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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
Current Report
Filed pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) August 11, 1998
BRANDYWINE REALTY TRUST
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(Exact name of registrant as specified in its charter)
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<CAPTION>
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MARYLAND 1-9106 23-2413352
(State or Other Jurisdiction (Commission (I.R.S. Employer
of Incorporation) file number) Identification Number)
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16 Campus Boulevard, Newtown Square, Pennsylvania 19073
(Address of principal executive offices)
(610) 325-5600
(Registrant's telephone number, including area code)
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Item 2. Acquisition or Disposition of Assets.
(i) Consummation of the Lazard Transaction. On September 28, 1998,
Brandywine Realty Trust (the "Trust," and together with its subsidiaries, the
"Company") and Brandywine Operating Partnership, L.P. (the "Operating
Partnership") consummated the "Lazard Transaction." Reference is made to the
previous description of the Lazard Transaction contained in Item 5 "Lazard
Transaction" of the Company's Quarterly Report on Form 10-Q for the quarter
ended June 30, 1998 (the "Form 10-Q"). The information regarding the Lazard
Transaction contained in this Current Report on Form 8-K amends and supplements
the information regarding the Lazard Transaction previously provided by the
Company in the Form 10-Q. Defined terms used in the following discussion of the
Lazard Transaction but not defined below have the meanings given to them in the
Form 10-Q.
At the September 28th closing, the Company acquired 67 of the Lazard
Properties (containing approximately 5.5 million net rentable square feet) for
an aggregate purchase price of approximately $591.6 million. The Company paid
approximately (i) $37.5 million of the acquisition price through the issuance of
$37.5 million in stated value of the Trust's Series A Preferred Shares (as
defined below), (ii) $74.5 million of the acquisition price through the issuance
of $74.5 million in stated value of the Operating Partnership's Series B
Preferred Units (as defined below), (iii) $239.7 million of the acquisition
price through the assumption of mortgage debt secured by 62 of the Lazard
Properties and (iv) $239.9 million of the acquisition price in cash (which was
funded through advances under the Company's $550 million revolving credit
facility and the Company's $150 million credit facility).
The Operating Partnership's acquisition of four of the 67 Lazard
Properties (known as Arboretum I, II, III and V) was structured so as to defer
transfer of title until the earlier of (i) receipt of consent to the transfer
from the lender that holds the mortgage on the properties and (ii) prepayment of
the loan. The Operating Partnership has agreed to prepay the loan by January 31,
1999 if lender consent to the transfer has not then been received. Upon transfer
of title to the properties, the Operating Partnership or the applicable seller
will pay to the other, as applicable, an amount equal to the economic benefits
or losses arising from the ownership of the properties from the September 28
closing date until the date of transfer of title. The Operating Partnership also
agreed to acquire the additional Lazard Property (commonly known as 8260
Greensboro Drive) not acquired at the September 28 closing on January 31, 1999,
subject to receipt of approval of a subdivision of such property from an
adjacent property (which adjacent property is the subject of a purchase option
held by the Operating Partnership). The acquisition price of 8260 Greensboro
Drive is $20.0 million, which is payable at the time of acquisition of such
property through the issuance of $20.0 million in stated value of the Operating
Partnership's Series B Preferred Units. The Company expects the required
subdivision to be approved prior to January 31, 1999.
In exchange for the $591.6 million purchase price, the Operating
Partnership also acquired approximately 172 acres of undeveloped land and a 50%
general partnership interest in each of IR Northlight II Associates, a
Pennsylvania general partnership, and Interstate Center Associates, a Virginia
general partnership. In connection with the closing of the Lazard Transaction,
the Operating Partnership also (i) acquired the remaining 50% general
partnership interest in IR Northlight II Associates from a third party unrelated
to the Company or the Sellers in exchange
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for $7.5 million in cash (which was funded through advances under the Company's
$550 million revolving credit facility) and (ii) agreed to acquire (subject
to execution of the definitive documents and satisfaction of customary closing
conditions) the remaining 50% general partnership interest in Interstate Center
Associates from a third party unrelated to the Company or the Sellers in
exchange for approximately $2.1 million payable through the issuance of Class A
Units valued at $24.00 per unit. IR Northlight II Associates owns the Lazard
Property commonly known as 7350 Tilghman Street, Allentown, Pennsylvania, and
Interstate Center Associates owns the Lazard Property commonly known as
2100-2108 West Laburnum (Interstate Center), Richmond, Virginia.
At the closing, the Operating Partnership also lent Commonwealth
Atlantic Land Company, one of the Sellers ("CALC"), $3.0 million which CALC used
to purchase $3.0 million in stated value of the Operating Partnership's Series B
Preferred Units. Such loan is evidenced by a promissory note (the "CALC Note")
in favor of the Operating Partnership which accrues interest at a rate of 7.25%
per annum and matures on September 30, 1999. The Operating Partnership may, at
its option, apply any outstanding principal amount of the CALC Note, together
with any accrued and unpaid interest thereon, towards the payment of the $68.0
million purchase price for an certain office property currently under
construction in Tyson's Corner, Virginia which is the subject of a purchase
option granted to the Operating Partnership as part of the Lazard Transaction.
In connection with the Lazard Transaction, the Trust designated 750,000
of its authorized and unissued preferred shares of beneficial interest, par
value $.01 per share, as 7.25% Series A Cumulative Convertible Preferred Shares
(the "Series A Preferred Shares"). Each Series A Preferred Share has a stated
value (the "Stated Value") of $50 and is convertible into Common Shares at the
option of the holder at a conversion price (the "Conversion Price") of $28. The
Conversion Price will be reduced to $26.50 if the average closing price of the
Common Shares during the 60-trading day period ending on December 31, 2003 is
$23 or lower. At any time that the average market price of the Common Shares is
equal to or greater than 120% of the Conversion Price for 60 consecutive trading
days, the Trust has the right to redeem all or any part of the outstanding
Series A Preferred Shares for an amount in cash equal to the aggregate Stated
Value of the Series A Preferred Shares to be redeemed (plus accrued and unpaid
distributions) or for a number of Common Shares equal to the aggregate Stated
Value of the Series A Preferred Shares to be redeemed divided by the Conversion
Price (plus accrued and unpaid distributions). In addition, at any time on or
after January 2, 2004, the Trust has the right to redeem all or any part of the
outstanding Series A Preferred Shares for an amount in cash equal to the
aggregate Stated Value of the Series A Preferred Shares to be redeemed (plus
accrued and unpaid distributions) or, in the event that the average closing
price of the Common Shares is equal to or greater than 110% of the Conversion
Price for 60 consecutive trading days, for a number of Common Shares equal to
the aggregate Stated Value of the Series A Preferred Shares to be redeemed
divided by the Conversion Price (plus accrued and unpaid distributions). Each
Series A Preferred Share accrues distributions, payable in cash, in an amount
equal to the greater of (i) $0.9063 per quarter (equivalent to $3.625 per annum)
or (ii) the cash distributions paid or payable for the most recent quarter on
the number of Common Shares into which a Series A Preferred Share is
convertible. The holders of Series A Preferred Shares will have no voting rights
except (i) with respect to actions which would have a material and
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adverse effect on the rights of such holders and (ii) in the event
quarterly distributions on the Series A Preferred Shares are in arrears for six
or more quarters. In the event the quarterly distributions are so in arrears,
the holders of the Series A Preferred Shares will have the right, voting
together as a single class with any other class of the Trust's preferred shares
of beneficial interest ranking on a parity with the Series A Preferred Shares,
to elect two additional members to the Board of Trustees of the Trust (the
"Board").
In exchange for the Trust's contribution to the Operating Partnership
of the properties acquired by the Trust in exchange for the issuance of the
Series A Preferred Shares, the Operating Partnership issued to the Trust $37.5
million in liquidation value of a newly created class of limited partner
interest (the "Series A Preferred Mirror Units"). The preferences of the Series
A Preferred Mirror Units "mirror" those of the Series A Preferred Shares. Upon
conversion of Series A Preferred Shares into Common Shares, an equal number of
Series A Preferred Mirror Units will be converted into an equal number of Class
A Units. Upon redemption of Series A Preferred Shares for cash, an equal number
of Series A Preferred Mirror Units will be canceled. Upon redemption of Series A
Preferred Shares for Common Shares, an equal number of Series A Preferred Mirror
Units will be redeemed for an equal number of Class A Units. Each Class A Unit
is redeemable, at the option of the holder, for either an amount of cash equal
to the trading price of one Common Share at the time of the redemption or, at
the option of the Trust, for one Common Share.
In connection with the Lazard Transaction, the Operating Partnership
created Series B Preferred Units of limited partner interest (the "Series B
Preferred Units"). Each Class B Preferred Unit has a Stated Value of $50 and is
convertible into Class A Units at the option of the holder at the Conversion
Price. The Conversion Price is subject to reduction from $28.00 to $26.50 under
the circumstances identified above. At any time that the average market price of
the Common Shares is equal to or greater than 120% of the Conversion Price for
60 consecutive trading days, the Operating Partnership has the right to redeem
all or any part of the outstanding Series B Preferred Units for an amount in
cash equal to the aggregate Stated Value of the Series B Preferred Shares to be
redeemed (plus accrued and unpaid distributions), or for a number of Class A
Units equal to the aggregate Stated Value the Series B Preferred Shares to be
redeemed divided by the Conversion Price (plus accrued and unpaid
distributions). In addition, at any time on or after January 2, 2004, the
Operating Partnership has the right to redeem all or any part of the outstanding
Series B Preferred Units for an amount in cash equal to the aggregate Stated
Value the Series B Preferred Shares to be redeemed (plus accrued and unpaid
distributions) or, in the event that the average closing price of the Common
Shares is equal to or greater than 110% of the Conversion Price for 60
consecutive trading days, for a number of Class A Units equal to the aggregate
Stated Value the Series B Preferred Shares to be redeemed divided by the
Conversion Price (plus accrued and unpaid distributions). Each Class B Preferred
Unit accrues distributions, payable in cash, in an amount equal to the greater
of (i) $0.9063 per quarter (equivalent to $3.625 per annum) or (ii) the cash
distributions paid or payable on the number of Class A Units, or portion
thereof, into which a Class B Preferred Unit is convertible. The holders of
Series B Preferred Units have no voting rights except (i) with respect to
actions which would have a material and adverse effect on the rights of such
holders and (ii) in the event quarterly distributions on the Series B Preferred
Units are in arrears for six or
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more quarters. In the event quarterly distributions are so in arrears, holders
of Series B Preferred Units have the right, voting separately as a class, to
nominate two individuals who will vote as a group with the Board in connection
with any action to be taken by the Operating Partnership at the direction of the
Trust, as general partner, and as to which the Trust may act only upon
authorization by its Board. Except for transfers to affiliates of the Sellers or
upon the prior written consent of the Company, none of the Series B Preferred
Units, the Class A Units issuable upon redemption or conversion of the Series B
Preferred Units (the "Underlying Class A Units") nor the Common Shares issuable
upon redemption of the Underlying Class A Units may be transferred prior to
January 2, 2004.
