<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION Exhibit Index
Washington, D.C. 20549 on Page
FORM 10-K
Annual Report Pursuant to Section 15(d) of the
Securities Exchange Act of 1934
/X/ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 (FEE REQUIRED)
For the fiscal year ended December 31, 1995
Commission File Number 1-10328
BRADLEY REAL ESTATE, INC.
-------------------------
(Exact name of Registrant as specified in its charter)
Maryland 04-6034603
-------- ----------
(State of Organization) (I.R.S. Employer Identification No.)
699 Boylston Street, Boston, Massachusetts 02116
------------------------------------------ -----
(Address of Principal Executive Offices) (ZIP Code)
Registrant's telephone number, including area code (617) 867-4200
Securities registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange on which registered
------------------- -----------------------------------------
Common Stock New York Stock Exchange
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, and (2) been subject to such filing
requirements for the past 90 days. Yes /X/ , No / /
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [ ]
Aggregate market value of 18,608,895 Shares of Common Stock believed to be
held by non-affiliates of the registrant based upon the $14.875 closing price
for such Shares on the New York Stock Exchange on March 21, 1996: $276,807,213.
Approximate number of Shares outstanding as of March 21, 1996: 18,658,515
DOCUMENTS INCORPORATED BY REFERENCE
Registrant expects to file no later than April 1, 1996 its definitive Proxy
Statement for the 1996 Annual Meeting of Stockholders and hereby incorporates by
reference portions of said Proxy Statement into Part III hereof.
<PAGE> 2
PART I
------
ITEM 1. BUSINESS
--------
Bradley Real Estate, Inc. (the "Company") is one of the nation's oldest
continuously qualified real estate investment trusts ("REIT") under the Internal
Revenue Code. The Company focuses on the ownership and operation of community
shopping centers, primarily in the Midwestern and, to a lesser extent, the
Northeastern regions of the United States. Bradley's objective is to enhance the
operating performance and value of its portfolio through renovations, expansion
and leasing strategies designed to meet the needs of an evolving retail
marketplace. The Company also seeks to create value through the acquisition of
properties which can benefit from the Company's expertise in shopping center
management, renovation and expansion. At December 31, 1995, the Company owned 17
properties consisting of approximately 3.0 million square feet of rentable
retail space.
Originally organized in 1961 as a Massachusetts business trust under the
name Bradley Real Estate Trust and externally advised by an outside advisor, in
October 1994 the Company reorganized as a Maryland corporation and in January
1995 acquired the REIT advisory business of the external advisor. The
acquisition resulted in the termination of an advisory arrangement extending
through August 1999, and permitted the Company to become self-administered. In
January 1995, the Company also brought in-house the property management and
leasing operations of a significant number of its properties by hiring the
management team previously employed by an independent firm that had managed the
Company's Minnesota properties.
On October 30, 1995, the Company entered into a merger agreement to acquire
Tucker Properties Corporation ("Tucker"), a REIT whose properties also consist
primarily of community shopping centers located in the Midwestern United States.
The merger closed on March 15, 1996, and as a result, the Company presently owns
31 properties aggregating approximately 7.4 million square feet of rentable
space in 11 states.
During 1995, the Company focused its efforts towards three strategic
objectives: to continue managing its existing properties to compete successfully
in a challenging retail environment, to increase its equity base and to continue
its growth through opportunistic acquisitions.
Despite a competitive retail climate, the properties owned by the Company
at December 31, 1995 were at a 93% occupancy rate. During 1995, the Company
negotiated 234,000 square feet of new and renewed leases, representing 7.6% of
the aggregate portfolio, of which 189,000 square feet were new leases. The most
significant tenant additions during the year were two new anchor tenants, Barnes
& Noble Superstore and HomePlace, at the expanded and modernized Har Mar Mall in
Roseville, Minnesota. The Company also expanded Sun Ray Center in St. Paul,
Minnesota, completing construction of 6,000 square feet of new space for two
new tenants, Boston Market and Bruegger's Bagels. During 1995 and going
forward, the Company continues to work on leasing and expansion at Burning
Tree Plaza in Duluth, Minnesota, and filling a significant vacancy at Westview
Center in Hanover Park, Illinois.
The Company effected issuances of 182,500 shares in April 1995, the
proceeds of which were applied to the cash portion of the purchase price of a
small shopping center in
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<PAGE> 3
Santa Fe, New Mexico acquired from a family partnership controlled by William
D. Sanders, and of 2,500,000 shares in July 1995 in an underwritten public
offering whose proceeds were used to pay-down debt. The resulting reduction in
the Company's percentage of debt to total market capitalization to less than
20% after the offering positioned the Company to consider further acquisitions
of properties or portfolios of properties.
During 1995, management of the Company considered several possible
acquisitions of additional retail properties, although only the acquisition of
the Santa Fe property was completed during the year, as management focused on
the extensive investigation and planning activities and negotiations involved in
the Tucker transaction that culminated with the execution of a merger agreement
with Tucker on October 30, 1995. The Company believes that the acquisition of
Tucker, which closed in March 1996, represents the purchase of a solid Midwest
community shopping center portfolio at a favorable yield, adds to the Company's
near-term earnings outlook and affords it greater opportunities to expand
top-line growth through future acquisitions. Strategically, the acquisition
increases the Company's operating efficiencies, substantially increases market
capitalization and the number of the Company's outstanding shares, thereby
enhancing share liquidity, and significantly diversifies the Company's property
and tenant base. The acquisition does, however, also significantly increase the
Company's percentage of debt to total market capitalization, to approximately
44%, and results in the acquisition of some properties with future tenancy and
operating challenges that the Company believes are more than offset by the
advantages of the transaction. The background, advantages, challenges and other
considerations of the Tucker acquisition were set forth in detail in the
Company's February 15, 1996 proxy statement for the special meeting of
stockholders of the Company held on March 14, 1996 to consider the acquisition
(the "Merger Proxy Statement"). Following approval by the stockholders of the
Company at that meeting (and by the stockholders of Tucker at a separate meeting
on the same day), the acquisition was completed on March 15, 1996, with the
issuance by the Company of 7,428,202 shares of its common stock valued at $13.96
per share, in cancellation of all outstanding Tucker shares, payment of certain
transaction costs and the assumption of all of Tucker's liabilities.
Tucker held title to its properties through two partnerships; eight
properties through Tucker Operating Limited Partnership ("TOP"), in which Tucker
had a 95.9% general partnership interest, and six properties through Tucker
Financing Partnership ("TFP"), a general partnership of which TOP owned 99% and
a wholly-owned Tucker corporate subsidiary owned the remaining 1%. The
properties owned by TFP secure a $100 million mortgage note due in September
2000 issued by TFP (the "Tucker REMIC Note"). Upon the acquisition of Tucker,
the Company succeeded to Tucker's interest in TOP and the wholly-owned Tucker
corporate subsidiary, and the name "Bradley" was substituted for "Tucker" in
each subsidiary and partnership. A diagram of the resulting structure appears at
page 31 of the Merger Proxy Statement.
Concurrently with the Tucker acquisition, on March 15, 1996 the Company
entered into a new $150 million unsecured revolving credit facility with The
First National Bank of Boston. The line bears interest at the lower of the
bank's base rate or 1.75% over LIBOR. The rates available under the line become
more favorable in the event the Company meets certain loan to value tests or
receives an investment grade unsecured debt rating. In addition to replacing
outstanding borrowings under the Company's and Tucker's previously outstanding
secured lines of credit, the facility is available for the acquisition,
development, renovation and expansion of new and existing properties (including
but not limited to capital
2
<PAGE> 4
improvements, tenant improvements and leasing commissions), and for other
working capital purposes. The new line of credit contains certain financial and
operational covenants that, among other provisions, limit the amount of secured
and unsecured indebtedness the Company may have outstanding at any time to a
percentage of the Company's Consolidated Market Value as defined, and provides
for the maintenance of certain financial tests including minimum net worth and
debt service coverage requirements. The Company believes that such covenants
will not adversely affect the Company's business or the operation of its
properties.
The Company continues to evaluate a number of additional acquisition
opportunities, as management believes that conditions remain favorable for the
acquisition of additional shopping center properties. Such acquisitions may be
effected through exchanges for existing properties, exchanges for limited
partnership interests in the newly acquired operating partnership or for newly
issued shares of the Company's common stock, joint ventures and similar
arrangements, as well as for cash under the line of credit or other funds which
may be raised through private or public issuances of debt or equity depending
upon market conditions and the Company's capital situation at the time.
At December 31, 1995, the Company had 16 employees. Following the
acquisition of Tucker, the Company presently has approximately 75 employees.
Most of the new employees are property management personnel who will continue to
manage the properties acquired from Tucker; no member of Tucker's former senior
management is an employee of the Company.
The Company's Properties
- ------------------------
Management believes the Company's portfolio is made up primarily of
well-established, strategically located shopping centers, in suburban
communities near major metropolitan areas. The Company's shopping centers have
good visibility and access from major traffic arteries.
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<PAGE> 5
<TABLE>
The following table and notes describe the Company's properties as of
December 31, 1995:
<CAPTION>
BASE LEASE
RENTABLE PERCENT LEASED AT OPTION
YEAR SQUARE DECEMBER 31 SQUARE EXPIRATION
SHOPPING CENTERS ACQUIRED FEET 1995 1994 MAJOR TENANT(S) FEET DATE
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Har Mar Mall(2)(19) 1992 428,000 86% 90% HomePlace 53,000 2011/2026
Roseville, Minnesota Barnes & Noble 44,856 2010/2025
Marshalls 34,858 1998/2013
T.J.Maxx 25,025 1998/2008
General Cinema 22,252 2001/2021
General Cinema 19,950 2000/2010
Michaels Stores 17,907 2003/2018
- ----------------------------------------------------------------------------------------------------------------------------
Sun Ray Shopping Center(3) 1961 254,000 97% 97% J.C. Penney 40,451 1999/2009
St. Paul, Minnesota Marshalls 26,256 2005/2020
T.J. Maxx 23,955 2000/2005
Kowalski's 23,218 2000/2010
Michaels Stores 18,127 2004/2019
- ----------------------------------------------------------------------------------------------------------------------------
Terrace Mall(4) 1993 140,000 92% 90% Rainbow Foods 59,232 2013/2033
Robbinsdale, Minnesota North Memorial 32,000 1999/2004
- ----------------------------------------------------------------------------------------------------------------------------
Richfield Hub Shopping Center(5) 1988 138,000 97% 96% Marshalls 26,785 2003/2008
Richfield, Minnesota Michaels Stores 24,235 1999/2014
- ----------------------------------------------------------------------------------------------------------------------------
Westwind Plaza(6) 1994 88,000 96% 100% Northern Hydraulics 18,165 2002/2012
Minnetonka, Minnesota
- ----------------------------------------------------------------------------------------------------------------------------
Burning Tree Plaza(7) 1993 110,000 100% 98% T.J. Maxx 30,000 2004/2019
Duluth, Minnesota Best Buy 28,000 1999/2014
Northwest Fabrics 17,682 1999/2004
- ----------------------------------------------------------------------------------------------------------------------------
Hub West Shopping Center(8) 1991 77,000 100% 100% Rainbow Foods 50,817 2012/2017
Richfield, Minnesota U.S. Swim & Fitness 26,185 2001/2003
- ----------------------------------------------------------------------------------------------------------------------------
White Bear Hills(9) 1993 67,000 100% 100% Gateway Foods 45,679 2011/2021
White Bear Lake, Minnesota
- ----------------------------------------------------------------------------------------------------------------------------
Rivercrest Center(10)(19) 1994 429,000 100% 100% Omni Foods 87,937 2011/2031
Crestwood, Illinois Venture 79,903 2012/2032
Sears Roebuck and Co. 55,000 2001/2011
T.J. Maxx 34,425 2004/2019
PETsMART 31,639 2009/2030
Best Buy 25,000 2008/2023
Office Max 24,000 2007/2017
Hollywood Park 15,000 2000/2005
- ----------------------------------------------------------------------------------------------------------------------------
Westview Center(11)(19) 1993 326,000 78% 81% Cub Foods 67,163 2009/2029
Hanover Park, Illinois Marshalls 34,302 2004/2019
- ----------------------------------------------------------------------------------------------------------------------------
Crossroads Center(12) 1992 242,000 93% 99% K-Mart (ground lease) 96,268 2001/2020
Fairview Heights, Illinois T.J. Maxx 25,200 1998/2013
- ----------------------------------------------------------------------------------------------------------------------------
Grandview Plaza(13) 1971 314,000 98% 97% Home Quarters 84,611 2013/2033
Florissant, Missouri Schnucks 68,025 2011/2026
J.C. Penney 63,892 1996
Walgreens 15,984 2043
- ----------------------------------------------------------------------------------------------------------------------------
St. Francis Plaza(14) 1995 30,000 100% N/A Walgreens 14,950 2043
Santa Fe, New Mexico Wild Oats 14,850 2006/2066
- ----------------------------------------------------------------------------------------------------------------------------
Hood Commons(15) 1973 216,000 97% 98% Shaw's 58,258 2013/2033
Derry, New Hampshire Ames 50,000 2000/2005
Decelle 26,353 1999/2014
- ----------------------------------------------------------------------------------------------------------------------------
Augusta Plaza(16) 1971 152,000 89% 89% K-Mart 85,808 1997/2012
Augusta, Maine
- ----------------------------------------------------------------------------------------------------------------------------
RETAIL/OFFICE BUILDING
- ----------------------
585 Boylston Street(17) 1961 22,000 98% 100% CVS Pharmacy 7,582 2001/2016
Boston, MA
- ----------------------------------------------------------------------------------------------------------------------------
GROUND LEASE
- ------------
501-529 Nicollet Ave.(18) 1969 51,000 100% 100% Brookfield 51,000 2086
Minneapolis, MN
- ----------------------------------------------------------------------------------------------------------------------------
</TABLE>
4
<PAGE> 6
(1) Major tenants are defined as tenants occupying 15,000 square feet or greater
of the rentable square footage with the exception of 585 Boylston Street and
St. Francis Plaza. In some cases, the named tenant occupies the premises as
a sublessee. The Company views "anchor" tenants as a subset of the major
tenants at each property, generally consisting of those tenants which also
represent more than 15% of the property's rentable square footage.
(2) At Har Mar, the lease to HomePlace provides current minimum annual rent of
$584,592 upon rent commencement at the completion of tenant fit up which
occurred in the first quarter of 1996. The lease to Barnes & Noble provides
for current minimum annual rent of $641,628 upon rent commencement at the
completion of tenant fit up which occurred in the third quarter of 1995. The
lease to Marshalls provides for current minimum annual rent of $155,400. The
lease to T. J. Maxx provides current minimum annual rent of $168,920. The
22,252 square foot lease to General Cinema provides current minimum annual
rent of $201,000 and the 19,950 square foot lease to General Cinema provides
current minimum annual rent of $17,100. The lease to Michaels Stores
provides current minimum annual rent of $111,919. There are four tenants,
occupying an aggregate of 11,606 square feet, which are tenants-at-will. In
1996 three leases for 4,906 square feet will expire. The Company expects
that the majority of these leases will be renewed.
(3) At Sun Ray, the lease to J.C. Penney expires in 1999, with the tenant having
the option to terminate upon 12 months' notice, and provides current minimum
annual rent of $146,812. The lease to Marshalls provides current minimum
annual rent of $182,000. The lease to T.J. Maxx provides current minimum
annual rent of $162,968. The lease to Kowalski's provides current minimum
annual rent of $58,045. The lease to Michaels Stores provides current
minimum annual rent of $109,728. There are four tenants, occupying an
aggregate of 8,810 square feet, which are tenants-at-will. In 1996, six
leases for 29,451 square feet will expire. The Company expects that the
majority of these leases will be renewed.
(4) At Terrace, the lease to Rainbow Foods provides current minimum annual rent
of $444,240. North Memorial Medical Center's lease provides current minimum
annual rent of $180,012. There are no leases expiring in 1996.
(5) At Richfield Hub, the lease to Marshalls provides current minimum annual
rent of $174,103. The lease to Michaels Stores provides current minimum
annual rent of $121,175. There are six tenants, occupying an aggregate of
6,335 square feet, which are tenants-at-will. In 1996, four leases totaling
6,940 square feet will expire. The Company expects that the majority of
these leases will be renewed.
(6) At Westwind the lease to Northern Hydraulics provides current minimum annual
rent of $109,898. In 1996, five leases for 12,200 square feet, will expire.
The Company expects the majority of these leases to be renewed.
(7) At Burning Tree, the T.J. Maxx lease provides $225,000 in current minimum
annual rent. The lease to Best Buy provides $182,000 in current minimum
annual rent. The lease to Northwest Fabrics provides current minimum annual
rent of $88,410. There is one tenant, occupying 1,181 square feet, which is
a tenant-at-will. In 1996, one lease for 5,935 square feet will expire.
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<PAGE> 7
(8) At Hub West, which is adjacent to Richfield Hub, the lease to Rainbow Foods
provides current minimum annual rent of $464,976. The lease to U. S. Swim &
Fitness provides current minimum annual rent of $325,117. None of the
present lease agreements are scheduled to expire until 1999.
(9) At White Bear Hills, the Gateway Foods lease provides current minimum
annual rent of $239,815. In 1996, three leases for 3,626 square feet will
expire.
(10) At Rivercrest, the lease to Omni Foods provides current minimum annual rent
of $678,873. The lease to Venture provides current minimum annual rent of
$299,636. The lease to Sears Roebuck and Co. provides current minimum
annual rent of $261,250. The lease to T.J. Maxx provides current minimum
annual rent of $275,400. The lease to PETsMART provides current minimum
annual rent of $256,593. The lease to Best Buy provides current minimum
annual rent of $168,750. The lease to OfficeMax provides current minimum
annual rent of $192,000. The lease to Hollywood Park provides current
minimum annual rent of $131,698. One tenant occupying 6,390 square feet is
a tenant-at-will. In 1996, four leases for 16,137 square feet will expire.
The Company expects the majority of these leases will be renewed.
(11) At Westview, the lease to Cub Foods provides current minimum annual rent of
$513,125. The lease to Marshalls provides current minimum annual rent of
$257,265. One tenant occupying 1,800 square feet is a tenant-at-will. In
1996, two leases for 3,400 square feet will expire. The Company does not
expect these leases to be renewed.
(12) At Crossroads Center, the lease to K-Mart is a ground lease that provides
current minimum annual rent of $38,000. The lease to T.J. Maxx provides
current minimum annual rent of $163,800. In 1996, two leases for 5,880
square feet will expire, one which the Company believes will be renewed.
(13) At Grandview Plaza, the lease to Home Quarters Warehouse provides $676,888
in current minimum annual rent. The Schnucks lease provides current minimum
annual rent of $509,903. The lease to J.C. Penney provides $365,487 in
current minimum annual rent and expires in 1998; however the tenant has
exercised its option to accelerate the expiration of the lease term to
March 1996. The lease to Walgreens provides current minimum annual rent of
$181,255. One tenant occupying 2,000 square feet is a tenant-at-will. In
1996, seven leases for 80,181 square feet will expire. The Company expects
the majority of these leases will be renewed.
(14) St. Francis Plaza was purchased in April 1995 for $5.2 million. The lease
to Walgreens provides current minimum annual rent of $149,500. The lease to
Wild Oats provides current minimum annual rent of $207,500. There are no
leases expiring until 2006.
(15) At Hood Commons, the lease to Shaw's provides current minimum annual rent
of $466,064. The lease to Ames provides current minimum annual rent of
$113,880. The lease to Decelle provides current minimum annual rent of
$210,824. There are four tenants occupying an aggregate of 6,785 square
feet, which are tenants-at-will. In 1996, five leases aggregating 8,647
square feet will expire. The Company expects the majority of these leases
to be renewed.
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<PAGE> 8
(16) At Augusta Plaza, the lease to K-mart provides current minimum annual rent
of $162,792. One tenant occupying 8,222 square feet is a tenant-at-will. In
1996, five leases for 12,080 square feet will expire. The Company expects
the majority of these leases will be renewed.
(17) At 585 Boylston Street, the lease to CVS Pharmacy provides current minimum
annual rent of $434,000.
(18) At 501-529 Nicollet Avenue, the unsubordinated ground lease of 51,000
square feet of land to Brookfield Development (California), Inc. is for
a 99-year term that commenced in 1987. This lease provides for stepped
minimum rents over its term, with the actual cash paid in each year
through 1993 being $800,000, in 1994 being $950,000, in 1995 being
$990,000 and thereafter increasing by $40,000 each year through 1998 and
by $50,000 each year through 2003, following which minimum rent reverts to
$1,100,000 annually for all subsequent years. Under the "leveling" method
of averaging contractual minimum rent payments over the life of the lease,
the minimum annual rent recognized as income by the Company for financial
reporting purposes each year is $1,089,000. The ground tenant has
constructed an approximately 670,000 square foot mixed-use retail and
office tower, known as Dain Bosworth Plaza, on the site. Major tenants of
the building include Neiman Marcus, Dain Bosworth and Marquette Bank.
(19) Har Mar Mall, Westview Center, and Rivercrest each represented 10% or more
of the historic book value of the Company's total assets at December 31,
1995 or accounted for 10% or more of the Company's gross revenues in 1995.
The following tables set forth certain supplemental information with
respect to these properties to the extent that such information is
available to the Company:
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<PAGE> 9
<TABLE>
a. Percentage occupied at December 31 for the last five years:
<CAPTION>
Har Mar Westview Rivercrest
------- -------- ----------
<S> <C> <C> <C>
1995 86% 74% 100%
1994 79% 81% 100%
1993 83% 95% *
1992 86% * *
1991 * * *
<FN>
* Information not available prior to acquisition by the Company
</TABLE>
<TABLE>
b. The average effective annual rentals per square foot for 1995, 1994, and
1993 were as follows:
<CAPTION>
Har Mar Westview Rivercrest
<S> <C> <C> <C>
1995 $13.12 $14.65 $12.71
1994 $15.51 $17.50 $14.77
1993 $14.88 $15.88 *
<FN>
* Information not available prior to acquisition by the Company
</TABLE>
<TABLE>
c. Leases in effect at December 31, 1995 expiring over each of the next ten
years, assuming no tenants exercise renewal options:
<CAPTION>
Har Mar Mall
------------
No. of Square Annual
Leases Feet Minimum Rent
------ ----- ------------
<S> <C> <C> <C>
1996 3 4,906 $ 64,191
1997 8 35,881 258,096
1998 10 84,186 554,621
1999 4 19,935 188,456
2000 10 40,749 240,050
2001 5 29,248 321,228
2002 1 2,015 16,120
2003 4 21,840 193,700
2004 2 9,319 106,170
2005 2 4,516 85,912
</TABLE>
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<PAGE> 10
<TABLE>
Rivercrest Shopping Center
--------------------------
<CAPTION>
No. of Square Annual
Leases Feet Minimum Rent
------ ----- ------------
<S> <C> <C> <C>
1996 4 16,137 $169,407
1997 3 9,900 157,048
1998 3 4,497 76,262
1999 - - -
2000 2 16,977 192,682
2001 4 78,500 477,500
2002 3 11,952 147,258
2003 - - -
2004 2 37,398 328,289
2005 - - -
</TABLE>
<TABLE>
Westview Center
---------------
No. of Square Annual
Leases Feet Minimum Rent
------ ----- ------------
<S> <C> <C> <C>
1996 2 3,400 $ 56,200
1997 - - -
1998 4 13,371 217,080
1999 2 16,500 166,500
2000 6 32,422 402,980
2001 5 11,085 224,932
2002 - - -
2003 1 6,490 94,395
2004 1 34,302 274,416
2005 5 44,432 509,480
</TABLE>
<TABLE>
Annual minimum future rentals to be received under non-cancelable operating
leases in effect at December 31, 1995 for the properties included in the
portfolio at December 31, 1995 and the number of leases that will expire, the
square feet covered by such leases and the current minimum annual rent under
such expiring leases for the next ten years are as follows:
<CAPTION>
Leases Expiring
-----------------------------------------
Year Ending Minimum Number Minimum
December 31 Future Rents of Leases Square Feet Future Rents
----------- ------------ --------- ----------- ------------
<S> <C> <C> <C> <C>
1996 $23,178,000 48 191,070 $1,733,443
1997 21,637,000 53 254,103 1,882,249
1998 19,595,000 36 181,320 1,611,322
1999 17,734,000 39 302,569 2,419,197
2000 15,950,000 44 266,467 2,034,196
2001 13,932,000 24 290,017 2,357,818
2002 12,618,000 9 43,834 424,894
2003 12,039,000 9 73,115 672,361
2004 11,010,000 11 146,410 1,303,010
2005 9,870,000 12 85,194 924,754
</TABLE>
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<PAGE> 11
<TABLE>
The following table and notes describe the properties acquired upon the
acquisition of Tucker on March 15, 1996:
<CAPTION>
PERCENT BASE LEASE/
YEAR RENTABLE LEASED AT SQUARE OPTION
SHOPPING CENTERS ACQUIRED(1) SQUARE FEET DEC. 31, 1995 MAJOR TENANTS (2) FEET EXPIRATION DATE
---------------- -------- ----------- ------------- ------------- ------ ---------------
<S> <C> <C> <C> <C> <C> <C>
ILLINOIS
Commons of Chicago Ridge 1988 286,000 76% T.J. Maxx 25,082 1998/2008
Chicago Ridge, Illinois Marshalls 27,000 1999/2014
Office Depot 27,680 2002/2012
Cineplex Odeon 25,000 2008/2018
Michaels Stores 17,550 1999/2004
- ------------------------------------------------------------------------------------------------------------------------
Chicago Ridge Annex 1995 42,000 53% Pep Boys 22,354 2015/2035
Chicago Ridge, Illinois
- ------------------------------------------------------------------------------------------------------------------------
Commons of Crystal Lake* 1993 269,000(3) 98% Jewel/Osco 59,804 2007/2042
Crystal Lake, Illinois Handy Andy 68,800 2018
Venture 81,338 2006
(not owned)
- ------------------------------------------------------------------------------------------------------------------------
Heritage Square* 1992 212,000 100% Montgomery Ward 111,016 2013/2033
Naperville, Illinois Circuit City 28,351 2009/2024
Stroud's 26,703 2003/2013
- ------------------------------------------------------------------------------------------------------------------------
Meadows Town Mall 1988 382,000 81% T.J. Maxx 24,000 1999/2009
Rolling Meadows, Illinois Waccamaw 108,000 1999/2009
Elek-Tek 32,000 2001/2011
Women's Club 20,478 1998/2008
- ------------------------------------------------------------------------------------------------------------------------
Sheridan Village* 1990 301,000 97% Bergner's Dept. 162,852 2006/2021
Peoria, Illinois Cohen Furniture 16,600 2007
- ------------------------------------------------------------------------------------------------------------------------
High Point Centre 1993 240,000 100% Cub Foods 62,000 2008/2033
Lombard, Illinois T.J. Maxx 25,200 1998/2013
Office Depot 36,416 2003/2013
Macfrugal's 17,040 2006/2016
- ------------------------------------------------------------------------------------------------------------------------
Rollins Crossing 1995 62,000(4) 100% Sears Hardware 21,083 2005/2020
Round Lake Beach, Illinois Super K-Mart 190,000 2033
(not owned)
- ------------------------------------------------------------------------------------------------------------------------
INDIANA
Speedway SuperCenter* 1993 530,000 98% Kohl's 75,000 1999/2019
Speedway, Indiana Kroger 59,515 2013/2043
Sears Roebuck & Co. 30,825 2004/2024
Old Navy 15,000 2005/2010
Kittles 25,320 2000/2010
PETsMART 21,781 2002/2012
Factory Card Outlet 16,675 2003/2013
Lindo Super Spa 16,589 2000/2010
- ------------------------------------------------------------------------------------------------------------------------
The Village 1993 355,000 97% J.C. Penney 60,600 1999/2004
Gary, Indiana Goldblatt's 55,000 2000/2005
McCrory's 24,500 1998/2003
Jacobsens 22,896 1996
Post-Tribune Publishing 19,246 1996
Indiana Employment 18,050 1996/2000
- ------------------------------------------------------------------------------------------------------------------------
</TABLE>
10
<PAGE> 12
<TABLE>
<CAPTION>
PERCENT LEASED BASE LEASE/
YEAR RENTABLE AT SQUARE OPTION
SHOPPING CENTERS ACQUIRED SQUARE FEET DEC. 31, 1995 MAJOR TENANTS(1) FEET EXPIRATION DATE
---------------- -------- ----------- ------------- ---------------- ------ ---------------
<S> <C> <C> <C> <C> <C> <C>
Washington Lawndale Commons* 1992 333,000 99% Target 83,110 2005/2025
Evansville, Indiana Sears Homelife 34,527 2003/2018
Allied Sporting Goods 20,285 1997/2012
Kuester's 40,857 1996
Jo-Ann Fabrics 15,262 2003/2013
Books-A-Million 20,515 2002/2008
- ------------------------------------------------------------------------------------------------------------------------
TENNESSEE
Williamson Square 1993 335,000 96% Wal-Mart 117,493 2008/2038
Franklin, Tennessee Kroger 63,986 2008/2038
Carmike Cinemas 29,000 2008
- ------------------------------------------------------------------------------------------------------------------------
WISCONSIN
Mequon Pavilions 1994 212,000 98% Kohl's Food Emporium 45,697 2010/2050
Mequon, Wisconsin Furniture Clearance 19,900 1997
- ------------------------------------------------------------------------------------------------------------------------
KENTUCKY
StonyBrook Center 1991 136,000 96% Kroger 79,625 2021/2046
Louisville, Kentucky
- ------------------------------------------------------------------------------------------------------------------------
RETAIL/OFFICE BUILDINGS
One North State* 1990 640,000 95% First Chicago 296,782 2003
Chicago, Illinois Arthur Andersen 126,533 2003/2013 (5)
T.J. Maxx 77,675 2001/2011
Filene's Basement 50,000 2002/2012
Int'l Academy of Design 27,270 2003/2008
- ------------------------------------------------------------------------------------------------------------------------
<FN>
* This property is included in the blanket mortgage securing the $100 million Tucker REMIC Note due in year 2000.
(1) The year acquired is the year in which the property was acquired by Tucker or by a predecessor business that
transferred the property to Tucker at the time of Tucker's initial public offering in 1993.
(2) Major tenants are defined as tenants occupying 15,000 square feet or more of the rentable square feet.
(3) The amount of rentable square feet at Commons of Crystal Lake does not include approximately 81,000 square feet which
is owned by an insurance company and leased to Venture.
(4) The amount of rentable square feet at Rollins Crossing does not include approximately 190,000 square feet which is
owned by K-Mart Corp.
(5) This tenant has the right exercisable on or before April 1, 1996 to terminate its lease effective as of April 1, 1998
upon payment of a $1.8 million cancellation fee. The tenant has indicated it will move out of the space prior to the
expiration of the lease but has not yet advised the Company whether or not it will exercise its early termination
rights.
</TABLE>
11
<PAGE> 13
Tenant Mix and Leases
- ---------------------
As evidenced by the foregoing tables of the Company and Tucker, the
Company's tenant mix is diverse and well represented by supermarkets,
drugstores and other consumer necessity or value-oriented retailers. Such
tenants tend to be stable performers in both good and bad economic times. As of
March 15, 1996, fourteen of the Company's shopping centers are anchored by
supermarkets, most of which are leading grocery chains in their respective
markets. No tenant included in the Company's portfolio of properties on
December 31, 1995 accounted for 10% or more of the Company's rental income in
1995. Including the properties acquired from Tucker, no single tenant accounts
for as much as 6% of pro forma base rental revenue and only two tenants account
for more than 2.5% of such revenue.
The terms of the Company's outstanding retail leases vary from tenancies at
will to 50 years. Major tenant leases are typically for 10 to 25 years, with one
or more extension options available to the lessee upon expiration of the initial
lease. By contrast, smaller shop leases are typically negotiated for three to
five year terms. The longer term of the major tenant leases serves to protect
the Company against significant vacancies and to assure the presence of strong
tenants who draw consumers to the Company's centers. The shorter term of the
smaller shop leases allows the Company to adjust rental rates for non-major
store space on a regular basis and upgrade the overall tenant mix.
Leases to major tenants tend to provide lower minimum rents per square foot
than smaller shop leases. At December 31, 1995, major tenant leases for
properties included in the portfolio at December 31, 1995 provided an average
annual minimum rent of $6.29 per square foot, compared with non-major tenant
leases which provided an average annual minimum rent of $10.37. In general, the
Company believes that minimum rental rates for anchor tenant leases entered into
several years ago are below current market rates, while recent anchor tenant
leases and most non-anchor leases provide for minimum rental rates that more
closely reflect current market rates. The payment by tenants of minimum rents
that are below current market rates is offset in part by payment of percentage
rents.
Risk Factors
- ------------
General
- -------
As in every business, there are risk factors that face the Company and its
operations. Certain risk factors involve the nature of the Company's industry -
real estate operations. Others are unique to the Company, some arising from or
in connection with the Company's recent acquisition of Tucker (the "Merger"). By
setting forth below some of the factors that could cause the actual results of
the Company's operations or plans to differ materially from the Company's
expectations as set forth in statements in this Report or elsewhere that may be
considered to be "forward-looking statements," the Company seeks to avail itself
of the "safe harbor" provided in the recently enacted Private Securities
Litigation Reform Act.
Substantial Debt Obligations and Term of Debt
- ---------------------------------------------
The Company's obligations for borrowed money immediately after giving
effect to the Merger aggregate approximately $221 million as compared to $39.4
million at December 31, 1995. The ratio of debt to Total Market Capitalization
of the Surviving Company is
12
<PAGE> 14
approximately 44% as compared to 20% at December 31, 1995. This increase in the
Company's leverage and its ratio of debt to Total Market Capitalization could
increase the risk of default under its indebtedness. Failure to pay the debt
obligations when due could result in the Company losing its interest in the
properties collateralizing such obligations.
The Company believes that the ratio of debt to Total Market Capitalization
is an important factor to consider in evaluating a REIT's debt level because
this ratio is one indicator of a company's ability to borrow funds. The Company
believes that using the ratio of debt to book value of assets is not as reliable
an indicator of a REIT's debt level because the book value of a REIT's assets
indicates only the depreciated value of the REIT's property without
consideration of the market value of such assets at a particular point in time.
The use of the ratio of debt to Total Market Capitalization of a company is more
variable than the book value because it is dependent on the current stock price
of a company. Accordingly, there can be no assurance that the use of the ratio
of debt to Total Market Capitalization in evaluating the Company's debt level
will adequately protect it from being too highly leveraged.
In particular, the maturity in September 2000 of the $100 million Tucker
REMIC Note secured by various of the properties acquired from Tucker may
increase the Company's risk of default on its indebtedness. Prior to the date
hereof, the Company has been able to refinance debt when it has become due on
terms which it believes to be commercially reasonable. There can be no assurance
that the Company will continue to be able to repay or to refinance its
indebtedness relating to the Tucker REMIC Note or any of its other indebtedness
on commercially reasonable or any other terms.
The Company's debt obligations subject to floating interest rates
immediately after the Merger aggregate approximately $95.5 million at a weighted
average interest rate of approximately 7.2% per annum as compared to $14.6
million at a weighted average interest rate of approximately 7.6% per annum for
the Company at December 31, 1995. To the extent the Company's exposure to
increases in interest rates is not eliminated through interest rate protection
or cap agreements, such increases will adversely affect the Company's net
income, funds from operations ("FFO") and cash available for distribution and
may affect the amount of distributions it can make to its stockholders.
The Company's new line of credit requires the Company to maintain interest
rate protection, at a rate satisfactory to the lead lender, with respect to $100
million of indebtedness. The Company has entered into an interest rate
protection agreement with The First National Bank of Boston (the "Bank"), with
respect to $40 million of indebtedness, whereby the Bank will reimburse the
Company the amount by which the then applicable three month LIBOR rate, exceeds
the then applicable cap rate per the agreement (currently 9.25%). The Company
intends to enter into an interest rate swap and/or cap agreement with the Bank
with respect to the remaining $60 million required to be hedged, thereby fixing
the interest rate on the amount subject to the swap agreement over the two year
term of the line of credit agreement. There can be no assurance that these
interest rate protection provisions will be effective.
The foregoing risks associated with the debt obligations of the Company may
adversely affect the market price of the Company's Common Stock and may inhibit
the Company's ability to raise capital and issue equity in both the public and
private markets.
13
<PAGE> 15
Restrictions on Ability of the Company to Dispose of Properties
- ---------------------------------------------------------------
Pursuant to the terms of the Indenture ("Tucker REMIC Indenture") governing
the Tucker REMIC Note, prior to October 1997 principal payments on the Tucker
REMIC Note cannot be made and the properties collateralizing the Tucker REMIC
Note cannot be sold. If the Company wishes either to prepay all or part of the
$100 million principal of the Tucker REMIC Note or to sell any of the properties
collateralizing the Tucker REMIC Note after such date, the Company will incur
significant prepayment penalties. The prepayment of principal of the Tucker
REMIC Note requires an additional payment of the greater of either (i) 1% of the
amount of principal being prepaid or (ii) the product of (A) the difference
between the outstanding principal balance of the Tucker REMIC Note before
prepayment and the present value of all remaining interest and principal
payments thereon and (B) the amount of principal being prepaid divided by the
outstanding principal balance of the Tucker REMIC Note. After October 1997, in
order to release any of the properties collateralizing the Tucker REMIC Note
from the lien so that such properties may be sold, the Tucker REMIC Indenture
requires that certain additional conditions be met, including that (i) the
aggregate amount of principal repaid on the Tucker REMIC Note equal at least
125% of the amount of principal allocated to the property to be released and
(ii) certain debt service coverage ratios continue to be satisfied.
Pursuant to the terms of the amended partnership agreement relating to the
operating partnership that holds title to several of the properties acquired
from Tucker (the "Operating Partnership"), for a period of 24 months after the
Merger, the Company, as the general partner of the Operating Partnership, may
not elect to dissolve the Operating Partnership or sell all or substantially all
of the assets of the Operating Partnership without the consent of a majority in
interest of the limited partners, except in connection with a merger or other
business combination of the Company. Thus the Company is restricted from
disposing of all or substantially all of the properties held by the Operating
Partnership.
Real Estate Investment Considerations
- -------------------------------------
Dependence on Midwestern Region and Retail Industry
---------------------------------------------------
The substantial majority of the Company's properties are located in the
Midwestern region of the United States and such properties consist predominantly
of community shopping centers. The Company's performance therefore is linked to
economic conditions in the Midwest and in the market for retail space generally.
The market for retail space has been adversely affected by the ongoing
consolidation in the retail sector, the adverse financial condition of certain
large companies in this sector and the excess amount of retail space in certain
markets. To the extent that these conditions impact the market rents for retail
space, they could result in a reduction of net income, FFO and cash available
for distribution and thus affect the amount of distributions the Company can
make to its stockholders.
In addition, the Company predominantly owns and operates retail shopping
centers catering to retail tenants. To the extent that the investing public has
a negative perception of the retail sector, the value of shares of common stock
of the Company may be negatively impacted, thereby resulting in such shares
trading at a discount below the inherent value of the assets of the Company as a
whole.
14
<PAGE> 16
Financial Condition and Bankruptcy of Tenants
---------------------------------------------
Since substantially all of the Company's and Tucker's income has been, and
substantially all of the Company's income will continue to be, derived from
rental income from retail shopping centers, the Company's net income, FFO and
cash available for distribution would be adversely affected if a significant
number of tenants were unable to meet their obligations to the Company or if
the Company were unable to lease on economically favorable terms a significant
amount of space in its shopping centers. In addition, in the event of default
by a tenant, the Company may experience delays and incur substantial costs in
enforcing its rights as landlord.
At any time, a tenant of the Company's properties may seek the protection
of the bankruptcy laws, which could result in the rejection and termination of
the tenant lease. Such an event could cause a reduction of net income, FFO and
cash available for distribution and thus affect the amount of distributions the
Company can make to its stockholders. No assurance can be given that any present
tenant which has filed for bankruptcy protection will continue making payments
under its lease or that any tenants will not file for bankruptcy protection in
the future or, if any tenants file, that they will continue to make rental
payments in a timely manner. In addition, a tenant may, from time to time,
experience a downturn in its business, which may weaken its financial condition
and result in a reduction or failure to make rental payments when due. If a
lessee or sublessee defaults in its obligations to the Company, the Company may
experience delays in enforcing its right as lessor or sublessor and may incur
substantial costs and experience significant delays associated with protecting
its investment, including costs incurred in renovating and releasing the
property.
Potential Negative Effect of One North State Property
-----------------------------------------------------
On a pro forma combined basis, for the year ended December 31, 1995, more
than 10% of the total revenue of the Company and Tucker was derived from rents
and expense reimbursements from tenants of Tucker's One North State property,
which is a "mixed use" property located in downtown Chicago. The total charges
currently being paid by certain of this property's tenants may be in excess of
current market rates. The leases of these tenants begin to expire in 2001. One
office tenant, however, has the option exercisable on or before April 1, 1996 to
terminate its lease, effective as of April 1, 1998, upon payment of a $1.8
million cancellation fee. This tenant has indicated that it will move out of
this space prior to the expiration of its lease, but has not yet advised the
Company whether or not it will exercise its early termination right. Pursuant to
the terms of the Tucker REMIC Indenture, this termination fee is required to be
paid into a reserve account which can be used, for among other things, to pay
for tenant alterations, leasing commissions and other lease inducements directly
related to this space. Any unused amount of this reserve account must be used to
repay the principal amounts owed under the Tucker REMIC Note. The inability of
the Company to lease such property, or a significant reduction in the amount of
rent and expense reimbursements paid by the tenants of such property, could have
an adverse impact on the operating results of the Company.
Vacancies and Lease Renewals
----------------------------
The descriptions above of the properties owned by the Company at December
31, 1995 recite the number of leases expiring during 1996 and management's
expectations as to
15
<PAGE> 17
how many tenants are likely to renew their leases. Some lease expirations
provide the Company with the opportunity to increase rentals or to hold the
space available for a stronger long-term tenancy. In other cases, there may be
no immediately foreseeable strong tenancy for space, and the space may remain
vacant for a longer period than anticipated or may be able to be re-leased only
at less favorable rents. In such situations, the Company may be subject to
competitive and economic conditions over which it has no control. The Company's
underwriting and negotiation of the terms of the Tucker acquisition took into
consideration anticipated lease expirations and possible resulting vacancies at
One North State and the other Tucker properties. There is, however, no
assurances that the effects of possible vacancies or lease renewals at such
properties, or at the Company's previously owned properties, may not reduce the
rental income, net income, FFO and funds available for distribution below levels
anticipated by the Company.
Possible Environmental Liabilities
- ----------------------------------
Under various federal, state and local laws, ordinances and regulations, an
owner of real estate is liable for the costs of removal or remediation of
certain hazardous or toxic substances on or in such property. Such laws often
impose such liability without regard to whether the owner knew of, or was
responsible for, the presence of such hazardous or toxic substances. The
presence of such substances, or the failure to properly remediate such
substances, may adversely affect the owner's ability to sell or rent such
property or to use such property as collateral in its borrowings. All of the
Company's properties, including those acquired from Tucker, have been subjected
to Phase I or similar environmental audits (which involve inspection without
soil sampling or ground water analysis) by independent environmental
consultants. Except as described below, these environmental audit reports have
not revealed any potential significant environmental liability, nor is
management aware of any environmental liability with respect to the properties
that it believes would have a material adverse effect on the Company's business,
assets or results of operations. No assurance can be given that existing
environmental studies with respect to the properties reveal all environmental
liabilities or that any prior owner of any such property did not create any
material environmental condition not known to the Company.
Phase II site assessments of the Commons of Chicago Ridge property acquired
from Tucker have disclosed the presence of contaminants in fill material and
soil at the property that could be associated with the property's former use as
a landfill and as the former site of an asphalt plant and storage tanks for
petroleum products (which storage tanks have been removed from the property),
but not at such levels as would require reporting to environmental agencies.
These Phase II site assessments also disclosed the presence in groundwater of
contaminants similar to those detected in the soil samples. Environmental
assessments of the property have also detected methane gas, probably associated
with the former use of the property as landfill. A regular maintenance program
was implemented by Tucker and is being continued by the Company to control the
migration and effect of the methane gas. There can be no assurance that an
environmental regulatory agency such as the Illinois Environmental Protection
Agency will not in the future require further investigation to determine the
source and vertical and horizontal extent of the contamination. If any such
investigation is required and confirms the existence of contaminants at the
levels disclosed in the Phase II site assessments, it is possible that the
relevant agency could require the Company to take action to address the
contamination, which action could range from ongoing monitoring to remediation
of the contamination. Based on the information currently available,
16
<PAGE> 18
management does not believe that the cost of responding to such contamination
would be material to the Company.
In connection with the execution of the merger agreement relating to the
acquisition of Tucker, the Company and certain individuals who had previously
provided a limited indemnity to Tucker for environmental liabilities at Commons
of Chicago Ridge (the "Individuals") have agreed to share the cost of having an
outside consultant conduct a new Phase II investigation of the soil and
groundwater of the property and to prepare a report recommending what action the
Company should take with respect to such matters. It is anticipated that this
outside consultant will be engaged shortly. In the event that the Company
decides to implement any of the recommendations of such consultant (the
"Recommended Work"), the Individuals have agreed to pay fifty percent of the
costs of the Recommended Work, with the Individuals' aggregate liability for the
Recommended Work limited to a maximum of $200,000. The Individuals have also
agreed to indemnify the Company and its subsidiaries and affiliates against all
claims, losses, costs and expenses incurred by such parties arising out of any
administrative, regulatory or judicial action, suit, investigation or proceeding
in connection with any applicable environmental health or safety law regarding
hazardous substances, materials, wastes or petroleum products, or any common law
right of action regarding such substances, materials, wastes or products,
whether brought by a governmental or regulatory authority by a third party, that
is initiated on or before October 4, 2003 with respect to conditions or acts at
the Commons of Chicago Ridge which existed prior to October 4, 1993. In
connection with this indemnification obligation, the Company has agreed to keep
the Individuals reasonably informed of various activities relating to the
property and to consult with the Individuals with respect to any potential
claims, settlements and remediation which could trigger the indemnification
obligations of the Individuals. There is no assurance that the Individuals will
be in a position to honor their indemnity obligations or that the liabilities
may not exceed the limit of their indemnity obligations. Regardless of such
indemnification, based on the information currently available, management of the
Company does not believe that the environmental liabilities and expenses
relating to the Commons of Chicago Ridge property would have a material effect
on the liquidity, financial condition or operating results of the Company.
Insurance
- ---------
The Company carries comprehensive general liability coverage and umbrella
liability coverage on all of its properties with limits of liability which the
Company deems adequate to insure against liability claims and provide for cost
of defense. Similarly, the Company is insured against the risk of direct
physical damage in amounts the Company estimates to be adequate to reimburse the
Company on a replacement cost basis for costs incurred to repair or rebuild each
property, including loss of rental income during the reconstruction period.
Currently, the Company also insures the properties for loss caused by earthquake
or flood in the aggregate amount of $10 million per occurrence. Because of the
high cost of this type of insurance coverage and the wide fluctuations in price
and availability, the Company has made the determination that the risk of loss
due to earthquake and flood does not justify the cost to increase coverage
limits any further under current market conditions. Should the availability and
pricing of this coverage become more cost advantageous, management would
re-evaluate its position.
17
<PAGE> 19
Competition
- -----------
All of the properties owned by the Company are located in developed areas.
There are numerous other retail properties and real estate companies within the
market area of each such property which compete with the Company for tenants and
development and acquisition opportunities. The number of competitive retail
properties and real estate companies in such areas could have a material effect
on (i) the Company's ability to rent space at the properties and the amount of
rents currently charged and (ii) development and acquisition opportunities. The
Company competes for tenants and acquisitions with others who have greater
resources than the Company.
Adverse Consequence of Failure to Qualify as a REIT and Other Tax Risks
- -----------------------------------------------------------------------
The Company believes that it (including its predecessor, Bradley Real
Estate Trust) has operated in a manner that permits it to qualify as a REIT
under the Code for each taxable year since its formation in 1961. Although
management of the Company believes that the Company is organized and is
operating in such a manner, no assurance can be given that the Company will be
able to continue to operate in a manner so as to qualify or remain so qualified.
Qualification as a REIT involves the application of highly technical and complex
Code provisions for which there are only limited judicial or administrative
interpretations and the determination of various factual matters and
circumstances not entirely within the Company's control. For example, in order
to qualify as a REIT, at least 95% of the Company's gross income in any year
must be derived from qualifying sources and the Company must make distributions
to stockholders aggregating annually at 95% of its REIT taxable income
(excluding net capital gains). In addition, no assurance can be given that new
legislation, new regulations, administrative interpretations or court decisions
will not change the tax laws with respect to qualification as a REIT or the
federal income tax consequences of such qualification. The Company, however, is
not aware of any currently pending tax legislation that would adversely affect
its ability to continue to operate as a REIT.
If the Company fails to qualify as a REIT, it will be subject to federal
income tax (including any applicable alternative minimum tax) on its taxable
income at corporate rates. In addition, unless entitled to relief under certain
statutory provisions, it will also be disqualified from treatment as a REIT for
the four taxable years following the year during which qualification is lost.
This treatment would reduce the net earnings of the Company available for
investment or distribution to stockholders because of the additional tax
liability for the year or years involved. In addition, distribution would no
longer be required to be made. To the extent that distributions to stockholders
would have been made in anticipation of the Company's qualifying as a REIT, the
Company might be required to borrow funds or to liquidate certain of its
investments to pay the applicable tax. The failure to qualify as a REIT would
also constitute a default under certain debt obligations of the Company.
Tucker represented to the Company that, since its formation, it also
operated so as to qualify as a REIT under the Code up to the time of the Merger.
If Tucker failed to qualify as a REIT in any year in which it elected so to
qualify and consequently becomes liable to pay taxes as a regular non-REIT
corporation, the liabilities of Tucker that the Company assumed in the Merger
would include such tax liability. Moreover, if it were subsequently determined
that Tucker had earnings and profits as determined for federal income tax
purposes (notwithstanding the requirement in the Merger Agreement that Tucker
distribute all earnings
18
<PAGE> 20
and profits prior to the Merger and the Company management's belief that such
distributions were in fact made) or if former stockholders of Tucker acquired
50% or more in value of the shares of the Company's Common Stock as a result of
or following the Merger, Tucker's failure to qualify as a REIT could disqualify
the Company as a REIT.
The Company's acquisition of Tucker's general partner interest in the
Operating Partnership and Tucker's indirect interests in certain subsidiary
partnerships of the Operating Partnership involve special tax considerations,
including the qualification of each such partnership as a "partnership" for
federal income tax purposes, which also could impact the Company's ability to
qualify as a REIT following the Merger. The Company believes that its operations
and those of all such subsidiaries are such as not to result in the Company's
failure to continue to meet all requirements for qualification as a REIT.
However, there is no assurance that the Company has qualified or will qualify as
a REIT for any year until the period of limitations has expired for a challenge
to such qualification by the Internal Revenue Service.
ITEM 2. PROPERTIES
----------
The properties of the Company are described under Item 1 and, with respect
to properties owned at December 31, 1995, in Note 2 of the Notes to Financial
Statements contained in this Report.
ITEM 3. LEGAL PROCEEDINGS
-----------------
Not applicable.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF STOCKHOLDERS
-----------------------------------------------
No matter was submitted to a vote of the Company's stockholders during the
fourth quarter of 1995.
On March 14, 1996, a Special Meeting of Stockholders of the Company
approved the merger of Tucker Properties Corporation with and into the Company
and the Agreement and Plan of Merger dated October 30, 1995, all as described
in the Merger Proxy Statement, by the following vote:
For 7,599,486
Against 365,927
Abstain 42,141
Broker non-votes 0
(Shares entitled to vote) 11,230,313
ITEM 4.A. EXECUTIVE OFFICERS OF THE REGISTRANT
------------------------------------
The Company's by-laws provide that the officers of the Company shall be a
President, a Treasurer, a Secretary and such other officers as are elected or
appointed by the Directors. Each officer holds office at the pleasure of the
Directors. The Directors have determined that the following officers are
executive officers of the Company within the meaning of Rule 3b-7 under the
Securities Exchange Act:
19
<PAGE> 21
President and Chief Executive Officer -. Thomas P. D'Arcy, age 36, has held
this position since February 1996, having served as Executive Vice President
since September 1995, Senior Vice President since 1992 and Vice President since
1989. Prior to joining the Company, Mr. D'Arcy was employed by R.M. Bradley &
Co., Inc. as a member of its property management and real estate brokerage
departments for over eight years.
Executive Vice President - Richard L. Heuer, age 43, has held this position
since late 1994. Prior to joining the Company, Mr. Heuer was employed by the
Welsh Companies, the independent property management Company that was managing
the Company's Minnesota properties.
Executive Vice President - E. Paul Dunn, age 49, has held this position since
March 1996. Prior to joining the Company, Mr. Dunn was Executive Vice President
of the Welsh Companies in Minneapolis, Minnesota since 1983.
Senior Vice President - Marianne Dunn, age 36, was named Senior Vice
President of the Company in September 1995, having served as Vice President of
Bradley since 1993 and as Investment Manager since 1990. Prior to joining the
Company, Ms. Dunn was employed by a lending institution as an Assistant
Treasurer in the Consumer Lending Department.
Chief Financial Officer and Treasurer - Irving E. Lingo, Jr., age 44, has
held this position with the Company since September 1995. Prior to joining the
Company, Mr. Lingo served as Chief Financial Officer of Lingerfelt Industrial
Properties, a division of The Liberty Property Trust.
None of the Officers or Directors of the Company is related to any other Officer
or Director of the Company. No description is required with respect to any of
the foregoing persons of any type of event referred to in Item 401(f) of
Regulation S-K.
20
<PAGE> 22
PART II
-------
ITEM 5. MARKET FOR THE REGISTRANT'S SHARES AND RELATED STOCKHOLDER
----------------------------------------------------------
MATTERS
-------
<TABLE>
The Company's Common Stock has traded on the NYSE (symbol "BTR") since
October 18, 1994 and before that dated traded for many years on the American
Stock Exchange. The share prices set forth below reflect a doubling of the
actual sales prices on the American Stock Exchange through October 17, 1994, as
a result of reverse stock split in October 1994, and the actual sales prices on
the New York Stock Exchange commencing October 18, 1994. The ranges of high and
low prices reported on such exchanges during 1994 and 1995 were:
<CAPTION>
Quarter Ended High Low Quarter Ended High Low
- ------------- ---- --- ------------- ---- ---
<S> <C> <C> <C> <C> <C>
March 1994 $18 3/4 $16 3/4 March 1995 $16 3/4 $14 7/8
June 1994 19 1/4 16 3/4 June 1995 16 3/8 15
September 1994 17 3/4 14 1/2 September 1995 16 7/8 15 3/8
December 1994 15 3/4 13 5/8 December 1995 16 1/4 13 1/8
</TABLE>
The closing sale price on the NYSE on March 21, 1996 was $14 7/8. At
December 31, 1995 there were approximately 622 holders of record of the
Company's shares.
<TABLE>
Dividends (adjusted for the one-for-two reverse stock split in 1994) have
been paid by the Company during the past two full years as follows:
<CAPTION>
Payment Per Share Payment Per Share
- ------- --------- ------- ---------
<S> <C> <C> <C>
March 31, 1994 $.32 March 31, 1995 $.33
June 30, 1994 .32 June 30, 1995 .33
September 30, 1994 .32 September 29, 1995 .33
December 30, 1994 .33 December 29, 1995 .33
</TABLE>
The Company has determined that approximately 16% and 26% of the
distributions paid in 1995 and 1994, respectively, were non-taxable returns of
capital to shareholders.
21
<PAGE> 23
<TABLE>
ITEM 6. SELECTED FINANCIAL DATA
-----------------------
<CAPTION>
YEARS ENDING DECEMBER 31,
-------------------------------------------------------------
1995 1994 1993 1992 1991
---- ---- ---- ---- ----
(Thousands of dollars, except per share data)
<S> <C> <C> <C> <C> <C>
Rental income $ 36,405 $ 32,875 $ 22,875 $ 11,839 $ 10,352
Other income 167 112 594 308 202
Expenses 28,141 25,343 17,934 11,360 9,850
-------------------------------------------------------------
Income before gain on sale of property 8,431 7,644 5,535 787 704
Gain on sale of property - 983 - - -
Net income $ 8,431 $ 8,627 $ 5,535 $ 787 $ 704
=============================================================
Total assets at end of year $ 180,545 $ 166,579 $ 127,931 $ 93,326 $ 50,345
-------------------------------------------------------------
Mortgage and bank loans payable at end of year $ 39,394 $ 66,748 $ 29,317 $ 44,085 $ 40,685
-------------------------------------------------------------
Per share:
Net income $ 0.85 $ 1.05 $ 0.82 $ 0.40 $ 0.38
Distributions $ 1.32 $ 1.29 $ 1.22 $ 1.20 $ 1.20
Weighted average shares outstanding 9,863,767 8,191,831 6,715,813 1,972,054 1,898,284
</TABLE>
22
<PAGE> 24
ITEM 7.
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
- -------------------------------------------------------------------------------
GENERAL
- -------
The Company is one of the nation's oldest continuously qualified real
estate investment trusts ("REIT") under the Internal Revenue Code. The Company
focuses on the ownership and operation of community shopping centers, primarily
in the Midwestern and the Northeastern regions of the United States. Bradley's
objective is to enhance the operating performance and value of its portfolio
through renovations, expansion and leasing strategies designed to meet the needs
of an evolving retail marketplace. The Company also seeks to create value
through the acquisition of properties which can benefit from the Company's
expertise in shopping center management, renovation and expansion. The
Company's properties consisted of approximately 3.0 million square feet of
rentable retail space at December 31, 1995.
Originally organized in 1961 as a Massachusetts business trust under the
name Bradley Real Estate Trust and externally advised by an outside advisor, in
October 1994, the Company reorganized as a Maryland corporation and in January
1995 acquired the REIT advisory business of the external advisor. The
acquisition resulted in the termination of an advisory arrangement extending
through August 1999, and permitted the Company to become self-administered. In
January 1995, the Company also brought in-house the property management and
leasing operations of a significant number of its properties by hiring the
management team previously employed by an independent firm that had managed the
Company's Minnesota properties.
On October 30, 1995, the Company entered into a merger agreement to
acquire Tucker Properties Corporation ("Tucker"), a REIT whose properties also
consist primarily of community shopping centers located in the Midwestern United
States. The merger closed on March 15, 1996 and as a result, the Company
presently owns 31 properties aggregating approximately 7.4 million square feet
of rentable space in 11 states.
LIQUIDITY AND CAPITAL RESOURCES
- -------------------------------
During 1995, the Company spent approximately $11,466,000 on property
acquisitions and capital improvements. Of that amount, approximately $5,300,000
was spent on property acquisitions, approximately $5,073,000 on tenant specific
capital improvements and approximately $1,093,000 for other property
improvements.
At December 31, 1995, the Company had commitments of approximately
$515,000 for tenant specific capital improvements.
On January 31, 1995, the Company completed the acquisition of the real
estate investment trust advisory business of its former advisor, thus enabling
the Company to become self-administered. The acquisition was completed through
the issuance of 325,000 shares of common stock to the owners of the former
advisor.
In April 1995, the Company acquired St. Francis Plaza, a 29,800 square
foot community shopping center in Santa Fe, New Mexico for approximately
$5,261,000. The purchase was financed by the assumption of $2,094,000 in debt
and the cash proceeds from the issuance of 182,500 shares of common stock.
The Company has used its secured bank line of credit to fund
expenditures for property acquisitions and capital improvements. Interest under
the line was at the lower of the lead bank's base rate or 1.875% over LIBOR.
During 1995, the weighted average rate was 8.0%. Approximately $50,400,000 was
available under the aggregate $65,000,000 line of credit at December 31, 1995.
Effective March 15, 1996, the Company's line of credit was renegotiated in
conjunction with the merger of the Company and Tucker, discussed below, to an
aggregate $150,000,000.
In December 1994, the Company filed a "shelf" registration statement
with the Securities and Exchange Commission to register $125,000,000 of common
stock, preferred stock, debt securities, warrants, rights, or units of the
foregoing securities that the Company may issue through underwriters or in
privately negotiated transactions from time to time.
23
<PAGE> 25
In July 1995, the Company completed an offering under the shelf
registration of 2,500,000 common shares at a price of $16 per share. Net
proceeds from the offering were approximately $37,405,000 of which $32,600,000
was used to pay-down the line of credit, $4,712,000 was used to pay-off the
non-recourse mortgages assumed in 1994 upon the purchase of Westwind Plaza, and
the balance used for general business purposes.
On March 15, 1996, the Company closed the merger acquisition of Tucker
after approval by the stockholders of the two companies. The acquisition was
completed through the issuance of 7,428,202 common shares of the Company valued
at $13.96 per share in exchange for 100% of the outstanding shares of Tucker,
the payment of certain transaction costs and the assumption of all of Tuckers'
liabilities. The acquisition was structured as a tax-free transaction, and is
being treated as a purchase for financial reporting purposes. The Company has
succeeded to Tucker's interest in two partnerships which hold title to all of
the former Tucker properties, and as a result now owns some of its 31 properties
directly and the others through the two partnerships (now renamed Bradley
Operating Limited Partnership and Bradley Financing Partnership). The Company
has in excess of a 95% general partner interest in each partnership.
In conjunction with the merger, on March 15, 1996, the Company entered
into a new $150,000,000 unsecured revolving credit facility with The First
National Bank of Boston. The line bears interest at the lower of the bank's base
rate or 1.75% over LIBOR. The rates available under the line become more
favorable in the event the Company meets certain loan-to-value tests or receives
an investment grade unsecured debt rating. In addition to replacing outstanding
borrowings under the Company's and Tucker's previously outstanding secured lines
of credit, the facility is available for the acquisition, development,
renovation and expansion of new and existing properties (including, but not
limited to, capital improvements, tenant improvements and leasing commissions),
and for other working capital purposes.
The Company's new line of credit contains certain financial and
operational covenants that, among other provisions, limit the amount of secured
and unsecured indebtedness the Company may have outstanding at any time to a
percentage of the Company's Consolidated Market Value as defined, and provide
for the maintenance of certain financial tests including minimum net worth and
debt service coverage requirements. The Company believes that such covenants
will not adversely affect the Company's business or the operation of its
properties.
The Company has entered into an agreement with Brookfield Development,
Inc., the current ground lessee, regarding the proposed sale by the Company of
its interest in 501-529 Nicollet Avenue, Minneapolis, Minnesota. The sale price,
subject to standard closing adjustments, is $12,900,000. If consummated, the
sale would result in a gain for financial reporting purposes of approximately
$9,182,000 and approximately $10,800,000 for federal income tax purposes. For
federal income tax purposes, however, the Company intends to structure the
transaction as a "like-kind" exchange. In that regard, the Company intends to
identify Brookdale Square Shopping Center, a 185,000 square foot community
shopping center located in Brooklyn, Minnesota ("Brookdale") as the replacement
property in the exchange. The purchase price for Brookdale, subject to standard
closing adjustments, is $8,750,000. To the extent that sales proceeds from
501-529 Nicollet Avenue exceed the purchase price of Brookdale, the Company
intends to apply such excess to the line of credit. The Company expects to
close these transactions by March 31, 1996.
While the acquisition of Tucker results in the Company's assumption of
substantial additional indebtedness, the Company anticipates that the additional
revenues from the former Tucker properties will be sufficient to service such
debt as well as to cover the operating expenses of such properties and to make
distributions with respect to the additional shares of the Company issued to
the former Tucker stockholders. $100,000,000 of Tucker mortgage debt assumed is
represented by a REMIC note that matures September, 2000. The Company believes
that the properties securing the REMIC note and other mortgage debt have
sufficient current value to permit
24
<PAGE> 26
the refinancing of such debt upon maturity, although there can be no assurance
that property values or refinancing terms at the time of maturity will be
favorable. In general, a goal of management is to receive an investment grade
rating from one or more national rating agencies that will increase the
Company's financial flexibility by permitting the Company to issue fixed-rate
unsecured debt on favorable terms.
The Company funds operating expenses and distributions primarily from
operating cash flows, although the line of credit may also be used for these
purposes. Net cash flows provided by operating activities increased to
$12,733,000 during 1995, from $10,877,000 in 1994 and $6,532,000 in 1993.
Distributions (treated as a charge to cash flows from financing activities in
the Company's financial statements) were $13,098,000 in 1995, $10,568,000 in
1994 and $8,285,000 in 1993.
Funds from operations ("FFO") increased $2,958,000 or 23% during 1995
from $12,790,000 in 1994 to $15,748,000 in 1995. FFO increased by $3,691,000 or
41% during 1994, from $9,099,000 in 1993. The Company generally considers FFO
to be a relevant and meaningful supplemental measure of the performance of an
equity REIT because it is predicated on a cash flow basis, as opposed to a
measure predicated on generally accepted accounting principles which gives
effect to non-cash items such as depreciation and amortization. FFO, as defined
by the National Association of Real Estate Investment Trusts and as followed by
the Company, represents 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, 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. Since the definition of FFO is a
guideline, computation of FFO may vary from one REIT to another. FFO does not
represent cash generated from operating activities in accordance with generally
accepted accounting principles and should not be considered as an alternative
to net income as an indicator of the Company's operating performance or as an
alternative to cash flow as a measure of liquidity. In addition, FFO is not
necessarily indicative of cash available to fund cash needs.
The Company believes that improving its financial flexibility will
position the Company for future growth, allowing it to take advantage of
acquisition, renovation and expansion opportunities. The Company continues to
evaluate prospective acquisitions of individual properties and entire
portfolios. To fund potential acquisitions, the Company may issue securities
under the multi-security "shelf" registration referred to above either to the
public or in privately negotiated transactions. The Company may also acquire
properties through the direct issuance of securities of the Company or, via its
Operating Partnership, through the issuance of limited partnership units in the
Operating Partnership. The Company also expects that it will make further
tax-deferred "like-kind" exchanges of existing mature properties for properties
with more growth potential. In addition, the Company may acquire partial
interests in real estate assets through participation in joint venture
transactions. Finally, the Company may borrow under its line of credit to
provide the initial funds for acquisitions (and, potentially, renovations and
expansions), with such borrowings being subsequently repaid from the proceeds
of further equity or debt offerings, depending upon market conditions at the
time.
RESULTS OF OPERATIONS
- ---------------------
1995 Compared to 1994
- ---------------------
Rental income increased $3,530,000 or 11% from $32,875,000 in 1994 to
$36,405,000 in 1995. Approximately $3,594,000 of this increase was due to the
effect of the acquisitions of Westwind Plaza and Rivercrest Center in 1994 and
St. Francis Plaza in 1995. These increases were partially offset by the effect
of the sale of Spruce Tree Centre in late 1994. Rental income from Har Mar
Mall increased approximately $598,000 while rental income from Burning Tree
Plaza increased approximately $260,000 from the prior year. Income at Har Mar
increased primarily due to the signing of leases with Barnes & Noble and
HomePlace. The increase at Burning Tree is substantially attributed to the
expansion of T.J. Maxx.
25
<PAGE> 27
Other income increased $55,000 or 49% from $112,000 in 1994 to $167,000
in 1995. This increase was primarily due to an increase in interest income,
resulting from the temporary investment of the July 1995 offering proceeds.
Total expenses increased $2,798,000 or 11% from $25,343,000 in 1994 to
$28,141,000 in 1995. Operations, maintenance and management expense increased
$543,000 during 1995 (from $5,315,000 to $5,858,000), due primarily to an
increase in operating expenses of $295,000 at Rivercrest, $285,000 at Har Mar
Mall and $269,000 at Westview Center, partially offset by the sale of Spruce
Tree Centre.
Real estate tax expense increased $656,000 during 1995 (from $8,070,000
to $8,726,000); $375,000 of the increase was due to the change in properties in
the Company's portfolio. The remaining increase of $281,000 was due to tax
increases at all of the properties, most notably the Illinois properties, with
the exception of Har Mar Mall, which had a $355,000 reduction in real estate
taxes following negotiation of abatements.
Mortgage and other interest expenses increased $181,000 during 1995,
from $4,524,000 in 1994 to $4,705,000. Approximately $270,000 of this increase
was due to mortgages on St. Francis Plaza and Westwind Plaza, partially offset
by a decrease in interest expense on the line of credit ($63,000) due to a
decrease in the average debt balance, and an increase in capitalized interest.
The average interest rate on outstanding borrowings under the line of credit
increased from 7.1% in 1994 to 8.0% in 1995.
Depreciation and amortization expense increased from $5,146,000 in 1994
to $7,317,000 in 1995. Of this $2,171,000 increase, $1,193,000 was related to
amortizing the cost of the purchase of the advisory business of the Company's
former external advisor, consummated in January 1995; $300,000 of the increase
was due to changes in the Company's real estate holdings; and the balance of
the increase was due to real estate improvements.
Administrative and general expenses decreased $753,000 in 1995, from
$2,288,000 in 1994 to $1,535,000 in 1995. This decrease primarily reflects
savings associated with the Company becoming self-administered following the
purchase of the advisory business of the former advisor in January 1995.
The acquisition of Westwind Plaza for approximately $7,500,000 was
effected in a tax-deferred exchange following the sale of Spruce Tree Centre
for $2,750,000, which resulted in a gain on sale of property of $983,000
recognized in 1994.
The aggregate result for 1995 was a $196,000 or 2% decrease in net
income from $8,627,000 ($1.05 per share) to $8,431,000 ($.85 per share). In
1994, income before the gain on sale of property was $7,644,000 ($.93 per
share), compared with $8,431,000 in 1995, ($.85 per share). Per share amounts
reflect weighted-average shares outstanding of 9,863,767 in 1995 and 8,191,831
in 1994, the increased number of shares primarily reflecting the 2,500,000
share public offering completed in July 1995.
1994 Compared to 1993
- ---------------------
Rental income increased $10,000,000 or 44% from $22,875,000 in 1993 to
$32,875,000 in 1994. The increase was primarily attributable to the
acquisitions of Terrace Mall, in May 1993; Westview Center and Burning Tree
Plaza, in July 1993; White Bear Hills, in December 1993; Rivercrest Center, in
March 1994 and Westwind Plaza, in November 1994. These increases were partially
offset by the effect of the sale of Spruce Tree Centre in November 1994.
Other income decreased $482,000 or 81% from $594,000 in 1993 to
$112,000 in 1994. During 1993, the Company had received (i) a $300,000
termination fee from a restaurant tenant at Har Mar Mall, (ii) approximately
$58,000 in interest on funds raised in the December 1992 public offering of
shares, and (iii) a $110,000 payment from the Company's directors and officers
insurance carrier to cover legal fees incurred in a prior year lawsuit.
Total expenses increased $7,409,000 or 41% from $17,934,000 in 1993 to
$25,343,000 in 1994 due primarily to increases in the following expenses which
were attributable to the addition of properties to the Company's portfolio
referred to above: (i) operations, maintenance and management expenses
increased $1,584,000 from $3,731,000 to $5,315,000, (ii) real estate taxes
increased $2,298,000 from $5,772,000 to $8,070,000, and (iii) depreciation and
amortization increased $1,582,000 from $3,564,000 to $5,146,000. Mortgage and
other interest increased $1,577,000 or 54% from $2,947,000 in 1993 to
$4,524,000 in 1994 primarily due to higher outstanding
26
<PAGE> 28
borrowings and higher prevailing rates of interest paid under the
revolving line of credit, offset by lower outstanding mortgage debt in 1994 as
a result of an aggregate of $20,500,000 being paid during 1993 on the Hood
Commons and Grandview construction loans, which loans carried an average rate
in excess of that on the 1994 borrowings under the line of credit.
Administrative and general expenses increased $368,000 or 19% from $1,920,000
in 1993 to $2,288,000 in 1994 reflecting both increased advisory fees to the
then external advisor resulting from the expanded portfolio and increased costs
for shareholder services resulting from public offerings in late-1992 and
mid-1993.
The acquisition of Westwind Plaza for approximately $7,500,000 was
effected in a tax-deferred exchange following the sale of Spruce Tree Centre
for $2,750,000, which resulted in a gain of approximately $983,000.
The aggregate result for 1994 was a $3,092,000 or 56% increase in net
income from $5,535,000 ($.82 per share) in 1993 to $8,627,000 ($1.05 per share)
in 1994. Before the gain on sale of property, net income in 1994 would have
been $7,644,000 ($.93 per share), an increase of 38%. Per share amounts reflect
weighted-average shares outstanding of 6,715,813 for 1993 and 8,191,831 for
1994. Share and per share amounts have been adjusted for the one-for-two
reverse stock split effected October 17, 1994.
27
<PAGE> 29
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
-------------------------------------------
See the Financial Statements and Schedule including the Index thereto,
immediately following the signature page to this report.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
------------------------------------------------
ACCOUNTING AND FINANCIAL DISCLOSURE
-----------------------------------
Not applicable.
28
<PAGE> 30
PART III
--------
Registrant plans to provide information required for ITEMS 10 through 13 in
its definitive Proxy Statement for its 1996 Annual Meeting of Stockholders,
which information is hereby incorporated by reference.
PART IV
-------
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
----------------------------------------------------------------
(a) The following documents are filed as part of this report:
(1) and (2) The Financial Statements and Schedules required by Item 8 are listed
in the Index to Financial Statements and Schedules following the signatures to
this report.
(3) The following exhibits (listed according to the exhibit index set forth in
the instructions to Item 601) of Regulation S-K, are a part of this report.
