and (iii) no Loan may be converted into
a Eurodollar Rate Loan when any Default or Event of Default has occurred and is
continuing. All or any part of outstanding Revolving Credit Loans of any Type
may be converted as provided herein, provided that each Conversion Request
relating to the conversion of a Base Rate Loan to a Eurodollar Rate Loan shall
be for an amount equal to $500,000 or an integral multiple of $100,000 in excess
thereof and shall be irrevocable by the Borrower.
(b) Any Revolving Credit Loan of any Type may be continued as such
upon the expiration of the Interest Period with respect thereto (i) in the case
of Base Rate Loans, automatically and (ii) in the case of Eurodollar Rate Loans
by compliance by the Borrower with the notice provisions contained in
ss.2.7(a)(ii); provided that no Eurodollar Rate Loan may be continued as such
when any Default or Event of Default has occurred and is continuing but shall be
automatically converted to a Base Rate Loan on the last day of the first
Interest Period relating thereto ending during the continuance of any Default or
<PAGE>
-31-
Event of Default. The Agent shall notify the Banks promptly when any such
automatic conversion contemplated by this ss.2.7(b) is scheduled to occur.
(c) In the event that the Borrower does not notify the Agent of its
election hereunder with respect to any Revolving Credit Loan, such Loan shall be
automatically converted to a Base Rate Loan at the end of the applicable
Interest Period.
(d) The Borrower may not request or elect a Eurodollar Rate Loan
pursuant to ss.2.6, elect to convert a Base Rate Loan to a Eurodollar Loan
pursuant to ss.2.7(a) or elect to continue a Eurodollar Rate Loan pursuant to
ss.2.7(b) if, after giving effect thereto, there would be greater than five (5)
Eurodollar Rate Loans then outstanding. Any Loan Request for a Eurodollar Rate
Loan that would create greater than five (5) Eurodollar Rate Loans outstanding
shall be deemed to be a Loan Request for a Base Rate Loan.
ss.2.8. Funds for Revolving Credit Loans.
(a) Subject to the other provisions of this ss.2, not later than 11:00
a.m. (Boston time) on the proposed Drawdown Date of any Revolving Credit Loans,
each of the Banks will make available to the Agent, at its Head Office, in
immediately available funds, the amount of such Bank's Commitment Percentage of
the amount of the requested Revolving Credit Loan. Upon receipt from each Bank
of such amount, the Agent will make available to the Borrower the aggregate
amount of such Revolving Credit Loan made available to the Agent by the Banks;
all such funds received by the Agent by 11:00 a.m. (Boston Time) on any Business
Day will be made available to the Borrower not later than 2:00 p.m. on the same
Business Day. Funds received after such time will be made available by not later
than 11:00 a.m. on the next Business Day. The failure or refusal of any Bank to
make available to the Agent at the aforesaid time and place on any Drawdown Date
the amount of its Commitment Percentage of the requested Revolving Credit Loan
shall not relieve any other Bank from its several obligation hereunder to make
available to the Agent the amount of its Commitment Percentage of any requested
Revolving Credit Loan but in no event shall the Agent (in its capacity as Agent)
have any obligation to make any funding or shall any Bank be obligated to fund
more than its Commitment Percentage of the requested Revolving Credit Loan or to
increase its Commitment Percentage on account of such failure or otherwise.
(b) The Agent may, unless notified to the contrary by any Bank prior
to a Drawdown Date, assume that such Bank has made available to the Agent on
such Drawdown Date the amount of such Bank's Commitment Percentage of the
Revolving Credit Loan to be made on such Drawdown Date, and the Agent may (but
it shall not be required to), in reliance upon such
<PAGE>
-32-
assumption, make available to the Borrower a corresponding amount. If any Bank
makes available to the Agent such amount on a date after such Drawdown Date,
such Bank shall pay to the Agent on demand an amount equal to the product of (i)
the average, computed for the period referred to in clause (iii) below, of the
weighted average interest rate paid by the Agent for federal funds acquired by
the Agent during each day included in such period, multiplied by (ii) the amount
of such Bank's Commitment Percentage of such Revolving Credit Loan, multiplied
by (iii) a fraction, the numerator of which is the number of days that elapsed
from and including such Drawdown Date to the date on which the amount of such
Bank's Commitment Percentage of such Revolving Credit Loan shall become
immediately available to the Agent, and the denominator of which is 365. A
statement of the Agent submitted to such Bank with respect to any amounts owing
under this paragraph shall be prima facie evidence of the amount due and owing
to the Agent by such Bank.
ss.2A. LETTERS OF CREDIT.
ss.2A.1. Letter of Credit Commitments.
ss.2A.1.1. Commitment to Issue Letters of Credit. Subject to the terms
and conditions hereof and the execution and delivery by the Borrower of a letter
of credit application on the Fronting Bank's customary form as part of a
Completed Loan Request (a "Letter of Credit Application") deleting, however, the
terms and conditions customarily attached thereto, the Fronting Bank on behalf
of the Banks and in reliance upon the agreement of the Banks set forth in
ss.2A.1.4 and upon the representations and warranties of the Borrower contained
herein, agrees, in its individual capacity, to issue, extend and renew for the
account of the Borrower one or more letters of credit (individually, a "Letter
of Credit"), in such form as may be requested from time to time by the Borrower
and reasonably agreed to by the Fronting Bank; provided, however, that, after
giving effect to such Completed Loan Request, (a) the Maximum Drawing Amount
shall not exceed $50,000,000 at any one time, (b) the sum of (i) the Maximum
Drawing Amount on all Letters of Credit and (ii) the amount of all Loans
outstanding shall not exceed the Total Commitment in effect at such time, and
(c) the total number of Letters of Credit outstanding shall not exceed five (5).
ss.2A.1.2. Letter of Credit Applications. Each Letter of Credit
Application shall be completed to the reasonable satisfaction of the Agent and
the Fronting Bank. In the event that any provision of any Letter of Credit
Application shall be inconsistent with any provision of this Agreement
(including provisions applicable to a Completed Loan Request), then the
provisions of this Agreement shall, to the extent of any such inconsistency,
govern.
<PAGE>
-33-
ss.2A.1.3. Terms of Letters of Credit. Each Letter of Credit issued,
extended or renewed hereunder shall, among other things, (i) provide for the
payment of sight drafts for honor thereunder when presented in accordance with
the terms thereof and when accompanied by the documents described therein, and
(ii) have an expiry date no later than the date which is fourteen (14) days
prior to the Maturity Date. Each Letter of Credit so issued, extended or renewed
shall be subject to the Uniform Customs.
ss.2A.1.4. Reimbursement Obligations of Banks. Each Bank severally
agrees that it shall be absolutely liable, without regard to the occurrence of
any Default or Event of Default or any other condition precedent whatsoever, to
the extent of such Bank's Commitment Percentage, to reimburse the Fronting Bank
on demand pursuant to ss.2A.3 for the amount of each draft paid by the Fronting
Bank under each Letter of Credit to the extent that such amount is not
reimbursed by the Borrower pursuant to ss.2A.2 (such agreement for a Bank being
called herein the "Letter of Credit Participation" of such Bank).
ss.2A.2. Reimbursement Obligation of the Borrower. In order to induce
the Fronting Bank to issue, extend and renew each Letter of Credit and the Banks
to participate therein, the Borrower hereby agrees, except as contemplated in
ss.2A.3 below, to reimburse or pay to the Fronting Bank, for the account of the
Fronting Bank or (as the case may be) the Banks, with respect to each Letter of
Credit issued, extended or renewed by the Fronting Bank hereunder,
(a) except as otherwise expressly provided in ss.2A.2(b) and (c)
or ss.2A.3, on each date that any draft presented under such Letter of Credit is
honored by the Fronting Bank, or the Fronting Bank otherwise makes a payment
with respect thereto, (i) the amount paid by the Fronting Bank under or with
respect to such Letter of Credit, and (ii) any amounts payable pursuant to
ss.4.5 hereof under, or with respect to, such Letter of Credit,
(b) upon the reduction (but not termination) of the Total
Commitment to an amount less than the then Maximum Drawing Amount, an amount
equal to such difference, which amount shall be held by the Agent in an
interest-bearing account (with interest to be added to such account) as cash
collateral for the benefit of the Banks and the Agent for all Reimbursement
Obligations, and
(c) upon the termination of the Total Commitment, or the
acceleration of the Reimbursement Obligations with respect to all Letters of
Credit in accordance with ss.13, an amount equal to the then Maximum Drawing
Amount on all Letters of Credit, which amount shall be held by the Agent in an
interest-bearing account (with interest to be added to such account) as cash
<PAGE>
-34-
collateral for the benefit of the Banks and the Agent for all Reimbursement
Obligations.
Each such payment shall be made to the Agent for the benefit of the Banks
at the Agent's Head Office in immediately available funds. Interest on any and
all amounts not converted to a Loan pursuant to ss.2A.3 and remaining unpaid by
the Borrower under this ss.2A.2 at any time from the date such amounts become
due and payable (whether as stated in this ss.2A.2, by acceleration or
otherwise) until payment in full (whether before or after judgment) shall be
payable to the Agent for the benefit of the Banks on demand at the rate
specified in ss.4.9 for overdue principal on the Loans.
ss.2A.3. Letter of Credit Payments; Funding of a Loan. If any draft shall
be presented or other demand for payment shall be made under any Letter of
Credit, the Fronting Bank shall notify the Borrower and the Banks, on or before
the date the Fronting Bank intends to honor such drawing, of the date and amount
of the draft presented or demand for payment and of the date and time when it
expects to pay such draft or honor such demand for payment, and, except as
provided in this ss.2A.3, Borrower shall reimburse Agent, as set forth in
ss.2A.2 above. Notwithstanding anything contained in ss.2A.2 above or this
ss.2A.3 to the contrary, however, unless Borrower shall have notified the Agent
and Fronting Bank prior to 11:00 a.m. (New York time) on the Business Day
immediately prior to the date of such drawing that Borrower intends to reimburse
Fronting Bank for the amount of such drawing with funds other than the proceeds
of the Loans, Borrower shall be deemed to have timely given a Completed Loan
Request pursuant to ss.2.6 to Agent, requesting a Base Rate Loan on the date on
which such drawing is honored and in an amount equal to the amount of such
drawing. The Borrower may thereafter convert any such Base Rate Loan to a Loan
of another Type in accordance with ss.2.7. Each Bank shall, in accordance with
ss.2.8, make available such Bank's Commitment Percentage of such Loan to Agent,
the proceeds of which shall be applied directly by Agent to reimburse Fronting
Bank for the amount of such draw. In the event that any Bank fails to make
available to Agent the amount of such Bank's Commitment Percentage of such Loan
on the date of the drawing, Agent shall be entitled to recover such amount on
demand from such Bank plus any additional amounts payable under ss.2.8(b) in the
event of a late funding by a Bank. The Fronting Bank is irrevocably authorized
by the Borrower and each of the Banks to honor draws on each Letter of Credit by
the beneficiary thereof in accordance with the terms of the Letter of Credit.
The responsibility of the Agent to the Borrower and the Banks shall be only to
determine that the documents (including each draft) delivered under each Letter
of Credit in connection with such presentment shall be in conformity in all
material respects with such Letter of Credit.
<PAGE>
-35-
ss.2A.4. Obligations Absolute. The Borrower's obligations under this ss.2A
shall be absolute and unconditional under any and all circumstances and
irrespective of the occurrence of any Default or Event of Default or any
condition precedent whatsoever or any setoff, counterclaim or defense to payment
which the Borrower may have or have had against the Agent, any Bank or any
beneficiary of a Letter of Credit. The Borrower further agrees with the Agent
and the Banks that the Agent and the Banks shall not be responsible for, and the
Borrower's Reimbursement Obligations under ss.2A.2 shall not be affected by,
among other things, the validity or genuineness of documents or of any
endorsements thereon (so long as the documents delivered under each Letter of
Credit in connection with such presentment shall be in the form required by, and
in conformity in all material respects with, such Letter of Credit), even if
such documents should in fact prove to be in any or all respects invalid,
fraudulent or forged, or any dispute between or among the Borrower, the
beneficiary of any Letter of Credit or any financing institution or other party
to whom any Letter of Credit may be transferred, or any claims or defenses
whatsoever of the Borrower against the beneficiary of any Letter of Credit or
any such transferee. If done in good faith and absent gross negligence, the
Agent and the Banks shall not be liable for any error, omission, interruption or
delay in transmission, dispatch or delivery of any message or advice, however
transmitted, in connection with any Letter of Credit. The Borrower agrees that
any action taken or omitted by the Agent or any Bank under or in connection with
each Letter of Credit and the related drafts and documents, if done in good
faith and absent gross negligence, shall be binding upon the Borrower and shall
not result in any liability on the part of the Agent or any Bank to the
Borrower.
ss.2A.5. Reliance by Issuer. To the extent not inconsistent with ss.2A.4,
the Agent and any Fronting Bank shall be entitled to rely, and shall be fully
protected in relying upon, any Letter of Credit, draft, writing, resolution,
notice, consent, certificate, affidavit, letter, cablegram, telegram, telecopy,
telex or teletype message, statement, order or other document believed by it to
be genuine and correct and to have been signed, sent or made by the proper
Person or Persons and upon advice and statements of legal counsel, independent
accountants and other experts selected by the Agent. The Agent and any Fronting
Bank shall be fully justified in failing or refusing to take any action under
this ss.2A unless it shall first have received such advice or concurrence of the
Majority Banks as it reasonably deems appropriate or it shall first be
indemnified to its reasonable satisfaction by the Banks against any and all
liability and expense which may be incurred by it by reason of taking or
continuing to take any such action. The Agent and any Fronting Bank shall in all
cases be fully protected by the Banks in acting, or in refraining from acting,
under this ss.2A in accordance with a request of the Majority Banks, and such
request and any action taken or failure to act pursuant thereto shall be binding
<PAGE>
-36-
upon the Banks and all future holders of the Notes or of a Letter of Credit
Participation.
ss.2A.6. Letter of Credit Fee. The Borrower shall pay to the Agent a fee
(in each case, a "Letter of Credit Fee") in an amount equal to the Applicable
L/C Percentage of the undrawn amount of each outstanding Letter of Credit, which
fee (a) shall be payable quarterly in arrears on the first day of each calendar
quarter for the immediately preceding calendar quarter, with a final payment on
the Maturity Date or any earlier date on which the Commitments shall terminate
(which Letter of Credit Fee shall be pro-rated for any calendar quarter in which
such Letter of Credit is issued, drawn upon or otherwise reduced or terminated)
and (b) shall be for the accounts of the Banks as follows: (i) an amount equal
to 0.25% per annum of the undrawn amount of the Letter of Credit shall be for
the account of the Fronting Bank and (ii) the remainder of the Letter of Credit
Fee shall be for the accounts of the Bank (including the Fronting Bank) pro rata
in accordance with their respective Commitment Percentages.
ss.2A.7. Existing Letter of Credit. The letter of credit dated November 14,
1996 issued by the Bank of Boston to Burlington Retail Limited Partnership shall
for all purposes be deemed to be a Letter of Credit issued under this Agreement.
ss.3. REPAYMENT OF THE REVOLVING CREDIT LOANS.
ss.3.1. Maturity. The Borrower promises to pay on the Maturity Date, and
there shall become absolutely due and payable on the Maturity Date, all unpaid
principal of the Revolving Credit Loans outstanding on such date, together with
any and all accrued and unpaid interest thereon, the unpaid balance of the
Commitment Fee accrued through such date, and any and all other unpaid amounts
due under this Agreement, the Revolving Credit Notes or any other of the Loan
Documents.
ss.3.2. Optional Repayments of Revolving Credit Loans. The Borrower shall
have the right, at its election, to prepay the outstanding amount of the
Revolving Credit Loans, in whole or in part, at any time without penalty or
premium; provided that the outstanding amount of any Eurodollar Rate Loans may
not be prepaid unless the Borrower pays the Eurodollar Breakage Costs for each
Eurodollar Rate Loan so prepaid at the time of such prepayment. The Borrower
shall give the Agent (with copies for each Bank), no later than 10:00 a.m.,
Boston time, at least two (2) Business Days' prior written notice of any
prepayment pursuant to this ss.3.2 of any Base Rate Loans, and at least four (4)
Eurodollar Business Days' notice of any proposed prepayment pursuant to this
ss.3.2 of Eurodollar Rate Loans, specifying the proposed date of prepayment of
<PAGE>
-37-
Revolving Credit Loans and the principal amount to be prepaid. Each such partial
prepayment of the Loans shall be in an integral multiple of $100,000, or, if
less, the outstanding balance of the Revolving Credit Loans then being repaid,
shall be accompanied by the payment of all charges outstanding on all Revolving
Credit Loans so prepaid and of all accrued interest on the principal prepaid to
the date of payment, and shall be applied, in the absence of instruction by the
Borrower, first to the principal of Base Rate Loans and then to the principal of
Eurodollar Rate Loans, at the Agent's option.
ss.4. CERTAIN GENERAL PROVISIONS.
ss.4.1. Funds for Payments.
(a) All payments of principal, interest, fees, and any other amounts
due hereunder or under any of the other Loan Documents shall be made to the
Agent, for the respective accounts of the Banks or (as the case may be) the
Agent, at the Agent's Head Office, in each case in Dollars and in immediately
available funds.
(b) All payments by the Borrower hereunder and under any of the other
Loan Documents shall be made without setoff or counterclaim and free and clear
of and without deduction for any taxes, levies, imposts, duties, charges, fees,
deductions, withholdings, compulsory liens, restrictions or conditions of any
nature now or hereafter imposed or levied by any jurisdiction or any political
subdivision thereof or taxing or other authority therein unless the Borrower is
compelled by law to make such deduction or withholding. If any such obligation
is imposed upon the Borrower with respect to any amount payable by it hereunder
or under any of the other Loan Documents (except with respect to taxes on the
income or profits of the Agent or any Bank), the Borrower shall pay to the
Agent, for the account of the Banks or (as the case may be) the Agent, on the
date on which such amount is due and payable hereunder or under such other Loan
Document, such additional amount in Dollars as shall be necessary to enable the
Banks to receive the same net amount which the Banks would have received on such
due date had no such obligation been imposed upon the Borrower. The Borrower
will deliver promptly to the Agent (with copies for each Bank) certificates or
other valid vouchers for all taxes or other charges deducted from or paid with
respect to payments made by the Borrower hereunder or under such other Loan
Document.
ss.4.2. Computations. All computations of interest on the Loans and of
other fees to the extent applicable shall be based on a 360-day year and paid
for the actual number of days elapsed. Except as otherwise provided in the
definition of the term "Interest Period" with respect to Eurodollar Rate Loans,
whenever a payment hereunder or under any of the other Loan Documents
<PAGE>
-38-
becomes due on a day that is not a Business Day, the due date for such payment
shall be extended to the next succeeding Business Day, and interest shall accrue
during such extension. The outstanding amount of the Loans as reflected on the
Revolving Credit Note Record from time to time shall constitute prima facie
evidence of the principal amount thereof.
ss.4.3. Inability to Determine Eurodollar Rate. In the event, prior to the
commencement of any Interest Period relating to any Eurodollar Rate Loan, the
Agent shall reasonably determine that adequate and reasonable methods do not
exist for ascertaining the Eurodollar Rate that would otherwise determine the
rate of interest to be applicable to any Eurodollar Rate Loan during any
Interest Period, the Agent shall forthwith give notice of such determination
(which shall be conclusive and binding on the Borrower) to the Borrower and the
Banks. In such event (a) any Loan Request with respect to Eurodollar Rate Loans
shall be automatically withdrawn and shall be deemed a request for Base Rate
Loans, (b) each Eurodollar Rate Loan will automatically, on the last day of the
then current Interest Period thereof, become a Base Rate Loan, and (c) the
obligations of the Banks to make Eurodollar Rate Loans shall be suspended until
the Agent reasonably determines that the circumstances giving rise to such
suspension no longer exist, whereupon the Agent shall so notify the Borrower and
the Banks.
ss.4.4. Illegality. Notwithstanding any other provisions herein, if any
present or future law, regulation, treaty or directive or in the interpretation
or application thereof shall make it unlawful for any Bank to make or maintain
Eurodollar Rate Loans, such Bank shall forthwith give notice of such
circumstances to the Borrower and thereupon (a) the Commitment of such Bank to
make Eurodollar Rate Loans or convert Base Rate Loans to Eurodollar Rate Loans
shall forthwith be suspended and (b) such Bank's Commitment Percentage of a
Eurodollar Rate Loans then outstanding shall be converted automatically to Base
Rate Loans on the last day of each Interest Period applicable to such Eurodollar
Rate Loans or within such earlier period as may be required by law, all until
such time as it is no longer unlawful for such Bank to make or maintain
Eurodollar Rate Loans. The Borrower hereby agrees promptly to pay the Agent for
the account of such Bank, upon demand, any additional amounts necessary to
compensate such Bank for any costs incurred by such Bank in making any
conversion required by this ss.4.4 prior to the last day of an Interest Period
with respect to a Eurodollar Rate Loan, including any interest or fees payable
by such Bank to lenders of funds obtained by it in order to make or maintain its
Eurodollar Rate Loans hereunder.
ss.4.5. Additional Costs, Etc. If any present or future applicable law,
which expression, as used herein, includes statutes, rules and regulations
thereunder and interpretations thereof by any competent court or by any
<PAGE>
-39-
governmental or other regulatory body or official charged with the
administration or the interpretation thereof and requests, directives,
instructions and notices at any time or from time to time hereafter made upon or
otherwise issued to any Bank by any central bank or other fiscal, monetary or
other authority (whether or not having the force of law, but if not having the
force of law, then generally applied by the Banks with respect to similar
loans), shall:
(a) subject any Bank to any tax, levy, impost, duty, charge, fee,
deduction or withholding of any nature with respect to this Agreement, the other
Loan Documents, any Letters of Credit, such Bank's Commitment or the Loans
(other than taxes based upon or measured by the income or profits of such Bank),
or
(b) materially change the basis of taxation (except for changes in
taxes on income or profits) of payments to any Bank of the principal of or the
interest on any Loans or any other amounts payable to the Agent or any Bank
under this Agreement or the other Loan Documents, or
(c) impose or increase or render applicable (other than to the extent
specifically provided for elsewhere in this Agreement) any special deposit,
reserve, assessment, liquidity, capital adequacy or other similar requirements
(whether or not having the force of law) against assets held by, or deposits in
or for the account of, or loans by, or letters of credit issued by, or
commitments of an office of any Bank, or
(d) impose on any Bank any other conditions or requirements with
respect to this Agreement, the other Loan Documents, any Letters of Credit, the
Loans, such Bank's Commitment, or any class of loans, letters of credit or
commitments of which any of the Loans or such Bank's Commitment forms a part;
and the result of any of the foregoing is
(i) to increase the cost to any Bank of making, funding, issuing,
renewing, extending or maintaining any of the Loans or such Bank's
Commitment or any Letter of Credit, or
(ii) to reduce the amount of principal, interest, Reimbursement
Obligation or other amount payable to such Bank hereunder on account
of such Bank's Commitment, any Letter of Credit or any of the Loans,
or
<PAGE>
-40-
(iii) to require such Bank to make any payment or to forego any
interest or Reimbursement Obligation or other sum payable hereunder,
the amount of which payment or foregone interest or Reimbursement
Obligation or other sum is calculated by reference to the gross amount
of any sum receivable or deemed received by such Bank from the
Borrower hereunder,
then, and in each such case, the Borrower will, upon demand made by such Bank at
any time and from time to time and as often as the occasion therefor may arise,
pay to such Bank such additional amounts as such Bank shall determine in good
faith to be sufficient to compensate such Bank for such additional cost,
reduction, payment or foregone interest or other sum, provided that such Bank is
generally imposing similar charges on its other similarly situated borrowers.
ss.4.6. Capital Adequacy. If any future law, governmental rule, regulation,
policy, guideline or directive (whether or not having the force of law, but if
not having the force of law, then generally applied by the Banks with respect to
similar loans) or the interpretation thereof by a court or governmental
authority with appropriate jurisdiction affects the amount of capital required
or expected to be maintained by banks or bank holding companies and any Bank or
the Agent determines that the amount of capital required to be maintained by it
is increased by or based upon the existence of Loans made or deemed to be made
pursuant hereto, then such Bank or the Agent may notify the Borrower of such
fact, and the Borrower shall pay to such Bank or the Agent from time to time on
demand, as an additional fee payable hereunder, such amount as such Bank or the
Agent shall determine in good faith and certify in a notice to the Borrower to
be an amount that will adequately compensate such Bank in light of these
circumstances for its increased costs of maintaining such capital. Each Bank and
the Agent shall allocate such cost increases among its customers in good faith
and on an equitable basis, and will not charge the Borrower unless it is
generally imposing a similar charge on its other similarly situated borrowers.
ss.4.7. Certificate. A certificate setting forth any additional amounts
payable pursuant to ss.ss.4.5 or 4.6 and a brief explanation of such amounts
which are due, submitted by any Bank or the Agent to the Borrower, shall be
prima facie evidence that such amounts are due and owing.
ss.4.8. Indemnity. In addition to the other provisions of this Agreement
regarding such matters, the Borrower agrees to indemnify the Agent and each Bank
and to hold the Agent and each Bank harmless from and against any loss, cost or
expense (including loss of anticipated profits) that the Agent or such Bank may
sustain or incur as a consequence of (a) the failure by the Borrower to pay any
principal amount of or any interest on any Eurodollar Rate Loans as
<PAGE>
-41-
and when due and payable, including any such loss or expense arising from
interest or fees payable by the Agent or such Bank to lenders of funds obtained
by it in order to maintain its Eurodollar Rate Loans, (b) the failure by the
Borrower to make a borrowing or conversion after the Borrower has given a
Completed Loan Request for a Eurodollar Rate Loan or a Conversion Request for a
Eurodollar Rate Loan, and (c) the making of any payment of a Eurodollar Rate
Loan or the making of any conversion of any such Loan to a Base Rate Loan on a
day that is not the last day of the applicable Interest Period with respect
thereto, including interest or fees payable by the Agent or a Bank to lenders of
funds obtained by it in order to maintain any such Eurodollar Rate Loans.
ss.4.9. Interest on Overdue Amounts. Overdue principal and (to the extent
permitted by applicable law) interest on the Loans and all other overdue amounts
payable hereunder or under any of the other Loan Documents shall bear interest
payable on demand at a rate per annum equal to four percent (4%) above the Base
Rate until such amount shall be paid in full (after as well as before judgment).