None of the securities issued in connection with the Lazard Transaction
nor the securities issuable upon the redemption or conversion thereof have been
registered under the Securities Act of 1933, as amended, or any state securities
laws and none of such securities may be offered and sold in the United States
absent registration or an applicable exemption from registration. The Company
has agreed to file registration statements registering the resale of the Series
A Preferred Shares, the Common Shares issuable upon the redemption or conversion
of the Series A Preferred Shares and the Common Shares issuable upon redemption
of the Underlying Class A Units.
The definitive forms of the Articles Supplementary with respect to the
Preferred Shares, the Company's $550 million revolving credit facility and
pledge agreement with NationsBank, N.A., the Company's new $150 million credit
facility with NationsBanc Mortgage Capital Corp., the Fourth Amendment to the
Amended and Restated Agreement of Limited Partnership of the Operating
Partnership creating the Series A Preferred Mirror Units and the Fifth Amendment
to the Amended and Restated Agreement of Limited Partnership of the Operating
Partnership creating the Series B Preferred Units are attached hereto as
Exhibits 3.1, 10.1, 10.2, 10.3, 10.4 and 10.5, respectively.
At closing, Murry N. Gunty, a principal of Lazard Freres Real Estate
Investors, L.L.C., a manager of realty investment funds ("LFREI"), and a senior
member of its investment team, became a member of the Board of Trustees of the
Company.
(ii) Consummation of the Axinn Transaction. On October 6, 1998, the
Company and the Operating Partnership consummated the "Axinn Transaction."
Reference is made to the previous description of the Axinn Transaction contained
in Item 5 "Other Events" of the Company's Current Report on Form 8-K filed with
the Securities and Exchange Commission on July 30, 1998 (the "Prior 8-K"). The
information regarding the Axinn Transaction contained in this Current Report on
Form 8-K amends and supplements the information regarding the Axinn Transaction
previously provided by the Company in the Prior 8-K. Defined terms used in the
following discussion of the Axinn Transaction but not defined below have the
meanings given to them in the Prior 8-K.
At the October 6th closing, the Company acquired 22 of the Axinn
Properties (containing approximately 889,993 net rentable square feet) for an
aggregate acquisition price of approximately $62.7 million. The Company paid
approximately $36.5 million of the acquisition
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price in cash and approximately $26.2 million of the acquisition price through
the issuance of 1,127,895 Class A Units. The Company paid the cash portion of
the acquisition price through advances under its $550 million revolving credit
facility and its $150 million credit facility. The Company did not assume any
of the mortgage debt securing the acquired properties, which was discharged at
the closing. At the closing, the Company also paid an aggregate of approximately
$1.1 million in connection with its agreement to acquire the properties known as
3 Paragon Drive and 101 Paragon Drive. As indicated in the Prior 8-K, the
Company expects to acquire 3 Paragon Drive on or about December 28, 1998 and
expects to acquire 101 Paragon Drive by September 2005.
As indicated in the Prior 8-K, the Company has agreed to acquire the
property known as 31 Commercial Street only upon satisfaction of certain
environmental conditions relating to this property. As part of the Axinn
Transaction, the Company and the applicable Axinn Entities agreed to defer the
closing of two office properties in Long Island, New York (125 and 131 Jericho
Turnpike) until the closing of the 263 Old Country Road property closing. The
Company expects this closing to occur by approximately March 31, 1999. The
Company and the applicable Axinn Entities also agreed to remove from the
transaction the Long Island office property known as 163-167 South Service Road,
which the Company had previously agreed to acquire for approximately $2.8
million. In addition, the Company did not acquire the Long Island industrial
property known as 885 Waverly Road which, as indicated in the Prior 8-K, was
subject to a purchase right in favor of a tenant. The tenant exercised its
purchase right for this property.
The definitive form of the Sixth Amendment to the Amended and Restated
Agreement of Limited Partnership of the Operating Partnership executed in
connection with the Axinn Transaction is attached hereto as Exhibit 10.6. The
First Amendment to Contribution Agreement, which provided for the
above-referenced changes and certain other matters, is attached hereto as
Exhibit 10.7.
At closing, Donald E. Axinn, founder and chairman of the Donald E.
Axinn Companies, developers of office and industrial parks throughout the New
York metropolitan area since 1958, became a member of the Board of Trustees of
the Company.
Item 5. Other Events
From August 11, 1998 to September 2, 1998, the Company repurchased
86,744 of its Common Shares from the public at share prices ranging from $17.75
per share to $20.125 per share for a total of approximately $1.7 million.
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Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
(a) Financial Statements of Businesses Acquired.
The required financial statements of the Lazard Properties and the
Axinn Properties will be included in an amendment to this Current Report on Form
8-K to be filed no later than December 12, 1998.
(b) Pro Forma Financial Information.
The required pro forma financial information which gives effect to the
Company's acquisition of the Lazard Properties and the Axinn Properties will be
included in an amendment to this Current Report Form 8-K by no later than
December 12, 1998.
(c) Exhibits.
3.1 Articles Supplementary
10.1 Second Amended and Restated Credit Agreement
10.2 Pledge Agreement
10.3 Credit Agreement
10.4 Fourth Amendment to the Amended and Restated Agreement of Limited
Partnership of the Operating Partnership creating the Series A
Preferred Mirror Units
10.5 Fifth Amendment to the Amended and Restated Agreement of Limited
Partnership of the Operating Partnership creating the Series B
Preferred Units
10.6 Sixth Amendment to the Amended and Restated Agreement of Limited
Partnership of the Operating Partnership
10.7 First Amendment to Contribution Agreement
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed on its behalf by
the undersigned hereunto duly authorized.
BRANDYWINE REALTY TRUST
Date: October 13,1998 By: /s/ Gerard H. Sweeney
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Title: President and Chief
Executive Officer
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EXHIBIT 3.1
BRANDYWINE REALTY TRUST
ARTICLES SUPPLEMENTARY
CLASSIFYING AND DESIGNATING 750,000
PREFERRED SHARES AS SHARES OF
7.25% SERIES A CUMULATIVE CONVERTIBLE PREFERRED SHARES
Brandywine Realty Trust, a Maryland real estate investment trust (the
"Trust"), hereby certifies to the State Department of Assessments and Taxation
of Maryland that:
FIRST: Under a power contained in Article 6 of the Trust's
Declaration of Trust (as amended and restated to date, the "Declaration of
Trust") the Board of Trustees (the "Board"), by resolutions duly adopted on
August 6, 1998, classified and designated 750,000 shares of the Trust's
preferred shares of beneficial interest, $.01 par value per share, as the
7.25% Series A Cumulative Convertible Preferred Shares, with the preferences,
conversion and other rights, voting powers, restrictions, limitations as to
distributions, qualifications and terms and conditions of redemption of shares
(which under any restatement of the Declaration of Trust will become a part of
Article 6 thereof, with any necessary or appropriate changes to the numbering
or lettering thereof) as follows:
7.25% SERIES A CUMULATIVE CONVERTIBLE PREFERRED SHARES
1. Designation and Number. A series of Preferred Shares,
designated the "7.25% Series A Cumulative Convertible Preferred Shares" (the
"Series A Preferred Shares"), is hereby established. The par value of the
Series A Preferred Shares, as set forth in the Declaration of Trust, is $.01
per share. The authorized number of Series A Preferred Shares shall be
750,000. The stated value of each Series A Preferred Share shall be $50.00
(the "Stated Value").
2. Rank. The Series A Preferred Shares shall, with respect
to distribution rights and rights upon voluntary or involuntary liquidation,
dissolution or winding up of the Trust, rank (a) senior to all classes or
series of Common Shares (as defined in the Declaration of Trust) and to all
equity securities the terms of which provide that such equity securities shall
rank junior to such Series A Preferred Shares; (b) on a parity with all equity
securities issued by the Trust other than those referred to in clauses (a) and
(c); and (c) junior to all equity securities issued by the Trust which rank
senior to the Series A Preferred Shares in accordance with Section 6(d). The
term "equity securities" shall not include debt securities including
convertible debt securities.
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3. Distributions.
a. The holders of Series A Preferred Shares shall be
entitled to receive, when, as and if authorized by the Board out of funds
legally available for that purpose, cumulative distributions payable in cash
in an amount per Series A Preferred Share equal to the greater of (i) $0.9063
per quarter (equivalent to $3.625 per annum) or (ii) the cash distributions
paid or payable on the number of Common Shares, or portion thereof, into which
a Series A Preferred Share is convertible, in each case with appropriate
proration for partial quarters. The amount referred in clause (ii) of this
paragraph (a) with respect to each Distribution Period (as defined in Section
9 below) shall be determined as of the applicable Distribution Payment Date
(as defined in Section 9 below) by multiplying the number of Common Shares, or
portion thereof calculated to the fourth decimal point, into which a share of
Series A Preferred Share would be convertible at the opening of business on
such Distribution Payment Date (based on the Conversion Price then in effect)
by the quarterly cash distribution payable or paid for such Distribution
Period in respect of a Common Share outstanding as of the record date for the
payment of distributions on the Common Shares with respect to such
Distribution Period or, if different, with respect to the most recent
quarterly period for which distributions with respect to the Common Shares
have been declared. Such distributions shall be cumulative from the Issue Date
(as defined in Section 9 below), whether or not in any Distribution Period or
Periods such distributions shall be declared or there shall be funds of the
Trust legally available for the payment of such distributions, and shall be
payable quarterly in arrears on the Distribution Payment Dates, commencing on
the first Distribution Payment Date after the Issue Date. Each such
distribution shall be payable in arrears to the holders of record of the
Series A Preferred Shares, as they appear on the share records of the Trust at
the close of business on a record date which shall be not less than 10 and not
more than 60 days prior to the applicable Distribution Payment Date and shall
be fixed by the Board to coincide with the record date for the regular
quarterly distributions, if any, payable with respect to the Common Shares.