Exhibit No. Description
- ---------- -----------
3.1 Articles of Amendment and Restatement of
Bradley Real Estate, Inc., incorporated
by reference to Exhibit 3.1 of the
Company's Current Report on Form 8-K
dated October 17, 1994.*
3.2 Articles of Merger between Bradley Real
Estate Trust and Bradley Real Estate,
Inc., incorporated by reference to
Exhibit 3.2 of the Company's Current
Report on Form 8-K dated October 17, 1994.*
3.3 Articles of Merger between Tucker
Properties Corporation and Bradley Real
Estate, Inc.**
3.4 By-laws of Bradley Real Estate, Inc.,
incorporated by reference to Exhibit 3.3
of the Company's Current Report on Form
8-K dated October 17, 1994.*
4.1 Form of stock certificate for shares of
Common Stock of Bradley Real Estate,
Inc., incorporated by reference to
Exhibit 4.1 of the Company's Current
Report on Form 8-K dated October 17, 1994.*
29
<PAGE> 31
Exhibit No. Description
- ---------- -----------
10.1 Amended and Restated Agreement of Limited
Partnership of Bradley Operating Limited
Partnership in the form executed on March 15, 1996,
incorporated by reference to Exhibit 10.1 of the
Company's current report on Form 8-K dated
November 3, 1995.*
10.2 Revolving Credit Agreement dated as of March 15,
1996 by and among the Company, Bradley Operating
Limited Partnership and The First National Bank
of Boston.**
10.3 Indenture dated as of June 1, 1994 between Tucker
Financing Partnership (name changed March 15, 1996
to Bradley Financing Partnership) and Bankers Trust
Company of California, N.A. relating to 7.30%
Mortgage Notes due September 30, 2000.**
10.4 1993 Stock Option and Incentive Plan, as amended
and restated on March 13, 1996, incorporated by
reference to Appendix A to the Company's Proxy
Statement for its 1996 Annual Meeting of
Stockholders.*
21.1 Subsidiaries of the Company.**
23.1 Consent of KPMG Peat Marwick LLP (regarding Form
S-3 and Form S-8 Registration Statements).**
27.1 Financial Data Schedule.**
- ------------------
* Previously filed.
** Filed herewith.
(b) REPORT ON FORM 8-K. The Company filed a Form 8-K report on November 3,
1995 reporting in Items 5 and 7 the execution of the Agreement and Plan of
Merger dated October 30, 1995 with Tucker Properties Corporation.
30
<PAGE> 32
SIGNATURES
----------
Pursuant to the requirements of section 13 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 this 25th day of March 1996.
BRADLEY REAL ESTATE, INC.
by: /s/ Thomas P. D'Arcy
-------------------------------
Thomas P. D'Arcy, President
<TABLE>
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed by the following persons on behalf of the registrant and
in the capacities and on the dates indicated.
<S> <C>
/s/ Thomas P. D'Arcy March 25, 1996
----------------------------------------------------------------
Thomas P. D'Arcy, President, CEO and Director
/s/ Irving E. Lingo, Jr. March 25, 1996
----------------------------------------------------------------
Irving E. Lingo, Jr., Chief Financial Officer and Treasurer
/s/ Stephen G. Kasnet March 25, 1996
----------------------------------------------------------------
Stephen G. Kasnet, Director
/s/ W. Nicholas Thorndike March 25, 1996
----------------------------------------------------------------
W. Nicholas Thorndike, Director
----------------------------------------------------------------
William L. Brown, Director
/s/ Paul G. Kirk, Jr. March 25, 1996
----------------------------------------------------------------
Paul G. Kirk, Jr., Director
/s/ John B. Hynes III March 25, 1996
----------------------------------------------------------------
John B. Hynes III, Director
/s/ Joseph E. Hakim March 25, 1996
----------------------------------------------------------------
Joseph E. Hakim, Director
----------------------------------------------------------------
A. Robert Towbin, Director
</TABLE>
31
<PAGE> 33
INDEX TO FINANCIAL STATEMENTS AND SCHEDULES
PAGE
Report of Independent Auditors for the years ended F-2
December 31, 1995, 1994 and 1993
Financial Statements:
Balance Sheets - December 31, 1995 and 1994 F-3
For the years ended December 31, 1995, 1994 and 1993:
Statements of Income F-4
Statements of Cash Flows F-5
Statements of Changes in Stockholders' Equity F-6
Notes to Financial Statements F-7
Schedule:
Schedule III - Real Estate and Accumulated Depreciation F-16
All other schedules have been omitted since they are not required, not
applicable, or the information is included in the financial statements or notes
thereto.
F-1
<PAGE> 34
INDEPENDENT AUDITORS' REPORT
The Directors and Stockholders of
Bradley Real Estate, Inc.:
We have audited the accompanying balance sheets of Bradley Real Estate,
Inc. (formerly Bradley Real Estate Trust) as of December 31, 1995 and 1994 and
the related statements of income, changes in stockholders' equity and cash
flows for each of the years in the three-year period ended December 31, 1995.
These financial statements are the responsibility of the Company's management.
Our responsibility is to express an opinion on these financial statements based
on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of Bradley Real
Estate, Inc. as of December 31, 1995 and 1994, and the results of its
operations and its cash flows for each of the years in the three-year period
ended December 31, 1995, in conformity with generally accepted accounting
principles.
KPMG Peat Marwick LLP
Boston, Massachusetts
February 19, 1996, except for note 10, which is as of March 15, 1996
F-2
<PAGE> 35
BRADLEY REAL ESTATE, INC.
---------------------------
B A L A N C E S H E E T S
---------------------------
<TABLE>
- -----------------------------------------------------------------------------------------------------------
<CAPTION>
DECEMBER 31, December 31,
1995 1994
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C>
ASSETS
Real estate investments - at cost ........................................... $189,405,000 $177,939,000
Accumulated depreciation and amortization ................................... 27,591,000 22,385,000
- -----------------------------------------------------------------------------------------------------------
Net real estate investments ................................................. 161,814,000 155,554,000
Other assets:
Cash ...................................................................... 697,000 193,000
Rents and other receivables net of allowance
for doubtful accounts of $711,000 in 1995
and $459,000 for 1994 ................................................... 8,671,000 5,776,000
Unamortized buyout of contract, net ....................................... 4,372,000 --
Deferred charges, net and other assets .................................... 4,991,000 5,056,000
- -----------------------------------------------------------------------------------------------------------
$180,545,000 $166,579,000
===========================================================================================================
LIABILITIES AND STOCKHOLDER'S EQUITY
Mortgage loans .............................................................. $ 24,794,000 $ 27,748,000
Line of credit .............................................................. 14,600,000 39,000,000
Accounts payable and accrued expenses ....................................... 6,053,000 5,252,000
- -----------------------------------------------------------------------------------------------------------
45,447,000 72,000,000
- -----------------------------------------------------------------------------------------------------------
Stockholders' equity:
Shares of preferred stock, par value $.01 per share:
Authorized 20,000,000 shares; Issued and outstanding,
0 shares at December 31, 1995 and 1994 ............................... -- --
Shares of common stock, par value $.01 per share:
Authorized 80,000,000 shares; Issued and outstanding shares,
11,230,313 and 8,197,054 at December 31, 1995 and 1994, respectively . 112,000 82,000
Shares of excess stock, par value $.01 per share:
Authorized 50,000,000 shares; Issued and outstanding,
0 shares at December 31, 1995 and 1994 ............................... -- --
Additional paid-in capital .................................................. 148,407,000 103,251,000
Distributions in excess of accumulated earnings ............................. (13,421,000) (8,754,000)
- -----------------------------------------------------------------------------------------------------------
135,098,000 94,579,000
- -----------------------------------------------------------------------------------------------------------
$180,545,000 $166,579,000
===========================================================================================================
</TABLE>
The accompanying notes are an integral part of the financial statements.
F-3
<PAGE> 36
BRADLEY REAL ESTATE, INC.
---------------------------------------
S T A T E M E N T S O F I N C O M E
---------------------------------------
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------
Years Ended December 31,
1995 1994 1993
- --------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Income:
Rental income ................................ $36,405,000 $32,875,000 $22,875,000
Other income ................................. 167,000 112,000 594,000
- --------------------------------------------------------------------------------------------
36,572,000 32,987,000 23,469,000
Expenses:
Operations, maintenance and management ....... 5,858,000 5,315,000 3,731,000
Real estate taxes ............................ 8,726,000 8,070,000 5,772,000
Mortgage and other interest .................. 4,705,000 4,524,000 2,947,000
Depreciation and amortization ................ 7,317,000 5,146,000 3,564,000
Administrative and general ................... 1,535,000 2,288,000 1,920,000
- --------------------------------------------------------------------------------------------
28,141,000 25,343,000 17,934,000
Income before gain on sale of property ......... 8,431,000 7,644,000 5,535,000
Gain on sale of property ....................... -- 983,000 --
- --------------------------------------------------------------------------------------------
Net income ..................................... $ 8,431,000 $ 8,627,000 $ 5,535,000
- --------------------------------------------------------------------------------------------
Net income per share ......................... $ 0.85 $ 1.05 $ 0.82
- --------------------------------------------------------------------------------------------
Weighted average shares outstanding ............ 9,863,767 8,191,831 6,715,813
- --------------------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
F-4
<PAGE> 37
BRADLEY REAL ESTATE, INC.
-----------------------------------------------
S T A T E M E N T S O F C A S H F L O W S
-----------------------------------------------
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------
Years Ended December 31,
1995 1994 1993
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Cash flows from operating activities:
Net income .................................................. $ 8,431,000 $ 8,627,000 $ 5,535,000
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation and amortization ........................... 7,317,000 5,146,000 3,564,000
Gain on sale of property ................................ -- (983,000) --
Change in operating assets and liabilities:
Increase in rents and other receivables ................. (2,895,000) (1,428,000) (2,572,000)
Increase in accounts payable and accrued expenses ....... 362,000 2,822,000 935,000
Increase in deferred charges ............................ (482,000) (3,307,000) (930,000)
- ----------------------------------------------------------------------------------------------------------------
Net cash flows provided by operating activities ....... 12,733,000 10,877,000 6,532,000
- ----------------------------------------------------------------------------------------------------------------
Cash flows from investing activities:
Expenditures for real estate investments .................... (9,410,000) (36,253,000) (39,451,000)
Proceeds from sales of property, net ........................ -- 2,600,000 --
Decrease in investing - related deferred charges ............ 106,000 -- --
Expenditures for purchase of advisory business .............. (649,000) -- --
- ----------------------------------------------------------------------------------------------------------------
Net cash flows used by investing activities ............... (9,953,000) (33,653,000) (39,451,000)
- ----------------------------------------------------------------------------------------------------------------
Cash flows from financing activities:
Borrowings under line of credit ............................. 15,300,000 38,700,000 6,100,000
Payments under line of credit ............................... (7,100,000) (5,800,000) --
Pay-down line of credit with offering proceeds .............. (32,600,000) -- --
Pay-off of Westwind mortgage loans with offering proceeds ... (4,712,000) -- --
Distributions paid .......................................... (13,098,000) (10,568,000) (8,285,000)
Proceeds from public offerings, net ......................... 40,508,000 -- 51,158,000
Exercise of stock options ................................... 128,000 -- 68,000
Principal payments on mortgage loans ........................ (336,000) (449,000) (20,868,000)
Reorganization costs ........................................ (617,000) -- --
Shares issued under dividend reinvestment plan .............. 251,000 136,000 64,000
- ----------------------------------------------------------------------------------------------------------------
Net cash (used by) provided by financing activities ......... (2,276,000) 22,019,000 28,237,000
- ----------------------------------------------------------------------------------------------------------------
Net increase (decrease) in cash ............................... 504,000 (757,000) (4,682,000)
Cash
Beginning of year ........................................... 193,000 950,000 5,632,000
- ----------------------------------------------------------------------------------------------------------------
End of year ................................................. $ 697,000 $ 193,000 $ 950,000
================================================================================================================
Supplemental cash flow information:
Income taxes paid ........................................... $ 106,000 $ 45,000 $ --
Interest paid, net of amount capitalized .................... $ 4,854,000 $ 4,218,000 $ 2,947,000
</TABLE>
Supplemental schedule of non-cash investing and financing activities:
In 1994, a property was purchased for $7,496,000 which included the
Company's assumption of $4,980,000 in non-recourse mortgages.
In 1995, the Company issued 325,000 shares of Common Stock having a value of
$4,916,000 in connection with the acquisition of the REIT advisory business of
its former advisor.
In 1995, a property was purchased for $5,261,000 which included the
Company's assumption of $2,094,000 in non-recourse mortgages.
The accompanying notes are an integral part of the financial statements.
F-5
<PAGE> 38
<TABLE>
BRADLEY REAL ESTATE, INC.
- ----------------------------------------------------------------------------------
S T A T E M E N T O F C H A N G E S I N S T O C K H O L D E R S' E Q U I T Y
- ----------------------------------------------------------------------------------
<CAPTION>
Retained
Earnings
(Distributions
Additional in Excess of
Shares Paid-In Accumulated
at Par Value Capital Earnings)
- -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Balance at December 31, 1992 ......................... $ 9,797,000 $ 42,110,000 $ (4,063,000)
Net income ......................................... - - 5,535,000
Cash distributions
($.61 per share) ................................. - - (8,285,000)
Issuance of shares net of offering
costs of $3,564,000 .............................. 6,557,000 44,601,000 -
Exercise of share options .......................... 12,000 56,000 -
Shares issued under dividend
reinvestment plan ................................ 11,000 53,000 -
- -------------------------------------------------------------------------------------------------------
Balance at December 31, 1993 ......................... 16,377,000 86,820,000 (6,813,000)
Net income ......................................... - - 8,627,000
Cash distributions
($1.29 per share) ................................ - - (10,568,000)
Shares issued under dividend
reinvestment plan ................................ 15,000 121,000 -
Reverse one-for-two stock split .................... (8,195,000) 8,195,000 -
Change in par value from $1 to $.01 ................ (8,115,000) 8,115,000 -
- -------------------------------------------------------------------------------------------------------
Balance at December 31, 1994 ......................... 82,000 103,251,000 (8,754,000)
Net income ......................................... - - 8,431,000
Cash distributions
($1.32 per share) ................................ - - (13,098,000)
Issuance of stock, net of offering
costs of $2,595,000 .............................. 30,000 45,394,000 -
Stock issued under dividend reinvestment plan - 251,000 -
Exercise of stock options .......................... - 128,000 -
Reorganization costs ............................... - (617,000) -
- -------------------------------------------------------------------------------------------------------
Balance at December 31, 1995 ......................... $ 112,000 $148,407,000 $(13,421,000)
=======================================================================================================
</TABLE>
The accompanying notes are an integral part of the financial statements.
F-6
<PAGE> 39
BRADLEY REAL ESTATE, INC.
------------------------------------------------------
N O T E S T O F I N A N C I A L S T A T E M E N T S
------------------------------------------------------
- --------------------------------------------------------------------------------
ORGANIZATION
Bradley Real Estate, Inc. (the "Company") was organized in 1961 as a
Massachusetts business trust. In October 1994, the Company was reorganized into
a Maryland corporation, at which time the Company changed its name to Bradley
Real Estate, Inc., to reflect its new corporate structure. For both financial
reporting and federal income tax purposes, Bradley Real Estate, Inc. is
considered to be a continuation of the same entity as Bradley Real Estate Trust;
and references to the Company include both the trust and the corporation.
The Company's primary business is to own and operate commercial real
estate properties, consisting of shopping centers and office/retail buildings
located primarily in the midwest region of the United States. Substantially all
of the Company's income consists of rental income from tenants under the terms
of long-term operating leases. Retail leases usually include a provision for
additional rent to be paid based on gross sales on the premises. Certain leases
also include provisions for additional rent to recover allocable portions of
operating costs and real estate taxes.
From its inception through January 31, 1995, the Company retained the
firm of R.M. Bradley & Co., Inc. (R.M. Bradley) to provide certain management
services, to serve as advisor to the Company with respect to investments and
other matters, and to provide office facilities and various personnel. In
September 1994, shareholders of the Company voted to approve the acquisition of
R.M. Bradley's real estate investment trust advisory business, thus enabling the
Company to become self-administered. The acquisition, which has been accounted
for using the purchase method of accounting, was completed through the issuance
of 325,000 shares of common stock to the former advisor. The total purchase
price, including related costs in excess of the fair value of the net
identifiable assets acquired, was $5,565,000, which is being amortized over the
56 month remaining life of the contract at the time of the buy-out using the
straight-line method. The unamortized balance at December 31, 1995 is
$4,372,000.
Effective January 1, 1995, the Company brought its Minnesota property
management and leasing operations in-house as a further move to vertically
integrate the Company's operations. This activity included the hiring of the
eight member management team previously employed by the independent property
management firm that was managing the Company's Minnesota properties.
- --------------------------------------------------------------------------------
Note 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The financial statements are prepared on the accrual basis in accordance
with generally accepted accounting principles. The preparation of financial
statements in conformity with generally accepted accounting principles requires
management to make estimates and assumptions that affect the reported amounts of
assets and liabilities and disclosure of contingent assets and liabilities at
the date of the financial statements and the reported amounts of revenues and
expenses during the reporting period. Actual results could differ from these
estimates.
Rents and Other Receivables
Management has determined that all of the Company's leases with its
various tenants are operating leases. Revenues for such leases are recognized
using the straight-line method over the remaining term of the leases.
Real Estate Investments
Real estate investments are carried at cost less accumulated
depreciation. The provision for depreciation and amortization has been
calculated using the straight-line method based upon the following estimated
useful lives of assets:
------------------------------------------------------
Buildings......................... 18 - 50 years
Improvements and Alterations...... 2 - 39 years
------------------------------------------------------
Expenditures for maintenance, repairs and betterments that do not
materially prolong the normal useful life of an asset are charged to operations
as incurred and amounted to $874,000, $626,000, and $378,000, for 1995, 1994 and
1993, respectively.
F-7
<PAGE> 40
Additions and betterments that substantially extend the useful lives of the
properties are capitalized. Upon sale or other disposition of assets, the
cost and related accumulated depreciation are removed from the accounts and
the resulting gain or loss, if any, is reflected in income.
Real estate investments include capitalized interest and other costs on
significant construction in progress. Capitalized costs are included in the cost
of the related asset and charged to operations through depreciation over the
asset's estimated useful life. Interest capitalized amounted to $137,000,
$89,000, and $58,000 in 1995, 1994 and 1993, respectively.
Management reviews each property for impairment whenever events or
changes in circumstances indicate that the carrying value of a property may not
be recoverable. The review of recoverability is based on an estimate of
undiscounted future cash flows expected to result from its use and eventual
disposition. If impairment exists due to the inability to recover the carrying
value of a property, an impairment loss is recorded to the extent that the
carrying value of the property exceeds its estimated fair value.
On March 31, 1995, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 121, "Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of"
("Statement No. 121"). This Statement provides guidance for recognition and
measurement of impairment of long-lived assets, certain identifiable
intangibles and goodwill related both to assets to be held and used and assets
to be disposed of.
Statement No. 121 is effective for financial statements issued for
fiscal years beginning after December 15, 1995. Thus, for the Company, Statement
No. 121 is effective for the 1996 financial statements. Management does not
expect implementation of Statement No. 121 to have a material effect on the
financial statements of the Company.
Deferred Charges
A majority of deferred charges consist of agency commissions incurred in
leasing the Company's properties. Such charges are amortized under the
straight-line method over the life of the related lease. In addition, deferred
charges includes costs incurred in connection with securing long-term debt,
including the costs of entering into interest rate protection agreements. Such
costs are amortized over the term of the related agreement.
Earnings Per Share
Earnings per share are based on the weighted-average number of shares
outstanding during each year exclusive of outstanding stock options, which do
not materially affect earnings per share. Per share data and weighted-average
shares outstanding have been restated on the accompanying financial statements
to reflect a one-for-two reverse share split effected on October 17, 1994.
NOTE 2 - REAL ESTATE INVESTMENTS
<TABLE>
The following is a summary of the Company's real estate investments that
are held for lease at December 31, 1995 and 1994:
<CAPTION>
- ------------------------------------------------------------------------------------
DECEMBER 31, 1995 December 31, 1994
- ------------------------------------------------------------------------------------
<S> <C> <C>
Land ............................... $ 35,781,000 $ 34,215,000
Buildings .......................... 88,674,000 84,991,000
Improvements and alterations ....... 63,098,000 55,509,000
Construction in progress ........... 1,852,000 3,224,000
- ------------------------------------------------------------------------------------
$189,405,000 $177,939,000
- ------------------------------------------------------------------------------------
Accumulated depreciation
and amortization ................. (27,591,000) (22,385,000)
- ------------------------------------------------------------------------------------
$161,814,000 $155,554,000
====================================================================================
</TABLE>
The following table sets forth detail with respect to the individual
properties owned by the Company at December 31, 1995. The aggregate cost of
those properties for federal income tax purposes was approximately $159,134,000.
F-8
<PAGE> 41
<TABLE>
NOTE 2 -- REAL ESTATE INVESTMENTS (continued)
- ------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
Mortgage & Bank loans at Initial cost
December 31, 1995 (Note 3) to the Company
- ------------------------------------------------------------------------------------------------------------------------------
Buildings
and
Rate Maturity Balance Land Improvements
-------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
SHOPPING CENTERS
Har Mar Mall ................................ - - - $ 6,551,000 $15,263,000
Roseville, Minnesota
Sun Ray Shopping Center*** .................. 11.750% 1996 4,586,000 82,000 2,945,000
St. Paul, Minnesota ......................... 10.000% 1996 3,734,000
9.625% 1996 4,000,000
Terrace Mall ................................ - - - 630,000 1,706,000
Robbinsdale, Minnesota
Richfield Hub Shopping Center ................. 9.875% 1998 5,431,000 3,000,000 5,390,000
Richfield, Minnesota
Westwind Plaza ................................ - - - 1,949,000 5,547,000
Minnetonka, Minnesota
Burning Tree Plaza ............................ - - - 609,000 3,744,000
Duluth, Minnesota
Hub West Shopping Center ...................... 9.875% 1998 5,014,000 757,000 345,000
Richfield, Minnesota
White Bear Hills .............................. - - - 750,000 3,762,000
White Bear Lake, Minnesota
Rivercrest Shopping Center .................... * * * 7,349,000 17,147,000
Crestwood, Illinois
Westview Center ............................... * * * 6,417,000 14,973,000
Hanover Park, Illinois
Crossroads Center ............................. * * * 2,846,000 8,538,000
Fairview Heights, Illinois
Grandview Plaza Shopping Center ............... * * * 414,000 2,205,000
St. Louis, Missouri
Hood Commons .................................. * * * 361,000 1,685,000
Derry, New Hampshire
Augusta Plaza Shopping Center ................. - - - 297,000 1,376,000
Augusta, Maine
St. Francis Plaza ............................. 8.125% 2008 2,029,000 1,578,000 3,683,000
Santa Fe, New Mexico
RETAIL/OFFICE BUILDING
585 Boylston Street ........................... - - - 77,000 18,000
Boston, Massachusetts
GROUND LEASE
501-29 Nicollet Avenue ........................ Base* 1996 14,600,000 852,000 -
Minneapolis, Minnesota or
Land** LIBOR + 1.875
Total ........................................... $39,394,000 $34,519,000 $88,327,000
<FN>
* Rivercrest, Westview, Crossroads, Grandview, Hood Commons and 501-29 Nicollet Avenue secure borrowings under the Company's
line of credit aggregating $14,600,000 at December 31, 1995. Base is defined as the higher of the bank prime rate or the
federal funds rate + .5%. At December 31, 1995 base was 8.5%, the bank's prime rate. (See Note 3). Effective
January 30, 1995 the rate is Base or LIBOR + 1.875%.
** Land area upon which groundtenant has constructed a 670,000 square foot mixed-use retail and office tower.
*** The mortgage loans secured by Sun Ray were paid-off on January 2, 1996.
Note: The Sun Ray, Richfield Hub and Hub West loans are cross-collateralized.
Note: Due to certain provisions in the line of credit agreement the Company may be subject to additional fees as determined by
the bank.
</TABLE>
F-9
<PAGE> 42
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------
Gross amount carried
December 31, 1995
- -------------------------------------------------------------------------------------------------------
Capitalized Buildings Date Lives on which
Subsequent and Accumulated Acquired Depreciation
to Acquisition Land Improvements Total Depreciation by Company is Computed
- -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
$ 7,867,000 $ 6,786,000 $ 22,895,000 $ 29,681,000 $ 1,886,000 1992 5 - 39
11,598,000 91,000 14,534,000 14,625,000 6,857,000 1961 3 - 33
2,351,000 630,000 4,057,000 4,687,000 330,000 1993 6 - 39
5,147,000 3,000,000 10,537,000 13,537,000 2,451,000 1988 2 - 39
5,000 1,949,000 5,552,000 7,501,000 166,000 1994 39
2,900,000 609,000 6,644,000 7,253,000 394,000 1993 5 - 39
4,165,000 757,000 4,510,000 5,267,000 540,000 1991 31.5
49,000 755,000 3,806,000 4,561,000 207,000 1993 39
1,694,000 7,349,000 18,841,000 26,190,000 931,000 1994 8 - 39
1,035,000 6,405,000 16,020,000 22,425,000 1,174,000 1993 4 - 39
326,000 2,878,000 8,832,000 11,710,000 863,000 1992 2 - 31.5
14,794,000 427,000 16,986,000 17,413,000 4,804,000 1971 2 - 33
10,292,000 366,000 11,972,000 12,338,000 4,080,000 1973 3 - 31.5
1,769,000 297,000 3,145,000 3,442,000 1,832,000 1971 3 - 31.5
-- 1,578,000 3,683,000 5,261,000 63,000 1995 39
1,592,000 77,000 1,610,000 1,687,000 1,013,000 1961 5 - 50
975,000 1,827,000 -- 1,827,000 -- 1969 --
$66,559,000 $35,781,000 153,624,000 $189,405,000 $27,591,000
</TABLE>
F-10
<PAGE> 43
- --------------------------------------------------------------------------------
NOTE 3 - MORTGAGE LOANS AND LINE OF CREDIT
<TABLE>
The book value of real estate pledged as collateral for loans was
approximately $108,830,000 at December 31, 1995 (see Note 2). Scheduled
principal payments on mortgage loans and the line of credit outstanding at
December 31, 1995 are as follows:
<CAPTION>
- ---------------------------------------------------------------------------------
<S> <C>
1996 ......................................................... $27,133,000
1997 ......................................................... 250,000
1998 ......................................................... 10,282,000
1999 ......................................................... 117,000
2000 ......................................................... 127,000
Thereafter ................................................... 1,485,000
- ---------------------------------------------------------------------------------
$39,394,000
=================================================================================
</TABLE>
The Company's revolving bank line of credit, in effect in 1994 and 1995,
provides for borrowings of up to $65,000,000. The borrowings under this
revolving line of credit are secured by a blanket mortgage on Nicollet Avenue,
Hood Commons, Grandview Plaza, Crossroads Center, Westview Center and Rivercrest
Center (see Note 2). The current interest rates available to the Company under
the line of credit are (i) the higher of (x) the rate announced by the lead
lender as its "base rate" or (y) one half of one percent (.5%) above the
overnight federal funds effective rate published by the Board of Governors of
the Federal Reserve System and (ii) the adjusted LIBOR rate (as defined therein)
plus one and seven-eighths percent (1.875%). The weighted average effective
borrowing rate during 1995 was 8.0%. Among other requirements, the facility
provides for an annual commitment fee of .25% on the unused portion of the line
of credit. As of December 31, 1995, the line of credit matures in December 1996.
In order to reduce the Company's (and thus the lenders') exposure to the
risks associated with floating rate debt, the line of credit requires that the
Company maintain interest rate protection, at a rate satisfactory to the lead
lender, with respect to at least $30 million of indebtedness. As required, the
Company entered into an interest rate protection agreement in January 1994 with
its lead lender for a premium of $30,000, which has the effect of mitigating
increases in interest rates available under the line of credit with respect to
the protected amount by reimbursing the Company the amount by which the then
applicable three-month LIBOR Rate (as defined in the interest rate protection
agreement) for the protected amount exceeds the then applicable cap rate (as
described below) for the protected amount. The cap rate is 8.7% for the period
January 30, 1995 through January 28, 1996 and 8.9% for the period January 29,
1996 through January 28, 1997. The interest rate protection agreement had no
effect on the Company's interest expense in 1995 or 1994.
The Company's line of credit contains certain covenants which, among
other provisions, require lenders' consent regarding the incurrence of
additional indebtedness, the signing of certain leases and the sale and purchase
of assets by the Company. The covenants also provide for the maintenance of
certain financial tests, including minimum net worth and debt service coverage
requirements, and contain cross-default and cross-collateral provisions. The
Company believes that such covenants will not adversely affect the Company's
business or the operation of its properties.
On January 2, 1996, the Company paid-off its mortgage loans of
$12,320,000 secured by the Sun Ray Shopping Center investment with proceeds from
the bank line of credit.
F-11
<PAGE> 44
- --------------------------------------------------------------------------------
NOTE 4 - RENTALS UNDER OPERATING LEASES
<TABLE>
Annual minimum future rentals to be received under non-cancelable
operating leases in effect at December 31, 1995 are as follows:
<CAPTION>
- ---------------------------------------------------------------------------------
<S> <C>
1996 ...................................................... $23,178,000
1997 ...................................................... 21,637,000
1998 ...................................................... 19,595,000
1999 ...................................................... 17,734,000
2000 ...................................................... 15,950,000
Later Years ............................................... 192,455,000
- ---------------------------------------------------------------------------------
Total Minimum Future Rentals ................................... $290,549,000
=================================================================================
</TABLE>
Total minimum future rentals do not include contingent rentals under
certain leases based upon lessees' sales volume. Contingent rentals earned
amounted to approximately $1,083,000, $1,121,000, and $772,000 in 1995, 1994 and
1993, respectively. Certain leases also require lessees to pay all or a portion
of real estate taxes and oper ating costs, amounting to $10,774,000, $9,259,000
and $6,193,000 in 1995, 1994 and 1993, respectively.
No tenant accounted for as much as 10% of rental income in 1995, 1994 or
1993.
NOTE 5 - INCOME TAXES
The Company has elected to be taxed as a real estate investment trust
("REIT") under the Internal Revenue Code (the "Code"). Under the Code, a
qualifying REIT that distributes at least 95% of its ordinary taxable income to
its stockholders is entitled to a tax deduction in the amount of the
distribution. In addition, qualifying REITs a re permitted to deduct capital
gain distributions in the determination of the tax on capital gains. The Company
paid distributions to stockholders aggregating $13,098,000, $10,568,000 and
$8,285,000 in 1995, 1994 and 1993, respectively. The Company has determined that
for Federal income tax purposes approximately 84% of the distributions paid in
1995 were ordinary dividends and approximately 16% were a return of capital;
approximately 74% of the distributions paid in 1994 were ordinary dividends and
approximately 26% were a return of capital; and approximately 70% of the
distributions paid in 1993 were ordinary dividends and approximately 30% were a
return of capital.
NOTE 6 - STOCKHOLDERS' EQUITY
Per share information prior to October 17, 1994 has been adjusted to
reflect the Company's one-for-two reverse stock split effected on October 17,
1994. In December 1992, the Company issued 3,000,000 shares at a public offering
price of $14.75 per share. In January 1993, pursuant to the exercise of the
underwriters' over-allotment option in connection with such public offering, the
Company issued another 450,000 shares at the same public offering price. Net
proceeds to the Company related to the January offering were $6,224,000 after
additional offering costs of approximately $414,000.
In July 1993, the Company issued 2,828,500 shares (including 78,500
shares issued pursuant to the underwriters' exercise of their over-allotment
option) at a public offering price of $17 per share. Net proceeds to the Company
were approximately $44,934,000 after offering costs of approximately $3,150,000.
In December 1994, the Company filed a shelf registration with the
Securities and Exchange Commission to register $125 million of common stock,
preferred stock, debt securities, warrants, rights or units of the foregoing
securities that the Company may issue through underwriters or in privately
negotiated transactions for cash from time to time.
In January 1995, the Company issued 325,000 shares of common stock in
conjunction with the purchase of the REIT advisory business of its former
advisor. In April 1995, the Company issued 182,500 shares of common stock at a
price of $17 per share, which proceeds were applied to the acquisition of St.
Francis Plaza. In July 1995, the Company completed a public share offering of
2,500,000
F-12
<PAGE> 45
shares of common stock at a price of $16 per share. Net proceeds from the
offering were approximately $37,405,000 (net of offering costs of approximately
$2,595,000), of which $32,600,000 was used to pay-down the Company's bank line
of credit and $4,712,000 was used to pay-off the non-recourse mortgages
assumed in November 1994 in connection with the Westwind Plaza purchase.
Under the Company's Dividend Reinvestment and Share Purchase Plan in
effect since 1993, stockholders of record owning at least 100 shares may elect
to reinvest cash dividends and make limited additional cash payments (minimum
$100, maximum $2,500 per quarter) to purchase newly issued shares of the
Company without brokerage fees or other transaction costs, at a 3% discount
from market prices (as determined in the Plan). During 1995, 1994 and 1993, the
Company issued 16,714, 8,530 and 5,550 shares, respectively, under this Plan.
- --------------------------------------------------------------------------------
NOTE 7 - STOCK OPTION PLANS
- --------------------------------------------------------------------------------
In 1985, the Company adopted an Incentive Stock Option Plan for officers
and key employees under which options for 75,000 shares were granted. No further
options may be granted under the 1985 plan, but options for 54,751 and 61,875
shares remain outstanding at December 31, 1995 and 1994, respectively.
In 1993, the shareholders approved a new 1993 Stock Option Plan which
authorizes options to be granted for up to 5% of the Company's shares
outstanding. During 1995, 217,500 options were granted under this Plan. At
December 31, 1995 and 1994, 240,500 and 29,500 options, respectively, remained
outstanding under this Plan.
A committee of the Board of Directors administers both Plans and is
responsible for selecting persons eligible to be granted options and determining
the number and purchase price of shares subject to option (which in the case of
incentive options may not be less than the fair market value of shares at the
date of grant), the duration of an option (which may not be more than ten years
from date of grant) and the times when shares may be issued upon exercise of an
option.
<TABLE>
A summary of option transactions during the periods covered by these
financial statements is as follows:
<CAPTION>
- -----------------------------------------------------------------------------------
Exercise Prices
Shares Per Share
- -----------------------------------------------------------------------------------
<S> <C> <C> <C>
Outstanding at December 31, 1992 .................... 52,875 $11.50 - $22.00
Granted ............................................. 44,500 $14.75 - $17.00
Exercised ........................................... (6,000) $11.50
- -----------------------------------------------------------------------------------
Outstanding at December 31, 1993 and 1994 ........... 91,375 $11.50 - $22.00
Granted ............................................. 217,500 $14.875 - $16.50
Expired ............................................. (4,624) $16.66 - $21.25
Exercised ........................................... (9,000) $11.50 - $14.875
- -----------------------------------------------------------------------------------
Outstanding at December 31, 1995 .................... 295,251 $11.50 - $22.00
===================================================================================
</TABLE>
All options outstanding at December 31, 1995 are fully vested and have a
duration of ten years from the date of grant, subject to earlier termination in
certain circumstances.
- --------------------------------------------------------------------------------
NOTE 8 - FAIR VALUE OF FINANCIAL INSTRUMENTS
Statement of Financial Accounting Standards No. 107, "Disclosures about
Fair Value of Financial Instruments", requires the Company to make disclosure of
the fair value information of all financial instruments, whether or not
recognized in the balance sheet, for which it is practicable to estimate fair
value.
The Company's financial instruments, other than debt and an interest
rate protection agreement for the Company's line of credit, are generally
short-term in nature and contain minimal credit risk. These instruments consist
of cash, rents and other receivables, and accounts payable. The carrying amount
of these assets and liabilities in the balance sheet are assumed to be at fair
value.
F-13
<PAGE> 46
The Company's mortgage loans are at fixed rates, and when compared with
borrowing rates currently available to the Company with similar terms and
average maturities, approximate fair value. The Company's line of credit is at a
variable rate, which results in a carrying value that approximates its fair
value. It is not practicable to estimate the fair value of the interest rate
protection agreement; however, the replacement cost of the interest rate cap is
not material based on prevailing market rates.
- --------------------------------------------------------------------------------
NOTE 9 - COMMITMENTS/SUBSEQUENT EVENTS
At December 31, 1995, the Company had commitments of approximately
$515,000 for tenant related capital improvements. Cash flow from operations and
the Company's revolving bank line of credit are available to fund these
improvements.
The Company has entered into an agreement with Brookfield Development,
Inc., the current ground lessee, regarding the proposed sale by the Company of
its interest in 501-529 Nicollet Avenue, Minneapolis, Minnesota. The sale price,
subject to standard closing adjustments, is $12,900,000. If consummated, the
sale would result in a gain of approximately $9,182,000 for financial reporting
purposes and $10,800,000 for federal income tax purposes. For federal income tax
purposes, however, the Company intends to structure the transaction in part as a
tax deferred "like-kind" exchange. In that regard, the Company intends to
identify Brookdale Square Shopping Center, a 185,000 square foot community
shopping center located in Brooklyn Center, Minnesota ("Brookdale"), as the
replacement property in the exchange. The purchase price for Brookdale, subject
to standard closing adjustments, is $8,750,000. Brookdale is currently owned by
a major insurance Company whose asset disposition team has agreed upon the
business terms which it will recommend to its corporate office. To the extent
that the sales proceeds from 501-529 Nicollet Avenue exceed the purchase price
of Brookdale, the Company intends to apply such excess to reduce its line of
credit with the First National Bank of Boston.
- --------------------------------------------------------------------------------
NOTE 10 - MERGER AGREEMENT
On March 15, 1996, the Company closed the merger acquisition of Tucker
Properties Corporation ("Tucker"), after approval of such merger by the
stockholders of the two companies. The acquisition was completed through the
issuance of 7,428,202 common shares of the Company valued at $13.96 per share,
in exchange for 100% of the outstanding shares of Tucker, payment of certain
transaction costs and the assumption of all of Tucker's liabilities. The Tucker
shareholders received .686 of a share of Bradley for each outstanding Tucker
share. The acquisition was structured as a tax-free transaction, and will be
accounted for using the purchase method of accounting. Accordingly, the purchase
price will be allocated to the assets purchased and the liabilities assumed
based upon the fair values at the date of acquisition. Any difference between
the purchase price and fair value of net assets acquired is not expected to be
significant. As a result of the merger the Company owns 31 properties
aggregating approximately 7.4 million square feet in eleven states.
<TABLE>
The following table sets forth certain summary unaudited pro forma
balance sheet information for the Company as if the merger had occurred as of
December 31, 1995.
<CAPTION>
- --------------------------------------------------------------------------------
Historical Pro Forma
- --------------------------------------------------------------------------------
(Unaudited)
<S> <C> <C>
Total assets .................................. $180,545,000 $491,156,000
Total debt .................................... $ 45,447,000 $247,966,000
Stockholders' equity .......................... $135,098,000 $238,796,000
</TABLE>
F-14
<PAGE> 47
<TABLE>
The following table sets forth certain summary unaudited pro forma operating
data for the year ended December 31, 1995 as if the merger, the July
offering and the acquisition of St. Francis Plaza had been consummated on
January 1, 1995, after giving effect to certain adjustments including a
reduction in depreciation expense due to longer useful lives and estimated cost
savings of the combined entity.
<CAPTION>
- ---------------------------------------------------------------------------------
Historical Pro Forma
- ---------------------------------------------------------------------------------
(Unaudited)
<S> <C> <C>
Total revenues ............................... $36,572,000 $87,922,000
Net income ................................... $ 8,431,000 $19,038,000
Net income per share ......................... $ 0.85 $ 1.02
</TABLE>
The unaudited pro forma operating data are presented for comparative
purposes only and are not necessarily indicative of what the actual results of
operations would have been for the year ended December 31, 1995, nor does such
data purport to represent the results to be achieved in future periods.
In conjunction with the merger, on March 15, 1996 the Company entered
into a new $150 million unsecured revolving credit facility with The First
National Bank of Boston. The line bears interest at a rate equal to the lower of
the bank's base rate or 1.75% over LIBOR. The rates available under the line
become more favorable in the event the Company meets certain loan-to-value
tests or receives an investment grade unsecured debt rating. In addition to
replacing outstanding borrowings under the Company's and Tucker's previously
outstanding secured lines of credit, the facility is available for the
acquisition, development, renovation and expansion of new and existing
properties (including, but not limited to, capital improvements, tenant
improvements and leasing commissions), and other working capital purposes.
The Company's new line of credit contains certain financial and
operational covenants that, among other provisions, limit the amount of secured
and unsecured indebtedness the Company may have outstanding at any time to a
percentage of the Company's Consolidated Market Value as defined, and provide
for the maintenance of certain financial tests including minimum net worth and
debt service coverage requirements.
<TABLE>
NOTE 11 - SUPPLEMENTARY QUARTERLY DATA (UNAUDITED)
<CAPTION>
- -------------------------------------------------------------------------------------------
March 31, June 30, Sept. 30, Dec. 31,
1995 1995 1995 1995
- -------------------------------------------------------------------------------------------
(Thousands of dollars except per share data)
<S> <C> <C> <C> <C>
Rental income ................................. $8,615 $8,686 $9,396 $9,708
Net income .................................... $1,835 $1,638 $2,357 $2,601
Net income per share .......................... $ .22 $ .19 $ .21 $ .23
</TABLE>
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------
March 31, June 30, Sept. 30, Dec. 31,
1994 1994 1994 1994
- -------------------------------------------------------------------------------------------
(Thousands of dollars except per share data)
<S> <C> <C> <C> <C>
Rental income ................................ $7,455 $8,474 $8,538 $8,408
Net income ................................... $2,094 $1,994 $1,850 $2,689
Net income per share ......................... $ .25 $ .24 $ .23 $ .33
</TABLE>
F-15
<PAGE> 48
<TABLE>
SCHEDULE III
BRADLEY REAL ESTATE, INC.
-------------------------
REAL ESTATE AND ACCUMULATED DEPRECIATION
----------------------------------------
<CAPTION>
Cost December 31,
---- -----------
1995 1994 1993
---- ---- ----
<S> <C> <C> <C>
Balance, beginning of year $177,939,000 $138,189,000 $ 98,840,000
Improvements and other
additions: 11,466,000 41,443,000 39,349,000
Sale of property - (1,683,000) -
------------ ------------ ------------
Balance, end of year $189,405,000 $177,939,000 $138,189,000
============ ============ ============
Accumulated Depreciation
------------------------
Balance, beginning of year $ 22,385,000 $ 18,156,000 $ 15,090,000
Depreciation provided 5,206,000 4,330,000 3,066,000
Sale of property - (101,000) -
------------ ------------ ------------
Balance, end of year $ 27,591,000 $ 22,385,000 $ 18,156,000
============ ============ ============
</TABLE>
F-16
<PAGE> 49
INDEX TO EXHIBITS
Exhibit No. Description
- ---------- -----------
3.3 Articles of Merger between Tucker
Properties Corporation and Bradley Real
Estate, Inc.
10.2 Revolving Credit Agreement dated as of March 15,
1996 by and among the Company, Bradley Operating
Limited Partnership and The First National Bank
of Boston.
10.3 Indenture dated as of June 1, 1994 between Tucker
Financing Partnership (name changed March 15, 1996
to Bradley Financing Partnership) and Bankers Trust
Company of California, N.A. relating to 7.30%
Mortgage Notes due September 30, 2000.
21.1 Subsidiaries of the Company.
23.1 Consent of KPMG Peat Marwick LLP (regarding Form
S-3 and Form S-8 Registration Statements).
27.1 Financial Data Schedule.
<PAGE> 1
Exhibit 3.3
-----------
[State Department of Assessments and Taxation
Approved for Record 3/15/96 at 9:49 a.m.]
ARTICLES OF MERGER
BETWEEN
TUCKER PROPERTIES CORPORATION
AND
BRADLEY REAL ESTATE, INC.
THIS IS TO CERTIFY THAT:
FIRST: Bradley Real Estate, Inc. and Tucker Properties Corporation agree to
merge in the manner hereinafter set forth.
SECOND: Bradley Real Estate, Inc. is the corporation to survive the merger.
THIRD: Both Bradley Real Estate, Inc. (the "Surviving Corporation") and
Tucker Properties Corporation (the "Merging Corporation") are incorporated under
the laws of the State of Maryland.
FOURTH: The principal office of the Surviving Corporation in the State of
Maryland is located in Baltimore City and the principal office of the Merging
Corporation in the State of Maryland is located in Baltimore City.
FIFTH: The Merging Corporation owns no interest in land in the State of
Maryland.
SIXTH: The charter of the Surviving Corporation will not be amended as a
result of the merger.
SEVENTH: The total number of shares of all classes of stock which each
corporation party to these Articles has the authority to issue and the number of
shares of each class are as follows:
a) Surviving Corporation
The total number of shares of all classes of stock which the Surviving
Corporation has authority to issue is one hundred fifty million
(150,000,000) shares, consisting of eighty million (80,000,000) shares of
common stock, $.01 par value per share, twenty million (20,000,000) shares
of preferred stock, $.01 par value per share, and fifty million
(50,000,000) shares of excess stock, $.01 par value per share. The
aggregate par value of all shares of all classes having a par value is one
million five hundred thousand dollars ($1,500,000).
<PAGE> 2
b) Merging Corporation
The total number of shares of all classes of stock which the Merging
Corporation has authority to issue is one hundred million (100,000,000)
shares, consisting of ninety million (90,000,000) shares of common stock,
$.001 par value per share, and ten million (10,000,000) shares of preferred
stock, $.001 par value per share. The aggregate par value of all shares of
all classes having a par value is one hundred thousand dollars ($100,000).
EIGHTH: Upon the Effective Date (as defined in Article Eleventh), the
Merging Corporation shall be merged into the Surviving Corporation; and,
thereupon, the Surviving Corporation shall possess any and all purposes and
powers of the Merging Corporation; and all leases, licenses, property, rights,
privileges, and powers of whatever nature and description of the Merging
Corporation shall be transferred to, vested in, and devolved upon the Surviving
Corporation, without further act or deed, subject to all of the debts and
obligations of the Merging Corporation. Each share of common stock, $.001 par
value per share, of the Merging Corporation shall be converted into .686
share(s) of common stock, $.01 par value per share, of the Surviving Corporation
on the Effective Date, without the necessity of any action on the part of the
holder thereof, except that fractional shares will be treated as described
below.
No fractional shares of common stock, $.01 par value per share, of the
Surviving Corporation will be issued in connection with the Merger. In lieu
thereof, a holder of shares of common stock, $.001 par value per share, of the
Merging Corporation otherwise entitled to a fractional share of common stock,
$.01 par value per share, of the Surviving Corporation will be paid an amount in
cash (without interest), rounded to the nearest cent, determined by multiplying
$13.96 by the fraction of a share of common stock, $.01 par value per share, of
the Surviving Corporation to which such holder would otherwise be entitled.
From and after the Effective Date, each holder of a certificate or
certificates which prior thereto represented outstanding shares of common stock,
$.001 par value per share, of the Merging Corporation shall be entitled, upon
surrender of the same, to receive in exchange therefor certificates representing
the number of shares of common stock, $.01 par value per share, of the Surviving
Corporation into which the shares theretofore represented by the certificate or
certificates to surrendered shall have been converted as provided in the
previous paragraph. Until so surrendered, each such outstanding certificate
which prior to the Effective Date represented shares of common stock, $.001 par
value per share, of the Merging Corporation, shall be deemed for all corporate
purposes, to evidence the ownership of the number of shares of common stock,
$.01 par value per share, of the Surviving Corporation into which such shares of
common stock, $.001 par value per share, of the Merging Corporation shall have
been so converted. However, until the certificates which prior to the Effective
Date represented shares of common stock, $.001 par value, of the Merging
Corporation have been surrendered, the holder thereof shall not be entitled to
receive any dividend or other distribution, if any, payable to the Surviving
Corporation's stockholders.
2
<PAGE> 3
All dividends or other distributions, if any, will be accrued and paid, without
interest, to the stockholder upon surrender of his certificate or certificates
which represented share(s) of common stock, $.001 par value per share, of the
Merging Corporation.
NINTH: The terms and conditions of the transaction described in these
Articles were duly advised, authorized and approved by the Merging Corporation
in the manner and by the vote required by the laws of the State of Maryland and
the charter of the Merging Corporation, as follows:
a) At a meeting of the Board of Directors of the Merging Corporation held
on October 29, 1995, the Board of Directors adopted a resolution
declaring that the terms and conditions of the transaction described
herein were advisable and directing that the proposed transaction be
submitted for consideration by the stockholders of the Merging
Corporation and such resolution is filed with the minutes of the
proceedings of the Board of Directors.
b) At a special meeting of stockholders of the Merging Corporation held
on March 14, 1996, the stockholders adopted a resolution approving the
terms and conditions of the transaction and of the Merger Agreement
described herein as so proposed and such resolution is filed with the
minutes of the proceeds of the stockholders.
TENTH: The terms and conditions of the transaction described in these
Articles were duly advised, authorized and approved by the Surviving
Corporation, in the manner and by the vote required by the laws of the State of
Maryland and the charter of the Surviving Corporation, as follows:
a) At a special meeting of the Board of Directors of the Surviving
Corporation held on October 20, 1995, the Board of Directors adopted a
resolution declaring that the terms and conditions of the transaction
described herein were advisable and directing that the proposed
transaction be submitted for consideration by the stockholders of the
Surviving Corporation and such resolution is filed with the minutes of
the proceedings of the Board of Directors.
b) At a special meeting of stockholders of the Surviving Corporation held
on March 14, 1996, the stockholders adopted a resolution approving the
terms and conditions of the transaction described herein as so
proposed and such resolution is filed with the minutes of the proceeds
of the stockholders.
ELEVENTH: These Articles of Merger shall become effective upon filing with
the State Department of Assessments and Taxation of Maryland (the "Effective
Date").
TWELFTH: Each undersigned President acknowledges these Articles of Merger
to be the corporate act of the respective corporate party on whose behalf he has
signed, and further,
3
<PAGE> 4
as to all matters or facts required to be verified under oath, each President
acknowledges that to the best of his knowledge, information and belief, these
matters and facts relating to the corporation on whose behalf he has signed are
true in all material respects and that this statement is made under the
penalties for perjury.
<TABLE>
IN WITNESS WHEREOF, these Articles of Merger have been duly executed by the
parties hereto this 15th day of March, 1996.
<S> <C>
ATTEST: TUCKER PROPERTIES CORPORATION
/s/ Richard H. Tucker By: /s/ Kenneth L. Tucker (SEAL)
- --------------------- ---------------------
Richard H. Tucker Kenneth L. Tucker
Secretary President
ATTEST: BRADLEY REAL ESTATE, INC.
/s/ William B. King By: /s/ Thomas P. D'Arcy (SEAL)
- --------------------- ---------------------
William B. King Thomas P. D'Arcy
Secretary President
</TABLE>
4
<PAGE> 1
EXHIBIT 10.2
REVOLVING CREDIT AGREEMENT
This REVOLVING CREDIT AGREEMENT is made as of the 15th day of March, 1996,
by and among BRADLEY REAL ESTATE, INC., a Maryland corporation and BRADLEY
OPERATING LIMITED PARTNERSHIP, a Delaware limited partnership, each having its
principal place of business at 699 Boylston Street, Boston, Massachusetts 02116,
and certain Subsidiaries which become parties hereto (jointly and severally, the
"Borrower"), and THE FIRST NATIONAL BANK OF BOSTON, a national banking
association ("FNBB"), and the other lending institutions which become parties
hereto (the "Banks"); and THE FIRST NATIONAL BANK OF BOSTON, as agent for itself
and such other Banks.
[Section] 1. DEFINITIONS AND RULES OF INTERPRETATION.
[Section] 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:
AGENT. The First National Bank of Boston or any permitted successor agent
acting as agent for the Banks.
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.
AGENT'S SPECIAL COUNSEL. Bingham, Dana & Gould, or such other counsel as
may be approved by the Agent.
AGREEMENT. This Revolving Credit Agreement, including the SCHEDULES and
EXHIBITS hereto, as any of the same may hereafter be modified, supplemented or
amended from time to time.
ANNUAL CAPITAL EXPENDITURE RESERVE. For any period, the amount set forth on
EXHIBIT H with respect to such period.
<TABLE>
APPLICABLE MARGIN. The applicable margin over the then Eurodollar Rate or
LIBOR Rate, as applicable to the Loan(s) in question, as set forth below used in
calculating the interest rate applicable to Eurodollar Rate Loans and LIBOR Rate
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 Rating).
The Applicable Margin to be used in calculating the interest rate applicable to
Eurodollar Rate or LIBOR Rate Loans shall vary from time to time in accordance
with the Borrower's then applicable (x) Moody's debt rating or (y) S&P's debt
rating, as the case may be, and the Applicable Margins 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, as the case may be for Loans arising
thereafter. In the event that only one of Moody's or S&P has set Borrower's
credit rating, then the Applicable Margin shall be based on such rating only. In
the event that the Borrower has then current ratings from S&P and Moody's and
neither of such ratings is lower than BBB- and Baa3, respectively, then the
Applicable Margin shall be based upon the average of such ratings. In the event
that the Borrower has then current ratings from S&P and Moody's, and one or both
of such ratings is lower than BBB- or Baa3, as applicable, then the Applicable
Margin shall be based upon the lower of such ratings. The applicable debt
ratings and the Applicable Margins are set forth in the following table:
<CAPTION>
- --------------------------------------------------------------------------------
APPLICABLE
APPLICABLE MARGIN
MARGIN FOR LIBOR FOR EURODOLLAR RATE
S&P RATING MOODY'S RATING RATE LOANS LOANS
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
</TABLE>
<PAGE> 2
<TABLE>
<S> <C> <C> <C>
- --------------------------------------------------------------------------------
A OR HIGHER A2 OR HIGHER 1.250% 1.250%
- --------------------------------------------------------------------------------
BBB+ TO A- BAA1 TO A3 1.375% 1.375%
- --------------------------------------------------------------------------------
BBB- TO BBB BAA3 TO BAA2 1.500% 1.500%
- --------------------------------------------------------------------------------
LESS THAN BBB- LESS THAN BAA3 1.750% 1.750%
- --------------------------------------------------------------------------------
</TABLE>
IF A RATING AGENCY DOWNGRADE
OR DISCONTINUANCE RESULTS IN AN INCREASE IN THE APPLICABLE MARGIN FOR EURODOLLAR
RATE LOANS OR THE APPLICABLE MARGIN FOR LIBOR 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, AT BORROWER'S
REQUEST, 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.
UNTIL SUCH TIME AS THE BORROWER
OBTAINS LONG-TERM UNSECURED DEBT RATINGS (OR INDICATIVE RATING, AS APPLICABLE)
FROM EITHER S&P OR MOODY'S, THE APPLICABLE MARGIN FOR EURODOLLAR RATE LOANS AND
LIBOR RATE LOANS SHALL BE 1.75%; PROVIDED THAT IF DURING SUCH PERIOD PRIOR TO
THE OBTAINING OF LONG-TERM UNSECURED DEBT RATINGS THE FINANCIAL STATEMENTS
DELIVERED BY THE BORROWER PURSUANT TO [SECTION] 7.4 INDICATE THAT THE
CONSOLIDATED OUTSTANDING INDEBTEDNESS AS AT THE END OF ANY FISCAL QUARTER OF
THE BORROWER IS LESS THAN OR EQUAL TO 40% OF CONSOLIDATED MARKET VALUE AS AT
THE END OF SUCH FISCAL QUARTER, THEN, EFFECTIVE FROM THE FIRST DAY AFTER
RECEIPT OF SUCH FINANCIAL STATEMENTS UNTIL THE EARLIER OF THE DELIVERY OF THE
NEXT FINANCIAL STATEMENTS PURSUANT TO [SECTION] 7.4 OR THE BORROWER'S OBTAINING
SUCH LONG-TERM UNSECURED DEBT RATINGS, THE APPLICABLE MARGIN FOR EURODOLLAR
RATE LOANS AND LIBOR RATE LOANS SHALL BE 1.625%. THE AGENT ACKNOWLEDGES THAT,
AS OF THE CLOSING DATE, THE APPLICABLE MARGIN FOR EURODOLLAR RATE LOANS AND
LIBOR RATE LOANS IS 1.75%.
ASSETS UNDER DEVELOPMENT.
AS OF ANY DATE OF DETERMINATION, THE TOTAL BOOK VALUE (AS DETERMINED BY
GENERALLY ACCEPTED ACCOUNTING PRINCIPLES) OF LAND (AND ANY BUILDINGS TO THE
EXTENT CONSTRUCTED THEREON) WHOLLY-OWNED BY THE BORROWER OR ITS SUBSIDIARIES
WHICH IS CURRENTLY UNDER DEVELOPMENT. AS USED HEREIN, "CURRENTLY UNDER
DEVELOPMENT" SHALL MEAN THAT THE BORROWER OR ITS SUBSIDIARIES IS ACTIVELY
PURSUING CONSTRUCTION OF BUILDINGS, AND SUCH CONSTRUCTION IS PROCEEDING TO
COMPLETION WITHOUT UNDUE DELAY FROM PERMIT DENIAL, CONSTRUCTION DELAYS OR
OTHERWISE.
ASSIGNMENT AND ACCEPTANCE.
SEE [SECTION] 18.1.
BALANCE SHEET DATE. SEPTEMBER
30, 1995.
BANKS. FNBB AND THE OTHER
LENDING INSTITUTIONS LISTED FROM TIME TO TIME ON SCHEDULE 1 HERETO WHO BECOME
SIGNATORIES TO THIS AGREEMENT, ANY OTHER PERSON WHO IS AN ELIGIBLE ASSIGNEE AND
BECOMES AN ASSIGNEE OF ANY RIGHTS OF A BANK PURSUANT TO [SECTION] 18 AND
BECOMES A SIGNATORY TO THIS AGREEMENT OR ANY PERSON WHO ACQUIRES ALL OR
SUBSTANTIALLY ALL OF THE STOCK OR ASSETS OF A BANK.
BASE RATE. THE ANNUAL RATE
OF INTEREST ANNOUNCED FROM TIME TO TIME BY FNBB AT THE AGENT'S HEAD OFFICE AS
ITS "BASE RATE".
2
<PAGE> 3
BASE RATE LOANS. THOSE LOANS
BEARING INTEREST CALCULATED BY REFERENCE TO THE BASE RATE.
BORROWER. AS DEFINED IN THE
PREAMBLE HERETO.
BUILDINGS. THE BUILDINGS,
STRUCTURES AND OTHER IMPROVEMENTS NOW OR HEREAFTER LOCATED ON THE REAL ESTATE.
BUSINESS DAY. ANY DAY ON
WHICH ALL OF THE BANKS 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, AND IN THE CASE OF LIBOR RATE LOANS, ALSO A DAY WHICH IS A LIBOR BUSINESS
DAY.
BUSINESS PLAN SUMMARY. A
STATEMENT PREPARED AS OF THE DATE HEREOF BY THE BORROWER AND REASONABLY
SATISFACTORY TO THE AGENT, SPECIFYING, AMONG OTHER THINGS, (I) THE INTENDED
OPERATIONS AND TYPE OF REAL ESTATE INVESTMENT TRUST OF THE BORROWER, (II) THE
SHORT AND LONG TERM GOALS OF THE BORROWER WITH RESPECT TO GROWTH AND INCOME AND
(III) THE REAL ESTATE ASSET ACQUISITION STRATEGY OF THE BORROWER. A TRUE AND
ACCURATE COPY OF THE BUSINESS PLAN SUMMARY IS ATTACHED AS SCHEDULE 1.1. BORROWER
SHALL HAVE THE RIGHT TO UPDATE THE BUSINESS PLAN SUMMARY FROM TIME TO TIME WITH
THE PRIOR CONSENT OF THE BANKS, WHICH WILL NOT BE UNREASONABLY WITHHELD SO LONG
AS THE BASIC OPERATIONS OF, TYPE OF REAL ESTATE OWNED BY, AND TYPE OF REAL
ESTATE INVESTMENT TRUST OF THE BORROWER DO NOT CHANGE.
CAPITAL STOCK. ALL SHARES,
INTERESTS, PARTICIPATIONS, OR OTHER EQUIVALENTS (HOWEVER DESIGNATED) OF CAPITAL
STOCK OF A CORPORATION, ANY AND ALL EQUIVALENT LEGAL AND BENEFICIAL OWNERSHIP
INTERESTS IN A PERSON WHICH IS NOT A CORPORATION AND ANY AND ALL WARRANTS OR
OPTIONS TO PURCHASE ANY OF THE FOREGOING.
CAPITALIZATION RATE. TEN AND
ONE-HALF PERCENT (10.5%).
CAPITALIZED LEASES. LEASES
UNDER WHICH THE BORROWER IS THE LESSEE OR OBLIGOR, THE DISCOUNTED FUTURE RENTAL
PAYMENT OBLIGATIONS UNDER WHICH ARE REQUIRED TO BE CAPITALIZED ON THE BALANCE
SHEET OF THE BORROWER IN ACCORDANCE WITH GENERALLY ACCEPTED ACCOUNTING
PRINCIPLES.
CASH EQUIVALENTS. THOSE
INVESTMENTS DESCRIBED IN [SECTION] 8.3(A), (B) AND (C) HEREOF.
CERCLA. SEE [SECTION] 6.18.
CLOSING DATE. THE FIRST DATE
ON WHICH THE CONDITIONS SPECIFIED IN [SECTION] 10 HEREOF HAVE BEEN SATISFIED OR
WAIVED IN WRITING BY THE BANKS.
CODE. THE INTERNAL REVENUE
CODE OF 1986, AS AMENDED AND IN EFFECT FROM TIME TO TIME.
COMMITMENT. WITH RESPECT
TO EACH BANK, THE AMOUNT SET FORTH FROM TIME TO TIME ON SCHEDULE 1.2 HERETO
AS THE AMOUNT OF SUCH BANK'S
3
<PAGE> 4
COMMITMENT TO MAKE LOANS TO, AND TO PARTICIPATE IN THE ISSUANCE, EXTENSION AND
RENEWAL OF LETTERS OF CREDIT FOR THE ACCOUNT OF, THE BORROWER.
COMMITMENT PERCENTAGE. WITH
RESPECT TO EACH BANK, THE PERCENTAGE SET FORTH FROM TIME TO TIME ON SCHEDULE 1.2
HERETO AS SUCH BANK'S PERCENTAGE OF THE TOTAL COMMITMENT.
COMPLIANCE CERTIFICATE. A
STATEMENT IN THE FORM OF EXHIBIT C ATTACHED HERETO SIGNED BY THE PRINCIPAL
FINANCIAL OR ACCOUNTING OFFICER OF BRADLEY REAL ESTATE, INC. SETTING FORTH IN
REASONABLE DETAIL COMPUTATIONS EVIDENCING COMPLIANCE WITH THE COVENANTS
CONTAINED IN [SECTION] 9.1 THROUGH 9.7 HEREOF, AND SUCH OTHER MATTERS REQUIRED
BY THE TERMS OF THIS AGREEMENT. IN ADDITION, ANY COMPLIANCE CERTIFICATES
SUBMITTED TO THE AGENT HEREUNDER SHALL GIVE EFFECT TO ANY TRANSACTIONS FOR
WHICH A COMPLIANCE CERTIFICATE IS THEN CURRENTLY PENDING.
CONSOLIDATED OR CONSOLIDATED.
WITH REFERENCE TO ANY TERM DEFINED HEREIN, SHALL MEAN THE TERM AS APPLIED TO THE
ACCOUNTS OF THE BORROWER AND ITS SUBSIDIARIES, CONSOLIDATED IN ACCORDANCE WITH
GENERALLY ACCEPTED ACCOUNTING PRINCIPLES.
CONSOLIDATED CAPITALIZATION
VALUE. AN AMOUNT EQUAL TO CONSOLIDATED CASH FLOW FOR THE MOST RECENT PERIOD OF
TWO (2) CONSECUTIVE COMPLETED FISCAL QUARTERS MULTIPLIED BY 2, WITH THE PRODUCT
BEING DIVIDED BY THE CAPITALIZATION RATE.
CONSOLIDATED CASH FLOW. FOR
ANY PERIOD, AN AMOUNT EQUAL TO THE SUM OF (a) FUNDS FROM OPERATIONS FOR SUCH
PERIOD PLUS (b) CONSOLIDATED TOTAL INTEREST EXPENSE FOR SUCH PERIOD PLUS (c)
GENERAL AND ADMINISTRATIVE EXPENSES FOR SUCH PERIOD.
CONSOLIDATED DEBT SERVICE. FOR
ANY PERIOD, (a) CONSOLIDATED TOTAL INTEREST EXPENSE FOR SUCH PERIOD PLUS (b) THE
AGGREGATE AMOUNT OF SCHEDULED PRINCIPAL PAYMENTS OF INDEBTEDNESS (EXCLUDING
OPTIONAL PREPAYMENTS AND 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 PERIOD
BY THE BORROWER AND ANY OF ITS SUBSIDIARIES.
CONSOLIDATED MARKET VALUE.
AS OF ANY DATE, AN AMOUNT EQUAL TO THE SUM OF (a) THE CONSOLIDATED
CAPITALIZATION VALUE AS OF SUCH DATE, PLUS (b) 100% OF THE VALUE OF
UNRESTRICTED CASH AND CASH EQUIVALENTS (EXCLUDING, UNTIL FORFEITED OR
OTHERWISE ENTITLED TO BE RETAINED BY BORROWER OR ITS SUBSIDIARIES, TENANT
SECURITY AND OTHER RESTRICTED DEPOSITS), PLUS (c) 100% OF THE VALUE OF ASSETS
UNDER DEVELOPMENT.
CONSOLIDATED NET INCOME. THE
CONSOLIDATED NET INCOME (BEFORE DEDUCTION FOR INCOME ALLOCATED TO MINORITY
INTERESTS OF BRADLEY OPERATING LIMITED PARTNERSHIP) OF THE BORROWER AND ITS
SUBSIDIARIES, AFTER DEDUCTION OF ALL EXPENSES, TAXES, AND OTHER PROPER CHARGES,
DETERMINED IN ACCORDANCE WITH GENERALLY ACCEPTED ACCOUNTING PRINCIPLES, AFTER
ELIMINATING THEREFROM ALL EXTRAORDINARY NONRECURRING ITEMS OF INCOME.
CONSOLIDATED NET OPERATING
INCOME. WITH RESPECT TO ONE OR MORE REAL ESTATE ASSETS, AS APPLICABLE,
CONSOLIDATED NET INCOME FOR SUCH REAL ESTATE ASSETS, BUT BEFORE PAYMENT OR
PROVISION FOR INTEREST EXPENSE OR OTHER DEBT SERVICE CHARGES AND ANY NON-CASH
CHARGES SUCH AS DEPRECIATION OR AMORTIZATION OF FINANCING COSTS RELATING TO SUCH
REAL ESTATE ASSETS.
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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 GENERALLY ACCEPTED ACCOUNTING PRINCIPLES.
CONSOLIDATED SECURED
INDEBTEDNESS. AS OF ANY DATE OF DETERMINATION, THE SUM OF THE FOLLOWING
INDEBTEDNESS, WITHOUT DUPLICATION: (a) THE AGGREGATE PRINCIPAL AMOUNT OF ALL
INDEBTEDNESS OF THE BORROWER AND ITS SUBSIDIARIES OUTSTANDING AT SUCH DATE
SECURED BY A LIEN ON PROPERTIES OF THE BORROWER OR ITS SUBSIDIARIES, WITHOUT
REGARD TO RECOURSE, PLUS (b) THE AGGREGATE PRINCIPAL AMOUNT OF ALL UNSECURED
INDEBTEDNESS OF THE SUBSIDIARIES (OTHER THAN BRADLEY OPERATING LIMITED
PARTNERSHIP) OF THE BORROWER OVER $5,000,000.
CONSOLIDATED TOTAL INTEREST
EXPENSE. FOR ANY PERIOD, THE AGGREGATE AMOUNT OF INTEREST REQUIRED TO BE PAID OR
ACCRUED BY THE BORROWER AND ITS SUBSIDIARIES DURING SUCH PERIOD ON ALL
INDEBTEDNESS OF THE BORROWER AND ITS SUBSIDIARIES OUTSTANDING DURING ALL OR ANY
PART OF SUCH PERIOD, WHETHER SUCH INTEREST WAS OR IS REQUIRED TO BE REFLECTED AS
AN ITEM OF EXPENSE OR CAPITALIZED, INCLUDING PAYMENTS CONSISTING OF INTEREST IN
RESPECT OF CAPITALIZED LEASES AND INCLUDING COMMITMENT FEES, AGENCY FEES,
FACILITY FEES, BALANCE DEFICIENCY FEES AND SIMILAR FEES OR EXPENSES IN
CONNECTION WITH THE BORROWING OF MONEY.
CONSOLIDATED UNENCUMBERED
ASSET CASH FLOW. CONSOLIDATED NET OPERATING INCOME FOR EACH UNENCUMBERED ASSET
MINUS THE ANNUAL CAPITAL EXPENDITURE RESERVE FOR SUCH UNENCUMBERED ASSET.
CONSOLIDATED UNSECURED DEBT
SERVICE CHARGES. FOR ANY PERIOD, AN AMOUNT DETERMINED BY THE AGENT BASED ON A
TWENTY-FIVE (25) YEAR MORTGAGE STYLE AMORTIZATION SCHEDULE, CALCULATED ON THE
AVERAGE AMOUNT OF CONSOLIDATED UNSECURED INDEBTEDNESS OUTSTANDING DURING SUCH
PERIOD AT AN INTEREST RATE EQUAL TO THE GREATER OF (i) THE ACTUAL INTEREST RATE
IN EFFECT AT THE END OF SUCH FISCAL PERIOD FOR EACH ITEM OF CONSOLIDATED
UNSECURED INDEBTEDNESS AND (ii) AN INTEREST RATE EQUAL TO THE THEN CURRENT TEN
YEAR U.S. TREASURY BILL YIELD PLUS TWO PERCENT (2.0%).
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 GENERALLY
ACCEPTED ACCOUNTING PRINCIPLES.
CONVERSION REQUEST. A NOTICE
GIVEN BY THE BORROWER TO THE AGENT OF ITS ELECTION TO CONVERT OR CONTINUE A LOAN
IN ACCORDANCE WITH [SECTION] 2.6.
DEFAULT. AN EVENT OR ACT WHICH
WITH THE GIVING OF NOTICE AND/OR THE LAPSE OF TIME, WOULD BECOME AN EVENT OF
DEFAULT. NOTWITHSTANDING THE FOREGOING, ANY EVENT OR ACT WHICH CONSTITUTES A
NON-MATERIAL BREACH SHALL NOT BE A DEFAULT.
DISTRIBUTION. THE DECLARATION
OR PAYMENT OF ANY DISTRIBUTION OF CASH OR CASH EQUIVALENTS TO THE BENEFICIARIES
OR SHAREHOLDERS OF THE BORROWER IN RESPECT OF ANY SHARES OF BENEFICIAL INTEREST
OF THE BORROWER, OTHER THAN DISTRIBUTIONS PAYABLE SOLELY IN EQUITY SECURITIES OF
THE BORROWER; THE PURCHASE, REDEMPTION, EXCHANGE OR OTHER RETIREMENT OF ANY
SHARES OF BENEFICIAL
5
<PAGE> 6
INTEREST OF THE BORROWER, DIRECTLY OR INDIRECTLY THROUGH A SUBSIDIARY OF THE
BORROWER OR OTHERWISE; THE RETURN OF CAPITAL BY THE BORROWER TO ITS SHAREHOLDERS
AS SUCH; OR ANY OTHER DISTRIBUTION ON OR IN RESPECT OF ANY SHARES OF BENEFICIAL
INTEREST OF THE BORROWER.
DOLLARS OR $. DOLLARS IN LAWFUL
CURRENCY OF THE UNITED STATES OF AMERICA.
DOMESTIC LENDING OFFICE.
INITIALLY, THE OFFICE OF EACH BANK DESIGNATED AS SUCH IN SCHEDULE 1.3 HERETO;
THEREAFTER, SUCH OTHER OFFICE OF SUCH BANK, IF ANY, LOCATED WITHIN THE UNITED
STATES THAT WILL BE MAKING OR MAINTAINING BASE RATE LOANS.
DRAWDOWN DATE. THE DATE ON
WHICH ANY LOAN IS MADE OR IS TO BE MADE, AND THE DATE ON WHICH ANY LOAN IS
CONVERTED OR CONTINUED IN ACCORDANCE WITH [SECTION] 2.6.
EFFECTIVE DATE. THE DATE UPON
WHICH THIS AGREEMENT SHALL BECOME EFFECTIVE PURSUANT TO [SECTION] 10.
ELIGIBLE ASSIGNEE. ANY OF (a)
A COMMERCIAL BANK ORGANIZED UNDER THE LAWS OF THE UNITED STATES, OR ANY STATE
THEREOF OR THE DISTRICT OF COLUMBIA, AND HAVING TOTAL ASSETS IN EXCESS OF
$5,000,000,000; AND (b) A COMMERCIAL BANK ORGANIZED UNDER THE LAWS OF ANY OTHER
COUNTRY WHICH IS A MEMBER OF THE ORGANIZATION FOR ECONOMIC COOPERATION AND
DEVELOPMENT (THE "OECD"), OR A POLITICAL SUBDIVISION OF ANY SUCH COUNTRY, AND
HAVING TOTAL ASSETS IN EXCESS OF $5,000,000,000, PROVIDED THAT SUCH BANK IS
ACTING THROUGH A BRANCH OR AGENCY LOCATED IN THE COUNTRY IN WHICH IT IS
ORGANIZED OR ANOTHER COUNTRY WHICH IS ALSO A MEMBER OF THE OECD.