In addition, the Borrower shall pay a late charge equal to three percent (3%) of
any amount of principal (other than principal due on the Maturity Date) and/or
interest charges on the Loans which is not paid within ten (10) days of the date
when due.
ss.4.10. HLT Classification. The Agent and each of the Banks hereby
confirms that as of the date hereof none of the Loans, the Letters of Credit or
the Commitment are classified as "highly leveraged transactions".
Notwithstanding the foregoing, if after the date hereof, the Agent determines,
or is advised by any Bank that such Bank has determined, or is advised by any
Bank that such Bank has received notice from any governmental authority, central
bank or comparable agency having jurisdiction over such Bank, that any of the
Commitments or Loans or Letters of Credit or Letter of Credit Participations are
classified as a "highly leveraged transaction" (an "HLT Classification")
pursuant to any existing regulations regarding "highly leveraged transactions"
or any modification, amendment or interpretation thereof, or the adoption of new
regulations regarding "highly leveraged transactions" after the date hereof by
any governmental authority, central bank or comparable agency, the Agent shall
promptly give notice of such HLT Classification to the Borrower and the Banks.
The Agent, the Banks and the Borrower shall thereupon commence negotiations in
good faith to agree on the extent to which fees, interest rates and/or margins
hereunder should be increased so as to reflect such HLT Classification. If the
Borrower and the Banks subject to such HLT Classification agree on the amount of
such increase or increases, this Agreement shall be promptly amended to give
effect to such increase or increases. If the Borrower and the Banks subject to
such HLT Classification fail to so agree and the Borrower has failed to
refinance the Obligations within one hundred and twenty (120) days after notice
is given by the Agent as provided above, then the
<PAGE>
-42-
Agent shall, if so requested by such Banks, by notice to the Borrower terminate
the Commitments of such Banks, and such Commitments shall thereupon terminate,
and the Borrower shall on such date make mandatory prepayment of all outstanding
principal, interest and other amounts due to such Banks on account of Loans made
by them as if the Borrower had elected to make a prepayment of such amounts in
accordance with ss.3.2 and shall pay such other amounts as would be due under
ss.3.2 on account of an optional prepayment. The Agent and the Banks acknowledge
that an HLT Classification is not a default, Default or an Event of Default.
ss.5. GUARANTIES. Each of the Guarantors will guaranty the Obligations
pursuant to its Guaranty. The Obligations are full recourse obligations of the
Borrower and each Subsidiary Guarantor, and all of the respective assets and
properties of the Borrower and each Subsidiary Guarantor shall be available for
the payment in full in cash and performance of the Obligations. The Guaranty of
any Subsidiary Guarantor shall be released by the Agent if and when all of the
Real Estate Assets owned or ground-leased by such Subsidiary Guarantor shall
cease to be Unencumbered Assets pursuant to the terms of this Agreement. The
Obligations are limited recourse obligations of BPC (whether in its own
capacity, in its capacity as a general partner of any Subsidiary Guarantor, in
its capacity as general partner of the Borrower (in the Borrower's own capacity
and/or in the Borrower's capacity as general partner of any Subsidiary
Guarantor) or otherwise) as provided in ss.28 hereof.
ss.6. REPRESENTATIONS AND WARRANTIES. The Borrower for itself and for each
Guarantor insofar as any such statements relate to such Guarantor represents and
warrants to the Banks all of the statements contained in this ss.6.
ss.6.1. Authority; Etc.
(a) Organization; Good Standing.
(i) Each of the Borrower, 1333 and Burlington is a limited
partnership duly organized, validly existing and in good standing
under the laws of the State of Delaware; each Subsidiary of the
Borrower is duly organized, validly existing and in good standing as a
corporation or a partnership, as the case may be, under the laws of
the state of its organization; the Borrower, 1333, Burlington and each
of the Borrower's Subsidiaries has all requisite partnership or
corporate, as the case may be, power to own its respective properties
and conduct its respective business as now conducted and as presently
contemplated; and each of the Borrower, 1333, Burlington and the
Borrower's other
<PAGE>
-43-
Subsidiaries is in good standing as a foreign entity and is duly
authorized to do business in the jurisdictions where the Unencumbered
Assets owned or ground-leased by it are located and in each other
jurisdiction where such qualification is necessary except where a
failure to be so qualified in such other jurisdiction would not have a
materially adverse effect on any of their respective businesses,
assets or financial conditions.
(ii) BPC is a corporation duly organized, validly existing and in
good standing under the laws of the State of Maryland; each Subsidiary
of BPC is duly organized, validly existing and in good standing as a
corporation or partnership, as the case may be, under the laws of the
state of its organization; BPC and each of its Subsidiaries has all
requisite corporate or partnership, as the case may be, power to own
its respective properties and conduct its respective business as now
conducted and as presently contemplated; and BPC and each of its
Subsidiaries is in good standing as a foreign entity and is duly
authorized to do business in the jurisdictions where such
qualification is necessary (including, as to BPC, in the Commonwealth
of Massachusetts) except where a failure to be so qualified in such
other jurisdiction would not have a materially adverse effect on the
business, assets or financial condition of BPC or such Subsidiary.
(iii) As to each subsequent Guarantor, a provision similar, as
applicable, to (a) (i) or (ii) above shall be included in each such
subsequent Guarantor's Guaranty, and the Borrower shall be deemed to
make for itself and on behalf of each such subsequent Guarantor a
representation and warranty as to such provision regarding such
subsequent Guarantor.
(b) Capitalization.
(i) The outstanding equity of the Borrower is comprised of a
general partner interest and limited partner interests, all of which
have been duly issued and are outstanding and fully paid and
non-assessable as set forth in Schedule 6.1(b) hereto. All of the
issued and outstanding general partner interests of the Borrower are
owned and held of record by BPC; all of the limited partner interests
of the Borrower are owned and held of record as set forth in
<PAGE>
-44-
Schedule 6.1(b) hereto. Except as set forth in the Agreement of
Limited Partnership of the Borrower or as disclosed in Schedule 6.1(b)
hereto, as of the Closing Date there are no outstanding securities or
agreements exchangeable for or convertible into or carrying any rights
to acquire any equity interests in the Borrower. Except as disclosed
in the SEC Filings or in Schedule 6.1(b), there are no outstanding
commitments, options, warrants, calls or other agreements (whether
written or oral) binding on the Borrower or BPC which require or could
require the Borrower or BPC to sell, grant, transfer, assign,
mortgage, pledge or otherwise dispose of any equity interests of the
Borrower. Except as set forth in the Agreement of Limited Partnership
of the Borrower, no general partnership interests of the Borrower are
subject to any restrictions on transfer or any partner agreements,
voting agreements, trust deeds, irrevocable proxies, or any other
similar agreements or interests (whether written or oral).
(ii) As of the Closing Date, the authorized capital stock of, or
any other equity interests in, each of the Borrower's Subsidiaries are
as set forth in the SEC Filings, and the issued and outstanding voting
and non-voting shares of the common stock of each of the Borrower's
Subsidiaries, and all of the other equity interests in such
Subsidiaries, all of which have been duly issued and are outstanding
and fully paid and non-assessable, are owned and held of record as set
forth in the SEC Filings. Except as disclosed in the SEC Filings, as
of the Closing Date there are no outstanding securities or agreements
exchangeable for or convertible into or carrying any rights to acquire
any equity interests in any of the Borrower's Subsidiaries, and there
are no outstanding options, warrants, or other similar rights to
acquire any shares of any class in the capital of or any other equity
interests in any of the Borrower's Subsidiaries. Except as disclosed
in the SEC Filings, as of the Closing Date there are no outstanding
commitments, options, warrants, calls or other agreements or
obligations (whether written or oral) binding on any of the Borrower's
Subsidiaries to issue, sell, grant, transfer, assign, mortgage, pledge
or otherwise dispose of any shares of any class in the capital of or
other equity interests in any of the Borrower's Subsidiaries. Except
as disclosed in the SEC Filings, no shares of, or equity interests in,
any of the Borrower's Subsidiaries held by the Borrower
<PAGE>
-45-
are subject to any restrictions on transfer pursuant to any of the
Borrower's Subsidiaries' applicable partnership, charter, by-laws or
any shareholder agreements, voting agreements, voting trusts, trust
agreements, trust deeds, irrevocable proxies or any other similar
agreements or instruments (whether written or oral).
(iii) The outstanding equity of 1333 is comprised of a general
partner interest and a limited partner interest, all of which have
been duly issued and are outstanding and fully paid and
non-assessable. All of the issued and outstanding general partner
interests of 1333 are owned and held of record by Beacon Property
Management, L.P., and such general partner interests comprise a 1%
interest in 1333. All of the limited partner interests of 1333
(comprising a 99% interest) are owned and held of record by the
Borrower. There are no outstanding securities or agreements
exchangeable for or convertible into or carrying any rights to acquire
any equity interests in 1333. There are no outstanding commitments,
options, warrants, calls or other agreements (whether written or oral)
binding on the Borrower, Beacon Property Management, L.P., or BPC
which require or could require any of them to sell, grant, transfer,
assign, mortgage, pledge or otherwise dispose of any equity interests
of 1333. Except as set forth in the 1333 Agreement of Limited
Partnership, no general partnership interests of 1333 are subject to
any restrictions on transfer or any partner agreements, voting
agreements, trust deeds, irrevocable proxies, or any other similar
agreements or interests (whether written or oral).
(iv) 1333 has no Subsidiaries or subsidiaries.
(v) The outstanding equity of Burlington is comprised of a
general partner interest and a limited partner interest, each of which
has been duly issued and is outstanding and fully paid and
non-assessable. All of the issued and outstanding general partner
interests of Burlington are owned and held of record by the Borrower,
and such general partner interests comprise a 99.9% interest in
Burlington. All of the limited partner interests of Burlington
(comprising a .1% interest) are owned and held of record by BPC. There
are no outstanding securities or agreements exchangeable for or
convertible into or carrying any rights to
<PAGE>
-46-
acquire any equity interests in Burlington. There are no outstanding
commitments, options, warrants, calls or other agreements (whether
written or oral) binding on the Borrower or BPC which require or could
require either of them to sell, grant, transfer, assign, mortgage,
pledge or otherwise dispose of any equity interests of Burlington.
Except as set forth in the Burlington Agreement of Limited
Partnership, no general partnership interests of Burlington are
subject to any restrictions on transfer or any partner agreements,
voting agreements, trust deeds, irrevocable proxies, or any other
similar agreements or interests (whether written or oral).
(vi) Burlington has no Subsidiaries or subsidiaries.
(vii) As to each subsequent Guarantor, provisions similar to
(b)(iii) and (iv) or (b)(v) and (vi), as applicable, shall be included
in each such subsequent Guarantor's Guaranty, and the Borrower shall
be deemed to make for itself and on behalf of each such subsequent
Guarantor a representation and warranty as to such provisions
regarding such subsequent Guarantor.
(c) Due Authorization. The execution, delivery and performance of this
Agreement and the other Loan Documents to which the Borrower or any of the
Guarantors is or is to become a party and the transactions contemplated hereby
and thereby (i) are within the authority of the Borrower and such Guarantor,
(ii) have been duly authorized by all necessary proceedings on the part of the
Borrower or such Guarantor and any general partner thereof, (iii) do not
conflict with or result in any breach or contravention of any provision of law,
statute, rule or regulation to which the Borrower or such Guarantor is subject
or any judgment, order, writ, injunction, license or permit applicable to the
Borrower or such Guarantor, (iv) do not conflict with any provision of the
agreement of limited partnership, any certificate of limited partnership, the
charter documents or by-laws of the Borrower or such Guarantor or any general
partner thereof, and (v) do not contravene any provisions of, or constitute a
default, Default or Event of Default hereunder or a failure to comply with any
term, condition or provision of, any other agreement, instrument, judgment,
order, decree, permit, license or undertaking binding upon or applicable to the
Borrower or such Guarantor or any of the Borrower's or such Guarantor's
properties (except for any such failure to comply under any such other
agreement, instrument, judgment, order, decree, permit, license, or undertaking
as would not materially and adversely affect the condition (financial or
otherwise), properties, business or results of operations of the Borrower, the
<PAGE>
-47-
Operating Subsidiaries or any Guarantor) or result in the creation of any
mortgage, pledge, security interest, lien, encumbrance or charge upon any of the
properties or assets of the Borrower, the Operating Subsidiaries or any
Guarantor.
(d) Enforceability. Each of the Loan Documents to which the Borrower
or any of the Guarantors is a party has been duly executed and delivered and
constitutes the legal, valid and binding obligations of the Borrower and each
Guarantor, as the case may be, subject only to applicable bankruptcy,
insolvency, reorganization, moratorium or other laws relating to or affecting
generally the enforcement of creditors' rights and to the fact that the
availability of the remedy of specific performance or injunctive relief is
subject to the discretion of the court before which any proceeding therefor may
be brought.
ss.6.2. Governmental Approvals. The execution, delivery and performance by
the Borrower of this Agreement and by the Borrower and each Guarantor of the
other Loan Documents to which the Borrower or such Guarantor is or is to become
a party and the transactions contemplated hereby and thereby do not require (i)
the approval or consent of any governmental agency or authority other than those
already obtained, or (ii) filing with any governmental agency or authority,
other than filings which will be made with the SEC when and as required by law.
ss.6.3. Title to Properties; Leases.
The Borrower, the Operating Subsidiaries and the Guarantors each has good
title to all of its respective properties, assets and rights of every name and
nature purported to be owned by it, including, without limitation, that:
(a) As of the Closing Date (with respect to Unencumbered Assets
designated as such on the Closing Date) or the date of designation as an
Unencumbered Asset (with respect to Unencumbered Assets acquired and/or
designated as such after the Closing Date), and in each case to the best of its
knowledge thereafter, the Borrower or a Guarantor holds good and clear record
and marketable fee simple or leasehold title to (or an undivided condominium
interest in) the Unencumbered Assets, subject to no rights of others, including
any mortgages, conditional sales agreements, title retention agreements, liens
or encumbrances, except for Permitted Liens and, in the case of any
ground-leased Unencumbered Asset, the terms of such ground lease, as the same
may then or thereafter be amended from time to time in a manner consistent with
the minimum term for ground leases set forth in the definition of "Real Estate
Assets" in ss.1.1 above.
<PAGE>
-48-
(b) The Borrower and each of the Guarantors will, as of the Closing
Date, own all of the assets as reflected in the financial statements of the
Borrower and BPC described in ss.6.4 or acquired since the date of such
financial statements (except property and assets sold or otherwise disposed of
in the ordinary course of business since that date).
(c) Each of the direct or indirect interests of the Borrower or its
Subsidiaries in any Partially-Owned Real Estate Holding Entity is set forth on
Schedule 6.3 hereto, including the type of entity in which the interest is held,
the percentage interest owned by the Borrower or such Subsidiary in such entity,
the capacity in which the Borrower or such Subsidiary holds the interest, and
the Borrower's or such Subsidiaries' ownership interest therein.
ss.6.4. Financial Statements. The following financial statements have
been furnished to each of the Banks:
(a) The unaudited consolidated balance sheet of the Borrower and its
Subsidiaries as of December 31, 1996 and their related unaudited consolidated
statements of operations (with supplemental consolidating schedules) for the
fiscal year ended December 31, 1996. Such balance sheet and statements of
operations have been prepared in accordance with GAAP and fairly present the
financial condition of the Borrower and its Subsidiaries as at the close of
business on the date thereof and the results of operations for the fiscal year
then ended. There are no contingent liabilities of the Borrower or any of its
Subsidiaries as of such date involving material amounts, known to the officers
of the Borrower or any of its Subsidiaries, not disclosed in said balance sheet
and the related notes thereto.
(b) [Intentionally Omitted]
(c) Unaudited statements of Net Operating Income and outstanding
Indebtedness as at December 31, 1996 and for the fiscal year then ended (or
portion thereof during which the Borrower or a Guarantor owned or ground-leased
such property) in respect of each Real Estate Asset (including the Unencumbered
Assets) owned or ground-leased by the Borrower or a Guarantor as of such date,
which statements fairly present such Net Operating Income and outstanding
Indebtedness with respect to such Real Estate Assets as of such date and for the
fiscal year (or such portion thereof) then ended. There are no contingent
liabilities in respect of such Real Estate Assets as of such date known to the
officers of the Borrower that involve material amounts not disclosed in such
statements.
(d) The unaudited consolidated balance sheet of BPC and its
Subsidiaries (including, without limitation, the Borrower and its Subsidiaries)
<PAGE>
-49-
as of December 31, 1996 and their related consolidated statements of operations
for the fiscal year ended December 31, 1996. Such balance sheet and statements
of operations have been prepared in accordance with GAAP and fairly present the
financial condition of BPC and its Subsidiaries as of the close of business on
the date thereof and the results of operations for the fiscal year then ended.
There are no contingent liabilities of BPC as of such dates involving material
amounts, known to the officers of the Borrower or of BPC, not disclosed in said
financial statements and the related notes thereto.
(e) The SEC Filings, which contain (inter alia) certain environmental
disclosures.
ss.6.5 [Intentionally Omitted.]
ss.6.6. Franchises, Patents, Copyrights, Etc. The Borrower, each Guarantor
and each of their respective Subsidiaries possesses all franchises, patents,
copyrights, trademarks, trade names, licenses and permits, and rights in respect
of the foregoing, adequate for the conduct of their respective businesses
substantially as now conducted without known conflict with any rights of others,
including all Permits.
ss.6.7. Litigation. Except as stated on Schedule 6.7 there are no actions,
suits, proceedings or investigations of any kind pending or threatened against
the Borrower, any Guarantor or any of their respective Subsidiaries before any
court, tribunal or administrative agency or board that, if adversely determined,
might, either individually or in the aggregate, materially adversely affect the
properties, assets, financial condition or business of the Borrower, such
Guarantor or their respective Subsidiaries or materially impair the right of the
Borrower, such Guarantor or their respective Subsidiaries to carry on their
respective businesses substantially as now conducted by them, or result in any
substantial liability not adequately covered by insurance, or for which adequate
reserves are not maintained, as reflected in the applicable financial statements
of the Borrower and BPC, or which question the validity of this Agreement or any
of the other Loan Documents, or any action taken or to be taken pursuant hereto
or thereto.
ss.6.8. No Materially Adverse Contracts, Etc. Neither the Borrower, any
Guarantor nor any of their respective Subsidiaries is subject to any charter,
corporate, partnership or other legal restriction, or any judgment, decree,
order, rule or regulation that has or is expected in the future to have a
materially adverse effect on their respective businesses, assets or financial
conditions. None of the Borrower, any Guarantor or any of their respective
Subsidiaries is a party to any contract or agreement that has or is expected, in
the judgment of
<PAGE>
-50-
their respective officers, to have any materially adverse effect on the
respective businesses of the Borrower, such Guarantor or their respective
Subsidiaries.
ss.6.9. Compliance With Other Instruments, Laws, Etc. Neither the Borrower,
any Guarantor nor any of their respective Subsidiaries is in violation of any
provision of its partnership agreement or charter, as the case may be, or any
respective agreement or instrument to which it may be subject or by which it or
any of its properties may be bound or any decree, order, judgment, statute,
license, rule or regulation, in any of the foregoing cases in a manner that
could result, individually or in the aggregate, in the imposition of substantial
penalties or materially and adversely affect the financial condition, properties
or businesses of the Borrower, such Guarantor or their respective Subsidiaries.
ss.6.10. Tax Status.
(a) (i) Each of the Borrower, the Guarantors and their respective
Subsidiaries (A) has made or filed all federal, state and local income and all
other tax returns, reports and declarations required by any jurisdiction to
which it is subject, (B) has paid all taxes and other governmental assessments
and charges shown or determined to be due on such returns, reports and
declarations, except those being contested in good faith and by appropriate
proceedings, and (C) has set aside on its books provisions reasonably adequate
for the payment of all taxes for periods subsequent to the periods to which such
returns, reports or declarations apply, and (ii) there are no unpaid taxes in
any material amount claimed to be due by the taxing authority of any
jurisdiction, and the respective officers of the Borrower and the Guarantors and
their respective Subsidiaries know of no basis for any such claim.
(b) To the best of the Borrower's knowledge, except as otherwise
disclosed in writing to the Agent, each Partially-Owned Real Estate Holding
Entity (i) has made or filed all federal, state and local income and all other
tax returns, reports and declarations required by any jurisdiction to which it
is subject, (ii) has paid all taxes and other governmental assessments and
charges shown or determined to be due on such returns, reports and declarations,
except those being contested in good faith and by appropriate proceedings, and
(iii) has set aside on its books provisions reasonably adequate for the payment
of all taxes for periods subsequent to the periods to which such returns,
reports or declarations apply. To the best of the Borrower's knowledge, except
as otherwise disclosed in writing to the Agent, there are no unpaid taxes in any
material amount claimed to be due by the taxing authority of any jurisdiction
from any Partially-Owned Real Estate Holding Entity, and the officers of the
Borrower know of no basis for any such claim.
<PAGE>
-51-
ss.6.11. No Event of Default. No default (except as may previously have
been disclosed in writing), Default or Event of Default has occurred and is
continuing.
ss.6.12. Investment Company Acts. None of the Borrower, any Guarantor or
any of their respective Subsidiaries is an "investment company", or an
"affiliated company" or a "principal underwriter" of an "investment company", as
such terms are defined in the Investment Company Act of 1940.
ss.6.13. Absence of UCC Financing Statements, Etc. Except for Permitted
Liens, as of the Closing Date there will be no financing statement, security
agreement, chattel mortgage, real estate mortgage, equipment lease, financing
lease, option, encumbrance or other document filed or recorded with any filing
records, registry, or other public office, that purports to cover, affect or
give notice of any present or possible future lien or encumbrance on, or
security interest in, any Unencumbered Asset. Neither the Borrower nor any
Guarantor has pledged or granted any lien on or security interest in or
otherwise encumbered or transferred any of their respective interests in any
Subsidiary (including in the case of BPC, its interests in the Borrower, and in
the case of the Borrower, its interests in the Operating Subsidiaries) or in any
Partially-Owned Real Estate Holding Entity.
ss.6.14. Absence of Liens The Borrower or a Guarantor is the owner of or
the holder of a ground leasehold interest in the Unencumbered Assets free from
any lien, security interest, encumbrance and any other claim or demand, except
for Permitted Liens.
ss.6.15. Certain Transactions. Except as set forth on Schedule 6.15 or in
the SEC Filings, none of the officers, partners, directors, or employees of the
Borrower or any of its Subsidiaries is presently a party to any transaction with
the Borrower, any Guarantor or any of their respective Subsidiaries (other than
for services as employees, officers and directors), including any contract,
agreement or other arrangement providing for the furnishing of services to or
by, providing for rental of real or personal property to or from, or otherwise
requiring payments to or from any officer, partner, director or such employee
or, to the knowledge of the Borrower, any corporation, partnership, trust or
other entity in which any officer, partner, director, or any such employee or
natural Person related to such officer, partner, director or employee or other
Person in which such officer, partner, director or employee has a direct or
indirect beneficial interest has a substantial interest or is an officer,
director, trustee or partner.
ss.6.16. Employee Benefit Plans; Multiemployer Plans; Guaranteed Pension
Plans. Except as disclosed in the SEC Filings, none of the Borrower, the
<PAGE>
-52-
Guarantors nor any ERISA Affiliate maintains or contributes to any Employee
Benefit Plan, Multiemployer Plan or Guaranteed Pension Plan.
ss.6.17. Regulations U and X. No portion of any Loan is to be used, and no
portion of any Letter of Credit is to be obtained, for the purpose of purchasing
or carrying any "margin security" or "margin stock" as such terms are used in
Regulations U and X of the Board of Governors of the Federal Reserve System, 12
C.F.R. Parts 221 and 224.
ss.6.18. Environmental Compliance. The Borrower has caused Phase I and
other environmental assessments to be conducted and/or taken other steps to
investigate the past and present environmental condition and usage of the Real
Estate Assets. Based upon such assessments and/or investigation, to the
Borrower's knowledge, the Borrower makes the following representations and
warranties:
(a) None of the Borrower, its Subsidiaries, any Guarantor or any
operator of the Real Estate Assets or any portion thereof, or any operations
thereon is in violation, or alleged violation, of any judgment, decree, order,
law, license, rule or regulation pertaining to environmental matters, including
without limitation, those arising under the Resource Conservation and Recovery
Act ("RCRA"), the Comprehensive Environmental Response, Compensation and
Liability Act of 1980 as amended ("CERCLA"), the Superfund Amendments and
Reauthorization Act of 1986 ("SARA"), the Federal Clean Water Act, the Federal
Clean Air Act, the Toxic Substances Control Act, or any state or local statute,
regulation, ordinance, order or decree relating to health, safety or the
environment (hereinafter "Environmental Laws"), which violation or alleged
violation has, or its remediation would have, by itself or when aggregated with
all such other violations or alleged violations, a material adverse effect on
the business, assets or financial condition of the Borrower and its
Subsidiaries, taken as a whole, or constitutes a Disqualifying Environmental
Event with respect to any Unencumbered Asset.