Accumulated, accrued and unpaid distributions for any past Distribution
Periods may be declared and paid at any time, without reference to any regular
Distribution Payment Date, to holders of record on a given date, which date
shall not precede by more than 45 days the payment date thereof, as may be
fixed by the Board. The amount of accumulated, accrued and unpaid
distributions on any Series A Preferred Share, or fraction thereof, at any
date shall be the amount of any distributions thereon calculated at the
applicable rate to and including such date, whether or not earned or declared,
which have not been paid in cash. The amount of distributions payable per
Series A Preferred Share for the initial Distribution Period, or any other
period shorter or longer than a full Distribution Period, shall be computed
ratably on the basis of four 90-day quarters and a 364-day year.
b. No distribution on the Series A Preferred Shares shall
be authorized by the Board or paid or set apart for payment by the Trust at
such time as the terms
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and provisions of any agreement of the Trust, including any agreement relating
to its indebtedness, prohibits such authorization, payment or setting apart
for payment or provides that such authorization, payment or setting apart for
payment would constitute a breach thereof, or a default thereunder, or if such
authorization or payment shall be restricted or prohibited by law. No
interest, or sum of money in lieu of interest, shall be payable in respect of
any distribution payment or payments on the Series A Preferred Shares which
may be in arrears.
Notwithstanding the foregoing, distributions on the Series A
Preferred Shares shall accumulate whether or not any of the foregoing
restrictions exist, whether or not there are funds legally available for the
payment thereof and whether or not such distributions are authorized.
Accumulated but unpaid distributions on the Series A Preferred Shares shall
not bear interest and holders of the Series A Preferred Shares shall not be
entitled to any distributions in excess of full cumulative distributions. Any
distribution payment made on the Series A Preferred Shares shall first be
credited against the earliest accumulated but unpaid distribution due with
respect to such shares which remains payable.
c. Except as provided in subsection 3(d) herein, if any
Series A Preferred Shares are outstanding, no distributions (other than in
Common Shares or other equity securities of the Trust ranking junior to the
Series A Preferred Shares as to distributions and upon liquidation,
dissolution or winding up of the Trust) shall be declared or paid or set apart
for payment nor shall any other distribution be declared or made on any equity
securities of the Trust ranking, as to distributions or upon liquidation,
dissolution or winding up of the Trust, on a parity with or junior to the
Series A Preferred Shares for any period unless full cumulative distributions
have been or contemporaneously are declared and paid or declared and a sum
sufficient for the payment thereof set apart for such payment on the Series A
Preferred Shares for all past distribution periods and the then current
distribution period, nor shall any Common Shares, or any other equity
securities of the Trust ranking junior to or on a parity with the Series A
Preferred Shares as to distributions or upon liquidation, dissolution or
winding up of the Trust, be redeemed, purchased or otherwise acquired for any
consideration (or any monies be paid to or made available for a sinking fund
for the redemption of any such equity securities) by the Trust or any other
entity controlled directly or indirectly by the Trust (except (i) by
conversion into or exchange for other equity securities of the Trust ranking
junior to the Series A Preferred Shares as to distributions and upon
liquidation, dissolution or winding up of the Trust, (ii) for the repurchase
of Common Shares held by employees, officers, trustees, or consultants of the
Trust (or their permitted transferees) that are subject to restrictive share
purchase agreements under which the Trust has the option or obligation to
repurchase such shares upon the occurrence of certain events, such as
termination of employment or (iii) as necessary for the Trust to continue to
qualify as a REIT).
d. When distributions are not paid in full (or a sum
sufficient for such full payment is not so set apart) upon the Series A
Preferred Shares and any other equity
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securities ranking on a parity as to distributions with the Series A Preferred
Shares, all distributions declared upon the Series A Preferred Shares and any
other equity securities ranking on a parity as to distributions with the
Series A Preferred Shares shall be declared pro rata so that the amount of
distributions declared per share of Series A Preferred Shares and such other
equity securities shall in all cases bear to each other the same ratio that
accumulated distributions per share on the Series A Preferred Shares and such
other equity securities (which shall not include any accumulation in respect
of unpaid distributions for prior distribution periods if such equity
securities do not have a cumulative distribution) bear to each other.
e. Holders of Series A Preferred Shares shall not be
entitled to any distribution, whether payable in cash, property or shares, in
excess of full cumulative distributions on the Series A Preferred Shares as
described above. Accumulated but unpaid distributions on the Series A
Preferred Shares will accumulate as of the Distribution Payment Date on which
they first become payable.
4. Liquidation Preference.
a. In the event of any voluntary or involuntary
liquidation, dissolution or winding up of the Trust, the holders of the Series
A Preferred Shares shall be entitled to receive out of the assets of the Trust
available for distribution to shareholders remaining after payment or
provisions for payment of all debts and other liabilities of the Trust a
liquidation preference equal to the Stated Value per share, plus an amount
equal to any accumulated and unpaid distributions to the date of payment,
before any distribution of assets is made to holders of Common Shares or any
other equity securities that rank junior to the Series A Preferred Shares as
to liquidation rights.
b. If upon any such voluntary or involuntary liquidation,
dissolution or winding up of the Trust, the assets of the Trust are
insufficient to make such full payment to holders of the Series A Preferred
Shares and the corresponding amounts payable on all shares of other classes or
series of equity securities of the Trust ranking on a parity with the Series A
Preferred Shares as to liquidation rights, then the holders of the Series A
Preferred Shares and all other such classes or series of equity securities
shall share ratably in any such distribution of assets in proportion to the
full liquidating distributions to which they would otherwise be respectively
entitled.
c. Written notice of any such liquidation, dissolution or
winding up of the Trust, stating the payment date or dates when, and the place
or places where, the amounts distributable in such circumstances shall be
payable, shall be given by first class mail, postage pre-paid, not less than
30 nor more than 60 days prior to the payment date stated therein, to each
record holder of the Series A Preferred Shares at the respective addresses of
such holders as the same shall appear on the share transfer records of the
Trust.
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d. After payment of the full amount of the liquidating
distributions to which they are entitled, the holders of Series A Preferred
Shares shall have no right or claim to any of the remaining assets of the
Trust.
e. None of a consolidation or merger of the Trust with or
into another entity, a merger of another entity with or into the Trust, a
statutory share exchange by the Trust or a sale, lease or conveyance of all or
substantially all of the Trust's property or business shall be considered a
liquidation, dissolution or winding up of the Trust.
f. In determining whether a distribution (other than upon
voluntary or involuntary liquidation) by dividend, redemption or other
acquisition of shares or otherwise is permitted under Maryland Law, no effect
shall be given to amounts that would be needed, if the Trust were to be
dissolved at the time of the distribution, to satisfy the preferential rights
upon dissolution of shareholders whose preferential rights on dissolution are
superior to those receiving the distribution.
5. Redemption.
a. Cash Redemption Right. On and after January 2, 2004
and, in addition, at any time after the Issue Date that the Current Market
Price (as defined in Section 9) of the Common Shares has equaled or exceeded
120% of the Conversion Price for any 60 consecutive Trading Days (as defined
in Section 9), the Trust, upon giving notice as provided below, may redeem the
Series A Preferred Shares, in whole or in part, for a redemption price per
share payable in cash equal to the Stated Value (the "Cash Redemption Right").
b. Share Redemption Right. If (i) at any time during the
period commencing on the Issue Date and ending on January 1, 2004, the Current
Market Price of the Common Shares has equaled or exceeded 120% of the
Conversion Price for any 60 consecutive Trading Days or (ii) at any time on or
after January 2, 2004, the Current Market Price of the Common Shares has
equaled or exceeded 110% of the Conversion Price for 60 consecutive Trading
Days, the Trust, upon giving notice as provided below, may redeem the Series A
Preferred Shares, in whole or in part, for such number of Common Shares as
equals the Stated Value of the Series A Preferred Shares to be redeemed
divided by the Conversion Price as of the opening of business on the date set
for such redemption (the "Share Redemption Right").
c. Limitations on Redemption.
(i) The Trust may exercise the Cash Redemption Right
provided that the redemption price (other than the portion thereof consisting
of accumulated and unpaid distributions) is payable solely out of the sale
proceeds of other equity securities of the
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Trust, and from no other source. For purposes of the preceding sentence,
"equity securities" means any equity securities (including Common Shares and
Preferred Shares (as defined in the Declaration of Trust)), shares, interest,
participation or other ownership interests (however designated) and any rights
(other than debt securities convertible into or exchangeable for equity
securities) or options to purchase any of the foregoing.
(ii) If fewer than all of the outstanding Series A
Preferred Shares are to be redeemed, the shares to be redeemed shall be
determined pro rata or by lot or in such other manner as prescribed by the
Board.
(iii) Notwithstanding anything to the contrary
contained herein, unless full cumulative distributions on all Series A
Preferred Shares shall have been or contemporaneously are declared and paid or
declared and a sum sufficient for the payment thereof set apart for payment
for all past distribution periods and the current distribution period, no
Series A Preferred Shares shall be redeemed unless all outstanding Series A
Preferred Shares are simultaneously redeemed or exchanged; provided, however,
that the foregoing shall not prevent the purchase or acquisition of Series A
Preferred Shares pursuant to a purchase or exchange offer made on the same
terms to holders of all outstanding Series A Preferred Shares. In addition,
unless full cumulative distributions on all outstanding Series A Preferred
Shares have been or contemporaneously are declared and paid or declared and a
sum sufficient for the payment thereof set apart for payment for all past
distributions periods and the then current distribution period, the Trust
shall not purchase or otherwise acquire directly or indirectly any Series A
Preferred Shares or any equity securities of the Trust ranking junior to or on
a parity with the Series A Preferred Shares as to distributions or upon
liquidation, dissolution or winding up of the Trust (except (i) by conversion
into or exchange for other equity securities of the Trust ranking junior to
the Series A Preferred Shares as to distributions and upon liquidation,
dissolution or winding up of the Trust, (ii) for the repurchase of Common
Shares held by employees, officers, trustees, or consultants of the Trust (or
their permitted transferees) that are subject to restrictive share purchase
agreements under which the Trust has the option or obligation to repurchase
such shares upon the occurrence of certain events, such as termination of
employment or (iii) as necessary for the Trust to continue to qualify as a
REIT).