EMPLOYEE BENEFIT PLAN. ANY
EMPLOYEE BENEFIT PLAN WITHIN THE MEANING OF [SECTION] 3(3) OF ERISA MAINTAINED
OR CONTRIBUTED TO BY THE BORROWER OR ANY ERISA AFFILIATE, OTHER THAN A
MULTIEMPLOYER PLAN.
ENVIRONMENTAL LAWS. SEE
[SECTION] 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 [SECTION] 414 OF
THE CODE.
ERISA REPORTABLE EVENT. A
REPORTABLE EVENT WITH RESPECT TO A GUARANTEED PENSION PLAN WITHIN THE MEANING OF
[SECTION] 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 OR LIBOR RATE LOAN, THE
MAXIMUM RATE (EXPRESSED AS A DECIMAL) AT WHICH ANY BANK 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.
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<PAGE> 7
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.
7
<PAGE> 8
EURODOLLAR LENDING OFFICE.
INITIALLY, THE OFFICE OF EACH BANK DESIGNATED AS SUCH IN SCHEDULE 1.3 HERETO;
THEREAFTER, SUCH OTHER OFFICE OF SUCH BANK, IF ANY, THAT SHALL BE MAKING OR
MAINTAINING EURODOLLAR RATE LOANS.
EURODOLLAR RATE. FOR ANY
INTEREST PERIOD WITH RESPECT TO A EURODOLLAR RATE LOAN, THE RATE PER ANNUM EQUAL
TO THE QUOTIENT (ROUNDED UPWARDS TO THE NEAREST 1/16 OF ONE PERCENT) OF (a) THE
RATE AT WHICH THE AGENT IS OFFERED DOLLAR DEPOSITS TWO EURODOLLAR BUSINESS DAYS
PRIOR TO THE BEGINNING OF SUCH INTEREST PERIOD IN AN INTERBANK EURODOLLAR MARKET
WHERE THE EURODOLLAR AND FOREIGN CURRENCY AND EXCHANGE OPERATIONS OF THE AGENT
ARE CUSTOMARILY CONDUCTED FOR DELIVERY ON THE FIRST DAY OF SUCH INTEREST PERIOD
FOR THE NUMBER OF DAYS COMPRISED THEREIN AND IN AN AMOUNT COMPARABLE TO THE
AMOUNT OF THE EURODOLLAR RATE LOAN TO WHICH SUCH INTEREST PERIOD APPLIES,
DIVIDED BY (b) A NUMBER EQUAL TO 1.00 MINUS THE EUROCURRENCY RESERVE RATE.
EURODOLLAR RATE LOANS. LOANS
BEARING INTEREST CALCULATED BY REFERENCE TO THE EURODOLLAR RATE.
EVENT OF DEFAULT. SEE [SECTION] 12.1.
FNBB. SEE PREAMBLE.
FRONTING BANK MEANS ANY BANK
WHICH IS DESIGNATED BY BORROWER IN ITS LOAN REQUEST AS THE BANK WHICH SHALL
ISSUE THE LETTER OF CREDIT WITH RESPECT TO SUCH LOAN REQUEST; PROVIDED, THAT THE
FRONTING BANK SHALL BE FNBB UNLESS ANOTHER BANK HAS A HIGHER (I.E. MORE
FAVORABLE) S&P OR MOODY'S CREDIT RATING.
FUNDS FROM OPERATIONS. FOR
ANY PERIOD COMMENCING ON OR AFTER JULY 1, 1996, CONSOLIDATED NET INCOME FOR SUCH
PERIOD (BEFORE DEDUCTION FOR INCOME ALLOCATED TO MINORITY INTERESTS OF BRADLEY
OPERATING LIMITED PARTNERSHIP, DEPRECIATION, AMORTIZATION, EQUITY GAINS (LOSSES)
FROM EACH UNCONSOLIDATED JOINT VENTURE INCLUDED THEREIN AND OTHER NON- CASH
CHARGES EXCLUDING ANY AMORTIZATION OF DEFERRED FINANCE COSTS), LESS GAINS
(LOSSES) ON SALES OF PROPERTY, NON- RECURRING CHARGES AND EXTRAORDINARY ITEMS,
PLUS THE PROPORTIONATE SHARE OF FUNDS FROM OPERATIONS OF EACH UNCONSOLIDATED
JOINT VENTURE THAT IS RECEIVED BY THE BORROWER OR ANY SUBSIDIARY FOR SUCH
PERIOD, ALL DETERMINED ON A CONSISTENT BASIS. NOTWITHSTANDING ANYTHING CONTAINED
HEREIN TO THE CONTRARY, FUNDS FROM OPERATIONS FOR EACH OF THE QUARTERS ENDING
DECEMBER 31, 1995, MARCH 31, 1996, AND JUNE 30, 1996 RESPECTIVELY, SHALL BE
DETERMINED AS SET FORTH IN THE REGISTRATION STATEMENT AND SHALL EQUAL THE
QUOTIENT OF (i) THE SUM OF FUNDS FROM OPERATIONS FOR THE THREE FISCAL QUARTERS
OF 1995 SHOWN ON THE PRO FORMA CONSOLIDATED INCOME STATEMENT INCLUDED ON THE
REGISTRATION STATEMENT DIVIDED BY (ii) 3.
GENERALLY ACCEPTED ACCOUNTING
PRINCIPLES OR GAAP. PRINCIPLES THAT ARE (a) CONSISTENT WITH THE PRINCIPLES
PROMULGATED OR ADOPTED BY THE FINANCIAL ACCOUNTING STANDARDS BOARD AND ITS
PREDECESSORS, AS IN EFFECT FROM TIME TO TIME AND (b) CONSISTENTLY APPLIED WITH
PAST FINANCIAL STATEMENTS OF THE BORROWER ADOPTING THE SAME PRINCIPLES; PROVIDED
THAT A CERTIFIED PUBLIC ACCOUNTANT WOULD, INSOFAR AS THE USE OF SUCH ACCOUNTING
PRINCIPLES IS PERTINENT, BE IN A POSITION TO DELIVER AN UNQUALIFIED OPINION
(OTHER THAN A QUALIFICATION REGARDING CHANGES IN GENERALLY ACCEPTED ACCOUNTING
PRINCIPLES) AS TO FINANCIAL STATEMENTS IN WHICH SUCH PRINCIPLES HAVE BEEN
PROPERLY APPLIED.
GUARANTEED PENSION PLAN. ANY
EMPLOYEE PENSION BENEFIT PLAN WITHIN THE MEANING OF [SECTION] 3(2) OF ERISA
MAINTAINED OR CONTRIBUTED TO BY THE BORROWER OR ANY ERISA AFFILIATE THE
BENEFITS OF WHICH ARE GUARANTEED ON TERMINATION IN FULL OR IN PART BY THE
PBGC PURSUANT TO TITLE IV OF ERISA, OTHER THAN A MULTIEMPLOYER PLAN.
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<PAGE> 9
HAZARDOUS SUBSTANCES. SEE
[SECTION] 6.18(B).
INDEBTEDNESS. ALL OF THE
FOLLOWING OBLIGATIONS WITHOUT DUPLICATION: (a) THE OBLIGATIONS TO THE EXTENT
OUTSTANDING FROM TIME TO TIME, (b) ALL DEBT AND SIMILAR MONETARY OBLIGATIONS FOR
BORROWED MONEY, WHETHER DIRECT OR INDIRECT; (c) ALL OTHER LIABILITIES FOR
BORROWED MONEY SECURED BY ANY LIEN EXISTING ON PROPERTY OWNED OR ACQUIRED
SUBJECT THERETO, WHETHER OR NOT THE LIABILITY SECURED THEREBY SHALL HAVE BEEN
ASSUMED; (d) REIMBURSEMENT OBLIGATIONS FOR LETTERS OF CREDIT, AND (e) ALL
GUARANTEES, ENDORSEMENTS AND OTHER CONTINGENT OBLIGATIONS FOR BORROWED MONEY
WHETHER DIRECT OR INDIRECT IN RESPECT OF INDEBTEDNESS OR OBLIGATIONS OF OTHERS.
INDICATIVE RATING. AN UNISSUED
LONG-TERM UNSECURED DEBT RATING PROVIDED TO THE BORROWER IN WRITING BY EITHER
MOODY'S OR S&P WHICH RATING IS NO OLDER THAN TWO FISCAL QUARTERS.
INTEREST PAYMENT DATE. (i) AS
TO ANY BASE RATE LOAN, THE LAST DAY OF THE CALENDAR MONTH WHICH INCLUDES THE
DRAWDOWN DATE THEREOF; AND (ii) AS TO ANY EURODOLLAR RATE LOAN OR LIBOR RATE
LOAN IN RESPECT OF WHICH THE INTEREST PERIOD IS (a) 3 MONTHS OR LESS, THE LAST
DAY OF SUCH INTEREST PERIOD AND (b) MORE THAN 3 MONTHS, THE DATE THAT IS 3
MONTHS FROM THE FIRST DAY OF SUCH INTEREST PERIOD AND, IN ADDITION, THE LAST DAY
OF SUCH INTEREST PERIOD.
INTEREST PERIOD. WITH RESPECT
TO EACH LOAN, BUT WITHOUT DUPLICATION OF ANY OTHER INTEREST PERIOD, (a)
INITIALLY, THE PERIOD COMMENCING ON THE DRAWDOWN DATE OF SUCH LOAN AND ENDING ON
THE LAST DAY OF ONE OF THE PERIODS SET FORTH IN THE SUCCEEDING SUBCLAUSES, AS
SELECTED BY THE BORROWER IN A LOAN REQUEST (i) FOR ANY BASE RATE LOAN, THE LAST
DAY OF THE CALENDAR MONTH IN WHICH THE DRAWDOWN DATE OCCURS; (ii) FOR ANY
EURODOLLAR RATE LOAN, 1, 2, 3, 6 OR 12 MONTHS; AND (iii) FOR ANY LIBOR RATE
LOAN, 1, 2, 3, 6 OR 12 MONTHS AND (b) THEREAFTER, EACH PERIOD COMMENCING ON THE
LAST DAY OF THE NEXT PRECEDING INTEREST PERIOD APPLICABLE TO SUCH LOAN AND
ENDING ON THE LAST DAY OF ONE OF THE PERIODS SET FORTH ABOVE, AS SELECTED BY THE
BORROWER IN A CONVERSION REQUEST OR OTHERWISE DEEMED SELECTED BY BORROWER;
PROVIDED THAT ALL OF THE FOREGOING PROVISIONS RELATING TO INTEREST PERIODS ARE
SUBJECT TO THE FOLLOWING:
(A) IF ANY INTEREST PERIOD WITH RESPECT TO A EURODOLLAR RATE LOAN WOULD
OTHERWISE END ON A DAY THAT IS NOT A EURODOLLAR BUSINESS DAY, THAT INTEREST
PERIOD SHALL BE EXTENDED TO THE NEXT SUCCEEDING EURODOLLAR BUSINESS DAY UNLESS
THE RESULT OF SUCH EXTENSION WOULD BE TO CARRY SUCH INTEREST PERIOD INTO ANOTHER
CALENDAR MONTH, IN WHICH EVENT SUCH INTEREST PERIOD SHALL END ON THE IMMEDIATELY
PRECEDING EURODOLLAR BUSINESS DAY;
(B) IF ANY INTEREST PERIOD WITH RESPECT TO A LIBOR RATE LOAN WOULD
OTHERWISE END ON A DAY THAT IS NOT A LIBOR BUSINESS DAY, THAT INTEREST PERIOD
SHALL BE EXTENDED TO THE NEXT SUCCEEDING LIBOR 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 LIBOR BUSINESS DAY;
(C) 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;
(D) IF THE BORROWER SHALL FAIL TO GIVE NOTICE AS PROVIDED IN [SECTION]
2.6, THE BORROWER SHALL BE DEEMED TO HAVE REQUESTED A CONVERSION OF THE AFFECTED
EURODOLLAR RATE LOAN OR LIBOR RATE LOAN TO A BASE RATE LOAN ON THE LAST DAY OF
THE THEN CURRENT INTEREST PERIOD WITH RESPECT THERETO;
(E) ANY INTEREST PERIOD RELATING TO ANY EURODOLLAR RATE LOAN THAT BEGINS ON
THE LAST EURODOLLAR BUSINESS DAY OF A CALENDAR MONTH (OR ON A DAY FOR WHICH
THERE IS NO NUMERICALLY CORRESPONDING DAY IN THE
9
<PAGE> 10
CALENDAR MONTH AT THE END OF SUCH INTEREST PERIOD) SHALL END ON THE LAST
EURODOLLAR BUSINESS DAY OF A CALENDAR MONTH; AND
10
<PAGE> 11
(F) ANY INTEREST PERIOD RELATING TO ANY LIBOR RATE LOAN THAT BEGINS ON THE
LAST LIBOR BUSINESS DAY OF A CALENDAR MONTH (OR ON A DAY FOR WHICH THERE IS NO
NUMERICALLY CORRESPONDING DAY IN THE CALENDAR MONTH AT THE END OF SUCH INTEREST
PERIOD) SHALL END ON THE LAST LIBOR BUSINESS DAY OF A CALENDAR MONTH; AND
(G) ANY INTEREST PERIOD RELATING TO ANY EURODOLLAR RATE LOAN OR LIBOR RATE
LOAN 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) FOR THE ACQUISITION OF CAPITAL STOCK OR TOTAL
INDEBTEDNESS OF, OR FOR LOANS, ADVANCES, CAPITAL CONTRIBUTIONS OR TRANSFERS OF
PROPERTY TO, OR IN RESPECT OF ANY GUARANTIES (OR OTHER COMMITMENTS AS DESCRIBED
UNDER TOTAL INDEBTEDNESS), OR OBLIGATIONS OF, ANY PERSON. IN DETERMINING THE
AGGREGATE AMOUNT OF INVESTMENTS OUTSTANDING AT ANY PARTICULAR TIME: (a) THE
AMOUNT OF ANY INVESTMENT REPRESENTED BY A GUARANTY SHALL BE TAKEN AT NOT LESS
THAN THE PRINCIPAL AMOUNT OF THE OBLIGATIONS GUARANTEED AND STILL OUTSTANDING;
(b) THERE SHALL BE INCLUDED AS AN INVESTMENT ALL INTEREST ACCRUED WITH RESPECT
TO TOTAL INDEBTEDNESS CONSTITUTING AN INVESTMENT UNLESS AND UNTIL SUCH INTEREST
IS PAID; (c) THERE SHALL BE DEDUCTED IN RESPECT OF EACH SUCH INVESTMENT ANY
AMOUNT RECEIVED AS A RETURN OF CAPITAL (BUT ONLY BY REPURCHASE, REDEMPTION,
RETIREMENT, REPAYMENT, LIQUIDATING DIVIDEND OR LIQUIDATING DISTRIBUTION); (d)
THERE SHALL NOT BE DEDUCTED IN RESPECT OF ANY INVESTMENT ANY AMOUNTS RECEIVED AS
EARNINGS ON SUCH INVESTMENT, WHETHER AS DIVIDENDS, INTEREST OR OTHERWISE, EXCEPT
THAT ACCRUED INTEREST INCLUDED AS PROVIDED IN THE FOREGOING CLAUSE (b) MAY BE
DEDUCTED WHEN PAID; AND (e) THERE SHALL NOT BE DEDUCTED FROM THE AGGREGATE
AMOUNT OF INVESTMENTS ANY DECREASE IN THE VALUE THEREOF.
LEASES. LEASES, LICENSES AND AGREEMENTS WHETHER WRITTEN OR ORAL, RELATING
TO THE USE OR OCCUPATION OF SPACE IN OR ON THE BUILDINGS OR ON THE REAL ESTATE
BY PERSONS OTHER THAN BORROWER.
LETTER OF CREDIT. SEE [SECTION] 2A.1.1.
LETTER OF CREDIT APPLICATION. SEE [SECTION] 2A.1.1.
LETTER OF CREDIT PARTICIPATION. SEE [SECTION] 2A.1.4.
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LIBOR 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.
LIBOR LENDING OFFICE. INITIALLY, THE OFFICE OF EACH BANK DESIGNATED AS SUCH
IN SCHEDULE 1.3 HERETO; THEREAFTER, SUCH OTHER OFFICE OF SUCH BANK, IF ANY, THAT
SHALL BE MAKING OR MAINTAINING LIBOR RATE LOANS.
LIBOR RATE. FOR ANY INTEREST PERIOD WITH RESPECT TO A LIBOR RATE LOAN, THE
RATE OF INTEREST EQUAL TO (i) THE RATE DETERMINED BY THE AGENT AT WHICH DOLLAR
DEPOSITS FOR SUCH INTEREST PERIOD ARE OFFERED BASED ON INFORMATION PRESENTED ON
TELERATE PAGE 3750 AS OF 11:00 A.M. LONDON TIME ON THE SECOND LIBOR BUSINESS DAY
PRIOR TO THE FIRST DAY OF SUCH INTEREST PERIOD, DIVIDED BY (ii) A NUMBER EQUAL
TO 1.00 MINUS THE EUROCURRENCY RESERVE RATE, IF APPLICABLE.
LIBOR RATE LOANS. LOANS BEARING INTEREST CALCULATED BY REFERENCE TO THE
LIBOR RATE.
LIEN. ANY LIEN, ENCUMBRANCE, MORTGAGE, PLEDGE, CHARGE, RESTRICTION,
PREFERENCE, PRIORITY OR OTHER SECURITY INTEREST OF ANY KIND OR NATURE (INCLUDING
THE PROHIBITION OR RESTRICTION ON ANY SECURITY INTEREST), INCLUDING, WITHOUT
LIMITING THE GENERALITY OF THE FOREGOING, THE TRANSFER OF ASSETS FOR THE PURPOSE
OF SUBJECTING THE SAME TO THE PAYMENT OF TOTAL INDEBTEDNESS OR PERFORMANCE OF
ANY OTHER OBLIGATION IN PRIORITY TO PAYMENT OF ITS GENERAL CREDITORS, OR ANY
CONDITIONAL SALE OR OTHER TITLE RETENTION OR PURCHASE MONEY SECURITY AGREEMENT,
DEVICE OR ARRANGEMENT.
LOAN DOCUMENTS. THIS AGREEMENT, THE NOTES, THE LETTER OF CREDIT
APPLICATIONS, THE LETTERS OF CREDIT, AND ANY AND ALL OTHER AGREEMENTS, DOCUMENTS
AND INSTRUMENTS EXECUTED AND DELIVERED BY BORROWER AND NOW OR HEREAFTER
EVIDENCING OR OTHERWISE RELATING TO THE LOANS.
LOAN REQUEST. SEE [SECTION] 2.5.
LOANS. LOANS MADE OR TO BE MADE BY THE BANKS TO THE BORROWER PURSUANT
TO [SECTION] 2.
MAJORITY BANKS. AS OF ANY DATE, THE BANKS HOLDING AT LEAST FIFTY-ONE
PERCENT (51%) OF THE OUTSTANDING PRINCIPAL AMOUNT OF THE NOTES ON SUCH DATE; AND
IF NO SUCH PRINCIPAL IS OUTSTANDING, THE BANKS WHOSE AGGREGATE COMMITMENTS
CONSTITUTE AT LEAST FIFTY-ONE PERCENT (51%) OF THE TOTAL COMMITMENT.
MATURITY DATE. MARCH 15, 1998, OR SUCH OTHER DATE ON WHICH THE LOANS SHALL
BECOME DUE AND PAYABLE PURSUANT TO THE TERMS HEREOF; PROVIDED THAT THE BORROWER
MAY, AT ITS OPTION, EXTEND THE MATURITY DATE FROM MARCH 15, 1998 (THE "ORIGINAL
MATURITY DATE") TO MARCH 15, 1999 IF: (a) THE BORROWER SUBMITS A WRITTEN REQUEST
FOR SUCH EXTENSION TO THE AGENT AT LEAST NINETY (90) DAYS PRIOR TO THE ORIGINAL
MATURITY DATE TOGETHER WITH AN EXTENSION FEE EQUAL TO ONE-QUARTER OF ONE PERCENT
(1/4%) OF THE TOTAL COMMITMENT, (b) NO DEFAULT OR EVENT OF DEFAULT EXISTS AS OF
THE ORIGINAL MATURITY DATE, AS EVIDENCED BY A CERTIFICATE FROM THE PRINCIPAL
FINANCIAL OR ACCOUNTING OFFICER OF THE BORROWER DELIVERED AT LEAST FIVE (5) DAYS
PRIOR TO THE ORIGINAL MATURITY DATE AND (c) THE BORROWER SHALL HAVE (x) A SENIOR
UNSECURED DEBT RATING (OR INDICATIVE RATING) OF AT LEAST BAA3 FROM MOODY'S OR A
SENIOR UNSECURED DEBT RATING (OR INDICATIVE RATING) OF AT LEAST BBB- FROM S&P,
EACH AS OF THE ORIGINAL MATURITY DATE, OR (xx) A SENIOR UNSECURED DEBT RATING
(OR INDICATIVE RATING) OF AT LEAST BAA3 FROM MOODY'S AND A SENIOR UNSECURED DEBT
RATING (OR INDICATIVE RATING) OF AT LEAST BBB- FROM S&P IF THE BORROWER SHALL
HAVE A RATING FROM BOTH SUCH AGENCIES.
MAXIMUM DRAWING AMOUNT. THE MAXIMUM AGGREGATE AMOUNT THAT THE BENEFICIARIES
MAY AT ANY TIME DRAW UNDER OUTSTANDING LETTERS OF CREDIT, AS SUCH AGGREGATE
AMOUNT MAY BE REDUCED FROM TIME TO TIME PURSUANT TO THE TERMS OF THE LETTERS OF
CREDIT.
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MOODY'S. MOODY'S INVESTORS' SERVICE, INC. AND ITS SUCCESSORS.
MULTIEMPLOYER PLAN. ANY MULTIEMPLOYER PLAN WITHIN THE MEANING OF [SECTION]
3(37) OF ERISA MAINTAINED OR CONTRIBUTED TO BY THE BORROWER OR ANY ERISA
AFFILIATE.
NON-MATERIAL BREACH. A BREACH OF A REPRESENTATION OR WARRANTY OR AN
AFFIRMATIVE COVENANT SET FORTH IN [SECTION] 6 OR [SECTION] 7 OF THIS AGREEMENT
WHICH DOES NOT (a) MATERIALLY ADVERSELY AFFECT THE BUSINESS, PROPERTIES OR
FINANCIAL CONDITION OF THE BORROWER AND ITS SUBSIDIARIES TAKEN AS A WHOLE, OR
(b) MATERIALLY IMPAIR THE ABILITY OF THE BORROWER AND ITS SUBSIDIARIES, TAKEN
AS A WHOLE, TO FULFILL THE MATERIAL OBLIGATIONS TO THE BANKS UNDER THE LOANS
(INCLUDING WITHOUT LIMITATION THE REPAYMENT OF ALL AMOUNTS OUTSTANDING ON THE
LOANS, TOGETHER WITH INTEREST AND CHARGES THEREON WHEN DUE). NOTWITHSTANDING
THE FOREGOING, (i) IN THE EVENT OF A NON-MATERIAL BREACH WITH RESPECT TO A REAL
ESTATE ASSET WHICH IS OTHERWISE AN UNENCUMBERED ASSET, SUCH REAL ESTATE ASSET
SHALL NOT BE INCLUDED AS AN UNENCUMBERED ASSET FOR PURPOSES OF CALCULATING
FINANCIAL COVENANT COMPLIANCE PURSUANT TO [SECTION] 9 OF THIS AGREEMENT FOR SO
LONG AS SUCH BREACH SHALL EXIST; (ii) IN THE EVENT OF A NON-MATERIAL BREACH
WITH RESPECT TO A REAL ESTATE ASSET OF A SUBSIDIARY WHICH HAS A MATERIAL
ADVERSE EFFECT ON SUCH SUBSIDIARY BUT DOES NOT HAVE A MATERIAL ADVERSE EFFECT
ON THE OTHER REAL ESTATE ASSETS OF SUCH SUBSIDIARY, ONLY THE AFFECTED REAL
ESTATE ASSET SHALL NOT BE INCLUDED FOR PURPOSES OF CALCULATING FINANCIAL
COVENANT COMPLIANCE PURSUANT TO SS.9 OF THIS AGREEMENT FOR SO LONG AS SUCH
BREACH SHALL EXIST; AND (iii) IN THE EVENT OF A NON-MATERIAL BREACH WITH
RESPECT TO A SUBSIDIARY OR A REAL ESTATE ASSET OF A SUBSIDIARY WHICH HAS A
MATERIAL ADVERSE EFFECT ON SUCH SUBSIDIARY AND HAS A MATERIAL ADVERSE EFFECT ON
REAL ESTATE ASSETS OF SUCH SUBSIDIARY, ALL OF THE REAL ESTATE ASSETS OF SUCH
SUBSIDIARY SHALL NOT BE INCLUDED FOR PURPOSES OF CALCULATING FINANCIAL COVENANT
COMPLIANCE PURSUANT TO [SECTION] 9 OF THIS AGREEMENT FOR SO LONG AS SUCH BREACH
SHALL EXIST.
NOTES. SEE [SECTION] 2.3.
OBLIGATIONS. ALL INDEBTEDNESS, OBLIGATIONS AND LIABILITIES OF THE BORROWER
AND ANY OF 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 MADE OR REIMBURSEMENT OBLIGATIONS INCURRED, OR THE
NOTES, 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, ISSUED OR DRAWN,
ARISING BY CONTRACT, OPERATION OF LAW OF OTHERWISE.
OUTSTANDING. WITH RESPECT TO THE LOANS, THE AGGREGATE UNPAID PRINCIPAL
THEREOF AS OF ANY DATE OF DETERMINATION.
PBGC. THE PENSION BENEFIT GUARANTY CORPORATION CREATED BY [SECTION] 4002
OF ERISA AND ANY SUCCESSOR ENTITY OR ENTITIES HAVING SIMILAR RESPONSIBILITIES.
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PERMITS. ALL GOVERNMENTAL PERMITS, LICENSES, AND APPROVALS NECESSARY FOR
THE LAWFUL CONSTRUCTION, OPERATION AND MAINTENANCE OF THE REAL ESTATE.
PERMITTED LIENS. LIENS, SECURITY INTERESTS AND OTHER ENCUMBRANCES PERMITTED
BY [SECTION] 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.
PROPERTIES. ALL REAL ESTATE ASSETS, REAL ESTATE, AND ALL OTHER ASSETS,
INCLUDING, WITHOUT LIMITATION, INTANGIBLES AND PERSONALTY OWNED BY THE BORROWER
OR ANY OF ITS SUBSIDIARIES.
REAL ESTATE. ALL REAL PROPERTY AT ANY TIME OWNED, LEASED (AS LESSEE OR
SUBLESSEE) OR OPERATED BY THE BORROWER OR ANY OF ITS SUBSIDIARIES.
REAL ESTATE ASSETS. THOSE FIXED AND TANGIBLE PROPERTIES CONSISTING OF
LAND, BUILDINGS AND/OR OTHER IMPROVEMENTS WHOLLY-OWNED BY THE BORROWER OR ANY
OF ITS SUBSIDIARIES AT THE RELEVANT TIME OF REFERENCE THERETO OR JOINTLY OWNED
TO THE EXTENT PERMITTED UNDER [SECTION] 8.3(f) OF THIS AGREEMENT, BUT
EXCLUDING ALL LEASEHOLDS OTHER THAN LEASEHOLDS UNDER GROUND LEASES HAVING AN
UNEXPIRED TERM OF 30 YEARS OR MORE AND THAT CERTAIN LEASEHOLD INTEREST GRANTED
BY NATURAL GAS PIPELINE COMPANY AT THE WESTVIEW SHOPPING CENTER.
RECORD. THE GRID ATTACHED TO ANY NOTE, OR THE CONTINUATION OF SUCH GRID, OR
ANY OTHER SIMILAR RECORD, INCLUDING COMPUTER RECORDS, MAINTAINED BY ANY BANK
WITH RESPECT TO ANY LOAN REFERRED TO IN SUCH NOTE.
REGISTRATION STATEMENT. THE REGISTRATION STATEMENT FORM S-4 FOR THE
BORROWER FILED WITH THE SECURITIES AND EXCHANGE COMMISSION AS REGISTRATION
STATEMENT NO. 33-64811, AS FILED ON FEBRUARY 15, 1996, AS THE SAME MAY BE
FURTHER AMENDED OR MODIFIED.
REIMBURSEMENT OBLIGATION. THE BORROWER'S OBLIGATION TO REIMBURSE THE
AGENT AND THE BANKS ON ACCOUNT OF ANY DRAWING UNDER ANY LETTER OF CREDIT AS
PROVIDED IN [SECTION] 2A.2. NOTWITHSTANDING THE FOREGOING, UNLESS BORROWER
SHALL NOTIFY AGENT OF ITS INTENT TO REPAY THE REIMBURSEMENT OBLIGATION ON THE
DATE OF THE RELATED DRAWING UNDER ANY LETTER OF CREDIT AS PROVIDED IN [SECTION]
2A.2, SUCH REIMBURSEMENT OBLIGATION SHALL SIMULTANEOUSLY WITH SUCH DRAWING BE
CONVERTED TO AND BECOME A BASE RATE LOAN AS SET FORTH IN [SECTION] 2A.3.
RELEASE. SEE [SECTION] 6.18(c)(iii).
S&P. STANDARD & POOR'S RATINGS GROUP AND ITS SUCCESSORS.
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<PAGE> 15
SUBSIDIARY. ANY CORPORATION, ASSOCIATION, TRUST, OR OTHER BUSINESS ENTITY
OF WHICH THE DESIGNATED PARENT OR OTHER CONTROLLING PERSON SHALL AT ANY TIME OWN
DIRECTLY OR INDIRECTLY THROUGH A SUBSIDIARY OR SUBSIDIARIES AT LEAST A MAJORITY
(BY NUMBER OF VOTES) OF THE OUTSTANDING VOTING INTERESTS.
TOTAL COMMITMENT. THE SUM OF THE COMMITMENTS OF THE BANKS, AS IN EFFECT
FROM TIME TO TIME.
TOTAL INDEBTEDNESS. ALL OF THE FOLLOWING OBLIGATIONS, CONTINGENT AND
OTHERWISE, BUT WITHOUT DUPLICATION, THAT IN ACCORDANCE WITH GENERALLY ACCEPTED
ACCOUNTING PRINCIPLES SHOULD BE CLASSIFIED UPON THE OBLIGOR'S BALANCE SHEET AS
LIABILITIES, OR TO WHICH REFERENCE SHOULD BE MADE BY FOOTNOTES THERETO,
INCLUDING IN ANY FOLLOWING EVENT AND WHETHER OR NOT SO CLASSIFIED: (a) ALL
INDEBTEDNESS, (b) ALL OTHER DEBT AND SIMILAR MONETARY OBLIGATIONS, WHETHER
DIRECT OR INDIRECT; (c) ALL OTHER LIABILITIES SECURED BY ANY MORTGAGE, PLEDGE,
NEGATIVE PLEDGE, SECURITY INTEREST, LIEN, NEGATIVE LIEN, CHARGE, OR OTHER
ENCUMBRANCE EXISTING ON PROPERTY OWNED OR ACQUIRED SUBJECT THERETO, WHETHER OR
NOT THE LIABILITY SECURED THEREBY SHALL HAVE BEEN ASSUMED; (d) ALL OTHER
GUARANTEES, ENDORSEMENTS AND OTHER CONTINGENT OBLIGATIONS WHETHER DIRECT OR
INDIRECT IN RESPECT OF INDEBTEDNESS OR OBLIGATIONS OF OTHERS, INCLUDING ANY
OBLIGATION TO SUPPLY FUNDS TO OR IN ANY MANNER TO INVEST IN, DIRECTLY OR
INDIRECTLY, THE DEBTOR, TO PURCHASE INDEBTEDNESS, OR TO ASSURE THE OWNER OF
INDEBTEDNESS AGAINST LOSS, THROUGH AN AGREEMENT TO PURCHASE GOODS, SUPPLIES, OR
SERVICES FOR THE PURPOSE OF ENABLING THE DEBTOR TO MAKE PAYMENT OF THE
INDEBTEDNESS HELD BY SUCH OWNER OR OTHERWISE, AND THE OBLIGATIONS TO REIMBURSE
THE ISSUER IN RESPECT OF ANY LETTERS OF CREDIT; AND (e) JOINT VENTURE AND
PARTNERSHIP OBLIGATIONS, CONTINGENT OR OTHERWISE.
TYPE. AS TO ANY LOAN ITS NATURE AS A BASE RATE LOAN, A EURODOLLAR RATE LOAN
OR A LIBOR RATE LOAN.
UNENCUMBERED ASSET. WITH RESPECT TO ANY REAL ESTATE ASSET, AT ANY DATE OF
DETERMINATION, THE CIRCUMSTANCE THAT SUCH ASSET ON SUCH DATE (a) IS NOT SUBJECT
TO ANY LIENS (INCLUDING ANY SUCH LIEN IMPOSED BY THE ORGANIZATIONAL DOCUMENTS OF
THE OWNER OF SUCH ASSET, BUT EXCLUDING PERMITTED LIENS), (b) IS NOT THE SUBJECT
OF A NON-MATERIAL BREACH, (c) HAS BEEN IMPROVED WITH A BUILDING OR BUILDINGS
WHICH (1) HAVE BEEN ISSUED A CERTIFICATE OF OCCUPANCY, (2) ARE FULLY
OPERATIONAL, AND (3) HAVE AN AGGREGATE AVERAGE OCCUPANCY OF ALL BUILDING(S) IN
SUCH REAL ESTATE ASSET OF NOT LESS THAN 75% FOR THE FOUR FISCAL QUARTERS MOST
RECENTLY ENDED, PROVIDED AT ANY ONE TIME TWO REAL ESTATE ASSETS THAT OTHERWISE
QUALIFY AS AN UNENCUMBERED ASSET MAY HAVE AN AVERAGE OCCUPANCY OF LESS THAN 75%
FOR THE FOUR FISCAL QUARTERS MOST RECENTLY ENDED, PROVIDED FURTHER THAT AT ANY
DATE OF DETERMINATION ALL REAL ESTATE ASSETS THAT ARE UNENCUMBERED ASSETS SHALL
HAVE AN AGGREGATE OCCUPANCY OF NOT LESS THAN 85% FOR THE FOUR FISCAL QUARTERS
MOST RECENTLY ENDED, AND (d) IS WHOLLY OWNED BY A BORROWER.
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<PAGE> 16
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 THERETO 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.
16
<PAGE> 17
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 CONSOLIDATED SUBSIDIARIES AND (b) THE AGGREGATE AMOUNT OF
UNRESTRICTED CASH EQUIVALENTS (VALUED AT FAIR MARKET VALUE) THEN HELD BY THE
BORROWER OR ANY OF ITS CONSOLIDATED 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 UNENCUMBERED ASSETS. FOR ANY PERIOD OF TWO CONSECUTIVE FISCAL
QUARTERS, AN AMOUNT EQUAL TO THE SUM OF (i) CONSOLIDATED NET OPERATING INCOME
ATTRIBUTABLE TO UNENCUMBERED ASSETS FOR THE MOST RECENT PERIOD OF TWO
CONSECUTIVE FISCAL QUARTERS OF THE BORROWER (EXCLUDING ANY PORTION OF
CONSOLIDATED NET OPERATING INCOME ATTRIBUTABLE TO UNENCUMBERED ASSETS ACQUIRED
BY THE BORROWER DURING OR AFTER SUCH PERIOD) MULTIPLIED BY 2, WITH THE PRODUCT
BEING DIVIDED BY THE CAPITALIZATION RATE, PLUS (ii) WITH RESPECT TO THOSE
UNENCUMBERED ASSETS SO ACQUIRED BY THE BORROWER DURING SUCH PERIOD OF TWO
CONSECUTIVE FISCAL QUARTERS, THE BORROWER'S ESTIMATED ANNUAL CONSOLIDATED NET
OPERATING INCOME FOR SUCH UNENCUMBERED ASSETS BASED ON LEASES IN EXISTENCE AT
THE DATE OF SUCH CALCULATION DIVIDED BY THE CAPITALIZATION RATE.
VOTING INTERESTS. CAPITAL STOCK OF ANY CLASS OR CLASSES (HOWEVER
DESIGNATED), THE HOLDERS OF WHICH ARE AT THE TIME ENTITLED, AS SUCH HOLDERS, (a)
TO VOTE FOR THE ELECTION OF A MAJORITY OF THE DIRECTORS (OR PERSONS PERFORMING
SIMILAR FUNCTIONS) OF THE CORPORATION, ASSOCIATION, PARTNERSHIP, TRUST OR OTHER
BUSINESS ENTITY INVOLVED, OR (b) TO CONTROL, MANAGE OR CONDUCT THE BUSINESS OF
THE CORPORATION, PARTNERSHIP, ASSOCIATION, TRUST OR OTHER BUSINESS ENTITY
INVOLVED.
[SECTION] 1.2. RULES OF INTERPRETATION.
-----------------------
(a) A reference to any document or agreement shall include such document or
agreement as amended, modified or supplemented from time to time in accordance
with its terms and the terms of this Agreement.
(b) The singular includes the plural and the plural includes the singular.
(c) A reference to any law includes any amendment or modification to such
law.
(d) A reference to any Person includes its permitted successors and
permitted assigns.
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(e) Accounting terms not otherwise defined herein have the meanings
assigned to them by generally accepted accounting principles applied on a
consistent basis by the accounting entity to which they refer.
(f) The words "include", "includes" and "including" are not limiting.
(g) All terms not specifically defined herein or by generally accepted
accounting principles, which terms are defined in the Uniform Commercial Code as
in effect in Massachusetts, have the meanings assigned to them therein.
(h) Reference to a particular "ss." refers to that section of this
Agreement unless otherwise indicated.
(i) The words "herein", "hereof", "hereunder" and words of like import
shall refer to this Agreement as a whole and not to any particular section or
subdivision of this Agreement.
(j) The words "so long as any Loan or Note is outstanding" shall mean so
long as such Loan or Note is not indefeasibly paid in full in cash.
[SECTION] 2. THE REVOLVING CREDIT FACILITY.
-----------------------------
[SECTION] 2.1. COMMITMENT TO LEND; LIMITATION ON TOTAL COMMITMENT.
Subject to the provisions of [SECTION] 2.1, [SECTION] 2.5, [SECTION] 2A and the
other terms and conditions set forth in this Agreement, each of the Banks
severally agrees to lend to the Borrower and the Borrower may borrow, repay,
and reborrow from time to time between the Effective Date and the Maturity Date
upon notice by the Borrower to the Agent given in accordance with [SECTION]
2.5, such sums as are requested by the Borrower up to a maximum aggregate
principal amount outstanding (after giving effect to all amounts requested) at
any one time equal to such Bank's Commitment minus such Bank's Commitment
Percentage of the sum of the Maximum Drawing Amount, PROVIDED that the sum of
the outstanding amount of the Loans (after giving effect to all amounts
requested) plus the Maximum Drawing Amount shall not at any time exceed the
Total Commitment. The Loans shall be made pro rata in accordance with each
Bank's Commitment Percentage and the Banks shall at all times immediately
adjust inter se any inconsistency between each Bank's outstanding principal
amount and each Bank's Commitment. Each request for a Loan hereunder shall
constitute a representation and warranty by the Borrower that the conditions
set forth in [SECTION] 11 have been satisfied (or waived in writing by the
Banks) on the date of such request and will be satisfied (or waived in writing
by the Banks) on the proposed Drawdown Date of the requested Loan, PROVIDED
that the making of such representation and warranty by Borrower shall not limit
the right of any Bank not to lend if such conditions have not been satisfied or
if the Compliance Certificate delivered in connection with ss.11 is inaccurate.
Nothing herein shall prevent the Borrower from seeking recourse (subject to
[SECTION] 24 of this Agreement) against any Bank that wrongfully fails to
advance its proportionate share of a requested Loan as
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<PAGE> 19
required by this Agreement. The Agent intends, and shall have the right, to
syndicate, or enter into co-lending arrangements with respect to, the Loans and
the Total Commitment pursuant to [SECTION] 18, and the Borrower agrees to
cooperate with the Agent's syndication and/or co-lending efforts, such
cooperation to include, without limitation, the provision of information
reasonably requested by potential syndicate members.
[SECTION] 2.2. 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 to reduce by $1,000,000 or an integral multiple of
$1,000,000 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 any
commitment fee then accrued on the amount of the reduction. No reduction or
termination of the Commitments may be reinstated.
[SECTION] 2.3. THE NOTES. The Loans shall be evidenced by separate
promissory notes of the Borrower in substantially the form of EXHIBIT A hereto
(each a "Note"), and completed with appropriate insertions. A Note shall be
payable to the order of each Bank in a principal amount equal to such Bank's
Commitment. The Borrower irrevocably authorizes each Bank to make or cause to
be made, at or about the time of the Drawdown Date of any Loan or at the time
of receipt of any payment of principal on such Bank's Note, an appropriate
notation on such Bank's Record reflecting the making of such Loan or (as the
case may be) the receipt of such payment. The failure to record, or any error
in so recording, any such amount on the Record shall not limit or otherwise
affect the obligations of the Borrower hereunder or under any Note to make
payments of principal of or interest on any Note when due.
[SECTION] 2.4. INTEREST ON LOANS.
-----------------
(a) Each Base Rate Loan shall bear interest for the period commencing with
the Drawdown Date thereof and ending on the last day of the Interest Period with
respect thereto at the Base Rate.
(b) Each Eurodollar Rate Loan shall bear interest for the period commencing
with the Drawdown Date thereof and ending on the last day of the Interest Period
with respect thereto at a rate equal to Eurodollar Rate determined for such
Interest Period plus the Applicable Margin for Eurodollar Rate Loans.
(c) Each LIBOR Rate Loan shall bear interest for the period commencing with
the Drawdown Date thereof and ending on the last day of the Interest Period with
respect thereto at a
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rate equal to the LIBOR Rate determined for such Interest Period plus the
Applicable Margin for LIBOR Rate Loans.
(d) The Borrower unconditionally promises to pay interest on each Loan in
arrears on each Interest Payment Date with respect thereto.
[SECTION] 2.5. REQUESTS FOR LOANS.
------------------
(a) The Borrower shall give to the Agent written notice in the form of
Exhibit B hereto (or telephonic notice confirmed in a writing in the form of
Exhibit B hereto) of each Loan requested hereunder (a "Loan Request") no less
than (a) five (5) Business Days prior to the proposed Drawdown Date of such
Loan. Each such notice shall specify (i) the principal amount of the Loan
requested, (ii) the proposed Drawdown Date of such Loan, (iii) the Interest
Period for such Loan, (iv) the Type of such Loan, (v) the permitted purpose for
which such funds will be used, and (vi) in the case of a Letter of Credit,
include a Letter of Credit Application, and in all cases shall be accompanied
by a Compliance Certificate evidencing covenant compliance at the time of the
making of such Loan and, on a pro-forma basis, after giving effect to such
requested Loan. Promptly upon receipt of a Loan Request, the Agent shall notify
each of the Banks thereof. Notwithstanding the maximum amount of the Total
Commitment stated herein or the submission of a Loan Request, no Loan shall be
required to be made by any Bank unless all of the conditions contained in
[SECTION] 11 of this Agreement have been met and the Compliance Certificate
delivered in connection with [SECTION] 11 is accurate. Each such notice shall
be irrevocable and binding on the Borrower and shall obligate the Borrower to
accept the Loan requested from the Banks on the proposed Drawdown Date provided
that the Borrower may revoke a Loan Request by written notice given to the
Agent on or before three (3) Business Days prior to the proposed Drawdown Date.
Each Loan Request shall be in a minimum aggregate amount of $100,000 or an
integral multiple of $100,000 in excess thereof. Upon delivery of a Loan
Request in accordance with this Section 2.5(a), each of the Banks shall be
obligated to fund its Commitment Percentage of the requested Loans subject to
the limitations and conditions specified in this [SECTION] 2.5 or in [SECTION]
2.1 hereof.
(b) Notwithstanding anything contained in [SECTION] 2.1 or [SECTION]
2.5(a) to the contrary, the Agent and the Banks shall not be required to fund
any Loan if, after giving effect thereto, the outstanding amount of Loans and
Letters of Credit advanced to the Borrower or its Subsidiaries for working
capital purposes would exceed $25,000,000. The Agent and the Borrower agree and
acknowledge that the limitation on Loans and Letters of Credit for working
capital purposes shall not include Loans for the costs of tenant improvements,
capital improvements, leasing commissions, repayment of Indebtedness or other
fees or closing costs.
(c) Each Loan Request for the acquisition of a Real Estate Asset shall
include, in addition to the information specified in [SECTION] 2.5(a) hereof,
(i) a certification by the Borrower that such acquisition is consistent with
the Business Plan Summary and that an environmental inspection has
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<PAGE> 21
been conducted in accordance with [SECTION] 7.12 hereof and, based on
such inspection, the proposed Real Estate Asset to be acquired does not have
potential environmental remediation costs or other environmental liabilities in
excess of $1,000,000, and (ii) a copy of the environmental site assessment
report with respect to such Real Estate Asset.
(d) Notwithstanding anything contained in [SECTION] 2.1 or [SECTION]
2.5(a) hereof to the contrary, in the event of any Loan Request for the
development of a Real Estate Asset, in addition to the information specified in
[SECTION] 2.5(a) hereof to be included with each Loan Request, Borrower shall
also submit to the Agent a certification by the Borrower that the covenants
contained in [SECTION] 7.20 are true and correct as of the date of the Loan
Request and will be true as of the time of the making of such Loan.
[SECTION] 2.6. CONVERSION OPTIONS.
-----------------
(a) The Borrower may elect from time to time to convert any outstanding
Loan to a Loan of another Type, PROVIDED that (i) with respect to any such
conversion of a Eurodollar Rate Loan or LIBOR Rate Loan to a Base Rate Loan,
the Borrower shall give the Agent at least three (3) Business Days' prior
written notice of such election; (ii) with respect to any such conversion of a
Eurodollar Rate Loan or LIBOR Rate Loan into a Loan of another Type, such
conversion shall only be made on the last day of the Interest Period with
respect thereto; (iii) subject to the further proviso at the end of this
section and subject to [SECTION] 2.6(b) and [SECTION] 2.6(d) hereof with
respect to any such conversion of a Base Rate Loan or a LIBOR Rate Loan to a
Eurodollar Rate Loan, the Borrower shall give the Agent at least four (4)
Eurodollar Business Days' prior written notice of such election; (iv) subject
to the further proviso at the end of this section and subject to [SECTION]
2.6(b) and [SECTION] 2.6(d) hereof with respect to any such conversion of a
Base Rate Loan or a Eurodollar Rate Loan to a LIBOR Rate Loan, the Borrower
shall give the Agent at least four (4) LIBOR Business Days' prior written
notice of each election and (v) no Loan may be converted into a Eurodollar Rate
Loan or a LIBOR Rate Loan when any Default or Event of Default has occurred and
is continuing. On the date on which such conversion is being made, each Bank
shall take such action as is necessary to transfer its Commitment Percentage of
such Loans to its Domestic Lending Office, its Eurodollar Lending Office or
LIBOR Lending Office, as the case may be. All or any part of outstanding Loans
of any Type may be converted as provided herein, PROVIDED FURTHER that each
Conversion Request relating to the conversion of a Loan of another Type to a
Eurodollar Rate Loan or LIBOR Rate Loan shall be for an amount equal to
$600,000 or an integral multiple of $100,000 in excess thereof and shall be
irrevocable by the Borrower.
(b) Any Loans of any Type may be continued as such upon the expiration
of an Interest Period with respect thereto by compliance by the Borrower with
the notice provisions contained in [SECTION] 2.6(a); PROVIDED that no
Eurodollar Rate Loan or LIBOR 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
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thereto ending during the continuance of any Default or Event of Default of
which the officers of the Agent active upon the Borrower's account have actual
knowledge.
(c) In the event that the Borrower does not notify the Agent of its
election hereunder with respect to any Loan, such Loan shall be automatically
converted to a Base Rate Loan at the end of the applicable Interest Period.
(d) The Borrower may not request a Eurodollar Rate Loan or a LIBOR Rate
Loan pursuant to [SECTION] 2.5, elect to convert a Loan of another Type to a
Eurodollar Rate Loan or a LIBOR Rate Loan pursuant to [SECTION] 2.5(a) or elect
to continue a Eurodollar Rate Loan or a LIBOR Rate Loan pursuant to [SECTION]
2.6(b) if, after giving effect thereto, there would be greater than an
aggregate of five (5) Eurodollar Rate Loans and LIBOR Rate Loans outstanding.
Any Loan Request for a Eurodollar Rate Loan or a LIBOR Rate Loan that would
create greater than an aggregate of five (5) Eurodollar Rate Loans and LIBOR
Rate Loans outstanding shall be deemed to be a Loan Request for a Base Rate
Loan. All Loans which are Eurodollar Rate Loans, having identical Interest
Periods and interest rates shall constitute one (1) Eurodollar Rate Loan
hereunder. All Loans which are LIBOR Rate Loans having identical Interest
Periods and interest rates shall constitute one (1) LIBOR Rate Loan hereunder.
[SECTION] 2.7. FUNDS FOR LOANS.
---------------
(a) Not later than 12:00 p.m. (Boston time) on the proposed Drawdown
Date of any Loans, each of the Banks will make available to the Agent, at the
Agent's Head Office, in immediately available funds, the amount of such Bank's
Commitment Percentage of the amount of the requested Loans. Upon receipt from
each Bank of such amount, and upon receipt of the documents required by
[SECTION] 11 and the satisfaction of the other conditions set forth herein, to
the extent applicable, the Agent will make available to the Borrower the
aggregate amount of such Loans made available to the Agent by the Banks. The
Agent shall make reasonable efforts to fund the aggregate amount of the Loans
to the Borrower by 2:00 p.m. on the Drawdown Date. The failure or refusal of
any Bank to make available to the Agent at the aforesaid time and place on any
Drawdown Date the amount of its Commitment Percentage of the requested Loans
shall not relieve any other Bank from its several obligation hereunder to make
available to the Agent the amount of such other Bank's Commitment Percentage of
any requested Loans but shall not obligate any other Bank or Agent to fund more
than its Commitment Percentage of the requested Loans or to increase its
Commitment Percentage.
(b) The Agent may, unless notified to the contrary by any Bank prior to a
Drawdown Date, assume that such Bank has made available to the Agent on such
Drawdown Date the amount of such Bank's Commitment Percentage of the Loans to be
made on such Drawdown Date, and the Agent may (but it shall not be required to),
in reliance upon such assumption, make available to the Borrower a corresponding
amount. If any Bank makes available to the Agent such amount on a date
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<PAGE> 23
after such Drawdown Date, such Bank shall pay to the Agent on demand an amount
equal to the product of (i) the average computed for the period referred to in
clause (iii) below, of the weighted average interest rate paid by the Agent for
federal funds acquired by the Agent during each day included in such period,
TIMES (ii) the amount of such Bank's Commitment Percentage of such Loans, TIMES
(iii) a fraction, the numerator of which is the number of days or portion
thereof that elapsed from and including such Drawdown Date to the date on which
the amount of such Bank's Commitment Percentage of such Loans shall become
immediately available to the Agent, and the denominator of which is 365. A
statement of the Agent submitted to such Bank with respect to any amounts owing
under this paragraph shall be PRIMA FACIE evidence of the amount due and owing
to the Agent by such Bank.
[SECTION] 2A LETTERS OF CREDIT.
-----------------
2A.1 LETTER OF CREDIT COMMITMENTS.
----------------------------
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 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
[SECTION] 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 Loan Request, (a) the sum
of the aggregate Maximum Drawing Amount shall not exceed $20,000,000 at any one
time and (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.
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 Credit Agreement (including provisions applicable to a Loan Request), then
the provisions of this Credit Agreement shall, to the extent of any such
inconsistency, govern.
2A.1.3 TERMS OF LETTERS OF CREDIT.
--------------------------
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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 (or, if the Letter of Credit is confirmed by a
confirmer or otherwise provides for one or more nominated persons, forty-five
(45) days) prior to the Maturity Date. Each Letter of Credit so issued, extended
or renewed shall be subject to the Uniform Customs.
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 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 [SECTION] 2A.2 (such
agreement for a Bank being called herein the "Letter of Credit Participation"
of such Bank).
2A.1.5. PARTICIPATIONS OF BANKS.
-----------------------
Each such payment made by a Bank shall be treated as the purchase by such Bank
of a participating interest in the Borrower's Reimbursement Obligation under
[SECTION] 2A.2 in an amount equal to such payment. Each Bank shall share in
accordance with its participating interest in any interest which accrues
pursuant to [SECTION] 2A.2.
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 [SECTION] 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 [SECTION] 2A.2(b) and (c)
or [SECTION] 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) the amount of any taxes
(other than income taxes, franchise fees and other similar impositions based
upon the net income or assets of the Bank or any Bank), fees, charges or other
costs and expenses whatsoever incurred by the Fronting Bank or any Bank in
connection with any payment made by the Fronting Bank or any Bank under, or
with respect to, such Letter of Credit,
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(b) upon the reduction (but not termination) of the Total Commitment to an
amount less than the Maximum Drawing Amount, an amount equal to such difference,
which amount shall be held by the Agent for the benefit of the Banks and the
Agent as cash collateral 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 [SECTION] 12, an amount equal to the then Maximum Drawing
Amount on all Letters of Credit, which amount shall be held by the Agent for
the benefit of the Banks and the Agent as cash collateral for all Reimbursement
Obligations.
Each such payment shall be made to the Agent at the Agent's Head Office
in immediately available funds. Interest on any and all amounts remaining
unpaid by the Borrower under this [SECTION] 2A.2 at any time from the date such
amounts become due and payable (whether as stated in this [SECTION] 2A.2, by
acceleration or otherwise) until payment in full (whether before or after
judgment) shall be payable to the Agent on demand at the rate specified in
[SECTION] 4.9 for overdue principal on the Loans.
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 [SECTION] 2A.3, Borrower shall reimburse Agent,
as set forth in [SECTION] 2A.2 above. Notwithstanding anything contained in
this [SECTION] 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 Loan Request pursuant to [SECTION] 2.5 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. Each Bank shall, in accordance with [SECTION] 2.7, make
available its PRO RATA share 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 participation 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 [SECTION] 2.7(b) in the event of a late funding by a Bank. The
Fronting Bank is irrevocably authorized by the Borrower 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.
2A.4 OBLIGATIONS ABSOLUTE.
--------------------
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The Borrower's obligations under this [SECTION] 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 [SECTION] 2A.2 shall not be affected by, among
other things, the validity or genuineness of documents or of any endorsements
thereon, 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 which 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. 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, 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.
2A.5 RELIANCE BY ISSUER.
------------------
To the extent not inconsistent with [SECTION] 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 Agreement 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 Agreement 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 upon the Banks and all future holders of the Notes or of a
Letter of Credit Participation.
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 1.5% per annum of the face amount of the issued
Letter of Credit, which fee shall be payable on the date of issuance of the
Letter of Credit, and which fee shall be prorated based on the stated
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expiration date of the Letter of Credit if less than one year, with no rebate in
the event that the Letter of Credit is terminated prior to such expiration date.
[SECTION] 3. REPAYMENT OF THE LOANS.
----------------------
[SECTION] 3.1. MATURITY. The Borrower unconditionally promises to pay
on the Maturity Date, and there shall become absolutely due and payable on the
Maturity Date, all of the Loans outstanding on such date, together with any and
all accrued and unpaid interest and charges thereon.
[SECTION] 3.2. MANDATORY REPAYMENTS OF LOANS. If at any time the sum of the
outstanding amount of the Loans and the Maximum Drawing Amount exceeds the Total
Commitment, then the Borrower shall, within one (1) Business Day of receipt of
notice of the same from the Agent, pay the amount of such excess to the Agent
for the respective accounts of the Banks for application to the Loans.
[SECTION] 3.3. OPTIONAL REPAYMENTS OF LOANS. The Borrower shall have
the right, at its election, to repay the outstanding amount of the Loans, as a
whole or in part, on any Business Day, without penalty or premium; PROVIDED
that the full or partial prepayment of the outstanding amount of any Eurodollar
Rate Loans or LIBOR Rate Loans made pursuant to this [SECTION] 3.3 may be made
only on the last day of the Interest Period relating thereto except as
otherwise provided in this [SECTION] 3.3. The Borrower shall give the Agent no
later than 10:00 a.m., Boston time, at least two (2) Business Days' prior
written notice of any prepayment pursuant to this [SECTION] 3.3 of any Base
Rate Loans, three (3) Eurodollar Business Days' notice of any proposed
repayment pursuant to this [SECTION] 3.3 of any Eurodollar Rate Loans and three
(3) LIBOR Business Days' notice of any proposed repayment pursuant to this
[SECTION] 3.3 of any LIBOR Rate Loans, specifying the proposed date of payment
of Loans and the principal amount to be paid. The Agent shall give the Banks
notice of any proposed prepayment within one (1) Business Day after receipt of
written notice from the Borrower. Each such partial prepayment of the Loans
shall be in an integral multiple of $100,000 and shall be accompanied by the
payment of accrued interest on the principal repaid to the date of payment and
shall be applied, in the absence of instruction by the Borrower, first to the
principal of Base Rate Loans, then to the principal of Eurodollar Rate Loans
and then to the principal of LIBOR Rate Loans. Notwithstanding anything
contained herein to the contrary, the Borrower may make a full or partial
prepayment of a Eurodollar Rate Loan or a LIBOR Rate Loan on a date other than
the last day of the Interest Period relating thereto, if all optional
prepayments (in whole or in part) on such Loans shall be accompanied by, and
the Borrower hereby promises to pay, a prepayment fee in an amount determined
by the Agent in the following manner:
(i) 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 so paid or not borrowed, during the period beginning on
the date of such payment or failure to borrow and ending on the last day of the
Interest Period relating thereto on which date such installment would have been
due (the "Reemployment Period"), exceeds (B) the total amount of interest which
would
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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 borrowed and to have a maturity
comparable to the Reemployment Period, and the interest to accrue thereon to
take account of amortization of any discount from par or accretion of premium
above par at which the same is selling at the time of designation. Each such
amount is hereafter referred to as an "Installment Amount".
(ii) Second, each Installment Amount shall be treated as payable as of the
date on which the related principal installment would have been payable by the
Borrower 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 annual interest rate as that payable upon the bond or other obligation
of the United States of America designated as aforesaid by the Agent.
[SECTION] 4. CERTAIN GENERAL PROVISIONS.
--------------------------
[SECTION] 4.1. APPROVAL AND CO-LENDER FEE; AGENT'S FEE. The Borrower
agrees to pay (a) to the Agent an "Approval" fee and "Co-Lender" fee as defined
and set forth in the letter agreement dated March 11, 1996 between the Agent
and the Borrower (the "Approval Letter") and (b) to the Agent for its own
account, an agent's fee of $75,000 per annum, payable in equal installments
quarterly in arrears on May 1, August 1, November 1 and February 1 of each year
and on the Maturity Date. In the event of any conflict or inconsistency between
a provision set forth in the Approval Letter and a provision set forth in this
Agreement, the terms and provisions of this Agreement shall prevail.
[SECTION] 4.2. COMMITMENT FEE. The Borrower shall pay to the Agent for the
accounts of the Banks in accordance with their respective Commitment
Percentages, a commitment fee calculated at the rate of (a) one eighth of one
percent (.125%) per annum on the average daily amount during each calendar
quarter or portion thereof from the date hereof to the Maturity Date by which
the Total Commitment exceeds the outstanding amount of Loans plus the Maximum
Drawing Amount during such calendar quarter if the average outstanding amount of
the Loans plus the Maximum Drawing Amount during such calendar quarter is equal
to or more than 60% of the Total Commitment or (b) one quarter of one percent
(.25%) per annum on the average daily amount during each calendar quarter or
portion thereof from the date hereof to the Maturity Date by which the Total
Commitment exceeds the outstanding amount of Loans plus the Maximum Drawing
Amount during such calendar quarter if the average outstanding amount of the
Loans plus the Maximum Drawing Amount during such calendar quarter is less than
60% of the Total Commitment. The commitment fee shall be payable quarterly in
arrears on the first day of each calendar quarter for the immediately preceding
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calendar quarter commencing on the first such date following the date hereof,
with a final payment on the Maturity Date or any earlier date on which the
Commitments shall terminate.
[SECTION] 4.3. FUNDS FOR PAYMENTS.
------------------
(a) All payments of principal, interest, closing fees, Letter of Credit
fees, commitment fees and any other amounts due hereunder (other than as
provided in [SECTION] 4.5 and [SECTION] 4.6) or under any of the other Loan
Documents, and all prepayments, shall be made to the Agent, for the respective
accounts of the Banks, at the Agent's Head Office, in each case in Dollars in
immediately available funds.
(b) All payments by the Borrower hereunder and under any of the other Loan
Documents shall be made without setoff or counterclaim and free and clear of and
without deduction for any taxes, levies, imposts, duties, charges, fees,
deductions, withholdings, compulsory liens, restrictions or conditions of any
nature now or hereafter imposed or levied by any jurisdiction or any political
subdivision thereof or taxing or other authority therein unless the Borrower is
compelled by law to make such deduction or withholding. If any such obligation
is imposed upon the Borrower with respect to any amount payable by it hereunder
or under any of the other Loan Documents, the Borrower shall pay to the Agent,
for the account of the Banks or (as the case may be) the Agent, on the date on
which such amount is due and payable hereunder or under such other Loan
Document, such additional amount in Dollars as shall be necessary to enable the
Banks or the Agent to receive the same net amount which the Banks or the Agent
would have received on such due date had no such obligation been imposed upon
the Borrower. The Borrower will deliver promptly to the Agent certificates or
other valid vouchers for all taxes or other charges deducted from or paid with
respect to payments made by the Borrower hereunder or under such other Loan
Document.
[SECTION] 4.4. COMPUTATIONS. All computations of interest on the Loans
and of other fees to the extent applicable shall be based on a 360-day year and
paid for the actual number of days elapsed. Except as otherwise provided in the
definition of the term "Interest Period" with respect to Eurodollar Rate Loans
and LIBOR Rate Loans, whenever a payment hereunder or under any of the other
Loan Documents becomes due on a day that is not a Business Day, the due date
for such payment shall be extended to the next succeeding Business Day, and
interest shall accrue during such extension.
[SECTION] 4.5. ADDITIONAL COSTS, ETC. If any present or future
applicable law, which expression, as used herein, includes statutes, rules and
regulations thereunder and interpretations thereof by any competent court or by
any governmental or other regulatory body or official charged with the
administration or the interpretation thereof and requests, directives,
instructions and notices at any time or from time to time hereafter made upon
or otherwise issued to any Bank or the Agent by any central bank or other
fiscal, monetary or other authority (whether or not having the force of law),
shall:
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<PAGE> 30
(a) subject any Bank or the Agent to any tax, levy, impost, duty, charge,
fee, deduction or withholding of any nature with respect to this Agreement, the
other Loan Documents, such Bank's Commitment or the Loans (other than taxes
based upon or measured by the income or profits of such Bank or the Agent), or
(b) materially change the basis of taxation (except for changes in taxes on
income or profits) of payments to any Bank of the principal of or the interest
on any Loans or any other amounts payable to any Bank under this Agreement or
the other Loan Documents, or
(c) impose or increase or render applicable (other than to the extent
specifically provided for elsewhere in this Agreement) any special deposit,
reserve, assessment, liquidity, capital adequacy or other similar requirements
(whether or not having the force of law) against assets held by, or deposits in
or for the account of, or loans by, or Letters of Credit issued by, commitments
of an office of any Bank, or
(d) impose on any Bank any other conditions or requirements with respect to
this Agreement, the other Loan Documents, the Loans, the Commitment, or any
class of loans, Letters of Credit or commitments of which any of the Loans or
the Commitment forms a part;
and the result of any of the foregoing is
(i) to increase the cost to such Bank of making, funding, issuing,
renewing, extending or maintaining any of the Loans or such Bank's
Commitment or any Letter of Credit, or
(ii) to reduce the amount of principal, interest, or other amount
payable to such Bank or the Agent hereunder on account of the Commitments,
and Letters of Credit or any of the Loans, or
(iii) to require such Bank or the Agent to make any payment or to
forego any interest or other sum payable hereunder, the amount of which
payment or foregone interest or other sum is calculated by reference to the
gross amount of any sum receivable or deemed received by such Bank or the
Agent from the Borrower hereunder,
then, and in each such case, the Borrower will, within ninety (90) days of
demand made by such Bank or (as the case may be) the Agent at any time and from
time to time and as often as the occasion therefor may arise, pay to such Bank
or the Agent, to the extent permitted by law, such additional amounts as will be
sufficient to compensate such Bank or the Agent for such additional cost,
reduction, payment or foregone interest or other sum.
[SECTION] 4.6. CAPITAL ADEQUACY. If any present or future law,
governmental rule, regulation, policy, guideline or directive (whether or not
having the force of law) or the interpretation thereof by a court
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<PAGE> 31
or governmental authority with appropriate jurisdiction affects the amount of
capital required or expected to be maintained by banks or bank holding companies
and any Bank or the Agent determines that the amount of capital required to be
maintained by it is increased by or based upon the existence of the Loans made
or deemed to be made pursuant hereto, then such Bank or the Agent may notify the
Borrower of such fact, and the Borrower shall pay to such Bank or the Agent from
time to time within ninety (90) days of demand, as an additional fee payable
hereunder, such amount as such Bank or the Agent shall determine in good faith
and certify in a notice to the Borrower to be an amount that will adequately
compensate such Bank or the Agent in light of these circumstances for its
increased costs of maintaining such capital. Each Bank and the Agent shall
allocate such cost increases among its customers in good faith and on an
equitable basis.
[SECTION] 4.7. CERTIFICATE. A certificate setting forth any additional
amounts payable pursuant to [SECTIONS] 4.5 or 4.6 and a brief
explanation of such amounts which are due, including reasonably detailed
information regarding the method and calculation of such amount, submitted by
any Bank or the Agent to the Borrower, shall be PRIMA FACIE evidence that such
amounts are due and owing.
[SECTION] 4.8. INDEMNITY. In addition to the other provisions of this
Agreement regarding any such matters, the Borrower agrees to indemnify each
Bank and to hold each Bank harmless from and against any loss, cost or
reasonable expense (including loss of the spread to which such Bank would have
been entitled through the end of the applicable Interest Period in excess of
the applicable interest rate(s) then in effect) that such Bank may sustain or
incur as a consequence of (a) a default by the Borrower in payment of the
principal amount of or any interest on any Eurodollar Rate Loans or LIBOR Rate
Loans as and when due and payable, including any such loss or expense caused by
Borrower's breach or other default and arising from interest or fees payable by
such Bank to lenders of funds obtained by it in order to maintain its
Eurodollar Rate Loans or LIBOR Rate Loans, (b) a default by the Borrower in
making a borrowing or conversion after the Borrower has given (or is deemed to
have given) a Loan Request or a Conversion Request, and (c) the making of any
payment of a Eurodollar Rate Loan or LIBOR Rate Loan or the making of any
conversion of a Eurodollar Rate Loan or a LIBOR Rate Loan to a Loan of another
Type on a day that is not the last day of the applicable Interest Period with
respect thereto, including interest or fees payable by such Bank to lenders of
funds obtained by it in order to maintain any such Eurodollar Rate Loan or
LIBOR Rate Loan; PROVIDED, however, that the Borrower shall not be required to
so indemnify any Bank pursuant to clause (b) above which wrongfully fails or
refuses to fund its proportionate share of a Loan in accordance with the terms
of this Agreement.
[SECTION] 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 compounded monthly and payable on demand at a rate per
annum equal to four percent (4%) above the rate of interest otherwise payable
hereunder until such amount shall be paid in full (after as well as before
judgment). In addition, the Borrower shall pay to the Agent for the account of
the Banks a late charge equal to three percent (3%) of any
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amount of principal and/or interest and/or charges on the Loans which is not
paid within ten (10) days of the date when due.
[SECTION] 4.10. INABILITY TO DETERMINE EURODOLLAR RATE OR LIBOR RATE.
In the event, prior to the commencement of any Interest Period relating to any
Eurodollar Rate Loan or LIBOR Rate Loan, the Agent after consulting with the
Banks shall determine in good faith that adequate and reasonable methods do not
exist for ascertaining the Eurodollar Rate or the LIBOR Rate that would
otherwise determine the rate of interest to be applicable to any Eurodollar
Rate Loan or LIBOR Rate Loan during any Interest Period, the Agent shall
forthwith give notice of such determination (which shall be conclusive and
binding on the Borrower) to the Borrower. In such event (a) any Loan Request
with respect to Eurodollar Rate Loans or LIBOR Rate Loans, as the case may be,
shall be automatically withdrawn and shall be deemed a request for Base Rate
Loans, (b) each Eurodollar Rate Loan or LIBOR Rate Loan, as the case may be,
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 or LIBOR Rate Loans, as the case may be, shall be
suspended until the Agent determines in good faith that the circumstances
giving rise to such suspension no longer exist, whereupon the Agent shall
promptly so notify the Borrower.
[SECTION] 4.11. ILLEGALITY. Notwithstanding any other provisions
herein, if any present or future law, regulation, treaty or directive or in the
interpretation or application thereof shall make it unlawful for any Bank to
make or maintain Eurodollar Rate Loans or LIBOR 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 LIBOR Rate Loans,
as the case may be, or convert Loans of another Type to Eurodollar Rate Loans
or LIBOR Rate Loans, as the case may be, shall forthwith be suspended and (b)
the Eurodollar Rate Loans or LIBOR Rate Loans, as the case may be, 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 LIBOR Rate
Loans or within such earlier period as may be required by law. The Borrower
hereby agrees promptly to pay to the Agent for the account of such Bank, upon
demand, any additional amounts necessary to compensate such Bank for any costs
incurred by such Bank in making any conversion in accordance with this
[SECTION] 4.11, including any interest or fees payable by such Bank to lenders
of funds obtained by it in order to make or maintain its Eurodollar Rate Loans
or LIBOR Rate Loans hereunder.
[SECTION] 5. INTENTIONALLY OMITTED.
---------------------
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[SECTION] 6. REPRESENTATIONS AND WARRANTIES. The Borrower represents
and warrants to the Agent and each of the Banks as follows.
[SECTION] 6.1. AUTHORITY; ETC.
--------------
(a) ORGANIZATION; GOOD STANDING. The Borrower and each Subsidiary which is
a Borrower (i) is a corporation or other entity duly organized under the laws of
its state of organization and is validly existing and in good standing under the
laws of such state, (ii) has all requisite corporate or partnership or other
organizational power to own its properties and conduct its business as now
conducted and as presently contemplated, and (iii) to the extent required by law
is in good standing as a foreign entity and is duly authorized to do business in
each 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 the business, properties or financial condition of the
Borrower. Each of the Subsidiaries that is not a Borrower is duly organized,
validly existing and in good standing under the laws of its jurisdiction of
organization and has all requisite power to conduct its business as now
conducted in each jurisdiction where its business is conducted.
(b) AUTHORIZATION. The execution, delivery and performance of this
Agreement and the other Loan Documents to which the Borrower is to become a
party and the transactions contemplated hereby and thereby (i) are within the
organizational authority of the Borrower, (ii) have been duly authorized by all
necessary organizational proceedings on the part of the Borrower, (iii) do not
materially conflict with or result in any material breach or contravention of
any provision of law, statute, rule or regulation to which the Borrower or any
of its Subsidiaries is subject or any judgment, order, writ, injunction, license
or permit applicable to the Borrower or any of its Subsidiaries and (iv) do not
materially conflict with any provision of its articles of incorporation or other
charter documents or bylaws of, or any agreement or other instrument binding
upon, the Borrower or any of its Subsidiaries or to which any of their
properties are subject.
(c) ENFORCEABILITY. The execution and delivery of this Agreement and the
other Loan Documents to which the Borrower is or is to become a party will
result in valid and legally binding obligations of the Borrower enforceable
against it in accordance with the respective terms and provisions hereof and
thereof, except as enforceability is limited by bankruptcy, insolvency,
reorganization, moratorium or other laws relating to or affecting generally the
enforcement of creditors' rights and except to the extent that availability of
the remedy of specific performance or injunctive relief is subject to the
discretion of the court before which any proceeding therefor may be brought.
[SECTION] 6.2. GOVERNMENTAL APPROVALS. The execution, delivery and
performance by the Borrower of this Agreement and the other Loan Documents to
which the Borrower is or is to become a party and the transactions contemplated
hereby and thereby do not require the approval or consent of, or filing with,
any governmental agency or authority other than those already obtained or those
which
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would not have a material adverse effect on the Borrower or any of its
Subsidiaries or any of the properties if not obtained.
[SECTION] 6.3. TITLE TO PROPERTIES; LEASES. Except as indicated on the
consolidated balance sheet or on SCHEDULE 6.3 hereto, the Borrower and its
Subsidiaries own all of the properties reflected in the consolidated balance
sheet of the Borrower and its Subsidiaries as at the Balance Sheet Date or
acquired since that date (except properties sold or otherwise disposed of since
that date).
[SECTION] 6.4. FINANCIAL STATEMENTS. The following financial statements
have been furnished to each of the Banks.
(a) A consolidated pro forma balance sheet of the Borrower (for each of
Bradley Real Estate, Inc. and Tucker Properties Corporation) and its
Subsidiaries as included in the Registration Statement as of September 30, 1995,
and a pro forma statement of income for the period ended September 30, 1995.