(b) None of the Borrower, any Guarantor or any of their respective
Subsidiaries has received notice from any third party, including, without
limitation, any federal, state or local governmental authority, (i) that it has
been identified by the United States Environmental Protection Agency ("EPA) as a
potentially responsible party under CERCLA with respect to a site listed on the
National Priorities List, 40 C.F.R. Part 300 Appendix B (1986), (ii) that any
hazardous waste, as defined by 42 U.S.C. ss. 9601(5), any hazardous substances
as defined by 42 U.S.C. ss. 9601(14), any pollutant or contaminant as defined by
42 U.S.C. ss.9601(33) or any toxic substances, oil or hazardous materials or
other chemicals or substances regulated by any Environmental Laws ("Hazardous
Substances") which it has generated, transported or disposed
<PAGE>
-53-
of have been found at any site at which a federal, state or local agency or
other third party has conducted or has ordered that the Borrower, any Guarantor
or any of their respective Subsidiaries conduct a remedial investigation,
removal or other response action pursuant to any Environmental Law, or (iii)
that it is or shall be a named party to any claim, action, cause of action,
complaint, or legal or administrative proceeding (in each case, contingent or
otherwise) arising out of any third party's incurrence of costs, expenses,
losses or damages of any kind whatsoever in connection with the release of
Hazardous Substances; which event described in any such notice would have a
material adverse effect on the business, assets or financial condition of the
Borrower and its Subsidiaries, taken as a whole, or constitutes a Disqualifying
Environmental Event with respect to any Unencumbered Asset.
(c) (i) No portion of the Real Estate Assets has been used for the
handling, processing, storage or disposal of Hazardous Substances except in
accordance with applicable Environmental Laws; and no underground tank or other
underground storage receptacle for Hazardous Substances is located on any
portion of any Real Estate Assets except in accordance with applicable
Environmental Laws, (ii) in the course of any activities conducted by the
Borrower, the Guarantors, their respective Subsidiaries or the operators of
their respective properties, or any ground or space tenants on any Real Estate
Asset, no Hazardous Substances have been generated or are being used on such
Real Estate Asset except in accordance with applicable Environmental Laws, (iii)
there has been no present or past releasing, spilling, leaking, pumping,
pouring, emitting, emptying, discharging, injecting, escaping, disposing or
dumping (a "Release") or threatened Release of Hazardous Substances on, upon,
into or from the Real Estate Assets, (iv) there have been no Releases on, upon,
from or into any real property in the vicinity of any of the Real Estate Assets
which, through soil or groundwater contamination, may have come to be located on
such Real Estate Asset, and (v) any Hazardous Substances that have been
generated on any of the Real Estate Assets during ownership thereof by the
Borrower or a Guarantor or any member of the Beacon Group have been transported
off-site only by carriers having an identification number issued by the EPA,
treated or disposed of only by treatment or disposal facilities maintaining
valid permits as required under applicable Environmental Laws, which
transporters and facilities have been and are, to the best of the Borrower's
knowledge, operating in compliance with such permits and applicable
Environmental Laws; any of which events described in clauses (i) through (v)
above would have a material adverse effect on the business, assets or financial
condition of the Borrower and its Subsidiaries, taken as a whole, or constitutes
a Disqualifying Environmental Event with respect to any Unencumbered Asset.
Notwithstanding that the representations contained herein are limited to the
knowledge of the Borrower, any such limitation shall not affect the covenants
specified in 7.11 or elsewhere in this Agreement.
<PAGE>
-54-
(d) None of the Borrower, any Guarantor or any of the Real Estate
Assets is subject to any applicable Environmental Law requiring the performance
of Hazardous Substances site assessments, or the removal or remediation of
Hazardous Substances, or the giving of notice to any governmental agency or the
recording or delivery to other Persons of an environmental disclosure document
or statement, by virtue of the transactions set forth herein and contemplated
hereby, or as a condition to the effectiveness of any other transactions
contemplated hereby.
ss.6.19. Subsidiaries. Schedule 6.19 sets forth all of the respective
Subsidiaries of the Borrower and BPC, and Schedule 6.19 will be updated to
reflect any subsequent Guarantor and its Subsidiaries, if any.
ss.6.20. Loan Documents. All of the representations and warranties of the
Borrower and the Guarantors made in this Agreement and in the other Loan
Documents or any document or instrument delivered to the Agent or the Banks
pursuant to or in connection with any of such Loan Documents are true and
correct in all material respects and do not include any untrue statement of a
material fact or omit to state a material fact required to be stated or
necessary to make such representations and warranties not materially misleading.
ss.6.21. REIT Status. BPC has not taken any action that would prevent it
from maintaining its qualification as a REIT for its tax year ended December 31,
1996 or from maintaining such qualification at all times during the term of the
Loans.
ss.6.22. Subsequent Guarantors. The foregoing representations and
warranties in ss.6.3 through ss.6.20, as the same are true, correct and
applicable to Guarantors existing on the Closing Date, shall be true, correct
and applicable to each subsequent Guarantor.
ss.7. AFFIRMATIVE COVENANTS OF THE BORROWER AND THE GUARANTORS. The
Borrower for itself and on behalf of each of the Guarantors (if and to the
extent expressly included in Subsections contained in this Section) covenants
and agrees that, so long as any Loan, Letter of Credit or Revolving Credit Note
is outstanding or the Banks have any obligation to make any Loans or any Bank
has any obligation to issue, extend or renew any Letters of Credit:
ss.7.1. Punctual Payment. The Borrower will duly and punctually pay or
cause to be paid the principal and interest on the Loans and all interest, fees,
charges and other amounts provided for in this Agreement and the other Loan
Documents, all in accordance with the terms of this Agreement and the Revolving
Credit Notes, and the other Loan Documents.
<PAGE>
-55-
ss.7.2. Maintenance of Office. Each of the Borrower and the Guarantors will
maintain its chief executive office in Boston, Massachusetts, or at such other
place in the United States of America as each of them shall designate upon
written notice to the Agent to be delivered within five (5) days of such change,
where notices, presentations and demands to or upon the Borrower and the
Guarantors, as the case may be, in respect of the Loan Documents may be given or
made.
ss.7.3. Records and Accounts. Each of the Borrower and the Guarantors will
(a) keep, and cause each of its Subsidiaries to keep, true and accurate records
and books of account in which full, true and correct entries will be made in
accordance with GAAP and (b) maintain adequate accounts and reserves for all
taxes (including income taxes), contingencies, depreciation and amortization of
its properties and the properties of its Subsidiaries; all of such reserves may
be unfunded.
ss.7.4. Financial Statements, Certificates and Information. The Borrower
will deliver and cause BPC to deliver to the Agent (with copies for each Bank):
(a) as soon as practicable, but in any event not later than one
hundred (100) days after the end of each of its fiscal years:
(i) in the case of the Borrower, the audited consolidated balance
sheet of the Borrower and its subsidiaries at the end of such year,
and the related audited consolidated statements of operations, owner's
equity (deficit) and cash flows for the year then ended, in each case
with supplemental consolidating schedules provided by the Borrower if
requested by the Agent; and
(ii) in the case of BPC, the audited consolidated balance sheet
of BPC and its subsidiaries (including, without limitation, the
Borrower and its subsidiaries) at the end of such year, and the
related audited consolidated statements of operations, owner's equity
(deficit) and cash flows for the year then ended, in each case with
supplemental consolidating schedules provided by BPC if requested by
the Agent;
each setting forth in comparative form the figures for the previous fiscal year
and all such statements to be in reasonable detail, prepared in accordance with
GAAP, and, in each case, accompanied by an auditor's report prepared without
qualification by the Accountants, together with a written statement from such
<PAGE>
-56-
Accountants to the effect that they have read a copy of this Agreement, and
that, in making the examination necessary to said certification, they have
obtained no knowledge of any default, Default, Event of Default or of any facts
or circumstances that would cause BPC not to continue to qualify as a REIT for
federal income tax purposes, or, if such accountants shall have obtained
knowledge of any then existing default, Default, Event of Default or such facts
or circumstances, they shall make disclosure thereof in such statement;
(b) as soon as practicable, but in any event not later than forty-
five (45) days after the end of each of its fiscal quarters:
(i) in the case of the Borrower, copies of the unaudited
consolidated balance sheet of the Borrower and its subsidiaries as at
the end of such quarter, and the related unaudited consolidated
statements of operations, owner's equity (deficit) and cash flows for
the portion of the Borrower's fiscal year then elapsed, with
supplemental consolidating schedules provided by the Borrower if
requested by the Agent; and
(ii) in the case of BPC, copies of the unaudited consolidated
balance sheet of BPC and its subsidiaries (including, without
limitation, the Borrower and its subsidiaries) as at the end of such
quarter, and the related unaudited consolidated statements of
operations, owner's equity (deficit) and cash flows for the portion of
such Guarantor's fiscal year then elapsed;
all in reasonable detail and prepared in accordance with GAAP, together with a
certification by the principal financial officer of the Borrower or BPC, as
applicable, that the information contained in such financial statements fairly
presents the financial position of the Borrower or BPC (as the case may be) and
its subsidiaries on the date thereof (subject to year-end adjustments none of
which shall be materially adverse);
(c) as soon as practicable, but in any event not later than one
hundred (100) days after the end of each of its fiscal years, (i) audited
statements of Net Operating Income and outstanding Indebtedness as at the end of
such fiscal year and for the fiscal year then ended in respect of each Real
Estate Asset (including each Unencumbered Asset), each prepared in accordance
with GAAP (but without related financial statement footnote disclosures included
in the Borrower's or BPC's financial statements) consistent with the definitions
of Net Operating Income and outstanding Indebtedness used in this Agreement and
accompanied by an auditor's report prepared without
<PAGE>
-57-
qualification by the Accountants and (ii) a summary rent roll in respect of each
Unencumbered Asset, certified by the chief financial officer of the Borrower as
true and correct;
(d) as soon as practicable, but in any event not later than forty-five
(45) days after the end of each of the fiscal quarters of the Borrower, (i)
copies of the unaudited statements of Net Operating Income and outstanding
Indebtedness as at the end of such quarter and for the portion of the fiscal
year then elapsed in respect of each Real Estate Asset (including each
Unencumbered Asset), each prepared in accordance with GAAP (but without related
financial statement footnote disclosures included in the Borrower's or BPC's
financial statements) consistent with the definitions of Net Operating Income
and outstanding Indebtedness used in this Agreement and certified by the chief
financial officer of the Borrower to present fairly the Net Operating Income and
outstanding Indebtedness in respect of each such Real Estate Asset and (ii) an
occupancy analysis in respect of each Real Estate Asset (including each
Unencumbered Asset) certified by the chief financial officer of the Borrower to
be true and complete;
(e) simultaneously with the delivery of the financial statements
referred to in subsections (a) and (b) above, a statement in the form of Exhibit
D hereto signed by the chief financial officer of the Borrower or BPC, as
applicable, and (if applicable) reconciliations to reflect changes in GAAP since
the applicable Financial Statement Date; and, in the case of the Borrower,
setting forth in reasonable detail computations evidencing compliance with the
covenants contained in ss.ss.9.1 through 9.7;
(f) promptly as they become available, a copy of each report
(including any so-called management letters) submitted to the Borrower, BPC, or
any other Guarantor or any of their respective subsidiaries by the Accountants
in connection with each annual audit of the books of the Borrower, BPC, or any
other Guarantor or such subsidiary by such Accountants or in connection with any
interim audit thereof pertaining to any phase of the business of the Borrower,
BPC or any other Guarantor or any such subsidiary;
(g) contemporaneously with the filing or mailing thereof, copies of
all material of a financial nature sent to the holders of any Indebtedness of
the Borrower (other than the Loans) for borrowed money, to the extent that the
information or disclosure contained in such material refers to or could
reasonably be expected to have a material adverse effect on the business,
assets, financial condition or prospects, or operations of the Borrower;
<PAGE>
-58-
(h) contemporaneously with the filing or mailing thereof, copies of
all material of a financial nature filed with the SEC or sent to the
stockholders of BPC;
(i) as soon as practicable, but in any event not later than one
hundred (100) days after the end of each fiscal year of BPC, copies of the Form
10-K statement filed by BPC with the SEC for such fiscal year, and as soon as
practicable, but in any event not later than fifty (50) days after the end of
each fiscal quarter of BPC, copies of the Form 10-Q statement filed by BPC with
the SEC for such fiscal quarter, provided that, in either case, if the SEC has
granted an extension for the filing of such statements, BPC shall deliver such
statements to the Agent within ten (10) days after the filing thereof with the
SEC;
(j) from time to time such other financial data and information about
the Borrower, BPC, the other Guarantors, their respective Subsidiaries, the Real
Estate Assets and the Partially-Owned Real Estate Holding Entities as the Agent
or any Bank may reasonably request, including without limitation complete rent
rolls, existing environmental reports, and insurance certificates with respect
to the Real Estate Assets (including the Unencumbered Assets); and
(k) in the case of the Borrower, BPC, and each other Guarantor, as
soon as practicable, but in any event not later than ninety (90) days after the
end of each of their respective fiscal years, pro forma projections for the next
three fiscal years.
ss.7.5. Notices.
(a) Defaults. The Borrower will, and will cause each Guarantor, as
applicable, to, promptly notify the Agent in writing (with copies for each Bank)
of the occurrence of any default, Default or Event of Default of which (i) the
Borrower or such Guarantor has knowledge, and (ii) the Agent has not previously
given notice. If any Person shall give any notice or take any other action in
respect of (x) a claimed default (whether or not constituting an Event of
Default) under this Agreement or (y) a claimed failure by the Borrower, any
Guarantor or any of their respective Subsidiaries, as applicable, to comply with
any term, condition or provision of or under any note, evidence of Indebtedness,
indenture or other obligation aggregating in excess of $1,000,000 to which or
with respect to which any of them is a party or obligor, whether as principal or
surety, and such failure to comply would permit the holder of such note or
obligation or other evidence of Indebtedness to accelerate the maturity thereof,
which acceleration would have a material adverse effect on the Borrower or its
Subsidiaries, or BPC
<PAGE>
-59-
or its Subsidiaries, as the case may be, the Borrower, BPC or such Guarantor, as
the case may be, shall forthwith give written notice thereof to the Agent and
each of the Banks, describing the notice or action and the nature of the claimed
failure to comply.
(b) Environmental Events. The Borrower will, and will cause each
Guarantor to, promptly give notice in writing to the Agent (with copies for each
Bank) (i) upon Borrower's or such Guarantor's obtaining knowledge of any
material violation (as determined by the Borrower or such Guarantor in the
exercise of its reasonable discretion) of any Environmental Law regarding any
Real Estate Asset or Borrower's or such Guarantor's operations, (ii) upon
Borrower's or such Guarantor's obtaining knowledge of any known Release of any
Hazardous Substance at, from, or into any Real Estate Asset which it reports in
writing or is reportable by it in writing to any governmental authority and
which is material in amount or nature or which could materially affect the value
of such Real Estate Asset, (iii) upon Borrower's or such Guarantor's receipt of
any notice of material violation of any Environmental Laws or of any material
Release of Hazardous Substances in violation of any Environmental Laws or any
matter that may be a Disqualifying Environmental Event, including a notice or
claim of liability or potential responsibility from any third party (including
without limitation any federal, state or local governmental officials) and
including notice of any formal inquiry, proceeding, demand, investigation or
other action with regard to (A) Borrower's or such Guarantor's or any other
Person's operation of any Real Estate Asset, (B) contamination on, from or into
any Real Estate Asset, or (C) investigation or remediation of off-site locations
at which Borrower or such Guarantor or any of its predecessors are alleged to
have directly or indirectly disposed of Hazardous Substances, or (iv) upon
Borrower's or such Guarantor's obtaining knowledge that any expense or loss has
been incurred by such governmental authority in connection with the assessment,
containment, removal or remediation of any Hazardous Substances with respect to
which Borrower or such Guarantor or any Partially-Owned Real Estate Entity may
be liable or for which a lien may be imposed on any Real Estate Asset; any of
which events described in clauses (i) through (iv) above would have a material
adverse effect on the business, assets or financial condition of the Borrower
and its Subsidiaries, taken as a whole, or constitutes a Disqualifying
Environmental Event with respect to any Unencumbered Asset.
(c) Notification of Claims against Unencumbered Assets. The Borrower
will, and will cause each Subsidiary Guarantor to, promptly upon becoming aware
thereof, notify the Agent in writing (with copies for each Bank) of any setoff,
claims, withholdings or other defenses to which any of the Unencumbered Assets
are subject, which (i) would have a material adverse effect on (x) the business,
assets or financial condition of the Borrower and its Subsidiaries, taken as a
whole, or (y) the value of such Unencumbered Asset, or (ii) with respect to such
Unencumbered Asset, constitute a Disqualifying
<PAGE>
-60-
Environmental Event or a Lien subject to the bonding or insurance requirement of
ss.8.2(viii).
(d) Notice of Litigation and Judgments. The Borrower will, and will
cause each Guarantor to, and the Borrower will cause each of the wholly-owned
Subsidiaries to, give notice to the Agent in writing (with copies for each Bank)
within fifteen (15) days of becoming aware of any litigation or proceedings
threatened in writing or any pending litigation and proceedings an adverse
determination in which could materially affect the Borrower, any Guarantor or
any of their respective Subsidiaries or any Unencumbered Asset or to which the
Borrower, any Guarantor or any of their respective Subsidiaries is or is to
become a party involving an uninsured claim against the Borrower, any Guarantor
or any of their respective Subsidiaries that could reasonably be expected to
have a materially adverse effect on the Borrower or such Guarantor or their
respective properties, business, assets, financial condition or prospects or on
the value or operation of the Unencumbered Assets and stating the nature and
status of such litigation or proceedings. The Borrower will, and will cause each
of the Operating Subsidiaries, the Guarantors and the wholly-owned Subsidiaries
to, give notice to the Agent and each of the Banks, in writing, in form and
detail reasonably satisfactory to the Agent and each of the Banks, within ten
(10) days of any judgment not covered by insurance, final or otherwise, against
the Borrower, any Guarantor or any of the wholly-owned Subsidiaries in an amount
in excess of $1,000,000.
(e) Acquisition of Real Estate Assets. The Borrower shall notify the
Agent in writing (with copies for each Bank) within seven (7) days of the
acquisition of any Real Estate Asset by the Borrower, any Guarantor, any of
their respective Subsidiaries or any Partially-Owned Real Estate Holding Entity
(whether or not such acquisition was made with proceeds of the Loans), which
notice shall include, with respect to such Real Estate Asset, its address, a
brief description and recent photograph, a rent roll summary, a proforma and
historic (if available) income statement and a summary of the key business terms
of such acquisition.
ss.7.6. Existence of Borrower and Subsidiary Guarantors; Maintenance of
Properties. The Borrower for itself and for each Subsidiary Guarantor insofar as
any such statements relate to such Subsidiary Guarantor will do or cause to be
done all things necessary to, and shall, preserve and keep in full force and
effect its existence as a Delaware limited partnership or its existence as
another legally constituted entity, and will do or cause to be done all things
necessary to preserve and keep in full force all of its rights and franchises
and those of its Subsidiaries. The Borrower (a) will cause all necessary
repairs, renewals, replacements, betterments and improvements to be made to all
Real Estate Assets owned or controlled by it or any Subsidiary Guarantor, all as
in the
<PAGE>
-61-
judgment of the Borrower or such Subsidiary Guarantor may be necessary so that
the business carried on in connection therewith may be properly and
advantageously conducted at all times, subject to the terms of the applicable
Leases and partnership agreements or other entity charter documents, (b) will
cause, and will cause the Subsidiary Guarantors to cause, all of its (or their)
other properties and those of its Subsidiaries (to the extent controlled by the
Borrower) used or useful in the conduct of its business or the business of its
Subsidiaries to be maintained and kept in good condition, repair and working
order and supplied with all necessary equipment, and (c) will, and will cause
each of its Subsidiaries and each Subsidiary Guarantor to, continue to engage
primarily in the businesses now conducted by it and in related businesses,
consistent with ss.7.27.
ss.7.7. Existence of BPC; Maintenance of REIT Status of BPC; Maintenance of
Properties. The Borrower will cause BPC to do or cause to be done all things
necessary to preserve and keep in full force and effect BPC's existence as a
Maryland corporation. The Borrower will cause BPC at all times to maintain its
status as a REIT and not to take any action which could lead to its
disqualification as a REIT. The Borrower will cause BPC not to engage in any
business other than the business of acting as a REIT and serving as the general
partner and limited partner of the Borrower, as a member, partner or stockholder
of other Persons and as a Guarantor, and shall cause BPC to conduct all or
substantially all of its business operations through the Borrower or through
subsidiary partnerships or other entities in which the Borrower owns at least
99% of the economic interests. The Borrower will cause BPC to do or cause to be
done all things necessary to preserve and keep in full force all of its rights
and franchises and those of its Subsidiaries. The Borrower will cause BPC (a) to
cause all of its properties and those of its Subsidiaries used or useful in the
conduct of its business or the business of its Subsidiaries to be maintained and
kept in good condition, repair and working order and supplied with all necessary
equipment, (b) to cause to be made all necessary repairs, renewals,
replacements, betterments and improvements thereof, all as in the judgment of
BPC may be necessary so that the business carried on in connection therewith may
be properly and advantageously conducted at all times, and (c) to cause each of
its Subsidiaries to continue to engage primarily in the businesses now conducted
by it and in related businesses, consistent with ss.7.27.
ss.7.8. Insurance. The Borrower will, and will cause each Guarantor to,
maintain with respect to its properties, and will cause each of its Subsidiaries
to maintain with financially sound and reputable insurers, insurance with
respect to such properties and its business against such casualties and
contingencies as shall be in accordance with the general practices of businesses
engaged in similar activities in similar geographic areas and in amounts,
containing such terms, in such forms and for such periods as may be reasonable
and prudent.