(iv) The foregoing provisions of subsections
5(c)(i)-(iii) shall not prevent the purchase by the Trust of Series A
Preferred Shares pursuant to Article 6 of the Declaration of Trust or
otherwise in order to ensure that the Trust remains qualified as a REIT for
federal income tax purposes.
(v) Immediately prior to any redemption of Series A
Preferred Shares, the Trust shall pay, in cash, any accumulated and unpaid
distributions through the Redemption Date (as defined in subsection (d)
below), unless a Redemption Date falls after a Distribution Record Date and on
or prior to the corresponding Distribution Payment Date, in
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which case each holder of Series A Preferred Shares at the close of business
on such Distribution Record Date shall be entitled to the distribution payable
on such shares on the corresponding Distribution Payment Date notwithstanding
the redemption of such shares on or prior to such Distribution Payment Date.
Except as provided above, the Trust will make no payment or allowance for
unpaid distributions, whether or not in arrears, on Series A Preferred Shares
for which a notice of redemption has been given.
d. Procedures for Redemption.
(i) Notice of redemption shall be mailed, not
less than 30 nor more than 60 days, prior to the date fixed for redemption set
forth in such notice (the "Redemption Date") to each holder of record of
Series A Preferred Shares to be redeemed, notifying such holder of the Trust's
election to redeem such shares. Such notice shall be mailed to such holder's
address as the same appears on the share records of the Trust. No failure to
give such notice or any defect therein or in the mailing thereof shall affect
the validity of the proceedings for the redemption of any Series A Preferred
Shares except as to the holder to whom notice was defective or not given.
(ii) In addition to any information required by
law, such notice shall state: (i) the Redemption Date, (ii) with respect to
the Cash Redemption Right, the cash redemption price per Series A Preferred
Share and, with respect to the Share Redemption Right, the number of Common
Shares to be issued with respect to each Series A Preferred Share, (iii) the
number of shares to be redeemed (and, if fewer than all the Series A Preferred
Shares are to be redeemed from such holder, the number of shares to be
redeemed from such holder), (iv) the place or places where certificates for
such Series A Preferred Shares are to be surrendered for payment of the
redemption price in cash, with respect to the Cash Redemption Right, and in
certificates representing Common Shares, with respect to the Share Redemption
Right, (v) that distributions on the shares to be redeemed will cease to
accumulate on such Redemption Date and (vi) the date upon which the holder's
conversion rights, if any, as to such shares shall terminate.
(iii) On or after the Redemption Date, each
holder of Series A Preferred Shares to be redeemed shall present and surrender
the certificates evidencing its Series A Preferred Shares to the Trust at the
place designated in the notice of redemption and thereupon the redemption
price (in cash or Common Shares, as applicable) of such shares shall be paid
to or on the order of the person whose name appears on such certificate
evidencing Series A Preferred Shares as the owner thereof and each surrendered
certificate shall be canceled. If fewer than all the shares evidenced by any
such certificate evidencing Series A Preferred Shares are to be redeemed, a
new certificate shall be issued evidencing the unredeemed shares.
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(iv) From and after the Redemption Date (unless
the Trust defaults in payment of the redemption price), all distributions on
the Series A Preferred Shares designated for redemption in such notice shall
cease to accumulate and all rights of the holders thereof, except the right to
receive the redemption price thereof (including all accumulated and unpaid
distributions up to the Redemption Date), shall cease and terminate and such
shares shall not thereafter be transferred (except with the consent of the
Trust) on the Trust's books, and such shares shall not be deemed to be
outstanding for any purpose whatsoever. At its election, the Trust, prior to a
Redemption Date, may irrevocably deposit the redemption price (including
accumulated and unpaid distributions) of the Series A Preferred Shares so
called for redemption in trust for the holders thereof with a bank or trust
company, in which case the redemption notice to holders of the Series A
Preferred Shares to be redeemed shall (i) state the date of such deposit, (ii)
specify the office of such bank or trust company as the place of payment of
the redemption price and (iii) require such holders to surrender the
certificates evidencing such shares at such place on or about the date fixed
in such redemption notice (which may not be later than the Redemption Date)
against payment of the redemption price (including all accumulated and unpaid
distributions to the Redemption Date). At the close of business on a
Redemption Date relating to the Trust's Share Redemption Right, each holder of
Series A Preferred Shares to be so redeemed (unless the Trust defaults in the
delivery of the Common Shares payable on such Redemption Date) shall be deemed
to be the record holder of the number of Common Shares into which such Series
A Preferred Shares are to be so redeemed, regardless of whether such holder
has surrendered the certificates evidencing the Series A Preferred Shares. Any
monies or Common Shares so deposited which remain unclaimed by the holders of
the Series A Preferred Shares at the end of two years after the Redemption
Date shall be returned by such bank or trust company to the Trust.
e. Status of Redeemed Shares. Any Series A Preferred
Shares that shall at any time have been redeemed shall, after such redemption,
have the status of authorized but unissued Preferred Shares, without
designation as to series until such shares are once more designated as part of
a particular series by the Board.
f. No Fractional Shares. No fractional shares or scrip
representing fractions of Common Shares shall be issued upon redemption of a
Series A Preferred Share pursuant to the Trust's Share Redemption Right.
Instead of any fractional interest in a Common Share that would otherwise be
deliverable upon the redemption of a Series A Preferred Share, the Trust shall
pay to the holder of such Series A Preferred Share an amount in cash in
respect of such fractional interest (computed to the nearest cent) based upon
the Current Market Price of Common Shares on the Trading Day immediately
preceding the Redemption Date. If more than one Series A Preferred Share shall
be surrendered for redemption at one time by the same holder, the number of
full Common Shares issuable upon redemption thereof shall be computed on the
basis of the aggregate number of Series A Preferred Shares so surrendered.
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g. Common Shares Issuable Upon Redemption. The Trust
covenants that any Common Shares issued upon redemption of the Series A
Preferred Shares shall be validly issued, fully paid and non-assessable.
6. Voting Rights.
a. Holders of the Series A Preferred Shares shall not
have any voting rights, except as provided by law and as described below.
b. Whenever distributions on any Series A Preferred
Shares shall be in arrears for six or more quarterly periods (a "Preferred
Distribution Default"), the number of trustees of the Trust shall be
automatically increased by two and the holders of such Series A Preferred
Shares (voting separately as a class with all other equity securities ranking
on a parity with the Series A Preferred Shares as to distributions and upon
voluntary or involuntary liquidation, dissolution or winding up of the Trust
upon which like voting rights have been conferred and are exercisable ("Parity
Preferred Shares")) shall be entitled to vote for the election of a total of
two additional trustees of the Trust (the "Preferred Share Trustees") who
shall each be elected for one-year terms. Such election shall be held at a
special meeting called by the holders of record of at least 10% of the
outstanding Series A Preferred Shares or the holders of shares of any other
series of Parity Preferred Shares so in arrears (unless such request is
received less than 90 days before the date fixed for the next annual or
special meeting of shareholders) or, if the request for a special meeting is
received by the Trust less than 90 days before the date fixed for the next
annual or special meeting of the shareholders, at the next annual or special
meeting of shareholders, and at each subsequent annual meeting until all
distributions accumulated on the Series A Preferred Shares for the past
distribution periods and the distribution for the then current distribution
period shall have been fully paid or authorized and a sum sufficient for the
payment thereof set aside for payment in full.
c. If and when all accumulated distributions on the
Series A Preferred Shares shall have been paid in full or set aside for
payment in full, the holders of Series A Preferred Shares shall be divested of
the voting rights set forth in Section 6(b) herein (subject to revesting in
the event of each and every Preferred Distribution Default) and, if all
accumulated distributions have been paid in full or set aside for payment in
full on all other series of Parity Preferred Shares upon which like voting
rights have been conferred and are exercisable, the term of office of each
Preferred Share Trustee so elected shall terminate and the number of trustees
of the Trust shall be automatically decreased by two. So long as a Preferred
Distribution Default shall continue, any vacancy in the office of a Preferred
Share Trustee may be filled by written consent of the Preferred Share Trustee
remaining in office, or if there is no such remaining trustee, by vote of
holders of a majority of the outstanding Series A Preferred Shares and any
other series of Parity Preferred Shares voting as a single class. Any
Preferred Share Trustee may be removed at any time with or without cause by
the vote of, and shall not be removed otherwise
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<PAGE>
than by the vote of, the holders of record of a majority of the outstanding
Series A Preferred Shares when they have the voting rights set forth in
Section 6(b) (voting separately as a class with all other series of Parity
Preferred Shares upon which like voting rights have been conferred and are
exercisable). The Preferred Share Trustees shall each be entitled to one vote
per trustee on any matter.
d. So long as any Series A Preferred Shares remain
outstanding, the Trust shall not, without the affirmative vote or consent of
the holders of at least two-thirds of Series A Preferred Shares outstanding at
the time, given in person or by proxy, either in writing or at a meeting, (i)
authorize or create, or increase the authorized or issued amount of, any class
or series of shares of beneficial interest ranking prior to Series A Preferred
Shares with respect to the payment of distributions or the distribution of
assets upon voluntary or involuntary liquidation, dissolution or winding up of
the Trust or reclassify any authorized shares of beneficial interest of the
Trust into such shares, or create, authorize or issue any obligation or
security convertible or exchangeable into or evidencing the right to purchase
any such shares; or (ii) amend, alter or repeal the provisions of the
Declaration of Trust or these Articles Supplementary, whether by merger,
consolidation or otherwise, or consummate a merger or consolidation involving
the Trust (any such merger or consolidation, an "Event"), so as to materially
and adversely affect any right, preference, privilege or voting power of such
Series A Preferred Shares or the holders thereof; provided, however, with
respect to the occurrence of any of the Events set forth in (ii) above, the
occurrence of any such Event shall not be deemed to materially adversely
affect such rights, preferences, privileges or voting powers of holders of
Series A Preferred Shares if immediately after any such Event (i) in which the
Trust is the surviving entity, there are outstanding no equity securities
ranking as to distribution rights or liquidation preference senior to the
Series A Preferred Shares other than the securities of the Trust outstanding
prior to such Event, (ii) in which the Trust is not the surviving entity, as a
result of the Event, the holders of the Series A Preferred Shares receive
shares of stock or other equity securities with preferences, rights and
privileges substantially similar to the preferences, rights and privileges of
the Series A Preferred Shares and there are outstanding no shares of stock or
other equity securities of the surviving entity ranking as to distribution
rights or liquidation preference senior to the Series A Preferred Shares other
than the securities issued in respect of securities of the Trust outstanding
prior to such Event or (iii) whether or not the Trust is the surviving entity,
there are no outstanding equity securities of the Trust or its successor
(other than securities of the Trust outstanding prior to such Event, or
securities issued in respect of securities of the Trust outstanding prior to
such Event) ranking as to distribution rights or liquidation preference senior
to the Senior A Preferred Shares; and provided further that any increase in
the amount of the authorized Preferred Shares or the creation or issuance of
any series of Preferred Shares (other than the Series A Preferred Shares), in
each case ranking on a parity with or junior to the Series A Preferred Shares
with respect to payment of distributions and the distribution of assets upon
voluntary or involuntary liquidation, dissolution or winding up of the Trust,
shall not be deemed to materially and adversely affect such rights,
preferences, privilege or voting powers.