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 not disclosed in the Registration Statement.
(b) Operating statements for each of the Real Estate Assets for the periods
ending September 30, 1995 and December 31, 1995.
(c) The Business Plan Summary of the Borrower.
[SECTION] 6.5. NO MATERIAL CHANGES, ETC. Since the Balance Sheet Date,
there has occurred no material adverse change in the financial condition or
assets or business of the Borrower and its Subsidiaries as shown on or
reflected in the consolidated balance sheet of the Borrower and its
Subsidiaries as of the Balance Sheet Date, or the other statements contained in
the Registration Statement, other than changes in the ordinary course of
business that have not had any material adverse effect on the business or
properties or financial condition of the Borrower or its Subsidiaries, taken as
a whole.
[SECTION] 6.6. FRANCHISES, PATENTS, COPYRIGHTS, ETC. Except as set forth in
SCHEDULE 6.6, each of the Borrower and its Subsidiaries possesses all material
franchises, patents, copyrights, trademarks, trade names, licenses and permits,
and rights in respect of the foregoing, adequate for the conduct of its business
substantially as now conducted without known conflict with any rights of others,
including all material Permits.
[SECTION] 6.7. LITIGATION. Except as listed and described on SCHEDULE
6.7 hereto, there are no actions, suits, proceedings or investigations of any
kind pending or, to Borrower's knowledge, threatened against the Borrower or
any of its Subsidiaries before any court, tribunal or administrative agency or
board that, if adversely determined, might, either in any case or in the
aggregate, materially adversely affect the properties, financial condition or
business of the Borrower and its Subsidiaries
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or materially impair the right of the Borrower and its Subsidiaries to carry on
business substantially as now conducted by them, or which question the validity
of this Agreement or any of the other Loan Documents, any action taken or to be
taken pursuant hereto or thereto, or which will materially adversely affect the
ability of the Borrower to pay and perform the Obligations in the manner
contemplated by this Agreement and the other Loan Documents.
[SECTION] 6.8. NO MATERIALLY ADVERSE CONTRACTS, ETC. Neither the
Borrower nor any of its Subsidiaries is subject to any charter, trust or other
legal restriction, or any judgment, decree, order, rule or regulation that has
or is expected in the future to have a materially adverse effect on the
business, properties or financial condition of the Borrower or any of its
Subsidiaries. Neither the Borrower nor any of its Subsidiaries is a party to
any contract or agreement that has or is expected, in the judgment of the
Borrower's officers, to have any materially adverse effect on the business,
properties or financial condition of the Borrower or any of its Subsidiaries.
[SECTION] 6.9. COMPLIANCE WITH OTHER INSTRUMENTS, LAWS, ETC. Neither
the Borrower nor any of its Subsidiaries is in violation of any provision of
its articles of incorporation or other charter documents, by-laws, or any
agreement or instrument to which it is subject or by which it or any of its
properties is bound or any decree, order, judgment, statute, license, rule or
regulation, in any of the foregoing cases in a manner that could materially
adversely affect the financial condition, properties or business of the
Borrower or any of its Subsidiaries.
[SECTION] 6.10. TAX STATUS. The Borrower and its Subsidiaries (a) have
made or filed all federal and state income and all other tax returns, reports
and declarations required by any jurisdiction to which it is subject, and (b)
have paid all taxes and other governmental assessments and charges shown or
determined to be due on such returns, reports and declarations, except those
being contested in good faith and by appropriate proceedings. There are no
unpaid taxes in any material amount claimed to be due by the taxing authority
of any jurisdiction, and the officers of the Borrower know of no basis for any
such claim.
[SECTION] 6.11. NO EVENT OF DEFAULT. No Default or Event of Default has
occurred and is continuing.
[SECTION] 6.12. INVESTMENT COMPANY ACT. Neither the Borrower nor any of its
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.
[SECTION] 6.13. ABSENCE OF FINANCING STATEMENTS, ETC. There is no Lien that
purports to cover, affect or give notice of any present or possible future lien
or encumbrance on, or security interest in, any properties of the Borrower or
any of its Subsidiaries or any rights relating thereto, except with respect to
Permitted Liens.
[SECTION] 6.14. INTENTIONALLY OMITTED.
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[SECTION] 6.15. CERTAIN TRANSACTIONS. Except as set forth on SCHEDULE
6.15 hereto, and except for ordinary course, arm's length transactions, none of
the officers, directors or employees of the Borrower or any of its Subsidiaries
is presently a party to any transaction with the Borrower or any of its
Subsidiaries (other than for services as employees, officers and trustees),
including any contract, agreement or other arrangement providing for the
furnishing of services to or by, providing for rental of real or personal
property to or from, or otherwise requiring payments to or from any officer,
director or such employee or, to the knowledge of the Borrower, any
corporation, partnership, trust or other entity in which any officer, director
or any such employee or natural Person related to such officer, director or
employee or other Person in which such officer, director or employee has a
direct or indirect beneficial interest has a substantial interest or is an
officer or director.
[SECTION] 6.16. EMPLOYEE BENEFIT PLANS; MULTIEMPLOYER PLANS; GUARANTEED
PENSION PLANS. As of the date hereof, neither the Borrower nor any ERISA
Affiliate maintains or contributes to any Guaranteed Pension Plan. Borrower
presently contributes to the Multiemployer Plans specified on SCHEDULE 6.16
attached hereto. Borrower presently maintains and contributes to Employee
Benefit Plans. To the extent that Borrower or any ERISA Affiliate maintains or
contributes to any Employee Benefit Plan, Multiemployer Plan or Guaranteed
Pension Plan, it has, and shall at all times in the future, do so in compliance
with [SECTION] 7.19 hereof.
[SECTION] 6.17. REGULATIONS U AND X. No portion of any Loan is to be
used for the purpose of purchasing or carrying any "margin security" or "margin
stock" as such terms are used in Regulations U and X of the Board of Governors
of the Federal Reserve System, 12 C.F.R. Parts 221 and 224.
[SECTION] 6.18. ENVIRONMENTAL COMPLIANCE. The Borrower has taken all
necessary steps to investigate the past and present condition and usage of the
Real Estate and the operations conducted thereon. Based upon such
investigation, to Borrower's knowledge, except as set forth in the
environmental reports delivered to the Agent, in the Registration Statement or
on SCHEDULE 6.18 attached hereto:
(a) None of the Borrower or any of its Subsidiaries, or any operator of the
Real Estate or any portion thereof, or any operations thereon is in violation,
or alleged material violation, of any judgment, decree, order, law, license,
rule or regulation pertaining to environmental matters (hereinafter collectively
referred to as the "Environmental Laws"), including without limitation, those
arising under the Resource Conservation and Recovery Act ("RCRA"), the
Comprehensive Environmental Response, Compensation and Liability Act of 1980 as
amended ("CERCLA"), the Superfund Amendments and Reauthorization Act of 1986
("SARA"), the Federal Clean Water Act, the Federal Clean Air Act, the Toxic
Substances Control Act, or any state or local statute, regulation, ordinance,
order or decree relating to health, safety or the environment, including,
without limitation, the environmental statutes, regulations, orders and decrees
of the states in which such Real Estate
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is located, which violation would have a material adverse effect on the
business, properties or financial condition of the Borrower or its Subsidiaries.
(b) Neither the Borrower nor any of its Subsidiaries has received
written 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. [SECTION] 9601(5), any hazardous substances as
defined by 42 U.S.C. [SECTION] 9601(14), any pollutant or contaminant as
defined by 42 U.S.C. [SECTION] 9601(33) or any toxic substances, oil or
hazardous materials or other chemicals or substances regulated by any
Environmental Laws ("Hazardous Materials") which it has generated, transported
or disposed of have been found at any site at which a federal, state or local
agency or other third party has conducted or has ordered that the Borrower or
any of its 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 Materials.
(c) (i) No portion of the Real Estate has been used for the handling,
processing, storage or disposal of Hazardous Materials except in material
compliance with applicable Environmental Laws; and except as set forth on
SCHEDULE 6.18, no underground tank or other underground storage receptacle for
Hazardous Materials is located on any portion of the Real Estate; (ii) in the
course of any activities conducted by the Borrower or any of its Subsidiaries,
or the operators of any Real Estate, or to the best of Borrower's knowledge, any
ground or space tenants on any Real Estate, no Hazardous Materials have been
generated or are being used on the Real Estate except in material compliance
with applicable Environmental Laws; (iii) there has been no present or, to the
best of Borrower's knowledge, past, releasing, spilling, leaking, pumping,
pouring, emitting, emptying, discharging, injecting, escaping, disposing or
dumping (a "Release") or threatened Release of Hazardous Materials on, upon,
into or from the Real Estate in violation of applicable Environmental Laws,
which Release would have a material adverse effect on the value of any of such
Real Estate or adjacent real property; (iv) to the best of Borrower's knowledge,
there have been no Releases in violation of applicable Environmental Laws, on,
upon, from or into any real property in the vicinity of any of the Real Estate
which, through soil or groundwater contamination, may have come to be located
on, and which would have a material adverse effect on the value of, the Real
Estate; and (v) to the best of Borrower's knowledge, any Hazardous Materials
that have been generated on any of the Real Estate have been transported
off-site in compliance with applicable Environmental Laws. Notwithstanding that
any representation contained herein may be limited to the knowledge of the
Borrower, any such limitation shall not affect the covenants specified in
[SECTION] 7.10 or elsewhere in this Agreement.
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(d) None of the Real Estate is or shall be subject to any applicable
environmental clean-up responsibility law or environmental restrictive transfer
law or regulation, solely by virtue of the transactions set forth herein and
contemplated hereby.
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[SECTION] 6.19. SUBSIDIARIES. Schedule 6.19 hereto contains, as of the
Closing Date, an accurate list of all of the presently existing Subsidiaries of
the Borrower, setting forth their respective jurisdictions of organization and
the percentage of their respective Capital Stock owned by the Borrower or other
Subsidiaries of the Borrower. All of the issued and outstanding shares of
Capital Stock of such Subsidiaries have been duly authorized and issued and are
fully paid and non-assessable. Bradley Financing Partnership is not permitted
to be a Borrower to this Agreement. Each Subsidiary which hereafter becomes a
Borrower shall as a condition of becoming a Borrower comply with [SECTIONS]
10.2, 10.3, 10.4, 10.7 and 10.13.
[SECTION] 6.20. LOAN DOCUMENTS. All of the representations and
warranties of the Borrower and its Subsidiaries made in the other Loan
Documents are true and correct in all material respects.
[SECTION] 7. AFFIRMATIVE COVENANTS OF THE BORROWER. The Borrower covenants
and agrees as follows, so long as any Loan, Letter of Credit or Note is
outstanding or the Banks have any obligations to make Loans or the Agent has any
obligation to issue, extend or renew any Letters of Credit:
[SECTION] 7.1. PUNCTUAL PAYMENT. The Borrower will unconditionally duly and
punctually pay the principal and interest on the Loans, the Letter of Credit
fees, and all other amounts provided for in the Note, this Agreement, and the
other Loan Documents all in accordance with the terms of the Note, this
Agreement and the other Loan Documents.
[SECTION] 7.2. MAINTENANCE OF OFFICE. The Borrower will maintain its chief
executive office in Boston, Massachusetts or at such other place in the United
States of America as the Borrower shall designate upon written notice to the
Agent to be delivered within fifteen (15) days of such change, where notices,
presentations and demands to or upon the Borrower in respect of the Loan
Documents may be given or made.
[SECTION] 7.3. RECORDS AND ACCOUNTS. The Borrower 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 in all material respects will
be made in accordance with generally accepted accounting principles and (b)
maintain adequate accounts and reserves for all taxes (including income taxes),
depreciation and amortization of its properties and the properties of its
Subsidiaries, contingencies, and other reserves.
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[SECTION] 7.4. FINANCIAL STATEMENTS, CERTIFICATES AND INFORMATION. The
Borrower will deliver to each of the Banks:
(a) as soon as practicable, but in any event not later than ninety (90)
days after the end of each fiscal year of the Borrower, the audited consolidated
balance sheet of the Borrower and its Subsidiaries at the end of such year, and
the related consolidated audited statement of income, statement of changes in
shareholders' equity and statement of cash flows for such year, each setting
forth in comparative form the figures for the previous fiscal year and all such
statements to be in reasonable detail, prepared in accordance with generally
accepted accounting principles, and accompanied by an auditor's report prepared
without qualification by K.P.M.G. Peat Marwick or by another independent
certified public accountant reasonably acceptable to the Agent and each of the
Banks;
(b) as soon as practicable, but in any event not later than forty-five (45)
days after the end of the March 31, June 30 and September 30 fiscal quarters 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
statement of income, statement of changes in shareholders' equity and statement
of cash flows for the portion of the Borrower's fiscal year then elapsed, all in
reasonable detail and prepared in accordance with generally accepted accounting
principles (which may be provided by inclusion in the Form 10-Q of the Borrower
filed with the SEC for such period provided pursuant to subsection (g) below),
together with a certification by the principal financial or accounting officer
of the Borrower that the information contained in the financial statements
accompanying such filing fairly presents the financial position of the Borrower
on the date thereof (subject to year-end adjustments);
(c) As soon as practicable, but in any event not later than 45 days after
the end of each fiscal quarter of the Borrower, the following reports in form
and substance reasonably satisfactory to the Agent, all certified by the
entity's chief financial officer or chief accounting officer: a statement of
Funds From Operations, a statement of cash flows for each individual Real Estate
Asset, a statement detailing Consolidated Outstanding Indebtedness, Consolidated
Secured Indebtedness, Consolidated Unsecured Indebtedness, and Consolidated Cash
Flow, a listing of capital expenditures, a report listing and describing all
newly acquired Real Estate Assets, including their projected net operating
income, cash flow, cost and secured or unsecured Indebtedness assumed in
connection with such acquisition, if any, summary information and such other
information on all Real Estate Assets as may be reasonably requested;
(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, copies
of a statement of the Consolidated Net Operating Income for such fiscal quarter
for each Real Estate Asset, prepared on a basis consistent with the statements
furnished pursuant to [SECTION] 6.4(c), certified by the chief financial or
accounting officer of the Borrower;
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(e) as soon as practicable, but in any event no later than forty-five (45)
days after the end of each fiscal quarter of the Borrower, the Borrower will
provide the Agent with (i) a current rent roll and record of the billed rent and
common area maintenance charges (if applicable) for each tenant, and (ii) a
schedule of any environmental remediation costs payable with respect to such
Real Estate Asset;
(f) simultaneously with the delivery of the financial statements referred
to in subsections (a) and (b) above, a Compliance Certificate and (if
applicable) reconciliations to reflect changes in generally accepted accounting
principles since the Balance Sheet Date;
(g) as soon as practicable, but in any event not later than ninety (90)
days after the end of each fiscal year of the Borrower, copies of the Form 10-K
statement filed with the Securities and Exchange Commission ("SEC") for such
fiscal year, and as soon as practicable, but in any event not later than
forty-five (45) days after the end of each fiscal quarter, copies of the Form
10-Q statement filed with the SEC for such fiscal quarter, PROVIDED that in
either case if the SEC has granted an extension for the filing of such
statements, Borrower shall deliver such statements to the Agent simultaneously
with the filing thereof with the SEC;
(h) promptly following the filing or mailing thereof, copies of all other
material of a financial nature filed with the SEC or sent to the shareholders of
the Borrower;
(i) promptly after request by the Agent, evidence of payment of real estate
taxes, other taxes, assessments and other governmental charges against the Real
Estate, in the form of receipted tax bills or other evidence reasonably
acceptable to the Agent; and
(j) from time to time such other financial data and information as the
Agent may reasonably request and which are reasonably necessary for the Banks to
complete their financial analysis of Borrower.
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[SECTION] 7.5. NOTICES.
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(a) DEFAULTS. The Borrower will promptly after obtaining knowledge of the
same notify the Agent in writing of the occurrence of any Default or Event of
Default, or a Non-Material Breach having a material adverse effect on an
Unencumbered Asset or a Subsidiary taken as a whole that owns Unencumbered
Assets. If any Person shall give any notice or take any other action in respect
of a claimed default (whether or not constituting a Default or an Event of
Default under this Agreement) under any note, evidence of Indebtedness,
indenture or other obligation to which or with respect to which the Borrower or
any of its Subsidiaries is a party or obligor, whether as principal or surety,
and such default 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 and its Subsidiaries taken
as a whole, the Borrower shall forthwith give written notice thereof to the
Agent and each of the Banks, describing the notice or action and the nature of
the claimed default.
(b) ENVIRONMENTAL EVENTS. The Borrower will promptly notify the Agent in
writing of any of the following events: (i) upon Borrower's obtaining knowledge
of any violation of any Environmental Law regarding any Real Estate or
Borrower's or any of its Subsidiaries' operations which violation could have a
material adverse effect on such Real Estate or on Borrower's or such
Subsidiary's operations; (ii) upon Borrower's obtaining knowledge of any
potential or known Release of any Hazardous Substance at, from, or into any Real
Estate which it reports in writing or is reportable by it in writing to any
governmental authority and which is material in amount or nature or which could
materially adversely affect the value of such Real Estate; (iii) upon Borrower's
receipt of any notice of violation of any Environmental Laws or of any Release
of Hazardous Substances in violation of applicable Environmental Laws, including
a notice or claim of liability or potential responsibility from any third party
(including without limitation any federal, state or local governmental
officials) and including notice of any formal inquiry, proceeding, demand,
investigation or other action with regard to (A) Borrower's or any Person's
operation of any Real Estate, (B) contamination on, from or into any Real
Estate, or (C) investigation or remediation of off-site locations at which
Borrower, any of its Subsidiaries or any of their predecessors are alleged to
have directly or indirectly disposed of Hazardous Substances; or (iv) upon
Borrower's obtaining knowledge that any expense or loss has been incurred by
such governmental authority in connection with the assessment, containment,
removal or remediation of any Hazardous Substances with respect to which
Borrower or any of its Subsidiaries may be liable or for which a lien may be
imposed on any Real Estate.
(c) NOTIFICATION OF CLAIMS AGAINST REAL ESTATE. The Borrower will, promptly
upon becoming aware thereof, notify the Agent in writing of any setoff, claims,
withholdings or other defenses which could have a material adverse effect on any
Real Estate.
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(d) NOTICE OF LITIGATION AND JUDGMENTS. The Borrower will, and will cause
each of its Subsidiaries to, give notice to the Agent in writing within fifteen
(15) days of becoming aware of any litigation or proceedings threatened in
writing or any pending litigation and proceedings affecting the Borrower or any
of its Subsidiaries or to which the Borrower or any of its Subsidiaries is or is
to become a party involving an uninsured claim (or as to which the insurer
reserves rights) against the Borrower or any of its Subsidiaries that at the
time of giving of notice could reasonably be expected to have a materially
adverse effect on the Borrower or any of its Subsidiaries or their properties,
business or financial condition, and stating the nature and status of such
litigation or proceedings. The Borrower will, and will cause each of its
Subsidiaries to, give notice to the Agent, in writing, in form and detail
reasonably satisfactory to the Agent, within ten (10) days of any judgment not
covered by insurance, final or otherwise, against the Borrower or any of its
Subsidiaries in an amount in excess of $300,000.
[SECTION] 7.6. EXISTENCE; MAINTENANCE OF REIT STATUS; MAINTENANCE OF
PROPERTIES. The Borrower will do or cause to be done all things necessary to
preserve and keep in full force and effect its status as a real estate
investment trust in compliance with all applicable provisions of the Code
relating to such status. The Borrower will do or cause to be done all things
necessary to preserve and keep in full force its organizational existence,
rights and franchises, and those of its Subsidiaries, which in the judgment of
the Borrower may be necessary to properly and advantageously conduct the
businesses being conducted by it and its Subsidiaries. The Borrower will, in a
manner not inconsistent with its Business Plan Summary, (a) 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) cause to be made all necessary repairs, renewals, replacements, betterments
and improvements thereof, all as in the judgment of the Borrower may be
necessary so that the business carried on in connection therewith may be
properly and advantageously conducted at all times, and (c) continue, and cause
its Subsidiaries to continue, to engage primarily in the businesses now
conducted by them and in related businesses, to the extent necessary to comply
with the other terms and conditions set forth in this Agreement.
[SECTION] 7.7. INSURANCE. The Borrower will, and will cause each of its
Subsidiaries to, maintain insurance with financially sound and reputable
insurers against such casualties and contingencies as shall be in accordance
with the general practices of businesses engaged in similar activities in
similar geographic areas and in amounts, containing such terms, in such forms
and for such periods as may be reasonable and prudent. At the request of the
Agent, the Borrower will provide the Agent with evidence of such insurance.
[SECTION] 7.8. TAXES; MECHANICS' AND MATERIALMENS' LIENS. The Borrower
will, and will cause each of its Subsidiaries to, pay real estate taxes, other
taxes, assessments and other governmental charges against the Real Estate
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
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governmental charges imposed upon it and its other properties, sales and
activities, or any part thereof, or upon the income or profits therefrom, as
well as all claims for labor, materials, or supplies that if unpaid might by law
become a lien or charge upon any of its properties; PROVIDED that any such tax,
assessment, charge, levy or claim need not be paid if the validity or amount
thereof shall currently be contested in good faith by appropriate proceedings
and if the Borrower or such Subsidiary shall have set aside on its books
adequate reserves with respect thereto; and PROVIDED FURTHER that the Borrower
and each Subsidiary of the Borrower will pay all such taxes, assessments,
charges, levies or similar governmental claims forthwith prior to consummation
of proceedings to foreclose any Lien that may have attached as security
therefor.
[SECTION] 7.9. INSPECTION OF PROPERTIES AND BOOKS.
----------------------------------
(a) The Borrower shall permit the Banks, through the Agent or any of the
Banks' other designated representatives, to visit and inspect any of the Real
Estate, to examine the books of account of the Borrower and its Subsidiaries
(and to make copies thereof and extracts therefrom) and to discuss the affairs,
finances and accounts of the Borrower and its Subsidiaries with, and to be
advised as to the same by, its officers, all during regular business hours and
upon reasonable advance notice, in each case at the expense of the Banks except
as set forth in [SECTION] 7.9(b).
(b) The Borrower shall permit the Agent, through the Agent or any of the
Agent's other designated representatives, on an annual basis and at the expense
of the Borrower, to visit and inspect a representative sample (it being agreed
that the goal shall be to visit all of the properties during the term of this
Agreement) of the properties of the Borrower and its Subsidiaries (during
regular business hours and upon reasonable advance notice) and to review
environmental and hazardous waste inspection reports and reports of third party
inspecting engineers regarding structural matters with respect to such
properties. The Banks may employ professional engineering and environmental
consultants to assist them in the review of such reports, and the fees and
expenses of such consultants shall also be paid by the Borrower.
[SECTION] 7.10. COMPLIANCE WITH LAWS, CONTRACTS, LICENSES, AND PERMITS. The
Borrower will, and will cause each of its Subsidiaries to, comply with (a) all
applicable laws and regulations now or hereafter in effect wherever its business
is conducted, including all Environmental Laws, (b) the provisions of its
organizational documents, and other charter documents and by-laws, (c) all
agreements and instruments to which it is a party or by which it or any of its
Real Estate Assets may be bound, including the Leases, and (d) all applicable
decrees, orders, and judgments, unless such non-compliance constitutes a
Non-Material Breach. If at any time any Permit from any governmental Person
shall be required in order that the Borrower may fulfill or be in compliance
with any of its obligations hereunder, the Borrower will immediately take or
cause to be taken all reasonable steps within the power of the Borrower to
obtain such authorization, consent, approval, permit or license and furnish the
Agent and the Banks with evidence thereof.
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[SECTION] 7.11. LESSEE COMPLIANCE WITH ENVIRONMENTAL LAWS. Borrower and
each of its Subsidiaries shall use reasonable efforts to ensure compliance in
all material respects by all tenants and subtenants, if any, with, all
applicable Environmental Laws and to ensure that all tenants and subtenants
obtain and comply with and maintain, any and all licenses, approvals,
notifications, registrations or permits required by applicable Environmental
Laws, except to the extent that failure to do so would constitute a
Non-Material Breach; PROVIDED that in no event shall the Borrower or its
Subsidiaries be required to modify the terms of Leases, or renewals thereof,
with any tenants (i) at properties owned by the Borrower or its Subsidiaries as
of the date hereof, or (ii) at properties hereafter acquired by the Borrower or
its Subsidiaries as of the date of such acquisition, to add provisions to such
effect.
[SECTION] 7.12. ENVIRONMENTAL ASSESSMENTS. Prior to the acquisition of
a Real Estate Asset after the Closing Date, the Borrower will, and will cause
each of its Subsidiaries to, perform or cause to be performed a Phase I
environmental site assessment report in accordance with ASTM standards. In
connection with any such investigation, the Borrower shall cause to be prepared
a report of such investigation, to be made available to any Bank upon
reasonable request, for informational purposes and to assure compliance with
the specifications and procedures.
[SECTION] 7.13. USE OF PROCEEDS. Subject to the provisions of [SECTION]
2.5 hereof, the proceeds of the Loans shall be used by the Borrower for working
capital purposes (up to an aggregate of $25,000,000 outstanding at any time) as
permitted by [SECTION] 2.5(b) hereof, tenant improvements, leasing commissions,
improvements necessary for the operation of the Real Estate Assets, repayment
of indebtedness, payment of loan fees and closing costs, acquisitions of Real
Estate in accordance with the Borrower's Business Plan Summary delivered to the
Agent herewith and as permitted by [SECTION] 2.5(c) hereof, and payment of
costs of Assets Under Development as permitted by [SECTION] 2.5(d) and
[SECTION] 9.7.
[SECTION] 7.14. FURTHER ASSURANCES. The Borrower will, and will cause
each of its Subsidiaries to, cooperate with the Agent and the Banks and execute
such further instruments and documents and perform such further acts as the
Agent and the Banks shall reasonably request to carry out to their satisfaction
the transactions contemplated by this Agreement and the other Loan Documents.
[SECTION] 7.15. INTEREST RATE PROTECTION. The Borrower shall maintain
in effect interest rate protection arrangements, in form and substance
reasonably satisfactory to the Agent, providing for the rate of interest
applicable to the Loans to be capped at a rate satisfactory to the Agent with
respect to a portion equal to not less than $100,000,000 for a period of two
(2) years from the Effective Date. The Borrower shall maintain such
arrangements in full force and effect during the period specified above, and
shall not, without the written consent of the Agent, modify terminate or
transfer such arrangements during such period.
[SECTION] 7.16 REAL ESTATE ASSETS SUBSEQUENTLY ACQUIRED. Within
forty-five (45) days after the acquisition of a Real Estate Asset permitted by
[SECTION] 2.5(c) or [SECTION] 2.5(d) hereof, Borrower shall, to the
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extent in Borrower's possession, provide to the Agent with respect to such Real
Estate Asset (i) a construction engineer's statement of condition report, (ii) a
capital expenditure program, (iii) an actual historical operating statement (to
the extent available to the Borrower), (iv) historical operating statement
estimated by the Borrower (to the extent a true historical operating statement
is not available to the Borrower), (v) a ten year cash flow analysis, (vi)
financial statements and profiles for all major tenants and guarantors (to the
extent available to the Borrower), (vii) insurance certificates for such Real
Estate Asset, and (viii) the investment summary presented to the Board of
Directors of the Borrower with respect to such acquisition.
[SECTION] 7.17. ENVIRONMENTAL INDEMNIFICATION. The Borrower covenants
and agrees that it will indemnify and hold the Agent and each Bank harmless
from and against any and all claims, expense, damage, loss or liability
incurred by the Agent or any Bank (including all reasonable costs of legal
representation incurred by the Agent or any Bank, but excluding, as applicable,
for the Agent or a Bank any claim, expense, damage, loss or liability as a
result of the gross negligence or willful misconduct of the Agent or such Bank)
relating to (a) any Release or threatened Release of Hazardous Substances on
any Real Estate; (b) any violation of any Environmental Laws with respect to
conditions at any Real Estate or the operations conducted thereon; or (c) the
investigation or remediation of off-site locations at which the Borrower or any
of its Subsidiaries or their predecessors are alleged to have directly or
indirectly disposed of Hazardous Substances. It is expressly acknowledged by
the Borrower that this covenant of indemnification shall survive the payment of
the Loans and shall inure to the benefit of the Agent and the Banks, and their
successors and assigns.
[SECTION] 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 Real Estate in violation of applicable Environmental Laws,
the Borrower will cause the prompt containment and removal of such Hazardous
Substances and remediation of such Real Estate as necessary to comply with all
Environmental Laws.
[SECTION] 7.19. EMPLOYEE BENEFIT PLANS.
----------------------
(a) REPRESENTATION. The Borrower and its ERISA Affiliates do not currently
maintain or contribute to any Guaranteed Pension Plan.
(b) NOTICE. The Borrower will obtain the consent of the Agent and the Banks
prior to the establishment of any Guaranteed Pension Plan by the Borrower or any
ERISA Affiliate.
(c) IN GENERAL. Each Employee Benefit Plan maintained by the Borrower or
any ERISA Affiliate will be operated in compliance in all material respects with
the provisions of ERISA and, to the extent applicable, the Code, including but
not limited to the provisions thereunder respecting prohibited transactions.
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(d) TERMINABILITY OF WELFARE PLANS. Except as provided in SCHEDULE
7.19, with respect to each Employee Benefit Plan maintained by the Borrower or
an ERISA Affiliate which is an employee welfare benefit plan within the meaning
of [SECTION] 3(1) or [SECTION] 3(2)(B) of ERISA, the Borrower, or the ERISA
Affiliate, as the case may be, has the right to terminate each such plan at any
time (or at any time subsequent to the expiration of any applicable bargaining
agreement) without liability other than liability to pay claims incurred prior
to the date of termination.
(e) MULTIEMPLOYER PLANS. Without the consent of the Agent, the Borrower
will not enter into, maintain or contribute to, any Multiemployer Plan, other
than the Multiemployer Plans specified on SCHEDULE 6.16.
(f) UNFUNDED OR UNDERFUNDED LIABILITIES. The Borrower will not, at any
time, have accrued, unfunded or underfunded liabilities with respect to Employee
Benefit Plans in an amount exceeding $500,000 in the aggregate, or with respect
to Guaranteed Pension Plans in an amount exceeding $1,000,000 in the aggregate,
or permit any condition to exist under Multiemployer Plans that would create
withdrawal liability in an amount exceeding $1,000,000 in the aggregate.
[SECTION] 7.20. CAPITAL FOR DEVELOPMENT AND ACQUISITION. The Borrower
will, and will cause each of its Subsidiaries to, maintain available to it
sources of Unrestricted Cash and Cash Equivalents which are equal to or greater
than the sum of (a) the total cost to complete all Assets Under Development by
the Borrower and its Subsidiaries PLUS (b) the total amount that the Borrower
and its Subsidiaries may be obligated to pay under agreements for the purchase
of Real Estate Assets, which sources may include the amount of the Total
Commitment available to Borrower under this Agreement in excess of outstanding
Loans.
[SECTION] 7.21. NO AMENDMENT TO CERTAIN DOCUMENTS. The Borrower will
not, and will not permit any of its Subsidiaries to, cause or permit its
certificate of incorporation or by-laws or other organizational or charter
documents to be modified, amended or supplemented in any respect without the
prior written consent of the Agent if such modification would affect the
Borrower's status as a real estate investment trust or otherwise materially
adversely affect the rights of the Banks and the Agent hereunder or under any
of the other Loan Documents.
[SECTION] 8. CERTAIN NEGATIVE COVENANTS OF THE BORROWER. The Borrower
covenants and agrees as follows, so long as any Loan, Letter of Credit or Note
is outstanding or the Banks have any obligation to make any Loans or the Agent
or any Fronting Bank has any obligations to issue, extend or renew any Letters
of Credit:
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[SECTION] 8.1. RESTRICTIONS ON INDEBTEDNESS AND TOTAL INDEBTEDNESS
---------------------------------------------------
The Borrower may, and may permit its Subsidiaries to, create, incur,
assume, guarantee or be or remain liable for, contingently or otherwise, any
Total Indebtedness other than the specific Total Indebtedness which is
prohibited under this [SECTION] 8.1 and with respect to which the Borrower will
not, and will not permit any of its Subsidiaries to, create, incur, assume,
guarantee or be or remain liable for, contingently or otherwise, as follows:
(i) Consolidated Unsecured Indebtedness (excluding the Obligations) in an
amount in excess of $1,000,000 at any one time until such time as the Borrower
receives a long term unsecured debt rating or Indicative Rating from either
Moody's or S&P, of not less than BBB- or Baa3, whichever is applicable;
(ii) Consolidated Secured Indebtedness in an aggregate amount which would
create a Default under [SECTION] 9.2 hereof;
(iii) An aggregate amount in excess of $500,000 at any one time in respect
of taxes, assessments, governmental charges or levies and claims for labor,
materials and supplies for which payment therefor shall be required to be made
in accordance with the provisions of [SECTION] 7.8;
(iv) An aggregate amount in excess of $500,000 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 have been rendered; and
(v) Other Liabilities (other than Indebtedness) of the Borrower or its
Subsidiaries which are not incurred in the ordinary course of business and which
exceed $5,000,000 in the aggregate, at any one time.
The terms and provisions of this [SECTION] 8.1 are in addition to, and
not in limitation of, the covenants set forth in [SECTION] 9 of this Agreement.
Notwithstanding anything contained herein to the contrary, the Borrower
will not, and will not permit any of its Subsidiaries to, incur any Indebtedness
which, together with other Indebtedness incurred by the Borrower and its
Subsidiaries 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 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
[SECTION] 8.2. RESTRICTIONS ON LIENS, ETC. The Borrower will not, and
will not permit any of its Subsidiaries to, create or incur or agree not to
create or incur or suffer to be created or incurred or
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to exist any Lien upon any of its Real Estate Assets of any character whether
now owned or hereafter acquired, or upon the rents, income or profits therefrom;
PROVIDED that the Borrower may create or incur or suffer to be created or
incurred or to exist:
(i) Liens securing Consolidated Secured Indebtedness permitted pursuant to
[SECTION] 8.1 hereof;
(ii) Liens securing taxes, assessments, governmental charges, or levies
or claims for labor, materials and supplies which are permitted by [SECTION]
8.1 hereof;
(iii) deposits or pledges made in connection with, or to secure payment of,
workmen's compensation, unemployment insurance, old age pensions or other social
security obligations;
(iv) Liens in respect of judgments or awards, the Total Indebtedness with
respect to which is permitted by [SECTION] 8.1;
(v) 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 or any of its Subsidiaries is a party or bound; and other
minor Liens or encumbrances on properties none of which in the opinion of the
Borrower 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 materially adverse
effect on the business of the Borrower or its Subsidiaries and (xx) do not make
title to such property unmarketable by the conveyancing standards in effect
where such property is located;
(vi) any Leases;
(vii) presently outstanding Liens and other encumbrances listed on SCHEDULE
8.2 hereto; and
(viii) other Liens in connection with any Indebtedness or Total
Indebtedness permitted under [SECTION] 8.1.
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[SECTION] 8.3. RESTRICTIONS ON INVESTMENTS AND ACQUISITIONS. The
Borrower will not, and will not permit any of its Subsidiaries to, make or
permit to exist or to remain outstanding any Investment or become or remain a
partner in any partnership or joint venture, or to acquire any Real Estate
Assets, except:
(a) Investments in marketable direct or guaranteed obligations of the
United States of America that mature within one (1) year from the date of
purchase by the Borrower;
(b) Investments in 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) Investments in 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 or contemplated on the date hereof and listed on
SCHEDULE 8.3(d) hereto;
(e) So long as no Event of Default has occurred and is continuing or would
occur after giving effect thereto, acquisitions of Real Estate of the type of
Real Estate Assets currently owned by the Borrower and the Capital Stock of
Persons whose primary operations consist of the ownership, development,
operation and management of properties of the type of Real Estate Assets owned
by the Borrower, in each case which are consistent with the Business Plan
Summary and in which the total consideration (both cash and non-cash) paid for
such acquisition does not exceed $100,000,000, it being agreed that the
acquisition of multiple assets in one transaction or a series of related
transactions shall constitute one acquisition for purposes of the $100,000,000
limitation; PROVIDED, HOWEVER that (i) the Borrower shall not, and shall not
permit any of its Subsidiaries to, acquire any Real Estate Asset without the
prior written consent of the Agent if the environmental investigation for such
Real Estate Asset determines that the potential environmental remediation costs
and other environmental liabilities associated with such Real Estate Asset
exceed $1,000,000; and (ii) the Borrower shall not permit any of its
Subsidiaries which is not a party to, or which does not become a party to, this
Agreement to acquire any Real Estate Asset;
(f) Investments in any other partnerships, joint ventures, corporations or
other entities (other than Subsidiaries) (including, without limitation, those
currently existing and those entered into subsequently) in an amount not to
exceed $25,000,000 in the aggregate (excluding for the purposes of the
$25,000,000 limitation, the Investment by the Borrower in the Williams Square
Partnership) including, without limitation, any Total Indebtedness incurred or
assumed thereby;
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(g) any other Investments made in the ordinary course of the Borrower's
business in a manner consistent with the Business Plan Summary of the Borrower;
and
(h) Investments in Subsidiaries.
[SECTION] 8.4. MERGER, CONSOLIDATION AND DISPOSITION OF PROPERTIES.
---------------------------------------------------
(a) The Borrower will not, and will not permit any of its Subsidiaries
to, become a party to any merger, consolidation, reorganization or liquidation
or agree to transfer all or substantially all of its assets, in each case in
transactions in excess of $1,000,000, except (i) the merger or consolidation of
one or more Subsidiaries of the Borrower with or into the Borrower, or (ii) the
merger or consolidation of two or more Subsidiaries of the Borrower or as
otherwise approved in advance by the Banks.
(b) The Borrower will not, and will not permit any of its Subsidiaries
to, become a party to or agree to or effect any disposition of any Unencumbered
Asset or Real Estate Asset unless at least five (5) Business Days prior to such
disposition the Borrower shall have provided a statement in the form of EXHIBIT
C hereto signed by the principal financial or accounting officer of the
Borrower and setting forth in reasonable detail computations evidencing
compliance with the covenants contained in [SECTION] 9.1 through 9.7 hereof
after giving effect to such proposed transfer and all liabilities, fixed or
contingent, pursuant thereto and certifying that no Default or Event of Default
has occurred and is continuing.
[SECTION] 8.5. SALE AND LEASEBACK. The Borrower will not, and will not
permit any of its Subsidiaries to, enter into any arrangement, directly or
indirectly, whereby the Borrower or any Subsidiary of the Borrower shall sell
or transfer any property owned by it in order then or thereafter to lease such
property.
[SECTION] 8.6. COMPLIANCE WITH ENVIRONMENTAL LAWS. The Borrower will
not, and will not permit any of its Subsidiaries to, do any of the following:
(a) use any of the Real Estate or any portion thereof as a facility for the
handling, processing, storage or disposal of Hazardous Materials in violation
of applicable Environmental Laws, (b) cause or permit to be located on any of
the Real Estate any underground tank or other underground storage receptacle
for Hazardous Materials except in material compliance with Environmental Laws,
(c) generate any Hazardous Materials on any of the Real Estate except in
material compliance with Environmental Laws, or (d) conduct any activity at any
Real Estate or use any Real Estate in any manner so as to cause a Release in
violation of applicable Environmental Laws; unless any such occurrence would
constitute a Non-Material Breach hereunder.
[SECTION] 8.7. DISTRIBUTIONS. So long as no Event of Default has
occurred and is continuing, the Borrower and its Subsidiaries shall be
permitted to make Distributions from time to time in amounts
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determined by Borrower, PROVIDED, HOWEVER, that in no event shall Borrower make
any Distribution if (a) such Distribution, together with other Distributions
made in such fiscal quarter, in the aggregate, would exceed 95% of Funds From
Operations for such fiscal quarter, or (b) such Distribution, together with
other Distributions made in such period of four (4) consecutive fiscal quarters,
in the aggregate, would exceed 90% of Funds From Operations for such period.
Notwithstanding the foregoing, the Borrower shall be permitted at any time to
make those Distributions which are necessary to maintain its tax status as a
real estate investment trust; PROVIDED, HOWEVER, that any such Distributions
permitted to be made during the continuance of an Event of Default shall in no
way constitute a waiver of or forbearance of such Event of Default by the Banks,
it being understood and agreed that the Banks shall continue to have all rights
and remedies with respect to such Event of Default as are provided in the
Agreement, the other Loan Documents and applicable law.
[SECTION] 9. FINANCIAL COVENANTS OF THE BORROWER. The Borrower
covenants and agrees that so long as any Loan, Letter of Credit or Note is
outstanding or the Banks have any obligation to make any Loans or the Agent or
any Fronting Bank has any obligations to issue, extend or renew any Letters of
Credit that:
[SECTION] 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.
[SECTION] 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.
[SECTION] 9.3. NET WORTH. The Borrower shall not at any time permit
Consolidated Net Worth to be less than the sum of (a) $200,000,000 PLUS (b) 50%
of the aggregate proceeds received by the Borrower (net of related fees and
expenses customarily incurred in transactions of such type) in connection with
any offering of stock in the Borrower after the Closing Date and on or prior to
the date such determination of Consolidated Net Worth is made.
[SECTION] 9.4. UNENCUMBERED ASSETS. As at the end of any fiscal quarter
or any other date of measurement, the Borrower shall not permit the Value of
Unencumbered Assets to be less than 1.75 times Consolidated Unsecured
Indebtedness.
[SECTION] 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 Capital Expenditure Reserve to be less
than 2 TIMES Consolidated Debt Service, based on the most recent two (2) fiscal
quarter results annualized.
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[SECTION] 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 most recent two (2)
fiscal quarter results annualized, provided that as at the end of any fiscal
quarter or any other date of measurement after June 30, 1996, the Borrower shall
not permit Consolidated Unencumbered Asset Cash Flow to be less than 1.75 TIMES
Consolidated Unsecured Debt Service Charges, based on the most recent two (2)
fiscal quarter results annualized.
[SECTION] 9.7. ASSETS UNDER DEVELOPMENT. (a) The Borrower shall not
permit Assets Under Development to exceed 10% of Consolidated Capitalization
Value at any time.
(b) The Borrower shall not, and shall not permit any of its Subsidiaries
to, commence any construction of new Buildings or additions to existing
Buildings unless (i) such proposed project is at least 50% pre-leased by size
and at least 50% pre-leased by pro-forma and (ii) the Borrower and such
Subsidiary are, and during the course of construction, remain in compliance with
[SECTION] 7.20.
[SECTION] 10. CONDITIONS TO EFFECTIVENESS. This Agreement shall become
effective when each of the following conditions precedent have been satisfied:
[SECTION] 10.1. LOAN DOCUMENTS. Each of the Loan Documents shall have been
duly executed and delivered by the respective parties thereto, shall be in full
force and effect and shall be in form and substance satisfactory to each of the
Banks. Each Bank shall have received a fully executed copy of each such
document prior to or on the Effective Date.
[SECTION] 10.2. CERTIFIED COPIES OF ORGANIZATION DOCUMENTS. Each of the
Banks shall have received from the Borrower and each Subsidiary of the Borrower
a copy, certified as of a recent date by a duly authorized officer of such
Person to be true and complete on the Closing Date, of its articles of
incorporation and by-laws any other charter and organization documents as in
effect on such date of certification, and a certificate of good standing from
the Borrower's jurisdiction of incorporation.
[SECTION] 10.3. RESOLUTIONS. All corporate action or other charter or
organizational acts on the part of the Borrower necessary for the valid
execution, delivery and performance by the Borrower of this Agreement and the
other Loan Documents to which it is or is to become a party shall have been duly
and effectively taken, and evidence thereof satisfactory to the Banks shall have
been provided to each of the Banks. Each Bank shall have received from the
Borrower true copies of the resolutions adopted by its Board of Directors or
other organizational vote authorizing the transactions described herein, each
certified by its secretary or equivalent organizational Person to be true and
complete and in effect on the Effective Date and evidence that the secretary or
equivalent organizational Person is authorized to so certify by the Borrower's
charter documents.
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[SECTION] 10.4. INCUMBENCY CERTIFICATE; AUTHORIZED SIGNERS. Each of the
Banks shall have received from the Borrower an incumbency certificate, dated as
of the Effective Date, signed by a duly authorized officer of the Borrower and
giving the name and bearing a specimen signature of each individual who shall be
authorized: (a) to sign, in the name and on behalf of the Borrower, each of the
Loan Documents to which the Borrower is or is to become a party; (b) to make
Loan Requests and Conversion Requests; and (c) to give notices and to take other
action on behalf of the Borrower under the Loan Documents.
[SECTION] 10.5. TAXES. The Bank shall have received evidence of payment of
real estate taxes and municipal charges on the Real Estate which were due and
payable on or before the Effective Date.
[SECTION] 10.6. CERTIFICATES OF INSURANCE. The Agent shall have received
(a) a certificate of insurance as to the insurance maintained by Borrower and
its Subsidiaries on the Real Estate (including flood insurance if necessary)
from the insurer or an independent insurance broker dated as of the Effective
Date, identifying insurers, types of insurance, insurance limits, and policy
terms; and (b) such further information and certificates from Borrower, its
insurers and insurance brokers as the Agent may reasonably request.
[SECTION] 10.7. OPINIONS OF COUNSEL CONCERNING ORGANIZATION AND LOAN
DOCUMENTS. Each of the Banks and the Agent shall have received favorable
opinions addressed to the Banks and the Agent and dated as of the Effective
Date (other than for [SECTION] 6.19 opinions), in form and substance
satisfactory to the Banks and the Agent from Goodwin, Procter & Hoar with
respect to Massachusetts and Maryland law.
[SECTION] 10.8 PAYMENT OF FEES. The Borrower shall have paid to the Agent
the fees referred to in ss.4.1 and shall have paid all other expenses as
provided in [SECTION] 15 hereof then outstanding.
[SECTION] 10.9 INTEREST RATE PROTECTION. The Agent shall have received
evidence satisfactory to the Agent that the Borrower has obtained and is
maintaining interest rate protection arrangements in accordance with the
requirements set forth in [SECTION] 7.15 hereof.
[SECTION] 10.10 FINANCIAL ANALYSES OF PROPERTIES. Each Bank shall have
completed to its satisfaction, a financial analysis of each Real Estate Asset,
which analyses shall include, without limitation, a review of the most recent
rent rolls, the historical operating statements, cash flow projections, capital
expenditure budgets, market data, leases and tenant financial statements. Each
such analysis shall be completed at each Bank's sole expense with materials
furnished by the Borrower at the Borrower's expense.
[SECTION] 10.11. INSPECTION OF PROPERTIES. The Agent shall have completed
to its satisfaction an inspection of a representative sample of the Borrower's
Real Estate Assets, including Unencumbered Assets, at Borrower's expense.
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[SECTION] 10.12. CAPITAL EXPENDITURE BUDGETS. The Agent shall have
received and approved capital expenditure budgets for each of the Real Estate
Assets, in form and substance satisfactory to the Agent.
[SECTION] 10.13. UCC LIEN SEARCHES. The Agent shall have received UCC lien
searches of the applicable public records disclosing no conditional sales
contracts, security agreements, chattel mortgages, leases of personalty,
financing statements or other encumbrances which affect any of the Real Estate
(other than UCC financing statements approved by the Agent and Permitted Liens).
[SECTION] 10.14. CERTIFICATE OF MERGER. The Agent shall have received
satisfactory evidence of the completion of the Borrower's acquisition of Tucker
Properties Corporation, which evidence shall include, without limitation, the
filing of a Certificate of Merger with the Maryland Department of Taxes and
Assessment merging Tucker Properties Corporation into the Borrower and copies
of all required consents and approvals.
[SECTION] 10.15. PARTNERSHIP AGREEMENTS. The Agent shall have received,
reviewed and approved all partnership and joint venture agreements to which the
Borrower is a party and which relate to any assets of the Borrower, including,
without limitation, those partnership agreements of Bradley Operating
Partnership, Bradley Financing Partnership and the Williams Square Partnership.
[SECTION] 10.16. EXISTING INDEBTEDNESS. The existing Indebtedness of the
Borrower (a) to the Banks under the Amended and Restated Revolving Credit
Agreement dated as of January 27, 1994, as amended, and (b) set forth on
SCHEDULE 10.16 (which Indebtedness shall not be Permitted Indebtedness) shall
have been satisfied in full.
10.17. RELEASE DOCUMENTS. The Agent shall have delivered to the Borrower
appropriate release documentation necessary to release all security interests
granted by the Borrower in the properties and assets of the Borrower, including,
without limitation, appropriate releases of mortgages and deeds of trust and UCC
termination statements.
[SECTION] 11. CONDITIONS TO ALL BORROWINGS. The obligations of the Banks
to make any Loan, and of the Agent to issue, extend or renew any Letter of
Credit, in each case whether on or after the Effective Date, shall also be
subject to the satisfaction of the following conditions precedent:
[SECTION] 11.1. REPRESENTATIONS TRUE; NO EVENT OF DEFAULT; COMPLIANCE
CERTIFICATE. Each of the representations and warranties of the Borrower
contained in this Agreement, the other Loan Documents or in any document or
instrument delivered pursuant to or in connection with this Agreement shall be
true as of the date as of which they were made and shall also be true at and as
of the time of the making of such Loan or the issuance, extension or renewal of
such Letter of Credit, with the same effect as if made at and as of that time
(except (i) to the extent of changes resulting
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from transactions contemplated or permitted by this Agreement and the other Loan
Documents and changes occurring in the ordinary course of business that singly
or in the aggregate are not materially adverse, (ii) to the extent that such
representations and warranties relate expressly to an earlier date and (iii) for
Non-Material Breaches); the Borrower shall have performed and complied with all
terms and conditions herein required to be performed by it or prior to the
Drawdown Date of such Loan; and no Default or Event of Default shall have
occurred and be continuing on the date of any Loan Request or on the Drawdown
Date of such Loan. Each of the Banks shall have received a Compliance
Certificate evidencing covenant compliance after giving effect to such requested
Loan.
[SECTION] 12. EVENTS OF DEFAULT; ACCELERATION; ETC.
-------------------------------------
[SECTION] 12.1 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 when the same shall
become due and payable, and such failure continues for three (3) days;
(c) the borrower shall fail to comply with any of its covenants contained
in [SECTION] 7.5, [SECTION] 7.6, [SECTION] 7.7, [SECTION] 8 or [SECTION] 9
hereof and such failure continues for thirty (30) days (subject to the
Non-Material Breach standard for [SECTION] 8.6 if the breach thereof is a
Non-Material Breach);
(d) the Borrower or any of its Subsidiaries shall fail to perform any other
term, covenant or agreement contained herein or in any of the other Loan
Documents (other than those specified elsewhere in this [SECTION] 12) for
thirty (30) days after written notice of such failure from Agent to the
Borrower PROVIDED that if Borrower is diligently and in good faith prosecuting
a cure of such breach, an Event of Default shall not be deemed to have occurred
until ninety (90) days after such written notice;
(e) any representation or warranty of the Borrower or relating to any of
its Subsidiaries in this Agreement or any of the other Loan Documents shall
prove to have been false in any material respect upon the date when made or
deemed to have been made or repeated, and the same does not constitute a
Non-Material Breach under this Agreement, PROVIDED, HOWEVER, that if the
condition or event making the representation and warranty false is capable of
being cured by the Borrower or such Subsidiary, the Borrower shall have a period
of thirty (30) days in the case of a breach specifically with respect to an
Unencumbered Asset, and sixty (60) days in the case of any other breach, 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
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reasonably capable of being cured within the initial cure period, such
additional period of time as may be reasonably required in order to cure such
condition or event but in any event such period shall not exceed six (6) months
from the date that the Borrower first obtained knowledge of such condition or
event), and no Event of Default shall exist hereunder during such initial cure
period or additional period so long as the Borrower continuously and diligently
pursues the cure of such condition or event and the other conditions to such
cure period have not changed;
(f) the Borrower or any of its Subsidiaries shall fail to pay at maturity,
or within any applicable period of grace, any Indebtedness or obligation in
respect of any Capitalized Leases in an aggregate amount in excess of
$10,000,000 or fail to observe or perform any material term, covenant or
agreement contained in any agreement by which it is bound, evidencing or
securing Indebtedness or obligation in respect of any Capitalized Leases in an
aggregate amount in excess of $10,000,000 for such period of time as would
permit (assuming the giving of appropriate notice if required) the holder or
holders thereof or of any obligations issued thereunder to accelerate the
maturity thereof; and in any event, such failure shall continue for sixty (60)
days, unless the amount, applicability or validity thereof is being contested by
the Borrower or such Subsidiary in good faith by appropriate legal proceedings
and the Borrower or such Subsidiary has reserves adequate to pay any such
disputed amounts;
(g) the Borrower or any of its Subsidiaries 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
the Borrower or any of its Subsidiaries or of any substantial part of the
properties of the Borrower or any of its Subsidiaries or shall commence any case
or other proceeding relating to the Borrower or any of its Subsidiaries 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 the Borrower or any of its
Subsidiaries and the Borrower or any of its Subsidiaries shall indicate its
approval thereof, consent thereto or acquiescence therein or such petition or
application shall not have been dismissed within sixty (60) days following the
filing thereof;
(h) a decree or order is entered appointing any such trustee, custodian,
liquidator or receiver or adjudicating the Borrower or any of its Subsidiaries
bankrupt or insolvent, or approving a petition in any such case or other
proceeding, or a decree or order for relief is entered in respect of the
Borrower or any Subsidiary of the Borrower in an involuntary case under federal
bankruptcy laws as now or hereafter constituted, and such petition, decree or
order shall not have been dismissed within sixty (60) days following the entry
thereof;
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(i) there shall remain in force, undischarged, unsatisfied and unstayed,
for more than sixty days, whether or not consecutive, any uninsured final
judgment against the Borrower or any of its Subsidiaries that, with other
outstanding uninsured final judgments, undischarged, against the Borrower or any
of its Subsidiaries exceeds in the aggregate at any one time $500,000;
(j) if any of the Loan Documents or any material provision of any Loan
Documents shall be unenforceable, cancelled, terminated, revoked or rescinded
otherwise than in accordance with the terms thereof or with the express prior
written agreement, consent or approval of the Agent, or any action at law, suit
or in equity or other legal proceeding to make unenforceable, cancel, revoke or
rescind any of the Loan Documents shall be commenced by or on behalf of the
Borrower or any 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
in accordance with the terms thereof;
(k) the Borrower or any of its Subsidiaries shall be indicted for a federal
crime, a punishment for which could include the forfeiture of any material
assets of the Borrower or any of its Subsidiaries;
(l) any "Event of Default", as defined in any of the other Loan Documents,
shall occur and be continuing;
(m) 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 to the PBGC or such
Guaranteed Pension Plan in an aggregate amount exceeding $500,000 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 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 Guaranteed Pension Plan; or the PBGC
shall have instituted proceedings to terminate such Guaranteed Pension Plan;
then, and in any such event, so long as the same may be continuing, the Agent
may (unless instructed to the contrary by the Majority Banks), 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 Notes and the
other Loan Documents to be, and they shall thereupon forthwith become,
immediately due and payable without presentment, demand, protest or other notice
of any kind, all of which are hereby expressly waived by the Borrower; PROVIDED
that in the event of any Event of Default specified in [SECTION] 12.1(g) or
12.1(h), all such amounts shall become immediately due and payable
automatically and without any requirement of notice from the Agent or action by
the Majority Banks.
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[SECTION] 12.2 TERMINATION OF COMMITMENTS. If any one or more Events of
Default specified in [SECTION] 12.1(g) or [SECTION] 12.1(h) shall occur, any
unused portion of the Commitments hereunder shall forthwith terminate and the
Banks shall be relieved of all obligations to make Loans to the Borrower 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, any Bank may by notice to the Borrower
terminate the unused portion of its Commitment hereunder, and upon such notice
being given such unused portion of its Commitment hereunder shall terminate
immediately and such Bank shall be relieved of all further obligations to make
Loans and the Agent and any Fronting Bank shall be relieved of all further
obligations to issue, extend or renew Letters of Credit. No termination of such
Bank's Commitment hereunder shall relieve the Borrower of any of the
Obligations or any of its existing obligations to such Bank arising under other
agreements or instruments.
[SECTION] 12.3 REMEDIES. In case any one or more of the Events of Default
shall have occurred and be continuing, and whether or not the Banks shall have
accelerated the maturity of the Loans pursuant to [SECTION] 12.1, each Bank, if
owed any amount with respect to the Loans may, with the consent of the Majority
Banks, direct the Agent to proceed to protect and enforce the rights and
remedies of the Agent and the Banks under this Agreement, the Notes or any of
the other Loan Documents by suit in equity, action at law or other appropriate
proceeding, whether for the specific performance of any covenant or agreement
contained in this Agreement and the other Loan Documents or any instrument
pursuant to which the Obligations are evidenced, including to the full extent
permitted by applicable law the obtaining of the EX PARTE appointment of a
receiver, and, if any amount shall have become due, by declaration or otherwise,
to proceed to enforce the payment thereof or any other legal or equitable right
of such Bank. No remedy herein conferred upon any Bank or the Agent or the
holder of any Note 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 now
or hereafter existing at law or in equity or by statute or any other provision
of law.
[SECTION] 13. SETOFF. During the continuance of any Event of Default, any
deposits (general or specific, time or demand, provisional or final, regardless
of currency, maturity, or the branch of where such deposits are held) or other
sums credited by or due from any of the Banks to the Borrower or any of its
Subsidiaries and any securities or other property of the Borrower or any of its
Subsidiaries in the possession of such Bank may be applied to or set off against
the payment of Obligations and any and all other liabilities, direct, or
indirect, absolute or contingent, due or to become due, now existing or
hereafter arising, of the Borrower to such Bank. Each of the Banks agrees with
each other Bank that (a) if an amount to be set off is to be applied to
Indebtedness of the Borrower to such Bank, other than Indebtedness evidenced by
the Notes held by such Bank, such amount shall be applied ratably to such other
Indebtedness and to the Indebtedness evidenced by all such Notes held by such
Bank, and (b) if such Bank shall receive from the Borrower, whether by voluntary
payment, exercise of the right of setoff, counterclaim, cross action,
enforcement of the
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claim evidenced by the Notes held by such Bank by proceedings against the
Borrower at law or in equity or by proof thereof in bankruptcy, reorganization,
liquidation, receivership or similar proceedings, or otherwise, and shall retain
and apply to the payment of the Note or Notes held by such Bank any amount in
excess of its ratable portion of the payments received by all of the Banks with
respect to the Notes held by all of the Banks, such Bank will make such
disposition and arrangements with the other Banks with respect to such excess,
either by way of distribution, PRO TANTO assignment of claims, subrogation or
otherwise as shall result in each Bank receiving in respect of the Notes held by
it, its proportionate payment as contemplated by this Agreement; PROVIDED that
if all or any part of such excess payment is thereafter recovered from such
Bank, such disposition and arrangements shall be rescinded and the amount
restored to the extent of such recovery, but without interest. Notwithstanding
the foregoing, no Bank shall exercise a right of setoff if such exercise would
limit or prevent the exercise of any other remedy or other recourse against the
Borrower.
[SECTION] 14. THE AGENT.
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[SECTION] 14.1. AUTHORIZATION. The Agent is authorized to take such action
on behalf of each of the Banks and to exercise all such powers as are hereunder
and under any of the other Loan Documents and any related documents delegated
to the Agent, together with such powers as are reasonably incident thereto,
PROVIDED that no duties or responsibilities not expressly assumed herein or
therein shall be implied to have been assumed by the Agent. The relationship
between the Agent and the Banks is and shall be that of agent and principal
only, and nothing contained in this Agreement or any of the other Loan
Documents shall be construed to constitute the Agent as a trustee for any Bank.
[SECTION] 14.2. EMPLOYEES AND AGENTS. The Agent may exercise its powers and
execute its duties by or through employees or agents and shall be entitled to
take, and to rely on, advice of counsel concerning all matters pertaining to its
rights and duties under this Agreement and the other Loan Documents. The Agent
may utilize the services of such Persons as the Agent in its sole discretion may
reasonably determine, and all reasonable fees and expenses of any such Persons
shall be paid by the Borrower.
[SECTION] 14.3. NO LIABILITY. Neither the Agent nor any of its
shareholders, directors, officers or employees nor any other Person assisting
them in their duties nor any agent or employee thereof, shall be liable for any
waiver, consent or approval given or any action taken, or omitted to be taken,
in good faith by it or them hereunder or under any of the other Loan Documents,
or in connection herewith or therewith, or be responsible for the consequences
of any oversight or error of judgment whatsoever, except that the Agent or such
other Person, as the case may be, may be liable for losses due to its willful
misconduct or gross negligence.
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[SECTION] 14.4. NO REPRESENTATIONS. The Agent shall not be responsible for
the execution or validity or enforceability of this Agreement, the Notes, any
of the other Loan Documents or for the validity, enforceability or
collectability of any such amounts owing with respect to the Notes, or for any
recitals or statements, warranties or representations made herein or in any of
the other Loan Documents or in any certificate or instrument hereafter
furnished to it by or on behalf of the Borrower, or be bound to ascertain or
inquire as to the performance or observance of any of the terms, conditions,
covenants or agreements herein. The Agent shall not be bound to ascertain
whether any notice, consent, waiver or request delivered to it by the Borrower
or any holder of any of the Notes shall have been duly authorized or is true,
accurate and complete. The Agent has not made nor does it now make any
representations or warranties, express or implied, nor does it assume any
liability to the Banks, with respect to the credit worthiness or financial
condition of the Borrower. Each Bank acknowledges that it has, independently
and without reliance upon the Agent or any other Bank, and based upon such
information and documents as it has deemed appropriate, made its own credit
analysis and decision to enter into this Agreement. Agent's Special Counsel has
only represented Agent and FNBB in connection with the Loan Documents and the
only attorney-client relationship or duty of care is between Agent's Special
Counsel and Agent. Each Bank, at such Bank's sole cost and expense (except as
otherwise provided in [SECTION] 15 hereof), has been independently represented
by separate counsel on all matters regarding the Loan Documents.
[SECTION] 14.5. PAYMENTS.
(a) A payment by the Borrower to the Agent hereunder or any of the other
Loan Documents for the account of any Bank shall constitute a payment to such
Bank subject to the PRO RATA rights to repayment based upon the Commitment
Percentage of each Bank. The Agent agrees promptly to distribute to each Bank
such Bank's pro rata share of payments received by the Agent for the account of
the Banks except as otherwise expressly provided herein or in any of the other
Loan Documents.
(b) If in the opinion of the Agent the distribution of any amount received
by it in such capacity hereunder, under the Notes or under any of the other Loan
Documents might involve it in liability, it may refrain from making distribution
until its right to make distribution shall have been adjudicated by a court of
competent jurisdiction. If a court of competent jurisdiction shall adjudge that
any amount received and distributed by the Agent is to be repaid, each Person to
whom any such distribution shall have been made shall either repay to the Agent
its proportionate share of the amount so adjudged to be repaid or shall pay over
the same in such manner and to such Persons as shall be determined by such
court; PROVIDED that if such court specifies that such amount shall be repaid
due entirely to the action or inaction of a Bank or Banks, only such Bank or
Banks shall be required to repay to the Agent their share of the amount so
adjudged to be repaid attributable to such Bank or Banks.
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(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 [SECTION] 12 or
[SECTION] 13 with respect to making dispositions and arrangements with the
other Banks, where such Bank's share of any payment received, whether by setoff
or otherwise, is in excess of its PRO RATA share of such payments due and
payable to all of the Banks, in each case as, when and to the full extent
required by the provisions of this Agreement, or to adjust promptly such Bank's
outstanding principal and its pro rata Commitment Percentage as provided in
[SECTION] 2.1 hereof, shall be deemed delinquent (a "Delinquent Bank") and
shall be deemed a Delinquent Bank until such time as such delinquency is
satisfied. A Delinquent Bank shall be deemed to have assigned any and all
payments due to it from the Borrower, whether on account of outstanding Loans,
interest, fees or otherwise, to the remaining nondelinquent Banks for
application to, and reduction of, their respective PRO RATA shares of all
outstanding Loans. The Delinquent Bank hereby authorizes the Agent to
distribute such payments to the nondelinquent Banks in proportion to their
respective PRO RATA shares of all outstanding Loans. A Delinquent Bank shall be
deemed to have satisfied in full a delinquency when and if, as a result of
application of the assigned payments to all outstanding Loans of the
nondelinquent Banks, the Banks' respective PRO RATA shares of all outstanding
Loans have returned to those in effect immediately prior to such delinquency and
without giving effect to the nonpayment causing such delinquency.
[SECTION] 14.6. HOLDERS OF NOTES. The Agent may deem and treat the payee
of any Note 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.
[SECTION] 14.7. INDEMNITY. The Banks ratably agree hereby to indemnify and
hold harmless the Agent from and against any and all claims, actions and suits
(whether groundless or otherwise), losses, damages, costs, expenses (including
any expenses for which the Agent has not been reimbursed by the Borrower as
required by [SECTION] 15), and liabilities of every nature and character
arising out of or related to this Agreement, the Notes, or any of the other
Loan Documents or the transactions contemplated or evidenced hereby or thereby,
or the Agent's actions taken hereunder or thereunder, except to the extent that
any of the same shall be directly caused by the Agent's willful misconduct or
gross negligence.
[SECTION] 14.8. AGENT AS BANK. In its individual capacity, FNBB shall have
the same obligations and the same rights, powers and privileges in respect to
its Commitment and the Loans made by it, and as the holder of any of the Notes
and as the purchaser of any Letter of Credit Participations, as it would have
were it not also the Agent.
[SECTION] 14.9. RESIGNATION. The Agent may resign at any time by giving
sixty (60) days' prior written notice thereof to the Banks and the Borrower.
Upon any such resignation, the Majority Banks shall
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have the right to appoint a successor Agent. Unless a Default or Event of
Default shall have occurred and be continuing, appointment of such successor
Agent shall be subject to the reasonable approval of the Borrower. If no
successor Agent shall have been so appointed by the Majority Banks and shall
have accepted such appointment within thirty (30) days after the retiring
Agent's giving of notice of resignation or the Borrower has disapproved or
failed to approve a successor agent within such period, then the retiring Agent
may, on behalf of the Banks, appoint a successor Agent, which shall be a
financial institution which is a Bank hereunder, meets the requirements of an
Eligible Assignee and has a rating of not less than A2/P2 or its equivalent by
S&P and is otherwise subject to the reasonable approval of the Borrower to be
given or denied within five (5) days of written notice to the Borrower from
Agent of such appointment. Upon the acceptance of any appointment as Agent
hereunder by a successor Agent, such successor Agent shall thereupon succeed to
and become vested with all the rights, powers, privileges and duties of the
retiring Agent, and the retiring Agent shall be discharged from its duties and
obligations hereunder. After any retiring Agent's resignation, the provisions of
this Agreement and the other Loan Documents shall continue in effect for its
benefit in respect of any actions taken or omitted to be taken by it while it
was acting as Agent.
[SECTION] 14.10. NOTIFICATION OF DEFAULTS AND EVENTS OF DEFAULT. Each Bank
hereby agrees that, upon learning of the existence of a Default or an Event of
Default, it shall promptly notify the Agent thereof. The Agent hereby agrees
that upon receipt of any notice under this [SECTION] 14.10 it shall promptly
notify the other Banks of the existence of such Default or Event of Default.
[SECTION] 15. EXPENSES. Subject to any specific limitations set forth in
this Agreement, the Borrower agrees to pay (a) the reasonable costs of
producing and reproducing this Agreement, the other Loan Documents and the
other agreements and instruments mentioned herein, (b) any taxes (including any
interest and penalties in respect thereto) payable by the Agent or any of the
Banks (other than taxes based upon the Agent's or any Bank's net income), or
other taxes payable on or with respect to the transactions contemplated by this
Agreement, including any taxes payable by the Agent or any of the Banks after
the Effective Date (the Borrower hereby agreeing to indemnify the Banks with
respect thereto), (c) all reasonable fees, expenses and disbursements of the
Agent's Special Counsel or any local counsel to the Agent incurred in
connection with the preparation, administration or interpretation of the Loan
Documents and other instruments mentioned herein, each closing hereunder, and
amendments, modifications, approvals, consents or waivers hereto or hereunder,
(d) the fees, costs, expenses and disbursements of the Agent incurred in
connection with the preparation, administration or interpretation of the Loan
Documents and other instruments mentioned herein including without limitation,
the Approval Fee and the costs incurred by the Agent in connection with its
inspection of the Real Estate, and the fees and disbursements of the Agent's
Special Counsel and the Borrower's legal counsel in preparing documentation,
(e) the fees, costs, expenses and disbursements of the Agent incurred in
connection with the syndication and/or participation of the Loans, including,
without limitation, travel costs, costs of preparing syndication materials and
photocopying costs (f) all reasonable out-of-pocket expenses (including
reasonable
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attorneys' fees and costs, which attorneys may be employees of any Bank or the
Agent and the fees and costs of appraisers, engineers, investment bankers,
surveyors or other experts retained by the Agent or any Bank in connection with
any such enforcement proceedings) incurred by any Bank or the Agent in
connection with (i) the enforcement of or preservation of rights under any of
the Loan Documents against the Borrower or the administration thereof after the
occurrence 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 the Agent's or the Bank's
relationship with the Borrower or any of its Subsidiaries, (g) all reasonable
fees, expenses and disbursements of the Agent incurred in connection with UCC
searches, (h) all costs incurred by the Agent in the future in connection with
its inspection of the Real Estate. The covenants of this [SECTION] 15 shall
survive payment or satisfaction of payment of amounts owing with respect to the
Notes.
[SECTION] 16. INDEMNIFICATION. The Borrower agrees to indemnify and hold
harmless the Agent and the Banks and the shareholders, directors, agents,
officers, subsidiaries, and affiliates of the Agent and the Banks from and
against any and all claims, actions or causes of action and suits whether
groundless or otherwise, and from and against any and all liabilities, losses,
settlement payments, obligations, damages and expenses of every nature and
character arising out of this Agreement or any of the other Loan Documents or
the transactions contemplated hereby or which otherwise arise in connection
with the financing including, without limitation unless directly caused by the
gross negligence or willful misconduct of a Bank or the Agent (but such
limitation on indemnification shall only apply to the Agent or Bank being
grossly negligent or committing willful misconduct), (a) any actual or proposed
use by the Borrower of the proceeds of any of the Loans, (b) any actual or
alleged infringement of any patent, copyright, trademark, service mark or
similar right of the Borrower, (c) the Borrower entering into or performing
this Agreement or any of the other Loan Documents or (d) with respect to the
Borrower and its respective properties, the violation of any Environmental Law,
the Release or threatened Release of any Hazardous Substances or any action,
suit, proceeding or investigation brought or threatened with respect to any
Hazardous Substances (including, but not limited to claims with respect to
wrongful death, personal injury or damage to property), (e) any cost, claim
liability, damage or expense in connection with any harm the Borrower may be
found to have caused in the role of a broker, in each case including, without
limitation, the reasonable fees and disbursements of counsel and allocated
costs of internal counsel incurred in connection with any such investigation,
litigation or other proceeding. In litigation, or the preparation therefor, the
Banks and the Agent shall each be entitled to select their own separate counsel
and, in addition to the foregoing indemnity, the Borrower agrees to pay
promptly the reasonable fees and expenses of such counsel. If, and to the
extent that the obligations of the Borrower under this [SECTION] 16 are
unenforceable for any reason, the Borrower hereby agrees to make the maximum
contribution to the payment in satisfaction of such obligations which is
permissible under applicable law. The provisions of this [SECTION] 16 shall
survive the repayment of the Loans and the termination of the obligations of the
Banks hereunder and shall continue in full force and effect as to the Banks so
long as the possibility of any such claim, action, cause of action or suit
exists.
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[SECTION] 17. SURVIVAL OF COVENANTS, ETC. All covenants, agreements,
representations and warranties made herein, in the Notes, in any of the other
Loan Documents or in any documents or other papers delivered by or on behalf of
the Borrower pursuant hereto shall be deemed to have been relied upon by the
Banks and the Agent, notwithstanding any investigation heretofore or hereafter
made by it, and shall survive the making by the Banks of the Loans 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 Notes or any of the other Loan
Documents remains outstanding or the Banks have any obligation to make any Loans
or the Agent has any obligation to issue, extend or renew any Letter of Credit.
The indemnification obligations of the Borrower provided herein and the other
Loan Documents shall survive the full repayment of amounts due and the
termination of the obligations of the Banks hereunder and thereunder to the
extent provided herein and therein. All statements contained in any certificate
or other paper delivered to the Agent or any Bank at any time by or on behalf of
the Borrower pursuant hereto or in connection with the transactions contemplated
hereby shall constitute representations and warranties by the Borrower
hereunder.
[SECTION] 18. ASSIGNMENT; PARTICIPATIONS; ETC.
--------------------------------
[SECTION] 18.1. CONDITIONS TO ASSIGNMENT BY BANKS. Except as provided
herein, each Bank may assign to one or more Eligible Assignees all or a portion
of its interests, rights and obligations under this Agreement (including all or
a portion of its Commitment Percentage and Commitment and the same portion of
the Loans at the time owing to it, and the Notes held by it 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, 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) each
assignment shall be in an amount that is a whole multiple of $1,000,000, (d)
each Bank which is a Bank on the date hereof shall retain, free of any such
assignment, an amount of its Commitment of not less than $10,000,000 and (e)
the parties to such assignment shall execute and deliver to the Agent, for
recording in the Register (as hereinafter defined), an Assignment and
Acceptance, substantially in the form of EXHIBIT F hereto (an "Assignment and
Acceptance"), together with any Notes subject to such assignment. Upon such
execution, delivery, acceptance and recording, from and after the effective
date specified in each Assignment and Acceptance, which effective date shall be
at least five (5) Business Days after the execution thereof, (i) the assignee
thereunder shall be a party hereto and, to the extent provided in such
Assignment and Acceptance, have the rights and obligations of a Bank hereunder,
and (ii) the assigning Bank shall, to the extent provided in such assignment
and upon payment to the Agent of the registration fee referred to in [SECTION]
18.3, be released from its obligations under this Agreement.