<PAGE>
-62-
ss.7.9. Taxes. The Borrower will, and will cause each Guarantor to, pay or
cause to be paid real estate taxes, other taxes, assessments and other
governmental charges against the Real Estate Assets (other than those owned or
ground-leased by Partially-Owned Real Estate Holding Entities) before the same
become delinquent and will duly pay and discharge, or cause to be paid and
discharged, before the same shall become overdue, all taxes, assessments and
other governmental charges imposed upon its sales and activities, or any part
thereof, or upon the income or profits therefrom, as well as all claims for
labor, materials, or supplies that if unpaid might by law become a lien or
charge upon any of the Real Estate Assets (other than those owned or
ground-leased by Partially-Owned Real Estate Holding Entities); provided that
any such tax, assessment, charge, levy or claim need not be paid if the validity
or amount thereof shall currently be contested in good faith by appropriate
proceedings and if the Borrower or such Guarantor shall have set aside on its
books adequate reserves with respect thereto; and provided further that the
Borrower or such Guarantor will pay all such taxes, assessments, charges, levies
or claims forthwith upon the commencement of proceedings to foreclose any lien
that may have attached as security therefor. Promptly upon request by the Agent
if required for bank regulatory compliance purposes or similar bank purposes,
the Borrower will provide evidence of the payment of real estate taxes, other
taxes, assessments and other governmental charges against the Real Estate Assets
(other than those owned or ground-leased by Partially-Owned Real Estate Holding
Entities) in the form of receipted tax bills or other form reasonably acceptable
to the Agent.
ss.7.10. Inspection of Properties and Books. The Borrower will, and will
cause each Guarantor to, permit the Agent or any of the Banks' other designated
representatives upon no less than 24 hours notice (which notice may be given
orally or in writing), to visit and inspect any of the properties of the
Borrower, any Guarantor or any of their respective Subsidiaries to examine the
books of account of the Borrower, such Guarantor and their respective
Subsidiaries (and to make copies thereof and extracts therefrom) and to discuss
the affairs, finances and accounts of the Borrower, such Guarantor and their
respective Subsidiaries with, and to be advised as to the same by, its officers,
all at such reasonable times and intervals as the Agent may reasonably request;
provided that, so long as no Event of Default has occurred and is continuing,
the Borrower shall only be responsible for the costs and expenses incurred by
the Agent in connection with such inspections. The Agent and each Bank agrees to
keep any non-public information delivered or made available by the Borrower to
it confidential from anyone other than persons employed or retained by the Agent
or such Bank who are or are expected to become engaged in evaluating, approving,
structuring or administering the Loans; provided that nothing herein shall
prevent the Agent or any Bank from disclosing such information (i) to any
<PAGE>
-63-
other Bank, (ii) to any other person if reasonably incidental to the
administration of the Loans, (iii) upon the order of any court or administrative
agency, (iv) upon the request or demand of any regulatory agency or authority,
(v) which has been publicly disclosed other than as a result of a disclosure by
the Agent or any Bank which is not permitted by this Agreement, (vi) in
connection with any litigation to which the Agent, any Bank, or their respective
Affiliates may be a party, (vii) to the extent reasonably required in connection
with the exercise of any remedy hereunder, (viii) to the Agent's or such Bank's
Affiliates, legal counsel and independent auditors, and (ix) to any actual or
proposed participant or Eligible Assignee of all or part of its rights
hereunder.
ss.7.11. Compliance with Laws, Contracts, Licenses, and Permits. The
Borrower will, and will cause each Guarantor to, comply with, and will cause
each of their respective Subsidiaries to comply with (a) all applicable laws and
regulations now or hereafter in effect wherever its business is conducted,
including, without limitation, all Environmental Laws and all applicable federal
and state securities laws, (b) the provisions of its partnership agreement or
corporate charter and other charter documents and by-laws, as applicable, (c)
all material agreements and instruments to which it is a party or by which it or
any of its properties may be bound (including the Real Estate Assets and the
Leases) and (d) all applicable decrees, orders, and judgments. If at any time
while any Loan or Revolving Credit Note is outstanding or the Banks have any
obligation to make Loans hereunder, any Permit shall become necessary or
required in order that the Borrower may fulfill any of its obligations
hereunder, the Borrower and the Guarantors will immediately take or cause to be
taken all reasonable steps within the power of the Borrower or the Guarantors,
as applicable, to obtain such Permit and furnish the Agent with evidence
thereof.
ss.7.12. Use of Proceeds. Subject at all times to the other provisions this
Agreement, the Borrower will use the proceeds of the Loans solely for working
capital and general corporate purposes (including the repayment of existing
Indebtedness).
ss.7.13. Acquisition of Unencumbered Assets. The Borrower shall promptly
deliver to the Agent a copy of the Title Policy for each Unencumbered Asset
which is designated as such after the Closing Date.
ss.7.14. Additional Guarantors; Solvency of Guarantors.
(a) If, after the Closing Date, the Borrower wishes to designate as
an Unencumbered Asset a Real Estate Asset that otherwise qualifies as an
Unencumbered Asset but is owned or ground-leased by a Person other than the
Borrower, 1333 or Burlington, the Borrower shall cause such Person (which Person
must be a wholly-owned Subsidiary of the Borrower) to execute and
<PAGE>
-64-
deliver a Guaranty to the Agent and the Banks in substantially the form of the
Burlington Guaranty or the 1333 Guaranty, as applicable, prior to such Real
Estate Asset becoming an Unencumbered Asset hereunder. Such Guaranty shall
evidence consideration and equivalent value. The Borrower will not permit any
Guarantor that owns or ground leases any Unencumbered Assets to have any
Subsidiaries unless such Subsidiary's business, obligations and undertakings are
exclusively related to the business of such Guarantor.
(b) The Borrower 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.
ss.7.15. Further Assurances. The Borrower will, and will cause each
Guarantor to, cooperate with, and to cause each of the wholly-owned Subsidiaries
to cooperate with, the Agent and the Banks and execute such further instruments
and documents as the Banks or the Agent shall reasonably request to carry out to
their satisfaction the transactions contemplated by this Agreement and the other
Loan Documents.
ss.7.16. Interest Rate Protection. The Borrower shall maintain in effect
its existing interest rate protection arrangements (a) in respect of a notional
principal amount of not less than $135,000,000 effective from the Closing Date
through May 26, 1997 and (b) in respect of a notional principal amount of not
less than $137,500,000 for the period from May 27, 1997 until May 25, 1999 or
such earlier date upon which the Loans are terminated. The Borrower shall
maintain such arrangements in full force and effect as provided therein, and
shall not, without Unanimous Bank Approval, modify, terminate, or transfer such
arrangements during such period. The Borrower may, at its option, enter into
additional interest rate protection arrangements permitted pursuant to ss.8.3.
ss.7.17. Environmental Indemnification. The Borrower covenants and agrees
that it will indemnify and hold the Agent and each Bank, and each of their
respective Affiliates, harmless from and against any and all claims, expense,
damage, loss or liability incurred by the Agent or any Bank (including all
reasonable costs of legal representation incurred by the Agent or any Bank, but
excluding, as applicable, for the Agent or a Bank any claim, expense, damage,
loss or liability as a result of the gross negligence or willful misconduct of
the Agent or such Bank or any of their respective Affiliates) relating to (a)
any Release or threatened Release of Hazardous Substances on any Real Estate
Asset; (b) any violation of any Environmental Laws with respect to conditions at
any Real Estate Asset or the operations conducted thereon; (c) the investigation
or remediation of off-site locations at which the Borrower, any Guarantor or any
<PAGE>
-65-
of their respective Subsidiaries or their predecessors are alleged to have
directly or indirectly disposed of Hazardous Substances; or (d) any action,
suit, proceeding or investigation brought or threatened with respect to any
Hazardous Substances relating to Real Estate Assets (including, but not limited
to, claims with respect to wrongful death, personal injury or damage to
property). It is expressly acknowledged by the Borrower that this covenant of
indemnification shall survive the payment of the Loans and shall inure to the
benefit of the Agent and the Banks and their respective Affiliates, their
respective successors, and their respective assigns under the Loan Documents
permitted under this Agreement.
ss.7.18. Response Actions. The Borrower covenants and agrees that if any
Release or disposal of Hazardous Substances shall occur or shall have occurred
on any wholly-owned Real Estate Asset, the Borrower will cause the prompt
containment and removal of such Hazardous Substances and remediation of such
wholly-owned Real Estate Asset as necessary to comply with all Environmental
Laws or to preserve the value of such wholly-owned Real Estate Asset.
ss.7.19. Environmental Assessments. If the Agent in its good faith
judgment, after discussion with the Borrower and review of any environmental
reports provided by the Borrower, has reasonable grounds to believe that a
Disqualifying Environmental Event has occurred with respect to any Unencumbered
Asset, after reasonable notice by the Agent, whether or not a default, Default
or an Event of Default shall have occurred, the Agent may, from time to time,
for the purpose of assessing and determining whether a Disqualifying
Environmental Event has in fact occurred, cause the Borrower to obtain one or
more environmental assessments or audits of such Unencumbered Asset prepared by
a hydrogeologist, an independent engineer or other qualified consultant or
expert approved by the Agent to evaluate or confirm (i) whether any Hazardous
Substances are present in the soil or water at such Unencumbered Asset and (ii)
whether the use and operation of such Unencumbered Asset complies with all
Environmental Laws. Environmental assessments may include without limitation
detailed visual inspections of such Unencumbered Asset including, without
limitation, any and all storage areas, storage tanks, drains, dry wells and
leaching areas, and, if and to the extent reasonable, appropriate and in
compliance with Environmental Laws, the taking of soil samples, surface water
samples and ground water samples, as well as such other investigations or
analyses as the Agent deems appropriate. All such environmental assessments
shall be at the sole cost and expense of the Borrower; provided, however, the
Agent may not require environmental assessments at the Borrower's expense, with
respect to any Unencumbered Asset, more frequently than upon the occurrence of a
Release on any Unencumbered Asset.
<PAGE>
-66-
ss.7.20. Employee Benefit Plans.
(a) Notice. The Borrower will, and will cause each Guarantor to,
obtain the consent of the Majority Banks prior to the establishment of any
Employee Benefit Plan or Guaranteed Pension Plan by any of them or any of their
respective ERISA Affiliates other than those disclosed in the SEC Filings.
(b) In General. Each Employee Benefit Plan maintained by the Borrower,
any Guarantor or any of their respective ERISA Affiliates will be operated in
compliance in all material respects with the provisions of ERISA and, to the
extent applicable, the Code, including but not limited to the provisions
thereunder respecting prohibited transactions.
(c) Terminability of Welfare Plans. With respect to each Employee
Benefit Plan maintained by the Borrower, any Guarantor or any of their
respective ERISA Affiliates which is an employee welfare benefit plan within the
meaning of ss.3(1) or ss.3(2)(B) of ERISA, the Borrower, such Guarantor, or any
of their respective ERISA Affiliates, as the case may be, has the right to
terminate each such plan at any time (or at any time subsequent to the
expiration of any applicable bargaining agreement) without liability other than
liability to pay claims incurred prior to the date of termination.
(d) Multiemployer Plans. Without the consent of the Majority Banks,
the Borrower will not, and will not permit any Guarantor to, enter into,
maintain or contribute to, any Multiemployer Plan.
(e) Unfunded or Underfunded Liabilities. The Borrower will not, and
will not permit any Guarantor to, at any time, have accruing or accrued unfunded
or underfunded liabilities with respect to any Employee Benefit Plan, Guaranteed
Pension Plan or Multiemployer Plan, or permit any condition to exist under any
Multiemployer Plan that would create a withdrawal liability.
ss.7.21. [Intentionally Omitted].
ss.7.22. No Amendments to Certain Documents. The Borrower will not, and
will not permit any Guarantor to, at any time cause or permit its certificate of
limited partnership, agreement of limited partnership (including without
limitation the Agreement of Limited Partnership of the Borrower, the 1333
Agreement of Limited Partnership or the Burlington Agreement of Limited
Partnership), articles of incorporation, by-laws 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 Agent, if such changes would affect BPC's REIT status or otherwise
<PAGE>
-67-
materially adversely affect the rights of the Agent and the Banks hereunder or
under any other Loan Document.
ss.7.23. [Intentionally Omitted]
ss.7.24. [Intentionally Omitted]
ss.7.25. Management. Except by reason of death or incapacity, at least
three (3) of the Key Management Individuals (as hereinafter defined) shall
remain active in the executive and/or operational management, in their current
(or comparable) positions, of BPC; provided, however, if at least three (3) of
the Key Management Individuals are not so active in such positions (except by
reason of death or incapacity as aforesaid), then within ninety (90) days of the
occurrence of such event, BPC shall propose and appoint such individual(s) of
comparable experience, reputation and otherwise reasonably acceptable to the
Majority Banks to such position(s) such that, after such appointment, such
acceptable replacement individuals, together with the Key Management Individuals
remaining so active in such positions with BPC, total at least three (3). For
purposes hereof, "Key Management Individuals" shall mean and include (a) Norman
B. Leventhal, Edwin N. Sidman, Alan M. Leventhal, Lionel P. Fortin, Douglas S.
Mitchell, Robert J. Perriello, and Carol Judson and (b) for so long as at least
two (2) of the foregoing seven (7) individuals remain active in the executive
and/or operational management, in their current (or comparable) positions, of
BPC, Nancy J. Broderick, Charles H. Cremens and William A. Bonn.
ss.7.26. [Intentionally Omitted].
ss.7.27. Class of Real Estate Assets. The Borrower will, and will cause its
Subsidiaries and each Guarantor to, comply with the following conditions with
respect to the Real Estate Assets:
(a) The aggregate Consolidated Capitalization Value plus Eligible Real
Estate Development Costs attributable to assets which are not Class A and Class
B office buildings shall not exceed 25% of Consolidated Capitalization Value
plus Eligible Real Estate Development Costs; and
(b) The aggregate Consolidated Capitalization Value plus Eligible Real
Estate Development Costs attributable to assets which are not Class A office
buildings shall not exceed 47.5% of Consolidated Capitalization Value plus
Eligible Real Estate Development Costs;
provided that the failure to comply with the covenants set forth in this ss.7.27
shall not constitute a Default or Event of Default hereunder, but the aggregate
<PAGE>
-68-
Consolidated Capitalization Value plus Eligible Real Estate Development Costs
attributable to assets in excess of the foregoing parameters (the "Value of
Nonconforming Assets") shall be excluded from the calculation of Consolidated
Market Value, as set forth in such definition.
ss.8. CERTAIN NEGATIVE COVENANTS OF THE BORROWER AND THE GUARANTORS.
The Borrower for itself and on behalf of the Guarantors covenants and agrees
that, so long as any Loan, Letter of Credit or Revolving Credit Note is
outstanding or any of the Banks has any obligation to make any Loans or any Bank
has any obligation to issue, extend or renew any Letters of Credit:
ss.8.1. Restrictions on Indebtedness.
The Borrower and the Guarantors may, and may permit their respective
Subsidiaries to, create, incur, assume, guarantee or be or remain liable for,
contingently or otherwise, any Indebtedness other than the specific Indebtedness
which is prohibited under this ss.8.1 and with respect to which each of the
Borrower and the Guarantors will not, and will not permit any Operating
Subsidiary or wholly-owned Subsidiary to, create, incur, assume, guarantee or be
or remain liable for, contingently or otherwise, singularly or in the aggregate
as follows:
(a) Unsecured Indebtedness (excluding the Obligations) which is
incurred under a revolving credit facility with a commercial bank, trust
company, or savings and loan association;
(b) Indebtedness which would result in a Default or Event of Default
under ss.9 hereof;
(c) An aggregate amount in excess of $5,000,000 at any one time in
respect of taxes, assessments, governmental charges or levies and claims for
labor, materials and supplies (other than in respect of properties owned by
Partially-Owned Real Estate Holding Entities) for which payment therefor is
required to be made in accordance with the provisions of ss.7.9 and has not been
timely made;
(d) An aggregate amount in excess of $1,000,000 at any one time in
respect of uninsured judgments or awards, with respect to which the applicable
periods for taking appeals have expired, or with respect to which final and
unappealable judgments or awards have been rendered, and such judgments or
awards remain unpaid for more than thirty (30) days; and
<PAGE>
-69-
(e) Current unsecured liabilities incurred in the ordinary course of
business, which (i) are overdue for more than sixty (60) days, (ii) exceed
$1,000,000 in the aggregate at any one time, and (iii) are not being contested
in good faith.
The terms and provisions of this ss.8.1 are in addition to, and not in
limitation of, the covenants set forth in ss.9 of this Agreement.
Without limiting the foregoing, but subject to the other provisions of this
Agreement (including without limitation ss.9 hereof), Indebtedness Without
Recourse to any of the Credit Parties or any of their respective assets other
than their respective interests in the Real Estate Assets that are subject to
such Indebtedness Without Recourse is not restricted.
Notwithstanding anything contained herein to the contrary, the Borrower and
the Guarantors will not, and will not permit any Operating Subsidiary or any
wholly-owned Subsidiary to, incur any Indebtedness for borrowed money which,
together with other Indebtedness for borrowed money incurred by the Borrower,
any Guarantor, any Operating Subsidiary and any wholly-owned Subsidiary since
the date of the most recent compliance certificate delivered to the Agent in
accordance with this Agreement, exceeds $5,000,000 in the aggregate unless the
Borrower shall have delivered a compliance certificate in the form of Exhibit D
hereto to the Agent evidencing covenant compliance at the time of delivery of
the certificate and on a pro-forma basis after giving effect to such proposed
Indebtedness.
ss.8.2. Restrictions on Liens, Etc. None of the Borrower, any Guarantor,
any Operating Subsidiary and any wholly-owned Subsidiary will: (a) create or
incur or suffer to be created or incurred or to exist any lien, mortgage,
pledge, attachment or security interest of any kind upon any of their respective
properties or assets of any character (other than the Real Estate Assets owned
or ground-leased by the Partially-Owned Real Estate Entities), whether now owned
or hereafter acquired, or upon the income or profits therefrom; (b) acquire, or
agree or have an option to acquire, any property or assets upon conditional sale
or other title retention or purchase money security agreement, device or
arrangement in connection with the operation of the Unencumbered Assets; (c)
suffer to exist for a period of more than thirty (30) days any Indebtedness or
claim or demand against any of them prohibited by ss.8.1(c) (without hereby
modifying ss.8.1(c)) that, if unpaid, might by law or upon bankruptcy or
insolvency, or otherwise, be given any priority whatsoever over its general
creditors, but excluding any Indebtedness of, or any claim or demand against,
any Partially-Owned Real Estate Holding Entity that is Without Recourse to any
of the Credit Parties, or any of their respective assets other than their
respective interests in the Real Estate Asset in question; or (d) sell,
<PAGE>
-70-
assign, pledge or otherwise transfer for security any accounts, contract rights,
general intangibles, chattel paper or instruments, with or without recourse,
relating to assets other than the assets of the Partially-Owned Real Estate
Holding Entities (the foregoing items (a) through (d) being sometimes referred
to in this ss.8.2 collectively as "Liens"), provided that the Borrower, the
Guarantors and any Operating Subsidiary or wholly-owned Subsidiary may create or
incur or suffer to be created or incurred or to exist:
(i) Liens securing taxes, assessments, governmental charges or
levies or claims for labor, material and supplies, the Indebtedness with respect
to which is not prohibited by ss.8.1(c) or ss.8.2(c) above;
(ii) deposits or pledges made in connection with, or to secure
payment of, worker's compensation, unemployment insurance, old age pensions or
other social security obligations; and deposits with utility companies and other
similar deposits made in the ordinary course of business;
(iii) Liens (other than affecting the Unencumbered Assets) in
respect of judgments or awards, the Indebtedness with respect to which is not
prohibited by ss.8.1(d);
(iv) encumbrances on properties consisting of easements, rights
of way, covenants, restrictions on the use of real property and defects and
irregularities in the title thereto; landlord's or lessor's Liens under Leases
to which the Borrower, any Guarantor, any Operating Subsidiary or any
wholly-owned Subsidiary is a party or bound; purchase options granted at a price
not less than the market value of such property; and other minor Liens or
encumbrances on properties, none of which interferes materially and adversely
with the use of the property affected in the ordinary conduct of the business of
the Borrower, and which matters (x) do not individually or in the aggregate have
a material adverse effect on the business of the Borrower or (xx) do not make
title to such property unmarketable by the conveyancing standards in effect
where such property is located;
(v) any Leases;
(vi) Liens and other encumbrances or rights of others which exist
on
<PAGE>
-71-
the date of this Agreement and which do not otherwise constitute a breach of
this Agreement; provided that nothing in this clause (vi) shall be deemed or
construed to permit an Unencumbered Asset to be subject to a Lien to secure
Indebtedness;
(vii) as to Real Estate Assets which are acquired after the date
of this Agreement, Liens and other encumbrances or rights of others which exist
on the date of acquisition and which do not otherwise constitute a breach of
this Agreement; provided that nothing in this clause (vii) shall be deemed or
construed to permit an Unencumbered Asset to be subject to a Lien to secure
Indebtedness;
(viii) Liens affecting the Unencumbered Assets in respect of
judgments or awards that have been in force for less than the applicable period
for taking an appeal, so long as execution is not levied thereunder or in
respect of which, at the time, a good faith appeal or proceeding for review is
being prosecuted, and in respect of which a stay of execution shall have been
obtained pending such appeal or review; provided that the Borrower shall have
obtained a bond or insurance with respect thereto to the Agent's reasonable
satisfaction;
(ix) Liens securing Indebtedness for the purchase price of
capital assets (other than Real Estate Assets but including Indebtedness in
respect of Capitalized Leases for equipment and other equipment leases) to the
extent not otherwise prohibited by ss.8.1; and
(x) other Liens (other than affecting the Unencumbered Assets) in
connection with any Indebtedness permitted under ss.8.1.
ss.8.3. Restrictions on Investments. None of the Borrower, any Guarantor,
any Operating Subsidiary or any wholly-owned Subsidiary will make or permit to
exist or to remain outstanding any Investment except Investments in:
(a) marketable direct or guaranteed obligations of the United States
of America that mature within two (2) years from the date of purchase;
(b) demand deposits, certificates of deposit, bankers acceptances and
time deposits of United States banks having total assets in excess of
$1,000,000,000;
(c) securities commonly known as "commercial paper" issued by a
corporation organized and existing under the laws of the United States of
America or any state thereof that at the time of purchase have been rated and
the ratings for which are not less than "P 1" if rated by Moody's, and not less
than "A 1" if rated by S&P;
(d) Investments existing on the Closing Date and listed in the SEC
Filings or in the financial statements referred to in ss.6.4 hereof, and any
other Investments hereafter made with respect to Real Estate Assets held by the
Borrower, by any wholly-owned Subsidiary or by any Partially-Owned Real Estate
Holding Entity as of the Closing Date (including, without limitation,
Investments in any such Partially-Owned Real Estate Holding Entity);
<PAGE>
-72-
(e) So long as no Event of Default has occurred and is continuing or
would occur after giving effect thereto, Investments (i) in Real Estate Assets,
(ii) in interests in Partially-Owned Real Estate Holding Entities, (iii) in the
stock of or other beneficial interests in Persons whose primary operations
consist of the ownership, development, operation or management of Real Estate
Assets or the ownership of Indebtedness for borrowed money secured by mortgage
liens on Real Estate Assets, or (iv) consisting of the acquisition of (A)
contracts for the management of Real Estate Assets or (B) Indebtedness for
borrowed money secured by mortgage liens on Real Estate Assets, in each case
consistent with the provisions of ss.7.27 hereof;
(f) any Investments now or hereafter made in the Operating
Subsidiaries or any wholly-owned Subsidiary;
(g) Investments in respect of (1) equipment, inventory and other
tangible personal property acquired in the ordinary course of business, (2)
current trade and customer accounts receivable for services rendered in the
ordinary course of business and payable in accordance with customary trade
terms, (3) advances to employees for travel expenses, drawing accounts and
similar expenditures, (4) prepaid expenses made in the ordinary course of
business;
(h) any other Investments made in the ordinary course of business,
provided that the aggregate value of all Investments under this subsection (h)
by the Borrower shall not exceed at any time $1,000,000;
(i) repurchase agreements having a term not greater than 90 days and
fully secured by obligations described in the foregoing subsection (a) with
banks described in the foregoing subsection (b) or with financial institutions
or other corporations having total assets in excess of $500,000,000;
(j) interest rate hedges in connection with Indebtedness; and
(k) shares of so-called "money market funds" registered with the SEC
under the Investment Company Act of 1940 which maintain a level per-share value,
invest principally in marketable direct or guaranteed obligations of the United
States of America and agencies and instrumentalities thereof, and have total
assets in excess of $50,000,000.
ss.8.4. Merger, Consolidation and Disposition of Assets.