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<PAGE>
Notwithstanding anything to the contrary contained
herein, the creation or issuance of any series of Preferred Shares that is
subject to mandatory redemption at a scheduled date or dates or that has the
benefit of a sinking fund or that is subject to redemption at the option of
the Trust or the holder but that otherwise ranks on a parity with or junior to
the Series A Preferred Shares with respect to payment of distributions and the
distribution of assets upon voluntary or involuntary liquidation, dissolution
or winding up of the Trust shall not require the affirmative vote or consent
of all or any of the holders of Series A Preferred Shares.
e. So long as any of the Series A Preferred Shares remain
outstanding, the Trust will not terminate the Trust's status as a REIT without
the affirmative vote or consent of the holders of at least two-thirds of the
outstanding Series A Preferred Shares, Common Shares and all other series or
classes of shares of beneficial interest of the Trust outstanding at the time
and having voting rights, voting together as a single class, given in person
or by proxy, either in writing or at a meeting. For the purposes of the
foregoing sentence, (i) each Series A Preferred Share shall entitle the holder
thereof to such number of votes as is equal to the number of Common Shares
into which such Series A Preferred Share is convertible and (ii) each other
share of beneficial interest of the Trust outstanding at the time and having
voting rights shall entitle the holder thereof to one vote per share or such
number of votes per share as is set forth in the amendment to the Declaration
of Trust designating such shares of beneficial interest.
f. The foregoing voting provisions shall not apply if, at
or prior to the time when the act with respect to which such vote would
otherwise be required shall be effected, all outstanding Series A Preferred
Shares shall have been converted, redeemed or called for redemption upon
proper notice and sufficient funds or Common Shares, as applicable, shall have
been deposited in trust to effect such redemption.
7. Conversion.
a. Subject to the restrictions on transfer and ownership
contained in Article 6 of the Declaration of Trust, each whole (but not
fractional) Series A Preferred Share shall be convertible at any time, at the
option of the holder thereof, into such number of fully paid and
non-assessable Common Shares as is equal to the quotient that results from
dividing (i) the sum of (X) the Stated Value plus (Y) accrued and unpaid
distributions on such Series A Preferred Share (other than such accrued and
unpaid distributions that the Trust elects to pay in cash at the time of
conversion) by (ii) a conversion price (the "Conversion Price") of $28.00 per
Series A Preferred Share; provided, however, that if the average Current
Market Price of the Common Shares during the 60-Trading Day period ending on
December 31, 2003 is $23.00 or lower then the Conversion Price shall
automatically be reduced from $28.00 to $26.50, subject to adjustment as
described in Section 7(f) herein; provided, further, that the right to convert
Series A Preferred
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Shares called for redemption pursuant to Section 5 shall terminate at the
close of business on the Redemption Date, unless the Trust shall default in
making payment of the redemption price.
b. To exercise the conversion right, the holder of each
Series A Preferred Share to be converted shall surrender the certificate
evidencing such share, duly endorsed or assigned to the Trust or in blank, at
the principal office of the Transfer Agent accompanied by written notice to
the Trust that the holder thereof elects to convert such Series A Preferred
Share. Unless the shares issuable on conversion are to be issued in the same
name as the name in which such Series A Preferred Share is registered, in
which case the Trust shall bear the related taxes, each share surrendered for
conversion shall be accompanied by instruments of transfer, in form
satisfactory to the Trust, duly executed by the holder or such holder's duly
authorized attorney and an amount sufficient to pay any transfer or similar
tax (or evidence reasonably satisfactory to the Trust demonstrating that such
taxes have been paid).
c. Each conversion shall be deemed to have been effected
immediately prior to the close of business on the date on which the
certificates for Series A Preferred Shares shall have been surrendered and
such notice (and if applicable, payment of an amount equal to the distribution
payable on such shares) received by the Trust as aforesaid, and the person or
persons in whose name or names any certificate or certificates for Common
Shares shall be issuable upon such conversion shall be deemed to have become
the holder or holders of record of the shares evidenced thereby at such time
on such date, and such conversion shall be at the Conversion Price in effect
at such time and on such date unless the share transfer books of the Trust
shall be closed on that date, in which event such person or persons shall be
deemed to have become such holder or holders of record at the close of
business on the next succeeding day on which such share transfer books are
open, but such conversion shall be at the Conversion Price in effect on the
date on which such shares have been surrendered and such notice received by
the Trust.
d. Holders of Series A Preferred Shares at the close of
business on a Distribution Record Date shall be entitled to receive the
distribution payable on such shares on the corresponding Distribution Payment
Date notwithstanding the conversion of such shares following such Distribution
Record Date and prior to such Distribution Payment Date. However, certificates
evidencing Series A Preferred Shares surrendered for conversion during the
period between the close of business on any Distribution Record Date and
ending with the opening of business on the corresponding Distribution Payment
Date (except shares converted after the issuance of a notice of redemption
with respect to a Redemption Date during such period or coinciding with such
Distribution Payment Date) shall be accompanied by payment of an amount equal
to the distribution payable on such shares on such Distribution Payment Date.
A holder of Series A Preferred Shares on a Distribution Record Date who (or
whose transferee) tenders any such shares for conversion into Common Shares on
such Distribution Payment Date shall receive the distribution payable by the
Trust on such Series A Preferred Shares on such date, and the
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converting holder need not include payment of the amount of such distribution
upon surrender of certificates representing such Series A Preferred Shares for
conversion. Except as provided above, the Trust shall make no payment or
allowance for unpaid distributions, whether or not in arrears, on converted
shares or for distribution on the Common Shares that are issued upon such
conversion.
As promptly as practicable after the surrender of
certificates for Series A Preferred Shares as aforesaid, the Trust shall issue
and shall deliver at such office to such holder, or on such holder's written
order, a certificate or certificates for the number of full Common Shares
issuable upon the conversion of such shares in accordance with the provisions
of this Section 7, and any fractional interest in respect of a Common Share
arising upon such conversion shall be settled as provided in subsection (e) of
this Section 7.
e. No fractional shares or scrip representing fractions
of Common Shares shall be issued upon conversion of the Series A Preferred
Shares. Instead of any fractional interest in a Common Share that would
otherwise be deliverable upon the conversion of a Series A Preferred Share,
the Trust shall pay to the holder of such share an amount in cash in respect
of such fractional interest based upon the Current Market Price of Common
Shares on the Trading Day immediately preceding the date of conversion. If
more than one Series A Preferred Share, as the case may be, shall be
surrendered for conversion at one time by the same holder, the number of full
Common Shares issuable upon conversion thereof shall be computed on the basis
of the aggregate number of Series A Preferred Shares so surrendered.
f. Conversion Price Adjustments.
The Conversion Price shall be adjusted from time to time
as follows:
(i) If the Trust shall after the Issue Date (A) pay or
make a distribution to holders of its equity securities in Common Shares, (B)
subdivide its outstanding Common Shares into a greater number of shares, (C)
combine its outstanding Common Shares into a smaller number of shares or (D)
issue any shares of beneficial interest by reclassification of its Common
Shares, the Conversion Price in effect at the opening of business on the day
following the date fixed for the determination of shareholders entitled to
receive such distribution or at the opening of business on the day following
the day on which such subdivision, combination or reclassification becomes
effective, as the case may be, shall be adjusted so that the holder of any
Series A Preferred Shares thereafter surrendered for conversion shall be
entitled to receive the number of Common Shares that such holder would have
owned or have been entitled to receive after the happening of any of the
events described above had such Series A Preferred Shares been converted
immediately prior to the record date in the case of a distribution or the
effective date in the case of a subdivision, combination or reclassification.
An adjustment made pursuant to this subsection (i) shall become effective
immediately after the opening of
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business on the day next following the record date (except as provided in
subsection (j) below) in the case of a distribution and shall become effective
immediately after the opening of business on the day next following the
effective date in the case of a subdivision, combination or reclassification.