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[SECTION] 18.2. CERTAIN REPRESENTATIONS AND WARRANTIES; LIMITATIONS;
COVENANTS. By executing and delivering an Assignment and Acceptance, the
parties to the assignment thereunder confirm to and agree with each other and
the other parties hereto as follows: (a) other than the representation and
warranty that it is the legal and beneficial owner of the interest being
assigned thereby free and clear of any adverse claim, the assigning Bank makes
no representation or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with this
Agreement or the execution, legality, validity, enforceability, genuineness,
sufficiency or value of this Agreement, the other Loan Documents or any other
instrument or document furnished pursuant hereto; (b) the assigning Bank makes
no representation or warranty and assumes no responsibility with respect to the
financial condition of the Borrower or any other Person primarily or
secondarily liable in respect of any of the Obligations, or the performance or
observance by the Borrower or any other Person primarily or secondarily liable
in respect of any of the Obligations of any of their obligations under this
Agreement or any of the other Loan Documents or any other instrument or
document furnished pursuant hereto or thereto; (c) such assignee confirms that
it has received a copy of this Agreement, together with copies of the most
recent financial statements referred to in [SECTION] 6.4 and [SECTION] 7.4 and
such other documents and information as it has deemed appropriate to make its
own credit analysis and decision to enter into such Assignment and Acceptance;
(d) such assignee will, independently and without reliance upon the assigning
Bank, the Agent or any other Bank and based on such documents and information
as it shall deem appropriate at the time, continue to make its own credit
decisions in taking or not taking action under this Agreement; (e) such
assignee represents and warrants that it is an Eligible Assignee; (f) such
assignee appoints and authorizes the Agent to take such action as "Agent" on
its behalf and to exercise such powers under this Agreement and the other Loan
Documents as are delegated to the Agent by the terms hereof or thereof,
together with such powers as are reasonably incidental thereto; (g) such
assignee agrees that it will perform in accordance with their terms all of the
obligations that by the terms of this Agreement are required to be performed by
it as a Bank; (h) such assignee represents and warrants that it is legally
authorized to enter into such Assignment and Acceptance; 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 to outstanding Letters of Credit.
[SECTION] 18.3. REGISTER. The Agent shall maintain a copy of each
Assignment and Acceptance delivered to it and a register or similar list (the
"Register") for the recordation of the names and addresses of the Banks and the
Commitment Percentages of, and principal amount of the Loans owing to the Banks
from time to time. The entries in the Register shall be conclusive, in the
absence of manifest error, and the Borrower, the Agent and the Banks may treat
each Person whose name is recorded in the Register as a Bank hereunder for all
purposes of this Agreement. The Register shall be available for inspection by
the Borrower and the Banks at any reasonable time and from time to time upon
reasonable prior notice. Upon each such recordation, the assigning Bank agrees
to pay to the Agent a registration fee in the sum of $2,500.00.
[SECTION] 18.4. NEW NOTES. Upon its receipt of an Assignment and Acceptance
executed by the parties to such assignment, together with each Note subject to
such assignment, the Agent shall (a) record the information
66
<PAGE> 67
contained therein in the Register, and (b) give prompt notice thereof to the
Borrower and the Banks (other than the assigning Bank). Within five (5)
Business Days after receipt of such notice, the Borrower, at its own expense,
shall execute and deliver to the Agent, in exchange for each surrendered Note,
a new Note to the order of such Eligible Assignee in an amount equal to the
amount assumed by such Eligible Assignee pursuant to such Assignment and
Acceptance and, if the assigning Bank has retained some portion of its Loans
hereunder, a new Note to the order of the assigning Bank in an amount equal to
the amount retained by it hereunder. Such new Notes shall provide that they are
replacements for the surrendered Notes, shall be in an aggregate principal
amount equal to the aggregate principal amount of the surrendered Notes, shall
be dated the effective date of such Assignment and Acceptance and shall
otherwise be in substantially the form of the assigned Notes. Within five (5)
days of issuance of any new Notes pursuant to this [SECTION] 18.4, the Borrower
shall deliver an opinion of counsel, addressed to the Banks and the Agent,
relating to the due authorization, execution and delivery of such new Notes and
the legality, validity and binding non-preferential effect thereof, in form and
substance satisfactory to the Banks. The surrendered Notes shall be cancelled
and returned to the Borrower.
[SECTION] 18.5. PARTICIPATIONS. Each Bank may sell participations to
one or more banks or other entities in a portion of such Bank's rights and
obligations under this Agreement and the other Loan Documents not to exceed
forty-nine percent (49%) of its Commitment Percentage; PROVIDED that (a) the
Agent shall have given its prior written consent to such participation, (b)
each such participation shall be in an amount of not less than $1,000,000, (c)
any such sale or participation shall not affect the rights and duties of the
selling Bank hereunder to the Borrower and the Bank shall continue to exercise
all approvals, disapprovals and other functions of a Bank, (d) the only rights
granted to the participant pursuant to such participation arrangements with
respect to waivers, amendments or modifications of the Loan Documents shall be
the rights to approve the vote of the Bank as to waivers, amendments or
modifications that would reduce the principal of or the interest rate on any
Loans, extend the term or increase the amount of the Commitment of such Bank as
it relates to such participant, reduce the amount of any fees to which such
participant is entitled or extend any regularly scheduled payment date for
principal or interest, PROVIDED that all approvals affecting a Loan or this
Agreement under this clause (d) shall be by a fifty-one percent (51%) vote of
such Bank's Commitment Percentage, and (e) no participant shall have the right
to grant further participations or assign its rights, obligations or interests
under such participation to other Persons without the prior written consent of
the Agent. The Agent shall promptly advise the Borrower in writing of any such
sale or participation.
[SECTION] 18.6. PLEDGE BY LENDER. Any Bank may at any time pledge all
or any portion of its interest and rights under this Agreement (including all
or any portion of its Note) to any of the twelve Federal Reserve Banks
organized under [SECTION] 4 of the Federal Reserve Act, 12 U.S.C. [SECTION]
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.
[SECTION] 18.7. NO ASSIGNMENT BY BORROWER. The Borrower shall not assign or
transfer any of its rights or obligations under any of the Loan Documents
without the prior written consent of each of the Banks.
[SECTION] 18.8. DISCLOSURE. The Borrower agrees that in addition to
disclosures made in accordance with standard banking practices any Bank may
disclose information obtained by such Bank pursuant to this Agreement to
assignees or participants and potential assignees or participants hereunder.
[SECTION] 19. NOTICES, ETC. Except as otherwise expressly provided in this
Agreement, all notices and other communications made or required to be given
pursuant to this Agreement or the Notes or any Letter of Credit
67
<PAGE> 68
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 telegraph, telecopy, telefax or telex and
confirmed by delivery via courier or postal service, addressed as follows:
(a) if to the Borrower, at Bradley Real Estate, Inc., 699 Boylston Street,
Boston, Massachusetts 02116, Attention: Thomas P. D'Arcy and Irving E. Lingo,
Jr., with a copy to Ross D. Gillman, Esq., Goodwin Procter & Hoar, Exchange
Place, Boston, Massachusetts 02109 or at such other address for notice as the
Borrower shall last have furnished in writing to the Agent; and
(b) if to the Agent, at 100 Federal Street, Boston, Massachusetts 02110,
Attention: Mr. Howard Blackwell, or such other address for notice as the Agent
shall last have furnished in writing to the Borrower, with a copy to Paul M.
Vaughn, Esq., Bingham, Dana & Gould, 150 Federal Street, Boston, Massachusetts
02110.
(c) if to any Bank, at such Bank's address set forth on SCHEDULE 1 hereto,
or such other address for notice as such Bank shall have last furnished in
writing to the Person giving the notice.
Any such notice or demand shall be deemed to have been duly given or made
and to have become effective (i) if delivered by hand, overnight courier or
facsimile to a responsible officer of the party to which it is directed, at the
time of the receipt thereof by such officer or the sending of such facsimile and
(ii) if sent by registered or certified first-class mail, postage prepaid, on
the third Business Day following the mailing thereof.
[SECTION] 20. GOVERNING LAW; CONSENT TO JURISDICTION AND SERVICE. THIS
AGREEMENT AND EACH OF THE OTHER LOAN DOCUMENTS, EXCEPT AS OTHERWISE
SPECIFICALLY PROVIDED THEREIN, ARE CONTRACTS UNDER THE LAWS OF THE COMMONWEALTH
OF MASSACHUSETTS AND SHALL FOR ALL PURPOSES BE CONSTRUED IN ACCORDANCE WITH AND
GOVERNED BY THE LAWS OF SUCH COMMONWEALTH (EXCLUDING THE LAWS APPLICABLE TO
CONFLICTS OR CHOICE OF LAW). THE BORROWER AGREES THAT ANY SUIT BY IT FOR THE
ENFORCEMENT OF THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS MAY BE BROUGHT
ONLY IN THE COURTS OF THE COMMONWEALTH OF MASSACHUSETTS OR ANY FEDERAL COURT
SITTING THEREIN AND BORROWER CONSENTS TO THE NONEXCLUSIVE JURISDICTION OF SUCH
COURT FOR ANY SUIT BY AGENT OR ANY BANK AND THE SERVICE OF PROCESS IN ANY SUCH
SUIT BEING MADE UPON THE BORROWER BY MAIL AT THE ADDRESS SPECIFIED IN [SECTION]
19. THE BORROWER HEREBY WAIVES ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE
TO THE VENUE OF ANY SUCH SUIT OR ANY SUCH COURT OR THAT SUCH SUIT IS BROUGHT IN
AN INCONVENIENT COURT. IN ADDITION TO THE COURTS OF THE COMMONWEALTH OR ANY
FEDERAL COURT SITTING THEREIN, THE AGENT OR ANY BANK MAY BRING ACTION(S) FOR
ENFORCEMENT ON A NONEXCLUSIVE BASIS WHERE ANY COLLATERAL EXISTS AND THE
BORROWER CONSENTS TO THE NON-EXCLUSIVE JURISDICTION OF SUCH COURT AND THE
SERVICE OF PROCESS IN ANY SUCH SUIT BEING MADE UPON THE BORROWER BY MAIL AT THE
ADDRESS SPECIFIED IN [SECTION] 19.
[SECTION] 21. HEADINGS. The captions in this Agreement are for
convenience of reference only and shall not define or limit the provisions
hereof.
68
<PAGE> 69
[SECTION] 22. COUNTERPARTS. This Agreement and any amendment hereof may be
executed in several counterparts and by each party on a separate counterpart,
each of which when so executed and delivered shall be an original, and all of
which together shall constitute one instrument. In proving this Agreement it
shall not be necessary to produce or account for more than one such counterpart
signed by the party against whom enforcement is sought.
[SECTION] 23. 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 [SECTION] 25.
[SECTION] 24. WAIVER OF JURY TRIAL AND CERTAIN DAMAGE CLAIMS. THE
BORROWER HEREBY WAIVES ITS RIGHT TO A JURY TRIAL WITH RESPECT TO ANY ACTION OR
CLAIM ARISING OUT OF ANY DISPUTE IN CONNECTION WITH THIS AGREEMENT, THE NOTES
OR ANY OF THE OTHER LOAN DOCUMENTS, ANY RIGHTS OR OBLIGATIONS HEREUNDER OR
THEREUNDER OR THE PERFORMANCE OF SUCH RIGHTS AND OBLIGATIONS. EXCEPT TO THE
EXTENT EXPRESSLY PROHIBITED BY LAW, THE BORROWER HEREBY WAIVES ANY RIGHT IT MAY
HAVE TO CLAIM OR RECOVER IN ANY LITIGATION REFERRED TO IN THE PRECEDING
SENTENCE ANY SPECIAL, EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES OR ANY
DAMAGES OTHER THAN, OR IN ADDITION TO, ACTUAL DAMAGES, INCLUDING ANY DAMAGES
PURSUANT TO M.G.L. C.93A ET SEQ. THE BORROWER (A) CERTIFIES THAT NO
REPRESENTATIVE, AGENT OR ATTORNEY OF THE AGENT OR ANY BANK HAD REPRESENTED,
EXPRESSLY OR OTHERWISE, THAT THE AGENT OR SUCH BANK WOULD NOT, IN THE EVENT OF
LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVERS AND (B) ACKNOWLEDGES THAT THE
AGENT AND THE BANKS HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE
OTHER LOAN DOCUMENTS TO WHICH THEY ARE PARTIES BY, AMONG OTHER THINGS, THE
WAIVERS AND CERTIFICATIONS CONTAINED HEREIN.
[SECTION] 25. CONSENTS, AMENDMENTS, WAIVERS, ETC. Any consent or
approval required or permitted by this Agreement may be given, and any term of
this Agreement or of any other instrument related hereto or mentioned herein
may be amended, and the performance or observance by the Borrower of any terms
of this Agreement or such other instrument or the continuance of any Default or
Event of Default may be waived (either generally or in a particular instance
and either retroactively or prospectively) with, but only with, the written
consent of the Majority Banks, and, in the case of amendments, with the written
consent of the Borrower other than amendments to schedules made in the ordinary
course as contemplated by this Agreement. Notwithstanding the foregoing, (i)
the rate of interest on and the term or amount of the Notes, (ii) the amount of
the Commitments of the Banks, (iii) the amount of any fee payable to a Bank
hereunder, (iv) any provision herein or in any of the Loan Documents which
expressly requires consent of all the Banks, (v) the funding provisions of
[SECTION] 2.1 and [SECTION] 2.5 hereof, and (vi) the rights, duties and
obligations of the Agent specified in [SECTION] 14 hereof, may not be amended
without the written consent of each Bank affected thereby. No waiver shall
extend to or affect any obligation not expressly waived or impair any right
consequent thereon. No course of dealing or delay or omission on the part of
the Agent or any Bank in exercising any right shall operate as a waiver thereof
or otherwise be prejudicial thereto. No notice to or demand upon the Borrower
shall entitle the Borrower to other or further notice or demand in similar or
other circumstances.
69
<PAGE> 70
[SECTION] 26. SEVERABILITY. The provisions of this Agreement are
severable, and if any one clause or provision hereof shall be held invalid or
unenforceable in whole or in part in any jurisdiction, then such invalidity or
unenforceability shall affect only such clause or provision, or part thereof,
in such jurisdiction, and shall not in any manner affect such clause or
provision in any other jurisdiction, or any other clause or provision of this
Agreement in any jurisdiction.
70
<PAGE> 71
IN WITNESS WHEREOF, the undersigned have duly executed this Agreement as a
sealed instrument as of the date first set forth above.
BRADLEY REAL ESTATE, INC.
By: /s/ Irving E. Lingo, Jr.
-----------------------------
Name: Irving E. Lingo, Jr.
Title: Chief Financial Officer
BRADLEY OPERATING LIMITED PARTNERSHIP
BY: BRADLEY REAL ESTATE, INC.
By: /s/ Irving E. Lingo, Jr.
-----------------------------
Name: Irving E. Lingo, Jr.
Title: Chief Financial Officer
THE FIRST NATIONAL BANK
OF BOSTON, INDIVIDUALLY AND
AS AGENT
By: /s/Howard N. Blackwell
-----------------------------
Howard N. Blackwell
Director
By: /s/ David H. Craig
------------------------------
David H. Craig
Assistant Vice President
71
<PAGE> 1
Exhibit 10.3
================================================================================
TUCKER FINANCING PARTNERSHIP,
as Issuer
TO
BANKERS TRUST COMPANY OF CALIFORNIA, N.A.,
as Indenture Trustee
-------------------------------------
BANKERS TRUST COMPANY
as Servicer
-------------------------------------
INDENTURE
Dated as of June 1, 1994
-------------------------------------
7.30% MORTGAGE NOTES DUE
SEPTEMBER 30, 2000
secured by a
Mortgage, Security Agreement,
Fixture Filing Statement,
Assignment of Leases and Rents,
and Financing Statement
covering
each of the Mortgaged Properties
listed in Schedule 1 annexed hereto
================================================================================
<PAGE> 2
TUCKER FINANCING PARTNERSHIP
----------------------------
<TABLE>
Certain Sections of this Indenture relating to
Sections 310 through 318, inclusive, of the
Trust Indenture Act of 1939:
<CAPTION>
Trust Indenture
Act Section Indenture Section
<S> <C>
[Sec.] 310(a)(1)........................................... 607
(a)(2).............................................. 607
(a)(3).............................................. 618
(a)(4).............................................. Not Applicable
(b)................................................. 606, 611
[Sec.] 311(a).............................................. 610
(b)................................................. 610
312(a).............................................. 701, 702(a)
(b)................................................. 702(b)
(c)................................................. 702(c)
[Sec.] 313(a).............................................. 703(a)
(b)................................................. 703
(c)................................................. 703(a)
(d)................................................. 703(b)
[Sec.] 314(a)(1),(2) and (3)............................... 704(a)
(a)(4).............................................. 102, 1006
(b)................................................. 1008(t)
(c)(1).............................................. 102
(c)(2).............................................. 102
(c)(3).............................................. Not Applicable
(d)................................................. 102, 705(a)
(e)................................................. 102
[Sec.] 315(a).............................................. 601(b)
(b)................................................. 603
(c)................................................. 601(b)
(d)................................................. 601(b)
(e)................................................. 514
[Sec.] 316(a)(1)(A)........................................ 512
(a)(1)(B)........................................... 513
(a)(2).............................................. Not Applicable
(b)................................................. 508
(c)................................................. 104(c)
[Sec.] 317(a)(1)........................................... 503
(a)(2).............................................. 504
(b)................................................. 1004
[Sec.] 318(a).............................................. 107
</TABLE>
<PAGE> 3
<TABLE>
TABLE OF CONTENTS
<CAPTION>
Page
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<S> <C>
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS OF
GENERAL APPLICATION......................................... 3
SECTION 101. Definitions ................................. 3
SECTION 102. Compliance Certificates and Opin-
ions........................................ 31
SECTION 103. Form of Documents Delivered to
Indenture Trustee or the Servicer........... 32
SECTION 104. Acts of Holders............................... 33
SECTION 105. Notices to the Indenture Trustee,
the Servicer and the Issuer................. 35
SECTION 106. Notice to the Holders of the Notes;
Waiver...................................... 36
SECTION 107. Conflict with Trust Indenture Act............. 37
SECTION 108. Effects of Headings and Table of
Contents.................................... 37
SECTION 109. Successors and Assigns........................ 37
SECTION 110. Separability Clause........................... 37
SECTION 111. Benefits of Indenture......................... 37
SECTION 112. Governing Law; Jurisdiction................... 38
SECTION 113. Legal Holidays................................ 38
SECTION 114. Limited Recourse.............................. 39
SECTION 115. Security Agreement............................ 40
SECTION 116. Survival of Representations, Etc.............. 41
SECTION 117. Relationship of the Indenture
Trustee to the Issuer and Third
Parties..................................... 41
ARTICLE TWO
FORM OF NOTES........................................................ 42
SECTION 201. Forms Generally............................... 42
SECTION 202. Form of Indenture Trustee's
Certificate of Authentication............... 43
SECTION 203. Form of the Notes............................. 43
</TABLE>
(i)
<PAGE> 4
<TABLE>
<CAPTION>
Page
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<S> <C>
ARTICLE THREE
THE NOTES............................................................ 43
SECTION 301. Equal and Ratable Security; Amount............ 43
SECTION 302. Denominations................................. 44
SECTION 303. Conditions Precedent to Issuance of
the Notes................................... 44
SECTION 304. Execution, Authentication and
Delivery of the Notes....................... 44
SECTION 305. [Reserved] ................................. 45
SECTION 306. Payment Account; Holdover Account............. 45
SECTION 307. Persons Deemed Owners......................... 48
SECTION 308. Registration, Registration of
Transfer and Exchange....................... 48
SECTION 309. Mutilated, Destroyed, Lost and
Stolen Notes................................ 50
SECTION 310. Interest...................................... 51
SECTION 311. Payment of Principal and Interest............. 52
SECTION 312. Interest on New Notes......................... 55
SECTION 313. Cancellation ................................. 55
SECTION 314. Paying Agent ................................. 56
ARTICLE FOUR
SATISFACTION AND DISCHARGE........................................... 57
SECTION 401. Satisfaction and Discharge of
Indenture................................... 57
SECTION 402. Application of Trust Money.................... 58
ARTICLE FIVE
REMEDIES............................................................. 58
SECTION 501. Events of Default............................. 58
SECTION 502. Acceleration of Maturity;
Rescission and Annulment.................... 60
SECTION 503. Collection of Indebtedness and
Suits for Enforcement by Indenture
Trustee..................................... 62
SECTION 504. Indenture Trustee or Servicer May
File Proofs of Claim........................ 63
SECTION 505. Indenture Trustee and Servicer May
Enforce Claims Without Possession
of Notes.................................... 65
</TABLE>
(ii)
<PAGE> 5
<TABLE>
<CAPTION>
Page
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<S> <C>
SECTION 506. Application of Money Collected................ 65
SECTION 507. Limitation on Suits........................... 66
SECTION 508. Unconditional Right of Holders to
Receive Principal and Interest.............. 67
SECTION 509. Restoration of Rights and Remedies............ 67
SECTION 510. Rights and Remedies Cumulative................ 67
SECTION 511. Delay or Omission Not Waiver.................. 68
SECTION 512. Control by Holders............................ 68
SECTION 513. Waiver of Past Defaults....................... 69
SECTION 514. Undertaking for Costs......................... 69
SECTION 515. Waiver of Appraisement and Other
Laws........................................ 70
SECTION 516. Marshalling; Payments Set Aside;
Further Assurance........................... 70
ARTICLE SIX
THE INDENTURE TRUSTEE................................................ 71
SECTION 601. Certain Duties and Responsibili-
ties........................................ 71
SECTION 602. Money Held in Trust........................... 75
SECTION 603. Notice of Defaults............................ 76
SECTION 604. Certain Rights of Indenture Trustee
and the Servicer............................ 76
SECTION 605. Compensation and Reimbursement................ 78
SECTION 606. Disqualification; Conflicting
Interests................................... 79
SECTION 607. Eligibility of the Indenture
Trustee and the Servicer.................... 80
SECTION 608. Authorization of Indenture Trustee
and the Servicer............................ 80
SECTION 609. Merger, Conversion, Consolidation
or Succession to Business................... 81
SECTION 610. Preferential Collection of Claims
Against Issuer.............................. 81
SECTION 611. Resignation and Removal; Appoint-
ment of Successor........................... 82
SECTION 612. Acceptance of Appointment by
Successor................................... 84
SECTION 613. Appointment of Authenticating
Agent....................................... 85
SECTION 614. The Rating Agencies........................... 87
SECTION 615. Investments ................................. 88
SECTION 616. Unclaimed Funds; Holdover Account............. 88
</TABLE>
(iii)
<PAGE> 6
<TABLE>
<CAPTION>
Page
----
<S> <C>
SECTION 617. Communications to be Sent to the
Rating Agencies............................. 89
SECTION 618. Separate Indenture Trustees and
Co-trustees................................. 90
SECTION 619. Fidelity Bond and Errors and Omis-
sions Coverage.............................. 92
ARTICLE SEVEN
HOLDERS' LISTS AND REPORTS BY INDENTURE
TRUSTEE AND ISSUER.......................................... 93
SECTION 701. Issuer to Furnish Indenture Trustee
and Servicer Names and Addresses
of Holders.................................. 93
SECTION 702. Preservation of Information; Com-
munications to Holders...................... 93
SECTION 703. Reports by Indenture Trustee.................. 94
SECTION 704. Reports by the Issuer......................... 94
SECTION 705. Release of Collateral......................... 95
ARTICLE EIGHT
CONDITIONS PRECEDENT................................................. 95
SECTION 801. Conditions Precedent to Exchange
of Notes for the Original Note.............. 95
ARTICLE NINE
SUPPLEMENTAL INDENTURES; AMENDMENTS.................................. 97
SECTION 901. Supplemental Indentures or
Amendments Without Consent of
Holders..................................... 97
SECTION 902. Supplemental Indentures With Con-
sent of Holders............................. 98
SECTION 903. Execution of Supplemental Inden-
tures....................................... 99
SECTION 904. Delivery of Supplements....................... 99
SECTION 905. Effect of Supplemental Indentures.............100
SECTION 906. Conformity with Trust Indenture
Act.........................................100
SECTION 907. Reference in Notes to Supplemental
Indentures..................................100
ARTICLE TEN
</TABLE>
(iv)
<PAGE> 7
<TABLE>
<CAPTION>
Page
----
<S> <C>
REPRESENTATIONS, WARRANTIES AND COVENANTS............................100
SECTION 1001. Representations and Warranties of
the Issuer.................................100
SECTION 1002. Payment of Principal and Interest............109
SECTION 1003. Maintenance of Office or Agency..............109
SECTION 1004. Paying Agent; Issuing Agent; Money
for Note Payments to be Held in
Trust......................................110
SECTION 1005. [Reserved] .................................110
SECTION 1006. Statement as to Compliance...................111
SECTION 1007. Register for the Mortgage Notes..............111
SECTION 1008. Affirmative Covenants........................111
SECTION 1009. Negative Covenants.........................120
SECTION 1010. Additions to Mortgaged Property..............125
ARTICLE ELEVEN
REDEMPTION OF NOTES; LIEN RELEASES...................................125
SECTION 1101. Redemption .................................125
SECTION 1102. Redemption Proceeds..........................129
SECTION 1103. Election to Redeem; Notice to
Indenture Trustee..........................130
SECTION 1104. Partial Redemption...........................130
SECTION 1105. Notice of Redemption.........................131
SECTION 1106. Notes Redeemed in Part.......................131
SECTION 1107. Notes Payable on Redemption Date.............132
SECTION 1108. Deposit of Redemption Price..................132
SECTION 1109. Lien Releases..............................132
ARTICLE TWELVE
RESERVES.............................................................134
SECTION 1201. Reserves .................................134
SECTION 1202. Initial Repair Reserve.......................134
SECTION 1203. Maintenance and Capital
Improvement Reserve..........................135
SECTION 1204. Credit Enhancement Reserve...................136
SECTION 1205. Arthur Andersen Reserve Account..............136
SECTION 1206. Security Interest............................137
SECTION 1207. Investment .................................137
</TABLE>
(v)
<PAGE> 8
<TABLE>
<CAPTION>
Page
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<S> <C> <C>
ARTICLE THIRTEEN
EXPENSES AND INDEMNITY...............................................138
SECTION 1301. Expenses; Indemnity..........................138
SCHEDULES:
Schedule 1......................................... Mortgaged Properties
Schedule 2........................................Allocated Note Amounts
Schedule 3....................... Anchor Leases and Operating Agreements
Schedule 4 ..........................................Insurance Coverages
Schedule 5 ........................................Environmental Reports
Schedule 6 ..........................................Initial Repair Work
Schedule 7 .........................................Financing Statements
EXHIBITS:
Exhibit A..................................................Form of Notes
Exhibit B...................................................... Mortgage
Exhibit C.......................................... Assignment of Leases
Exhibit D............................ Assignment of Management Agreement
Exhibit E....................................... Environmental Indemnity
Exhibit F..........................Form of Security Documents Assignment
</TABLE>
(vi)
<PAGE> 9
INDENTURE
---------
THIS INDENTURE, dated as of June 1, 1994, between TUCKER
FINANCING PARTNERSHIP, a general partnership organized and existing under the
laws of the State of Delaware (the "ISSUER"), having an address at 40 Skokie
Boulevard, Northbrook, Illinois 60062-1626, attention: Kenneth L. Tucker, and
BANKERS TRUST COMPANY OF CALIFORNIA, N.A., a national banking association
chartered under the laws of the United States of America (together with its
successors and any separate co-trustee appointed pursuant to Section 618, the
"INDENTURE TRUSTEE"), having an address at 3 Park Plaza, 16th Floor, Irvine,
California 92714, attention: Kidder/Tucker REMIC, as trustee for the benefit of
the Holders from time to time of the Notes, and Bankers Trust Company, a New
York banking corporation (the "Servicer") having an address at Four Albany
Street, New York, New York 10006, attention Kidder/Tucker REMIC, as servicer.
All capitalized terms used herein shall have the meanings
provided in Article One.
W I T N E S S E T H :
- - - - - - - - - -
WHEREAS, the Issuer has duly authorized the execution and
delivery of this Indenture to provide for the issuance in the aggregate
principal amount of ONE HUNDRED MILLION AND 00/100 DOLLARS ($100,000,000) of its
7.30% Mortgage Notes (as amended, restated, replaced, supplemented or otherwise
modified from time to time, individually, a "NOTE" and collectively, the
"NOTES") due September 30, 2000;
WHEREAS, the Notes shall be issued in exchange for and replace
the Original Note (as hereinafter defined), which Original Note shall be
cancelled;
WHEREAS, contemporaneously with the execution of this
Indenture in replacement of the Loan Agreement, (i) Kidder Peabody Mortgage
Capital Corporation has assigned and transferred all of its right, title and
interest in, to and under the Security Documents to the Indenture Trustee
pursuant to the Security Documents Assignment (as
<PAGE> 10
hereinafter defined) and (ii) the Loan Agreement is being terminated; and
WHEREAS, all things necessary have been done to make the
Notes, when the Notes are executed by the Issuer and authenticated and delivered
by the Indenture Trustee hereunder, the valid obligations of the Issuer, in
accordance with their terms, and to make this Indenture and the Security
Documents valid and legally binding agreements of the Issuer, in accordance with
their respective terms;
NOW, THEREFORE, THIS INDENTURE WITNESSETH that, to secure the
payment of the principal of, interest on and other amounts due from time to time
in respect of the Outstanding Notes, and the performance of the Issuer's
covenants herein contained and contained in the Notes and the Security
Documents, and to declare the terms and conditions on which the Outstanding
Notes are secured, and in consideration of the premises and of the purchase of
the Notes by the Holders thereof, the Issuer, by these presents, does grant,
assign, pledge, set over and confirm to the Indenture Trustee, and grants for
the benefit of the Indenture Trustee on behalf of the Holders of the Notes
issued hereunder, a security interest in, all of the Issuer's estate, right,
title and interest in, to and under any and all of the Trust Estate (including
any and all extensions and modifications thereof), any and all rights to make
claims for, collect, receive and receipt for any and all rents, income,
revenues, issues, insurance, condemnation and sale proceeds, profits, security
and other monies payable or receivable under the Trust Estate or with respect to
the Trust Estate, to bring proceedings thereunder or for the specific or other
enforcement thereof or with respect thereto, in the name of the Issuer or
otherwise, and the right to make all waivers and agreements, to grant or refuse
requests, to give or withhold notices, and to execute and deliver, in the name
and on behalf of the Issuer, as agent and attorney-in-fact, any and all
instruments in connection therewith and to do any and all things which the
Issuer is or may be entitled to do thereunder, all as limited by and more fully
described herein and in the other Transaction Documents, but no obligation of
the Issuer under the provisions of the Transaction Documents or of any other
instruments included in the Trust Estate or with respect thereto shall be
impaired or diminished by virtue thereof, nor shall any such obligation be
imposed upon the Indenture Trustee.
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TO HAVE AND TO HOLD all and singular the Trust Estate, whether
now owned or held or hereafter acquired, unto the Indenture Trustee and its
successors and assigns forever, for the benefit of the Holders of the Notes as
set forth below.
IN TRUST for the benefit and security of the Holders from time
to time of all the Outstanding Notes issued hereunder, in accordance with the
terms as hereinafter provided, and of all other sums payable hereunder or on the
Notes, and for the performance and observance of and compliance with the
provisions of this Indenture, the other Transaction Documents and any other
instruments included in the Trust Estate, all in accordance with this Indenture.
AND IT IS HEREBY COVENANTED AND DECLARED that (a) the Notes
are to be authenticated and delivered by the Indenture Trustee and the Trust
Estate is to be held and applied by the Indenture Trustee, subject to the
further covenants, conditions and trusts hereinafter set forth, and (b) the
Notes and the Mortgaged Properties are to be serviced by the Servicer as the
agent of the Indenture Trustee in accordance with the terms and provisions
hereinafter set forth, and the Issuer does hereby represent and warrant, and
covenant and agree, to and with the Indenture Trustee, for the benefit and
security of all Holders of the Notes, as follows:
ARTICLE ONE
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DEFINITIONS AND OTHER PROVISIONS
--------------------------------
OF GENERAL APPLICATION
----------------------
SECTION 101. Definitions.
-----------
For all purposes of this Indenture, except as otherwise
expressly provided or unless the context otherwise requires:
(1) the terms defined in this Article have the
meanings assigned to them in this Article and include
the plural as well as the singular;
(2) all other terms used herein which are de-
fined in the Trust Indenture Act, either directly or
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by reference therein, have the meanings assigned to
them therein;
(3) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with generally accepted
accounting principles in the United States of America;
(4) the word "including" shall be construed to be followed by
the words "without limitation";
(5) unless the context otherwise requires, any reference to an
"Article" or a "Section" refers to an Article or a Section, as the case
may be, of this Indenture; and
(6) the words "herein," "hereof" and "hereunder" and other
words of similar import refer to this Indenture as a whole and not to
any particular Article, Section or other subdivision;
ACCELERATION shall mean that the Default Amount shall become
and thereafter be immediately due and payable in accordance with the terms of
the Notes and this Indenture, whether automatically or by action of the
Indenture Trustee or the Holders.
ACT, when used with respect to any Holder, shall have the
meaning specified in Section 104.
AFFILIATE shall mean, as to any Person, any other Person that,
directly or indirectly, is in control of, is controlled by or is under common
control with such Person or is a director or officer of such Person or of an
Affiliate of such Person. For purposes of this definition, control of a Person
shall mean the power, direct or indirect, (i) to vote 10% or more of the
securities having ordinary voting power for the election of directors of such
Person, or (ii) to direct or cause the direction of the management and policies
of such Person, whether by contract or otherwise.
ALLOCATED NOTE AMOUNT shall mean, with respect to each
Mortgaged Property, the amount of the aggregate original principal balance of
the Notes allocated to such Mortgaged Property, as set forth on Schedule 2
annexed hereto.
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ANCHOR LEASES SHALL MEAN, collectively, the "Anchor Leases"
listed on Schedule 3 and, with respect to future Leases, any Lease demising a
portion of a Mortgaged Property comprising at least 20,000 square feet of
rentable space.
ARTHUR ANDERSEN RESERVE shall have the meaning specified in
Section 1201.
ARTHUR ANDERSEN RESERVE ACCOUNT shall have the meaning
specified in Section 1205.
ARTHUR ANDERSEN SPACE shall have the meaning specified in
Section 1205.
ASSIGNMENT OF LEASES shall mean, that certain Assignment of
Leases and Rents dated as of the Original Closing Date by Issuer, as assignor,
to the Originator, as assignee, and assigned and transferred by the Originator
to KPMCC pursuant to the KPMCC Assignment, and in turn assigned and transferred
by KPMCC to the Indenture Trustee pursuant to the Security Documents Assignment,
in respect of the Leases and Rents relating to the Mortgaged Properties, a copy
of which Assignment of Leases is annexed hereto as Exhibit C, as the same may be
amended, restated, replaced, supplemented or otherwise modified from time to
time.
ASSIGNMENT OF MANAGEMENT AGREEMENT shall mean the Assignment
of Management Agreement dated as of the Original Closing Date, among the Issuer,
as assignor, the Originator, as assignee, and the Operating Partnership, as
Manager, and assigned and transferred by the Originator to KPMCC pursuant to the
KPMCC Assignment, and in turn assigned and transferred by KPMCC to the Indenture
Trustee pursuant to the Security Documents Assignment, a copy of which
Assignment of Management Agreement is annexed hereto as Exhibit D, as the same
may be amended, restated, replaced, supplemented or otherwise modified from time
to time.
AUTHENTICATING AGENT shall mean any Person authorized in
writing by the Indenture Trustee pursuant to Section 613 to act on behalf of the
Indenture Trustee to authenticate the Notes.
AUTHORIZED AGENT shall mean any Person authorized by the
Issuer in writing to act on behalf of the Issuer to give or receive notices or
instructions.
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AUTHORIZED PARTNER shall have the meaning provided in Section
304.
BANKING DAY shall mean any day other than a Saturday, Sunday
or a day on which commercial banks located in New York, New York or the State of
California are required or authorized by applicable law or executive order to
close.
CALCULATION PERIOD shall mean a period of four (4) consecutive
calendar quarters ending on the March 31, June 30, September 30 or December 31
immediately preceding the date as of which the Debt Service Coverage Ratio is to
be determined.
CASH shall mean coin or currency of the United States of
America or immediately available federal funds, including funds delivered by
wire transfer.
CASUALTY shall have the meaning specified in Section 1101(a).
CERCLA shall mean the Comprehensive Environmental Response,
Compensation and Liability Act of 1980 (42 U.S.C. ss. 9601 et seq.), as
heretofore or hereafter amended or supplemented from time to time, including,
without limitation, the Superfund Amendments and Reauthorization Act of 1986.
CHARGES shall have the meaning specified in Section 310(e).
CODE shall mean the Internal Revenue Code of 1986, as amended
from time to time, any successor statute thereto, and any temporary or final
regulations of the United States Department of the Treasury promulgated
pursuant thereto.
COMMISSION shall mean the Securities and Exchange Commission,
as from time to time constituted, created under the Exchange Act or, if at any
time after the execution of this instrument such Commission is not existing and
performing the duties now assigned to it under the Trust Indenture Act, then the
body performing such duties at such time.
CONDEMNATION shall have the meaning specified in Section
1101(a).
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<PAGE> 15
CONTRIBUTING ENTITIES shall mean Tucker Master
General Partnership, Tucker State Street Limited
Partnership and Tucker-Sheridan Associates Limited
Partnership.
CONTRIBUTION AGREEMENTS shall mean, collectively, each of
those certain Contribution Agreements dated as of the Original Closing Date
between a Contributing Entity and the Operating Partnership, as the same may be
amended, restated, supplemented or otherwise modified from time to time.
CORPORATE TRUST OFFICE shall mean the principal office of the
Indenture Trustee at which at any particular time its corporate trust business
shall be administered, which on the date hereof is 3 Park Plaza, 16th floor,
Irvine, California 92714, Attention: Kidder/Tucker REMIC
1994-C2.
CORPORATION shall mean a corporation, association, company,
joint-stock company or business trust.
CREDIT ENHANCEMENT EVENT shall mean the occurrence of any of
the following events: (i) a termination by Arthur Andersen & Co. of all or any
material portion (greater than 10%) of its Lease with respect to office space at
the One North State Street Mortgaged Property unless a cancellation fee of at
least $1,800,000 shall have been made in connection therewith and shall have
been deposited in the Arthur Andersen Reserve Account in accordance with Section
1205 hereof, (ii) a termination by First National Bank of Chicago of all or any
material portion (greater than 10%) of its Lease with respect to office space at
the One North State Street Mortgaged Property, or (iii) Net Operating Income
Available for Debt Service for the Calculation Period ended June 30, 1999 shall
be less than $25,074,543.
CREDIT ENHANCEMENT RESERVE shall have the meaning specified in
Section 1201.
CREDIT ENHANCEMENT RESERVE ACCOUNT shall have the meaning
specified in Section 1204.
DEBT shall mean, with respect to any Person, without
duplication, (i) all indebtedness of such Person for borrowed money, (ii) all
indebtedness of such Person for the deferred purchase price of property or
services,
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<PAGE> 16
(iii) all obligations of such Person evidenced by notes, bonds, debentures or
other similar instruments (other than performance, surety and appeal bonds
arising in the ordinary course of business), (iv) all indebtedness of such
Person created or arising under any conditional sale or other title retention
agreement with respect to property acquired by such Person (even though the
rights and remedies of the seller or lender under such agreement in the event of
default are limited to repossession or sale of such property), (v) all
obligations of such Person under leases which have been or should be, in
accordance with generally accepted accounting principles, recorded as capital
leases, to the extent required to be so recorded, (vi) all reimbursement,
payment or similar obligations of such Person, contingent or otherwise, under
acceptance, letter of credit or similar facilities, (vii) all Debt referred to
in clauses (i) through (vi) above of any Person guaranteed directly or
indirectly by such Person, or in effect guaranteed directly or indirectly by
such Person through an agreement (A) to pay or purchase such Debt or to advance
or supply funds for the payment or purchase of such Debt, (B) to purchase, sell
or lease (as lessee) property, or to purchase or sell services, primarily for
the purpose of enabling the debtor to make payment of such Debt or to assure the
holder of such Debt against loss in respect of such Debt, (C) to supply funds to
or in any other manner invest in the debtor (including any agreement to pay for
property or services irrespective of whether such property is received or such
services are rendered) or (D) otherwise to assure a creditor against loss in
respect of such Debt, and (viii) all Debt referred to in clauses (i) through
(vi) above secured by (or for which the holder of such Debt has an existing
right, contingent or otherwise, to be secured by) any lien, security interest or
other charge or encumbrance upon or in property (including, without limitation,
accounts and contract rights) owned by such Person, even though such Person has
not assumed or become liable for the payment of such Debt.
DEBT SERVICE COVERAGE RATIO shall mean, with respect to any
Calculation Period, the ratio of the Net Operating Income Available for Debt
Service with respect to such Calculation Period, after giving effect to the
relevant release of a Mortgaged Property pursuant to Section 1109 hereof, if
any, to the interest accrued in respect of the aggregate outstanding principal
balances of the outstanding Notes during such Calculation Period, after taking
account of any relevant redemption of the outstanding Notes under Article
Eleven.
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<PAGE> 17
DEFAULT shall mean the occurrence of any event specified in
Section 501, whether or not any requirement in connection with such event for
the giving of notice or the lapse of time, or both, shall have been satisfied.
DEFAULT AMOUNT shall mean, with respect to any Note which has
been accelerated, an amount equal to the principal of and accrued interest on
such Note then outstanding, plus the applicable Yield Maintenance Charge, if
any, as of the date of determination.
DEFAULTED INTEREST shall have the meaning provided in Section
311.
DEFAULT RATE shall mean a rate of interest that is equal to
eleven percent (11%) per annum.
DISCOUNT RATE shall mean the rate per annum which, when
compounded monthly, is equivalent to the Treasury Rate when compounded
semi-annually.
DOLLARS, U.S. $, $ shall mean the lawful money of
the United States of America.
ELIGIBLE ACCOUNT shall mean either (i) an account maintained
with a depository institution or trust company the long term unsecured debt
obligations of which are rated by each Rating Agency in its highest rating
category at the time of any deposit therein or (ii) a trust account maintained
with a federal depository institution, a state chartered depository institution
or a trust company with trust powers acting in its fiduciary capacity, in each
case which may be an account maintained with the Indenture Trustee or the
Servicer. Eligible Accounts may bear interest.
ELIGIBLE INVESTMENTS shall mean each of the following:
(i) direct obligations of, or obligations fully guaranteed as
to full and timely payment of principal and interest by, (a) the United
States or any agency or instrumentality thereof provided that such
obligations are backed by the full faith and credit of the United
States of America, or (b) the Federal Home Loan Mortgage Corporation
("Freddie Mac"), the Federal National Mortgage Association ("Fannie
Mae") or the Federal Farm Credit System provided that any such
obligation at the time of purchase or contractual
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<PAGE> 18
commitment for purchase are qualified by each Rating Agency as an
Eligible Investment under the Indenture as evidenced in writing;
(ii) demand and time deposits in or certificates of deposit of, or
bankers' acceptances issued by, any bank or trust company, savings and
loan association or savings bank, which are fully insured by the
Federal Deposit Insurance Corporation or any successor thereto (the
"FDIC"), provided that such investments need not be insured if the
commercial paper and long-term unsecured debt obligations of such
depository institution or trust company (or in the case of the
principal depository institution in a holding company system, the
commercial paper or long-term unsecured debt obligations of such
holding company) have the highest rating available for such securities
by each Rating Agency, or such lower rating as will not result in the
downgrading or withdrawal of the rating then assigned to any Class of
Certificates by either Rating Agency as evidenced in writing;
(iii) repurchase obligations with respect to any security described
in clause (i) above entered into with a depository institution or trust
company (acting as principal) described in clause (ii) above;
(iv) general obligations of or obligations guaranteed by any State
of the United States or the District of Columbia receiving, at the time
of such investment or contracted commitment providing for such
investment, the highest long-term unsecured debt rating available for
such securities by each Rating Agency, or such lower rating as will not
result in the downgrading or withdrawal of the rating then assigned to
any Class of Certificates by each Rating Agency as evidenced in
writing;
(v) securities bearing interest or sold at a discount that are
issued by any corporation incorporated under the laws of the United
States of America or any State thereof or the District of Columbia and
are rated by each Rating Agency in its highest long-term unsecured
rating category at the time of such investment or contractual
commitment providing for such investment; PROVIDED, HOWEVER, that
securities issued by any such corporation will not be Eligible
Investments to the extent that investment therein will cause the then
outstanding principal
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amount of securities issued by such corporation and held as part of the
Trust Estate to exceed 20% of the aggregate principal amount of all
Eligible Investments held as a part of the Trust Estate;
(vi) commercial or finance company paper (including both
non-interest-bearing discount obligations and interest-bearing
obligations payable on demand or on a specified date not more than one
year after the date of issuance thereof) that is rated by each Rating
Agency in its highest short-term unsecured debt rating available at the
time of such investment or contractual commitment providing for such
investment, and is issued by a corporation the outstanding senior
long-term debt obligations of which are then rated by each Rating
Agency in its highest long-term unsecured debt rating available, or
such lower rating as will not result in the downgrading or withdrawal
of the rating then assigned to any Class of Certificates by either
Rating Agency as evidenced in writing;
(vii) guaranteed reinvestment agreements acceptable to each Rating
Agency issued by any bank, insurance company or other corporation rated
in the highest long-term unsecured rating level available to such
issuers by each Rating Agency at the time of such investment, provided
that any such agreement must by its terms provide that it is terminable
by the purchaser without penalty in the event any such rating is at any
time lower than such level;
(viii) units of taxable money market funds rated by each Rating
Agency in its highest rating category or which funds have been
designated in writing by each Rating Agency as Eligible Investments
with respect to this definition;
(ix) if previously confirmed in writing to the Servicer, any other
demand, money market or time deposit, or any other obligation, security
or investment, that may be acceptable to each Rating Agency as a
permitted investment of funds backing securities rated "AAA"; and
(x) such other obligations as are acceptable as Eligible
Investments to each Rating Agency; PROVIDED, HOWEVER, that such
instrument continues to qualify as a cash flow investment pursuant to
Code Section
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860G(a)(6) and that no instrument or security shall be an Eligible
Investment if (x) such instrument or security evidences a right to
receive only interest payments, (y) the right to receive principal and
interest payments derived from the underlying investment provides a
yield to maturity in excess of 120% of the yield to maturity at par of
such underlying investment or (z) such instrument or security can be
redeemed prior to its stated maturity date at an amount less than the
purchase price paid therefor.
ENCUMBRANCE shall mean any mortgage, deed of trust, pledge,
lien, encumbrance, assignment by way of security, hypothecation, security
interest, conditional sale, capital lease or other title retention or security
arrangement securing any obligation of any Person.
ENVIRONMENTAL CLAIM shall mean any notice of violation, claim,
demand, abatement order or other order or direction (conditional or otherwise)
by any Person for any damage, including, without limitation, personal injury
(including sickness, disease or death), tangible or intangible property damage,
contribution, indemnity, indirect or consequential damages, damage to the
environment, pollution, contamination or other adverse effects on the
environment, removal, cleanup or remedial action or for fines, penalties or
restrictions, resulting from or based upon (i) the existence or occurrence, or
the alleged existence or occurrence, of a Hazardous Substance Activity or (ii)
the violation, or alleged violation, of any Environmental Laws in connection
with a Mortgaged Property or any portion thereof.
ENVIRONMENTAL INDEMNITY shall mean the Environmental Indemnity
Agreement dated as of the Original Closing Date, made by Issuer in favor of the
Indemnitees, and assigned and transferred by the Originator to KPMCC pursuant to
the KPMCC Assignment, and in turn assigned and transferred by KPMCC to the
Indenture Trustee pursuant to the Security Documents Assignment, a copy of which
Environmental Indemnity is annexed hereto as Exhibit E, as the same may be
amended, restated, replaced, supplemented or otherwise modified from time to
time.
ENVIRONMENTAL LAWS shall mean all laws, statutes, ordinances,
orders, rules, codes, regulations and judgments and any judicial or
administrative interpretations thereof relating to health, safety and protection
of the
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<PAGE> 21
environment, including, without limitation, those relating to fines, orders,
injunctions, penalties, damages, contribution, cost recovery compensation,
removal, cleanup or remedial action, losses or injuries resulting from
Hazardous Substance Activity, in any manner applicable to the Issuer, the
Mortgaged Property or any part thereof, or the ownership, use, occupancy or
operation thereof, including, without limitation, CERCLA, the Hazardous
Material Transportation Act (49 U.S.C. [Sec.] 1801 ET SEQ.) the Resource
Conservation and Recovery Act (42 U.S.C. [Sec.] 6901 ET SEQ.), the Federal
Water Pollution Control Act (33 U.S.C. [Sec.] 1251 ET SEQ.), the Clean Air Act
(42 U.S.C. [Sec.] 7401 ET SEQ.), the Toxic Substances Control Act (15 U.S.C.
[Sec.] 2601 ET SEQ.), the Occupational Safety and Health Act (29 U.S.C. [Sec.]
651 ET SEQ.) and the Emergency Planning and Community Right-to-Know Act (42
U.S.C. [Sec.] 11001 ET SEQ.), each as heretofore or hereafter amended or
supplemented from time to time, and any analogous future or present applicable
local, state and federal statutes and regulations promulgated pursuant thereto,
each as in effect as of the date of determination.
ENVIRONMENTAL REPORTS shall mean, collectively, the reports
and letters listed on Schedule 5 annexed hereto.
EQUIPMENT shall mean the "Equipment" as defined in the
Mortgage and, if the context so indicates, the "Equipment" relating to a
particular Mortgaged Property.
EVENT OF DEFAULT shall mean the occurrence of any event
specified in Section 501 and the continuance of any such event beyond the
expiration of any requirement in connection with such event for the giving of
notice or the lapse of time, or both.
EXCHANGE ACT shall mean the Securities Exchange Act of 1934
and any statute successor thereto, in each case as amended from time to time.
EXPIRATION DATE shall have the meaning provided in Section
104.
GOVERNMENTAL AUTHORITY shall mean any court, board, agency,
commission, office or authority of any nature whatsoever for any governmental
unit (federal, state, county, district, municipal, city or otherwise) whether
now or hereafter in existence.
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GP CORP shall mean Tucker Financing Corp., a corporation
organized under the laws of the State of Delaware, and its successors and
assigns.
HAZARDOUS SUBSTANCE shall mean (i) any chemical, material or
substance defined as or included in the definition of "hazardous wastes,"
"hazardous materials," "hazardous substance," "extremely hazardous substance,"
"pollutants," "restricted hazardous waste," or "toxic substances" or words of
similar import under any applicable Environmental Laws, (ii) any oil, petroleum
or petroleum derived substance, any drilling fluids, produced waters and other
wastes associated with the exploration, development or production of crude oil,
any flammable substances or explosives, any radioactive materials, or any other
materials which cause any Mortgaged Property to be in violation of any
applicable Environmental Laws and (iii) asbestos in any form which is friable,
urea formaldehyde foam insulation or electrical equipment which contains any oil
or dielectric fluid containing levels of polychlorinated biphenyls in excess
of fifty parts per million.
HAZARDOUS SUBSTANCE ACTIVITY shall mean any storage, holding,
existence, release, spill, leaking, pumping, pouring, injection, escaping,
deposit, disposal, dispersal, leaching, migration, use, treatment, emission,
discharge, generation, processing, abatement, removal, disposition, handling or
transportation of any Hazardous Substance from, under, into or on any Mortgaged
Property, including, without limitation, the discharge of any Hazardous
Substance emanating from any Mortgaged Property through the air, soil, surface
water, groundwater or property and also including, without limitation, the
abandonment or disposal of any barrels, containers and other closed receptacles
containing any Hazardous Substance from or on such Mortgaged Property, in each
case whether sudden or non-sudden, accidental or non-accidental; PROVIDED,
HOWEVER, that neither (i) limited quantities of Hazardous Substances used or
stored at any Mortgaged Property in all respects in compliance with applicable
Environmental Laws in connection with the normal operation, occupancy, use or
maintenance of such Mortgaged Property nor (ii) limited quantities of Hazardous
Substances sold at any Mortgaged Property in the ordinary course of business of
a seller whose activities, including such seller's storage of such Hazardous
Substances, are in all respects in compliance with applicable Environmental
Laws, shall constitute a Hazardous Substance Activity.
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<PAGE> 23
HOLDER shall mean each Person in whose name a Note is
registered in the Register.
HOLDOVER ACCOUNT shall have the meaning provided in Section
306(d).
IMPOSITIONS shall mean all real estate and personal property
taxes, water, sewer and vault charges, municipal or other permit fees and all
other taxes, levies, fees, assessments and other similar charges, general and
special, ordinary and extraordinary, foreseen and unforeseen, of every kind and
nature whatsoever, which at any time prior to, at or after the execution hereof
may be assessed, levied or imposed by, in each case, a Governmental Authority
upon a Mortgaged Property or the Rents or the ownership, use, occupancy or
enjoyment thereof, and any interest, costs or penalties with respect to any of
the foregoing.
IMPROVEMENTS shall have the meaning set forth in Section 1010.
INDEMNIFIED LIABILITIES shall have the meaning specified in
Section 1301(c).
INDEMNITEES shall mean, collectively, the Originator, KPMCC,
Kidder, the Indenture Trustee, the Pass-Through Trustee and their respective
officers, directors, agents, parents and Affiliates.
INDENTURE shall mean this instrument as originally executed
and as it may be supplemented or amended from time to time by one or more
indentures supplemental hereto entered into pursuant to the applicable
provisions hereof, including, for all purposes of this instrument, and any such
supplemental indenture, the provisions of the Trust Indenture Act that are
deemed to be a part of and govern this instrument and any such supplemental
indenture, respectively.
INDENTURE TRUSTEE shall mean the Person named as the
"Indenture Trustee" in the first paragraph of this instrument until a successor
Person or successor Persons shall have become such pursuant to the applicable
provisions of this Indenture, and thereafter "Indenture Trustee" shall mean or
include each Person who is then an Indenture Trustee hereunder.
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<PAGE> 24
INITIAL REPAIR RESERVE shall have the meaning specified in
Section 1201.
INITIAL REPAIR RESERVE ACCOUNT shall have the meaning
specified in Section 1202.
INITIAL REPAIR WORK shall mean each of the items listed on
Schedule 6 hereto.
INTEREST PAYMENT DATE shall mean, in the case of the initial
Interest Period for each Note, June 29, 1994 and, (x) in the case of each
succeeding Interest Period for each Note, the second Banking Day preceding the
first day of the following Interest Period or, (y) in the case of the final
Interest Period for each Note, the second Banking Day preceding the Maturity
Date of the Notes.
INTEREST PERIOD shall mean with respect to each Note, each
calendar month during the term of the Note or, in the case of the initial
Interest Period, the Issuance Date through the last day of the calendar month in
which the Issuance Date occurs.
INTERNAL REVENUE CODE shall mean the Internal Revenue Code of
1986, as amended from time to time, or any successor statute, and the
regulations promulgated and the rulings issued thereunder.
INSURANCE COVERAGES shall have the meaning specified in
Section 1008(r).
ISSUANCE DATE shall mean the date on which the Notes are
initially issued by the Issuer and authenticated and delivered by the Indenture
Trustee pursuant hereto.
ISSUER shall mean the Person named as the "Issuer" in the
first paragraph of this Indenture until a successor Person shall have become
such pursuant to the applicable provisions of this Indenture, and thereafter
"Issuer" shall mean such successor Person.
ISSUER'S PARTNERSHIP AGREEMENT shall mean the Partnership
Agreement of Tucker Financing Partnership dated as of October 4, 1993, between
GP Corp and the Operating Partnership, as the same may be amended, restated,
replaced, supplemented or otherwise modified from time to time.
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ISSUER REQUEST or ISSUER ORDER shall mean a written request or
order signed in the name of the Issuer by an Authorized Partner and delivered to
the Indenture Trustee.
KIDDER shall mean Kidder Peabody & Co., Incorporated, a
corporation organized under the laws of the State of New York, and its
successors and assigns.
KPAC shall mean Kidder, Peabody Acceptance Corporation I, a
corporation organized under the laws of the State of Delaware, and its
successors and assigns.
KPMCC shall mean Kidder Peabody Mortgage Capital Corporation,
a corporation organized under the laws of the State of Delaware, and its
successors and assigns.
KPMCC ASSIGNMENT shall mean the Assignment dated as of the
Original Closing Date between the Originator, as assignor, and KPMCC, as
assignee, pursuant to which the Originator assigned and transferred to KPMCC all
of the Originator's right, title and interest in, to and under the Original
Note, the Loan Agreement and the Security Documents.
LEASE shall mean any lease, or, to the extent of the interest
therein of the Issuer, any sublease or subsublease, license, concession or other
agreement (whether written or oral and whether now or hereafter in effect)
pursuant to which any person is granted a possessory interest in, or right to
use or occupy all or any portion of any space in a Mortgaged Property, and every
modification, amendment or other agreement relating to such lease, sublease,
subsublease, or other agreement entered into in connection with such lease,
sublease, subsublease, or other agreement and every guarantee of the performance
and observance of the covenants, conditions and agreements to be performed and
observed by the other party thereto.
LEGAL RATE shall have the meaning specified in Section 310(e).
LEGAL REQUIREMENTS shall mean any and all present and future
judicial and administrative rulings or decisions, and any and all present and
future federal, state and local laws, ordinances, rules, regulations, permits
and certificates of any Governmental Authority, in each case in any way
applicable to the Issuer or the
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Mortgaged Property (or the ownership or use thereof), excluding any
Environmental Laws.
LOAN AGREEMENT shall mean the Loan Agreement dated as of the
Original Closing Date between the Originator, as lender thereunder, and the
Issuer, as borrower thereunder, and assigned and transferred by the Originator
to KPMCC pursuant to the Loan Purchase Agreement and the KPMCC Assignment, which
Loan Agreement shall be replaced by, and terminated contemporaneously with the
execution and delivery of, this Indenture.
LOAN PURCHASE AGREEMENT shall mean the Loan Purchase Agreement
dated as of the Original Closing Date between the Originator and KPMCC, as the
same may be amended, restated, replaced, supplemented or otherwise modified from
time to time.
MAINTENANCE AND CAPITAL IMPROVEMENT RESERVE shall have the
meaning specified in Section 1201.
MAINTENANCE AND CAPITAL IMPROVEMENT RESERVE ACCOUNT shall have
the meaning specified in Section 1203.
MAINTENANCE AND CAPITAL IMPROVEMENT EXPENDITURES shall mean
any expenditures made by the Issuer in respect of a Mortgaged Property for the
maintenance, repair, painting or decoration of such Mortgaged Property or for
capital improvements in respect of such Mortgaged Property.
MANAGEMENT AGREEMENT shall mean the Management Agreement dated
as of the Original Closing Date, between the Issuer and the Operating
Partnership, as Manager, as the same may be amended, restated, replaced,
supplemented or otherwise modified from time to time.
MANAGER shall have the meaning specified in Section 1008(n).
MATERIAL ADVERSE EFFECT shall mean any circumstance or event
that (i) has or could reasonably be expected to have a material adverse effect
on the validity, priority, perfection or enforceability of the Transaction
Documents or any of them, (ii) has or could reasonably be expected to have a
material adverse effect on the prospect of timely payment of interest and
principal of the Notes or on the value of, or the Indenture Trustee's ability to
have recourse as set forth in the Transaction Documents against, any Mortgaged
Property or any material portion thereof.
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MATURITY DATE shall mean with respect the Notes, the date on
which the final payment of principal of, and Yield Maintenance Charge, if any,
on the Notes becomes due and payable as therein and herein provided, whether at
its Stated Maturity, by declaration of acceleration, or otherwise.
MORTGAGE shall mean that certain first priority Mortgage,
Security Agreement, Fixture Filing Statement, Assignment of Leases and Rents and
Financing Statement dated as of the Original Closing Date between the Issuer, as
mortgagor, and the Originator, as mortgagee, and assigned and transferred by the
Originator to KPMCC pursuant to the KPMCC Assignment, and in turn assigned and
transferred by KPMCC to the Indenture Trustee pursuant to the Security Documents
Assignment, a copy of which Mortgage is annexed hereto as Exhibit B, as the same
may be amended, restated, replaced, supplemented or otherwise modified from time
to time, which Mortgage has been placed of record as an Encumbrance upon each
Mortgaged Property.
MORTGAGED PROPERTIES shall mean, collectively, each Mortgaged
Property then subject to the liens and Encumbrances created by the Mortgage.
MORTGAGED PROPERTY shall mean, individually, any one of the
six (6) properties listed on Schedule 1 annexed hereto then encumbered by the
Mortgage, as more particularly described in the Mortgage, including, without
limitation, all right, title and interest of the Issuer in all Real Property,
fixtures, improvements, Equipment and Personalty relating thereto and all other
items described in the Granting Clauses of the Mortgage in respect thereof.
NET OPERATING INCOME AVAILABLE FOR DEBT SERVICE shall mean,
with respect to any Calculation Period, the Operating Income for such
Calculation Period MINUS the Operating Expenses for such Calculation Period.
NEW NOTE shall have the meaning specified in Section 312.
NOTE AND NOTES shall have the respective meanings set forth in
the Recitals of this Indenture, each such Note to be substantially in the form
of Exhibit A annexed hereto.
OBLIGATIONS shall mean all present and future indebtedness,
obligations and liabilities, and all renewals
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and extensions thereof, now or hereafter owing to the Holders of Notes, the
Indenture Trustee and the Servicer pursuant to this Indenture, the Notes and the
Security Documents, together with any costs, expenses or attorney's fees
incurred in the enforcement or collection thereof, regardless of whether such
indebtedness, obligations and liabilities are direct, indirect, fixed, absolute,
contingent, liquidated or unliquidated.
OFFICER'S CERTIFICATE shall mean a non-recourse certificate
signed by the Authorized Partner or in the case of a successor Person to the
Issuer which is not a partnership, a certificate signed by a person or persons
of similar authority and responsibility, and delivered to the Indenture Trustee.
OPERATING AGREEMENTS shall mean, collectively, the operating
agreements and reciprocal easement agreements listed on Schedule 3 and, with
respect to future operating agreements or reciprocal easement agreements, any
agreement between Issuer and one or more owners or operators of buildings
adjacent to or comprising a part of a Mortgaged Property, which agreement
contains an operating covenant.
OPERATING EXPENSES shall mean all expenses paid in cash and
incurred by or on behalf of the Issuer in connection with or arising out of the
ownership, operation or use of the Mortgaged Properties, including, without
limitation, the following:
(i) expenses normally incurred in connection with the
operation of properties similar in character and use to each Mortgaged
Property in the jurisdiction of its location, including cleaning,
repair, maintenance, management, leasing, decoration or painting of
such Mortgaged Property or the provision of services to any tenant;
(ii) wages, benefits, payroll taxes, uniforms, insurance
costs, and all other related expenses incurred for on-site building
personnel, up to and including the level of the on-site building
manager, engaged in cleaning, repair, maintenance, management,
leasing, decoration or painting of each Mortgaged Property or the
provision of services to any tenant;
(iii) costs incurred for all electricity, oil, gas, water,
steam, heat, ventilation, air-conditioning and any other energy,
telecommunications, utility or
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similar item, including without limitation, overtime usage, and the
cost of building and cleaning supplies or the payment of any amount
therefor to others on behalf of any tenant;
(iv) premiums for liability, casualty, fidelity, business
interruption, loss of "rental value" and other insurance required by
the Transaction Documents, any Anchor Lease, any Operating Agreement or
any reciprocal easement agreement or the payment of any amount therefor
to others on behalf of any tenant;
(v) legal, accounting and auditing fees, expenses and
disbursements;
(vi) Impositions;
(vii) TI Amortization Amounts; and
(viii) all other expenses paid in cash which in accordance with
generally accepted accounting principles consistently applied would be
included in the Issuer's financial or operating statements for such
period as operating expenses of a Mortgaged Property.
Notwithstanding the foregoing, Operating Expenses shall not
include (a) depreciation or other non-cash items (other than TI Amortization
Amounts), (b) except to the extent the same is included in Operating Income, any
item of expense which would otherwise be considered within Operating Expenses
pursuant to the provisions above but is paid or to be paid by any tenant and not
reimbursed by the Issuer or is paid by the Issuer from forfeited tenant security
deposits, (c) any income or similar taxes on the income of the Issuer, (d)
interest, principal or Yield Maintenance Charges payable in respect of the Notes
and (e) any amounts required to be deposited in any Reserve Account.
OPERATING INCOME shall mean all income and revenues received
in cash by the Issuer in connection with or arising out of the ownership,
operation or use of the Mortgaged Properties and from the Leases, including,
without limitation, the following:
(i) all amounts earned as rent, additional rent, percentage
rent, charges for electricity, oil, gas, water, steam, heat,
ventilation, air-conditioning, and
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any other energy, telecommunications, utility or similar items,
including without limitation, overtime usage, escalation charges,
license fees, maintenance fees, charges for improvements, Impositions
and other amounts payable to the Issuer pursuant to Leases entered into
in accordance with the Transaction Documents;
(ii) condemnation proceeds under a temporary (and not a permanent)
taking to the extent that such proceeds are compensation for lost rent;
(iii) real estate tax refunds;
(iv) business interruption and loss of "rental value" insurance
proceeds; and
(v) all other amounts received in cash in respect of items
which in accordance with generally accepted accounting principles
consistently applied would be included in the financial statements for
a Mortgaged Property as operating income or in respect of the Leases.
Notwithstanding the foregoing, Operating Income shall not include (v) any
condemnation proceeds, except to the extent that such proceeds are compensation
for lost rent and relate to a temporary and not a permanent taking of the
Mortgaged Property, (w) insurance proceeds, unless (and except to the extent
that) such proceeds are characterized as business interruption or loss of
"rental value" insurance proceeds, (x) any proceeds resulting from the sale,
exchange, transfer, financing or refinancing of all or any part of a Mortgaged
Property, regardless of whether such sale, exchange, transfer, financing or
refinancing was permitted or not permitted pursuant to the Transaction
Documents, (y) any rent accrued by the Issuer but not received because of any
free rent provisions or other rental concessions in any Lease, and (z) forfeited
security deposits and other security deposits received.
OPERATING PARTNERSHIP shall mean Tucker Operating Limited
Partnership, a limited partnership organized under the laws of the State of
Delaware, and its successors and assigns.
OPINION OF COUNSEL shall mean a written opinion
of counsel, who shall be selected by the Issuer (unless
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such selection is reasonably disapproved by Indenture Trustee).
OP'S PARTNERSHIP AGREEMENT shall mean the Agreement of Limited
Partnership of Tucker Operating Limited Partnership, dated as of October 4,
1993, between the REIT as sole general partner and Kenneth L. Tucker, Richard H.
Tucker and such other persons as are party thereto as limited partners, as the
same may be amended, restated, replaced, supplemented or otherwise modified from
time to time.
ORIGINAL CLOSING DATE shall mean October 12, 1993.
ORIGINAL NOTE shall mean the mortgage note dated the Original
Closing Date in the aggregate principal stated amount of $100,000,000 issued by
the Issuer to the Originator pursuant to the Loan Agreement and assigned and
transferred by the Originator to KPMCC pursuant to the Loan Purchase Agreement
and the KPMCC Assignment, which Original Note shall be surrendered to the Issuer
for cancellation simultaneously with the execution, authentication and delivery
of the Notes pursuant to this Indenture.
ORIGINATOR shall mean Value Line Mortgage Corporation, a
corporation organized under the laws of Pennsylvania, and its successors and
assigns.
OUTSTANDING, when used with respect to any Notes, shall mean,
as of the date of determination, any Note theretofore authenticated and
delivered under this Indenture, EXCEPT:
(i) Notes theretofore cancelled by the Indenture Trustee or
delivered to the Indenture Trustee for cancellation;
(ii) Notes for which payment or redemption in full in the
necessary amount has been deposited with or irrevocably conveyed to
the Indenture Trustee in trust for the Holders of such Notes in
accordance with this Indenture; provided that if such Notes are to be
redeemed, notice of such redemption has been duly given pursuant to
this Indenture or provision therefor satisfactory to the Indenture
Trustee has been made; and
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(iii) Notes in exchange for or in lieu of which other Notes have
been authenticated and delivered pursuant to this Indenture, other than
any such Notes in respect of which there shall have been presented to
the Indenture Trustee proof satisfactory to it that such Notes are held
by a bona fide purchaser in whose hands such Notes are valid
obligations of the Issuer;
PROVIDED, HOWEVER, that in determining whether the Holders of the requisite
principal amount of the Outstanding Notes have given any request, demand,
authorization, vote, direction, notice, consent or waiver hereunder, Notes owned
by the Issuer, any other obligor upon the Notes, or an Affiliate of the Issuer
or any such other obligor, shall be disregarded and deemed not to be
Outstanding, except that, in determining whether the Indenture Trustee shall be
protected in relying upon any such request, demand, authorization, vote,
direction, notice, consent or waiver, only Notes which the Indenture Trustee
knows to be so owned shall be so disregarded. Notes so owned which have been
pledged in good faith may be regarded as Outstanding if the pledgee delivers
notice in writing to the Indenture Trustee of the pledgee's right to act with
respect to such Notes and that the pledgee is not the Issuer, any other obligor
upon the Notes, or an Affiliate of the Issuer or any such other obligor.
PASS-THROUGH CERTIFICATES shall mean the Commercial Mortgage
Pass-Through Certificates, Series 1994-C2, issued pursuant to the Trust and
Servicing Agreement.
PASS-THROUGH TRUSTEE shall mean the trustee under the Trust
and Servicing Agreement, and its successors and assigns.
PAYING AGENT shall mean any Person authorized by the Issuer
pursuant to Section 314 to pay the principal of and interest on any Notes on
behalf of the Issuer.
PAYMENT ACCOUNT shall have the meaning specified in Section
306(a).
PERMITTED DEBT shall mean (i) the Notes and the other
obligations, indebtedness and liabilities evidenced and secured by the
Transaction Documents; (ii) amounts, not secured by any Mortgaged Property,
payable by or on behalf of the Issuer, within 90 days following receipt of a
proper invoice or statement in respect thereof, for or in respect of the
operation of the Mortgaged Properties in the
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ordinary course of operating the Issuer's business, including amounts payable by
or on behalf of the Issuer to suppliers, contractors, mechanics, vendors,
materialmen or other persons providing property or services to the Issuer or to
the Mortgaged Properties, or in connection with the operation, leasing,
cleaning, maintaining, or repair thereof incurred, in each case, in the ordinary
course of operating the Issuer's business; and (iii) amounts, not secured by any
Mortgaged Property, payable or reimbursable, within 90 days following receipt of
a proper invoice or statement in respect thereof, to any tenant on account of
work performed at a Mortgaged Property by or on behalf of such tenant or for
costs incurred by such tenant in connection with its occupancy of space at a
Mortgaged Property.
PERMITTED ENCUMBRANCES shall mean, collectively, the
"Permitted Encumbrances" as defined in the Mortgage and, if the context so
indicates, the "Permitted Encumbrances" relating to a particular Mortgaged
Property.
PERMITTED TRANSFER shall mean the following:
(i) With respect to the Issuer's interest in the Mortgaged
Property, the transactions contemplated or otherwise permitted pursuant
to the terms of the Transaction Documents shall constitute Permitted
Transfers of the Mortgaged Property.
(ii) With respect to the 1.0% general partnership interest of
GP Corp in the Issuer, no transfer, pledge or hypothecation of such
interest or any portion thereof shall be a Permitted Transfer.
(iii) With respect to the 99% general partnership interest of
the Operating Partnership in the Issuer, transfers of any portion of
such interest to the REIT shall constitute Permitted Transfers, and no
other transfer, pledge or hypothecation of such interest or any
portion thereof shall be a Permitted Transfer.
(iv) With respect to the 100% shareholder interest of the REIT
in GP Corp, no transfer, pledge or hypothecation of such interest or
any portion thereof shall be a Permitted Transfer.
(v) With respect to the 4.1% limited partnership interest of
the limited partners in the Operating Partnership, any transfer,
pledge or hypothecation of
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any portion of such interest shall be a Permitted Transfer.
(vi) With respect to the 95.9% partnership interest of the
REIT in the Operating Partnership, no transfer, pledge or
hypothecation of such interest or any portion thereof shall be a
Permitted Transfer, except that (i) the issuance of additional
partnership interests in the Operating Partnership and (ii) any
transfer of limited partnership interests in the Operating
Partnership, shall be deemed Permitted Transfers to the extent that
after giving effect to any such issuance or transfer the REIT shall
own not less than 51% of the aggregate partnership interests in the
Operating Partnership.
PERSON shall mean an individual, corporation, company,
partnership, trust, joint stock company, joint venture, unincorporated
association, government, Governmental Authority or other entity.