None of the Borrower, any Guarantor, any Operating Subsidiary or any
wholly-owned Subsidiary will:
<PAGE>
-73-
(a) Become a party to any merger or consolidation, except that so long
as no Default or Event of Default has occurred and is continuing, or would occur
after giving effect thereto, the merger or consolidation of one or more Persons
with and into the Borrower, any Guarantor, any Operating Subsidiary or any
wholly-owned Subsidiary, shall be permitted if the Borrower, any Guarantor, any
Operating Subsidiary or any wholly-owned Subsidiary, as the case may be, is the
surviving entity; provided that prior to any such merger or consolidation (other
than (w) the merger or consolidation of one or more Operating Subsidiaries with
and into the Borrower, (x) the merger or consolidation of two or more
Subsidiaries of the Borrower, (y) the merger or consolidation of one or more
Subsidiaries of BPC with and into BPC, or (z) the merger or consolidation of two
or more Subsidiaries of BPC), the Borrower shall provide to the Agent (with
copies for each Bank) a statement in the form of Exhibit D hereto signed by the
chief financial officer or treasurer of the Borrower and setting forth in
reasonable detail computations evidencing compliance with the covenants
contained in ss.ss.9.1 through 9.7 hereof and certifying, to the best knowledge
of the signatory, that no Default or Event of Default has occurred and is
continuing, or would occur and be continuing after giving effect to such merger
or consolidation and all liabilities, fixed or contingent, pursuant thereto;
(b) Sell, transfer or otherwise dispose of (collectively and
individually, "Sell" or a "Sale") or grant a Lien to secure Indebtedness (an
"Indebtedness Lien") on any of its now owned or hereafter acquired assets
without obtaining the prior written consent of the Majority Banks except for:
(i) the Sale of or granting of an Indebtedness Lien on any
Unencumbered Asset so long as no Default or Event of Default has then
occurred and is continuing, or would occur and be continuing after
giving effect to such Sale or Indebtedness Lien; provided, that prior
to any Sale of any Unencumbered Asset or the granting of an
Indebtedness Lien on any Unencumbered Asset under this clause (i), the
Borrower shall provide to the Agent (with copies for each Bank) a
statement in the form of Exhibit D hereto signed by the chief
financial officer or treasurer of the Borrower and setting forth in
reasonable detail computations evidencing compliance with the
covenants contained in ss.9 hereof and certifying, to the best
knowledge of the signatory, that no Default or Event of Default has
occurred and is continuing, or would occur and be continuing after
giving effect to such proposed Sale or Indebtedness Lien and all
liabilities, fixed or contingent, pursuant thereto;
(ii) the Sale of or the granting of an Indebtedness Lien on any
of its now owned or hereafter acquired assets (other than any
Unencumbered
<PAGE>
-74-
Asset) so long as no Event of Default has then occurred and is
continuing and no Default or Event of Default would occur and be
continuing after giving effect to such Sale or Indebtedness Lien and
all other Sales (to be) made and Indebtedness Liens (to be) granted
under this clause (ii); provided, that (x) if such Sale or
Indebtedness Lien is made or granted under this clause (ii) while a
Default is continuing, such Sale or Indebtedness Lien (together with
other Sales and Indebtedness Liens under this clause (ii)) cures (or
would cure) such Default before it becomes an Event of Default, (y) if
multiple Sales or grantings of Indebtedness Liens are undertaken
pursuant to the foregoing subclause (x) to cure a Default, the
Borrower shall apply the net proceeds of each such Sale or
Indebtedness Lien remaining after application to such cure to the
repayment of the Revolving Credit Loans until such Default has been
fully cured, and (z) prior to the Sale of any asset or the granting of
an Indebtedness Lien on any asset under this clause (ii), the Borrower
shall provide to the Agent (with copies for each Bank) a statement in
the form of Exhibit D hereto signed by the chief financial officer or
treasurer of the Borrower and setting forth in reasonable detail
computations evidencing compliance with the covenants contained in
ss.9 hereof and certifying, to the best knowledge of the signatory,
that no Default or Event of Default would occur and be continuing
after giving effect to all such proposed Sales or Indebtedness Liens
and all liabilities, fixed or contingent, pursuant thereto; and
(iii) in addition to the Borrower's rights under clause (ii)
above, the Sale of or the granting of an Indebtedness Lien on any of
its now owned or hereafter acquired assets (other than Real Estate
Assets) in one or more transactions; provided that such transactions
under this clause (iii) shall not exceed $250,000 in the aggregate
after the occurrence and during the continuance of a Default or an
Event of Default.
ss.8.5. [Intentionally Omitted].
ss.8.6. Compliance with Environmental Laws. None of the Borrower, any
Guarantor, any Operating Subsidiary or any wholly-owned Subsidiary will do any
of the following: (a) use any of the Real Estate Assets or any portion thereof
as a facility for the handling, processing, storage or disposal of Hazardous
Substances except for quantities of Hazardous Substances 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 the Real Estate Assets any underground
tank or other underground storage receptacle for Hazardous Substances except in
full compliance with Environmental Laws, (c) generate any Hazardous Substances
on any of the Real Estate Assets except in full compliance with Environmental
Laws, or (d) conduct any activity at any Real Estate Asset or use any Real
<PAGE>
-75-
Estate Asset in any manner so as to cause a Release; provided that a breach of
this covenant shall constitute an Event of Default under ss.13.1(d) (subject to
the cure periods set forth therein) hereof only if such breach has a material
adverse effect on the Borrower and its Subsidiaries, taken as a whole.
ss.8.7. Distributions. (a) The Borrower will not make (i) annual
Distributions in excess of 95% of "funds from operations" or (ii) any
Distributions during any period when any Event of Default has occurred and is
continuing; provided, however, that the Borrower may at all times make
Distributions to the extent (after taking into account all available funds of
BPC from all other sources) required in order to enable BPC to continue to
qualify as a REIT.
(b) BPC will not, during any period when any Event of Default has
occurred and is continuing, make any Distributions in excess of the
Distributions required to be made by BPC in order to maintain its status as a
REIT.
ss.9. FINANCIAL COVENANTS OF THE BORROWER. The Borrower covenants and
agrees that, so long as any Loan, Letter of Credit or Revolving Credit Note is
outstanding or any Bank has any obligation to make any Loan or any Bank has any
obligation to issue, extend or renew any Letters of Credit:
ss.9.1. Consolidated Outstanding Indebtedness. As at the end of any
fiscal quarter or any other date of measurement, the Borrower shall not permit
Consolidated Outstanding Indebtedness to exceed 50% of Consolidated Market
Value; provided that the Borrower shall not be deemed to have breached the
within covenant if from time to time, for a period of not more than one hundred
eighty (180) consecutive days, Consolidated Outstanding Indebtedness exceeds 50%
of Consolidated Market Value but does not exceed 60% of Consolidated Market
Value (an "Increased Leverage Period") so long as (a) the Borrower shall have
given the Agent prior or simultaneous written notice of the commencement of an
Increased Leverage Period and (b) after the Borrower at any time reduces
Consolidated Outstanding Indebtedness to not greater than 50% of Consolidated
Market Value, the Borrower shall maintain Consolidated Outstanding Indebtedness
at not greater than 50% of Consolidated Market Value for a period of at least
thirty (30) consecutive days or such shorter period of time as may be agreed to
in writing by the Majority Banks. For purposes of this ss.9.1, Consolidated
Market Value shall be adjusted on a pro-forma basis to account for Real Estate
Assets acquired during such prior fiscal quarter by projecting the Funds from
Operations generated by each such acquired Real Estate Asset for the portion of
the quarter during which it was owned or ground-leased by the Borrower over the
entire quarter.
<PAGE>
-76-
ss.9.2. Consolidated Secured Indebtedness. As at the end of any fiscal
quarter or any other date of measurement, the Borrower shall not permit
Consolidated Secured Indebtedness to exceed 40% of Consolidated Market Value.
For purposes of this ss.9.2, Consolidated Market Value shall be adjusted on a
pro-forma basis to account for Real Estate Assets acquired during such prior
fiscal quarter by projecting the Funds from Operations generated by each such
acquired Real Estate Asset for the portion of the quarter during which it was
owned or ground-leased by the Borrower over the entire quarter.
ss.9.3. Net Worth. As at the end of any fiscal quarter or any other date of
measurement, the Borrower shall not permit Consolidated Net Worth to be less
than the sum of (a) $588,046,000 plus (b) 50% of the sum of (i) the aggregate
proceeds received by BPC (net of fees and expenses customarily incurred in
transactions of such type) in connection with any offering of stock in BPC and
(ii) the aggregate value of operating units issued by the Borrower in connection
with asset or stock acquisitions (valued at the time of issuance by reference to
the terms of the agreement pursuant to which such units are issued), in each
case after the Closing Date and on or prior to the date such determination of
Consolidated Net Worth is made. For purposes of determining Consolidated Net
Worth for this ss.9.3, Consolidated Market Value shall be adjusted on a
pro-forma basis to account for Real Estate Assets acquired during such prior
fiscal quarter by projecting the Funds from Operations generated by each such
acquired Real Estate Asset for the portion of the quarter during which it was
owned or ground-leased by the Borrower over the entire quarter.
ss.9.4. Unencumbered Assets.
(a) As at the end of any fiscal quarter or any other date of
measurement, the Borrower shall not permit Consolidated Outstanding Recourse
Indebtedness to exceed 60% of the aggregate Asset Value of all Unencumbered
Assets (provided that the maximum contribution that any single Unencumbered
Asset may make toward the aggregate Asset Value of all Unencumbered Assets shall
be limited to 25%).
(b) The Borrower shall not at any time permit (i) the aggregate Asset
Value of all Unencumbered Assets that are Class A and Class B office buildings
to be less than 85% of the aggregate Asset Value of all Unencumbered Assets or
(b) the aggregate Asset Value of all Unencumbered Assets that are Class A office
buildings to be less than 59.5% of the aggregate Asset Value of all Unencumbered
Assets.
(c) For purposes of determining the Asset Value of all Unencumbered
Assets for this ss.9.4, the Net Operating Income of any
<PAGE>
-77-
Unencumbered Asset acquired during such prior fiscal quarter shall be adjusted
on a pro-forma basis by projecting the Net Operating Income generated by each
such acquired Unencumbered Asset for the portion of the quarter during which it
was owned or ground-leased by the Borrower over the entire quarter.
ss.9.5. Cash Flow. As at the end of any fiscal quarter or any other date of
measurement, the Borrower shall not permit the sum of (a) Consolidated Cash Flow
minus (b) Annual Unfunded Capital Expenditure Reserve (appropriately prorated to
reflect the Borrower's pro rata interest in any Real Estate Asset owned or
ground-leased by a Partially-Owned Real Estate Holding Entity) to be less than 2
times Consolidated Debt Service, based on the results of the most recent one (1)
completed fiscal quarter annualized. For purposes of this ss.9.5, Consolidated
Cash Flow, Annual Unfunded Capital Expenditure Reserve and Consolidated Debt
Service shall each be adjusted on a proforma basis to account for Real Estate
Assets acquired during such prior fiscal quarter by projecting the results
generated by each such acquired Real Estate Asset for the portion of the quarter
during which it was owned or ground-leased by the Borrower over the entire
quarter.
ss.9.6. Unencumbered Asset Debt Service Coverage. As at the end of any
fiscal quarter or any other date of measurement, the Borrower shall not permit
Consolidated Unencumbered Asset Cash Flow to be less than 1.50 times
Consolidated Unsecured Debt Service Charges, based on the results of the most
recent one (1) completed fiscal quarter annualized. For purposes of this ss.9.6,
Consolidated Unencumbered Asset Cash Flow and Consolidated Unsecured Debt
Service Charges shall each be adjusted on a proforma basis to account for Real
Estate Assets acquired during such prior fiscal quarter by projecting the
results generated by each such acquired Real Estate Asset for the portion of the
quarter during which it was owned or ground-leased by the Borrower over the
entire quarter.
ss.9.7. Assets Under Development. The Borrower shall not permit the sum
of (a) the aggregate remaining Budgeted Project Costs to complete all Real
Estate Assets under Development plus (b) Consolidated Outstanding Recourse
Indebtedness to exceed 75% of the aggregate Asset Value of all Unencumbered
Assets. For purposes of determining the Asset Value of all Unencumbered Assets
for this ss.9.7, the Net Operating Income of any Unencumbered Asset acquired
during such prior fiscal quarter shall be adjusted on a pro-forma basis by
projecting the Net Operating Income generated by each such acquired Unencumbered
Asset for the portion of the quarter during which it was owned or ground-leased
by the Borrower over the entire quarter.
<PAGE>
-78-
ss.9.8. Covenant Calculations.
(a) For purposes of the calculations to be made pursuant to ss.ss.9.1,
9.2, 9.3, 9.4, 9.5, 9.6 and 9.7 (and the defined terms relevant thereto,
including, without limitation, those relating to "debt service"), references to
Indebtedness of the Borrower shall:
(i) mean Indebtedness of the Borrower, plus (but without
double-counting):
(A) all Indebtedness of the Operating Subsidiaries, the
Guarantors and any other wholly-owned Subsidiary (excluding any such
Indebtedness owed to the Borrower or any Guarantor; provided that, as
to BPC, BPC has a corresponding Indebtedness to the Borrower),
(B) all Indebtedness of each Partially-Owned Real Estate Holding
Entity, but only to the extent, if any, that said Indebtedness is
Recourse to any of the Credit Parties or any of their respective
assets (other than their respective interests in such Partially-Owned
Real Estate Holding Entity), and
(C) Indebtedness of each Partially-Owned Real Estate Holding
Entity to the extent of the pro-rata share of such Indebtedness
allocable to any of the Credit Parties, if the Indebtedness of such
Partially-Owned Real Estate Holding Entity is Without Recourse to such
Person or its assets (other than its interest in such Partially-Owned
Real Estate Holding Entity).
(ii) exclude (to the extent otherwise includable in the
definition of "Indebtedness") (A) all unsecured liabilities for trade payables
incurred in the ordinary course of business and which are not overdue for more
than sixty (60) days, (B) other accrued current liabilities that are not yet due
and payable and (C) contingent liabilities, other than contingent liabilities in
respect of obligations for borrowed money or in respect of other fixed liquid
obligations.
(b) For purposes of any calculations to be made pursuant to any of the
covenants contained in this ss.9 and the defined terms used herein, (i) each
wholly-owned Subsidiary and Center Plaza Associates shall be treated for all
purposes as if their assets, liabilities and operations were owned directly by
the Borrower (provided, however, for the purpose of determining the amount of
Consolidated Outstanding Recourse Indebtedness under Sections 9.4 and 9.7, the
Indebtedness of a wholly-owned Subsidiary which is not a Credit Party shall not
constitute Recourse Indebtedness of the Borrower) and (ii) references to
<PAGE>
-79-
Indebtedness of the Borrower shall not include the Center Plaza Subordinate
Debt, the Rowes Wharf Debt, the Russia Wharf Debt, or the South Station Debt.
(c) The Agent shall have the right to treat Center Plaza as not 100%
owned by the Borrower and/or to adjust, in its sole discretion, the Asset Value
thereof (including, without limitation, to exclude entirely from the
calculations to be made pursuant to the covenants contained in this ss.9 both
the Asset Value thereof and the Without Recourse Indebtedness on Center Plaza
owed to CIGNA or any other lender) in the event that (i) the Borrower ceases to
own at least a 75% limited partnership interest in Center Plaza Associates and
either the remaining 24% limited partnership interest therein or an option to
purchase such interest pursuant to the Center Plaza Option Agreement (Limited
Partnership Interest), (ii) the entire 1% general partner interest in Center
Plaza Associates ceases to be beneficially owned in its entirety by the Borrower
and/or BPC, or (iii) the Borrower ceases to own the Center Plaza Subordinate
Debt Interests (as hereinafter defined). For purposes of the preceding sentence,
the Borrower will be considered the owner of the Center Plaza Subordinate Debt
Interests even though the Borrower has pledged the same to CIGNA (the "CIGNA
Pledge") as collateral security for CIGNA's first mortgage loan on Center Plaza
(the "CIGNA Center Plaza Mortgage") unless and until (x) CIGNA or its assignee
forecloses on the CIGNA Pledge, (y) the Center Plaza Subordinate Debt Interests
are transferred to CIGNA or its assignee, or (z) CIGNA or its assignee commences
any other creditors' rights action against the Borrower or Center Plaza
Associates which results or may result in the Borrower not being the owner of
the Center Plaza Subordinate Debt Interests. As used herein, the "Center Plaza
Subordinate Debt Interests" shall mean (A) the Center Plaza First Tier Notes,
(B) the Center Plaza Beacon Note and (C) either the option to acquire the Center
Plaza Second Tier Note pursuant to the Center Plaza Option Agreement (Second
Tier Notes) or, if such option is exercised, the Center Plaza Second Tier Note
itself.
ss.10. [INTENTIONALLY OMITTED.]
ss.11. CONDITIONS TO THE CLOSING DATE. The obligations of the Banks to make
the initial Revolving Credit Loans and of the Fronting Bank to issue any initial
Letters of Credit shall be subject to the satisfaction of the following
conditions precedent on or prior to April 8, 1997:
ss.11.1. Loan Documents. Each of the Loan Documents shall have been duly
executed and delivered by the respective parties thereto and shall be in full
force and effect.
ss.11.2. Certified Copies of Organization Documents. The Agent shall have
received (i) from the Borrower a copy, certified as of a recent date by a duly
<PAGE>
-80-
authorized officer of BPC, in its capacity as general partner of the Borrower,
to be true and complete, of the Agreement of Limited Partnership of the Borrower
and any other agreement governing the rights of the partners of the Borrower,
(ii) from BPC a copy, certified as of a recent date by the appropriate officer
of the State of Maryland to be true and correct, of the corporate charter of the
BPC, (iii) from 1333 a copy, certified as of a recent date by a duly authorized
officer of BPC to be true and complete, of the 1333 Agreement of Limited
Partnership and any other agreement governing the rights of the partners of
1333, (iv) from Burlington a copy, certified as of a recent date by a duly
authorized officer of BPC to be true and complete, of the Burlington Agreement
of Limited Partnership and any other agreement governing the rights of the
partners of Burlington, in each case along with any other organization documents
of the Borrower or such Guarantor and their respective general partners, as the
case may be, and each as in effect on the date of such certification.
ss.11.3. By-laws; Resolutions. All action on the part of the Borrower and
each present Guarantor necessary for the valid execution, delivery and
performance by the Borrower and such Guarantor of this Agreement and the other
Loan Documents to which either of them is or is to become a party shall have
been duly and effectively taken, and evidence thereof satisfactory to the Banks
shall have been provided to the Agent. The Agent shall have received from BPC
true copies of its by-laws and the resolutions adopted by its board of directors
authorizing the transactions described herein and evidencing the due
authorization, execution and delivery of the Loan Documents to which BPC and/or
the Borrower and/or 1333 and/or Burlington is a party, each certified by the
secretary as of a recent date to be true and complete.
ss.11.4. Incumbency Certificate; Authorized Signers. The Agent shall have
received from BPC an incumbency certificate, dated as of the Closing Date,
signed by a duly authorized officer of BPC and giving the name of each
individual who shall be authorized: (a) to sign, in the name and on behalf of
the Borrower, 1333, Burlington and BPC, as the case may be, each of the Loan
Documents to which the Borrower, 1333, Burlington or BPC is or is to become a
party; (b) to make Loan and Conversion Requests on behalf of the Borrower; and
(c) to give notices and to take other action on behalf of the Borrower, 1333,
Burlington or BPC, as applicable, under the Loan Documents.
ss.11.5. Title Policies. The Agent (on behalf of the Banks) shall have
received the Title Policies for all Real Estate Assets which are Unencumbered
Assets as of the Closing Date.
ss.11.6. Certificates of Insurance. The Agent shall have received (a)
current certificates of insurance as to all of the insurance maintained by
Borrower on the Unencumbered Assets (including flood insurance if necessary)
<PAGE>
-81-
from the insurer or an independent insurance broker, identifying insurers, types
of insurance, insurance limits, and policy terms; and (b) such further
information and certificates from Borrower, its insurers and insurance brokers
as the Agent may reasonably request.
ss.11.7. Opinion of Counsel Concerning Organization and Loan Documents.
Each of the Banks and the Agent shall have received favorable opinions addressed
to the Banks and the Agent in form and substance satisfactory to the Banks and
the Agent from Goodwin, Procter and Hoar LLP and/or Goulston & Storrs, P.C., as
counsel to the Borrower, the present Guarantors and their respective
subsidiaries with respect to Massachusetts law and certain matters of Delaware
law and Goodwin, Procter and Hoar LLP, as counsel to BPC, with respect to
Maryland law.
ss.11.8. [Intentionally Omitted].
ss.11.9. Tax and Securities Law Compliance. Each of the Banks and the Agent
shall also have received from Goodwin, Procter & Hoar LLP, as counsel to the
Borrower and BPC, a favorable opinion addressed to the Banks and the Agent, in
form and substance satisfactory to each of the Banks and the Agent, with respect
to the qualification of BPC as a REIT and certain other tax matters.
ss.11.10. Guaranties. Each of the Guaranties shall have been duly executed
and delivered by the Guarantor thereunder.
ss.11.11. Interest Rate Protection. The Agent shall have received evidence
satisfactory to the Agent that the Borrower has obtained interest rate
protection arrangements in accordance with the requirements set forth in ss.7.16
hereof.
ss.11.12. Financial Analysis of Unencumbered Assets. Each of the Banks
shall have completed, to its satisfaction, a financial analysis of each
Unencumbered Asset, which analysis shall include, without limitation, a review,
with respect to each Unencumbered Asset, of (i) the most recent rent rolls, (ii)
three (3) year historical and projected operating statements, (iii) cash flow
projections, (iv) capital expenditure budgets (which shall be subject to the
review and approval of each of the Banks), (v) market data, (vi) selected
Leases, and (vii) tenant financial statements, to the extent available. The
costs and expenses incurred by each Bank in conducting such analysis shall be
borne by such Bank; provided that the Borrower will furnish such materials to
the Banks at the Borrower's expense. The Borrower agrees that at the request of
any Bank it will furnish the materials described in this ss.11.12 to such Bank
after the Closing Date.
<PAGE>
-82-
ss.11.13. Inspection of Unencumbered Assets. The Agent shall have completed
to its satisfaction, and at the Borrower's expense, an inspection of the
Unencumbered Assets which the Agent has not inspected in the one (1) year period
prior to the Closing Date.
ss.11.14. Certifications from Government Officials; UCC-11 Reports. The
Agent shall have received (i) long-form certifications from government officials
evidencing the legal existence, good standing and foreign qualification of the
Borrower and each Guarantor, along with a certified copy of the certificate of
limited partnership of each of the Borrower, 1333 and Burlington, all as of the
most recent practicable date; and (ii) UCC-11 search results from the
appropriate jurisdictions for the Borrower and each Guarantor with respect to
the Unencumbered Assets.
ss.11.15. Proceedings and Documents. All proceedings in connection with the
transactions contemplated by this Agreement, the other Loan Documents and all
other documents incident thereto shall be satisfactory in form and substance to
each of the Banks and to the Agent's counsel, and the Agent, each of the Banks
and such counsel shall have received all information and such counterpart
originals or certified or other copies of such documents as the Agent may
reasonably request.
ss.11.16. Fees. The Borrower shall have paid to the Agent, for the accounts
of the Banks or for its own account, as applicable, all of the fees and expenses
that are due and payable as of the Closing Date in accordance with this
Agreement.
ss.11.17. Closing Certificate; Compliance Certificate. The Borrower shall
have delivered a Closing Certificate to the Agent, the form of which is attached
hereto as Exhibit E. The Borrower shall have delivered a compliance certificate
in the form of Exhibit D hereto evidencing compliance with the covenants set
forth in ss.9 hereof on a pro forma basis.
ss.11.18. Capital Reserves. The Borrower shall have delivered and the Agent
shall have approved initial schedules of the Annual Unfunded Capital Expenditure
Reserve covering the 1997 fiscal year.
ss.11.19. Partnership Documents. The Agent shall have received from the
Borrower true copies of all Partnership Documents.
ss.11.20. Existing Indebtedness. The existing indebtedness of the Borrower
to the Banks under the Restated Revolving Credit Agreement dated as of June 27,
1996 among the Borrower, the Guarantors, certain of the Banks and the Agent (the
"Existing Agreement") shall have been satisfied in full.
<PAGE>
-83-
ss.11.21. Release Documents. The Agent shall have delivered to the Borrower
appropriate release documentation necessary to release all security interests
granted by the Borrower, BPC, 1333 or Burlington in its properties and assets,
including, without limitation, appropriate releases of mortgages and deeds of
trust and UCC termination statements, and shall have made satisfactory
arrangements for the return of the promissory notes issued under the Existing
Agreement described in ss.11.20.
ss.11.22. Subsequent Guarantors. As a condition to the effectiveness of any
subsequent Guaranty, each subsequent Guarantor shall deliver such documents,
agreements, instruments and opinions as the Agent shall require as to such
Guarantor and the Unencumbered Asset owned or ground-leased by such Guarantor
that are analogous to the deliveries made by the Guarantors as of the Closing
Date pursuant to ss.11.2 through ss.11.7, ss.11.10 and ss.11.14(i).
ss.12. CONDITIONS TO ALL BORROWINGS. The obligations of the Banks to make
any Loan and of any Bank to issue, extend or renew any Letter of Credit, in each
case, whether on or after the Closing Date, shall also be subject to the
satisfaction of the following conditions precedent:
ss.12.1. Representations True; No Event of Default; Compliance Certificate.
Each of the representations and warranties of the Borrower and the Guarantors
contained in this Agreement, the other Loan Documents or in any document or
instrument delivered pursuant to or in connection with this Agreement shall be
true as of the date as of which they were made and shall also be true at and as
of the time of the making of each Loan or the issuance, extension or renewal of
each Letter of Credit, with the same effect as if made at and as of that time
(except to the extent of changes resulting from transactions contemplated or not
prohibited by this Agreement or the other Loan Documents (including, without
limitation, the fact that a Real Estate Asset may cease to be an Unencumbered
Asset pursuant to the terms of this Agreement) and changes occurring in the
ordinary course of business, and except to the extent that such representations
and warranties relate expressly to an earlier date and except to the extent
otherwise represented by the Borrower with respect to the representation set
forth in ss.6.10); and no Default or Event of Default under this Agreement shall
have occurred and be continuing on the date of any Loan Request or on the
Drawdown Date of any Loan. Each of the Banks shall have received a certificate
of the Borrower signed by an authorized officer of the Borrower as provided in
ss.2.6(iv)(c).