(ii) If the Trust shall issue after the Issue Date
rights, options or warrants to all holders of Common Shares entitling them
(for a period expiring within 45 days after the record date mentioned below)
to subscribe for or purchase Common Shares at a price per share less than the
Fair Market Value per Common Share on the record date fixed for the
determination of shareholders entitled to receive such rights, options or
warrants (any of the foregoing being hereinafter in this subsection (ii)
sometimes called the "Securities"), then the Conversion Price shall be
adjusted so that it shall equal the price determined by multiplying (I) the
Conversion Price in effect immediately prior to the close of business on the
record date fixed for the determination of shareholders entitled to receive
such distribution by (II) a fraction, the numerator of which shall be the sum
of (A) the number of Common Shares outstanding on the close of business on the
record date fixed for the determination of shareholders entitled to receive
such distribution and (B) the number of shares that the aggregate proceeds to
the Trust from the issuance and the exercise of such rights, options or
warrants for Common Shares would purchase at such Fair Market Value, and the
denominator of which shall be the sum of (A) the number of Common Shares
outstanding on the close of business on the record date fixed for the
determination of shareholders entitled to receive such distribution and (B)
the number of additional Common Shares offered for subscription or purchase
pursuant to such rights, options or warrants. Such adjustment shall become
effective immediately upon the opening of business on the business day next
following the record date fixed for the determination of shareholders entitled
to receive such distribution (subject to paragraph (j) below). In determining
whether any rights, options or warrants entitle the holders of Common Shares
to subscribe for or purchase Common Shares at less than such Fair Market
Value, there shall be taken into account any consideration received by the
Trust upon issuance and upon exercise of such rights, options or warrants, the
value of such consideration, if other than cash, to be determined by the Chief
Executive Officer or the Board, whose determination shall be conclusive. For
the purposes of this subsection (ii), the distribution of a Security, which is
distributed not only to the holders of the Common Shares on the date for the
determination of shareholders entitled to such distribution of such Security,
but also is distributed or distributable with each Common Share delivered or
deliverable to a person converting a Series A Preferred Share after such
determination date, shall not require an adjustment of the Conversion Price
pursuant to this subsection (ii); provided that on the date, if any, on which
a person converting a Series A Preferred Share would no longer be entitled to
receive such Security with a Common Share (other than as a result of the
termination of all such Securities), a distribution of such Securities shall
be deemed to have occurred, and the Conversion Price shall be adjusted as
provided in this subsection (ii) (and such day shall be deemed to be "the
record date fixed for the determination of shareholders entitled to receive
such distribution" within the meaning of this subsection (ii)).
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In the event that any such rights, options or warrants expire unexercised or
are canceled prior to exercise, the Conversion Price (if previously adjusted
on account of the issuance of such rights, options or warrants) shall be
adjusted so that it shall equal the price it would have been had such rights,
options or warrants not been issued.
(iii) If the Trust shall distribute to all holders of
its Common Shares any equity securities of the Trust (other than Common
Shares) or evidence of its indebtedness or assets (excluding cash
distributions paid out of current or accumulated funds from operations to the
extent the same results in a payment of at least equal cash distributions to
the holders of Series A Preferred Shares) or rights, options and warrants to
subscribe for or purchase any of its securities (excluding those rights and
warrants issued to all holders of Common Shares entitling them for a period
expiring within 45 days after the record date referred to in subparagraph (ii)
above to subscribe for or purchase Common Shares, which rights and warrants
are referred to in and treated under subparagraph (ii) above) (any of the
foregoing being hereinafter in this subsection (iii) sometimes called the
"Securities"), then in each case the Conversion Price shall be adjusted so
that it shall equal the price determined by multiplying (I) the Conversion
Price in effect immediately prior to the close of business on the record date
fixed for the determination of shareholders entitled to receive such
distribution by (II) a fraction, the numerator of which shall be the Fair
Market Value per Common Share on the record date fixed for the determination
of shareholders entitled to receive such distribution less the then fair
market value (as determined by the Chief Executive Officer or the Board, whose
determination shall be conclusive) of the portion of the shares of beneficial
interest or assets or evidences of indebtedness so distributed or of such
rights, options or warrants applicable to one Common Share, and the
denominator of which shall be the Fair Market Value per Common Share on the
record date fixed for the determination of shareholders entitled to receive
such distribution. Such adjustment shall become effective immediately at the
opening of business on the business day next following the record date fixed
for the determination of shareholders entitled to receive such distribution
(except as provided in subsection (j) below). For the purposes of this
subsection (iii), the distribution of a Security, which is distributed not
only to the holders of the Common Shares on the record date fixed for the
determination of shareholders entitled to such distribution of such Security,
but also is distributed or distributable with each Common Share delivered or
deliverable to a person converting a Series A Preferred Share after such
determination date, shall not require an adjustment of the Conversion Price
pursuant to this subsection (iii); provided that on the date, if any, on which
a person converting a Series A Preferred Share would no longer be entitled to
receive such Security with a Common Share (other than as a result of the
termination of all such Securities), a distribution of such Securities shall
be deemed to have occurred, and the Conversion Price shall be adjusted as
provided in this subsection (iii) (and such day shall be deemed to be "the
record date fixed for the determination of the shareholders entitled to
receive such distribution" within the meaning of this subsection (iii)). In
the event that any such rights, options or warrants expire unexercised or are
canceled prior to exercise, the Conversion Price (if previously adjusted on
account of the issuance of such rights, options or warrants) shall be
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adjusted so that it shall equal the price it would have been had such rights,
options or warrants not been issued.
(iv) No adjustment in the Conversion Price shall be
required unless such adjustment would require a cumulative increase or
decrease of at least 1% in such price; provided, however, that any adjustments
that by reason of this subsection (iv) are not required to be made shall be
carried forward and taken into account in any subsequent adjustment until
made; and provided, further, that any adjustment shall be required and made in
accordance with the provisions of this Section 7 (other than this subsection
(iv)) not later than such time as may be required in order to preserve the
tax-free nature of a distribution to the holders of Common Shares.
Notwithstanding any other provisions of this Section 7, the Trust shall not be
required to make any adjustment of the Conversion Price for the issuance of
any Common Shares pursuant to any plan providing for the reinvestment of
distributions or interest payable on securities of the Trust and the
investment of additional optional amounts in Common Shares under such plan.
All calculations under this Section 7 shall be made to the nearest cent with
($.005 being rounded upward) or to the nearest one-tenth of a share (with .05
of a share being rounded upward), as the case may be. Anything in this
subsection (f) to the contrary notwithstanding, the Trust shall be entitled,
to the extent permitted by law, to make such reductions in the Conversion
Price, in addition to those required by this subsection (f), as the Board of
Trustees, the chief executive officer or the chief financial officer of the
Trust in its, his or her discretion shall determine to be advisable in order
that any share distributions, subdivision of shares, reclassification or
combination of shares, distribution of rights, options or warrants to purchase
shares or securities, or a distribution of other assets (other than cash
distributions) hereafter made by the Trust to its shareholders shall not be
taxable.
g. If the Trust shall be a party to any transaction
(including, without limitation, a merger, consolidation, statutory share
exchange, self tender offer for all or substantially all of the Common Shares,
sale of all or substantially all of the Trust's assets or recapitalization of
the Common Shares and excluding any transaction as to which subsection (f)(i)
of this Section 7 applied) (each of the foregoing being referred to herein as
a "Transaction"), in each case as a result of which Common Shares shall be
converted into the right to receive shares, stock, securities or other
property (including cash or any combination thereof), each Series A Preferred
Share which is not converted into the right to receive shares, stock,
securities or other property in connection with such Transaction shall
thereafter be convertible into the kind and amount of shares, stock,
securities and other property (including cash or any combination thereof)
receivable upon the consummation of such Transaction by a holder of that
number of Common Shares into which one Series A Preferred Share was
convertible immediately prior to such Transaction, assuming such holder of
Common Shares (i) is not a Person with which the Trust consolidated or into
which the Trust merged or which merged into the Trust or to which such sale or
transfer was made, as the case may be (a "Constituent Person"), or an
affiliate of a Constituent Person and (ii) failed to exercise his
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<PAGE>
appraisal rights or rights of election, if any, as to the kind or amount of
shares, stock, securities and other property (including cash) receivable upon
such Transaction (each a "Non-Electing Share") (provided that if the kind and
amount of shares, stock, securities and other property (including cash)
receivable upon such Transaction is not the same for each Non-Electing Share,
the kind and amount receivable by each Non-Electing Share shall be deemed to
be the kind and amount receivable per share by a plurality of the Non-Electing
Shares). The Trust shall not be a party to any Transaction unless the terms of
such Transaction are consistent with the provisions of this subsection (g),
and it shall not consent or agree to the occurrence of any Transaction until
the Trust has entered into an agreement with the successor or purchasing
entity, as the case may be, for the benefit of the holders of the Series A
Preferred Shares that will contain provisions enabling the holders of the
Series A Preferred Shares that remain outstanding after such Transaction to
convert into the consideration received by holders of Common Shares at the
Conversion Price in effect immediately prior to such Transaction. The
provisions of this subsection (g) shall similarly apply to successive
Transactions.
h. If:
(i) the Trust shall make a distribution on the
Common Shares (excluding cash distributions paid out of current or accumulated
funds from operations to the extent the same results in a payment of at least
equal cash distribution to the holders of Series A Preferred Shares) or there
shall be a reclassification, subdivision or combination of Common Shares; or
(ii) the Trust shall authorize the granting to
the holders of the Common Shares of rights, options or warrants to subscribe
for or purchase any shares of any class or any other rights, options or
warrants; or
(iii) there shall be any reclassification of the
Common Shares (other than an event to which subsection (f)(i) of this Section
7 applied) or any consolidation or merger to which the Trust is a party and
for which approval of any shareholders of the Trust is required, or a
statutory share exchange involving the conversion or exchange of Common Shares
into securities or other property, or a self tender offer by the Trust for all
or substantially all of its outstanding Common Shares, or the sale or transfer
of all or substantially all of the assets of the Trust as an entity and for
which approval of any shareholder of the Trust is required; or
(iv) there shall occur the voluntary or
involuntary liquidation, dissolution or winding up of the Trust,
then the Trust shall cause to be filed with the Transfer Agent and shall cause
to be mailed to the holders of the Series A Preferred Shares at their
addresses as shown on the share records of the Trust, as promptly as possible,
but at least 15 days prior to the applicable date hereinafter
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<PAGE>
specified, a notice stating (A) the date on which a record is to be taken for
the purpose of such distribution or rights, options or warrants, or, if a
record is not to be taken, the date as of which the holders of Common Shares
of record to be entitled to such distribution or rights, options or warrants
are to be determined or (B) the date on which such reclassification,
subdivision, combination, consolidation, merger, statutory share exchange,
sale, transfer, liquidation, dissolution or winding up is expected to become
effective, and the date as of which it is expected that holders of Common
Shares of record shall be entitled to exchange their Common Shares for
securities or other property, if any, deliverable upon such reclassification,
subdivision, combination, consolidation, merger, statutory share exchange,
sale, transfer, liquidation, dissolution or winding up. Failure to give or
receive such notice or any defect therein shall not affect the legality or
validity of the proceedings described in this Section 7.