PERSONALTY shall mean the "Personalty" as defined in the
Mortgage and, if the context so indicates, the "Personalty" relating to a
particular Mortgaged Property.
PREDECESSOR NOTE of any particular Note shall mean every
previous Note evidencing all or a portion of the same indebtedness as that
evidenced by such particular Note and, for the purposes of this definition, any
Note authenticated and delivered under Section 309 in exchange for or in lieu of
a mutilated, destroyed, lost or stolen Note shall be deemed to evidence the same
debt as the mutilated, destroyed, lost or stolen Note.
QUALIFIED ENGINEERING CONSULTANT shall mean an engineering
consultant selected by the Issuer (i) having all licenses, registrations and/or
certifications required to act as such in the jurisdiction in which the relevant
Mortgaged Property is located, and (ii) reasonably acceptable to the Servicer.
QUALIFIED ENVIRONMENTAL CONSULTANT shall mean an environmental
consultant selected by the Issuer (i) having all licenses, registrations and/or
certifications required to act as such in the jurisdiction in which the relevant
Mortgaged Property is located and (ii) reasonably acceptable to Servicer.
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RATED INSURANCE CARRIER means (i) an insurance carrier with a
claims paying ability rating of at least "AA-" or better from S&P and, if rated
by D&P, of at least "A" or better from D&P and (ii) any other insurance carrier
approved in writing by each Rating Agency.
RATING AGENCIES shall mean, at any time, collectively, each
nationally recognized credit rating agency that has issued a credit rating in
respect of the Notes at the request of the Issuer or KPAC.
REAL PROPERTY shall mean the "Real Property" as defined in the
Mortgage and, if the context so indicates, the "Real Property" relating to a
particular Mortgaged Property.
REDEMPTION DATE shall have the meaning specified in Section
1101.
REDEMPTION PRICE shall have the meaning specified in Section
1102.
REGISTER and NOTE REGISTRAR shall have the respective meanings
provided in Section 308(a).
REGULAR RECORD DATE for the interest payable on any Interest
Payment Date for the Notes shall mean the fifth Banking Day next preceding such
Interest Payment Date.
REIT means Tucker Properties Corporation, a corporation
organized under the laws of Maryland, and its successors and assigns.
REIT DOCUMENTS shall mean, (i) the Articles of Incorporation
of the REIT and (ii) the By-Laws of the REIT.
RELATED DOCUMENTS shall mean, collectively, the Issuer's
Partnership Agreement, the OP's Partnership Agreement, the Contribution
Agreements, the REIT Documents, the Trust and Servicing Agreement, the
Underwriting Agreement, the certificate of incorporation and by-laws of GP Corp,
the Management Agreement, the Original Note and the Loan Agreement.
RENT COLLECTION ACCOUNT shall have the meaning specified in
Section 1008(p).
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RENT ROLLS shall have the meaning specified in Section
1001(m)(ii).
RENTS shall mean the "Rents" as defined in the Mortgage and,
if the context so indicates, the "Rents" relating to a particular Mortgaged
Property.
RESERVES shall mean the Initial Repair Reserve, the Arthur
Andersen Reserve, the Maintenance and Capital Improvement Reserve and the Credit
Enhancement Reserve.
RESERVE ACCOUNTS shall mean the Initial Repair Reserve
Account, the Arthur Andersen Reserve Account, the Maintenance and Capital
Improvement Reserve Account and the Credit Enhancement Reserve Account. Each
Reserve Account shall be established and maintained as an Eligible Account.
RESPONSIBLE OFFICER, when used with respect to the Indenture
Trustee, shall mean any officer of the Indenture Trustee customarily performing
functions with respect to corporate trust matters and also means, with respect
to a particular corporate trust matter, any other officer to whom such matter is
referred because of such officer's knowledge of and familiarity with the
particular subject.
SECURITIES ACT shall mean the Securities Act of 1933 and any
statute successor thereto, in each case as amended from time to time.
SECURITY DOCUMENTS shall mean, collectively, the Mortgage, the
Assignment of Leases, the Assignment of Management Agreement, the Environmental
Indemnity, any Uniform Commercial Code financing statements executed in
connection therewith and any additional documents executed by the Issuer in
connection therewith or with the Notes.
SECURITY DOCUMENTS ASSIGNMENT shall mean the Assignment dated
the date hereof between KPMCC, as assignor, in favor of the Indenture Trustee,
as assignee, for the benefit of the Holders of the Notes, substantially in the
form of Exhibit F, annexed hereto, as the same may be amended, restated,
replaced, supplemented or otherwise modified from time to time.
SERVICER means the Person named as the "Servicer" in the first
paragraph of this Indenture until a successor Person or successor Persons shall
have become such pursuant to the applicable provisions of this Indenture and The
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Trust and Servicing Agreement, and thereafter "Servicer" shall mean or include
each Person who is then the Servicer hereunder and thereunder.
S&P shall mean Standard & Poor's Rating Group.
SPECIAL RECORD DATE for the payment of any Defaulted Interest
shall mean a date fixed pursuant to Section 311.
STATED MATURITY shall have the meaning specified in Section
301.
TI AMORTIZATION AMOUNTS shall mean, with respect to any
Calculation Period, the portion of all tenant improvement expenses, leasing
commissions and other tenant leasing inducements in respect of the Mortgaged
Properties that are not subject to reimbursement by tenants and are allocable to
such Calculation Period based upon a three-year straight line amortization of
all such non-reimbursable tenant improvement expenses and leasing commissions
incurred subsequent to October 1, 1990.
TITLE COMPANY shall mean, collectively, Commonwealth Land
Title Insurance Company and each other title insurer insuring the liens of a
Mortgage upon any Mortgaged Property, and their respective successors and
assigns.
TITLE INSURANCE POLICY shall mean with respect to each
Mortgaged Property, the mortgagee title insurance policy or policies issued by
the Title Company in accordance with the commitments therefor issued on the
Original Closing Date with respect to such Mortgaged Property and insuring the
lien of the Mortgage encumbering such Mortgaged Property subject only to the
Permitted Encumbrances and containing the endorsements and affirmative
assurances required by such commitments.
TRANSACTION DOCUMENTS shall mean, collectively, this
Indenture, the Notes and the Security Documents.
TRANSFER AGENT shall have the meaning specified in Section
314.
TREASURY RATE shall mean the yield per annum calculated by the
linear interpolation of the yield, as reported in Federal Reserve Statistical
Release H.15-Selected Interest Rates under the heading "U.S.
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government securities/ Treasury constant maturities" for the week ending prior
to the date of the relevant redemption of any Note, of U.S. Treasury constant
maturities with a maturity date (one longer and one shorter) most nearly
approximating the maturity date of the Note being redeemed. In the event Release
H.15 is no longer published, the Indenture Trustee shall select a comparable
publication to determine the Treasury Rate.
TRUST AND SERVICING AGREEMENT shall mean the Trust and
Servicing Agreement dated as of the date hereof among KPAC, the Servicer and the
Pass-Through Trustee for the purpose of issuing the Pass-Through Certificates
backed by, and/or representing interests in, the Notes, as the same may be
amended, restated, replaced, supplemented or otherwise modified from time to
time.
TRUST ESTATE shall mean, collectively, each "Mortgaged
Property" under and defined in the Mortgage and all monies, accounts,
instruments and other property now or hereafter subject or intended to be
subject to this Indenture, the Notes or any of the Security Documents or
constituting a part of the security for the Holders of the Notes or the
performance by the Issuer of its obligations thereunder or hereunder or under
any of the Security Documents as of any particular time, including all property
subject to the security interests evidenced by the Security Documents (including
the after-acquired property clauses thereof) and all amounts in the Rent
Collection Account and the Reserve Accounts and any other property that is
conveyed or pledged to the Indenture Trustee, from time to time, for the benefit
of the Holders of the Notes.
TRUST INDENTURE ACT shall mean the Trust Indenture Act of
1939, as amended, as in force at the date as of which this instrument was
executed; PROVIDED, HOWEVER, that in the event the Trust Indenture Act of 1939
is amended after such date, "Trust Indenture Act" means, to the extent required
by any such amendment, the Trust Indenture Act of 1939 as so amended.
UCC or UNIFORM COMMERCIAL CODE shall mean the Uniform
Commercial Code as in effect in a State.
UNDERWRITING AGREEMENT shall mean the Underwriting Agreement dated
May 11, 1993 between KPAC and Kidder relating to the offering and sale of the
Pass-Through Certificates, as such agreement may be amended,
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restated, replaced, supplemented or otherwise modified from time to time.
YIELD MAINTENANCE CHARGE shall mean, with respect to any
prepayment of principal of a Note, whether in whole or in part and whether
voluntary or mandatory (including, without limitation, by reason of an
acceleration or redemption), an amount equal to the greater of (A) one percent
(1%) of the amount of the principal balance of the Note being prepaid, or (B)
the product of (i) a fraction whose numerator is an amount equal to the portion
of the principal balance of the Note being prepaid and whose denominator is the
outstanding principal balance of such Note on the date of such prepayment
(before giving effect to such prepayment), multiplied by (ii) an amount equal to
the remainder obtained by subtracting (x) an amount equal to the entire
outstanding principal balance of the Note as of the date of such prepayment
(before giving effect to such prepayment) from (y) the present value as of the
date of such prepayment of the remaining scheduled payments of principal and
interest on the Note (before giving effect to such prepayment) determined by
discounting such payments at the Discount Rate. The calculation of the Yield
Maintenance Charge shall be made by the Indenture Trustee and shall, absent
manifest error, be final, conclusive and binding upon all parties.
SECTION 102. Compliance Certificates and Opinions.
Upon any application or request by the Issuer to the Indenture
Trustee or the Servicer to take any action under any provision of this
Indenture, the Issuer shall furnish to the Indenture Trustee or the Servicer, as
the case may be, such certificates and opinions as may be required under the
Trust Indenture Act. Each such certificate or opinion shall be given in the form
of an Officer's Certificate, if to be given by the Authorized Partner, or an
Opinion of Counsel, if to be given by counsel, and shall comply with the
requirements of the Trust Indenture Act and any other requirements set forth in
this Indenture.
Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture (except for certificates
provided for in Section 1006) shall include:
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(1) a statement that each individual signing such certificate
or opinion has read such covenant or condition and the definitions
herein relating thereto;
(2) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
(3) a statement that, in the opinion of each such individual,
he has made such examination or investigation as is necessary to enable
him to express an informed opinion as to whether or not such covenant
or condition has been complied with; and
(4) a statement as to whether, in the opinion of each such
individual, such condition or covenant has been complied with.
SECTION 103. Form of Documents Delivered to Indenture Trustee
------------------------------------------------
or the Servicer.
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In any case where several matters are required to be certified
by any specified Person, it is not necessary that all such matters be certified
by only one such Person, or that they be so certified by only one document, but
one such Person may certify with respect to some matters and one or more other
such Persons may certify with respect to other matters, and any such Persons may
certify as to such matters in one or several documents.
Any certificate or opinion of the Authorized Partner of the
Issuer may be based, insofar as it relates to legal matters, upon a certificate
or opinion of, or representations by, counsel, unless the officer of such
Authorized Partner knows, or had reasonable grounds to believe, that the
certificate or opinion or representations with respect to the matters upon which
his certificate or opinion is based are erroneous. Any such certificate or
opinion of counsel may be based, insofar as it relates to factual matters, upon
a certificate or opinion of, or representations by, partners in the Issuer or
partners in or officers of such partners, stating that the information with
respect to such factual matters is in the possession of the Issuer, unless such
counsel knows, or in the exercise of reasonable care should know, that the
certificate or opinion or representations with respect to such matters are
erroneous.
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Where any Person is required to make, give or execute two or
more applications, requests, consents, certificates, statements, opinions or
other instruments under this Indenture, they may, but need not, be consolidated
and form one instrument.
SECTION 104. Acts of Holders.
---------------
(a) Any request, demand, authorization, direction, notice,
consent, waiver or other action provided by this Indenture or any other
Transaction Document to be given or taken by Holders may be embodied in and
evidenced by one or more instruments of substantially similar tenor signed by
such Holders in person or by an agent duly appointed in writing which agent
shall be deemed to be the Servicer so long as the Pass-Through Trustee is the
Holder (and the Trust and Servicing Agreement shall be sufficient evidence of
such appointment). Except as herein otherwise expressly provided, such action
will become effective when such instrument or instruments are delivered to the
Indenture Trustee, and, where it is expressly required, to the Issuer. Such
instrument or instruments (and the action embodied therein and evidenced
thereby) are herein sometimes referred to as the "ACT" of the Holders signing
such instrument or instruments. Proof of execution of any such instrument or of
a writing appointing any such agent or proxy, or of the holding by any Person of
a Note, shall be sufficient for any purpose of this Indenture or any other
Transaction Documents and (subject to Section 601) conclusive in favor of the
Indenture Trustee and the Issuer, if made in the manner provided in this
Section.
(b) The fact and date of the execution by any Person of any
such instrument or writing may be proved by the affidavit of a witness of such
execution or by a certificate of a notary public or other officer authorized by
law to take acknowledgments of deeds, certifying that the individual signing
such instrument or writing acknowledged to him the execution thereof. Where such
execution is by a signer acting in a capacity other than his individual
capacity, such certificate or affidavit shall also constitute sufficient proof
of his authority. The fact and date of the execution of any such instrument or
writing, or the authority of the Person executing the same, may also be proved
in any other manner which the Indenture Trustee deems sufficient.
(c) The Issuer may set any day as a record date for the
purpose of determining the Holders of Outstanding
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Notes entitled to give, make or take any request, demand, authorization,
direction, notice, consent, waiver or other action provided or permitted by this
Indenture to be given, made or taken by Holders of Notes, PROVIDED that the
Issuer may not set a record date for, and the provisions of this paragraph shall
not apply with respect to, the giving or making of any notice, declaration,
request or direction referred to in the immediately succeeding paragraph. If any
record date is set pursuant to this paragraph, the Holders of Outstanding Notes
on such record date, and no other Holders, shall be entitled to take the
relevant action, whether or not such Holders remain Holders after such record
date; PROVIDED that no such action shall be effective hereunder unless taken on
or prior to the applicable Expiration Date by Holders of the requisite principal
amount of Outstanding Notes on such record date. Nothing in this paragraph shall
be construed to prevent the Issuer from setting a new record date for any action
for which a record date has previously been set pursuant to this paragraph
(whereupon the record date previously set shall automatically and with no action
by any Person be cancelled and of no effect), and nothing in this paragraph
shall be construed to render ineffective any action taken by Holders of the
requisite principal amount of Outstanding Notes on the date such action is
taken. Promptly after any record date is set pursuant to this paragraph, the
Issuer, at its own expense, shall cause notice of such record date, the proposed
action by Holders and the applicable Expiration Date to be given to the
Indenture Trustee in writing and to each Holder of Notes in the manner set forth
in Section 106.
The Indenture Trustee shall take the most recent record date
for the purpose of determining the Holders of Outstanding Notes entitled to join
in the giving or making of (i) any notice of Default, (ii) any declaration of
acceleration referred to in Section 502, (iii) any request to institute
proceedings referred to in Section 507(2) or (iv) any direction referred to in
Section 512. The Holders of Outstanding Notes on such record date, and no other
Holders, shall be entitled to join in such notice, declaration, request or
direction, whether or not such Holders remain Holders after such record date;
PROVIDED that no such action shall be effective hereunder unless taken on or
prior to the applicable Expiration Date by Holders of the requisite principal
amount of Outstanding Notes on such record date. Promptly after the record date
is set pursuant to this paragraph, the Indenture Trustee, at the Issuer's
expense, shall cause notice of such record date, the proposed action by Holders
and the applicable
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Expiration Date to be given to the Issuer in writing and to each Holder of Notes
in the manner set forth in Section 106.
With respect to any record date set pursuant to this Section,
the party hereto which sets such record dates may designate any day as the
"EXPIRATION DATE" and from time to time may change the Expiration Date to any
earlier or later day; PROVIDED that no such change shall be effective unless
notice of the proposed new Expiration Date is given to the other party hereto in
writing, and to each Holder of Notes in the manner set forth in Section 106, on
or prior to the existing Expiration Date. If an Expiration Date is not
designated with respect to any record date set pursuant to this Section, the
party hereto which set such record date shall be deemed to have initially
designated the 180th day after such record date as the Expiration Date with
respect thereto, subject to its right to change the Expiration Date as provided
in this paragraph. Notwithstanding the foregoing, no Expiration Date shall be
later than the 180th day after the applicable record date.
(d) Any request, demand, authorization, direction, notice,
consent, waiver or other Act of the Holder of any Note shall bind every future
Holder of the same Note and the Holder of every Note issued upon the
registration of transfer thereof or in exchange therefor or in lieu thereof in
respect of anything done, omitted or suffered to be done by the Indenture
Trustee or the Issuer in reliance thereon, whether or not notation of such
action is made upon such Note.
(e) If this Indenture (i) does not specify what percentage of
the Holders of the Notes shall be entitled or required to give or take any
request, demand, authorization, direction, notice, consent, waiver or other
action hereunder, or (ii) specifies that any such action is to be taken by the
"OUTSTANDING NOTES", such reference shall require such action to be taken by all
of the Holders of the Notes.
SECTION 105. Notices to the Indenture Trustee, the Servicer
----------------------------------------------
and the Issuer.
- --------------
Any request, demand, authorization, direction, notice,
consent, waiver or Act of or by the Holders or other document provided or
permitted by this Indenture to be made upon, given or furnished to, or filed
with,
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(1) the Indenture Trustee or the Servicer shall be sufficient
for every purpose hereunder if in writing and sent by telefax, by hand
delivery, or by registered or certified mail, return receipt requested,
postage prepaid or by overnight courier service, to the Indenture
Trustee at its Corporate Trust Office (in the case of delivery to the
Indenture Trustee) and to the Servicer at the address set forth in the
first paragraph of this Indenture (in the case of delivery to the
Servicer), or
(2) the Issuer shall be sufficient for every purpose hereunder
if in writing and sent by telefax, or by hand delivery, or by
registered or certified mail, return receipt requested, postage prepaid
or by overnight courier service, to the Issuer addressed to it at the
address specified in the first paragraph of this Indenture, or at any
other address furnished in writing to the Indenture Trustee or the
Servicer by the Issuer.
SECTION 106. Notice to the Holders of the Notes; Waiver.
------------------------------------------
Where this Indenture provides for notice to the Holders of the
Notes, such notice shall be sufficiently given (unless otherwise herein
expressly provided) if in writing and mailed, first-class postage prepaid, to
each Holder affected by such event, at his address as it appears in the
Register, not later than the latest date (if any), and not earlier than the
earliest date (if any), prescribed for the giving of such notice. In any case
where notice to Holders is given by mail, neither the failure to mail such
notice, nor any defect in any notice so mailed, to any particular Holder shall
affect the sufficiency of such notice with respect to other Holders. Where this
Indenture provides for notice in any manner, such notice may be waived in
writing by the Person entitled to receive such notice, either before or after
the event, and such waiver shall be the equivalent of such notice. Waivers of
notice by Holders of Notes shall be filed with the Indenture Trustee, but such
filing shall not be a condition precedent to the validity of any action taken in
reliance upon such waiver.
In case by reason of the suspension of regular mail service or
by reason of any other cause it shall be impracticable to give such notice by
mail, then such notification as shall be made with the approval of the Inden-
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ture Trustee shall constitute a sufficient notification for every purpose
hereunder.
All requests, demands, authorizations, directions, notices,
consents, waivers and other communications required or permitted under this
Indenture shall be in writing in the English language.
SECTION 107. Conflict with Trust Indenture Act.
---------------------------------
If any provision hereof limits, qualifies or conflicts with a
provision of the Trust Indenture Act that is required under such Act to be a
part of and govern this Indenture, the required provision shall control. If any
provision of this Indenture modifies or excludes any provision of the Trust
Indenture Act that may be so modified or excluded, such provisions of the Trust
Indenture Act shall be deemed to apply to this Indenture as so modified or
excluded, as the case may be.
SECTION 108. Effects of Headings and Table of Contents.
-----------------------------------------
The Article and Section headings hereof and the Table of
Contents are for convenience of reference only and shall not affect the
construction hereof.
SECTION 109. Successors and Assigns.
----------------------
All covenants and agreements in this Indenture by the Issuer
shall bind its successors and assigns, whether so expressed or not.
SECTION 110. Separability Clause.
-------------------
In case any provision of this Indenture or of the Notes or any
Security Document shall be invalid, illegal or unenforceable, the validity,
legality and enforceability of the remaining provisions shall not in any way be
affected or impaired thereby.
SECTION 111. Benefits of Indenture.
---------------------
Nothing in this Indenture or in the Notes or any Security
Document, express or implied, shall give to any Person, other than the parties
hereto and thereto, their successors hereunder and thereunder and the Holders of
the Notes any benefit or any legal or equitable right, remedy or claim under
this Indenture or any Security Document.
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SECTION 112. Governing Law; Jurisdiction.
---------------------------
(a) This Indenture, the Notes and the obligations arising
hereunder and thereunder shall be governed by, and construed in accordance with,
the laws of the State of Illinois applicable to contracts made and performed in
such State and any applicable law of the United States of America, except that
at all times the provisions for the creation, perfection, and enforcement of the
liens and security interests created pursuant hereto and pursuant to the
Security Documents shall be governed by and construed according to the law of
the State in which the applicable Mortgaged Property is located, it being
understood that, to the fullest extent permitted by the law of such State, the
law of the State of Illinois shall govern the validity and the enforceability of
all Security Documents and all of the indebtedness or obligations arising
hereunder or thereunder. To the fullest extent permitted by law, the Issuer
hereby unconditionally and irrevocably waives any claim to assert that the law
of any other jurisdiction governs this Indenture and the Notes.
(b) To the extent permitted by applicable law, any action or
proceeding against any of the parties hereto relating in any way to this
Indenture or any Note may be brought and enforced in any federal or state court
in Chicago, Illinois or New York, New York and the Issuer irrevocably submits to
the jurisdiction of each such court in respect of any such action or proceeding.
The Issuer hereby agrees to venue in such courts and hereby waives, to the
fullest extent permitted by law, any claim that any such action or proceeding
was brought in an inconvenient forum. As long as any of the Notes remain
Outstanding, the Issuer hereby irrevocably appoints GP Corp, with an office at
40 Skokie Boulevard, Northbrook, Illinois 60062-7626, as its authorized agent
for service of process in any legal action or proceeding relating in any way to
this Indenture or any Note. Service of process upon such agent and written
notice of such notice mailed or delivered to the Issuer in the manner provided
in this Indenture shall, to the fullest extent permitted by law, be deemed in
every respect effective service upon the Issuer in any such legal action or
proceeding.
SECTION 113. Legal Holidays.
--------------
In any case where any Interest Payment Date, Redemption Date
or Maturity Date of any Note shall not be a Banking Day, then (notwithstanding
any other provision of
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this Indenture or of the Notes) payment of principal of and interest on such
Note need not be made on such date, but may be made on the next succeeding
Banking Day with the same force and effect as if made on the Interest Payment
Date or Redemption Date or at the Maturity Date; PROVIDED, HOWEVER, that no
interest shall accrue on the amount so payable with respect to such Interest
Payment Date, Redemption Date or Maturity Date for the period from and after
such Interest Payment Date, Redemption Date or Maturity Date, as the case may
be, if paid on the next succeeding Banking Day at the rate herein provided.
SECTION 114. Limited Recourse.
----------------
(a) Notwithstanding anything to the contrary in this
Indenture, the other Transaction Documents or the Related Documents, but subject
to the last sentence of this Section 114(a), the Issuer's obligations to pay the
principal of and interest on the Notes and any and all other amounts payable
hereunder, thereunder and under the other Transaction Documents by the Issuer
(but exclusive of all amounts payable pursuant to Section 1301 hereof), shall be
limited recourse obligations of the Issuer payable and collectible only out of
the Trust Estate and the proceeds thereof (including the Rents) in accordance
with the terms and conditions of this Indenture and the Transaction Documents.
The Issuer shall not have any obligation to pay any such amount except to make
payments out of the Trust Estate and the proceeds thereof (including the Rents)
and no other property or asset of the Issuer, or of any of the Issuer's
partners, shall be subject to any lien, levy, execution, or other enforcement
procedure for satisfaction of any right or remedy of the Indenture Trustee or
any Holder of any Note or any other Person in connection with the Notes. Any
judgment or decree obtained in connection with the Notes shall be enforceable
against the Issuer or any of the Issuer's successors or assigns only to the
extent of the Issuer's interest in the Trust Estate and the proceeds thereof
(including the Rents) which may then be subjected to any lien created and given
to secure the Notes; and no such judgment or decree shall be enforceable by
execution against or become or remain a lien on any property or asset of the
Issuer or of any of the Issuer's successors or assigns not part of the Trust
Estate and the proceeds thereof (including the Rents) then subject to any lien
created and given to secure the Notes. Any right of setoff or counterclaim which
the Indenture Trustee or any Holder of any Note or any other Person might
otherwise have by law shall be limited to the Trust Estate and the proceeds
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<PAGE> 48
thereof (including the Rents). The foregoing provisions of this Section shall
not be construed to limit the rights of the Indenture Trustee, any Holder of any
Note and the other Indemnitees under and pursuant to the Environmental Indemnity
and under Section 616 with respect to amounts remaining unclaimed after two
years. Notwithstanding the foregoing provisions of this Section, the Indenture
Trustee and the Holders of the Notes shall have recourse to the Issuer and to
the partners in the Issuer (but not to any limited partner, officer or employee
of the Operating Partnership or any shareholder, director, officer or employee
of GP Corp or the REIT) (i) to the extent provided in the Environmental
Indemnity, (ii) for all obligations of the Issuer to pay costs, expenses and
indemnities under and pursuant to Section 1301 hereof (regardless of the
identity of the payee), (iii) for any loss, cost, damage or expense caused by,
arising out of or relating to any fraudulent misrepresentation contained in any
Transaction Document or any certificate or instrument delivered to the Indenture
Trustee or any Holder of any Note in connection therewith, (iv) for any loss,
cost, damage or expense caused by, arising out of or relating to any
appropriation of funds in contravention of any Transaction Document by the
Issuer or any of its partners, which funds relate in any way to the Notes, the
Trust Estate or the obligations of the Issuer or the rights of the Indenture
Trustee or any Holder of any Note under the Transaction Documents.
(b) The provisions of Section 114(a) above shall not (1)
constitute a waiver of any obligation evidenced by the Notes, this Indenture or
any Security Document, or in any way be construed to release or impair the
liens, Encumbrances and security interests created by this Indenture, the
Mortgage and the other Security Documents, (2) limit the rights of the holder of
the Mortgage to name the Issuer as a party defendant in any action or suit for
judicial foreclosure and sale or for enforcement of any other remedies provided
in this Indenture, the Notes or any Security Document, provided that, subject to
the last sentence of Section 114(a), any money or deficiency judgment obtained
by such holder shall be enforceable by such holder only to the extent of the
Issuer's interest in the Trust Estate.
(c) The parties hereto agree that the provisions of this
Section 114 are hereby incorporated into each Note and each Security Document
other than the Environmental Indemnity by reference as if set forth therein in
full.
SECTION 115. Security Agreetment
-------------------
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<PAGE> 49
This Indenture shall constitute a security agreement under the
Uniform Commercial Code as in effect in each State where any Transaction
Document or any portion of the Trust Estate is located. Upon the occurrence of
any Event of Default, and in addition to any other rights available under this
Indenture, the Notes, the Security Documents or any other instruments included
in the Trust Estate or otherwise available at law or in equity, the Indenture
Trustee, on behalf of the Holders of the Notes, shall have all rights and
remedies of a secured party on default under the Uniform Commercial Code to
enforce the assignments and security interests set forth in this Indenture and,
in addition, shall have the right, subject to compliance with any mandatory
requirements of applicable law, to sell or apply any rights and other interests
assigned or pledged hereby in accordance with the terms of this Indenture at
public or private sale. All amounts received hereunder shall be applied first to
all costs and expenses incurred by the Indenture Trustee in connection with such
collection and enforcement and thereafter as provided in this Indenture.
SECTION 116. Survival of Representations, Etc.
---------------------------------
All representations, warranties, covenants and agreements made
herein by Issuer and in certificates delivered by Issuer pursuant hereto shall
survive and shall continue in full force and effect until the Notes and all
accrued interest thereon and all other amounts secured by or evidenced by this
Indenture and the other Transaction Documents are paid in full.
SECTION 117. Relationship of the Indenture Trustee to the
--------------------------------------------
Issuer and Third Parties.
- ------------------------
The Issuer agrees that (i) the Indenture Trustee and the
Pass-Through Trustee, solely on account of their acting in their capacities as
the Indenture Trustee and the Pass-Through Trustee, respectively, shall not be
liable to any contractor, subcontractor, supplier, laborer, architect, engineer
or any other party for services performed or materials supplied in connection
with any Mortgaged Property, (ii) the Indenture Trustee and the Pass-Through
Trustee shall not be liable for any debts or claims accruing in favor of any
such parties against the Issuer or others against any Mortgaged Property, (iii)
the Issuer is not, and the Issuer shall not be, an agent of the Indenture
Trustee or the Pass-Through Trustee for any purposes and (iv) the Indenture
Trustee and the Pass-Through Trustee are
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not now, and upon the exercise of any or all of their respective remedies under
this Indenture or under any other Transaction Document or any Related Document,
shall not be, joint venturers or partners with the Issuer in any manner
whatsoever. The Indenture Trustee and the Pass-Through Trustee shall not be
deemed to be in privity of contract with any contractor or provider of services
to any Mortgaged Property, nor shall any payment of funds directly to a
contractor, subcontractor, or provider of services be deemed to create any third
party beneficiary status or recognition of same by the Indenture Trustee or the
Pass-Through Trustee. The Issuer agrees that the Indenture Trustee and the
Pass-Through Trustee shall have no duty to detect or warn the Issuer or any
third party of any deficiency or defect in any matter or thing submitted to the
Indenture Trustee or the Pass-Through Trustee for approval or otherwise.
Approvals granted by the Indenture Trustee or the Pass-Through Trustee for any
matters covered under this Indenture, the other Transaction Documents or any
Related Document shall be narrowly construed to cover only the parties and facts
identified in any written approval or, if not in writing, such approvals shall
be solely for benefit of the Issuer.
ARTICLE TWO
-----------
FORM OF NOTES
-------------
SECTION 201. Forms Generally.
---------------
The Notes and the Indenture Trustee's certificate of
authentication shall be in substantially the form set forth in this Article with
such appropriate insertions, omissions, substitutions and other variations as
are required or permitted by this Indenture, and may have such letters, numbers
or other marks of identification and such legends or endorsements placed thereon
as may be required to comply with any law or with any rules made pursuant
thereto or with the rules of any applicable securities exchange or governmental
agency or as may, consistent herewith, be determined by the Authorized Partner
executing the Notes, as evidenced by its execution of such Notes. All Notes
shall be substantially identical except as to denomination and as provided
herein.
The definitive Notes shall be printed, lithographed or
engraved on steel engraved borders or may be produced in any other manner, all
as determined by the
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Authorized Partner executing such Notes, as evidenced by its execution of such
Notes.
SECTION 202. Form of Indenture Trustee's Certificate of
------------------------------------------
Authentication.
- --------------
The Indenture Trustee's certificates of authentication for
Notes shall be in substantially the following form:
This Note is one of the Notes referred to in the
above-mentioned Indenture.
-------------------------------------,
as Indenture Trustee
By:
----------------------------------
Authorized Officer
SECTION 203. Form of the Notes.
-----------------
The Notes shall be issued in substantially the form of Exhibit
A annexed hereto.
ARTICLE THREE
-------------
THE NOTES
---------
SECTION 301. Equal and Ratable Security; Amount.
----------------------------------
(a) The aggregate principal amount of Notes which may be
authenticated and delivered under this Indenture is limited to ONE HUNDRED
MILLION AND 00/100 DOLLARS ($100,000,000), except for Notes authenticated and
delivered upon registration of transfer of, or in exchange for, or in lieu of,
other Notes pursuant to Section 305, 308, 309, 907 or 1106. The Notes shall be
issued in one series: 7.30% Mortgage Notes due September 30, 2000.
The stated maturity of the Notes shall be September 30, 2000
(THE "STATED MATURITY"), on which date the Issuer shall repay the principal
amount of each Note in full together with interest thereon to (but excluding)
the date of payment.
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Each Note shall rank PARI PASSU with each other Note and shall
be equally and ratably entitled to the benefits of and secured by this Indenture
and the Security Documents.
(b) This Indenture shall be a continuing lien to secure the
full payment of the principal of and interest on all the Notes, which shall in
all respects be equally and ratably secured hereby and by the Security Documents
without preference, priority or distinction on account of the actual time or
times of the authentication and delivery or maturity of the Notes.
SECTION 302. Denominations.
-------------
The Notes shall be issuable only in registered form, without
coupons and only in denominations of $100,000 and any integral multiple of one
dollar in excess thereof.
SECTION 303. Conditions Precedent to Issuance of the Notes.
---------------------------------------------
The Notes shall be executed by the Issuer and authenticated by
the Indenture Trustee on the Issuance Date only upon satisfaction by the Issuer
of the following conditions:
(a) delivery to the Indenture Trustee by Issuer of an
Officer's Certificate as to the satisfaction of the condition set
forth in Section 801(a);
(b) delivery by KPMCC of the Security Documents Assignment to
the Indenture Trustee;
(c) delivery by Issuer of fully executed counterparts of this
Indenture to the Indenture Trustee; and
(d) delivery to the Servicer by the Title Company of the Title
Insurance Policy naming the Indenture Trustee as named insured.
SECTION 304. Execution, Authentication and Delivery of the
---------------------------------------------
Notes.
- -----
Each Note shall be executed manually on behalf of the Issuer
by GP Corp, acting in its capacity as managing general partner of the Issuer, by
the President or an
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Executive Vice President of GP Corp (the "Authorized Partner").
------------------
The signature of the Authorized Partner on the Notes is to be
manual. Notes bearing the manual signature of Persons who were at any time the
authorized officers of the Authorized Partner shall bind the Issuer,
notwithstanding that such Persons or any of them have ceased to be so authorized
prior to the authentication and delivery of such Notes or were not so authorized
at the date of such Notes.
At any time and from time to time after the execution and
delivery of this Indenture, the Issuer may deliver a single Note in the
principal amount of $100,000,000 executed by the Issuer to the Indenture Trustee
for authentication, together with an Issuer Order for the authentication and
delivery of such Note, which Note shall be registered in the name of the
Pass-Through Trustee; and the Indenture Trustee in accordance with such Issuer
Order shall authenticate and deliver such Note as in this Indenture provided and
not otherwise.
Each Note shall be dated its date of authentication.
No Note shall be entitled to any benefit under this Indenture
or be valid or obligatory for any purpose unless there appears on such Note a
certificate of authentication substantially in the form provided for herein
executed by the Indenture Trustee by manual signature, and such certificate upon
any Note shall be conclusive evidence, and the only evidence, that such Note has
been duly authenticated and delivered hereunder and is entitled to the benefits
of this Indenture and the Security Documents.
SECTION 305. [Reserved].
SECTION 306. Payment Account; Holdover Account.
---------------------------------
(a) On or prior to the Issuance Date, the Indenture Trustee
shall establish one or more Eligible Accounts (collectively, the "PAYMENT
ACCOUNT"), in the Indenture Trustee's name each bearing a designation clearly
indicating that such account and all funds deposited therein (including all
investments of such deposited funds and all income or other gain from such
investments) are held for the exclusive benefit of the Holders. Except as
provided herein, the Indenture Trustee shall have exclusive
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control and sole right of withdrawal with respect to the Payment Account for the
purpose of making deposits in and withdrawals from the Payment Account in
accordance with this Indenture. Funds in the Payment Account shall not be
commingled with any other monies. All monies deposited from time to time in the
Payment Account and all investments made with such monies, including all income
or other gain from such investments, shall be held by the Indenture Trustee in
the Payment Account for the benefit of the Holders as herein provided.
(b) So long as no Event of Default shall have occurred and be
continuing, all of the funds on deposit in the Payment Account shall be invested
and reinvested by the Indenture Trustee, at the written direction of the Issuer,
in one or more Eligible Investments, subject to the following requirements:
(i) such Eligible Investments shall not mature later than the
Banking Day prior to the next Interest Payment Date;
(ii) the securities purchased with the monies in the Payment
Account shall be deemed a part of the Payment Account;
(iii) each such Eligible Investment shall be made in the name of
the Indenture Trustee (in its capacity as such) or in the
name of a nominee of the Indenture Trustee under its
complete and exclusive dominion and control (or, if
applicable law provides for perfection of pledges of an
instrument not evidenced by a certificate or other
instrument through registration of such pledge on books
maintained by or on behalf of the issuer of such investment,
such pledge may be so registered);
(iv) the Indenture Trustee shall have the sole control over such
investment, the income thereon and the proceeds thereof;
(v) other than the investments described in clause (iii)
above, any certificate or other instrument evidencing such
investment shall be delivered directly to the Indenture
Trustee or its agent; and
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<PAGE> 55
(vi) the proceeds of each investment shall be remitted by the
purchaser thereof directly to the Indenture Trustee.
All income or other gain from investments of monies deposited
in the Payment Account shall be deposited by the Indenture Trustee in the
Payment Account promptly upon receipt, and any loss resulting from such
investments shall be charged to the Payment Account. The Indenture Trustee shall
not be liable to any Holder of any Note, the Issuer or any other Person for any
loss (including non-realization of any profit or gain in the event that the
Indenture Trustee is required to sell Eligible Investments in accordance with
the terms of this Indenture or in the event that the Indenture Trustee does not
invest such amounts in those Eligible Investments yielding the highest return)
resulting from any such investment or sale in accordance with this Indenture,
whether by depreciation in value or otherwise.
(c) On each Interest Payment Date, Redemption Date or the
Maturity Date of any Note, as applicable, the Indenture Trustee shall apply all
amounts on deposit in the Payment Account to pay the following amounts in the
following order of priority:
(i) any interest (including, without limitation, any Defaulted
Interest and interest thereon at the Default Rate) due and
payable on the Notes shall be paid to the Holders on an
equal and ratable basis;
(ii) any principal due and payable on the Notes shall be paid
to the Holders on an equal and ratable basis;
(iii) any Yield Maintenance Charges due and payable on the Notes
shall be paid to the Holders on an equal and ratable
basis; and
(iv) the balance, if any, shall be transferred to the Issuer
upon written request from the Issuer.
(d) Funds in the Payment Account for payment of principal of
the Notes at Stated Maturity and not claimed in accordance with this Indenture
shall be deposited by the Indenture Trustee in an Eligible Account (the
"HOLDOVER ACCOUNT") in the Indenture Trustee's name and shall be held
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for the account of the Holder or Holders of such Notes pursuant to Section 616.
(e) In the event that the Payment Account does not contain
amounts on deposit sufficient to satisfy subdivisions (i), (ii) and (iii) of
paragraph (c) of this Section 306, the Indenture Trustee may exercise all
remedies provided for by this Indenture and/or the Security Documents and any
other instrument included in the Trust Estate.
SECTION 307. Persons Deemed Owners.
---------------------
Prior to due presentment of a Note for registration of
transfer, the Issuer, the Servicer or the Indenture Trustee and any agent of the
Issuer, the Servicer or the Indenture Trustee may treat the Person in whose name
such Note is registered as the absolute and sole owner of such registered Note
for the purpose of receiving payment of principal of and (subject to Section
311) interest on such Note and for all other purposes whatsoever, whether or not
such Note be overdue, and none of the Issuer, the Servicer or the Indenture
Trustee or any agent of the Issuer, the Servicer or the Indenture Trustee shall
be affected by written notice to the contrary, and payment of the principal of
and interest on such Note by the Indenture Trustee shall be made only to or upon
the order of such Holder.
SECTION 308. Registration, Registration of Transfer and
------------------------------------------
Exchange.
- --------
(a) The Issuer and the Indenture Trustee shall cause to be
kept at the Corporate Trust Office a register (the register maintained in such
office and in any other office or agency of the Issuer at any place where the
principal of and any interest on the Notes is payable being herein sometimes
collectively referred to as the "REGISTER") in which, subject to such reasonable
regulations as it may prescribe, the Issuer shall provide for the registration
of Notes and of transfers of Notes. The Indenture Trustee is hereby appointed
"NOTE REGISTRAR" for the purpose of registering Notes and transfers of Notes as
herein provided.
(b) Upon surrender for registration of transfer of any Note at
any office or agency of the Issuer designated pursuant to Section 1003 for such
purpose, the Issuer shall execute, and the Indenture Trustee shall authenticate
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and deliver, in the name of the designated transferee or transferees, one or
more new Notes of any authorized denominations and of a like aggregate principal
amount; provided that the Issuer and the Indenture Trustee shall have been
provided with an Opinion of Counsel or other evidence reasonably satisfactory to
the Issuer that such transfer does not violate the Securities Act. At the option
of the Holder, Notes may be exchanged for other Notes of any authorized
denominations and of a like aggregate principal amount, upon surrender of the
Notes to be exchanged at such office or agency. Whenever any Notes are so
surrendered for exchange, the Issuer shall execute, and the Indenture Trustee
shall authenticate and deliver, the Notes which the Holder making the exchange
is entitled to receive. All Notes issued upon any registration of transfer or
exchange of Notes shall be the valid obligations of the Issuer, evidencing the
same debt and entitled to the same benefits under this Indenture and the
Security Documents as the Notes surrendered upon such registration of transfer
or exchange. Every Note presented or surrendered for registration of transfer or
for exchange shall (if so required by the Issuer or the Indenture Trustee) be
duly endorsed, or be accompanied by a written instrument of transfer in form
satisfactory to the Issuer and the Note Registrar duly executed by the Holder
thereof or his attorney duly authorized in writing.
(c) No service charge shall be made for any registration of
transfer or exchange of Notes, but the Issuer or the Indenture Trustee may
require payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in connection with any registration of transfer or
exchange of Notes, other than exchanges pursuant to Section 305, 907 or 1106 not
involving any transfer.
(d) If the Notes are to be redeemed in part, the Issuer shall
not be required (A) to issue, register the transfer of or exchange any Notes
during a period beginning at the opening of business 15 days before the day of
the mailing of a notice of redemption of any such Notes selected for redemption
under Section 1103 and ending at the close of business on the day of such
mailing, or (B) to register the transfer of or exchange of any Note so selected
for redemption in whole or in part, except the unredeemed portion of any Note
being redeemed in part.
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SECTION 309. Mutilated, Destroyed, Lost and Stolen Notes.
-------------------------------------------
If any mutilated Note is surrendered to the Indenture Trustee,
the Issuer shall execute, and the Indenture Trustee shall authenticate and
deliver in exchange therefor, a new Note of like principal amount and bearing a
number not contemporaneously outstanding.
If there shall be delivered to the Issuer and the Indenture
Trustee (i) evidence to their satisfaction of the destruction, loss or theft of
any Note and (ii) such security or indemnity as may be required by them to save
each of them and any agent of either of them harmless, then, in the absence of
notice to the Issuer or the Indenture Trustee that such Note has been acquired
by a bona fide purchaser, the Issuer shall execute and upon its request the
Indenture Trustee shall authenticate and deliver, in lieu of any such destroyed,
lost or stolen Note, a new Note of like principal amount and bearing a number
not contemporaneously outstanding. In every case of mutilation or defacement,
the applicant shall surrender to the Indenture Trustee the Note so mutilated or
defaced.
In case any such mutilated, destroyed, lost or stolen Note has
become or is about to become due and payable, the Issuer in its discretion may,
instead of issuing a new security, pay such Note.
Upon the issuance of any new Note under this Section 309, the
Issuer or the Indenture Trustee may require the payment of a sum sufficient to
cover any tax or other governmental charge that may be imposed in relation
thereto and any other expenses (including the fees and expenses of the Indenture
Trustee) connected therewith.
Every new Note issued pursuant to this Section 309 in lieu of
any mutilated, destroyed, lost or stolen Note shall constitute an original
additional contractual obligation of the Issuer, evidencing the same debt as the
predecessor Note, whether or not the mutilated, destroyed, lost or stolen Note
shall be at any time enforceable by anyone, and any such new Note shall be
entitled to all the benefits of this Indenture and of the Security Documents
equally and proportionately with any and all other Notes and to the same extent
as such predecessor Note.
All Notes shall be held and owned upon the express condition
that, to the extent permitted by law, the
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foregoing provisions are exclusive with respect to the replacement or payment of
mutilated, destroyed, lost or stolen Notes and shall preclude (to the extent
lawful) all other rights and remedies with respect to the replacement or payment
of mutilated, destroyed, lost or stolen securities or negotiable instruments.
SECTION 310. Interest.
--------
(a) Subject to the provisions of paragraph (d) of this
Section, each Note shall bear interest at the rate of 7.30% per annum on the
outstanding principal balance of such Note, from the date of initial
authentication and delivery of such Note or the most recent Interest Payment
Date for which interest has been paid or duly provided for, as the case may be,
to, but not including, the date of payment of the principal amount of such Note,
but without duplication of any interest paid in connection with any repayment or
redemption of principal of such Note pursuant to Section 301 and Section 1102,
respectively. The Issuer shall make payment or provide for payment pursuant to
this Indenture of the interest accruing in respect of each Outstanding Note for
each Interest Period on the Interest Payment Date for such Interest Period.
(b) The Indenture Trustee shall notify any Paying Agent (with
a copy to the Issuer) on or prior to the related Interest Payment Date as to the
aggregate amount of interest that shall be payable on all Outstanding Notes in
respect of such Interest Payment Date.
(c) The Indenture Trustee shall compute interest on the Notes
on the basis of a 360-day year consisting of twelve (12) months of thirty (30)
days each.
(d) If the Issuer shall default in any payment of principal
of, interest on, or Yield Maintenance Charge in respect of, any Note, or any
other amount owed by the Issuer under this Indenture or any of the other
Transaction Documents, whether by acceleration or otherwise, the Issuer shall
pay interest at the Default Rate in respect of all amounts due and owing by the
Issuer, upon demand from time to time, to the extent permitted by applicable
law, until such defaulted amount has been paid by the Issuer, together with
interest thereon at the Default Rate. Payment or acceptance of the increased
rates provided for in this subsection is not a permitted alternative to timely
payment and shall not constitute a waiver of any Default or Event of Default or
an amendment to this Indenture or any other
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Transaction Document and shall not otherwise prejudice or limit any rights or
remedies of the Indenture Trustee or any Holder of any Note.
(e) Notwithstanding anything in this Indenture or in the Notes
to the contrary, if at any time the interest rate applicable to the Notes,
together with all fees and charges which are treated as interest under
applicable law (collectively, the "CHARGES"), as provided for in this Indenture
or in any other document executed in connection herewith, or otherwise
contracted for, charged, received, taken or reserved by the Indenture Trustee or
any Holder of any Note, shall exceed the maximum lawful rate (the "LEGAL RATE")
which may be contracted for, charged, taken, received or reserved by the
Indenture Trustee or any Holder of any Note in accordance with applicable law,
the rate of interest payable under such Note, together with all Charges payable,
shall be limited to the Legal Rate and any interest or Charges not so charged,
taken, received or reserved by the Indenture Trustee or any Holder of any Note
at such time shall be spread, prorated or amortized over the term of this
Indenture or such Note to the fullest extent permitted by law.
SECTION 311. Payment of Principal and Interest.
---------------------------------
(a) Interest in respect of the Notes shall be paid as follows:
(i) Any interest on any Notes which is payable, and is
punctually paid or duly provided for by the Issuer, on any Interest
Payment Date shall be paid to the Person in whose name such Notes (or
any Predecessor Note) is registered on the Register at the close of
business on the Regular Record Date immediately preceding such Interest
Payment Date.
(ii) The interest on the Notes shall be payable at the office or
agency of the Issuer in the Borough of Manhattan, The City of New York
maintained for such purpose and at any other office or agency
maintained by the Issuer for such purpose; PROVIDED, HOWEVER, that at
the option of the Issuer payment of interest may be made by check
mailed to the address of the Person entitled thereto as such address
shall appear in the Note Register and PROVIDED FURTHER, HOWEVER, that
in the case of a registered Holder of greater than $10,000,000
aggregate principal amount of Notes payments of interest may be made by
wire transfer to
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an account denominated in U.S. Dollars maintained by the payee with a
bank in the Borough of Manhattan, The City of New York by giving notice
to the Indenture Trustee, not less than 5 Banking Days prior to the
related Regular Record Date or Special Record Date.
(iii) Any interest on any registered Note which is payable, but is
not punctually paid or duly provided for on any Interest Payment Date
(herein called "DEFAULTED INTEREST") shall, subject to Section 113,
continue to accrue, to the extent permitted by applicable law, at the
Default Rate on such amounts not paid when due but shall forthwith
cease to be payable to the Holder on the relevant Regular Record Date
by virtue of having been such Holder, and such Defaulted Interest and
interest thereon at the Default Rate shall be paid by the Issuer to the
Persons in whose names the Notes (or their respective Predecessor
Notes) are registered at the close of business on a Special Record Date
for the payment of such Defaulted Interest, which shall be fixed in the
following manner. The Issuer shall notify the Indenture Trustee in
writing of the amount of Defaulted Interest proposed to be paid on each
Note and the date of the proposed payment, and at the same time the
Issuer shall deposit with the Indenture Trustee an amount of money
equal to the aggregate amount proposed to be paid in respect of such
Defaulted Interest and interest thereon at the Default Rate or shall
make arrangements satisfactory to the Indenture Trustee for such
deposit prior to the date of the proposed payment, such money when
deposited to be held in trust for the benefit of the Persons entitled
to such Defaulted Interest as in this clause provided. Thereupon the
Issuer shall fix a special record date (the "SPECIAL RECORD DATE") for
the payment of such Defaulted Interest. The Issuer shall promptly
notify the Indenture Trustee of such Special Record Date and, in the
name and at the expense of the Issuer, the Indenture Trustee shall
cause notice of the proposed payment of such Defaulted Interest and the
Special Record Date therefor to be mailed, first-class postage prepaid,
to each Holder of a Note at the address of such Holder as it appears in
the Register, not less than 10 days prior to such Special Record Date.
Notice of the proposed payment of such Defaulted Interest and the
Special Record Date therefor having been so mailed, such Defaulted
Interest and interest thereon at the Default Rate shall be paid to the
Person in whose name each
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respective Note (or respective Predecessor Note) is registered at the
close of business on such Special Record Date.
(iv) The Issuer may make payment of any Defaulted Interest in any
other lawful manner not inconsistent with the requirements of any
securities exchange on which the Notes may be listed, and upon such
notice as may be required by such exchange, if, after notice given by
the Issuer to the Indenture Trustee of the proposed payment, such
manner of payment shall be deemed practicable by the Indenture Trustee.
(b) Principal in respect of the Notes shall be paid as
follows at the Stated Maturity of the Notes:
(i) The Indenture Trustee shall pay the outstanding principal
amount of each Note in immediately available funds from funds in the
Payment Account as promptly as possible after presentation to the
Indenture Trustee of such Note upon the Stated Maturity, but shall
initiate such transfer no later than 4:00 p.m. (New York time) on the
day of such presentation, provided that such presentation has been made
no later than 11:00 a.m. (New York time). If presentation is made after
11:00 a.m. (New York time) on any day, such presentation shall be
deemed to have been made on the immediately succeeding Banking Day.
(ii) In the event that a Note is not presented for payment by
11:00 a.m. (New York time) on the Stated Maturity, the Indenture
Trustee shall transfer any principal thereof and interest thereon (and
any other amounts owing in respect thereof, including any Yield
Maintenance Charge) to the Holdover Account. If the Holder of such
Note shall present such Note to the Indenture Trustee within two years
after the Stated Maturity, the Indenture Trustee shall pay such Note
from funds in the Holdover Account. In no event shall such Note earn
interest after the Stated Maturity. If such Note is not presented for
payment within two years after the Stated Maturity, the Indenture
Trustee shall not honor a demand for payment of such Note and the
Indenture Trustee shall act in accordance with Section 616 in respect
of the unclaimed funds in the Holdover Account.
(iii) If at 4:00 p.m. (New York time) on the Stated Maturity,
any funds remain in the Payment
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Account after (i) the payment of each Note which is presented by 11:00
a.m. (New York time) for payment on such date, (ii) the transfer of
funds to the Holdover Account for each Note which is not presented for
payment on such date (or is presented after 11:00 a.m. (New York time)
on such date) and (iii) the payment of all other amounts due and owing
by the Issuer under this Indenture or the Transaction Documents, then
the Indenture Trustee shall notify the Issuer of the amount of such
remaining funds and such remaining funds upon notice from the Issuer
shall be transferred by the Indenture Trustee to the Issuer in
accordance with written wire transfer instructions given by the Issuer
to the Indenture Trustee.
(c) Principal, interest and Yield Maintenance Charges in
respect of the Notes shall be paid in accordance with Article Eleven hereof in
connection with any required or permitted redemption of the Notes, whether in
whole or in part.
SECTION 312. Interest on New Notes.
---------------------
Interest shall be deemed to have been paid on each new Note (a
"NEW NOTE") issued pursuant to Section 308 or Section 309 hereof in exchange
for, in substitution for, or in lieu of a Predecessor Note to the date to which
interest was paid on such Predecessor Note. Each New Note issued pursuant to
Section 308 or Section 309 hereof in exchange for or in substitution for or in
lieu of a Predecessor Note shall be a valid obligation of the Issuer evidencing
the same debt as such Predecessor Note and shall be entitled to the benefits of
this Indenture and of the Security Documents to the same extent as such
Predecessor Note.
SECTION 313. Cancellation.
------------
All Notes surrendered for payment, redemption, registration of
transfer or exchange shall, if surrendered to any Person other than the
Indenture Trustee, be delivered to the Indenture Trustee and shall be promptly
cancelled by it. The Issuer may at any time deliver to the Indenture Trustee for
cancellation any Notes previously authenticated and delivered hereunder which
the Issuer may have acquired in any manner whatsoever, and all Notes so
delivered shall be promptly cancelled by the Indenture Trustee. No Notes shall
be authenticated in lieu of or in exchange for any Notes cancelled as provided
in this
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Section, except as expressly permitted by this Indenture. All cancelled Notes
held by the Indenture Trustee shall be disposed of in its customary manner.
All Notes delivered to any Paying Agent appointed by the
Issuer pursuant to Section 314 hereof for payment, redemption, registration of
transfer or exchange as herein or in the Notes provided shall be forwarded to
the Indenture Trustee by the Paying Agent to which they are delivered. All such
Notes shall be cancelled and destroyed by the Indenture Trustee or such other
person as may be jointly designated by the Issuer and the Indenture Trustee.
SECTION 314. Paying Agent.
------------
The Issuer may, at its discretion, appoint one or more agents
(a "PAYING AGENT" or "PAYING AGENTS") for the payment (subject to applicable
laws and regulations) of the principal of, any interest on or Yield Maintenance
Charge with respect to the Notes, and one or more agents (a "TRANSFER AGENT" or
"TRANSFER AGENTS") for the transfer and exchange of Notes, at such place or
places as the Issuer may determine; PROVIDED, HOWEVER, that the Issuer shall at
all times maintain a Paying Agent and Transfer Agent in the Borough of
Manhattan, The City of New York. The Issuer hereby appoints the Indenture
Trustee as the Paying Agent and the Transfer Agent.
The Issuer shall promptly notify the Indenture Trustee of the
name and address of each Paying Agent and Transfer Agent appointed by it and of
the country or countries in which a Paying Agent or Transfer Agent may act in
that capacity, and will notify the Indenture Trustee of the resignation or
termination of any Paying Agent or Transfer Agent. Subject to the provisions of
this Section 314, the Issuer may vary or terminate the appointment of any such
Paying Agent or Transfer Agent at any time and from time to time upon giving not
less than ninety (90) days' notice to such Paying Agent or Transfer Agent, as
the case may be, and to the Indenture Trustee.
In respect of the Notes, the Issuer shall cause notice of any
resignation, termination or appointment of any Paying Agent or Transfer Agent or
of the Indenture Trustee and of any change in the office through which any such
agent will act to be given as provided in this Indenture.
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ARTICLE FOUR
------------
SATISFACTION AND DISCHARGE
--------------------------
SECTION 401. Satisfaction and Discharge of Indenture.
---------------------------------------
This Indenture shall upon Issuer Request cease to be of
further effect (except for any rights of the Holders of the Notes to receive
payment from the Holdover Account and, in the case of clause (1)(ii) below, for
the rights of the Holders of Notes hereunder to receive payment of the principal
of and interest on the Notes in conformity with Section 616), and the Indenture
Trustee, at the expense of the Issuer, shall execute proper instruments
acknowledging satisfaction and discharge of this Indenture, when
(1) all Notes theretofore authenticated and delivered (other
than (i) Notes which have been destroyed, lost or stolen and which have
been replaced or paid as provided in Section 309 and (ii) Notes for
which payment money has theretofore been deposited in trust or
segregated and held in trust by the Indenture Trustee and thereafter
repaid to the Issuer or discharged from such trust, in each case as
provided in Section 616) have been delivered to the Indenture Trustee
for cancellation;
(2) the Issuer has paid or caused to be paid all other sums
payable hereunder and under the Transaction Documents by the Issuer,
including, without limitation, any applicable Yield Maintenance
Charges; and
(3) the Issuer has delivered to the Indenture Trustee an
Officer's Certificate stating that all conditions precedent provided
for herein and in the Transaction Documents relating to the
satisfaction and discharge of this Indenture have been complied with.
Notwithstanding the satisfaction and discharge of this
Indenture, the obligations of the Issuer to the Indenture Trustee under Section
605, the obligations of the Indenture Trustee to any Authenticating Agent under
Section 613, the obligations of the Indenture Trustee under Section 402 and
Section 616 and the obligations of the Issuer under Section 1301 shall survive.
Notwithstanding the foregoing, the Issuer's obligations under
this Indenture and in respect of the
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Notes shall survive the discharge of this Indenture if and to the extent that
any payment of any amount paid by the Issuer to the Indenture Trustee or any
Holder is avoided as a preferential transfer, or otherwise rescinded or required
to be restored under applicable law. Upon the payment of all of the Outstanding
Notes in full, the Indenture Trustee shall notify each of the Rating Agencies
and the Pass-Through Trustee of such event.
Prior to the satisfaction and discharge of this Indenture, all
monies then held by any Paying Agent shall upon demand of the Indenture Trustee
be paid over to the Indenture Trustee (for deposit into the Payment Account) and
thereupon such Paying Agent shall be released from all further liability with
respect to such monies.
SECTION 402. Application of Trust Money.
--------------------------
Subject to the provisions of Section 616, all monies deposited
by the Indenture Trustee in the Holdover Account shall be held in trust and
applied by it, in accordance with the provisions of the Notes and this
Indenture, to the payment, as the Indenture Trustee may determine, either
directly or through any Paying Agent to the Persons entitled thereto, of the
principal of and interest on the Notes for whose payment such monies have been
so deposited in the Holdover Account by the Indenture Trustee.
ARTICLE FIVE
------------
REMEDIES
--------
SECTION 501. Events of Default.
-----------------
The following events shall constitute Events of Default under
each of the Transaction Documents (whether any such event shall be voluntary or
involuntary or come about or be effected by operation of law or pursuant to or
in compliance with any judgment, decree or order of any court or any order, rule
or regulation of any administrative or governmental body):
(1) any payment of (i) principal of, or Yield Maintenance
Charge with respect to, any Note when due hereunder or under such Note
shall not be paid by the Issuer when due and payable, whether at Stated
Maturity, upon redemption, by acceleration or otherwise,
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(ii) interest shall not be paid by the Issuer within one Banking Day of
the date such interest is due and payable, whether at Stated Maturity,
upon redemption, by acceleration or otherwise, or (iii) any other
amount due under this Indenture or any other Transaction Document shall
not be paid by the Issuer within three Banking Days after written
notice from the Indenture Trustee thereof; or
(2) any representation or warranty made by the Issuer in this
Indenture or in any other Transaction Document, or any representation,
warranty, statement or information contained in any certificate made or
delivered by the Issuer or any of its partners, officers, employees or
agents in connection with or pursuant to the Transaction Documents
shall prove to have been false in any material respect as of the date
made or deemed to be made; or
(3) any case, proceeding or other action, whether voluntary or
involuntary, shall be commenced against the Issuer, the REIT, the
Operating Partnership or GP Corp seeking to have an order for relief
entered against any of them as debtor, or seeking reorganization,
arrangement, adjustment, liquidation, dissolution or composition of any
of their debts under any Federal or state law relating to bankruptcy,
insolvency, reorganization or relief of debtors, or seeking appointment
of a receiver, trustee, custodian or other similar official for any of
them or for any substantial part of their property, and any such case,
proceeding or other action (i) results in the entry of an order for
relief against the Issuer, the REIT, the Operating Partnership or GP
Corp which is not fully stayed within sixty (60) days after the entry
thereof or (ii) remains undismissed for a period of sixty (60) days; or
(4) a receiver or trustee of all or substantially all of the
property of the Issuer, the REIT, the Operating Partnership or GP Corp
is appointed and is not discharged within sixty (60) days, or if any of
the foregoing makes a general assignment for the benefit of creditors,
or admits in writing its inability to pay its debts, or is adjudged
insolvent by any Federal or state court of competent jurisdiction, or
if an attachment or execution is levied against all or substantially
all of the property of any of the foregoing and is not discharged
within sixty (60) days; or
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(5) the Issuer or GP Corp is dissolved, terminated or
liquidated, or the Operating Partnership is dissolved, terminated or
liquidated and is not reconstituted within five days thereafter; or
(6) the Issuer shall fail to perform or observe its covenants
set forth in Sections 1008(d)(i) or (q) or Section 1009; or
(7) except as otherwise specified in this Section 501, the
Issuer shall fail to perform or observe any covenant or agreement
contained in this Indenture or in any other Transaction Document and
such failure shall continue unremedied beyond the grace or cure period
specified in the Transaction Documents therefor, or, if no such grace
or cure period is so specified, for a period of 30 days, PROVIDED that
if such default cannot be remedied with diligent effort within a period
of 30 days, but is susceptible to cure within a period of 180 days,
such longer period, not to exceed 180 days, as the Issuer may need to
remedy such default if the Issuer is proceeding with diligent effort to
remedy such default and provides the Trustee with an Officer's
Certificate or other evidence as to its efforts to cure within a period
of 90 days; or
(8) any Transaction Document, for any reason other than the
satisfaction in full of all obligations of the Issuer thereunder, shall
cease to be in all material respects in full force and effect (other
than in accordance with its terms) thereby preventing the Indenture
Trustee or any Holder from obtaining the practical realization of the
benefits thereof or shall be declared null and void or the liens and
the security interests purported to be created by the Mortgage and/or
the Assignment of Leases shall cease to be valid, perfected, first
priority security interests; or
(9) the occurrence of an Event of Default under and as
defined in any of the other Transaction Documents.
SECTION 502. Acceleration of Maturity; Rescission and
----------------------------------------
Annulment.
- ---------
(a)(i) If an Event of Default specified in Section 501(1),
501(2), 501(6), 501(7), 501(8) or 501(9)
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occurs and is continuing, then in every such case the Indenture Trustee or the
Holders of a majority in aggregate principal amount of the Outstanding Notes, by
a notice in writing to the Issuer (and to the Indenture Trustee if given by the
Holders of the Notes), may declare the Notes to be due and payable and the
Default Amount to be due and payable immediately, and upon any such declaration
the Default Amount shall become immediately due and payable.
(ii) If an Event of Default specified in Section 501(3), 501(4)
or 501(5) occurs and is continuing, then the Default Amount shall automatically
be and become due and payable immediately without any action whatsoever on the
part of the Indenture Trustee or the Holders of the Notes.
(b) Upon acceleration of the Notes under Section 502(a), the
sum of (A) the Default Amount and (B) any other amounts, including accrued
interest to the date of such acceleration, payable to the Holders of the Notes
shall become due and payable immediately.
In case the Default Amount shall be declared due and payable,
upon payment by the Issuer of the Default Amount and accrued interest thereon,
the Issuer shall be released from, and be deemed to satisfy all of its
obligations under the Notes.
(c) At any time after an acceleration of the Notes and before
a judgment or decree for payment of the money due has been obtained by the
Indenture Trustee as hereinafter provided in this Article, the Holders of not
less than 66 2/3% in aggregate principal amount of Outstanding Notes, in the
case of acceleration arising by virtue of an Event of Default specified in
Section 501(1), by written notice to the Issuer and the Indenture Trustee, may
rescind and annul such acceleration and its consequences if
(1) the Issuer has paid or deposited with the Indenture
Trustee a sum sufficient to pay
(A) all interest, if any, due and payable on all
Outstanding Notes;
(B) the principal of any Outstanding Notes, which has
become due otherwise than by such declaration of acceleration,
and interest thereon at the rate or rates prescribed therefor
in such Notes;
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(C) to the extent permitted by applicable law, interest
upon any Default Amount at the Default Rate;
(D) all sums paid or advanced by the Indenture
Trustee hereunder and the reasonable compensation, expenses,
disbursements and advances of the Servicer, the Indenture
Trustee, its agents and counsel; and
(2) all Events of Default with respect to Outstanding Notes,
other than the non-payment of the Default Amount have been cured or
waived as provided in Section 513.
No such rescission shall affect any subsequent default or
impair any right consequent thereon.
(d) The Issuer covenants that if
(1) default is made in the payment of any interest on or Yield
Maintenance Charge with respect to any Note when such interest or Yield
Maintenance Charge becomes due and payable, or
(2) default is made in the payment of the Default Amount or
the principal of any Note at the Maturity Date thereof,
the Issuer will, upon demand of the Indenture Trustee, pay to the Indenture
Trustee, for the benefit of the Holders of such Notes, the whole amount then due
and payable on such Notes for principal and interest or the Default Amount, and,
to the extent that payment of such interest shall be legally enforceable,
interest on any overdue principal, any overdue interest and any overdue Yield
Maintenance Charge and on the Default Amount, at the Default Rate, and, in
addition thereto, such further amount as shall be sufficient to cover the costs
and expenses of collection, including the reasonable compensation, expenses,
disbursements and advances of the Servicer, the Indenture Trustee and their
agents and counsel.
SECTION 503. Collection of Indebtedness and Suits for
----------------------------------------
Enforcement by Indenture Trustee.
- --------------------------------
If the Issuer fails to pay all amounts due upon an
acceleration under Section 502 forthwith upon demand, then the Indenture
Trustee, in its own name and as trustee
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of an express trust, or the Servicer, on behalf of the Indenture Trustee, may
institute a judicial proceeding for the collection of the sums so due and
unpaid, may prosecute such proceeding to judgment or final decree and may
enforce the same against the Issuer or any other obligor upon such Notes and
collect the monies adjudged or decreed to be payable in the manner provided by
law out of the Trust Estate, wherever situated, or may institute such
non-judicial proceedings in lieu of judicial proceedings as are then permitted
by applicable law, and may take such actions through a mortgage trustee if
necessary or advisable under applicable law.
If an Event of Default with respect to the Notes occurs and is
continuing, subject to the provisions of Section 114 hereof, the Indenture
Trustee or the Servicer, on behalf of the Indenture Trustee, may in its
discretion proceed to protect and enforce its rights and the rights of the
Holders of the Notes by such appropriate judicial proceedings as the Indenture
Trustee or the Servicer, on behalf of the Indenture Trustee, shall deem most
effectual to protect and enforce any such rights, whether for the specific
enforcement of any covenant or agreement in this Indenture, any Note or any
Security Document or in aid of the exercise of any power granted herein or
therein, or to enforce any other proper remedy; PROVIDED, HOWEVER, that, as set
forth in Section 512, and subject to Section 507, the Holders of the Notes or
their representative (which may be the Pass-Through Trustee or the Servicer) may
direct the time, method and place of conducting any proceeding for any remedy
available to the Indenture Trustee or exercising any trust or power conferred on
the Indenture Trustee or otherwise granted to the Indenture Trustee hereunder.
Further, the Indenture Trustee may appoint the Holders of the Notes or their
representative (which may be the Pass-Through Trustee or the Servicer) to act on
its behalf to conduct any proceeding for any remedy referred to in the preceding
sentence.
SECTION 504. Indenture Trustee or Servicer May File Proofs of
------------------------------------------------
Claim.
- -----
In the case of pendency of any receivership, insolvency,
liquidation, bankruptcy, reorganization, arrangement, adjustment, composition or
other judicial proceeding relative to the Issuer or any other obligor upon the
Notes, or the property of the Issuer or such other obligor or their creditors,
the Indenture Trustee (irrespective of whether the principal of the Notes shall
then be due and
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payable as therein expressed or by declaration or otherwise and irrespective of
whether the Indenture Trustee (or Servicer on its behalf) shall have made any
demand on the Issuer for the payment of overdue principal or interest) or the
Servicer on behalf of the Indenture Trustee shall be entitled and empowered, by
intervention in such proceeding or otherwise, to take any and all actions
authorized under the Trust Indenture Act in order to have claims of the Holders
and the Indenture Trustee allowed in any such proceeding. In particular, the
Indenture Trustee shall be authorized:
(i) to file and prove a claim for the whole amount of the
principal of and any interest and Yield Maintenance Charges and other
amounts owing and unpaid on the Notes or otherwise under this Indenture
or the Security Documents and to file such other papers or documents as
may be necessary or advisable in order to have the claims of the
Indenture Trustee (including any claim for the reasonable compensation,
expenses, disbursements and advances of the Indenture Trustee, its
agents and counsel) the Servicer and of the Holders allowed in such
judicial proceeding,
(ii) to collect and receive any monies, notes or other property
payable or deliverable on any such claims and to distribute the same in
accordance with this Indenture;
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Holder to make such payments to the Indenture Trustee (or to the Servicer
on its behalf) and, in the event that the Indenture Trustee shall consent to the
making of such payments directly to the Holders, to pay to the Indenture Trustee
and the Servicer any amount due it for the reasonable compensation, expenses,
disbursements and advances of the Indenture Trustee or the Servicer, their
agents and counsel, and any other amounts due the Indenture Trustee or the
Servicer hereunder.
No provision of this Indenture shall be deemed to authorize
the Indenture Trustee or the Servicer to authorize or consent to or accept or
adopt on behalf of any Holder any plan of reorganization, arrangement,
adjustment or composition affecting the Notes or the rights of any Holder
thereof or to authorize the Indenture Trustee or the Servicer to vote in respect
of the claim of any Holder in
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any such proceeding; PROVIDED, HOWEVER, that the Indenture Trustee may, on
behalf of the Holders, vote for the election of a trustee in bankruptcy or
similar official and be a member of a creditors' or other similar committee.
Nothing herein contained shall be deemed to limit each
Holder's right to file and prove its claim with respect to Notes held by it and
to collect and receive any award in any such proceeding.
SECTION 505. Indenture Trustee and Servicer may Enforce
------------------------------------------
Claims Without Possession of Notes.
- ----------------------------------
All rights of action and claims under this Indenture or the
Notes may be prosecuted and enforced by the Indenture Trustee or the Servicer on
its behalf without the possession of any of the Notes or the production thereof
in any proceeding relating thereto, and any such proceeding instituted by the
Indenture Trustee or the Servicer shall be brought in the name of the Indenture
Trustee as trustee of an express trust, and any recovery of judgment shall,
after provision for the payment of the reasonable compensation, expenses,
disbursements and advances of the Servicer, the Indenture Trustee, its agents
and counsel and be applied in accordance with Section 506 hereof.
SECTION 506. Application of Money Collected.
------------------------------
Any money collected by the Indenture Trustee pursuant to this
Article shall be applied in the following order, at the date or dates fixed by
the Indenture Trustee and, in case of the distribution of such money on account
of the principal of or interest on the Notes, upon presentation of the Notes and
the notation thereon of the payment if only partially paid and upon surrender
thereof if fully paid:
FIRST: To the payment of all amounts due the Indenture
Trustee, the Servicer and each Paying Agent hereunder;
SECOND: PRO RATA to the payment of the amounts then due and
unpaid for interest on the Notes and the principal of the Notes and
all Yield Maintenance Charges and other amounts, if any, due on the
Notes on an equal and ratable basis without preference or priority of
any kind;
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THIRD: If any Notes then remain Outstanding, then to the
Payment Account to the extent necessary to pay the outstanding Notes;
and
FOURTH: To the payment of the remainder, if any, to the
Issuer, its successors or assigns, or to whomsoever may lawfully be
entitled thereto or as a court of competent jurisdiction may
determine.
Payment of the Outstanding Notes on a PRO RATA basis shall be
based, for the payment of interest, on the relative proportions of the accrued
interest on any Outstanding Note to the aggregate amount of accrued interest on
all Outstanding Notes, and, for the payment of principal, on the outstanding
principal amount of any Outstanding Note to the aggregate outstanding principal
amount of all Outstanding Notes.
SECTION 507. Limitation on Suits.
-------------------
Except as provided in Section 508, no Holder of any Note shall
have any right to institute any proceeding, judicial or otherwise, with respect
to this Indenture or any Security Document, or for the appointment of a receiver
or trustee, or for any other remedy hereunder or thereunder, unless:
(1) such Holder has previously given written notice to the
Indenture Trustee of a continuing Event of Default;
(2) the Holders of more than 25% in aggregate principal amount
of the Outstanding Notes shall have made written request to the
Indenture Trustee to institute proceedings in respect of such Event of
Default in its own name as Indenture Trustee hereunder;
(3) such Holder or Holders have offered to the Indenture
Trustee reasonable indemnity or security against the costs, expenses
and liabilities to be incurred in compliance with such request;
(4) the Indenture Trustee for 30 days after its receipt of
such notice, request and offer of indemnity has failed to institute any
such proceeding; and
(5) no direction inconsistent with such written request has
been given to the Indenture Trustee during
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such 30-day period by the Holders of a majority in principal amount of
the Outstanding Notes;
it being understood and intended that no one or more of such Holders shall have
any right in any manner whatever by virtue of, or by availing of, any provision
of this Indenture or any Security Document to affect, disturb or prejudice the
rights of any other of such Holders, or to obtain or to seek to obtain priority
or preference over any other of such Holders to enforce any right under this
Indenture or any Security Document, except in the manner herein provided and for
the equal and ratable benefit of all of such Holders.