<PAGE>
-84-
ss.12.2. No Legal Impediment. No change shall have occurred in any law or
regulations thereunder or interpretations thereof that in the reasonable opinion
of the Agent or any Bank would make it illegal for any Bank to make such Loan or
to participate in the issuance, extension or renewal of such Letter of Credit
or, in the reasonable opinion of the Agent, would make it illegal to issue,
extend or renew such Letter of Credit.
ss.12.3. Governmental Regulation. Each Bank shall have received such
statements in substance and form reasonably satisfactory to such Bank as such
Bank shall require for the purpose of compliance with any applicable regulations
of the Comptroller of the Currency or the Board of Governors of the Federal
Reserve System.
ss.13. EVENTS OF DEFAULT; ACCELERATION; ETC.
ss.13.1. Events of Default and Acceleration. If any of the following events
("Events of Default") shall occur:
(a) the Borrower shall fail to pay any principal of the Loans when
the same shall become due and payable;
(b) the Borrower shall fail to pay any interest on the Loans or any
other sums due hereunder or under any of the other Loan Documents (including,
without limitation, amounts due under ss.7.17) when the same shall become due
and payable, and such failure continues for three (3) days (provided that in the
case of such sums due other than for interest, the Borrower shall have received
from the Agent notice of the nature and amount of such other amounts and that
payment therefor is due);
(c) the Borrower or any Guarantor shall fail to comply with any of
their respective covenants contained in ss.7.1 (except with respect to interest
and other sums covered by clause (b) above), ss.7.6 (as to the legal existence
of the Borrower, 1333 or Burlington and any future Guarantor), ss.7.7 (as to the
legal existence and REIT status of BPC), ss.7.12, ss.7.16, ss.7.22, ss.8.1,
ss.8.2 (pertaining to liens, mortgages, pledges, attachments or other security
interests with respect to Unencumbered Assets), ss.8.4 and ss.8.7;
(d) the Borrower or any Guarantor shall fail to comply with any of
their respective covenants contained in ss.7.5, ss.7.8, ss.7.9, ss.7.14,
ss.7.18, ss.8.2 (other than pertaining to liens, mortgages, pledges, attachments
or other security interests with respect to Unencumbered Assets), ss.8.6
(subject to the limitation set forth in ss.8.6) and ss.9 and such failure
continues for thirty (30) days; provided, however, that the grace periods within
which the Borrower must cure any failure to comply with any covenants contained
in ss.9 may be extended
<PAGE>
-85-
by an additional fifteen (15) days if prior to the expiration of such initial
thirty (30) day cure period, the Agent determines, in its reasonable discretion,
that the Borrower is diligently pursuing a cure;
(e) the Borrower or any of its Subsidiaries or any Guarantor shall
fail to perform any other term, covenant or agreement contained herein
(including the covenants in ss.7.6 and ss.7.7 not covered in (c) above) or in
any of the other Loan Documents (other than those specified elsewhere in this
ss.13) for thirty (30) days after written notice of such failure from the Agent
to the Borrower; provided, however that, with respect to the covenants contained
in ss.ss.7.2, 7.6 (other than as covered in (c) above), 7.7 (other than as
covered in (c) above), 7.11, 7.13, 7.15, 7.19, 7.20 and 7.21, if (i) the failure
to perform is capable of being cured by the Borrower but not within such thirty
(30) day period, (ii) no enforcement action has been commenced by a third party
against the Borrower, any Guarantor or any related Unencumbered Asset on account
of such failure to perform nor is such Unencumbered Asset subject to risk of
forfeiture to a third party due to such failure to perform, and (iii) the
Borrower promptly commences the cure thereof after the Borrower's receipt of
such notice from the Agent, the Borrower shall have such additional period of
time as may be reasonably required in order to cure such failure to perform but
in any event such period shall not exceed six (6) months from the date of notice
from the Agent, and no Event of Default shall exist under this ss.13.1(e) during
such additional period so long as the Borrower continuously and diligently
pursues the cure of such failure to perform and the other conditions to extended
cure (i.e., no enforcement action, forfeiture, etc.) have not changed;
(f) any representation or warranty of the Borrower or any Guarantor in
this Agreement or any of the other Loan Documents or in any other document or
instrument delivered pursuant to or in connection with this Agreement shall
prove to have been false in any material respect upon the date when made or
deemed to have been made or repeated, provided, however that, with respect to
the representations and warranties contained in ss.6.6, ss.6.9, ss.6.16, and
ss.6.18, if (i) the condition or event making the representation and warranty
false is capable of being cured by the Borrower, (ii) no enforcement action has
been commenced by a third party against the Borrower or any related Unencumbered
Asset on account of such condition or event nor is such Unencumbered Asset
subject to risk of forfeiture to a third party due to such condition or event,
and (iii) the Borrower promptly commences the cure thereof after the Borrower's
first obtaining knowledge of such condition or event, the Borrower shall have a
period of thirty (30) days after the date that the Borrower first obtained
knowledge of such condition or event during which the Borrower may cure such
condition or event (or, if such condition or event is not reasonably capable of
being cured within such thirty (30) day period, such additional period of time
as may be reasonably required in order to cure such condition or event
<PAGE>
-86-
but in any event such period shall not exceed six (6) months from the date that
the Borrower first obtained knowledge of such condition or event), and no Event
of Default shall exist under this ss.13.1(f) during such thirty (30) day or
additional period so long as the Borrower continuously and diligently pursues
the cure of such condition or event and the other conditions to cure (i.e., no
enforcement action, forfeiture, etc.) have not changed;
(g) the Borrower or any Guarantor or any of their respective
Subsidiaries shall fail to pay at maturity, or within any applicable period of
grace, any obligation for borrowed money or credit received or in respect of any
Capitalized Leases (other than non-recourse obligations or credit) in an
aggregate amount in excess of $1,000,000, or fail to observe or perform any
material term, covenant or agreement contained in any agreement by which it is
bound relating to such recourse obligations, evidencing or securing borrowed
money or credit received or in respect of any Capitalized Leases for such period
of time (after the giving of appropriate notice if required) as would permit the
holder or holders thereof or of any obligations issued thereunder aggregating in
excess of $1,000,000 to accelerate the maturity thereof; or the Borrower, any
Guarantor or any of their respective Subsidiaries shall fail to pay, observe or
perform any material term, covenant, condition or agreement contained in any
agreement, document or instrument evidencing, securing or otherwise relating to
any Indebtedness of the Borrower within any applicable period of grace provided
for in such agreement, document or instrument (other than (i) the Obligations,
(ii) Indebtedness which is Without Recourse to any of the Credit Parties, and
(iii) other Indebtedness, in the aggregate, not in excess of $1,000,000);
(h) any of the Credit Parties shall make an assignment for the benefit
of creditors, or admit in writing its inability to pay or generally fail to pay
its debts as they mature or become due, or shall petition or apply for the
appointment of a trustee or other custodian, liquidator or receiver of any of
the Credit Parties or of any substantial part of the properties or assets of any
of the Credit Parties or shall commence any case or other proceeding relating to
any of the Credit Parties under any bankruptcy, reorganization, arrangement,
insolvency, readjustment of debt, dissolution or liquidation or similar law of
any jurisdiction, now or hereafter in effect, or shall take any action to
authorize or in furtherance of any of the foregoing, or if any such petition or
application shall be filed or any such case or other proceeding shall be
commenced against any of the Credit Parties and (i) any of the Credit Parties
shall indicate its approval thereof, consent thereto or acquiescence therein or
(ii) any such petition, application, case or other proceeding shall continue
undismissed, or unstayed and in effect, for a period of ninety (90) days;
<PAGE>
-87-
(i) a decree or order is entered appointing any trustee, custodian,
liquidator or receiver or adjudicating any of the Credit Parties bankrupt or
insolvent, or approving a petition in any such case or other proceeding, or a
decree or order for relief is entered in respect of any of the Credit Parties in
an involuntary case under federal bankruptcy laws as now or hereafter
constituted;
(j) there shall remain in force, undischarged, unsatisfied and
unstayed, for more than thirty (30) days, whether or not consecutive, any
uninsured final judgment against any of the Credit Parties that, with other
outstanding uninsured final judgments, undischarged, unsatisfied and unstayed,
against any of the Credit Parties exceeds in the aggregate $1,000,000;
(k) any of the Loan Documents or any material provision of any Loan
Documents shall be cancelled, terminated, revoked or rescinded otherwise than in
accordance with the terms thereof or with the express prior written agreement,
consent or approval of the Agent or any Guaranty shall be cancelled, terminated,
revoked or rescinded at any time or for any reason whatsoever, or any action at
law, suit or in equity or other legal proceeding to make unenforceable, cancel,
revoke or rescind any of the Loan Documents shall be commenced by or on behalf
of the Borrower or any of its Subsidiaries or any Guarantor or any of its
Subsidiaries, or any court or any other governmental or regulatory authority or
agency of competent jurisdiction shall make a determination that, or issue a
judgment, order, decree or ruling to the effect that, any one or more of the
Loan Documents is illegal, invalid or unenforceable as to any material terms
thereof;
(l) [Intentionally Omitted];
(m) any "Event of Default" or default (after notice and expiration of
any period of grace, to the extent provided, and if none is specifically
provided, then for a period of thirty (30) days after notice), as defined or
provided in any of the other Loan Documents, shall occur and be continuing;
(n) with respect to any Guaranteed Pension Plan, an ERISA Reportable
Event shall have occurred and the Majority Banks shall have determined in their
reasonable discretion that such event reasonably could be expected to result in
liability of the Borrower or any of its Subsidiaries or any Guarantor or any of
its Subsidiaries to the PBGC or such Guaranteed Pension Plan in an aggregate
amount exceeding $1,000,000 and such event in the circumstances occurring
reasonably could constitute grounds for the termination of such Guaranteed
Pension Plan by the PBGC or for the appointment by the appropriate United
<PAGE>
-88-
States District Court of a trustee to administer such Guaranteed Pension Plan;
or a trustee shall have been appointed by the United States District Court to
administer such Plan; or the PBGC shall have instituted proceedings to terminate
such Guaranteed Pension Plan;
(o) [Intentionally Omitted];
(p) [Intentionally Omitted];
(q) [Intentionally Omitted];
(r) the occurrence of any of the events described in ss.28(b)(i) or
(ii) below; or
(s) the occurrence of a breach or default under ss.7.25 (Management)
hereof which remains uncured for the ninety (90) day period provided for
therein;
then, and in any such event, so long as the same may be continuing, the Agent
may, and upon the request of the Majority Banks shall, by notice in writing to
the Borrower, declare all amounts owing with respect to this Agreement, the
Revolving Credit Notes and the other Loan Documents and all Reimbursement
Obligations to be, and they shall thereupon forthwith become, immediately due
and payable without presentment, demand, protest or other notice of any kind,
all of which are hereby expressly waived by the Borrower and each Guarantor;
provided that in the event of any Event of Default specified in ss.13.1(h) or
13.1(i), all such amounts shall become immediately due and payable automatically
and without any requirement of notice from any of the Banks or the Agent or
action by the Banks or the Agent.
ss.13.2. Termination of Commitments. If any one or more Events of Default
specified in ss.13.1(h) or ss.13.1(i) shall occur, any unused portion of the
Commitments hereunder shall forthwith terminate and the Banks shall be relieved
of all obligations to make Loans to the Borrower and the Agent and any Fronting
Bank shall be relieved of all further obligations to issue, extend or renew
Letters of Credit. If any other Event of Default shall have occurred and be
continuing, whether or not the Banks shall have accelerated the maturity of the
Loans pursuant to ss.13.1, any Bank may, by notice to the Borrower, terminate
the unused portion of that Bank's Commitment hereunder, and upon such notice
being given such unused portion of such Commitment shall terminate immediately,
such Bank shall be relieved of all further obligations to make Loans, the Agent
and any Fronting Bank shall be relieved of all further obligations to issue,
extend or renew Letters of Credit and the Total Commitments shall be reduced
accordingly. No such termination of a Commitment hereunder shall relieve the
Borrower of any of the Obligations or
<PAGE>
-89-
any of its existing obligations to such Bank arising under other agreements or
instruments.
ss.13.3. Remedies. In the event that one or more Events of Default shall
have occurred and be continuing, whether or not the Banks shall have accelerated
the maturity of the Loans pursuant to ss.13.1, the Majority Banks may direct the
Agent to proceed to protect and enforce the rights and remedies of the Agent and
the Banks under this Agreement, the Revolving Credit Notes, any or all of the
other Loan Documents or under applicable law by suit in equity, action at law or
other appropriate proceeding (including for the specific performance of any
covenant or agreement contained in this Agreement or the other Loan Documents or
any instrument pursuant to which the Obligations are evidenced and, to the full
extent permitted by applicable law, the obtaining of the ex parte appointment of
a receiver), and, if any amount shall have become due, by declaration or
otherwise, proceed to enforce the payment thereof or any other legal or
equitable right or remedy of the Agent and the Banks under the Loan Documents or
applicable law. No remedy herein conferred upon the Banks or the Agent or the
holder of any Revolving Credit Note or purchaser of any Letter of Credit
Participation is intended to be exclusive of any other remedy and each and every
remedy shall be cumulative and shall be in addition to every other remedy given
hereunder or under any of the other Loan Documents or now or hereafter existing
at law or in equity or by statute or any other provision of law.
ss.14. SETOFF. Without demand or notice, during the continuance of any
Event of Default, any deposits in any Operating Account (general or specific,
time or demand, provisional or final, regardless of currency, maturity, or the
branch at which such deposits are held, but specifically excluding tenant
security deposits, other fiduciary accounts and other segregated escrow accounts
required to be maintained by the Borrower for the benefit of any third party in
connection with any Unencumbered Asset) in the possession of the Agent or a Bank
may be applied to or set off against the payment of the Obligations. Neither the
Agent nor any of the Banks shall have any right of set-off or the like with
respect to the Obligations against any other accounts of the Borrower, any
Guarantor, their respective Subsidiaries or any Partially-Owned Real Estate
Holding Entity, all such rights of set-off and the like being hereby waived by
the Agent and the Banks, excepting only the Agent's right of set-off with
respect to the Operating Accounts set forth in the preceding sentence. Each of
the Banks agrees with each other Bank that (a) if pursuant to any agreement
between such Bank and the Borrower (other than this Agreement or any other Loan
Document), an amount to be set off is to be applied to Indebtedness of the
Borrower to such Bank, other than with respect to the Obligations, such amount
shall be applied ratably to such other Indebtedness and to the Obligations, and
(b) if such Bank shall receive from the Borrower, whether by voluntary payment,
<PAGE>
-90-
exercise of the right of setoff, counterclaim, cross action, enforcement of the
Obligations by proceedings against the Borrower at law or in equity or by proof
thereof in bankruptcy, reorganization, liquidation, receivership or similar
proceedings, or otherwise, and shall retain and apply to the payment of the
Revolving Credit Note or Revolving Credit Notes held by, or Reimbursement
Obligations owed to, such Bank any amount in excess of its ratable portion of
the payments received by all of the Banks with respect to the Revolving Credit
Notes held by, and Reimbursement Obligations owed to, all of the Banks, such
Bank will make such disposition and arrangements with the other Banks with
respect to such excess, either by way of distribution, pro tanto assignment of
claims, subrogation or otherwise, as shall result in each Bank receiving in
respect of the Revolving Credit Notes held by it or Reimbursement Obligations
owed it, its proportionate payment as contemplated by this Agreement; provided
that if all or any part of such excess payment is thereafter recovered from such
Bank, such disposition and arrangements shall be rescinded and the amount
restored to the extent of such recovery, but without interest. Notwithstanding
the foregoing, no Bank shall exercise a right of setoff if such exercise would
limit or prevent the exercise of any other remedy or other recourse against the
Borrower.
ss.15. THE AGENT.
ss.15.1. Authorization. (a) The Agent is authorized to take such action on
behalf of each of the Banks and to exercise all such powers as are hereunder and
under any of the other Loan Documents and any related documents delegated to the
Agent, together with such powers as are reasonably incident thereto, provided
that no duties or responsibilities not expressly assumed herein or therein shall
be implied to have been assumed by the Agent. The relationship between the Agent
and the Banks is and shall be that of agent and principal only, and nothing
contained in this Agreement or any of the other Loan Documents shall be
construed to constitute the Agent as a trustee or fiduciary for any Bank.
(b) The Borrower, without further inquiry or investigation, shall,
and is hereby authorized by the Banks to, assume that all actions taken by the
Agent hereunder and in connection with or under the Loan Documents are duly
authorized by the Banks. The Banks shall notify Borrower of any successor to
Agent by a writing signed by Majority Banks, which successor shall be reasonably
acceptable to the Borrower so long as no Default or Event of Default has
occurred and is continuing. The Borrower acknowledges that any Bank which
acquires Bank of Boston or any Bank with a Commitment of at least $50,000,000
and an office in Boston, Massachusetts is acceptable as a successor to the
Agent.
<PAGE>
-91-
ss.15.2. Employees and Agents. The Agent may exercise its powers and
execute its duties by or through employees or agents and shall be entitled to
take, and to rely on, advice of counsel concerning all matters pertaining to its
rights and duties under this Agreement and the other Loan Documents. The Agent
may utilize the services of such Persons as the Agent in its sole discretion may
reasonably determine, and all reasonable fees and expenses of any such Persons
shall be paid by the Borrower.
ss.15.3. No Liability. Neither the Agent, nor any of its shareholders,
directors, officers or employees nor any other Person assisting them in their
duties nor any agent or employee thereof, shall be liable for any waiver,
consent or approval given or any action taken, or omitted to be taken, in good
faith by it or them hereunder or under any of the other Loan Documents, or in
connection herewith or therewith, or be responsible for the consequences of any
oversight or error of judgment whatsoever, except that the Agent may be liable
for losses due to its willful misconduct or gross negligence.
ss.15.4. No Representations. The Agent shall not be responsible for the
execution or validity or enforceability of this Agreement, the Revolving Credit
Notes, the Letters of Credit, or any of the other Loan Documents or for the
validity, enforceability or collectibility of any such amounts owing with
respect to the Revolving Credit Notes, or for any recitals or statements,
warranties or representations made herein or in any of the other Loan Documents
or in any certificate or instrument hereafter furnished to it by or on behalf of
any Guarantor or the Borrower or any of their respective Subsidiaries, or be
bound to ascertain or inquire as to the performance or observance of any of the
terms, conditions, covenants or agreements in this Agreement or the other Loan
Documents. The Agent shall not be bound to ascertain whether any notice,
consent, waiver or request delivered to it by the Borrower or any Guarantor or
any holder of any of the Revolving Credit Notes shall have been duly authorized
or is true, accurate and complete. The Agent has not made nor does it now make
any representations or warranties, express or implied, nor does it assume any
liability to the Banks, with respect to the credit worthiness or financial
condition of the Borrower or any of its Subsidiaries or any Guarantor or any of
the Subsidiaries or any tenant under a Lease or any other entity. Each Bank
acknowledges that it has, independently and without reliance upon the Agent or
any other Bank, and based upon such information and documents as it has deemed
appropriate, made its own credit analysis and decision to enter into this
Agreement.
ss.15.5. Payments.
(a) A payment by the Borrower to the Agent hereunder or any of the
other Loan Documents for the account of any Bank shall constitute a
<PAGE>
-92-
payment to such Bank. The Agent agrees to distribute to each Bank such Bank's
pro rata share of payments received by the Agent for the account of the Banks,
as provided herein or in any of the other Loan Documents. All such payments
shall be made on the date received, if before 1:00 p.m., and if after 1:00 p.m.,
on the next Business Day. If payment is not made on the day received, the funds
shall be invested by the Agent in overnight obligations, and interest thereon
paid pro rata to the Banks.
(b) If in the reasonable opinion of the Agent the distribution of any
amount received by it in such capacity hereunder, under the Revolving Credit
Notes or under any of the other Loan Documents might involve it in material
liability, it may refrain from making distribution until its right to make
distribution shall have been adjudicated by a court of competent jurisdiction,
provided that the Agent shall invest any such undistributed amounts in overnight
obligations on behalf of the Banks and interest thereon shall be paid pro rata
to the Banks. If a court of competent jurisdiction shall adjudge that any amount
received and distributed by the Agent is to be repaid, each Person to whom any
such distribution shall have been made shall either repay to the Agent its
proportionate share of the amount so adjudged to be repaid or shall pay over the
same in such manner and to such Persons as shall be determined by such court.
(c) Notwithstanding anything to the contrary contained in this
Agreement or any of the other Loan Documents, any Bank that fails (i) to make
available to the Agent its pro rata share of any Loan or to purchase any Letter
of Credit Participation or (ii) to comply with the provisions of ss.14 with
respect to making dispositions and arrangements with the other Banks, where such
Bank's share of any payment received, whether by setoff or otherwise, is in
excess of its pro rata share of such payments due and payable to all of the
Banks, in each case as, when and to the full extent required by the provisions
of this Agreement, or to adjust promptly such Bank's outstanding principal and
its pro rata Commitment Percentage as provided in ss.2.1, shall be deemed
delinquent (a "Delinquent Bank") and shall be deemed a Delinquent Bank until
such time as such delinquency is satisfied. A Delinquent Bank shall be deemed to
have assigned any and all payments due to it from the Borrower, whether on
account of outstanding Loans, interest, fees or otherwise, to the remaining
nondelinquent Banks for application to, and reduction of, their respective pro
rata shares of all outstanding Loans. The Delinquent Bank hereby authorizes the
Agent to distribute such payments to the nondelinquent Banks in proportion to
their respective pro rata shares of all outstanding Loans. If not previously
satisfied directly by the Delinquent Bank, a Delinquent Bank shall be deemed to
have satisfied in full a delinquency when and if, as a result of application of
the assigned payments to all outstanding Loans of the nondelinquent Banks, the
Banks' respective pro rata shares of all outstanding Loans have returned to
<PAGE>
-93-
those in effect immediately prior to such delinquency and without giving effect
to the nonpayment causing such delinquency.
ss.15.6. Holders of Revolving Credit Notes. The Agent may deem and treat
the payee of any Revolving Credit Notes or the purchaser of any Letter of Credit
Participation as the absolute owner or purchaser thereof for all purposes hereof
until it shall have been furnished in writing with a different name by such
payee or by a subsequent holder, assignee or transferee.
ss.15.7. Indemnity. The Banks ratably and severally agree hereby to
indemnify and hold harmless the Agent and its Affiliates from and against any
and all claims, actions and suits (whether groundless or otherwise), losses,
damages, costs, expenses (including any expenses for which the Agent has not
been reimbursed by the Borrower as required by ss.16), and liabilities of every
nature and character arising out of or related to this Agreement, the Revolving
Credit Notes, or any of the other Loan Documents or the transactions
contemplated or evidenced hereby or thereby, or the Agent's actions taken
hereunder or thereunder, except to the extent that any of the same shall be
directly caused by the Agent's willful misconduct or gross negligence.
ss.15.8. Agent as Bank. In its individual capacity as a Bank, the Bank of
Boston shall have the same obligations and the same rights, powers and
privileges in respect to its Commitment and the Loans made by it, and as the
holder of any of the Revolving Credit Notes and as the purchaser of any Letter
of Credit Participations, as it would have were it not also the Agent.
ss.15.9. Notification of Defaults and Events of Default. Each Bank
hereby agrees that, upon learning of the existence of a default, Default or an
Event of Default, it shall (to the extent notice has not previously been
provided) promptly notify the Agent thereof. The Agent hereby agrees that upon
receipt of any notice under this ss.15.9 it shall promptly notify the other
Banks of the existence of such default, Default or Event of Default.
ss.15.10. Duties in the Case of Enforcement. In case one or more Events
of Default have occurred and shall be continuing, and whether or not
acceleration of the Obligations shall have occurred, the Agent shall, if (a) so
requested by the Majority Banks and (b) the Banks have provided to the Agent
such additional indemnities and assurances against expenses and liabilities as
the Agent may reasonably request, proceed to enforce the provisions of this
Agreement and exercise all or any such other legal and equitable and other
rights or remedies as it may have in respect of enforcement of the Banks' rights
against the Borrower and the Guarantors under this Agreement and the other Loan
Documents. The Majority Banks may direct the Agent in writing as to the method
and the extent of any such enforcement, the Banks (including any Bank
<PAGE>
-94-
which is not one of the Majority Banks) hereby agreeing to ratably and severally
indemnify and hold the Agent harmless from all liabilities incurred in respect
of all actions taken or omitted in accordance with such directions, provided
that the Agent need not comply with any such direction to the extent that the
Agent reasonably believes the Agent's compliance with such direction to be
unlawful or commercially unreasonable in any applicable jurisdiction.
ss.15.11. Successor Agent. The Bank of Boston, or any successor Agent, may
resign as Agent at any time by giving written notice thereof to the Banks and to
the Borrower. In addition, the Majority Banks may remove the Agent in the event
of the Agent's willful misconduct or gross negligence or in the event that the
Agent ceases to hold a Commitment under this Agreement. Any such resignation or
removal shall be effective upon appointment and acceptance of a successor Agent,
as hereinafter provided. Upon any such resignation or removal, the Majority
Banks shall have the right to appoint a successor Agent, which is a Bank under
this Agreement, provided that so long as no Default or Event of Default has
occurred and is continuing the Borrower shall have the right to approve any
successor Agent, which approval shall not be unreasonably withheld. If, in the
case of a resignation by the Agent, no successor Agent shall have been so
appointed by the Majority Banks and approved by the Borrower, and shall have
accepted such appointment, within thirty (30) days after the retiring Agent's
giving of notice of resignation, then the retiring Agent may, on behalf of the
Banks, appoint any one of the other Banks as a successor Agent, provided such
Bank has an office in the City of Boston from which it will administer the Loan.