i. Whenever the Conversion Price is adjusted as
herein provided, the Trust shall promptly file with the Transfer Agent an
officer's certificate setting forth the Conversion Price after such adjustment
and setting forth a brief statement of the facts requiring such adjustment,
which certificate shall be conclusive evidence of the correctness of such
adjustment absent manifest error. Promptly after delivery of such certificate,
the Trust shall prepare a notice of such adjustment of the Conversion Price
setting forth the adjusted Conversion Price and the effective date such
adjustment becomes effective and shall mail such notice of such adjustment of
the Conversion Price to the holder of each Series A Preferred Share at such
holder's last address as shown on the share records of the Trust.
j. In any case in which subsection (f) of this
Section 7 provides that an adjustment shall become effective on the date next
following the record date for an event, the Trust may defer until the
occurrence of such event (A) issuing to the holder of any Series A Preferred
Shares converted after such record date and before the occurrence of such
event the additional Common Shares issuable upon such conversion by reason of
the adjustment required by such event over and above the Common Shares
issuable upon such conversion before giving effect to such adjustment and (B)
fractionalizing any Series A Preferred Share and/or paying to such holder any
amount of cash in lieu of any fraction pursuant to subsection (e) of this
Section 7.
k. There shall be no adjustment of the Conversion
Price in case of the issuance of any shares of beneficial interest of the
Trust in a reorganization, acquisition or other similar transaction except as
specifically set forth in this Section 7. If any action or transaction would
require adjustment of the Conversion Price pursuant to more than one
subsection of this Section 7, only one adjustment shall be made, and such
adjustment shall be the amount of adjustment that has the highest absolute
value.
l. If the Trust shall take any action affecting the
Common Shares, other than action described in this Section 7, that in the
opinion of the Board would materially
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<PAGE>
and adversely affect the conversion rights of the holders of the Series A
Preferred Shares, the Conversion Price for the Series A Preferred Shares may
be adjusted, to the extent permitted by law, in such manner, if any, and at
such time, as the Board, in its sole discretion, may determine to be equitable
in the circumstances.
m. The Trust will at all times reserve and keep
available, free from preemptive rights, out of the aggregate of its authorized
but unissued Common Shares, for the purpose of effecting conversion of the
Series A Preferred Shares, the full number of Common Shares deliverable upon
the conversion of all outstanding Series A Preferred Shares not theretofore
converted. For purposes of this subsection (m), the number of Common Shares
that shall be deliverable upon the conversion of all outstanding Series A
Preferred Shares shall be computed as if at the time of computation all such
outstanding shares were held by a single holder.
Any Common Shares issued upon conversion of the Series A
Preferred Shares shall be validly issued, fully paid and non-assessable.
n. The Trust will pay any and all documentary stamp
or similar issue or transfer taxes payable in respect of the issue or delivery
of Common Shares or other securities or property on conversion or redemption
of the Series A Preferred Shares pursuant hereto; provided, however, that the
Trust shall not be required to pay any tax that may be payable in respect of
any transfer involved in the issue or delivery of Common Shares or other
securities or property in a name other than that of the record holder of the
Series A Preferred Shares to be converted or redeemed, and no such issue or
delivery shall be made unless and until the person requesting such issue or
delivery has paid to the Trust the amount of any such tax or established, to
the reasonable satisfaction of the Trust, that such tax has been paid.
8. Ownership Limitations. The Series A Preferred Shares are
subject to the restrictions on transferability and ownership provisions set
forth in Article 6 of the Declaration of Trust. For purposes of applying the
ownership limitation and transfer restrictions contained in Section 6.6 of the
Declaration of Trust, including the definition of the term "Ownership Limit,"
the term "Shares" is and shall hereinafter be understood to mean shares of
beneficial interest of the Trust, whether such shares are Common Shares or
Preferred Shares.
Pursuant to Section 6.6(k) of the Declaration of Trust,
the initial holders (the "Initial Holders") of the Series A Preferred Shares
and the Series B Preferred Units of Brandywine Operating Partnership, L.P. and
the Initial Holders' permitted transferees who acquire such securities or any
securities of the Trust or Brandywine Operating Partnership, L.P. issued upon
redemption or conversion of such securities are hereby exempted from the
Ownership Limit on the condition that, and for so long as, such holders comply
with those
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<PAGE>
representations, warranties and agreements contained in Exhibit A attached
hereto and made a part hereof.
9. Definitions.
"Current Market Price" of publicly traded Common Shares or
any other class of shares of beneficial interest or other security of the
Trust or any other issuer for any day shall mean the last reported sales
price, regular way, on such day, or, if no sale takes place on such day, the
average of the reported closing bid and asked prices on such day, regular way,
in either case as reported on the New York Stock Exchange ("NYSE") or, if such
security is not listed or admitted for trading on the NYSE, on the principal
national securities exchange on which such security is listed or admitted for
trading or, if not listed or admitted for trading on any national securities
exchange, on the NASDAQ National Market or, if such security is not quoted on
such NASDAQ National Market, the average of the closing bid and asked prices
on such day in the over-the-counter market as reported by NASDAQ or, if bid
and asked prices for such security on such day shall not have been reported
through NASDAQ, the average of the bid and asked prices on such day as
furnished by any NYSE member firm regularly making a market in such security
selected for such purpose by the Chief Executive Officer of the Trust or the
Board.
"Distribution Payment Date" shall mean, with respect to each
Distribution Period, the fifteenth day of January, April, July and October in
each year, commencing, on October 15, 1998; provided, however, that if any
Distribution Payment Date falls on any day other than a business day, the
distribution payment due on such Distribution Payment Date shall be paid on
the business day immediately following such Distribution Payment Date.
"Distribution Periods" shall mean quarterly distribution
periods commencing on January 1, April 1, July 1 and October 1 of each year
and ending on and including the day preceding the first day of the next
succeeding Distribution Period (other than the initial Distribution Period,
which shall commence on the Issue Date and end on and include September 30,
1998).
"Fair Market Value" shall mean the average of the daily
Current Market Prices per Common Share during the five consecutive Trading
Days selected by the Trust commencing not more than 20 Trading Days before,
and ending not later than, the earlier of the day in question and the day
before the "ex" date with respect to the issuance or distribution requiring
such computation. The term " 'ex' date," when used with respect to any
issuance or distribution, means the first day on which the Common Shares trade
regular way, without the right to receive such issuance or distribution, on
the exchange or in the market, as the case may be, used to determine that
day's Current Market Price.
-20-
<PAGE>
"Issue Date" shall mean the date on which Series A Preferred
Shares are first issued by the Trust.
"Trading Day" shall mean any day on which the securities in
question are traded on the NYSE or, if such securities are not listed or
admitted for trading on the NYSE, on the principal national securities
exchange on which such securities are listed or admitted or, if not listed or
admitted for trading on any national securities exchange, on the NASDAQ
National Market or, if such securities are not quoted on such NASDAQ National
Market, in the applicable securities market in which the securities are
traded.
"Transfer Agent" means The Bank of New York, or such other
agent or agents of the Trust as may be designated by the Board or its designee
as the transfer agent for the Series A Preferred Shares.
SECOND: The Series A Preferred Shares have been classified
and designated by the Board under the authority contained in the Declaration
of Trust.
THIRD: These Articles Supplementary have been approved by
the Board in the manner and by the vote required by law.
FOURTH: These Articles Supplementary shall be effective at
the time the State Department of Assessments and Taxation of Maryland accepts
these Articles Supplementary for record.
FIFTH: The undersigned President and Chief Executive Officer
of the Trust acknowledges these Articles Supplementary to be the act of the
Trust and, as to all matters or facts required to be verified under oath, the
undersigned President and Chief Executive Officer acknowledges that to the
best of his knowledge, information and belief, these matters and facts are
true in all material respects and that this statement is made under the
penalties for perjury.
-21-
<PAGE>
IN WITNESS WHEREOF, the Trust has caused these Articles
Supplementary to be executed under seal in its name and on its behalf by its
President and Chief Executive Officer and attested to by its Secretary on this
28th day of September, 1998.
BRANDYWINE REALTY TRUST
By: /s/ Gerard H. Sweeney
-------------------------------------------
Gerard H. Sweeney
President and Chief Executive Officer
[SEAL]
ATTEST:
By: /s/ Brad A. Molotsky
-------------------------------
Brad A. Molotsky, Secretary
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<PAGE>
EXHIBIT A to EXHIBIT D
----------------------
REPRESENTATIONS OF
PROMETHEUS AAPT HOLDINGS, L.L.C.
and
COMMONWEALTH ATLANTIC PROPERTIES, INC.
I, the undersigned, certify that I am the _____________ of
Prometheus AAPT Holdings, L.L.C., a Delaware limited liability company
("Prometheus"), and the ______________ of Commonwealth Atlantic Properties
Inc., a Virginia corporation ("CAPI"), and on behalf of Prometheus and CAPI do
further represent, warrant and agree that:
1. Prometheus is a limited liability company that is
wholly-owned by LF Stragetic Realty Investors L.P., a Delaware limited
partnership ("LFSRI").
2. CAPI is a corporation, over 99% of the outstanding stock
of which is owned by LFSRI.
3. LFSRI is a limited partnership, the interests of which
are held by various pension funds, partnerships, and other entities. No
partner of LFSRI is a natural person or an organization described in Internal
Revenue Code (the "Code") section 501(c)(17) or section 509(a), or a portion
of a trust permanently set aside or to be used exclusively for the purposes
described in section 642(c) or a corresponding provision of prior law (any
such person, organization, or trust, an "Individual").
4. Applying the rules of Code section 544, as modified by
Code section 856(h), no Individual would be treated as owning shares of
beneficial interest of Brandywine Realty Trust (the "Company") held by
Prometheus and CAPI that have a value in excess of 9.8% of the value of all
outstanding shares of beneficial interest of the Company.
5. In connection with the delivery of these representations
to the Company, the Board of Trustees of the Company is expected to grant
LFSRI, Prometheus and CAPI permission to own shares of beneficial interest of
the Company in excess of the "Ownership Limit" and related restrictions on
ownership and transfer of shares of beneficial interest of the Company, as set
forth in the Company's declaration of trust. LFSRI, Prometheus and CAPI
acknowledge their understanding that if any of the above representations are
violated such that the ownership by Prometheus or CAPI of shares of beneficial
interest in the Company in excess of the Ownership Limit would cause an
Individual to be treated as owning shares of beneficial interest of the
Company held by Prometheus and CAPI that have a value in excess of 9.8% of the
value of all outstanding shares of beneficial interest of the Company, or
would cause the Company to cease to qualify as a REIT, the exemption granted
by the Board of Trustees will be revoked, and a portion of the shares of
beneficial interest owned by any of them will be automatically transferred to
a trust, as more particularly set forth in the Company's declaration of trust.