SECTION 508. Unconditional Right of Holders to Receive
-----------------------------------------
Principle and Interest.
- ----------------------
Notwithstanding any other provision in this Indenture, the
Holder of any Note shall have the right, which is absolute and unconditional, to
receive payment of the principal of and interest on such Note on the Stated
Maturity expressed in such Note (or, in the case of redemption, on the
Redemption Date, together with any applicable Yield Maintenance Charge) and to
institute suit for the enforcement of any such payment, subject to the
provisions of Section 507, and such rights shall not be impaired without the
consent of such Holder.
SECTION 509. Restoration of Rights and Remedies.
----------------------------------
If the Indenture Trustee, the Servicer or any Holder has
instituted any proceeding to enforce any right or remedy under this Indenture or
under any Transaction Document and such proceeding has been discontinued,
waived, rescinded, or abandoned for any reason, or has been determined adversely
to the Indenture Trustee or to such Holder, then and in every such case, subject
to any determination in such proceeding, the Issuer, the Indenture Trustee, the
Servicer and the Holders shall be restored severally and respectively to their
former positions hereunder and thereafter all rights and remedies of the
Indenture Trustee, the Holders, the Servicer and the Issuer shall continue as
though no such proceeding had been instituted.
SECTION 510. Rights and Remedies Cumulative.
------------------------------
Except as otherwise provided with respect to the replacement
or payment of mutilated, destroyed, lost or stolen Notes in Section 309, no
right or remedy herein
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conferred upon or reserved to the Indenture Trustee, the Servicer or to the
Holders of Notes is intended to be exclusive of any other right or remedy, and
every right and remedy shall, to the extent permitted by law, be cumulative and
in addition to every other right and remedy given hereunder, under the
Transaction Documents or now or hereafter existing at law or in equity or
otherwise. The assertion or employment of any right or remedy hereunder, or
otherwise, shall not prevent the concurrent assertion or employment of any other
appropriate right or remedy.
SECTION 511. Delay or Omission not Waiver.
----------------------------
None of the Indenture Trustee, the Servicer nor any Holder of
any Note shall by any act, delay, omission or otherwise be deemed to have waived
any of its rights, remedies or privileges hereunder and no waiver shall be valid
unless made pursuant of this Indenture. A waiver made pursuant to this Indenture
of any right, remedy or privilege hereunder on any one occasion shall not be
construed as a bar to any right, remedy or privilege which the Indenture
Trustee, the Servicer or any Holder of any Note would otherwise have had on any
future occasion. No failure to exercise nor any delay in exercising on the part
of the Indenture Trustee, the Servicer or any Holder of any Note, any right,
power or privilege hereunder or under the Notes shall be deemed a waiver of any
default or acquiescence therein or shall preclude any other or further exercise
thereof or the exercise of any other right, power or privilege. Every right and
remedy given by this Indenture or by any Transaction Document or by law to the
Indenture Trustee, the Servicer or to the Holders may be exercised from time to
time, and as often as may be deemed expedient, to the extent permitted by
applicable law, by the Indenture Trustee, the Servicer or by the Holders, as the
case may be.
SECTION 512. Control by Holders.
------------------
The Holders of a majority in aggregate principal amount of the
Outstanding Notes (or their representative, which may be the Pass-Through
Trustee or the Servicer) shall have the right to direct the time, method and
place of conducting any proceeding for any remedy available to the Indenture
Trustee, or exercising any trust or power conferred on the Indenture Trustee or
otherwise granted to the Indenture Trustee hereunder, PROVIDED that such
direction shall not be in conflict with any rule of law or with this Indenture
and that the Indenture Trustee may take any
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other action deemed proper by the Indenture Trustee which is not inconsistent
with such direction.
SECTION 513. Waiver of Past Defaults.
-----------------------
The Holders of not less than 66 2/3% in aggregate principal
amount of the Outstanding Notes, on behalf of the Holders of all the Notes, may
waive any past Default hereunder and its consequences, except a Default:
(1) in the payment of principal of or interest on any Notes,
which shall require the waiver of each Holder of any Note so affected;
or
(2) in respect of a covenant or provision hereof which under
Article Nine cannot be modified or amended without the consent of the
Holder of each Outstanding Note affected; or
(3) depriving the Indenture Trustee or any Holder of an
Encumbrance upon any of the Mortgaged Properties.
Upon any such waiver, such Default shall cease to exist, and
any Event of Default arising therefrom shall be deemed to have been cured for
every purpose of this Indenture, but no such waiver shall extend to any
subsequent or other Default or impair any right consequent thereon.
SECTION 514. Undertaking for Costs.
---------------------
All parties to this Indenture agree, and each Holder of any
Note by his acceptance thereof shall be deemed to have agreed, that any court
may in its discretion require, in any suit for the enforcement of any right or
remedy under this Indenture or any Transaction Document, or in any suit against
the Indenture Trustee for any action taken, suffered or omitted by it as
Indenture Trustee, the filing by any party litigant in such suit of an
undertaking to pay the costs of such suit, and that such court may in its
discretion assess costs against any such party litigant in the manner and to the
extent provided in the Trust Indenture Act; PROVIDED that neither this Section
nor the Trust Indenture Act shall be deemed to authorize any court to require
such an undertaking or to make such an assessment in any suit instituted by the
Issuer.
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SECTION 515. Waiver of Appraisement and Other Laws.
-------------------------------------
The Issuer covenants (to the extent that it may lawfully do
so) that it will not at any time insist upon, or plead, or in any manner
whatsoever claim to take the benefit or advantage of, any appraisement,
valuation, redemption, usury, stay or extension law wherever enacted, now or at
any time hereafter in force, which may affect the covenants or the performance
of this Indenture or any Security Document or the absolute sale of the Trust
Estate or any part thereof.
SECTION 516. Marshalling; Payments Set Aside; Further
---------------------------------------
Assurance.
- ---------
The Issuer, for itself and all who may claim under it, waives,
to the extent that it may lawfully do so, all right to have the property in the
Trust Estate marshal- led upon any foreclosure hereof, and agrees that any court
having jurisdiction to foreclose this Indenture and/or any Security Document may
order the sale of the Trust Estate as an entirety.
To the extent that the Issuer makes a payment or payments
hereunder or the Indenture Trustee or any Holder of any Note enforces its
security interests or exercises its rights of setoff, and such payment or
payments or the proceeds of such enforcement or setoff or any part thereof are
subsequently invalidated, declared to be fraudulent or preferential, set aside
and/or required to be repaid to a trustee, receiver or any other party under any
bankruptcy law, state or federal law, common law or equitable cause, then to the
extent of such recovery, the obligation or part thereof originally intended to
be satisfied, and all Encumbrances, rights and remedies therefor, shall be
revived and continued in full force and effect as if such payment had not been
made or such enforcement or setoff had not occurred.
Upon the reasonable request of the Indenture Trustee, the
Issuer will execute, acknowledge, record and/ or file such documents in form
reasonably satisfactory to the Indenture Trustee and do such further acts as may
be reasonably necessary, desirable or proper to carry out more effectively the
purposes of this Indenture, including with respect to all collateral pledged
under the Transaction Documents.
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ARTICLE SIX
-----------
THE INDENTURE TRUSTEE
---------------------
SECTION 601. Certain Duties and Responsibilities.
-----------------------------------
The duties and responsibilities of the Indenture Trustee and
the Servicer shall be as set forth in this Section.
(a) Subject to Section 601(b), the duties and responsibilities
of the Indenture Trustee in respect of the Transaction Documents shall be as
follows:
(1) The Indenture Trustee and the Servicer as agent for the
Indenture Trustee shall have the full power and authority to do all
things not inconsistent with the provisions hereof or any other
Transaction Document which the Indenture Trustee or the Servicer may
deem advisable in order to enforce the provisions hereof or thereof or
to take any action with respect to a Default or an Event of Default
hereunder or thereunder, or to institute, appear in or defend any suit
or other proceeding with respect hereto or thereto, or to protect the
interests of the Holders. Neither the Indenture Trustee nor the
Servicer shall be answerable or accountable except for its own bad
faith, willful misconduct or negligence. The Indenture Trustee and the
Servicer as agent of the Indenture Trustee shall be authorized to make,
at the expense of the Issuer, all required refilings of any Transaction
Document to preserve the Encumbrances created thereby to the extent not
done so by the Issuer as provided herein or therein, but shall have no
obligation to take any other action to protect, preserve or enforce any
rights or interests in the Transaction Documents or towards the
execution or enforcement of the trusts hereby created which, in the
Indenture Trustee's or the Servicer's opinion, shall be likely to
involve expense or liability to the Indenture Trustee, unless the
Indenture Trustee shall have received an agreement satisfactory to the
Indenture Trustee in its sole discretion to indemnify it against such
liability and expense. The Indenture Trustee shall not be required to
inquire as to the performance or observance of any of the covenants or
agreements in any Transaction Document to be performed or observed by
the Issuer (including, without limita-
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tion, the necessity or desirability under any applicable law to
re-record, re-register or re-file any Transaction Document) except for
the delivery of scheduled reports, certificates and statements required
by the terms of this Indenture and ensuring the timely filing of
Uniform Commercial Code continuation statements in respect of the
Uniform Commercial Code financing statements listed on Schedule 7
attached hereto. In accepting the trusts hereunder and under the other
Transaction Documents, the Indenture Trustee is acting solely as
Indenture Trustee hereunder and not in its individual capacity.
(2) Neither the Indenture Trustee nor the Servicer shall incur
any liability in acting upon any signature, notice, request, consent,
instrument, certificate, opinion, or other instrument reasonably
believed by it to be genuine. In administering the trusts, the
Indenture Trustee may execute any of the trusts or powers directly or
through its agents or attorneys and may consult with counsel,
accountants and other professionals or consultants to be selected and
employed by it, and the Indenture Trustee shall not be liable for
anything done, suffered or omitted in good faith by it in accordance
with the advice of any such Person nor for any error of judgment made
in good faith by a Responsible Officer, unless it shall be proved that
the Indenture Trustee was negligent in ascertaining the pertinent
facts.
(3) Neither the Indenture Trustee nor the Servicer shall have
any duty to make, arrange or ensure the completion of any recording,
filing or registration of any Transaction Document, any instrument of
further assurance, any instrument constituting part of the Trust
Estate, or any amendments or supplements to any of said instruments,
other than those refilings referred to in Section 601(a)(1) above, and
neither the Indenture Trustee nor the Servicer shall have any duty to
make, arrange or ensure the completion of the payment of any fees,
charges or taxes in connection therewith (and the Indenture Trustee and
the Servicer may act with respect to the Transaction Documents and pay
out deposited monies without regard thereto), or to give any notice
thereof, or to make, arrange or ensure the completion of the payment of
or be under any duty in respect of any tax, assessment or other
governmental charge which may be levied or assessed on
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any of the Trust Estate or any part thereof or against the Issuer.
(4) Whenever in administering the trust the Indenture Trustee
or the Servicer as the agent of the Indenture Trustee shall deem it
necessary or desirable that a matter be proved or established prior to
taking, suffering or omitting any action hereunder, the Indenture
Trustee or the Servicer, as the case may be, may, in the absence of
willful misconduct or knowledge to the contrary on the part of the
Indenture Trustee, rely upon (unless other evidence in respect thereof
be specifically prescribed herein or in any other Transaction Document)
an Officer's Certificate and such Officer's Certificate shall be full
warrant to the Indenture Trustee and the Servicer for any action taken,
suffered or omitted by either of them on the faith thereof, but in its
discretion the Indenture Trustee may in lieu thereof accept other
evidence of such fact or matter or may require such further or
additional evidence as may seem reasonable to it.
(5) Neither the Indenture Trustee nor the Servicer shall be
concerned with or accountable to any Person for the use or application
of any deposited monies which shall be released or withdrawn in
accordance with the provisions hereof or of any other Transaction
Document, or of any property or securities or the proceeds thereof
which shall be released from the Encumbrance hereof or thereof in
accordance with the provisions hereof or thereof and neither the
Indenture Trustee nor the Servicer shall have any liability for the
acts of other parties which are not in accordance with the provisions
hereof.
(6) Neither the Indenture Trustee nor the Servicer shall be
liable to any Holder with respect to any action taken, suffered or
omitted to be taken by it in good faith in accordance with the
direction of the Holders of not less than a majority in principal
amount of the Outstanding Notes relating to the time, method and place
of conducting any proceeding for any remedy available to the Indenture
Trustee (or the Servicer as agent for the Indenture Trustee), or
exercising any trust or power conferred upon the Indenture Trustee (or
the Servicer as agent for the Indenture Trustee), under this Indenture.
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(7) Neither the Indenture Trustee nor the Servicer shall be
charged with knowledge of any Event of Default under any Transaction
Document (except default in the payment of monies to the Indenture
Trustee or the Servicer which the Issuer is required to pay or cause to
be paid to the Indenture Trustee or the Servicer, as the case may be,
on or before a specified date and except default in the delivery of any
certificate, opinion or other document expressly required to be
delivered to the Indenture Trustee pursuant to any Transaction
Document), unless either (i) a Responsible Officer of the Indenture
Trustee assigned to its corporate trust department in the case of the
Indenture Trustee, or a Servicing Officer (as defined in the Trust and
Servicing Agreement), in the case of the Servicer, shall have knowledge
of such Event of Default or (ii) written notice of such Event of
Default shall have been given to and received by the Indenture Trustee
or the Servicer, as the case may be, by the Issuer, any other obligor
on the Notes or by any Holders of at least 10% in aggregate principal
amount of the Notes then Outstanding.
The Indenture Trustee (or the Servicer as agent for the
Indenture Trustee) may, without the consent of the Holders, give any consent,
waiver or approval under and contemplated by any Transaction Document, but shall
not (i) without the consent of the Holders of not less than 66 2/3% in aggregate
principal amount of the Outstanding Notes consent to any amendment or
modification of any Transaction Document in any respect having a material
adverse effect on the interests of the Holders generally, except as expressly
provided by the terms thereof, (ii) consent to any amendment or modification of
any Transaction Document in any respect having a material adverse effect on the
interests of any individual Holder apart from the effect on the interests of the
Holders generally without the consent of each individual Holder that would be
affected thereby, or (iii) without the prior written consent of all the Holders,
consent to or accept any cancellation or termination of any Transaction
Document, or any change in the manner or amount of payment of the Notes.
(b) The duties and responsibilities of the Indenture Trustee
in respect of this Indenture shall be as provided by the Trust Indenture Act.
Notwithstanding the foregoing, no provision of this Indenture shall require the
Indenture Trustee to expend or risk its own funds or otherwise incur any
financial liability in the performance of
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any of its duties hereunder, or in the exercise of any of its rights or powers,
if it shall in the exercise of its good faith business judgment believe that
repayment of such funds or adequate indemnity against such risk or liability is
not reasonably assured to it. Whether or not therein expressly so provided,
every provision of this Indenture relating to the conduct or affecting the
liability of or affording protection to the Indenture Trustee shall be subject
to the provisions of this Section 601(b).
(c) It is expressly understood and agreed among the parties
hereto that the Servicer is authorized to act on behalf of the Indenture Trustee
with respect to the servicing of the Trust Estate and to take any action
permitted to be taken hereunder by the Indenture Trustee or its agent (provided
that the Servicer takes such action in accordance with the servicing standards
in the Trust and Servicing Agreement), and that the Indenture Trustee shall not,
without the consent of the Servicer (which consent may not be unreasonably
withheld), take any action independently of the Servicer with respect to the
servicing of the Trust Estate, unless the Servicer has been terminated hereunder
or under the Trust and Servicing Agreement.
SECTION 602. Money Held in Trust.
-------------------
Money held by the Indenture Trustee, or the Servicer as the
agent for the Trustee, hereunder shall be held in trust for the purposes for
which it was paid, and shall be segregated from any other monies held by the
Servicer, and if held by the Indenture Trustee shall be segregated at the
Corporate Trust Office from any other monies held by the Indenture Trustee, and
may be deposited by the Indenture Trustee under such general conditions as may
be prescribed by law in the trust department of the Indenture Trustee. Neither
the Indenture Trustee nor the Servicer shall be under any liability for interest
on any money received by it hereunder except as provided in this Indenture or as
otherwise agreed with the Issuer. Within thirty days after the end of each month
or portion thereof during the term of the Notes, the Indenture Trustee (or the
Servicer as its agent) shall deliver to the Issuer and, upon request, to the
Holder of any Note, a statement of the receipts and disbursements from the
Payment Account and any other amounts received or disbursed by the Indenture
Trustee (or the Servicer as its agent) under this Indenture or otherwise in
respect of the Trust Estate during the preceding calendar month. Absent an Event
of Default, the
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Indenture Trustee shall not be obligated to review the statement of the receipts
of and the disbursements from the Payment Account to determine that the funds
have been disbursed by the Issuer in accordance with this Indenture.
SECTION 603. Notice of Defaults.
------------------
The Indenture Trustee and the Servicer, promptly after either
of them acquires knowledge of the occurrence of any Default under this Indenture
or any other Transaction Document, shall notify in writing the Servicer (in the
case of knowledge acquired by the Indenture Trustee), the Indenture Trustee (in
the case of knowledge acquired by the Servicer), Issuer, all Holders of then
Outstanding Notes, and the Rating Agencies of any such Default, unless all such
Defaults known to the Indenture Trustee, or the Servicer, as the case may be,
shall have been cured before the giving of such notice; PROVIDED that, except in
the case of a Default in the payment of the principal of and interest on any of
the Notes, the Indenture Trustee shall be protected in withholding such notice
if and so long as the board of directors, the executive committee or a trust
committee composed of directors and/or Responsible Officers of the Indenture
Trustee in good faith determines that the withholding of such notice is in the
interest of Holders of the Notes.
SECTION 604. Certain Rights of Indenture TRustee and the
-------------------------------------------
Servicer.
- --------
Subject to the provisions of Section 601:
(a) the Indenture Trustee and the Servicer may rely and shall
be protected in acting or refraining from acting upon any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document believed by it to be genuine
and to have been signed or presented by the proper party or parties;
(b) any request or direction of the Issuer mentioned herein
shall be sufficiently evidenced by an Issuer Request or Issuer Order;
(c) whenever in the administration of this Indenture the
Indenture Trustee or the Servicer shall deem it desirable that a matter
be proved or established prior to taking, suffering or omitting any
action
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hereunder, the Indenture Trustee or the Servicer, as the case may be
(in either case unless other evidence be herein specifically
prescribed), may, in the absence of bad faith on its part, rely upon an
Officer's Certificate;
(d) the Indenture Trustee and the Servicer may, and, if the
Holders of more than 10% in aggregate principal amount of Outstanding
Notes so request (or, with respect to any lawsuit in which the
Indenture Trustee is named as a party, at the request of any Holder),
shall, consult with counsel and the written advice of such counsel
shall be full and complete authorization and protection in respect of
any action taken, suffered or omitted by it hereunder in good faith and
in reliance thereon;
(e) neither the Indenture Trustee nor the Servicer shall be
under any obligation to exercise any of the rights or powers vested in
it by this Indenture at the request or direction of any of the Holders
pursuant to this Indenture, unless such Holders shall have offered to
the Indenture Trustee or the Servicer, as the case may be, reasonable
security or indemnity against the costs, expenses and liabilities which
might be incurred by it in compliance with such request or direction;
(f) neither the Indenture Trustee nor the Servicer, as the
case may be, shall be bound to make any investigation into the facts or
matters stated in any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent, order, bond,
debenture, note, other evidence of indebtedness or other paper or
document (except as may be required of the Servicer in connection with
the Trust and Servicing Agreement), but the Indenture Trustee or the
Servicer, as the case may be, in its discretion, may make such further
inquiry or investigation into such facts or matters as it may see fit,
and, if the Indenture Trustee shall determine to make such further
inquiry or investigation, it shall be entitled to examine the books,
records and premises of the Issuer, personally or by agent or attorney;
and
(g) the Indenture Trustee may execute any of the trusts or
powers hereunder or perform any duties hereunder either directly or by
or through agents or attorneys and the Indenture Trustee shall not be
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responsible for any misconduct or negligence on the part of any agent
or attorney appointed with due care by it hereunder.
SECTION 605. Compensation and Reimbursement.
------------------------------
(a) The Servicer agrees:
(1) to pay to the Indenture Trustee from time to time
reasonable compensation for all services rendered by it hereunder
(which compensation shall not be limited by any provision of law in
regard to the compensation of a trustee of an express trust);
(2) except as otherwise expressly provided herein, to
reimburse the Indenture Trustee upon its request for all reasonable
expenses, disbursements and advances incurred or made by the Indenture
Trustee in accordance with any provision of this Indenture, the other
Transaction Documents, the Underwriting Agreement, the Trust and
Servicing Agreement or the Management Agreement (including the
reasonable compensation and the expenses and disbursements of its
agents and counsel), except any such expense, disbursement or advance
as may be attributable to the Indenture Trustee's negligence, willful
misconduct or bad faith; and
(3) to indemnify (to the extent recoverable pursuant to
Section 1301) the Indenture Trustee for, and to hold it harmless
against, any loss, liability or expense incurred without negligence,
willful misconduct, or bad faith on its part, arising out of or in
connection with the acceptance or administration of the trust or trusts
hereunder, under the other Transaction Documents or under any other
instrument included in the Trust Estate, including the costs and
expenses of defending itself against any claim or liability in
connection with the exercise or performance of any of its powers or
duties hereunder.
(b) The Servicer shall be entitled to reimbursement for
amounts paid by it pursuant to clauses (2) and (3) of Section 605(a) pursuant
to, and to the extent provided in, Section 1301.
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SECTION 606. Disqualification; Conflicting Interests.
---------------------------------------
(a) If the Indenture Trustee has or shall acquire a
conflicting interest within the meaning of the Trust Indenture Act, the
Indenture Trustee shall either eliminate such interest or resign, to the extent
and in the manner provided by, and subject to the provisions of, the
Trust Indenture Act and this Indenture.
(b) If the Indenture Trustee has or shall acquire any
conflicting interest under the provisions of any state law applicable to this
Indenture or the Mortgage, the following shall apply:
(1) such Indenture Trustee shall, within ninety days after
ascertaining that it has such conflicting interest, either eliminate
such conflicting interest or resign, such resignation to become
effective upon the appointment of a successor Indenture Trustee and
such successor's acceptance of such appointment; and the Issuer shall
take prompt steps to have a successor appointed in the manner provided
herein;
(2) in the event that such Indenture Trustee shall fail to
comply with the provisions of subparagraph (a), such Indenture
Trustee shall, within ten days after the expiration of such ninety-day
period, transmit notice of such failure by mail (i) to all registered
Holders as the names and addresses of such Holders appear in the
Register, (ii) to such Holders as have, within the two years preceding
such transmission, filed their names and addresses with the Indenture
Trustee for the purpose of receiving notices or reports to the Holders,
and (iii) to all Holders whose names and addresses are contained in
information currently preserved by the Indenture Trustee for such
purpose in accordance with provisions of this Indenture requiring the
Issuer to furnish or cause to be furnished to the Indenture Trustee at
stated intervals of not more than six months, and at such other times
as the Indenture Trustee may request in writing, all information in the
possession or control of the Issuer, or of any of its Paying Agents, as
to the names and addresses of the Holders, and requiring the Indenture
Trustee to preserve, in as current a form as is reasonably practicable,
all such information so furnished to it or received by it in the
capacity of Paying Agent; and
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(3) any Holder who has been a bona fide Holder for at least
six months may, on behalf of himself and all others similarly situated,
petition any court of competent jurisdiction for the removal of such
Indenture Trustee, and the appointment of a successor, if such
Indenture Trustee fails, after written request therefor by such Holder,
to comply with the provisions of subparagraph (1).
SECTION 607. Eligibility of the Indenture Trustee and the
--------------------------------------------
Servicer.
- --------
(a) The Issuer agrees, for the benefit of the Holders, that
there shall at all times be an Indenture Trustee hereunder which shall be a
Person that is eligible pursuant to the Trust Indenture Act to act as such and
has a combined capital and surplus of at least $100,000,000, and is subject to
supervision or examination by Federal or State authority and has a rating on its
unsecured long-term debt of at least "BBB" from each Rating Agency. If such
Person publishes reports of condition at least annually, pursuant to law or to
the requirements of said supervising or examining authority, then for the
purposes of this Section, the combined capital and surplus of such Person shall
be deemed to be its combined capital and surplus as set forth in its most recent
report of condition as published. If at any time the Indenture Trustee shall
cease to be eligible in accordance with the provisions of this Section, it shall
resign immediately in the manner and with the effect hereinafter specified in
this Article.
(b) The Servicer shall at all times as it is acting as the
agent of the Indenture Trustee hereunder meet the eligibility requirements set
forth in Section 6.04(i)(B) of the Trust and Servicing Agreement. If at any time
the Servicer shall cease to be eligible in accordance with the provisions of
this Section or Section 6.04(i)(B) of the Trust and Servicing Agreement, it
shall resign immediately in the manner and with the effect hereinafter specified
in this Article.
SECTION 608. Authorization of Indenture Trustee and the
------------------------------------------
Servicer.
- --------
(a) The Indenture Trustee represents and warrants that it is
duly authorized under applicable law, its articles of association and its
by-laws to authenticate the Notes in accordance with the terms hereof, to
perform its obligations hereunder and under the Security Documents
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Assignment and the other Transaction Documents and to execute and deliver this
Indenture and the Security Documents Assignment and all corporate action
necessary or required therefor has been duly and effectively taken or obtained.
(b) The Servicer represents and warrants that it is duly
authorized under applicable law, its articles of association and its by-laws to
service the Trust Estate and the Notes in accordance with the terms hereof and
of the Trust and Servicing Agreement, to perform its obligations hereunder and
thereunder and to execute and deliver this Indenture and the Trust and Servicing
Agreement, and all corporate action necessary or required therefor has been duly
and effectively taken or obtained.
SECTION 609. Merger, Conversion, Consolidation or Succession
-----------------------------------------------
to Business.
- -----------
Any corporation into which the Indenture Trustee may be merged
or converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which it shall be a party, or
any corporation succeeding to all or substantially all the corporate trust
business of the Indenture Trustee, shall be the successor of the Indenture
Trustee hereunder, provided such corporation shall be otherwise qualified and
eligible under this Article, without the execution or filing of any paper or any
further act on the part of any of the parties hereto. In case any Notes shall
have been authenticated, but not delivered, by the Indenture Trustee then in
office, any successor by merger, conversion or consolidation to such
authenticating Indenture Trustee may adopt such authentication and deliver the
Notes so authenticated with the same effect as if such successor Indenture
Trustee had itself authenticated such Notes.
SECTION 610. Preferential Collection of Claims Against
-----------------------------------------
Issuer.
- ------
If and when the Indenture Trustee or the Servicer shall be or
become a creditor of the Issuer (or any other obligor upon the Notes), the
Indenture Trustee as its agent shall be subject to the provisions of the Trust
Indenture Act regarding the collection of claims against the Issuer (or any such
other obligor).
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SECTION 611. Resignation and Removal; Appointment of
---------------------------------------
Successor.
- ---------
(a) No resignation or removal of the Indenture Trustee or the
Servicer and no appointment of a successor Indenture Trustee or Servicer
pursuant to this Article shall become effective until the acceptance of
appointment by the successor Indenture Trustee in accordance with the applicable
requirements of Section 612 or the acceptance of appointment by the successor
Servicer in accordance with the applicable requirements of the Trust and
Servicing Agreement.
(b) The Indenture Trustee may resign at any time by giving
written notice thereof to the Issuer and a copy of such notice to the Servicer.
If the instrument of acceptance by a successor Indenture Trustee required by
Section 612 shall not have been delivered to the Indenture Trustee within 30
days after the giving of such notice of resignation, the resigning Indenture
Trustee may petition any court of competent jurisdiction for the appointment of
a successor Indenture Trustee.
(c) The Indenture Trustee may be removed at any time by the
Holders of a majority in principal amount of the Outstanding Notes and notice of
such action by the Holders shall be delivered to the Indenture Trustee, the
Servicer, the Rating Agencies and the Issuer.
(d) If at any time:
(1) the Indenture Trustee shall fail to comply with Section
606 after written request for compliance by the Indenture Trustee or
from the Issuer or from any Holder who has been a bona fide Holder of a
Note for at least six months, or
(2) the Indenture Trustee shall cease to be eligible under
Section 607 and shall fail to resign after written request therefor by
the Issuer or by any such Holder of Notes, or
(3) the Indenture Trustee shall become incapable of acting or
shall be adjudged a bankrupt or insolvent or a receiver of the
Indenture Trustee or of its property shall be appointed or any public
officer shall take charge or control of the Indenture Trustee or of its
property or affairs for the purpose of rehabilitation, conservation or
liquidation,
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then, in any such case, (i) the Issuer may remove the Indenture Trustee with
respect to all Notes, or (ii) subject to Section 514, any Holder who has been a
bona fide Holder of a Note for at least six months may, on behalf of itself and
all others similarly situated, petition any court of competent jurisdiction for
the removal of the Indenture Trustee with respect to all Notes and the
appointment of a successor Indenture Trustee or Indenture Trustees.
(e) If the Indenture Trustee shall resign, be removed or
become incapable of acting, or if a vacancy shall occur in the office of
Indenture Trustee for any cause, the Issuer shall promptly appoint a successor
Indenture Trustee or Indenture Trustees with respect to the Notes (which
appointment shall be subject to the approval of the Holders of a majority in
aggregate principal amount of the Outstanding Notes) and shall comply with the
applicable requirements of Section 612. The Indenture Trustee shall, however,
continue to act as Paying Agent for Outstanding Notes until the appointment of a
successor Paying Agent. If, within 60 days after such resignation, removal or
incapability, or the occurrence of such vacancy, a successor Indenture Trustee
shall not have been appointed by the Issuer and shall not have accepted such
appointment in accordance with the applicable requirements of Section 612, then
a successor Indenture Trustee shall be appointed by Act of the Holders of a
majority in aggregate principal amount of the Outstanding Notes delivered to the
Issuer and the retiring Indenture Trustee, and the successor Indenture Trustee
so appointed shall, forthwith upon its acceptance of such appointment in
accordance with the applicable requirements of Section 612, become the successor
Indenture Trustee with respect to the Notes. If, within 120 days after such
resignation, removal or incapability, or the occurrence of such vacancy, no
successor Indenture Trustee shall have been so appointed and accepted
appointment in the manner required by Section 612, the Issuer or any bona fide
Holder of a Note may, on behalf of himself and all others similarly situated,
petition any court of competent jurisdiction for the appointment of a successor
Indenture Trustee. Notwithstanding any resignation or removal of a Person acting
as Indenture Trustee hereunder, the Servicer shall be deemed for purposes of
this Indenture and the servicing of the Notes and the Trust Estate the agent of
any successor Indenture Trustee duly appointed and acting as such hereunder,
including any successor Indenture Trustee appointed pursuant to this Article.
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(f) The Issuer shall give written notice of each resignation
and each removal of the Indenture Trustee or the Servicer and each appointment
of a successor Indenture Trustee by giving notice of such event to each of the
Holders, the Servicer (in the case of a resignation or removal of the Indenture
Trustee), the Indenture Trustee (in the case of a resignation or removal of the
Servicer) and the Rating Agencies. Each notice shall include the name of the
successor Indenture Trustee and the address of its Corporate Trust Office.
SECTION 612. Acceptance of Appointment by Successor.
--------------------------------------
(a) In case of the appointment hereunder of a successor
Indenture Trustee, the successor Indenture Trustee so appointed shall execute,
acknowledge and deliver to the Issuer and to the retiring Indenture Trustee an
instrument accepting such appointment, and thereupon the resignation or removal
of the retiring Indenture Trustee shall become effective and such successor
Indenture Trustee, without any further act, deed or conveyance, shall become
vested with all the rights, powers, trusts and duties of the retiring Indenture
Trustee except that the retiring Indenture Trustee shall continue to act as
Paying Agent for the Outstanding Notes until the appointment of a successor
Paying Agent; but, on the request of the Issuer or the successor Indenture
Trustee, such retiring Indenture Trustee shall, upon payment of all amounts due
to it, execute and deliver an instrument transferring to such successor
Indenture Trustee all the rights, powers and trusts of the retiring Indenture
Trustee, including transferring the Payment Account, Holdover Account, the Rent
Collection Account and the Reserve Accounts, to the successor Indenture Trustee,
shall duly assign, transfer and deliver to such successor Indenture Trustee all
property and money held by such retiring Indenture Trustee hereunder, shall take
such action as may be necessary to provide for the appropriate interest in the
Trust Estate to be vested in such successor Indenture Trustee, and shall execute
and deliver any amendments to the Transaction Documents necessary in connection
therewith, but shall not be responsible for the recording of such documents and
instruments as may be necessary to give effect to the foregoing.
Upon request of any such successor Indenture Trustee, the
Issuer shall execute any and all instruments for more fully and certainly
vesting in and confirming to
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such successor Indenture Trustee all such rights, powers and trusts referred to
in this Section.
No successor Indenture Trustee shall accept its appointment
unless at the time of such acceptance such successor Indenture Trustee shall be
qualified and eligible under this Article.
(b) In case of the appointment or other succession of a
replacement Servicer hereunder, which shall only be made upon receipt of written
confirmation from each Rating Agency that such succession or replacement shall
not result in a withdrawal or downgrade of the rating of any Class of
Certificates then outstanding, the successor Servicer shall execute, acknowledge
and deliver to the Company and the Indenture Trustee an instrument accepting
such appointment; PROVIDED, HOWEVER, that any successor Servicer under the Trust
and Servicing Agreement shall, by its acceptance of appointment or its
succession thereunder, automatically succeed to the obligations of the Servicer
hereunder to the extent provided under the Trust and Servicing Agreement.
Notwithstanding the foregoing, the predecessor Servicer shall execute and
deliver an instrument transferring to such successor Servicer all the rights,
power and trusts of the predecessor Servicer, including transferring all
property and money held by such predecessor Servicer hereunder, and shall
execute and deliver any amendments to the Loan Documents necessary in connection
with the transfer of its obligations as Servicer.
SECTION 613. Appointment of Authenticating Agent.
-----------------------------------
The Indenture Trustee may appoint an Authenticating Agent or
Agents with respect to the Notes which shall be authorized to act on behalf of
the Indenture Trustee to authenticate Notes issued upon original issue and upon
exchange, registration of transfer or partial redemption thereof or pursuant to
Section 304, and Notes so authenticated shall be entitled to the benefits of
this Indenture and shall be valid and obligatory for all purposes as if
authenticated by the Indenture Trustee hereunder. Wherever reference is made in
this Indenture to the authentication and delivery of Notes by the Indenture
Trustee or the Indenture Trustee's certificate of authentication, such reference
shall be deemed to include authentication and delivery on behalf of the
Indenture Trustee by an Authenticating Agent and a certificate of authentication
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executed on behalf of the Indenture Trustee by an Authenticating Agent. Each
Authenticating Agent shall be acceptable to the Issuer and shall at all times be
a corporation organized and doing business under the laws of the United States
of America, any State thereof or the District of Columbia, authorized under such
laws to act as Authenticating Agent, having a combined capital and surplus of
not less than $100,000,000 and subject to supervision or examination by Federal
or State authority. If such Authenticating Agent publishes reports of condition
at least annually, pursuant to law or to the requirements of said supervising or
examining authority, then for the purposes of this Section, the combined capital
and surplus of such Authenticating Agent shall be deemed to be its combined
capital and surplus as set forth in its most recent report of condition so
published. If at any time an Authenticating Agent shall cease to be eligible in
accordance with the provisions of this Section, such Authenticating Agent shall
resign immediately in the manner and with the effect specified in this Section.
Any corporation into which an Authenticating Agent may be
merged or converted or with which it may be consolidated, or any corporation
resulting from any merger, conversion or consolidation to which such
Authenticating Agent shall be a party, or any corporation succeeding to the
corporate agency or corporate trust business of an Authenticating Agent, shall
continue to be an Authenticating Agent, provided such corporation shall be
otherwise eligible under this Section, without the execution or filing of any
paper or any further act on the part of the Indenture Trustee or the
Authenticating Agent.
An Authenticating Agent may resign at any time by giving
written notice thereof to the Indenture Trustee and to the Issuer. The Indenture
Trustee may at any time terminate the agency of an Authenticating Agent by
giving written notice thereof to such Authenticating Agent and to the Issuer.
Upon receiving such a notice of resignation or upon such a termination, or in
case at any time such Authenticating Agent shall cease to be eligible in
accordance with the provisions of this Section, the Indenture Trustee may
appoint a successor Authenticating Agent which shall be acceptable to the Issuer
and shall give notice of such appointment in the manner provided in Section 106
to all Holders of Notes. Any successor Authenticating Agent upon acceptance of
its appointment hereunder shall become vested with all the rights, powers and
duties of its predecessor hereunder, with like effect as if originally named as
an
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Authenticating Agent. No successor Authenticating Agent shall be appointed
unless eligible under the provisions of this Section.
The Indenture Trustee agrees to pay to each Authenticating
Agent from time to time reasonable compensation for its services under this
Section, and the Indenture Trustee shall be entitled to be reimbursed for such
payments.
If an appointment is made pursuant to this Section, the Notes
may have endorsed thereon, in addition to the Indenture Trustee's certificate of
authentication, an alternative certificate of authentication in the following
form:
This is one of the Notes referred to in the within-mentioned
Indenture.
BANKERS TRUST COMPANY OF
CALIFORNIA, N.A.,
As Indenture Trustee
By__________________________,
As Authenticating Agent
By__________________________,
Authorized Officer
SECTION 614. The Rating Agencies.
-------------------
The Indenture Trustee and the Servicer shall deliver to the
Rating Agencies all of the materials received by the Indenture Trustee or the
Servicer from the Issuer pursuant to Section 1008(a)(ii) hereof, any other
quarterly or annual materials in the possession of the Indenture Trustee or the
Servicer requested by the Rating Agencies in accordance with their monitoring
activities, a copy of any notices delivered by or to the Issuer under Section
502 hereof and notice of any Improvements at any Mortgaged Property or any part
thereof of which the Indenture Trustee or the Servicer, as the case may be,
receives notice.
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SECTION 615. Investments.
-----------
The Indenture Trustee and the Servicer shall invest any
amounts held under this Indenture, pending their application to the purposes
herein provided, in Eligible Investments, which investment, so long as no Event
of Default has occurred and is continuing hereunder, shall (unless otherwise
provided herein) be upon the written direction of the Issuer. Neither the
Indenture Trustee nor the Servicer shall make any investment requiring a payment
above par for an obligation if the obligation may be prepaid at the option of
the issuer thereof prior to its maturity nor shall the Indenture Trustee or the
Servicer make any investment in an interest-only strip if the security related
thereto is prepayable. Any such investments shall mature or be redeemable upon
the option of the holder thereof on or prior to the earlier of (x) three months
from the date of their purchase or (y) the Banking Day preceding the day before
the date such amounts are required to be applied under this Indenture. Neither
the Indenture Trustee nor the Servicer shall be responsible for their respective
inability to invest funds received after 12:00 noon New York City time. After
application to the purposes for which any amounts invested pursuant to this
Section 615 are held and so long as no Event of Default has occurred and is
continuing hereunder, any investment income earned from such investments shall
be transferred to the Issuer.
SECTION 616. Unclaimed Funds; Holdover Account.
---------------------------------
At the expiration of two years following the Stated Maturity
of Notes issued hereunder, the Indenture Trustee shall notify the Issuer of any
monies deposited in the Holdover Account for such Notes then remaining on
deposit and unclaimed by the lawful owner thereof and all such monies and any
accrued interest on such monies shall be paid to the Issuer upon written request
of the Issuer for the payment thereof and the person entitled to receive such
monies thereafter shall look only to the Issuer for payment thereof as an
unsecured general creditor (and in such event such Holder may look to the Issuer
to the extent of the amounts so discharged notwithstanding the provisions of
Section 114), and all liability of the Indenture Trustee or any Paying Agent
with respect to such trust money shall thereupon cease; provided that the
Indenture Trustee, before being required to make any such repayment, may, at the
expense of the Issuer, cause to be published at least once but not more than
three times in a newspaper in the
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English language customarily published on each Banking Day and of general
circulation, in New York, New York, a notice to the effect that said monies
remain unclaimed and have not been applied for the purpose for which they were
deposited, and that after a date specified therein, which shall be not less than
30 days after the date of first publication of said notice, any unclaimed
balance of said monies then remaining in the hands of the Indenture Trustee will
be paid to the Issuer upon its written directions. Any successor to the Issuer
through merger, consolidation or otherwise or any recipient of substantially all
the assets of the Issuer in a liquidation of the Issuer shall remain liable for
the amount of any unclaimed balance paid to the Issuer pursuant to this Section.
SECTION 617. Communications to be Sent to the Rating
---------------------------------------
Agencies.
- --------
(a) The Indenture Trustee and the Servicer shall send a copy
of each supplement, notice, certificate, request, demand, financial statement
and any other written communication sent by it or received by it pursuant to or
in connection with this Indenture, the other Transaction Documents or any
Mortgaged Property or any part thereof, other than statements of the Indenture
Trustee's fees and expenses and other communications of a similarly solely
administrative nature (in the Indenture Trustee's or the Servicer's, as the case
may be, sole opinion), to the Rating Agencies and to any Holder requesting
delivery of all or part of such information in writing who provides the
Indenture Trustee with an address for delivery of such information and
reasonably satisfactory evidence that such Person is a Holder. The Indenture
Trustee shall send to the Rating Agencies within two Banking Days of its receipt
thereof (i) a copy of any election of notice of redemption (in whole or in part)
affecting the Notes and (ii) a copy of any request for the Indenture Trustee's
consent or approval.
(b) The Indenture Trustee shall:
(i) immediately send to the Issuer after the date on which any
installment of interest or other amounts on the Notes becomes due and
payable hereunder and is not paid, a written demand for payment
thereof;
(ii) immediately send to the Issuer after any amount other than
principal or interest becomes due
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and payable hereunder and is not paid, a written demand for payment of
such amount;
(iii) send to the Issuer, within five Banking Days after a
Responsible Officer of the Indenture Trustee acquires actual knowledge
that any mechanic's lien or other Encumbrance has been filed against
any Mortgaged Property or any part thereof, a written demand that the
Issuer bond or otherwise satisfy such Encumbrance; and
(iv) promptly send to the Issuer as soon as the Indenture Trustee
acquires knowledge thereof of (A) any failure by the Issuer to perform
or comply with any of the terms of this Indenture or any other
Transaction Document, or (B) any breach of a representation or warranty
made by the Issuer in this Indenture, any other Transaction Document or
any other agreement or instrument to which the Issuer is a party,
written notice of such failure or breach and demand for cure in
accordance with the Indenture.
SECTION 618. Separate Indenture Trustees and Co-trustees.
-------------------------------------------
(a) At any time or times, for the purpose of meeting legal
requirements applicable to the Indenture Trustee or the Trust Estate, the
Indenture Trustee shall have the power to appoint one or more Persons to act as
separate trustees or co-trustees hereunder, jointly with the Indenture Trustee,
of any of the Trust Estate, including the Mortgaged Properties, subject to this
Indenture, and any such Persons shall be such separate trustee or co-trustee,
with such powers and duties consistent with the Transaction Documents as shall
be specified in the instrument appointing such Person but without thereby
releasing the Indenture Trustee from any of its duties hereunder. If the
Indenture Trustee shall request the Issuer and/or the Servicer so to do, the
Issuer and/or the Servicer, as the case may be, shall join with the Indenture
Trustee in the execution of such instrument, but the Indenture Trustee shall
have the power to make such appointment without making such request.
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(b) Every separate trustee and co-trustee shall, to the extent
not prohibited by law, be subject to the following terms and conditions:
(1) The rights, powers, duties and obligations conferred or
imposed upon such separate or co-trustee shall be conferred or imposed
upon and exercised or performed by the Indenture Trustee and such
separate or co-trustee jointly, as shall be provided in the appointing
instrument, except to the extent that under any law of any jurisdiction
in which any particular act is to be performed any nonresident trustee
shall be incompetent or unqualified to perform such act, in which event
such rights, powers, duties and obligations shall be exercised and
performed by such separate trustee or co-trustee;
(2) The Notes shall be authenticated and delivered, and all
rights, powers, and obligations hereunder in respect of the custody of
securities, cash and other personal property held by, or required to be
deposited or pledged with, the Indenture Trustee hereunder, shall be
exercised solely, by the Indenture Trustee (or by the Servicer as its
agent); and
(3) The Indenture Trustee may at any time by written
instrument accept the resignation of or remove, upon the concurrence of
the Issuer, any such separate trustee or co-trustee, and, upon the
request of the Indenture Trustee, the Issuer and the Servicer shall
join with the Indenture Trustee in the execution, delivery and
performance of all instruments and agreements necessary or proper to
make effective such resignation or removal, but the Indenture Trustee
shall have the power to accept such resignation or to make such removal
without making such request. A successor to a separate trustee or
co-trustee so resigning or removed may be appointed in the manner
otherwise provided herein.
(c) Such separate trustee or co-trustee, upon acceptance of
such trust, shall be vested with the estates or property specified in such
instrument, jointly with the Indenture Trustee, and the Indenture Trustee shall
take such action as may be necessary to provide for the appropriate interest in
the Trust Estate to be vested in such separate trustee or co-trustee, including
the execution and delivery of any amendments to the Transaction Documents
necessary in connection therewith and the recording of such
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documents and instruments as may be necessary to give effect to the foregoing.
Any separate trustee or co-trustee may, at any time, by written instrument
constitute the Indenture Trustee, his agent or attorney in fact with full power
and authority, to the extent permitted by law, to do all acts and things and
exercise all discretion authorized or permitted by him, for and in behalf of him
and in his name. If any separate trustee or co-trustee shall be dissolved,
become incapable of acting, resign, be removed or die, all the estates,
property, rights, powers, trusts, duties and obligations of said separate
trustee or co-trustee, so far as permitted by law, shall vest in and be
exercised by the Indenture Trustee, without the appointment of a successor to
said separate trustee or co-trustee, until the appointment of a successor to
said separate trustee or co-trustee is necessary as provided in this Indenture.
(d) Any notice, request or other writing, by or on behalf of
any Holder, delivered to the Indenture Trustee shall be deemed to have been
delivered to all separate trustees and co-trustees.
SECTION 619. Fidelity Bond and Errors and Omissions Coverage.
-----------------------------------------------
In connection with its responsibilities hereunder, and for the
term of this Indenture, the Indenture Trustee shall maintain a fidelity bond in
an amount sufficient to satisfy the Rating Agencies. Notwithstanding the
foregoing, the Indenture Trustee will be deemed to have complied with the
requirement set forth in the preceding sentence if one of its respective
affiliates has such fidelity bond coverage and, by the terms of such fidelity
bond, the coverage afforded thereunder extends to the Indenture Trustee. In
addition, the Indenture Trustee shall keep in force during the term of the
Indenture a policy or policies of insurance covering loss occasioned by the
errors and omissions of its officers, employees and agents in connection with
its obligations under the Indenture, such policies to be in such form and
amounts as are necessary to satisfy the Rating Agencies.
Any fidelity bond or errors and omissions coverage maintained
by the Servicer or its affiliates in accordance with the Trust and Servicing
Agreement shall extend to the Servicer's obligations under this Indenture. In
any event, the Servicer shall maintain such bond and such
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coverage in such form and amounts as are necessary to satisfy the Rating
Agencies.
The foregoing provisions of this Section 619 shall not apply
to any Indenture Trustee or Servicer to the extent that the long-term
obligations of such Person is then rated in one of the two highest rating
categories by each Rating Agency.
ARTICLE SEVEN
-------------
HOLDERS' LISTS AND REPORTS BY INDENTURE
TRUSTEE AND ISSUER
---------------------------------------
SECTION 701. Issuer to Furnish Indenture Trustee and Servicer
------------------------------------------------
Names and Addresses of Holders.
- ------------------------------
The Issuer will furnish or cause to be furnished to the
Indenture Trustee and the Servicer:
(a) semi-annually, not later than February 15 and August 15 in
each year, a list, in such form as the Indenture Trustee and the
Servicer may reasonably and respectively require, of the names and
addresses of the Holders as of the preceding December 31 or June 30, as
the case may be, and
(b) at such other times as the Indenture Trustee or the
Servicer may request in writing, within 30 days after the receipt by
the Issuer of any such request, a list of similar form and content as
of a date not more than 15 days prior to the time such list is
furnished;
EXCLUDING from any such list names and addresses received by the Indenture
Trustee in its capacity as Note Registrar.
SECTION 702. Preservation of Information; Communications to
----------------------------------------------
Holders.
- -------
(a) The Indenture Trustee shall preserve, in as current a form
as is reasonably practicable, the names and addresses of Holders contained in
the most recent list furnished to the Indenture Trustee as provided in Section
701 and the names and addresses of Holders received by the Indenture Trustee in
its capacity as Note Registrar. The Indenture Trustee may destroy any list
furnished to it as provided in Section 701 upon receipt of a new list so
furnished.
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(b) The rights of the Holders to communicate with other
Holders with respect to their rights under this Indenture or under the Notes,
and the corresponding rights and privileges of the Indenture Trustee, shall be
as provided by the Trust Indenture Act.
(c) Every Holder of Notes, by receiving and holding the same,
agrees with the Issuer and the Indenture Trustee that none of the Issuer, the
Servicer, the Indenture Trustee nor any agent of any of them shall be held
accountable by reason of any disclosure of information as to names and addresses
of Holders made pursuant to the Trust Indenture Act.
SECTION 703. Reports by Indenture Trustee.
----------------------------
(a) The Indenture Trustee shall transmit to Holders such
reports concerning the Indenture Trustee and its actions (and those of the
Servicer as its agent) under this Indenture as may be required pursuant to the
Trust Indenture Act at the times and in the manner provided pursuant thereto.
(b) A copy of each such report shall, at the time of such
transmission to Holders, be filed by the Indenture Trustee with each stock
exchange upon which any Notes are listed, with the Commission, the Servicer and
with the Issuer. The Issuer will notify the Indenture Trustee and the Servicer
when any Notes are listed on any stock exchange.
SECTION 704. Reports by the Issuer.
---------------------
(a) The Issuer shall file with the Indenture Trustee and the
Commission, and transmit to Holders, such information, documents and other
reports, and such summaries thereof, as may be required pursuant to the Trust
Indenture Act at the times and in the manner provided pursuant to such Act;
PROVIDED that any such information, documents or reports required to be filed
with the Commission pursuant to Section 13 or 15 of the Exchange Act shall be
filed with the Indenture Trustee within 15 days after the same is so required to
be filed with the Commission.
(b) The Issuer shall, at the Issuer's expense, promptly
deliver to the Indenture Trustee and the Servicer, for distribution to the
Rating Agencies at the Issuer's expense, copies of all reports, statements and
information
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required to be delivered by the Issuer pursuant to any Transaction Document.
SECTION 705. Release of Collateral.
---------------------
In the event the Issuer seeks to obtain a release of the
Encumbrance of any of the Mortgaged Properties pursuant to Section 1109, the
Issuer shall file with the Indenture Trustee and the Commission, and transmit to
the Holders and each Rating Agency, such information, documents and other
reports, and such summaries thereof, as may be required pursuant to the Trust
Indenture Act.
ARTICLE EIGHT
-------------
CONDITIONS PRECEDENT
--------------------
SECTION 801. Conditions Precedent to Exchange of Notes for
---------------------------------------------
the Original Note.
- -----------------
The obligation of the initial Holder to accept the Notes in
exchange for the Original Note is subject to the fulfillment by the Issuer of
the following conditions precedent no later than the Issuance Date:
(a) REPRESENTATIONS AND WARRANTIES; COMPLIANCE WITH
CONDITIONS. The representations and warranties of the Issuer contained in this
Indenture and the other Transaction Documents shall be true and correct in all
material respects on and as of the Issuance Date with the same effect as if made
on and as of such date, and no event shall have occurred and be continuing that
would constitute, by reason of the execution, delivery and performance of this
Indenture, the grant of the Encumbrances in the Mortgaged Properties
contemplated hereby, the issuance of the Notes, or the consummation of the other
transactions contemplated by this Indenture or the other Transaction Documents,
a Default or an Event of Default and no Default or Event of Default would occur
as a result of the issuance of the Notes; and the Issuer shall be in compliance
in all material respects with all terms and conditions set forth in this
Indenture and in each Note and the other Transaction Documents on its part to be
observed or performed.
(b) SECURITY DOCUMENTS ASSIGNMENT. The Indenture Trustee
shall have received from KPMCC fully executed and acknowledged counterparts of
the Security Documents
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Assignment submitted for recordation in the appropriate recording office in
respect of each Mortgaged Property and such other documents and instruments as
the Indenture Trustee may reasonably request, so as to effectively transfer and
assign all of KPMCC's rights, titles and interests in, to and under each of the
Security Documents to the Indenture Trustee.
(c) INDENTURE AND NOTES. The Indenture Trustee shall have
received from the Issuer fully executed and acknowledged counterparts of this
Indenture.
(d) MORTGAGE AND ASSIGNMENT OF LEASES. Each of the Mortgage
and the Assignment of Leases shall be in full force and effect and the Indenture
Trustee shall have received a true, correct and complete copy thereof. The
Indenture Trustee shall have received satisfactory evidence to it that the
Mortgage and Assignment of Leases in respect of each Mortgaged Property
continues to be validly and effectively recorded in the appropriate recording
office for such Mortgaged Property so as to maintain a valid and enforceable
first priority Encumbrance on such Mortgaged Property and the Leases and Rents
in respect of such Mortgage Property, subject only to the Permitted Encumbrances
and such other Encumbrances as are permitted pursuant to the Security Documents.
(e) MANAGEMENT AGREEMENT, ENVIRONMENTAL INDEMNITY AND
ASSIGNMENT OF MANAGEMENT AGREEMENT. Each of the Management Agreement, the
Environmental Indemnity and the Assignment of Management Agreement shall be in
full force and effect and the Indenture Trustee shall have received a true,
correct and complete copy thereof.
(f) ENCUMBRANCES. The Issuer shall have taken or caused to be
taken such actions in such a manner so that the Indenture Trustee has valid and
perfected first priority Encumbrances as of the Issuance Date in all of the
Mortgaged Properties, subject only to applicable Permitted Encumbrances and such
other Encumbrances as are permitted pursuant to the Security Documents, and the
Indenture Trustee shall have received satisfactory evidence thereof.
(g) INSURANCE. The Indenture Trustee shall have received valid
certificates of insurance for the policies of insurance required by the Mortgage
to be carried evidencing (A) the issuance of such policies by one or more Rated
Insurance Carriers, (B) the payment of all premiums payable for the existing
policy period, but not to exceed
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one year, and (C) coverage which meets all of the requirements set forth in the
Mortgage.
(h) TITLE INSURANCE. The Indenture Trustee shall have
received the Title Insurance Policy naming the Indenture Trustee as named
insured.
(i) OPINIONS. The Indenture Trustee shall have received an
opinion of counsel for the Issuer, prepared in accordance with the requirements
of the Trust Indenture Act.
(j) COMPLETION OF PROCEEDINGS. All corporate and other
proceedings taken or to be taken in connection with the transactions
contemplated by this Indenture, the Notes, the Security Documents and the
Related Documents and all documents incidental thereto shall be satisfactory in
form and substance to the Indenture Trustee, and the Indenture Trustee shall
have received all such counterpart originals or certified copies of such
documents as the Indenture Trustee may reasonably request.
ARTICLE NINE
------------
SUPPLEMENTAL INDENTURES; AMENDMENTS
-----------------------------------
SECTION 901. Supplemental Indentures or Amendments Without
---------------------------------------------
Consent of Holders.
- ------------------
Without the consent of any Holder, the Issuer, the Servicer
and the Indenture Trustee, at any time and from time to time, may enter into one
or more indentures supplemental hereto or one or more amendments hereto or to
all or any of the Notes or to any Security Document, in form satisfactory to the
Indenture Trustee and the Servicer, for any of the following purposes:
(1) to add to the covenants of the Issuer for the benefit of
the Holders of all Notes or to surrender any right or power herein
conferred upon the Issuer, PROVIDED that such surrender shall not
adversely affect the interests of any Holder of the Notes; or
(2) to evidence and provide for the acceptance of appointment
hereunder by a successor Indenture Trustee or Servicer; or
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(3) to cure any ambiguity, or to cure, correct or supplement
any defective or inconsistent provision herein, in the Notes or in any
Security Document, or to make any other provisions with respect to
matters or questions arising under this Indenture, the Notes or any
Security Document which shall not be inconsistent with the provisions
of this Indenture, PROVIDED that such action shall not adversely affect
the interests of the Holders of the Notes.
SECTION 902. Supplemental Indentures With Consent of Holders.
------------------------------------------------
With the consent of the Holders of not less than 66-2/3% in
aggregate principal amount of the Outstanding Notes, the Issuer and the
Indenture Trustee may enter into an indenture or indentures supplemental hereto
for the purpose of adding any provisions to or changing in any manner or
eliminating any of the provisions of this Indenture or of modifying in any
manner the rights of the Holders of the Notes under this Indenture; PROVIDED,
HOWEVER, that no such supplemental indenture shall, without the consent of the
Holder of each Outstanding Note affected thereby:
(1) change the Stated Maturity of the principal of, or any
installment of interest on, any Note, or reduce the principal amount
thereof or the rate of interest thereon, or change any obligation of
the Issuer to pay additional amounts in respect of the Notes or change
the coin or currency in which any Note or any interest or other amount
thereon is payable, or change the method of calculating the Default
Amount or the Yield Maintenance Charge, or impair the right to
institute suit for the enforcement of any such payment on or after the
Stated Maturity thereof (or, in the case of redemption, on or after the
Redemption Date); or
(2) reduce the percentage in principal amount of the
Outstanding Notes, the consent of whose Holders is required for any
such supplemental indenture, or the consent of whose Holders is
required for any waiver (of compliance with certain provisions of this
Indenture or certain defaults hereunder and their consequences)
provided for in this Indenture, or for any other reason under this
Indenture; or
(3) modify any of the provisions of this Section, Section 513
or Section 1009, except to
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increase any such percentage or to provide that certain other
provisions of this Indenture cannot be modified or waived without the
consent of the Holder of each Outstanding Note affected thereby; or
(4) except as otherwise expressly provided in this Indenture
or the Security Documents, deprive any Holder of the benefit of a first
priority security interest in the Mortgaged Properties as provided in
the Mortgages, or permit the creation of any Encumbrance ranking prior
to or on a parity with the Encumbrance of this Indenture or any
Security Document with respect to any of the Trust Estate, or terminate
the Encumbrance of this Indenture or any Security Document on any
property at any time subject hereto or thereto or deprive the Holder of
any Note of the security afforded by the Encumbrance of this Indenture
or any Security Document.
It shall not be necessary for any Act of the Holders under
this Section to approve the particular form of any proposed supplemental
indenture, but it shall be sufficient if such Act shall approve the substance
thereof.
SECTION 903. Execution of Supplemental Indentures.
------------------------------------
In executing, or accepting the additional trusts created by,
any supplemental indenture permitted by this Article or the modifications
thereby of the trusts created by this Indenture, the Indenture Trustee shall be
entitled to receive, and (subject to Section 601) shall be fully protected in
relying upon, an Opinion of Counsel stating that the execution of such
supplemental indenture is authorized or permitted by this Indenture. The
Indenture Trustee may, but shall not be obligated to, enter into any such
supplemental indenture which affects the Indenture Trustee's own rights, duties
or immunities under this Indenture or otherwise.
SECTION 904. Delivery of Supplements.
-----------------------
Promptly after the execution by the Issuer, the Indenture
Trustee and the Servicer of any supplemental indenture pursuant to the
provisions of this Article, the Indenture Trustee shall mail, by first class
mail, postage prepaid, a conformed copy of such supplement to each Holder of
Notes and to the Rating Agencies. Any failure of the Indenture Trustee to give
such notice, or any defect
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therein, shall not, however, in any way impair or affect the validity of any
such supplemental indenture.
SECTION 905. Effect of Supplemental Indentures.
---------------------------------
Upon the execution of any supplemental indenture under this
Article, this Indenture shall be modified in accordance therewith, and such
supplemental indenture shall form a part of this Indenture for all purposes; and
every Holder of Notes theretofore or thereafter authenticated and delivered
hereunder shall be bound thereby.
SECTION 906. Conformity with Trust Indenture Act.
-----------------------------------
Every supplemental indenture executed pursuant to this Article
shall conform to the requirements of the Trust Indenture Act as then in effect.
SECTION 907. Reference in Notes to Supplemental Indentures.
---------------------------------------------
Notes authenticated and delivered after the execution of any
supplemental indenture pursuant to this Article may, and shall if required by
the Indenture Trustee, bear a notation in form approved by the Indenture Trustee
as to any matter provided for in such supplemental indenture. If the Issuer
shall so determine, new Notes so modified as to conform, in the opinion of the
Indenture Trustee and the Issuer, to any such supplemental indenture may be
prepared and executed by the Issuer and authenticated and delivered by the
Indenture Trustee in exchange for Outstanding Notes.
ARTICLE TEN
-----------
REPRESENTATIONS, WARRANTIES AND COVENANTS
-----------------------------------------
SECTION 1001. Representations and Warranties of the Issuer.
--------------------------------------------
The Issuer hereby represents and warrants to the Indenture
Trustee, as of the Issuance Date, as follows:
(a) (i) The Issuer has been duly formed and is validly
existing as a general partnership under the laws of the State of Delaware, with
requisite partnership power and authority to own its properties and to transact
the
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businesses in which it is now engaged. The Issuer is duly qualified to do
business and to consummate the transactions contemplated hereby. The Issuer
possesses all rights, licenses, permits and authorizations, governmental or
otherwise, necessary to entitle it to own its properties and to transact the
businesses in which it is now engaged, and the sole business of the Issuer is
the ownership, management and operation of the Mortgaged Properties. The
Issuer's Partnership Agreement has been duly executed, delivered, and is in full
force and effect in accordance with its terms and has not been modified or
amended.
(ii) The Operating Partnership has been duly formed and is validly
existing and in good standing as a limited partnership under the laws of the
State of Delaware, with requisite partnership power and authority to own its
properties and to transact the businesses in which it is now engaged, including,
without limitation, to be a partner in the Issuer and the manager under the
Management Agreement. The Operating Partnership is duly qualified to do business
and is in good standing in each jurisdiction where it is required to be so
qualified in connection with its properties, businesses and operations. The
Operating Partnership possesses all rights, licenses, permits and
authorizations, governmental or otherwise, necessary to entitle it to own its
properties and to transact the businesses in which it is now engaged, including,
without limitation, to be a general partner in the Issuer, and to execute and
deliver the Transaction Documents and the Related Documents to which it is a
party or to which the Issuer is a party on behalf of the Issuer. The Operating
Partnership is duly qualified to do business and is in good standing in each
jurisdiction where it is required to be so qualified in connection with its
properties, businesses and operations. The Operating Partnership possesses all
rights, licenses, permits and authorizations, governmental or otherwise,
necessary to entitle it to own its properties and to transact the businesses in
which it is now engaged. The Operating Partnership holds a 99% partnership
interest in the Issuer. The Operating Partnership's Partnership Agreement and
certificate of limited partnership have been duly executed, delivered and filed,
and are in full force and effect in accordance with their respective terms and
have not been modified or amended.
(iii) The REIT has been duly organized and is validly existing and
in good standing as a corporation under the laws of the State of Maryland, with
all requisite corporate power and authority to own its properties and to
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transact the businesses in which it is now engaged, including, without
limitation, to be the general partner in the Operating Partnership and the sole
shareholder in GP Corp, and to execute and deliver the Transaction Documents and
the Related Documents to which it is a party or to which the Operating
Partnership is a party on behalf of the Operating Partnership. The REIT is duly
qualified to do business and is in good standing in each jurisdiction where it
is required to be so qualified in connection with its properties, businesses and
operations. The REIT possesses all rights, licenses, permits and authorizations,
governmental or otherwise, necessary to entitle it to own its properties and to
transact the businesses in which it is now engaged. The REIT is the sole general
partner in the Operating Partnership, holding a 95.9% general partnership
interest therein. The REIT is the sole shareholder in GP Corp holding 100% of
the outstanding shares of stock therein. The REIT Documents have been duly
executed, delivered and filed, and are in full force and effect in accordance
with their respective terms and have not been modified or amended.
(iv) GP Corp has been duly organized and is validly existing and in
good standing as a corporation under the laws of Delaware, with requisite
corporate power and authority to own its properties and to transact the
businesses in which it now engaged, including, without limitation, to be a
partner in the Issuer, and to execute and deliver the Transaction Documents and
the Related Documents to which it is a party or to which the Issuer is a party
on behalf of the Issuer. GP Corp is duly qualified to do business and is in good
standing in each jurisdiction where it is required to be so qualified in
connection with its properties, businesses and operations. GP Corp possesses all
rights, licenses, permits and authorizations, governmental or otherwise,
necessary to entitle it to own its properties and to transact the businesses in
which it is now engaged, and the sole business of GP Corp is to be a general
partner in the Issuer. GP Corp holds a 1% general partnership interest in the
Issuer. GP Corp is a duly qualified "real estate investment trust subsidiary" as
defined in Section 856(i)(2) of the Internal Revenue Code. The certificate of
incorporation and by-laws of GP Corp have been duly executed, delivered and
filed, and are in full force and effect in accordance with their respective
terms and have not been modified or amended.
(b) Each of the Issuer, the Operating Partnership, the REIT,
GP Corp, and each Contributing Entity has
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taken all necessary corporate, partnership or trust action, as the case may be,
to authorize the execution, delivery and performance of this Indenture, the
other Transaction Documents and the Related Documents to which they are parties.
This Indenture, the other Transaction Documents and the Related Documents have
been duly executed and delivered by or on behalf of the Issuer, the Operating
Partnership, the REIT, GP Corp, and each Contributing Entity, as applicable, and
constitute legal, valid and binding obligations of the Issuer, the Operating
Partnership, the REIT, GP Corp, and/or each Contributing Entity, as applicable,
enforceable against such parties in accordance with their respective terms,
subject to applicable bankruptcy, insolvency and similar laws affecting rights
of creditors generally, and subject, as to enforceability, to general principles
of equity (regardless of whether enforcement is sought in a proceeding in equity
or at law).
(c) The execution, delivery and performance by the Issuer, the
Operating Partnership, GP Corp, the REIT and each Contributing Entity of the
Transaction Documents and the Related Documents to which they are parties will
not conflict with or result in a breach of any of the terms or provisions of, or
constitute a default under, or result in the creation or imposition of any lien,
charge or encumbrance (other than pursuant to the Transaction Documents) upon
any of the property or assets of the Issuer, the Operating Partnership, GP Corp,
the REIT or the Contributing Entities, as applicable, pursuant to the terms of
any indenture, mortgage, deed of trust, loan agreement or other agreement or
instrument to which the Issuer, the Operating Partnership, GP Corp, the REIT or
a Contributing Entity is a party or by which any of such parties is or are bound
or to which any of its or their property or assets is subject, nor will such
action result in any violation of the provisions of the Issuer's Partnership
Agreement, the OP's Partnership Agreement, the certificate of incorporation and
by-laws of GP Corp, the REIT Documents, the constituent documents of each
Contributing Entity or any statute or any order, rule or regulation of any court
or governmental agency or body having jurisdiction over the Issuer, the
Operating Partnership, GP Corp, the REIT or the Contributing Entities or any of
its or their properties or assets, and any consent, approval, authorization,
order, registration or qualification of or with any court or any such regulatory
authority or other governmental agency or body required for the execution,
delivery and performance by the Issuer, the Operating Partnership, GP Corp, the
REIT or each Contributing Entity of the Transaction Documents and
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the Related Documents to which they are parties, has been obtained and is in
full force and effect.
(d) There is no action, suit, proceeding or investigation
pending or, to the best of the Issuer's knowledge, threatened before any court,
judicial or quasi-judicial body or administrative agency, (i) for the
condemnation or taking by power of eminent domain of any portion of any
Mortgaged Property, (ii) to revoke, attack or challenge the validity of, or
rescind or modify the zoning of any portion of any Mortgaged Property or any
building or improvement thereon or other permits previously issued with respect
thereto, (iii) otherwise relating to the validity of the Mortgage or the
Assignment of Leases or the proposed or actual use of any Mortgaged Property,
(iv) with respect to this Indenture, the other Transaction Documents or the
Related Documents or the transactions contemplated hereby or thereby or (v)
that, individually or in the aggregate, would have a Material Adverse Effect.
(e) The financial statements for the Issuer and for the
Mortgaged Properties, copies of which have been furnished to the Indenture
Trustee on or before the Issuance Date, comport with the requirements of Section
1008(a) and fairly present in all material respects the financial condition of
the Issuer and of the Mortgaged Properties as at the dates of such financial
statements and the results of operations and changes in net assets and cash
flows for the period ended on the dates of such financial statements, all in
conformity with generally accepted accounting principles, and no material
adverse change in the financial condition of the Issuer and/or of any Mortgaged
Property has occurred since the dates of such financial statements.
(f) The Issuer's principal place of business and chief
executive office is 40 Skokie Boulevard, Northbrook, Illinois 60062-1626 and the
foregoing address is the place at which its books and records relating to the
Mortgaged Properties are kept.
(g) The Issuer has good and indefeasible title in fee to the
Real Property, and good title to the Personalty and the Equipment, in each case,
after giving effect to the transactions contemplated by the Transaction
Documents, free and clear of all Encumbrances whatsoever except the Permitted
Encumbrances, such other Encumbrances as are permitted hereunder and the
Encumbrances created by the Security Documents. The Mortgage, has been recorded
in the appropriate records, together with any Uniform Commercial
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Code financing statements required to be filed in connection therewith, and as
so recorded creates as security for the Notes (i) a valid, perfected first lien
on each Mortgaged Property, subject only to Permitted Encumbrances, such other
Encumbrances as are permitted pursuant to the Transaction Documents and the
Encumbrances created by the Transaction Documents and (ii) a perfected first
priority security interest in and to, and a perfected first priority collateral
assignment of the Personalty (including the Leases) in which the Issuer has an
interest, all in accordance with the terms thereof, in each case subject only to
any applicable Permitted Encumbrances, such other Encumbrances as are permitted
pursuant to the Transaction Documents and the Encumbrances created by the
Transaction Documents. Except for any Permitted Encumbrance, such other
Encumbrances as are permitted pursuant to the Transaction Documents and the
Encumbrances created by the Transaction Documents, after giving effect to the
transactions contemplated by the Transaction Documents, there are no
Encumbrances or claims for work, labor or materials affecting any Mortgaged
Property which are or may be prior to, or of equal priority with, the
Encumbrances created by the Mortgage. The Permitted Encumbrances and other
Encumbrances permitted pursuant to the Transaction Documents do not adversely
affect the use or operation of the Mortgaged Properties as contemplated on the
date hereof or the ability of the Issuer to timely pay principal and interest
due under the Notes.
(h) All property and similar tax returns required to have been
filed with respect to each Mortgaged Property have been duly and timely filed,
and all installments for the payment of real estate, property or similar taxes
due to date and all other material Impositions imposed against, affecting or
relating to each Mortgaged Property (other than those which have not become
due), together with any fine, penalty, interest or cost for non-payment pursuant
to such returns or pursuant to any assessments have been paid and discharged.
(i) The Issuer has no knowledge of any proposed tax assessment
against a Mortgaged Property which could reasonably be expected to result in a
Material Adverse Effect, other than those which are being actively contested by
the Issuer in good faith and by appropriate proceedings, and for which such
reserves or other appropriate provisions, if any, as shall be required in
conformity with generally accepted accounting principles shall have been made or
provided.
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(j) The construction and use of each portion of each Mortgaged
Property does not violate in any material respect and will not violate in any
material respect (i) any zoning or building laws and ordinances or (ii) any
building permits or any conditions, easements, rights-of-way, covenants or
restrictions of record affecting any portion of the Mortgaged Property. Without
limiting the foregoing, all material permits, certificates and licenses required
to be obtained by the Issuer (or any other Person) for or in connection with the
construction, development and use of the Mortgaged Properties have been issued
and are in full force and effect. Each Mortgaged Property complies in all
material respects with currently existing Legal Requirements (including, without
limitation, applicable zoning ordinances) without the use or inclusion of any
other property for parking or any other purpose.
(k) The Issuer is not subject to regulation under the Public
Utility Holding Company Act of 1935 or the Federal Power Act. Neither the Issuer
nor the Operating Partnership is required to be registered as an "investment
company" within the meaning of the Investment Company Act of 1940.
(l) (i) Except as disclosed in the Environmental Reports,
neither the Issuer nor any Contributing Entity has any liability, including,
without limitation, any contingent liability, in connection with any Hazardous
Substance Activity, on, at or relating to, any portion of the Mortgaged
Properties under any Environmental Law.