The Borrower acknowledges that any Bank which acquires Bank of Boston or any
Bank which has a Commitment of at least $50,000,000 and an office in Boston,
Massachusetts is acceptable as a successor Agent. Upon the acceptance of any
appointment as Agent hereunder by a successor Agent, such successor Agent shall
thereupon succeed to and become vested with all the rights, powers, privileges
and duties of the retiring or removed Agent, and the retiring or removed Agent
shall be discharged from all further duties and obligations as Agent under this
Agreement. After any Agent's resignation or removal hereunder as Agent, the
provisions of this ss.15 shall inure to its benefit as to any actions taken or
omitted to be taken by it while it was Agent under this Agreement. The Agent
agrees that it shall not assign any of its rights or duties as Agent to any
other Person.
ss.15.12. Notices. Any notices or other information required hereunder to
be provided to the Agent (with copies for each Bank) shall be forwarded by the
Agent to each of the Banks on the same day (if practicable) and, in any case, on
the next Business Day following the Agent's receipt thereof.
ss.16. EXPENSES. The Borrower agrees to pay (a) the reasonable costs of
producing and reproducing this Agreement, the other Loan Documents and the
<PAGE>
-95-
other agreements and instruments mentioned herein, (b) the reasonable fees,
expenses and disbursements of the Agent's outside counsel or any local counsel
to the Agent incurred in connection with the preparation, administration or
interpretation of the Loan Documents and other instruments mentioned herein,
each closing hereunder, and amendments, modifications, approvals, consents or
waivers hereto or hereunder, (c) the fees, expenses and disbursements of the
Agent incurred by the Agent in connection with the preparation, administration
or interpretation of the Loan Documents and other instruments mentioned herein,
including, without limitation, the costs incurred by the Agent in connection
with its inspection of the Unencumbered Assets (subject to ss.11.13), and the
fees and disbursements of the Agent's counsel in preparing the documentation,
(d) the fees, costs, expenses and disbursements of the Agent and its Affiliates
incurred in connection with the syndication and/or participations of the Loans,
including, without limitation, travel costs, costs of preparing syndication
materials and photocopying costs, (e) all reasonable expenses (including
reasonable attorneys' fees and costs, which attorneys may be employees of any
Bank or the Agent, and the fees and costs of appraisers, engineers, investment
bankers, surveyors or other experts retained by any Bank or the Agent in
connection with any such enforcement proceedings) incurred by any Bank or the
Agent in connection with (i) the enforcement of or preservation of rights under
any of the Loan Documents against the Borrower or any of its Subsidiaries or any
Guarantor or the administration thereof after the occurrence and during the
continuance of a Default or Event of Default (including, without limitation,
expenses incurred in any restructuring and/or "workout" of the Loans), and (ii)
any litigation, proceeding or dispute whether arising hereunder or otherwise, in
any way related to any Bank's or the Agent's relationship with the Borrower or
any of its Subsidiaries or any Guarantor, (f) all reasonable fees, expenses and
disbursements of the Agent incurred in connection with UCC searches, UCC
terminations or mortgage discharges, and (g) all costs incurred by the Agent in
the future in connection with its inspection of the Unencumbered Assets. The
covenants of this ss.16 shall survive payment or satisfaction of payment of
amounts owing with respect to the Revolving Credit Notes.
ss.17. INDEMNIFICATION. The Borrower agrees to indemnify and hold harmless
the Agent and each of the Banks and the shareholders, directors, agents,
officers, subsidiaries and affiliates of the Agent and each of the Banks from
and against any and all claims, actions and suits, whether groundless or
otherwise, and from and against any and all liabilities, losses, settlement
payments, obligations, damages and expenses of every nature and character,
arising out of this Agreement or any of the other Loan Documents or the
transactions contemplated hereby or thereby or which otherwise arise in
connection with the financing, including, without limitation, (a) any actual or
proposed use by the Borrower or any of its Subsidiaries of the proceeds of any
of
<PAGE>
-96-
the Loans, (b) the Borrower or any of its Subsidiaries or any Guarantor
entering into or performing this Agreement or any of the other Loan Documents,
or (c) pursuant to ss.7.17 hereof, in each case including, without limitation,
the reasonable fees and disbursements of counsel and allocated costs of internal
counsel incurred in connection with any such investigation, litigation or other
proceeding, provided, however, that the Borrower shall not be obligated under
this ss.17 to indemnify any Person for liabilities arising from such Person's
own gross negligence, willful misconduct or breach of this Agreement. In
litigation, or the preparation therefor, the Borrower shall be entitled to
select counsel reasonably acceptable to the Majority Banks, and the Banks (as
approved by the Majority Banks) shall be entitled to select their own
supervisory counsel and, in addition to the foregoing indemnity, the Borrower
agrees to pay promptly the reasonable fees and expenses of each such counsel. If
and to the extent that the obligations of the Borrower under this ss.17 are
unenforceable for any reason, the Borrower hereby agrees to make the maximum
contribution to the payment in satisfaction of such obligations which is
permissible under applicable law. The provisions of this ss.17 shall survive the
repayment of the Loan and the termination of the obligations of the Banks
hereunder and shall continue in full force and effect as long as the possibility
of any such claim, action, cause of action or suit exists.
ss.18. SURVIVAL OF COVENANTS, ETC. All covenants, agreements,
representations and warranties made herein, in the Revolving Credit Notes, in
any of the other Loan Documents or in any documents or other papers delivered by
or on behalf of the Borrower or any of its Subsidiaries or any Guarantor
pursuant hereto shall be deemed to have been relied upon by the Banks and the
Agent, notwithstanding any investigation heretofore or hereafter made by any of
them, and shall survive the making by the Banks of any of the Loans and the
issuance, extension or renewal of any Letters of Credit, as herein contemplated,
and shall continue in full force and effect so long as any Letter of Credit or
any amount due under this Agreement or the Revolving Credit Notes or any of the
other Loan Documents remains outstanding or any Bank has any obligation to make
any Loans or the Agent or any Fronting Bank has any obligation to issue, extend
or renew any Letter of Credit. The indemnification obligations of the Borrower
provided herein and in the other Loan Documents shall survive the full repayment
of amounts due and the termination of the obligations of the Banks hereunder and
thereunder to the extent provided herein and therein. All statements contained
in any certificate or other paper delivered to any Bank or the Agent at any time
by or on behalf of the Borrower or any of its Subsidiaries or any Guarantor
pursuant hereto or in connection with the transactions contemplated hereby shall
constitute representations and warranties by the Borrower or such Subsidiary or
such Guarantor hereunder.
<PAGE>
-97-
ss.19. ASSIGNMENT; PARTICIPATIONS; ETC.
ss.19.1. Conditions to Assignment by Banks. Except as provided herein, each
Bank may assign to one or more Eligible Assignees all or a portion of its
interests, rights and obligations under this Agreement (including all or a
portion of its Commitment Percentage and Commitment and the same portion of the
Loans at the time owing to it, the Revolving Credit Notes held by it and its
participating interest in the risk relating to any Letters of Credit); provided
that (a) the Agent and the Borrower each shall have the right to approve any
Eligible Assignee, which approval shall not be unreasonably withheld, it being
agreed that the Agent and the Borrower must approve or reject a proposed
Eligible Assignee within seven (7) days of receiving a written request from any
Bank for such approval (provided that the request for approval, and the envelope
in which it is delivered, is conspicuously marked with the following legend:
"REQUEST FOR APPROVAL -- TIME SENSITIVE -- MUST RESPOND WITHIN SEVEN (7) DAYS")
and if the Agent or the Borrower fails to respond within such seven (7) day
period, such request for approval shall be deemed approved by the Agent or the
Borrower, or both, as the case may be, (b) each such assignment shall be of a
constant, and not a varying, percentage of all the assigning Bank's rights and
obligations under this Agreement, (c) subject to the provisions of ss.2.3
hereof, each Bank shall have at all times an amount of its Commitment of not
less than $10,000,000 and (d) the parties to such assignment shall execute and
deliver to the Agent, for recording in the Register (as hereinafter defined), an
assignment and assumption, substantially in the form of Exhibit F hereto (an
"Assignment and Assumption"), together with any Revolving Credit Notes subject
to such assignment. Upon such execution, delivery, acceptance and recording,
from and after the effective date specified in each Assignment and Assumption,
which effective date shall be at least five (5) Business Days after the
execution thereof, (i) the assignee thereunder shall be a party hereto and, to
the extent provided in such Assignment and Assumption, have the rights and
obligations of a Bank hereunder and thereunder, and (ii) the assigning Bank
shall, to the extent provided in such assignment and upon payment to the Agent
of the registration fee referred to in ss.19.3, be released from its obligations
under this Agreement. Any such Assignment and Assumption shall run to the
benefit of the Borrower and a copy of any such Assignment and Assumption shall
be delivered by the Assignor to the Borrower.
ss.19.2. Certain Representations and Warranties; Limitations; Covenants. By
executing and delivering an Assignment and Assumption, the parties to the
assignment thereunder confirm to and agree with each other and the other parties
hereto as follows: (a) other than the representation and warranty that it is the
legal and beneficial owner of the interest being assigned thereby free and clear
of any adverse claim, the assigning Bank makes no representation or warranty and
assumes no responsibility with respect to any statements,
<PAGE>
-98-
warranties or representations made in or in connection with this Agreement or
the execution, legality, validity, enforceability, genuineness, sufficiency or
value of this Agreement, the other Loan Documents or any other instrument or
document furnished pursuant hereto; (b) the assigning Bank makes no
representation or warranty and assumes no responsibility with respect to the
financial condition of the Borrower and its Subsidiaries or any Guarantor or any
other Person primarily or secondarily liable in respect of any of the
Obligations, or the performance or observance by the Borrower and its
Subsidiaries or any Guarantor or any other Person primarily or secondarily
liable in respect of any of the Obligations of any of their obligations under
this Agreement or any of the other Loan Documents or any other instrument or
document furnished pursuant hereto or thereto; (c) such assignee confirms that
it has received a copy of this Agreement, together with copies of the most
recent financial statements referred to in ss.6.4 and ss.7.4 and such other
documents and information as it has deemed appropriate to make its own credit
analysis and decision to enter into such Assignment and Assumption; (d) such
assignee will, independently and without reliance upon the assigning Bank, the
Agent or any other Bank and based on such documents and information as it shall
deem appropriate at the time, continue to make its own credit decisions in
taking or not taking action under this Agreement; (e) such assignee represents
and warrants that it is an Eligible Assignee; (f) such assignee appoints and
authorizes the Agent to take such action as agent on its behalf and to exercise
such powers under this Agreement and the other Loan Documents as are delegated
to the Agent by the terms hereof or thereof, together with such powers as are
reasonably incidental thereto; (g) such assignee agrees that it will perform in
accordance with their terms all of the obligations that by the terms of this
Agreement are required to be performed by it as a Bank; (h) such assignee
represents and warrants that it is legally authorized to enter into such
Assignment and Assumption; and (i) such assignee acknowledges that it has made
arrangements with the assigning Bank satisfactory to such assignee with respect
to its pro rata share of Letter of Credit Fees in respect of outstanding Letters
of Credit.
ss.19.3. Register. The Agent shall maintain a copy of each Assignment and
Assumption delivered to it and a register or similar list (the "Register") for
the recordation of the names and addresses of the Banks and the Commitment
Percentages of, and principal amount of the Loans owing to, the Banks from time
to time. The entries in the Register shall be conclusive, in the absence of
manifest error, and the Borrower, the Agent and the Banks may treat each Person
whose name is recorded in the Register as a Bank hereunder for all purposes of
this Agreement. The Register shall be available for inspection by the Borrower
and the Banks at any reasonable time and from time to time upon reasonable prior
notice. Upon each such recordation, the assigning Bank agrees to pay to the
Agent a registration fee in the sum of $2,500.
<PAGE>
-99-
ss.19.4. New Revolving Credit Notes. Upon its receipt of an Assignment and
Assumption executed by the parties to such assignment, together with each
Revolving Credit Note subject to such assignment, the Agent shall (a) record the
information contained therein in the Register, and (b) give prompt notice
thereof to the Borrower and the Banks (other than the assigning Bank). Within
five (5) Business Days after receipt of such notice, the Borrower, at its own
expense, (i) shall execute and deliver to the Agent, in exchange for each
surrendered Revolving Credit Note, a new Revolving Credit Note to the order of
such Eligible Assignee in an amount equal to the amount assumed by such Eligible
Assignee pursuant to such Assignment and Assumption and, if the assigning Bank
has retained some portion of its obligations hereunder, a new Revolving Credit
Note to the order of the assigning Bank in an amount equal to the amount
retained by it hereunder and (ii) shall deliver an opinion from counsel to the
Borrower in substantially the form delivered on the Closing Date pursuant to
ss.11.7 as to such new Revolving Credit Notes. Such new Revolving Credit Notes
shall provide that they are replacements for the surrendered Revolving Credit
Notes, shall be in an aggregate principal amount equal to the aggregate
principal amount of the surrendered Revolving Credit Notes, shall be dated the
effective date of such Assignment and Assumption and shall otherwise be in
substantially the form of the assigned Revolving Credit Notes. The surrendered
Revolving Credit Notes shall be cancelled and returned to the Borrower.
ss.19.5. Participations. Each Bank may sell participations to one or more
banks or other entities in all or a portion of such Bank's rights and
obligations under this Agreement and the other Loan Documents; provided that (a)
each such participation shall be in an amount of not less than $10,000,000, (b)
any such sale or participation shall not affect the rights and duties of the
selling Bank hereunder to the Borrower and the Agent and the Bank shall continue
to exercise all approvals, disapprovals and other functions of a Bank, (c) the
only rights granted to the participant pursuant to such participation
arrangements with respect to waivers, amendments or modifications of, or
approvals under, the Loan Documents shall be the rights to approve waivers,
amendments or modifications that would reduce the principal of or the interest
rate on any Loans, extend the term or increase the amount of the Commitment of
such Bank as it relates to such participant, reduce the amount of any fees to
which such participant is entitled or extend any regularly scheduled payment
date for principal or interest, and (d) no participant shall have the right to
grant further participations or assign its rights, obligations or interests
under such participation to other Persons without the prior written consent of
the Agent.
ss.19.6. Pledge by Lender. Notwithstanding any other provision of this
Agreement, any Bank at no cost to the Borrower may at any time pledge all or any
portion of its interest and rights under this Agreement (including all or any
portion of its Revolving Credit Notes) to any of the twelve Federal Reserve
<PAGE>
-100-
Banks organized under ss.4 of the Federal Reserve Act, 12 U.S.C. ss.341. No such
pledge or the enforcement thereof shall release the pledgor Bank from its
obligations hereunder or under any of the other Loan Documents.
ss.19.7. No Assignment by Borrower. The Borrower shall not assign or
transfer any of its rights or obligations under any of the Loan Documents
without prior Unanimous Bank Approval.
ss.19.8. Disclosure. The Borrower agrees that, in addition to disclosures
made in accordance with standard banking practices, any Bank may disclose
information obtained by such Bank pursuant to this Agreement to assignees or
participants and potential assignees or participants hereunder. Any such
disclosed information shall be treated by any assignee or participant with the
same standard of confidentiality set forth in ss.7.10 hereof.
ss.19.9. Syndication. The Borrower acknowledges that the Agent intends, and
shall have the right, by itself or through its Affiliates, to syndicate or enter
into co-lending arrangements with respect to the Loans and the Total Commitment
pursuant to this ss.19, and the Borrower agrees to cooperate with the Agent's
and its Affiliate's syndication and/or co-lending efforts, such cooperation to
include, without limitation, the provision of information reasonably requested
by potential syndicate members.
ss.20. NOTICES, ETC. Except as otherwise expressly provided in this
Agreement, all notices and other communications made or required to be given
pursuant to this Agreement or the Revolving Credit Notes or any Letter of Credit
Applications shall be in writing and shall be delivered in hand, mailed by
United States registered or certified first class mail, postage prepaid, sent by
overnight courier, or sent by facsimile and confirmed by delivery via courier or
postal service, addressed as follows:
(a) if to the Borrower or any Guarantor, at Beacon Properties
Corporation, 50 Rowes Wharf, Boston, Massachusetts 02110, Attention: Mr. Alan M.
Leventhal, President, with a copy to Gilbert G. Menna, Esq., Goodwin, Procter &
Hoar LLP, Exchange Place, Boston, Massachusetts 02109 and Harold Stahler, Esq.,
Goulston & Storrs, P.C., 400 Atlantic Avenue, Boston, Massachusetts 02110-3333,
or to such other address for notice as the Borrower or any Guarantor shall have
last furnished in writing to the Agent;
(b) if to the Agent, at 100 Federal Street, Boston, Massachusetts
02110, Attention: Mr. Howard Blackwell, or such other address for notice as the
Agent shall have last furnished in writing to the Borrower, with a copy to Paul
M. Vaughn, Esq., Bingham, Dana & Gould LLP, 150 Federal Street, Boston,
<PAGE>
-101-
Massachusetts 02110, or at such other address for notice as the Agent shall last
have furnished in writing to the Person giving the notice; and
(c) if to any Bank, at such Bank's address set forth on Schedule 1.3
hereto, or such other address for notice as such Bank shall have last furnished
in writing to the Person giving the notice.
Any such notice or demand shall be deemed to have been duly given or made
and to have become effective (i) if delivered by hand, overnight courier or
facsimile to the party to which it is directed, at the time of the receipt
thereof by such party or the sending of such facsimile and (ii) if sent by
registered or certified first-class mail, postage prepaid, on the third Business
Day following the mailing thereof.
ss.21. GOVERNING LAW; CONSENT TO JURISDICTION AND SERVICE. THIS AGREEMENT
AND EACH OF THE OTHER LOAN DOCUMENTS, EXCEPT AS OTHERWISE SPECIFICALLY PROVIDED
THEREIN, ARE CONTRACTS UNDER THE LAWS OF THE COMMONWEALTH OF MASSACHUSETTS AND
SHALL FOR ALL PURPOSES BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS
OF SUCH COMMONWEALTH (EXCLUDING THE LAWS APPLICABLE TO CONFLICTS OR CHOICE OF
LAW). EACH OF THE BORROWER AND THE GUARANTORS AGREES THAT ANY SUIT FOR THE
ENFORCEMENT OF THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS MAY BE BROUGHT
IN THE COURTS OF THE COMMONWEALTH OF MASSACHUSETTS SITTING IN SUFFOLK COUNTY OR
ANY FEDERAL COURT SITTING IN THE EASTERN DISTRICT OF MASSACHUSETTS AND CONSENTS
TO THE NON-EXCLUSIVE JURISDICTION OF SUCH COURTS AND THE SERVICE OF PROCESS IN
ANY SUCH SUIT BEING MADE UPON THE BORROWER OR THE GUARANTORS BY MAIL AT THE
ADDRESS SPECIFIED IN ss.20. THE BORROWER AND EACH OF THE GUARANTORS HEREBY WAIVE
ANY OBJECTION THAT EITHER OF THEM MAY NOW OR HEREAFTER HAVE TO THE VENUE OF ANY
SUCH SUIT OR ANY SUCH COURT OR THAT SUCH SUIT IS BROUGHT IN AN INCONVENIENT
COURT.
ss.22. HEADINGS. The captions in this Agreement are for convenience of
reference only and shall not define or limit the provisions hereof.
ss.23. COUNTERPARTS. This Agreement and any amendment hereof may be
executed in several counterparts and by each party on a separate counterpart,
each of which when so executed and delivered shall be an original, and all of
which together shall constitute one instrument. In proving this
<PAGE>
-102-
Agreement it shall not be necessary to produce or account for more than one such
counterpart signed by the party against whom enforcement is sought.
ss.24. ENTIRE AGREEMENT, ETC. The Loan Documents and any other documents
executed in connection herewith or therewith express the entire understanding of
the parties with respect to the transactions contemplated hereby. Neither this
Agreement nor any term hereof may be changed, waived, discharged or terminated,
except as provided in ss.26.
ss.25. WAIVER OF JURY TRIAL AND CERTAIN DAMAGE CLAIMS. EXCEPT TO THE EXTENT
EXPRESSLY PROHIBITED BY LAW, THE BORROWER AND EACH OF THE GUARANTORS HEREBY
WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL WITH RESPECT TO ANY ACTION OR
CLAIM ARISING OUT OF ANY DISPUTE IN CONNECTION WITH THIS AGREEMENT, THE
REVOLVING CREDIT NOTES OR ANY OF THE OTHER LOAN DOCUMENTS, ANY RIGHTS OR
OBLIGATIONS HEREUNDER OR THEREUNDER OR THE PERFORMANCE OF SUCH RIGHTS AND
OBLIGATIONS. EXCEPT TO THE EXTENT EXPRESSLY PROHIBITED BY LAW, THE BORROWER AND
EACH OF THE GUARANTORS HEREBY WAIVE ANY RIGHT ANY OF THEM MAY HAVE TO CLAIM OR
RECOVER IN ANY LITIGATION REFERRED TO IN THE PRECEDING SENTENCE ANY SPECIAL,
EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES OR ANY DAMAGES OTHER THAN, OR IN
ADDITION TO, ACTUAL DAMAGES, INCLUDING ANY DAMAGES PURSUANT TO M.G.L. C.93A ET
SEQ. EACH OF THE BORROWER AND THE GUARANTORS (A) CERTIFIES THAT NO
REPRESENTATIVE, AGENT OR ATTORNEY OF ANY BANK OR THE AGENT HAS REPRESENTED,
EXPRESSLY OR OTHERWISE, THAT SUCH BANK OR THE AGENT WOULD NOT, IN THE EVENT OF
LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVERS AND (B) ACKNOWLEDGE THAT THE
AGENT AND THE BANKS HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER
LOAN DOCUMENTS TO WHICH THEY ARE PARTIES BY, AMONG OTHER THINGS, THE WAIVERS AND
CERTIFICATIONS CONTAINED HEREIN.
ss.26. CONSENTS, AMENDMENTS, WAIVERS, ETC. Except as otherwise expressly
provided in this Agreement, any consent or approval required or permitted by
this Agreement may be given, and any term of this Agreement or of any of the
other Loan Documents may be amended, and the performance or observance by the
Borrower or any Guarantor of any terms of this Agreement or the other Loan
Documents or the continuance of any default, Default or Event of Default may be
waived (either generally or in a particular instance and either retroactively or
prospectively) with, but only with, the written consent of the Majority Banks.
<PAGE>
-103-
Notwithstanding the foregoing, Unanimous Bank Approval shall be required
for any amendment, modification or waiver of this Agreement that:
(i) reduces or forgives any principal of any unpaid Loan or any
interest thereon (including any interest "breakage" costs) or any fees
due any Bank hereunder, or permits any prepayment not otherwise
permitted hereunder; or
(ii) changes the unpaid principal amount of, or the rate of
interest on, any Loan; or
(iii) changes the date fixed for any payment of principal of or
interest on any Loan (including, without limitation, any extension of
the Maturity Date) or any fees payable hereunder; or
(iv) changes the amount of any Bank's Commitment (other than
pursuant to an assignment permitted under ss.19.1 hereof) or increases
the amount of the Total Commitment; or
(v) amends any of the covenants contained in ss.9.1 through
ss.9.7, inclusive, hereof; or
(vi) releases or reduces the liability of any Guarantor pursuant
to its Guaranty or ss.28 hereof; or
(vii) modifies any provision herein or in any other Loan Document
which by the terms thereof expressly requires Unanimous Bank Approval;
or
(viii) amends any of the provisions governing funding contained
in ss.2 hereof; or
(ix) changes the rights, duties or obligations of the Agent
specified in ss.15 hereof (provided that no amendment or modification
to such ss.15 or to the fee payable to the Agent under this Agreement
may be made without the prior written consent of the Agent); or
(x) changes the definitions of Majority Banks or Unanimous Bank
Approval.