(ii) Except as disclosed in the Environmental Reports, (A)
there exists and has existed no Hazardous Substance Activity at, upon, under or
within any portion of the Mortgaged Properties in violation of any Environmental
Law and (B) there exists no condition which may constitute a violation of any
Environmental Law at, upon, under, within or flowing or emanating from any
portion of the Mortgaged Properties.
(iii) Except as disclosed in the Environmental Reports, (A)
neither the Issuer nor any other Person has been or is involved in activities at
or related to any portion of the Mortgaged Properties which activities could
reasonably be expected to lead to (1) the imposition of any liability on the
Issuer under any Environmental Law, or on any subsequent or former owner of any
portion of the Mortgaged Properties, or (2) the creation of a lien with respect
to any liability on any portion of the Mortgaged
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Properties under any Environmental Law; and (B) no activity by any tenant or
occupant of any portion of the Mortgaged Properties could reasonably be expected
to result in a claim or liability under any Environmental Law on such tenant or
occupant, on the Issuer or on any other subsequent or former owner of any
portion of the Mortgaged Properties.
(iv) Except as disclosed in the Environmental Reports, the
Issuer is not, and has no reason to believe that it may become, subject to a
material liability under any Environmental Law.
(m) (i) Except as otherwise disclosed on Schedule 3, all
Anchor Leases and Operating Agreements are in full force and effect and no term
or condition thereof has been amended or modified in any material respect.
(ii) The Issuer has delivered to the Servicer a true and
correct copy of the rent roll or schedule, as the case may be, dated December
31, 1993, for each Mortgaged Property (collectively, the "RENT ROLLS"), which
sets forth each and every Lease which is in full force and effect as of such
date with respect to each Mortgaged Property. The information set forth on the
Rent Rolls is true and correct in all material respects as of such date. Except
as disclosed in the Rent Rolls, no Leases are in effect as of such date with
respect to any Mortgaged Property. The Issuer is (either directly or through an
authorized agent) the owner and holder of the landlord's interest under each of
the Leases set forth on the Rent Rolls and there are no prior outstanding
assignments of any of such Leases, or any portion of the rents, additional
rents, charges, issues or profits due and payable or to become due and payable
thereunder, except for Permitted Encumbrances, such other Encumbrances as are
permitted pursuant to the Transaction Documents and the Encumbrances created by
the Transaction Documents. Each Lease constitutes the legal, valid and binding
obligation of the Issuer and, to the knowledge of the Issuer, of each of the
other parties thereto, enforceable in accordance with its terms, subject to
bankruptcy, insolvency, reorganization or other similar laws relating to
creditors' rights generally, and no notice of any lease default by any tenant
under any Anchor Lease which remains uncured has been sent by the Issuer, except
as disclosed on Schedule 3, and no notice of any default by the Issuer under any
Anchor Lease which remains uncured has been received by the Issuer, except as
disclosed on Schedule 3.
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(n) Attached as Schedule 4 is a complete and accurate
description of all policies of insurance currently in effect as of the Issuance
Date for the Mortgaged Properties, each of which is in an amount not less than
the amount necessary to avoid the operation of any co-insurance provisions with
respect to any Mortgaged Property. All premiums for the existing policy period,
but not in excess of one year, have been paid with respect to each such
insurance policy. Each such insurance policy requires at least 30 days' prior
notice to the Servicer of termination or cancellation. The insurance policies
described on Schedule 4 conform in all respects to the requirements in respect
of property and liability insurance contained in the Mortgage.
(o) Neither this Agreement nor any other Transaction Document
nor any other certificate, agreement or notice furnished to the Indenture
Trustee by or on behalf of the Issuer for use in connection with the
transactions contemplated by this Agreement contains any untrue statement of a
material fact or omits to state a material fact.
(p) The amounts to be received by the Indenture Trustee and
the Holders under this Indenture and the Notes, to the extent that such amounts
are or may be deemed to be interest under the Notes or any of the other
Transaction Documents or otherwise in connection with the transactions
contemplated by the Transaction Documents, constitute lawful interest and are
not usurious or unlawful, and no aspect of the transactions contemplated by this
Indenture or any of the other Transaction Documents is or will be usurious.
(q) No brokerage fees or commissions are payable in
connection with this Indenture or the Notes to any Person claiming by, through
or under the Issuer.
(r) All utility services, which are sufficient to permit each
Mortgaged Property to be utilized in accordance with its current use, are
available at or within the boundary lines of the respective Mortgaged Property.
With respect to each Mortgaged Property, there is sufficient access to permit
utilization of such Mortgaged Property fully in accordance with its current use.
(s) The Issuer is not a party to any separate agreements with
tenants, other than their respective Leases, relating to a loan or other advance
of funds made in connection with such Lease.
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(t) All amounts received by the Issuer from the Operating
Partnership on or prior to the date hereof in order to fund the Initial Reserve
Account deposits or for any other purpose were funded to the Issuer by the
Operating Partnership as capital contributions and have been reflected as such
on the books and records of the Issuer.
SECTION 1002. Payment of Principal and Interest.
---------------------------------
The Issuer covenants and agrees for the benefit of the Holders
of the Notes that it will duly and punctually pay the principal of and interest
on the Notes and any fees and other amounts, including, without limitation,
Yield Maintenance Charges, due and payable in accordance with the terms of the
Notes, this Indenture and the Security Documents.
SECTION 1003. Maintenance of Office or Agency.
-------------------------------
The Issuer will maintain or cause to be maintained an office
or agency in the Borough of Manhattan, The City of New York, where Notes may be
surrendered for registration of transfer or exchange and where notices and
demands to or upon the Issuer in respect of the Notes and this Indenture or the
Security Documents may be served. The Issuer will give prompt written notice to
the Indenture Trustee of the location, and any change in the location, of such
office or agency. If at any time the Issuer shall fail to maintain any such
required office or agency or shall fail to furnish the Indenture Trustee with
the address thereof, such presentations, surrenders, notices and demands may be
made or served at the Corporate Trust Office of the Indenture Trustee, and the
Issuer hereby appoints the Indenture Trustee as its agent to receive all such
presentations, surrenders, notices and demands.
The Issuer may also from time to time designate one or more
other offices or agencies where the Notes may be presented or surrendered for
any or all such purposes and may from time to time rescind such designations;
PROVIDED, HOWEVER, that no such designation or rescission shall in any manner
relieve the Issuer of its obligation to maintain an office or agency in
accordance with the requirements set forth in the preceding paragraph. The
Issuer will give prompt written notice to the Indenture Trustee and prompt
notice to the Holders, in accordance with the provisions of Section 106, of any
such designation or rescission and of any change in the location of such office
or agency.
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SECTION 1004. Paying Agent; Issuing Agent; Money for Note
-------------------------------------------
PAyments to be Held in Trust.
- ----------------------------
The Issuer hereby appoints the Indenture Trustee as Paying
Agent at its Corporate Trust Office in connection with the Notes. The Issuer may
not have more than one Paying Agent for the Notes at any time, however, the
Servicer may act as the agent of the Indenture Trustee for such purpose and the
Servicer hereby agrees to so act. On each due date for the principal of or
interest on any Notes, the Issuer shall deposit with the Paying Agent a sum
sufficient to pay when due the principal of or interest on the Notes so becoming
due, such sum to be held as provided by the Trust Indenture Act, and (unless
such Paying Agent is the Indenture Trustee) the Issuer will promptly notify the
Indenture Trustee of its action or failure to so act. On each due date of the
principal of or interest on any Notes, the Paying Agent shall withdraw from the
Payment Account a sum sufficient to pay when due the principal of or interest on
the Notes so becoming due.
The Issuer will cause any Paying Agent other than the
Indenture Trustee to execute and deliver to the Indenture Trustee an instrument
in which such Paying Agent shall agree with the Indenture Trustee, subject to
the provisions of this Section, that such Paying Agent will (i) comply with the
provisions of the Trust Indenture Act applicable to it as a Paying Agent and
(ii) during the continuance of any Default by the Issuer (or any other obligor
upon the Notes) in the making of any payment in respect of the Notes, and upon
the written request of the Indenture Trustee, forthwith pay to the Indenture
Trustee all sums held in trust by such Paying Agent for payment in respect of
the Notes.
The Issuer may, at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, pay, or
by Issuer Order direct the Paying Agent (if other than the Indenture Trustee or
the Issuer) to pay, to the Indenture Trustee all sums held in trust by the
Paying Agent, such sums to be held by the Indenture Trustee upon the same trusts
as those upon which such sums were held by the Paying Agent; and, upon such
payment by the Paying Agent to the Indenture Trustee, the Paying Agent shall be
released from all further liability with respect to such money.
SECTION 1005. [Reserved].
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SECTION 1006. Statement as to Compliance.
--------------------------
The Issuer will deliver to the Indenture Trustee, within 120
days after the end of each fiscal year, an Officer's Certificate stating, as to
the authorized officer signatory thereto, that in the course of the performance
by such officer of his present duties, he would normally obtain knowledge or
have made due inquiry as to the existence of any Default or Event of Default and
that to the best knowledge of such officer, based on such knowledge or due
inquiry, (a) the Issuer has fulfilled all its obligations under this Indenture
and the Security Documents throughout such year, or, if there has been a Default
in the fulfillment of any such obligation, specifying each such Default known to
such officer and the nature and status thereof, and (b) no Event of Default has
occurred and is continuing or, if such an event has occurred and is continuing,
specifying each such event known to such officer and the nature and status
thereof. In addition, such Officers' Certificate shall state whether or not to
the best knowledge of the signers thereof the Issuer is in default in the
performance and observance of any of the terms, provisions and conditions of
this Indenture (without regard to any period of grace or requirement of notice
provided hereunder). The Indenture Trustee shall deliver copies of such
Officers' Certificate to the Holders, the Servicer and the Rating Agencies.
SECTION 1007. Register for the Mortgage Notes.
-------------------------------
The Issuer shall cause the Indenture Trustee to keep, and the
Indenture Trustee shall keep, at the Corporate Trust Office a register within
the meaning of Section 163(f) of the Code for the registration or transfer of
the Notes. Such register shall be maintained (and transfers and exchanges of the
Notes shall be effected) substantially in the same manner, and with the same
effect, as the Register is maintained (and transfers and exchanges of the Notes
are effected) by the Indenture Trustee in accordance with Section 308 and the
other provisions of Article Three, as applicable.
SECTION 1008. Affirmative Covenants.
---------------------
The Issuer hereby covenants and agrees with the Indenture
Trustee that:
(a) The Issuer (i) shall do or cause to be done all things
necessary to preserve and keep in full force and
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effect the Issuer's existence, rights (partnership and statutory) and
franchises, and (ii) will furnish to the Indenture Trustee, the Pass-Through
Trustee and the Rating Agencies (A) within 50 days after the end of each
calendar quarter, an unaudited operating statement for each Mortgaged Property,
(B) within 50 days after the end of each calendar quarter, an update to the Rent
Rolls setting forth in reasonable detail any changes thereto, (C) within 105
days after the end of each calendar year, an operating statement for each
Mortgaged Property, (D) within 50 days after the end of each calendar quarter,
an unaudited statement of financial condition of the Issuer and the related
statements of income and retained earnings and statements of changes in
financial position for such quarterly period and for the elapsed portion of the
calendar year ended with the last day of such quarterly period, in each case
setting forth comparative figures for the related periods in the prior calendar
year, (E) within 105 days after the end of each calendar year, the statements of
financial condition of the Issuer as of the end of such calendar year and the
related statements of income and retained earnings and statements of changes in
financial position for such calendar year, in each case setting forth
comparative figures for the preceding calendar year and certified by independent
certified public accountants of recognized national standing, in each case
together with a report of such accounting firm (which report may be contained in
such accounting firm's audit report) stating that in the course of its regular
audit of the financial statements of the Issuer, which audit was conducted in
accordance with generally accepted auditing standards, such accounting firm
obtained no knowledge of any Default or Event of Default which has occurred and
is continuing or, if in the opinion of such accounting firm such a Default or
Event of Default has occurred and is continuing, a statement as to the nature
thereof, (F) such other reports or information as are provided by the Issuer to
the partners in the Issuer, or the partners in such partners, with respect to
the Issuer or the Mortgaged Properties at the same time as sent to such
partners, and (G) such other financial information prepared by the Issuer in the
ordinary course with respect to the Issuer or the Mortgaged Properties as the
Indenture Trustee may from time to time reasonably request.
(b) The Issuer will continue to engage in the businesses
presently conducted by it as and to the extent the same are necessary for the
ownership, maintenance, management and operation of the Mortgaged Properties.
The Issuer will qualify to do business under the laws of each
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jurisdiction as and to the extent the same are required for the ownership,
maintenance, management and operation of the Mortgaged Properties. For so long
as this Indenture remains in effect, the sole business of the Issuer shall be
the ownership, maintenance, management and operation of the Mortgaged Properties
and the sole business of GP Corp shall be to be a general partner in the Issuer.
(c) The Issuer will comply in all material respects with all
applicable laws, rules, regulations and orders of any Governmental Authority
relative to the conduct of its business in connection with the operation of the
Mortgaged Properties; the Issuer will obtain or cause to be obtained as promptly
as possible any governmental, administrative or agency approval and make any
filing or registration therewith which at the time shall be required with
respect to the performance of its obligations under this Indenture, the Security
Documents or the Related Documents to which it is a party; the Issuer will
procure and continuously maintain in full force and effect, and will abide by
and satisfy all material terms and conditions of, all material permits, licenses
and other authorizations required or granted for (i) construction of
improvements which constitute part of any Mortgaged Property, (ii) any existing
use of any Mortgaged Property or any part thereof, or (iii) the lawful and
proper installation, operation and maintenance of the Mortgaged Properties.
(d) The Issuer will, promptly upon obtaining knowledge
thereof, give written notice to the Indenture Trustee of: (i) the occurrence of
any Default or Event of Default; (ii) any litigation or proceedings affecting
any Mortgaged Property or any part thereof which litigation or proceeding if
determined adversely to the Issuer's interest would have a Material Adverse
Effect; and (iii) any material dispute between the Issuer and any Governmental
Authority or any tenant or other occupant at any Mortgaged Property.
(e) The Issuer will keep books of record and account in which
full, true and correct entries in accordance with generally accepted accounting
principles will be made of all dealings or transactions in relation to the
business and activities of the Issuer.
(f) The Issuer will warrant and defend (i) the title to each
Mortgaged Property and every part thereof, subject only to Encumbrances
permitted hereunder (including Permitted Encumbrances), and (ii) the validity
and priority
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of the liens of the Mortgage and the Assignment of Leases, subject only to
Encumbrances permitted hereunder (including Permitted Encumbrances), in each
case against the claims of all Persons whomsoever. The Issuer shall reimburse
the Indenture Trustee for any losses, costs, damages or expenses (including
reasonable attorneys' fees and court costs) incurred by the Indenture Trustee if
an interest in any Mortgaged Property, other than as permitted hereunder, is
claimed by another Person (other than a Person claiming such interest through
the Indenture Trustee or its assigns); PROVIDED, HOWEVER, that the Issuer or the
Title Company may defend any such claims so long as the Indenture Trustee's
interests are not adversely affected by such defense.
(g) If any part of any Mortgaged Property shall be subjected
to a Casualty or the actual or, to the Issuer's knowledge, threatened
commencement of a Condemnation, the Issuer shall give prompt written notice
thereof to the Indenture Trustee and supply the Indenture Trustee with such
documents relating to same as are in the possession or control of, or can
reasonably be obtained by, the Issuer or the Operating Partnership.
(h) In the event (i) that the Mortgage is foreclosed in whole
or in part or that the Mortgage is put into the hands of an attorney for
collection, suit, action or foreclosure, (ii) of the foreclosure of any mortgage
prior to or subsequent to the Mortgage in which proceeding the Indenture Trustee
is made a party, or (iii) of the bankruptcy, insolvency, rehabilitation or other
similar proceeding in respect of the Issuer or an assignment by the Issuer for
the benefit of its creditors, the Issuer, its successors or assigns, shall be
chargeable with and agrees to pay all costs of collection and defense, including
reasonable attorneys' fees in connection therewith and in connection with any
appellate proceeding or post-judgment action involved therein, which shall be
due and payable together with all required service or use taxes.
(i) The Issuer, within 10 days after request from the
Indenture Trustee, shall from time to time as reasonably requested by the
Indenture Trustee furnish to the Indenture Trustee a statement, duly
acknowledged and certified, setting forth (a) the amount then owing under this
Indenture and the Notes, and (b) the date through which interest on any Note has
been paid, and acknowledging that this Indenture and the other Transaction
Documents are legal, valid and binding obligations and have not been
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modified or, if modified, giving the particulars of such modification.
(j) The Issuer will execute, acknowledge, record and/or file
such further statements, documents, agreements, Uniform Commercial Code
financing and continuation statements and such other instruments and do such
further acts as the Indenture Trustee from time to time may reasonably request
as necessary, desirable or proper to carry out more effectively the purposes of
this Indenture and the other Transaction Documents, to subject to the lien and
security interest of the Mortgage any property intended by the terms hereof or
of the Mortgage to be covered by the Mortgage, including, without limitation,
any renewals, additions, substitutions, replacements, betterments or
appurtenances to the Mortgaged Property encumbered thereby or to evidence,
perfect or otherwise implement or assure the lien and security interest intended
by the terms hereof or of the Mortgage to be covered by the Mortgage or in order
to exercise or enforce its rights under this Indenture and the Security
Documents.
(k) [Reserved].
(l) The Issuer shall in a timely manner observe, perform and
fulfill each and every covenant, term and provision of each Transaction Document
and the Management Agreement applicable to it, and shall not enter into or
otherwise suffer or permit any amendment, waiver, supplement, termination or
other modification of any Transaction Document, the Issuer's Partnership
Agreement or the Management Agreement without the prior written consent of the
Indenture Trustee.
(m) Subject to the immediately succeeding sentences of this
paragraph, the Issuer shall observe every material covenant, obligation and
agreement to be performed and observed on its part under the existing Leases and
Operating Agreements and any and all future Leases and Operating Agreements, and
will use commercially reasonable efforts to cause each and every lessee and
guarantor (if any) of each Lease and each party under an Operating Agreement to
perform and observe each and every material covenant, obligation and agreement
to be performed or observed on the part of such party, lessee and/or guarantor
under or in respect of each Operating Agreement, Lease or guaranty thereof, as
applicable. Notwithstanding the foregoing provisions of this paragraph, the
Issuer shall have the right (i) to terminate Leases (other than Anchor Leases)
in con-
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nection with its operation of the Mortgaged Properties so long as no Event of
Default shall have occurred and be continuing, (ii) to terminate Leases
(including Anchor Leases) in accordance with their respective terms upon a
default by the tenant thereunder whether or not an Event of Default has occurred
and is continuing, and (iii) so long as no Event of Default has occurred and is
continuing, to terminate Anchor Leases in connection with its operation of the
Mortgaged Properties so long as the Debt Service Coverage Ratio with respect to
the Mortgaged Properties as a whole is not less than 2.0:1.0 after giving effect
to such Anchor Lease termination and the execution of any new Anchor Lease with
respect to the related premises. The Issuer shall also have the right to
terminate Operating Agreements without the consent of the Indenture Trustee (i)
in accordance with their respective terms upon a default by the other party
thereto, or (ii) so long as no Event of Default has occurred and is continuing,
in connection with its operation of the Mortgaged Property so long as the Debt
Service Coverage Ratio with respect to the Mortgaged Properties as a whole is
not less than 2.0:1.0 after giving effect to such Operating Agreement
termination. The Issuer may, without the Indenture Trustee's prior consent,
enter into, modify or amend any Lease or any Operating Agreement so long as such
new Lease, Operating Agreement, or modification or amendment, as the case may
be, would not have a Material Adverse Effect. The Issuer shall promptly send
initial drafts of all Anchor Leases and Operating Agreements which it proposes
to execute and all amendments to Anchor Leases and Operating Agreements to the
Servicer and keep the Servicer reasonably informed of the substance of all
subsequent negotiations with respect to each Anchor Lease and Operating
Agreement.
(n) The Issuer shall cause each Mortgaged Property to be
managed by the Operating Partnership pursuant to the Management Agreement, and
the Issuer shall, and shall use commercially reasonable efforts to cause the
Operating Partnership to, comply with the terms of the Management Agreement in
all material respects. The Management Agreement shall provide, among other
things, that (i) the Operating Partnership may not terminate the Management
Agreement except in the case of non-payment of management fees for a period of
90 days after notice to the Issuer and the Indenture Trustee, (ii) the Operating
Partnership will recognize and attorn to the Indenture Trustee (or its successor
or designee) under the Management Agreement upon foreclosure of the Mortgage or
other taking of title by the Indenture Trustee (or its successor or designee) to
any
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Mortgaged Property, and (iii) the Servicer shall have the right to terminate (or
to direct the Issuer to terminate, as applicable) the Management Agreement upon
certain events, including, without limitation, (1) the insolvency of the
Operating Partnership, (2) the occurrence of an Event of Default, or (3) the
failure of the Mortgaged Properties to maintain a Debt Service Coverage Ratio of
at least 1.84:1.0. In the event the Operating Partnership is replaced as manager
at any Mortgaged Property in accordance with the terms of the Management
Agreement, the Issuer shall promptly engage a new property manager which manages
at least six other retail properties comparable to the Mortgaged Properties, as
the manager of such Mortgaged Property (each, a "MANAGER"); provided, that (x)
such Manager and the related management agreement must be approved by the
Servicer and (y) each Rating Agency shall have been given written notice
identifying the Manager to be engaged and shall not, within fifteen (15) days
after receiving such notice, have indicated that the appointment of such Manager
would result in a reduction or withdrawal of the then effective rating of the
Notes by such Rating Agency. The Issuer shall, or shall cause the Manager to,
manage and operate each such Mortgaged Property in a reasonably prudent manner
pursuant to a management agreement substantially similar to the Management
Agreement. The Issuer will provide to the Servicer a copy of any such new
management agreement within five (5) Banking Days of its execution by the Issuer
and such new manager, and the Issuer shall promptly assign such new management
agreement to the Indenture Trustee as additional collateral for the Obligations
pursuant to an assignment substantially similar to the Assignment of Management
Agreement.
(o) The Issuer's Partnership Agreement provides that no
bankruptcy or insolvency filing or proceeding in respect of the Issuer shall be
made or commenced without the consent of GP Corp, and the Issuer shall not
acquiesce, petition or otherwise invoke or cause any other Person to invoke the
process of the United States of America, any state or other political
subdivision thereof or any other jurisdiction, or any entity exercising
executive, legislative, judicial, regulatory or administrative functions of or
pertaining to government for the purpose of commencing or sustaining a case
against the Issuer under a Federal or state bankruptcy, insolvency or similar
law or appointing a receiver, liquidator, assignee, trustee, custodian, seques-
trator or other similar official of the Issuer or all or any part of its
property or assets or ordering the winding-up or liquidation of the affairs of
the Issuer, if such
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action has not been consented to by GP Corp. The certificate of incorporation
and by-laws of GP Corp provide that no bankruptcy or insolvency filing or
proceeding in respect of the Issuer or in respect of GP Corp shall be made or
commenced without the unanimous affirmative vote of the directors of GP Corp,
and neither the Issuer nor GP Corp shall acquiesce, petition or otherwise invoke
or cause any other Person to invoke the process of the United States of America,
any state or other political subdivision thereof or any other jurisdiction, or
any entity exercising executive, legislative, judicial, regulatory or
administrative functions of or pertaining to government for the purpose of
commencing or sustaining a case against the Issuer or GP Corp under a Federal or
state bankruptcy, insolvency or similar law or appointing a receiver,
liquidator, assignee, trustee, custodian, sequestrator or other similar official
of the Issuer or GP Corp or all or any part of its or their property or assets
or ordering the winding-up or liquidation of the affairs of the Issuer or GP
Corp, if such action has not been consented to by a unanimous vote of such
directors. GP Corp shall at all times on or after November 13, 1993 have two
independent directors who are not Affiliates of any Contributing Entity or any
limited partner of the Operating Partnership.
(p) The Issuer shall establish and maintain, in the name of
the Indenture Trustee, one or more Eligible Accounts at banking institutions
designated by the Issuer and approved by the Servicer for purposes of receiving
all gross Rents from the Mortgaged Properties (collectively, the "RENT
COLLECTION ACCOUNT") and shall direct all tenants under Leases at the Mortgaged
Properties to make payment of all Rents directly to the relevant Rent Collection
Account. As collateral security for the Obligations, the Issuer hereby pledges
and assigns to the Indenture Trustee in trust for the benefit of the Holders of
the Notes a continuing security interest in the Rent Collection Account. The
Rent Collection Account shall be subject to the exclusive dominion and control
of the Indenture Trustee and/or any Servicer acting on behalf of the Indenture
Trustee. Amounts received in the Rent Collection Account from time to time shall
be invested in Eligible Investments maturing not later than the Banking Day
prior to the Interest Payment Date following receipt thereof. On any Banking Day
on which an Event of Default shall not have occurred and be continuing, upon
request of the Issuer, the Indenture Trustee shall disburse from the Rent
Collection Account to the Issuer the amount, if any, by which (x) the amount on
deposit in the Rent Collection Account on such
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date exceeds (y) the sum of (i) the amount of interest due and payable on the
Interest Payment Date for the Interest Period in which such release is requested
plus (ii) any other amount then due and owing to the Indenture Trustee or the
Servicer under this Indenture or any other Transaction Document plus (iii) any
amount required to be deposited into a Reserve Account on or within thirty-five
days following the date of such request. On each Interest Payment Date, unless
an Event of Default shall have occurred and be continuing, all amounts then on
deposit in the Rent Collection Account, including all income or earnings on
Eligible Investments credited to the Rent Collection Account, shall be applied
in the following order of priority: (i) to the interest then due and owing in
respect of the Notes, (ii) to any other amounts then due and owing to the
Indenture Trustee or the Servicer under this Indenture or any other Transaction
Document and (iii) any remaining balance shall be remitted to, or upon the
instructions of, the Issuer. The Issuer covenants and agrees to take any and all
actions requested by the Indenture Trustee from time to time to maintain the
Indenture Trustee's first priority perfected lien upon and security interest in
the Rent Collection Account and the Rents on deposit therein from time to time.
The Issuer and the Indenture Trustee agree to cause each banking institution at
which a Rent Collection Account is established to forward to each of the Issuer
and the Indenture Trustee at their respective addresses for notices set forth
herein all periodic statements relating to such Rent Collection Account. Upon
the occurrence of an Event of Default, the Indenture Trustee may apply all sums
in the Rent Collection Account from time to time to the amounts then due and
payable in respect of the Notes and to any other amounts due and owing to the
Indenture Trustee or the Servicer under this Indenture or any other Transaction
Document.
(q) The Issuer will do or cause to be done all things
necessary to preserve and keep in full force and effect its existence and will
maintain adequate capitalization (taking into account, among other things, the
market value of its assets) for its business purposes; that it will not modify
its partnership agreement in any manner that would have a Material Adverse
Effect; will pay all expenses of the Mortgaged Properties from property of the
Issuer; will maintain books and records and bank accounts separate from those of
its Affiliates and will maintain a separate business office (which may be a
management office at any of the Mortgaged Properties); will at all times hold
itself out to the public as a legal entity separate and
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distinct from any of its Affiliates (including in its leasing activities, in
entering into any contract, in preparing its financial statements, and its
stationery), and will cause its Affiliates to conduct business with it on an
arm's-length basis (or, as to property management, on the basis provided in the
Management Agreement); will file its own tax returns or, if part of a
consolidated group, will join in the consolidated tax return of such group as a
separate member thereof; will cause its management to meet regularly to carry on
its business; will not commingle its assets with any of its Affiliates; and will
not guarantee any obligation of any of its Affiliates.
(r) As of the Issuance Date, each of the insurance coverages
required by Section 2.1(d) of the Mortgage (the "INSURANCE COVERAGES") shall be
provided by a Rated Insurance Carrier. If the Issuer replaces any insurance
carrier or any Insurance Coverages at any time, such replacement insurance
carrier shall be, and any such replacement Insurance Coverage shall be provided
by, a Rated Insurance Carrier. If any insurance carrier providing any Insurance
Coverage shall at any time cease to be a Rated Insurance Carrier, the Issuer
shall replace such Insurance Carrier with a Rated Insurance Carrier within one
hundred and twenty (120) days following the date on which such insurance carrier
ceases to be a Rated Insurance Carrier.
(s) The Issuer shall complete, or cause to be completed, not
later than November 30, 1994 and in a competent and professional manner, all of
the Initial Repair Work.
SECTION 1009. Negative Covenants.
------------------
The Issuer hereby covenants and agrees with the Indenture
Trustee that:
(a) Except for Permitted Transfers and except as otherwise
expressly provided for in this paragraph (a) and in paragraphs (b), (c) and (d)
below, the Issuer shall not, without the prior written consent of the Indenture
Trustee, sell, transfer, convey, assign or otherwise dispose of, directly or
indirectly, any interest in any Mortgaged Property other than (i) Equipment or
other Personalty as from time to time may become worn or obsolete, PROVIDED that
such Equipment or other Personalty shall be replaced with other Equipment or
other Personalty with a value at least equal to that of the replaced Equipment
or other Personalty and free from any security interest or lien other than a
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lease thereof, and by such removal and replacement, the Issuer shall be deemed
to have subjected such new Equipment or other Personalty to the lien of the
Mortgage, or (ii) Equipment or other Personalty as from time to time may become
worn or obsolete; PROVIDED that such Equipment or other Personalty is not
material in its use to the value and operation of the related Mortgaged
Property, or (iii) Equipment or other Personalty as from time to time may in the
reasonable judgment of the Issuer be determined to be unusable or unnecessary
for the continued operation of the related Mortgaged Property as currently
operated, or (iv) entering into any occupancy Lease of any portion of a
Mortgaged Property to any tenant or any Operating Agreement (or similar
agreement) relating to a Mortgaged Property, or (v) any Mortgaged Property
released from the lien of the Mortgage in accordance with Section 1109 hereof or
(vi) as may otherwise be permitted pursuant to the terms of the Mortgage.
(b) Except for Permitted Transfers and except as otherwise
expressly provided for in this paragraph (b) and in paragraph (a) above and
paragraphs (c) and (d) below, the Issuer shall not, without the prior written
consent of the Indenture Trustee, directly or indirectly, (A) sell, convey,
transfer or otherwise dispose of, grant easements or other rights with respect
to, or mortgage, encumber or create a security interest in, any Mortgaged
Property or any portion thereof or the income or any other revenues therefrom or
the proceeds payable upon the sale, transfer or other disposition of any
Mortgaged Property or any portion thereof, or (B) permit or suffer any such
action to be taken. The Indenture Trustee hereby agrees (i) to subordinate the
lien of the Mortgage and the Assignment of Leases to any modification of
existing easements, rights-of-way, restrictive covenants or similar agreements
included in the Permitted Encumbrances and to the creation by the Issuer of
additional easements, rights-of-way, restrictive covenants or similar agreements
affecting title to the Mortgaged Properties, and, upon the request of the
Issuer, to execute nondisturbance and attornment agreements in a form reasonably
satisfactory to the Servicer and the Indenture Trustee, in each case so long as
it will either benefit the related Mortgaged Property or will not affect the
utility, operation or value of the related Mortgaged Property in any material
adverse respect and will not cause any Mortgaged Property to be in violation of
any Legal Requirements, Leases or insurance requirements described in the
Transaction Documents, or result in the loss of any certificate of occupancy,
and (ii) that the Issuer may enter
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into and record a notice of lease in respect of any Lease entered into in
accordance with the terms of the Transaction Documents (any Lease covered by
such notice being expressly subject and subordinate to the lien of the Mortgage
and the Assignment of Leases).
(c) Except for Permitted Transfers, no sale, transfer,
assignment or other disposition of (i) the general partnership interest of GP
Corp in the Issuer or the general partnership interest of the Operating
Partnership in the Issuer, (ii) the general partnership interest of the REIT in
the Operating Partnership, or (iii) the shareholder interest of the REIT in GP
Corp, shall be made without the Indenture Trustee's prior written consent, which
consent may be given or withheld in the Indenture Trustee's sole discretion, and
the Issuer shall not permit or suffer any such action to be taken.
(d) The Issuer shall not, without the prior written consent of
the Indenture Trustee, create, incur, assume or suffer to exist any Encumbrance
on any portion of the Mortgaged Property or permit any such action to be taken,
except:
(i) Permitted Encumbrances;
(ii) Encumbrances created by or permitted pursuant to
Transaction Documents;
(iii) liens for taxes, assessments or other governmental charges
not yet due or which are being diligently contested in good faith and
by appropriate proceedings, if (A) reasonable reserves in an amount
not less than the tax, assessment or governmental charge being so
contested shall have been deposited in cash (or Eligible Investments)
with the Indenture Trustee to be held during the pendency of such
contest, (B) no risk of sale, forfeiture or loss of any interest in
any Mortgaged Property or any part thereof arises during the pendency
of such contest and (C) such contest does not have a Material Adverse
Effect;
(iv) carriers', warehousemen's, mechanic's, materialmen's,
repairmen's and other similar liens arising in the ordinary course of
business and which are being diligently contested in good faith and by
appropriate proceedings in accordance with the provisions of the
Mortgage, if (A) (i) reasonable reserves in an amount not less than the
claim secured by such
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lien which is the subject of such contest shall have been deposited in
cash (or Eligible Investments) with the Indenture Trustee, to be held
during the pendency of such contest, or (ii) the Issuer has caused such
contested lien to be duly bonded in accordance with applicable law, (B)
no risk of sale, forfeiture or loss of any interest in any Mortgaged
Property or any part thereof arises during the pendency of such contest
and (C) such contest does not have a Material Adverse Effect;
(v) zoning restrictions, easements, rights-of-way,
restrictions on use of real property and other similar Encumbrances
incurred or entered into in the ordinary course of business which do
not, individually or in the aggregate, (A) materially detract from the
value of the portion of any Mortgaged Property subject thereto, (B)
materially interfere with the operation and use of, or the ordinary
conduct of the business on, any Mortgaged Property subject thereto, or
(C) materially interfere with the validity, enforceability or priority
of the Encumbrances created by the Transaction Documents; and
(vi) Leases of any portion of any Mortgaged Property, provided
such Leases comply with the requirements of the Transaction Documents.
(e) The Issuer shall not initiate, acquiesce or consent to any
zoning or other land use change or reclassification of any Mortgaged Property
or any portion thereof or seek any variance under any existing zoning or other
land use ordinance or use or permit the use of any Mortgaged Property or any
portion thereof in any manner that could result in such use becoming a
non-conforming use under any zoning ordinance or any other applicable land use
law, rule or regulation, without the prior consent of the Indenture Trustee.
(f) The Issuer shall not enter into, acquiesce in, suffer or
permit any amendment, restatement or other modification of any of the
Transaction Documents, the Issuer's Partnership Agreement, or the Management
Agreement without the prior written consent of the Indenture Trustee
in each instance.
(g) The Issuer shall not engage in any business or activity
other than in connection with, or relating to, the ownership, use, management
and operation of the Mort-
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gaged Properties, the performance of its obligations under the Transaction
Documents and any other activities incidental thereto.
(h) The Issuer shall not purchase or own any properties other
than the Mortgaged Properties.
(i) The Issuer shall not create, incur or assume any Debt;
PROVIDED, HOWEVER, that if no Event of Default shall have occurred and be
continuing, the Issuer may, without the consent of the Indenture Trustee, incur,
create or assume Permitted Debt.
(j) The Issuer shall not liquidate or dissolve or enter into
any consolidation, merger, joint venture, syndicate or other combination.
(k) Except as otherwise permitted pursuant to the Transaction
Documents, the Issuer shall not make or allow any changes to be made in the use
of any Mortgaged Property or any part thereof from that in effect on the
Issuance Date without the prior written consent of the Indenture Trustee;
PROVIDED, HOWEVER, that the Issuer shall be permitted to make or allow changes
to be made in the use of a portion of any Mortgaged Property without the consent
of the Indenture Trustee to the extent that such changes are consistent with the
operation of the Mortgaged Property as a community shopping center or, in the
case of the One North State Street Mortgaged Property, a mixed-use retail and
office building.
(l) Except as otherwise permitted pursuant to the Transaction
Documents, the Issuer shall not purchase, acquire or lease any property from, or
sell, transfer or lease any property to, or lend or advance any money to, or
borrow any money from, or guarantee any obligation of, or acquire any stock,
obligations or securities of, or enter into any merger or consolidation
agreement, or any management or similar arrangement with, any Contributing
Entity or any Affiliate of the Issuer or any Contributing Entity or enter into
any other transaction or arrangement or make any payment to (whether for
management, technical, consulting or any other services) or otherwise deal with,
in the ordinary course of business or otherwise, any Contributing Entity or any
Affiliate of the Issuer or any Contributing Entity on terms other than
arm's-length commercially reasonable terms (or as to property management, on the
terms provided in the Management Agreement); PROVIDED, HOWEVER, that the Issuer
may distribute, transfer, sell or
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assign any Mortgaged Property released from the Encumbrance of the Mortgage in
accordance with Section 1109 to the Operating Partnership on such terms and at
such times as the Issuer may elect in its sole discretion.
(m) The Issuer shall not make any distribution to, or
otherwise lend, advance or transfer any amount to, the Operating Partnership, GP
Corp, the REIT or any Affiliate of any of the foregoing, at any time at which a
failure by the Issuer to make any deposit to a Reserve Account pursuant to
Article Twelve hereof has occurred and is continuing.
SECTION 1010. Additions to Mortgaged Property.
-------------------------------
Except as expressly provided in this Indenture or the Mortgage
in connection with damage, casualty or condemnation involving a Mortgaged
Property, the Issuer, tenants and other occupants of each Mortgaged Property
shall have the right to make modernization, renovations, improvements and/or
additions (collectively, "IMPROVEMENTS") to such Mortgaged Property without the
prior consent of the Servicer; PROVIDED, HOWEVER, that in any case, no such
Improvement shall be made without the prior written consent of the Servicer if
such Improvement would have a Material Adverse Effect, or a material adverse
impact upon the use or operation of the Mortgaged Property which is the subject
of such Improvement, or would result in the Debt Service Coverage Ratio for any
Calculation Period to be less than 1.84:1.0. All Improvements shall be
constructed in compliance with all applicable Legal Requirements, whether or not
the Servicer's consent is required in connection therewith. The Issuer shall
give the Servicer prior written notice of its intention to construct
Improvements with respect to any Mortgaged Property, whether or not the
Servicer's consent is required in connection therewith pursuant to this Section,
if the cost of any such Improvement or any series of related Improvements is in
excess of $1,000,000.
ARTICLE ELEVEN
--------------
REDEMPTION OF NOTES; LIEN RELEASES
----------------------------------
SECTION 1101. Redemption.
----------
(a) (i) The Notes shall only be subject to redemption as
provided in, and in accordance with all of the terms and conditions of, this
Article Eleven. The
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Notes are subject to mandatory redemption, in whole or in part, after the
Issuance Date in certain instances of Casualty or Condemnation, in the manner
and to the extent set forth in this Section 1101(a).
(ii) Issuer shall give prompt written notice to the Indenture
Trustee of (A) any damage to or destruction of all or any portion of the
Mortgaged Properties, and (B) any actual or, to the knowledge of Issuer,
proposed, contemplated or threatened taking of all or any portion of the
Mortgaged Properties by reason of any public improvements or condemnation or
similar proceeding. Any damage or destruction of all or any portion of the
Mortgaged Properties the insurance proceeds in respect of which exceed $250,000
shall be referred to herein as a "Casualty" and such insurance proceeds shall be
referred to herein as "Insurance Proceeds". Any taking, condemnation or other
similar proceeding the condemnation award proceeds or other compensation payable
in respect of which exceed $250,000 shall be referred to herein as a
"Condemnation" and such condemnation award proceeds or other compensation shall
be referred to herein as "Condemnation Proceeds."
(iii) All Insurance Proceeds and all Condemnation Proceeds shall be
applied and disbursed in accordance with the provisions of this Section. All
proceeds of insurance which do not constitute Insurance Proceeds and all awards
or other compensation which do not constitute Condemnation Proceeds shall be the
property of and payable to the Issuer or such other tenant, occupant or other
Person who is pursuant to any Lease or Operating Agreement entitled to such
proceeds of insurance or condemnation compensation.
(iv) In the event of (x) any Casualty at or Condemnation of the
Mortgaged Properties or any part thereof, and if an Event of Default shall have
occurred and be continuing, or (y) any Casualty at or Condemnation of the
Mortgaged Properties or any part thereof which results in occupants having
interests in five percent (5%) or more (in the aggregate) of the total square
footage of all Mortgaged Properties devoted to retail, mixed and appurtenant
uses (exclusive of common areas and leasable square footage which is not then
subject to a Lease) exercising their rights to cancel their respective Leases or
to abate their rent under their respective Leases and such abatement is not
covered by rent interruption/abatement insurance (a "Major
Casualty/Condemnation"), Servicer, on behalf of the Indenture Trustee, shall
receive all Insurance Proceeds or Condemnation Proceeds, as the
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case may be, and shall have the right to determine in its reasonable judgment
whether to disburse such Insurance Proceeds or condemnation Proceeds to Issuer
or to apply such proceeds to the redemption of the Notes on the first Interest
Payment Date occurring at least 3 Banking Days after receipt of such Insurance
Proceeds or Condemnation Proceeds, as the case may be. In the event the Servicer
determines in its reasonable judgment not to disburse such Insurance Proceeds or
Condemnation Proceeds to the Issuer, the following provisions shall apply:
(A) The Insurance Proceeds or Condemnation Proceeds shall be
applied in the following order and priority: (1) first, to the payment
of all costs and expenses (regardless of the particular nature thereof
and whether incurred with or without suit), including reasonable
attorneys' fees, incurred by Servicer or the Indenture Trustee in
connection with the adjustment of the loss and the collection of such
proceeds; (2) second, to the payment of all amounts of interest at the
time due and payable in respect of the Notes (whether at maturity or by
declaration or acceleration or otherwise); (3) third, to the redemption
of the outstanding principal amount of the Notes at such time, together
with all Yield Maintenance Premiums required to be paid in connection
therewith; (4) fourth, to the payment of all other Obligations then due
and payable hereunder; and (5) fifth, Servicer shall deliver the
balance, if any, to Issuer or to the Person legally entitled thereto.
(B) All Insurance Proceeds and Condemnation Proceeds shall be
payable to Servicer, and with respect to Insurance Proceeds, Issuer
hereby authorizes and directs any affected insurance company to make
payment of such Insurance Proceeds directly to
Servicer.
(v) In the event of any Casualty at or Condemnation of the
Mortgaged Properties or any part thereof which is not described in clauses (x)
or (y) of Section 1101(a)(iv) above or as to which Servicer has determined, as
provided in Section 1101(a)(iv) above, to disburse the relevant Insurance
Proceeds or Condemnation Proceeds to Issuer in accordance with the terms of the
Mortgage, the provisions of the Mortgage relating to restoration of the relevant
Mortgaged Properties shall apply. In connection with any such restoration of the
Mortgaged Properties, the Servicer shall be obligated to request, pursuant to
Section
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2.1(e)(iv)(B) of the Mortgage, that all Insurance Proceeds or Condemnation
Proceeds, together with any and all additional sums required to complete the
restoration of the related Mortgaged Property in accordance with the terms of
the Mortgage, be deposited with the Servicer for subsequent disbursement by the
Servicer in accordance with the provisions of the Mortgage. Any Insurance
Proceeds, Condemnation Proceeds or additional sums so deposited with the
Servicer and remaining in the possession of the Servicer at the time of the
Issuer's delivery to the Servicer of a written certification that the related
restoration has been completed in accordance with all the terms and provisions
of the Mortgage, shall be paid to the Issuer. Notwithstanding any provision
contained herein or in the Mortgage, the Issuer shall not have any obligation to
restore any Mortgaged Property following a Casualty or Condemnation in respect
thereof to the extent the Insurance Proceeds or Condemnation Proceeds received
in respect thereof are applied pursuant to clause (A) of Section 1101(a)(iv)
above.
(vi) In the event that Insurance Proceeds or Condemnation Proceeds
in respect of a Mortgaged Property are applied to the payment of the Notes in
accordance with Section 1101(a)(iv)(A) above and the aggregate amount of such
proceeds available to be applied to the redemption of the outstanding principal
amount of the Notes pursuant to Section 1101(a)(iv)(A)(3) above is less than
125% of the Allocated Note Amount for the related Mortgaged Property, the Issuer
may elect, but shall not be obligated, to deposit with the Indenture Trustee
such additional funds as shall, when taken together with the Insurance Proceeds
or Condemnation Proceeds available to be applied to the redemption of the
outstanding principal amount of the Notes (and after giving effect to the
payment of all Yield Maintenance Charges due in connection with such
redemption), permit the redemption of Notes in an outstanding principal amount
equal to 125% of the Allocated Note Amount for the related Mortgaged Property.
Any funds so deposited by the Issuer with the Indenture Trustee shall be
applied, together with the related Insurance Proceeds or Condemnation Proceeds,
as provided in Section 1101(a)(iv)(A) and, in connection therewith, the Issuer
may, subject to all of the terms and provisions of Section 1109 hereof, obtain
the release of the related Mortgaged Property.
(vii) In the event of any conflict or inconsistency between the
provisions of the Mortgage and
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the provisions of this Section 1101(a) with respect to the matters that are the
subject of this Section 1101(a), the provisions of this Section 1101(a) shall
control.
(b) In addition to the redemption of the Notes required to be
made pursuant to Section 1101(a), the Issuer may make optional redemptions of
the Notes, in whole or in part, on any Interest Payment Date after September 30,
1997, without any premium, but with the payment of Yield Maintenance Charges as
provided for hereunder.
(c) All redemptions in respect of the Notes, whether mandatory
or optional, may only be made if (i) the Issuer shall have given the Indenture
Trustee not less than 30 days' prior written notice of such redemption and (ii)
such redemption is accompanied by (1) interest on the principal amount being
redeemed through the end of the Interest Period in which such redemption occurs
and (2) the Yield Maintenance Charge with respect to the principal amount of
such redemption. Each notice of redemption shall be irrevocable and shall
specify (i) the redemption date (the "REDEMPTION DATE"), (ii) the principal
amount of such redemption, (iii) whether such redemption is a mandatory
redemption or an optional redemption, (iv) the amount of the Yield Maintenance
Charge that is payable in connection with such redemption, and (v) whether the
Issuer intends to obtain a release of the Encumbrance of the Mortgage in respect
of any Mortgaged Property in connection with such redemption, and if so, such
notice shall be accompanied by an Officer's Certificate described in paragraph
(b) of Section 1102.
SECTION 1102. REDEMPTION PROCEEDS. All principal in respect of
a redemption (in whole or in part, mandatory or optional) and accrued and unpaid
interest to (and including) the Redemption Date in respect of all Outstanding
Notes shall be paid in full on the Redemption Date, together with all applicable
Yield Maintenance Charges due in connection with such redemption (such
principal, interest and Yield Maintenance Charge, collectively, the "REDEMPTION
PRICE"). Upon receipt by the Indenture Trustee of amounts corresponding to the
Redemption Price owing on the Notes on the Redemption Date, the Indenture
Trustee shall deposit such monies into the Payment Account and apply such monies
as provided in Section 306.
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SECTION 1103. Election to Redeem; Notice to Indenture
---------------------------------------
Trustee.
- -------
The redemption by the Issuer of any Notes pursuant to Section
1101(a) or 1101(b) shall be evidenced by an Officer's Certificate delivered to
the Indenture Trustee, at least five Banking Days prior to the Redemption Date
(copies of which Officer's Certificate shall be forwarded promptly by the
Indenture Trustee to each Holder of Notes to be redeemed) (i) stating that the
Issuer is entitled or obligated to effect such redemption and the Redemption
Date, (ii) setting forth in reasonable detail a statement of facts showing that
the conditions precedent to the right or obligation of the Issuer to redeem the
Notes have occurred, and (iii) stating the aggregate principal amount of the
Notes to be redeemed, the accrued interest to be paid in connection therewith
and the amount of the Yield Maintenance Charge to be paid in connection
therewith. Any Officer's Certificate delivered by the Issuer stating that the
Issuer has elected to redeem Notes shall be irrevocable.
SECTION 1104. Partial Redemption.
------------------
Whenever less than all the Notes at any time Outstanding are
to be redeemed at the option or obligation of the Issuer, the particular Notes
(or portions thereof) to be redeemed shall be selected not more than 30 days
prior to the Redemption Date by random selection from the Outstanding Notes not
previously called for redemption; PROVIDED that the unredeemed portion of the
principal amount of any Note shall be in an authorized denomination (which shall
not be less than the minimum authorized denomination) for such Note. If the
Outstanding Notes are to be redeemed in part, the Notes shall be redeemed on a
PRO RATA basis to the greatest extent practicable. If and to the extent the
Notes cannot practicably be redeemed on a proportionate basis, the Indenture
Trustee shall select Notes (but only to such extent) to be redeemed by lot or in
such other manner as the Indenture Trustee deems fair and reasonable.
The Indenture Trustee shall promptly notify the Issuer in
writing of any Notes selected for partial redemption, and the principal amount
thereof to be redeemed.
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For purposes of this Indenture, unless the context otherwise
requires, all provisions relating to the redemption of Notes shall relate, in
the case of any Notes redeemed or to be redeemed only in part, to the portion of
the principal amount of such Notes which has been or is to be redeemed.
SECTION 1105. Notice of Redemption.
--------------------
Notice of redemption shall be given in the manner provided in
Section 106 to the Holders of the Notes to be redeemed, not less than one
Business Day prior to the Redemption Date.
All notices of redemption shall state:
(1) the Redemption Date;
(2) the Redemption Price;
(3) if less than all the Outstanding Notes are to be redeemed,
the principal amount of Notes to be redeemed;
(4) that on the Redemption Date the Redemption Price will
become due and payable upon each Note to be redeemed and that interest
thereon will cease to accrue on and after said date (or in the case of
a partial redemption, that interest thereon will cease to accrue on and
after such date with respect to the principal amount that is being
redeemed);
(5) whether such redemption is pursuant to Section 1101(a) or
(b); and
(6) the place or places where such Notes are to be surrendered
or exchanged for payment of the Redemption Price.
Notice of redemption of Notes shall be given by the Issuer or, at the Issuer's
request, by the Indenture Trustee in the name and at the expense of the Issuer.
SECTION 1106. Notes Redeemed in Part.
----------------------
Any Note which is to be redeemed only in part shall be
surrendered at an office or agency of the Issuer designated for that purpose
pursuant to Section 1003 (with, if the Issuer or the Indenture Trustee so
requires, due
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endorsement by, or a written instrument of transfer in form satisfactory to the
Issuer and the Indenture Trustee duly executed by, the Holder thereof or his
attorney duly authorized in writing), and the Issuer shall execute, and the
Indenture Trustee shall authenticate and deliver to the Holder of such Note
without service charge, a Note or Notes, of any authorized denomination as
requested by such Holder, in an aggregate principal amount equal to and in
exchange for the unredeemed portion of the principal of the Note so surrendered.
SECTION 1107. Notes Payable on Redemption Date.
--------------------------------
If notice of redemption shall have been given as aforesaid,
the Notes so to be redeemed shall, on the Redemption Date, become due and
payable at the Redemption Price therein specified, and from and after such date
(unless the Issuer shall default in the payment of the Redemption Price) the
principal amount being redeemed shall cease to bear interest. Upon surrender or
exchange of any such Note for redemption in accordance with said notice, such
Note shall be paid by the Issuer at the Redemption Price.
If any Note called for redemption shall not be so paid upon
surrender or exchange thereof for redemption, the principal shall, until paid,
bear interest from the Redemption Date at the Default Rate.
SECTION 1108. Deposit of Redemption Price.
---------------------------
On or before the second Banking Day next preceding the
Redemption Date, the Issuer shall deposit with the Indenture Trustee an amount
of Cash sufficient to pay the Redemption Price of all the Notes (or portions
thereof) which are to be redeemed on the Redemption Date.
SECTION 1109. LIEN RELEASES. Except as set forth in this
Section 1109 and Section 401, no repayment or redemption of principal of any
Note shall cause, give rise to a right to require or otherwise result in, the
release of the Encumbrance of the Mortgage on any Mortgaged Property. The Issuer
may obtain the release (in whole but not in part) of one or more Mortgaged
Properties from the Encumbrance of the related Mortgage (and the other Security
Documents) following a repayment or redemption of a portion of the Notes
pursuant to the provisions of this Article Eleven (including, but not limited
to, a redemption result-
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ing from a Casualty or Condemnation), upon satisfaction of each of the following
conditions:
(a) All payments of principal of, interest on and Yield
Maintenance Charge in respect of the Notes theretofore or at such time
required to be paid (including but not limited to any such amounts
required to be paid to the Indenture Trustee or the Servicer in
connection with any related redemption) shall have been paid and all
other amounts theretofore or at such time required to be paid under the
Transaction Documents shall have been received by the Indenture Trustee
or the Servicer, including, without limitation, all costs and expenses
incurred by the Indenture Trustee or the Servicer in connection with
such release;
(b) The Issuer shall have delivered an Officer's Certificate
to the Servicer (i) at least 30 days prior to the date the Mortgaged
Property is to be released from the lien of the Mortgage, and (ii) on
the date of such release, certifying in each case that the conditions
in this Section 1109 have been satisfied (or will be satisfied on or
prior to the date of such release), with detailed calculations
indicating the derivation of the amount of the Yield Maintenance Charge
then payable and the amounts then payable pursuant to paragraph (d) of
this Section;
(c) After giving effect to the proposed release, no Default or
Event of Default shall have occurred and be continuing;
(d) The Issuer shall, prior to or simultaneous with such
release, have made aggregate principal payments in respect of the Notes
pursuant to Section 1101(a) or otherwise in an amount at least equal to
125% of the Allocated Note Amounts for (i) the Mortgaged Property or
Mortgaged Properties to be released on such date and (ii) any Mortgaged
Properties theretofore released from the Encumbrance of the Mortgage;
(e) After giving effect to such release and to the related
repayment or redemption, the Debt Service Coverage Ratio with respect
to the Calculation Period ended most recently preceding the date of
such release shall be not less than the greater of (i) 2.45:1.0 and
(ii) the Debt Service Coverage Ratio with respect to
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the Calculation Period ended most recently preceding the date of such
release as determined without giving effect to either such release or
the related repayment or redemption; and
(f) Delivery of any certificate, opinion or other document
required pursuant to Section 705.
In addition, the Encumbrance of the Mortgage shall be
released, upon the written request and at the expense of the Issuer, upon
payment in full of all principal of, interest on and Yield Maintenance Charge,
if any, in respect of the Notes and all other amounts then due and payable under
the Transaction Documents.
ARTICLE TWELVE
--------------
RESERVES
--------
SECTION 1201. Reserves.
--------
The Issuer shall establish, and thereafter shall maintain, in
accordance with the terms and provisions of this Section 1201, an initial repair
reserve (the "INITIAL REPAIR RESERVE"), a maintenance and capital improvement
reserve (the "MAINTENANCE AND CAPITAL IMPROVEMENT RESERVE"), a credit
enhancement reserve (the "CREDIT ENHANCEMENT RESERVE") and a reserve in respect
of the Arthur Andersen Space (the "ARTHUR ANDERSEN RESERVE"), in each case in
accordance with the following terms and conditions:
SECTION 1202. Initial Repair Reserve.
----------------------
The Initial Repair Reserve was established on the Original
Closing Date in the amount of $1,227,227 and shall consist of Cash or Eligible
Investments on deposit in an Eligible Account (the "INITIAL REPAIR RESERVE
ACCOUNT") established with and in the name of the Indenture Trustee in the State
of New York or the State of California. The Issuer may withdraw funds from the
Initial Repair Reserve Account from time to time upon delivery to the Servicer
of an Officer's Certificate stating that such funds are to be applied to Initial
Repair Work, identifying in reasonable detail the specific Initial Repair Work
(and the cost thereof) to which such funds are being applied, attaching all
relevant invoices and/or bills and certifying that such funds shall not be used
for any other purpose. Upon
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<PAGE> 143
delivery to the Servicer of an Officer's Certificate accompanied by (i) a report
of a Qualified Engineering Consultant certifying that the Initial Repair Work
listed under the heading "Engineering" on Schedule 6 hereto has been completed
in a competent and professional manner and (ii) a report of a Qualified
Environmental Consultant certifying that the Initial Repair Work listed under
the heading "Environmental" on Schedule 6 hereto has been completed in a
competent and professional manner, the Indenture Trustee shall release to the
Issuer from the Initial Repair Reserve Account any amounts then remaining on
deposit therein.
SECTION 1203. Maintenance and Capital Improvement Reserve.
-------------------------------------------
The Maintenance and Capital Improvement Reserve was
established on the Original Closing Date in an initial amount of $778,386 and
shall consist of Cash or Eligible Investments on deposit in an Eligible Account
(the "MAINTENANCE AND CAPITAL IMPROVEMENT RESERVE ACCOUNT") established with and
in the name of the Indenture Trustee in the State of New York or the State of
California. On or prior to September 30 of each year from 1994 through the
Maturity Date, the Issuer shall make additional deposits to the Maintenance and
Capital Improvement Reserve Account in such amounts as shall be sufficient to
cause the balance in the Maintenance and Capital Improvement Reserve Account to
be not less than $778,386 at the close of business on September 30 in each of
the years 1994 through the Maturity Date excluding, however, the Maturity Date,
if such date is the Stated Maturity. The Issuer may withdraw funds from the
Maintenance and Capital Improvement Reserve Account from time to time upon
presentation to the Servicer of an Officer's Certificate stating that such funds
are to be applied to Maintenance and Capital Improvement Expenditures,
identifying in reasonable detail the specific Maintenance and Capital
Improvement Expenditures (and the cost thereof) to which such funds are to be
applied, attaching all relevant invoices and/or bills and certifying that such
funds shall not be used for any other purpose. On the Maturity Date, all amounts
then on deposit in the Maintenance and Capital Improvement Reserve Account shall
be applied to the principal amount then due and owing on the Notes and/or to any
other amounts then due and owing to the Indenture Trustee under this Indenture
or any other Transaction Document and, upon payment in full of all such amounts,
any remaining balance shall be paid to the Issuer.
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<PAGE> 144
SECTION 1204. Credit Enhancement Reserve.
--------------------------
The Credit Enhancement Reserve shall be established on the
Issuance Date in an initial amount of $994,387 and shall consist of Cash or
Eligible Investments on deposit in an Eligible Account (the "CREDIT ENHANCEMENT
RESERVE ACCOUNT") established with and in the name of the Indenture Trustee in
the State of New York or the State of California. On each of December 31, 1998,
March 31, 1999, June 30, 1999 and September 30, 1999, the Issuer shall deposit
an additional $200,000 into the Credit Enhancement Reserve Account. In the event
that a Credit Enhancement Event occurs, the Issuer shall deposit into the Credit
Enhancement Reserve Account, on each Interest Payment Date commencing with the
Interest Payment Date occurring in October 1999, the amount by which the balance
in the Rent Collection Account on such Interest Payment Date exceeds the sum of
(i) the interest then due and owing under the Notes, (ii) any other amounts then
due and owing to the Indenture Trustee or the Servicer under this Indenture or
any other Transaction Document and (iii) the Operating Expenses for the related
Interest Period; PROVIDED, HOWEVER, that the aggregate amount of all deposits
made to the Credit Enhancement Reserve Account pursuant to this sentence on all
such Interest Payment Dates shall not exceed $2,250,000; PROVIDED FURTHER, that
upon the occurrence of a Credit Enhancement Event, the Issuer may elect to
satisfy its obligation to make deposits to the Credit Enhancement Reserve
Account pursuant to this sentence by making one or more lump sum deposits to the
Credit Enhancement Reserve Account on or prior to October 30, 1999 in an
aggregate amount equal to $2,250,000. On the Maturity Date, all amounts then on
deposit in the Credit Enhancement Reserve Account shall be applied to the
principal amount then due and owing on the Notes and/or to any other amounts
then due and owing to the Indenture Trustee or the Servicer under this Indenture
or any other Transaction Document and, upon payment in full of all such amounts,
any remaining balance shall be paid to the Issuer.
SECTION 1205. Arthur Andersen Reserve Account.
-------------------------------
In the event that Arthur Andersen & Co. elects to exercise its
right to terminate its Lease with respect to office space at the One North State
Street Mortgaged Property (the "ARTHUR ANDERSEN SPACE") effective as of a date
prior to the expiration of such Lease, the Arthur Andersen Reserve shall be
established in an aggregate amount equal to the amount of the cancellation fee
paid by Arthur
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<PAGE> 145
Andersen & Co. to the Issuer under its Lease in connection with such termination
and shall consist of Cash or Eligible Investments on deposit in an Eligible
Account (the "ARTHUR ANDERSEN RESERVE ACCOUNT") established with and in the name
of the Indenture Trustee in the State of New York or the State of California.
The Issuer may withdraw funds from the Arthur Andersen Reserve Account from time
to time upon presentation to the Servicer of an Officer's Certificate stating
that such funds are to be applied to costs (including but not limited to tenant
alterations, leasing commissions and other lease inducements) directly related
to releasing the Arthur Anderson Space, identifying in reasonable detail the
specific costs to which such funds are to be applied, attaching all relevant
invoices and/or bills and certifying that such funds will not be used for any
other purpose. In the event that any balance remains in the Arthur Andersen
Reserve Account after completion of the releasing of all of the Arthur Andersen
Space, such amount shall be applied to the principal amount of the Notes on the
Maturity Date or on such earlier date on which the Issuer elects to apply such
funds to make an optional redemption of the Notes in accordance with Section
1101.
SECTION 1206. Security Interest.
-----------------
As collateral security for the Obligations, the Issuer hereby
pledges and assigns to the Indenture Trustee for the benefit of the Holders of
the Notes, and grants to the Indenture Trustee for the benefit of the Holders of
the Notes a continuing security interest in each Reserve, each Reserve Account
and all funds on deposit therein from time to time, subject to the provisions of
this Article Twelve.
SECTION 1207. Investment.
----------
The funds on deposit in each Reserve Account from time to time
shall be invested in Eligible Investments (and with maturity dates) as
designated from time to time in writing by Issuer to the Servicer and the
Indenture Trustee; PROVIDED, HOWEVER, that each such Eligible Investment shall
mature not later than 60 days following the acquisition of such Eligible
Investment and shall be maintained in the possession of the Indenture Trustee or
in such other manner as shall cause the Indenture Trustee to have a first
priority perfected security interest in each such Eligible Investment. None of
the Servicer, the Indenture Trustee, or the commercial bank or trust company
maintaining any Reserve Account shall have any liability for any Eligible
Investment made in accordance with this
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<PAGE> 146
Section 1207. So long as no Default or Event of Default has occurred and is
continuing, all income earned on the funds from time to time on deposit in the
Reserve Accounts shall be released from the respective Reserve Account and paid
to the Issuer on a quarterly basis.
ARTICLE THIRTEEN
----------------
EXPENSES AND INDEMNITY
----------------------
SECTION 1301. Expenses; Indemnity.
-------------------
(a) The provisions of this Section are supplemental to, not
duplicative of, Section 605.
(b) (EXPENSES.) Whether or not the transactions contemplated
hereby are consummated, the Issuer shall reimburse the Indenture Trustee, the
Servicer, KPMCC, Kidder, any Affiliate of Kidder, the Pass-Through Trustee and
the Originator (each a "REIMBURSEMENT PARTY") upon receipt of written notice
from such Reimbursement Party for all reasonable costs and expenses (including
reasonable attorneys' fees and disbursements) incurred by such Reimbursement
Party in connection with: (i) the preparation, negotiation, execution and
delivery of this Indenture, the other Transaction Documents and the Related
Documents and the consummation of the transactions contemplated hereby and
thereby (including the issuance and sale of the Notes) and all the costs of
furnishing all opinions by counsel for the Issuer (including, without
limitation, any opinions requested by the Indenture Trustee or any Rating Agency
as to any legal matters arising under this Indenture, the other Transaction
Documents or the Related Documents or with respect to any Mortgaged Property);
PROVIDED, HOWEVER, that the maximum amount payable by the Issuer for all of the
amounts referred to in this clause (i) (other than any such amounts payable to
counsel for the Issuer) shall not exceed $1,275,000 (which amount has previously
been paid by the Issuer to KPMCC); (ii) Issuer's ongoing performance of and
compliance with all agreements and covenants contained in this Indenture, the
other Transaction Documents and the Related Documents on its part to be
performed or complied with after the Issuance Date, including, without
limitation, confirming compliance with environmental and insurance requirements;
(iii) the negotiation, preparation, execution, delivery and administration of
any consents, amendments, waivers or other modifications to this Indenture, the
other Transac-
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<PAGE> 147
tion Documents or the Related Documents and any other documents or matters
requested by the Issuer; (iv) the filing and recording fees and expenses, title
insurance and reasonable fees and expenses of the Issuer's counsel for providing
the opinions delivered pursuant to this Indenture, and other similar expenses
incurred in creating and perfecting Encumbrances in favor of the Indenture
Trustee pursuant to this Indenture, the other Transaction Documents and/or the
Related Documents; (v) enforcing or preserving any rights, in response to third
party claims or prosecuting or defending of any action or proceeding or other
litigation, in each case against, under or affecting the Issuer, this Indenture,
the other Transaction Documents, the Related Documents, any party (other than
the Issuer) to any Related Document, any Mortgaged Property or any other
security given for the Notes; and (vi) enforcing any obligations of or
collecting any payments due from the Issuer under this Indenture, the other
Transaction Documents or any Related Document or with respect to the Mortgaged
Property or in connection with any refinancing or restructuring of the credit
arrangements provided under this Indenture in the nature of a "work-out" or of
any insolvency or bankruptcy proceedings.
(c) (INDEMNITY.) In addition to, but without duplication of
the payment of, expenses pursuant to paragraph (b) above or the indemnification
provided for in the Environmental Indemnity, whether or not the transactions
contemplated hereby shall be consummated, the Issuer agrees to indemnify, pay
and hold harmless each of the Originator, KPMCC, Kidder, the Servicer, the
Indenture Trustee, the Pass-Through Trustee and their respective officers,
directors, agents, parents and Affiliates (each an "indemnified party"), and
each of them, from and against any and all other liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, claims, costs, expenses
and disbursements of any kind or nature whatsoever (including, without
limitation, the reasonable fees and disbursements of counsel for such
indemnified party in connection with any investigative, administrative or
judicial proceeding commenced or threatened, whether or not such indemnified
party shall be designated a party thereto), that may be imposed on, incurred by,
or asserted against such indemnified party in any manner relating to or arising
out of (i) this Indenture, the other Transaction Documents or any Related
Document, (ii) the Notes or the use or intended use of the proceeds of the Notes
or (iii) the issuance, offering and sale of the Notes (collectively, the
"INDEMNIFIED LIABILITIES"); PROVIDED, HOWEVER, that
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<PAGE> 148
Issuer shall not have any obligation to an indemnified party under this Section
1301 to the extent that such Indemnified Liabilities arise from gross
negligence, illegal acts or willful misconduct of such indemnified party or with
respect to the principal of, or interest on, the Notes. To the extent that the
undertaking to indemnify, pay and hold harmless set forth in the preceding
sentence may be unenforceable because it violates any law or public policy, the
Issuer shall contribute the maximum portion that it is permitted to pay and
satisfy under applicable law to the payment and satisfaction of all Indemnified
Liabilities incurred by any indemnified party.
(d) The Issuer hereby acknowledges and agrees that each
indemnified party is an intended third party beneficiary of this Section 1301
and that each such indemnified party has agreed to enter into the Transaction
Documents and the Related Documents to which it is a party, and to perform its
obligations thereunder, based on and in reliance upon this Section 1301.
(e) The obligations of the Issuer set forth in this Article
Thirteen shall not be expanded or increased by any amendment of the Trust and
Servicing Agreement.
-140-
<PAGE> 149
IN WITNESS WHEREOF, the parties hereto have caused this
Indenture to be duly executed, and their respective corporate seals to be
hereunto affixed, all as of the day and year first above written.
BANKERS TRUST COMPANY OF
CALIFORNIA, N.A.,
as Indenture Trustee
By /s/ Lynnette Antosh
-------------------------------
Name: Lynnette Antosh
Title: Vice President
TUCKER FINANCING PARTNERSHIP,
a Delaware general
partnership
By: Tucker Financing Corp.,
as managing general
partner
By /s/ Richard H. Tucker
-----------------------------
Name: Richard H. Tucker
Title: Executive Vice
President
BANKERS TRUST COMPANY,
as Servicer
By /s/ Lynnette Antosh
---------------------------
Name: Lynnette Antosh
Title: Vice President
-141-
<PAGE> 150
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On the 16th day of June, 1994, before me personally came Lynnette Antosh, to me
known, who, being by me duly sworn, did depose and say that she is a Vice
President of Bankers Trust Company of California, N.A., the banking corporation
described in and which executed the foregoing instrument; that she knows the
seal of said corporation; that the seal affixed to said instrument is such
corporate seal; that it was so affixed by authority of the Board of Directors of
said corporation, and that she signed her name thereto by like authority.
/s/ Gregory E. Ostling
------------------------------
Notary Public
GREGORY E. OSTLING
Notary Public, State of New York
No. 31-5020668
Qualified in New York County
Commission Expires Nov. 22, 1995
<PAGE> 151
STATE OF ILLINOIS )
) ss.:
COUNTY OF COOK )
On the 13th day of June 1994, before me personally came Richard H. Tucker, to
me known, who, being by me duly sworn, did depose and say that he is the
Executive Vice President of Tucker Financing Corp., which corporation is a
general partnership of Tucker Financing Partnership, the partnership described
in and which executed the foregoing instrument; that he knows the seal of said
corporation; that the seal affixed to said instrument is such corporate seal;
that it was so affixed by authority of the Board of Directors of said
corporation, and that he signed his name thereto on behalf of such corporation
as general partner of such partnership by like authority.
/s/ Kenneth W. Bosworth
-----------------------------
Notary Public
My Commission Expires:
--------------------------------
"OFFICAL SEAL"
KENNETH W. BOSWORTH
NOTARY PUBLIC, STATE OF ILLINOIS
MY COMMISSION EXPIRES 5/17/97
--------------------------------
<PAGE> 152
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On the 16th day of June, 1994, before me personally came Lynnette Antosh, to me
known, who, being by me duly sworn, did depose and say that she is a Vice
President of Bankers Trust Company, the banking corporation described in and
which executed the foregoing instrument; that she knows the seal of said
corporation; that the seal affixed to said instrument is such corporate seal;
that it was so affixed by authority of the Board of Directors of said
corporation, and that she signed her name thereto by like authority.
/s/ Gregory E. Ostling
------------------------------
Notary Public
GREGORY E. OSTLING
Notary Public, State of New York
No. 31-5020668
Qualified in New York County
Commission Expires Nov. 22, 1995
<PAGE> 1
EXHIBIT 21.1
------------
SUBSIDIARIES OF BRADLEY REAL ESTATE, INC.
Bradley Real Estate Management, Inc., a Massachusetts corporation
Bradley Midwest Management, Inc., a Minnesota corporation
Bradley Operating Limited Partnership, a Delaware limited partnership
Bradley Financing Corp., a Delaware corporation
Bradley Financing Partnership, a Delaware partnership
Bradley Management Corp., a Delaware corporation
Bradley Management Limited Partnership, a Delaware limited partnership
Bradley Properties Investments, Inc., an Illinois corporation
Williamson Square Associates Limited Partnership, an Illinois limited
partnership
<PAGE> 1
Exhibit 23.1
------------
CONSENT OF INDEPENDEDNT AUDITORS
The Board of Directors
Bradley Real Estate, Inc.:
We consent to incorporation by reference in the registration statements (Nos.
33-87084 and 33-62200) on Form S-3 and the registration statements (Nos.
33-34884 and 33-65180) on Form S-8 of Bradley Real Estate, Inc. of our report
dated February 19, 1996, except for note 10, which is as of March 15, 1996,
relating to the balance sheets and related schedule of Bradley Real Estate,
Inc. as of December 31, 1995 and 1994, and the related statements of income,
changes in stockholders' equity and cash flows for each of the years in the
three-year period ended December 31, 1995, which report appears in the December
31, 1995 annual report on Form 10-K of Bradley Real Estate, Inc.
KPMG PEAT MARWICK LLP
Boston, Massachusetts
March 25, 1996
31
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
EXHIBIT 27.1
------------
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED CONDENSED FINANCIAL STATEMENTS OF BRADLEY REAL ESTATE FOR THE YEAR
ENDED DECEMBER 31, 1995 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1
<CURRENCY> US DOLLARS
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> DEC-31-1995
<EXCHANGE-RATE> 1
<CASH> 697,000
<SECURITIES> 0
<RECEIVABLES> 9,382,000
<ALLOWANCES> (711,000)
<INVENTORY> 0
<CURRENT-ASSETS> 18,034,000
<PP&E> 189,405,000
<DEPRECIATION> (27,591,000)
<TOTAL-ASSETS> 180,545,000
<CURRENT-LIABILITIES> 6,053,000
<BONDS> 39,394,000
<COMMON> 112,000
0
0
<OTHER-SE> 135,098,000
<TOTAL-LIABILITY-AND-EQUITY> 180,545,000
<SALES> 0
<TOTAL-REVENUES> 36,572,000
<CGS> 0
<TOTAL-COSTS> 16,119,000
<OTHER-EXPENSES> 7,317,000
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 4,705,000
<INCOME-PRETAX> 8,431,000
<INCOME-TAX> 0
<INCOME-CONTINUING> 8,431,000
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 8,431,000
<EPS-PRIMARY> .85
<EPS-DILUTED> .85
</TABLE>