<PAGE>
-104-
No waiver shall extend to or affect any obligation not expressly waived or
impair any right consequent thereon. No course of dealing or delay or omission
on the part of the Agent or the Banks or any Bank in exercising any right shall
operate as a waiver thereof or otherwise be prejudicial to such right or any
other rights of the Agent or the Banks. No notice to or demand upon the Borrower
shall entitle the Borrower to other or further notice or demand in similar or
other circumstances.
ss.27. SEVERABILITY. The provisions of this Agreement are severable, and if
any one clause or provision hereof shall be held invalid or unenforceable in
whole or in part in any jurisdiction, then such invalidity or unenforceability
shall affect only such clause or provision, or part thereof, in such
jurisdiction, and shall not in any manner affect such clause or provision in any
other jurisdiction, or any other clause or provision of this Agreement in any
jurisdiction.
ss.28. LIMITED RECOURSE AGAINST BPC.
(a) Notwithstanding anything to the contrary contained in this
Agreement, in the Revolving Credit Notes or in any of the other Loan Documents,
but subject to subparagraphs (b) and (c) below, (i) in no event shall any of the
general or limited partners of the Borrower have any personal liability for the
obligations of the Borrower or of any Subsidiary Guarantor hereunder, under the
Revolving Credit Notes or under any of the other Loan Documents, and (ii) the
liability of BPC in its own capacity hereunder and under any of the other Loan
Documents to which it is a party, and in its capacity as a direct or indirect
partner or member of any Subsidiary Guarantor, shall be limited to its interest
in the Borrower, and the Agent and the Banks shall have no recourse to any other
assets of BPC.
(b) Notwithstanding the provisions of subparagraph (a) above, BPC,
both in its capacity as the general partner of the Borrower and in its capacity
as a Guarantor, shall be and remain liable with full recourse for the
obligations of the Borrower hereunder, under the Revolving Credit Notes and
under the other Loan Documents, and for the obligations of BPC hereunder and
under the Loan Documents to which BPC is a party, for the following acts and
omissions, to the extent described (the "Non-Recourse Carve-Outs"):
<PAGE>
-105-
<TABLE>
<CAPTION>
Acts and Omissions Liability
------------------ ---------
<S> <C> <C>
(i) BPC shall hereafter voluntarily or To the full extent of the Net Proceeds
involuntarily fail for any cause or reason not so contributed unless and until BPC
whatsoever to contribute to the Borrower the in fact contributes all of such Net
Net Proceeds (as hereinafter defined) of any Proceeds to the Borrower;
capital raised by BPC (from a public offering
of shares of stock of BPC, other public
offerings of securities or any other capital
transaction entered into by BPC) within three
(3) Business Days of BPC's receipt thereof,
(ii) BPC shall hereafter voluntarily or To the full extent of such funds not paid
involuntarily fail for any cause or reason over to the Borrower unless and until BPC
whatsoever to pay over to the Borrower any in fact pays over all of such funds to
funds received by BPC for the account of the the Borrower;
Borrower (whether such funds are received by
BPC in its capacity as the general partner of
the Borrower, as a trustee for the
benefit of the Borrower or otherwise) within
three (3) Business Days of BPC's receipt
thereof,
(iii) The Borrower or BPC shall misapply any To the extent of such misapplication;
security deposits attributable to any of the
Real Estate Assets,
(iv) The Borrower or BPC shall commit (x) any To the extent of any loss, claim,
fraud or willful misrepresentation or (y) an liability, damage, expense or cost
intentional act of destruction with respect resulting from any of the foregoing
to any of the Real Estate Assets, matters referred to in this clause (iv);
and/or
<PAGE>
-106-
(v) With respect to the violation of any To the extent of any loss, claim,
Environmental Law, liability, damage, expense or cost
resulting from any such violation.
</TABLE>
As used herein, the "Net Proceeds" of any capital raised by BPC shall mean the
gross proceeds thereof received by BPC less any bona fide third party expenses
paid or incurred by BPC in connection therewith (including, without limitation,
any underwriter's discount in connection with a public offering).
(c) The provisions of this Section 28 shall not, however, limit the
liability of BPC under its Guaranty, subject to the limitations of liability
provided therein.
<PAGE>
-107-
IN WITNESS WHEREOF, the undersigned have duly executed this Agreement
as a sealed instrument as of the date first set forth above.
BEACON PROPERTIES, L.P.
By: Beacon Properties Corporation,
its general partner
By: /s/ Nancy J. Broderick
------------------------------------
Name: Nancy J. Broderick
Title: Vice President and Treasurer
THE FIRST NATIONAL BANK OF BOSTON,
individually and as Agent
By:
------------------------------------
Name: Howard N. Blackwell
Title: Director
[remainder of signature page left blank intentionally]
<PAGE>
-107-
IN WITNESS WHEREOF, the undersigned have duly executed this Agreement
as a sealed instrument as of the date first set forth above.
BEACON PROPERTIES, L.P.
By: Beacon Properties Corporation,
its general partner
By:
------------------------------------
Name: Nancy J. Broderick
Title: Vice President and Treasurer
THE FIRST NATIONAL BANK OF BOSTON,
individually and as Agent
By: /s/ Howard N. Blackwell
------------------------------------
Name: Howard N. Blackwell
Title: Director
[remainder of signature page left blank intentionally]
<PAGE>
-108-
MELLON BANK, N.A.
By: /s/ Ronald J. Bloch
---------------------------------------
Name: Ronald J. Bloch
Title: Vice President
PNC BANK, NATIONAL ASSOCIATION
By:
---------------------------------------
Name:
Title:
USTRUST
By:
---------------------------------------
Name:
Title:
UNION BANK OF CALIFORNIA, N.A.
By:
---------------------------------------
Name:
Title:
<PAGE>
-108-
MELLON BANK, N.A.
By:
---------------------------------------
Name:
Title:
PNC BANK, NATIONAL ASSOCIATION
By: /s/ Jay C. Bakes
---------------------------------------
Name: Jay C. Bakes
Title: Vice President
USTRUST
By:
---------------------------------------
Name:
Title:
UNION BANK OF CALIFORNIA, N.A.
By:
---------------------------------------
Name:
Title:
<PAGE>
-108-
MELLON BANK, N.A.
By:
---------------------------------------
Name:
Title:
PNC BANK, NATIONAL ASSOCIATION
By:
---------------------------------------
Name:
Title:
USTRUST
By: /s/ Brian W. Sopp
---------------------------------------
Name: Brian W. Sopp
Title: Exec. Vice Pres.
UNION BANK OF CALIFORNIA, N.A.
By:
---------------------------------------
Name:
Title:
<PAGE>
-108-
MELLON BANK, N.A.
By:
---------------------------------------
Name:
Title:
PNC BANK, NATIONAL ASSOCIATION
By:
---------------------------------------
Name:
Title:
USTRUST
By:
---------------------------------------
Name:
Title:
UNION BANK OF CALIFORNIA, N.A.
By: /s/ Michael King
---------------------------------------
Name: Michael King
Title: Vice Presidetn
Exhibit 10.2
------------
AMENDMENT NO. 1 TO
REVOLVING CREDIT AGREEMENT
This AMENDMENT NO. 1 TO REVOLVING CREDIT AGREEMENT (this "Amendment
No. 1") is made as of April 30, 1997 by and among (a) Beacon Properties, L.P.
(the "Borrower"), (b) BankBoston, N.A., f/k/a The First National Bank of Boston
("BankBoston"), USTrust ("USTrust"), Wells Fargo Bank, National Association
("Wells"), BHF-BANK Aktiengesellschaft ("BHF"), Fleet National Bank ("Fleet"),
The First National Bank of Chicago ("First Chicago"), Commerzbank
Aktiengesellschaft, New York Branch ("Commerzbank"), Mellon Bank, N.A.
("Mellon"), PNC Bank, National Association ("PNC"), Comerica Bank ("Comerica"),
Union Bank of California, N.A. ("Union") and the other lending institutions
which may become parties to the Credit Agreement (as defined below)
(collectively, the "Banks"), and (c) BankBoston, as Agent (in such capacity, the
"Agent") for the Banks.
WHEREAS, the Borrower, certain of the Banks and the Agent are parties
to a Revolving Credit Agreement dated as of March 31, 1997 (the "Credit
Agreement"), pursuant to which the Banks have agreed to make loans to the
Borrower;
WHEREAS, the Borrower has requested that the Banks and the Agent make
certain amendments to the Credit Agreement and certain related Loan Documents,
and the Banks and the Agent are willing to amend certain of the provisions of
the Credit Agreement and certain other Loan Documents upon the terms set forth
herein;
WHEREAS, Wells, Fleet, First Chicago, Commerzbank, BHF and Comerica
desire to become Banks under the Credit Agreement pursuant to Assignment and
Assumption Agreements of even date herewith, and USTrust, Mellon, PNC and Union
desire to increase their respective Commitments under the Credit Agreement
pursuant to Assignment and Assumption Agreements of even date herewith; and
NOW, THEREFORE, in consideration of the foregoing premises, and for
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, and fully intending to be legally bound
<PAGE>
-2-
by this Amendment No. 1, the parties agree to amend the Credit Agreement as
follows:
1. Definitions. Capitalized terms used herein without definition shall
have the meanings assigned to such terms in the Credit Agreement.
2. Amendments to the Credit Agreement. Effective as of the Effective
Date (as hereinafter defined), the Credit Agreement is hereby amended in the
following respects:
2.1. The following new definition is inserted immediately following
the definition of "Agreement of Limited Partnership of the Borrower" set forth
in Section 1.1 of the Credit Agreement:
"Amendment No. 1. Amendment No. 1 to Revolving Credit Agreement dated
as of April 30, 1997 among the Borrower, the Banks and the Agent."
2.2. The definition of "Loan Documents" set forth in Section 1.1 of
the Credit Agreement is hereby amended by inserting in the first line thereof,
immediately following the words "this Agreement," contained therein, the words
"Amendment No. 1,".
2.3. The definition of "Revolving Credit Notes" set forth in Section
1.1 of the Credit Agreement is hereby amended by deleting the amount
"$300,000,000" set forth in the third line thereof and substituting in place
thereof the amount "$350,000,000".
2.4. The definition of "Total Commitment" set forth in Section 1.1 of
the Credit Agreement is hereby amended by deleting the amount "$300,000,000" set
forth in the third line thereof and substituting in place thereof the amount
"$350,000,000".
2.5. All references in the Credit Agreement and the other Loan
Documents to "The First National Bank of Boston" are hereby amended to be
references to "BankBoston, N.A., f/k/a The First National Bank of Boston".
2.6. Schedule 1.3 to the Credit Agreement is hereby amended by
deleting such Schedule 1.3 in its entirety and substituting the Schedule 1.3
attached hereto
<PAGE>
-3-
in place thereof. From and after the Effective Date, each of the
Banks listed on Schedule 1.3 attached hereto shall be a Bank under the Credit
Agreement and have the rights and obligations of a Bank thereunder.
3. Representations and Warranties. The Borrower hereby represents and
warrants as follows:
3.1. Representations in Loan Documents. Each of the representations
and warranties made by or on behalf of the Borrower or the Guarantors in any of
the Loan Documents was true and correct when made and is true and correct on and
as of the date hereof (except to the extent of changes resulting from
transactions contemplated or not prohibited by the Credit Agreement or the other
Loan Documents and changes occurring in the ordinary course of business, and
except to the extent that such representations and warranties relate expressly
to an earlier date) with the same full force and effect as if each of such
representations and warranties had been made by the Borrower or the Guarantors
on the date hereof and in this Amendment No. 1.
3.2. Defaults. No Default or Event of Default exists on the date
hereof (after giving effect to all of the arrangements and transactions
contemplated by this Amendment No. 1).
3.3. Binding Effect of Documents. Each of this Amendment No. 1, the
Amended and Restated Revolving Credit Notes of even date herewith and the
Revolving Credit Notes of even date herewith has been duly executed and
delivered by the Borrower and is in full force and effect as of the date hereof,
and the respective agreements and obligations of the Borrower contained herein
and therein constitute the legal, valid and binding obligations of the Borrower,
enforceable against it in accordance with their respective terms, subject only
to applicable bankruptcy, insolvency, reorganization, moratorium or other laws
relating to or affecting generally the enforcement of creditors' rights and to
the fact that the availability of the remedy of specific performance or
injunctive relief is subject to the discretion of the court before which any
proceeding therefor may be brought.
4. Provisions Of General Application.
4.1. No Other Changes. Except as otherwise expressly provided or
contemplated by this Amendment No. 1, all of the terms, conditions and
provisions of the Credit Agreement and the other Loan Documents remain
unaltered. The Credit Agreement and this Amendment No. 1 shall be read and
construed as one agreement. The
<PAGE>
-4-
making of the amendments in this Amendment No. 1 does not imply any obligation
or agreement by the Agent or any Bank to make any other amendment, waiver,
modification or consent as to any matter on any subsequent occasion.
4.2. Governing Law. This Amendment No. 1 is intended to take effect as
a sealed instrument and shall be deemed to be a contract under the laws of the
Commonwealth of Massachusetts. This Amendment No. 1 and the rights and
obligations of each of the parties hereto are contracts under the laws of the
Commonwealth of Massachusetts and shall for all purposes be construed in
accordance with and governed by the laws of such Commonwealth (excluding the
laws applicable to conflicts or choice of law).
4.3. Assignment. This Amendment No. 1 shall be binding upon and inure
to the benefit of each of the parties hereto and their respective permitted
successors and assigns.
4.4. Counterparts. This Amendment No. 1 may be executed in any number
of counterparts, but all such counterparts shall together constitute but one and
the same agreement. In making proof of this Amendment No. 1, it shall not be
necessary to produce or account for more than one counterpart thereof signed by
each of the parties hereto.
4.5. Conditions Precedent. The effectiveness of this Amendment No. 1
is subject to satisfaction of the following conditions precedent (such date on
which such conditions precedent have been satisfied being referred to herein as
the "Effective Date"):
(i) execution and delivery to the Agent by the Borrower, the Banks and
the Agent, and acknowledgment by the Guarantors, of this Amendment No. 1;
(ii) execution and delivery to the Agent by BankBoston and each of
Wells, USTrust, Fleet, First Chicago, BHF, Commerzbank, Mellon, PNC, Comerica
and Union of Assignment and Assumption Agreements, in form and substance
satisfactory to such Banks;
(iii) execution and delivery to the Agent by the Borrower of (A)
Amended and Restated Revolving Credit Notes in favor of each of BankBoston,
USTrust, PNC, Mellon and Union, and (B) Revolving Credit Notes in favor of each
of Wells, Fleet, First Chicago, BHF, Commerzbank and Comerica, each in form and
substance satisfactory to such Banks;
<PAGE>
-5-
(iv) execution and delivery to the Agent of legal opinions, addressed
to the Agent and the Banks, of Goulston & Storrs, P.C., counsel to the Borrower
and the Guarantors, and Goodwin, Procter & Hoar LLP, counsel to Beacon
Properties Corporation, in form and substance satisfactory to the Agent and the
Banks; and
(v) receipt by the Agent of a certificate from an officer of Beacon
Properties Corporation as to organizational documents, authorizing resolutions
and incumbency of officers of each of the Borrower and the Guarantors, in form
and substance satisfactory to the Agent.
[remainder of page left blank intentionally]
<PAGE>
IN WITNESS WHEREOF, the undersigned have duly executed and delivered
this Amendment No. 1 as of the date first set forth above.
BEACON PROPERTIES, L.P.
By: Beacon Properties Corporation,
its general partner
By: /s/ Nancy J. Broderick
------------------------------------------
Name: Nancy J. Broderick
Title: Vice President
BANKBOSTON, N.A., f/k/a THE FIRST
NATIONAL BANK OF BOSTON,
individually and as Agent
By:
------------------------------------------
Name:
Title:
WELLS FARGO BANK, NATIONAL
ASSOCIATION
By:
------------------------------------------
Name:
Title:
FLEET NATIONAL BANK
By:
------------------------------------------
Name:
Title:
<PAGE>
IN WITNESS WHEREOF, the undersigned have duly executed and delivered
this Amendment No. 1 as of the date first set forth above.
BEACON PROPERTIES, L.P.
By: Beacon Properties Corporation,
its general partner
By:
------------------------------------------
Name:
Title:
BANKBOSTON, N.A., f/k/a THE FIRST
NATIONAL BANK OF BOSTON,
individually and as Agent
By: /s/ Howard N. Blackwell
------------------------------------------
Name: Howard N. Blackwell
Title: Director
WELLS FARGO BANK, NATIONAL
ASSOCIATION
By:
------------------------------------------
Name:
Title:
FLEET NATIONAL BANK
By:
------------------------------------------
Name:
Title:
<PAGE>
IN WITNESS WHEREOF, the undersigned have duly executed and delivered
this Amendment No. 1 as of the date first set forth above.
BEACON PROPERTIES, L.P.
By: Beacon Properties Corporation,
its general partner
By:
------------------------------------------
Name:
Title:
BANKBOSTON, N.A., f/k/a THE FIRST
NATIONAL BANK OF BOSTON,
individually and as Agent
By:
------------------------------------------
Name:
Title:
WELLS FARGO BANK, NATIONAL
ASSOCIATION
By: /s/ E.F. Shay III
------------------------------------------
Name: E.F. Shay III
Title: Vice President
FLEET NATIONAL BANK
By:
------------------------------------------
Name:
Title:
<PAGE>
IN WITNESS WHEREOF, the undersigned have duly executed and delivered
this Amendment No. 1 as of the date first set forth above.
BEACON PROPERTIES, L.P.
By: Beacon Properties Corporation,
its general partner
By:
------------------------------------------
Name:
Title:
BANKBOSTON, N.A., f/k/a THE FIRST
NATIONAL BANK OF BOSTON,
individually and as Agent
By:
------------------------------------------
Name:
Title:
WELLS FARGO BANK, NATIONAL
ASSOCIATION
By:
------------------------------------------
Name:
Title:
FLEET NATIONAL BANK
By: /s/ Susan W. Leff
------------------------------------------
Name: Susan W. Leff
Title: Senior Vice President
<PAGE>
COMMERZBANK AKTIENGESELLSCHAFT,
NEW YORK BRANCH
By: /s/ Douglas P. Traynof
------------------------------------------
Name: Douglas P. Traynof
Title: Vice President
By: /s/ Christine H. Finkel
------------------------------------------
Name: Christine H. Finkel
Title: Assistant Vice President
PNC BANK, NATIONAL ASSOCIATION
By:
------------------------------------------
Name:
Title:
THE FIRST NATIONAL BANK OF CHICAGO
By:
------------------------------------------
Name:
Title:
UNION BANK OF CALIFORNIA, N.A.
By:
------------------------------------------
Name:
Title:
MELLON BANK, N.A.
By:
------------------------------------------
Name:
Title:
USTRUST
By:
------------------------------------------
Name:
Title:
<PAGE>
COMMERZBANK AKTIENGESELLSCHAFT,
NEW YORK BRANCH
By:
------------------------------------------
Name:
Title:
PNC BANK, NATIONAL ASSOCIATION
By: /s/ Paul Palombo
------------------------------------------
Name: Paul Palombo
Title: Vice President
THE FIRST NATIONAL BANK OF CHICAGO
By:
------------------------------------------
Name:
Title:
UNION BANK OF CALIFORNIA, N.A.
By:
------------------------------------------
Name:
Title:
MELLON BANK, N.A.
By:
------------------------------------------
Name:
Title:
USTRUST
By:
------------------------------------------
Name:
Title:
<PAGE>
COMMERZBANK AKTIENGESELLSCHAFT,
NEW YORK BRANCH
By:
------------------------------------------
Name:
Title:
PNC BANK, NATIONAL ASSOCIATION
By:
------------------------------------------
Name:
Title:
THE FIRST NATIONAL BANK OF CHICAGO
By: /s/ Rebecca McCloskey
------------------------------------------
Name: Rebecca McCloskey
Title: Vice President
UNION BANK OF CALIFORNIA, N.A.
By:
------------------------------------------
Name:
Title:
MELLON BANK, N.A.
By:
------------------------------------------
Name:
Title:
USTRUST
By:
------------------------------------------
Name:
Title:
<PAGE>
COMMERZBANK AKTIENGESELLSCHAFT,
NEW YORK BRANCH
By:
------------------------------------------
Name:
Title:
PNC BANK, NATIONAL ASSOCIATION
By:
------------------------------------------
Name:
Title:
THE FIRST NATIONAL BANK OF CHICAGO
By:
------------------------------------------
Name:
Title:
UNION BANK OF CALIFORNIA, N.A.
By: /s/ D. Jim Mahoney
------------------------------------------
Name: D. Jim Mahoney
Title: Vice President & Manager
MELLON BANK, N.A.
By:
------------------------------------------
Name:
Title:
USTRUST
By:
------------------------------------------
Name:
Title:
<PAGE>
COMMERZBANK AKTIENGESELLSCHAFT,
NEW YORK BRANCH
By:
------------------------------------------
Name:
Title:
PNC BANK, NATIONAL ASSOCIATION
By:
------------------------------------------
Name:
Title:
THE FIRST NATIONAL BANK OF CHICAGO
By:
------------------------------------------
Name:
Title:
UNION BANK OF CALIFORNIA, N.A.
By:
------------------------------------------
Name:
Title:
MELLON BANK, N.A.
By: /s/ Ronald J. Bloch
------------------------------------------
Name: Ronald J. Bloch
Title: First Vice President
USTRUST
By:
------------------------------------------
Name:
Title:
<PAGE>
COMMERZBANK AKTIENGESELLSCHAFT,
NEW YORK BRANCH
By:
------------------------------------------
Name:
Title:
PNC BANK, NATIONAL ASSOCIATION
By:
------------------------------------------
Name:
Title:
THE FIRST NATIONAL BANK OF CHICAGO
By:
------------------------------------------
Name:
Title:
UNION BANK OF CALIFORNIA, N.A.
By:
------------------------------------------
Name:
Title:
MELLON BANK, N.A.
By:
------------------------------------------
Name:
Title:
USTRUST
By: /s/ Brian W. Sopp
------------------------------------------
Name: Brian W. Sopp
Title: Executive Vice President
<PAGE>
BHF-BANK AKTIENGESELLSCHAFT
By: /s/ Sylvia Gross
------------------------------------------
Name: Sylvia Gross
Title: Vice President
By: /s/ Catherine Hickey
------------------------------------------
Name: Catherine Hickey
Title: Vice President
COMERICA BANK
By:
------------------------------------------
Name:
Title:
<PAGE>
BHF-BANK AKTIENGESELLSCHAFT
By:
------------------------------------------
Name:
Title:
By:
------------------------------------------
Name:
Title:
COMERICA BANK
By: /s/ Scott Helmer
------------------------------------------
Name: Scott Helmer
Title: Account Officer
<PAGE>
Each Guarantor hereby acknowledges the foregoing Amendment No. 1 and
reaffirms its guaranty of the Obligations (as defined in the Guaranty executed
and delivered by such Guarantor) under the Credit Agreement and the other Loan
Documents, each as amended hereby or in connection herewith, in accordance with
(and subject to any limitations on liability contained in) the Guaranty executed
and delivered by such Guarantor.
BEACON PROPERTIES CORPORATION
By: /s/ Nancy J. Broderick
------------------------------
Name: Nancy J. Broderick
Title: Vice President and Treasurer
1333 H STREET, L.P.
By: Beacon Property Management, L.P.,
its general partner
By: BCN Management, LLC,
its general partner
By: Beacon Properties Corporation,
a member
By: /s/ Nancy J. Broderick
------------------------------
Name: Nancy J. Broderick
Title: Vice President and Treasurer
BURLINGTON HOLDING, L.P.
By: Beacon Properties, L.P., its
general partner
By: Beacon Properties Corporation,
its general partner
By: /s/ Nancy J. Broderick
------------------------------
Name: Nancy J. Broderick
Title: Vice President and
Treasurer
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> JUN-30-1997
<CASH> 49,098
<SECURITIES> 0
<RECEIVABLES> 35,939
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 67,767
<PP&E> 2,295,915
<DEPRECIATION> 121,987
<TOTAL-ASSETS> 2,386,146
<CURRENT-LIABILITIES> 66,768
<BONDS> 736,503
0
0
<COMMON> 0
<OTHER-SE> 1,313,788
<TOTAL-LIABILITY-AND-EQUITY> 2,386,146
<SALES> 0
<TOTAL-REVENUES> 166,016
<CGS> 0
<TOTAL-COSTS> 99,030
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 22,663
<INCOME-PRETAX> 61,059
<INCOME-TAX> 0
<INCOME-CONTINUING> 61,059
<DISCONTINUED> (1,473)
<EXTRAORDINARY> (2,635)
<CHANGES> 0
<NET-INCOME> 56,951
<EPS-PRIMARY> 0.97
<EPS-DILUTED> 0.97
</TABLE>