<PAGE>
IN WITNESS WHEREOF, I have hereunto subscribed by name as of
this ____ day of ___________, 1998.
PROMETHEUS AAPT HOLDINGS, L.L.C.,
By: LF Strategic Realty Investors L.P.,
its sole member
By: ____________________________
Name:
Title:
COMMONWEALTH ATLANTIC PROPERTIES INC.
By: ____________________________
Name:
Title:
LF STRATEGIC REALTY INVESTORS L.P.
By: Lazard Freres Real Estate Investors L.L.C.,
its general partner
By: ____________________________
Name:
Title:
<PAGE>
Exhibit 10.1
SECOND
AMENDED AND RESTATED
CREDIT AGREEMENT
among
BRANDYWINE REALTY TRUST
and
BRANDYWINE OPERATING PARTNERSHIP, L.P.
as Borrowers
and
THE SUBSIDIARIES OF THE BORROWERS
as Guarantors
and
THE LENDERS IDENTIFIED HEREIN
and
NATIONSBANC MONTGOMERY SECURITIES LLC
as Lead Arranger and Book Manager
and
NATIONSBANK, N.A.
as Administrative Agent
DATED AS OF SEPTEMBER 28, 1998
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
<S> <C> <C>
SECTION 1 DEFINITIONS AND ACCOUNTING TERMS.......................................................................2
1.1 Definitions..........................................................................................2
1.2 Computation of Time Periods and Other Definition Provisions.........................................23
1.3 Accounting Terms....................................................................................23
1.4 Joint Venture Investments...........................................................................23
SECTION 2 CREDIT FACILITY.......................................................................................24
2.1 Revolving Loans.....................................................................................24
2.2 Letter of Credit Subfacility........................................................................26
2.3 Joint and Several Liability of the Borrowers........................................................31
2.4 Appointment of BOP..................................................................................33
2.5 Non-Recourse........................................................................................33
SECTION 3 GENERAL PROVISIONS APPLICABLE TO LOANS AND LETTERS OF CREDIT..........................................34
3.1 Interest............................................................................................34
3.2 Place and Manner of Payments........................................................................34
3.3 Prepayments.........................................................................................35
3.4 Fees................................................................................................36
3.5 Payment in full at Maturity; Extension of Maturity..................................................37
3.6 Computations of Interest and Fees...................................................................37
3.7 Pro Rata Treatment..................................................................................38
3.8 Sharing of Payments.................................................................................39
3.9 Capital Adequacy....................................................................................39
3.10 Inability To Determine Interest Rate...............................................................40
3.11 Illegality.........................................................................................40
3.12 Requirements of Law................................................................................41
3.13 Taxes..............................................................................................42
3.14 Compensation.......................................................................................44
3.15 Mitigation; Mandatory Assignment...................................................................44
SECTION 4 GUARANTY..............................................................................................45
4.1 Guaranty of Payment.................................................................................45
4.2 Obligations Unconditional...........................................................................45
4.3 Modifications.......................................................................................46
4.4 Waiver of Rights....................................................................................46
4.5 Reinstatement.......................................................................................46
4.6 Remedies............................................................................................47
4.7 Limitation of Guaranty..............................................................................47
4.8 Rights of Contribution..............................................................................47
SECTION 5 CONDITIONS PRECEDENT..................................................................................48
5.1 Closing Conditions..................................................................................48
5.2 Conditions to All Extensions of Credit..............................................................52
SECTION 6 REPRESENTATIONS AND WARRANTIES........................................................................53
i
<PAGE>
6.1 Financial Condition.................................................................................53
6.2 No Material Change..................................................................................53
6.3 Organization and Good Standing......................................................................53
6.4 Due Authorization...................................................................................53
6.5 No Conflicts........................................................................................54
6.6 Consents............................................................................................54
6.7 Enforceable Obligations.............................................................................54
6.8 No Default..........................................................................................54
6.9 Ownership...........................................................................................54
6.10 Indebtedness.......................................................................................54
6.11 Litigation.........................................................................................55
6.12 Taxes..............................................................................................55
6.13 Compliance with Law................................................................................55
6.14 Compliance with ERISA..............................................................................55
6.15 Organization Structure/Subsidiaries................................................................56
6.16 Use of Proceeds; Margin Stock......................................................................57
6.17 Government Regulation..............................................................................57
6.18 Environmental Matters..............................................................................57
6.19 Solvency...........................................................................................58
6.20 Investments........................................................................................58
6.21 Location of Properties.............................................................................59
6.22 Disclosure.........................................................................................59
6.23 Licenses, etc......................................................................................59
6.24 No Burdensome Restrictions.........................................................................59
6.25 Year 2000 Compliance...............................................................................59
6.26 Excluded Material Subsidiaries.....................................................................59
SECTION 7 AFFIRMATIVE COVENANTS.................................................................................60
7.1 Information Covenants...............................................................................60
7.2 Financial Covenants.................................................................................64
7.3 Preservation of Existence...........................................................................65
7.4 Books and Records...................................................................................65
7.5 Compliance with Law.................................................................................65
7.6 Payment of Taxes and Other Indebtedness.............................................................65
7.7 Insurance...........................................................................................66
7.8 Maintenance of Assets...............................................................................66
7.9 Performance of Obligations..........................................................................66
7.10 Use of Proceeds....................................................................................66
7.11 Audits/Inspections.................................................................................66
7.12 Additional Credit Parties..........................................................................67
7.13 Interest Rate Protection Agreements................................................................67
7.14 Collateral Effective Date..........................................................................68
7.15 Construction.......................................................................................70
7.16 Acquisitions.......................................................................................70
7.17 Mortgage Documents.................................................................................70
SECTION 8 NEGATIVE COVENANTS....................................................................................71
ii
<PAGE>
8.1 Indebtedness........................................................................................71
8.2 Liens...............................................................................................71
8.3 Nature of Business..................................................................................71
8.4 Consolidation and Merger............................................................................71
8.5 Sale or Lease of Assets.............................................................................72
8.6 Advances, Investments and Loans.....................................................................72
8.7 Restricted Payments.................................................................................72
8.8 Transactions with Affiliates........................................................................73
8.9 Fiscal Year; Organizational Documents...............................................................73
8.10 Limitations........................................................................................73
8.11 Other Negative Pledges.............................................................................73
8.12 Construction and Development.......................................................................73
SECTION 9 EVENTS OF DEFAULT.....................................................................................74
9.1 Events of Default...................................................................................74
9.2 Acceleration; Remedies..............................................................................76
9.3 Allocation of Payments After Event of Default.......................................................77
SECTION 10 AGENCY PROVISIONS....................................................................................78
10.1 Appointment........................................................................................78
10.2 Delegation of Duties...............................................................................79
10.3 Exculpatory Provisions.............................................................................79
10.4 Reliance on Communications.........................................................................80
10.5 Notice of Default..................................................................................80
10.6 Non-Reliance on Administrative Agent and Other Lenders.............................................80
10.7 Indemnification....................................................................................81
10.8 Administrative Agent in Its Individual Capacity....................................................81
10.9 Successor Agent....................................................................................82
SECTION 11 MISCELLANEOUS........................................................................................82
11.1 Notices............................................................................................82
11.2 Right of Set-Off...................................................................................82
11.3 Benefit of Agreement...............................................................................83
11.4 No Waiver; Remedies Cumulative.....................................................................85
11.5 Payment of Expenses; Indemnification...............................................................85
11.6 Amendments, Waivers and Consents...................................................................86
11.7 Counterparts/Telecopy..............................................................................87
11.8 Headings...........................................................................................87
11.9 Defaulting Lender..................................................................................87
11.10 Survival of Indemnification and Representations and Warranties....................................87
11.11 Governing Law; Jurisdiction.......................................................................87
11.12 Waiver of Jury Trial..............................................................................88
11.13 Time..............................................................................................88
11.14 Severability......................................................................................88
11.15 Entirety..........................................................................................88
11.16 Binding Effect....................................................................................89
11.17 Confidentiality...................................................................................89
11.18 Collateral Termination Date.......................................................................90
11.19 Further Assurances................................................................................90
iii
<PAGE>
11.20 Release of Guarantors.............................................................................91
</TABLE>
SCHEDULES
Schedule 1.1(a) Revolving Loan Commitment Percentages
Schedule 1.1(b) Project Bell Properties
Schedule 1.1(c) Excluded Material Subsidiaries
Schedule 2.2(c) Existing Letters of Credit
Schedule 6.15 Organization Structure/Subsidiaries
Schedule 6.21 Properties
Schedule 7.14 Collateral Representation and Warranty
Schedule 8.2 Existing Liens
Schedule 8.5 Preapproved Transactions
Schedule 11.1 Notices
EXHIBITS
Exhibit 2.1(b) Form of Notice of Borrowing
Exhibit 2.1(e) Form of Notice of Continuation/Conversion
Exhibit 2.1(g) Form of Revolving Loan Note
Exhibit 7.1(c) Form of Officer's Certificate
Exhibit 7.12 Form of Joinder Agreement
Exhibit 7.17 Form of Mortgage
Exhibit 11.3 Form of Assignment Agreement
iv
<PAGE>
SECOND
AMENDED AND RESTATED
CREDIT AGREEMENT
THIS SECOND AMENDED AND RESTATED CREDIT AGREEMENT (this "Credit
Agreement") is entered into as of September 28, 1998 among BRANDYWINE REALTY
TRUST ("BRT"), a Maryland real estate investment trust and BRANDYWINE
OPERATING PARTNERSHIP, L.P. ("BOP"), a Delaware limited partnership
(collectively the "Borrowers"), certain Subsidiaries of the Borrowers as
Guarantors, the Lenders (as defined herein), NATIONSBANC MONTGOMERY SECURITIES
LLC as Lead Arranger and Book Manager and NATIONSBANK, N.A., as Administrative
Agent for the Lenders (the "Administrative Agent").
RECITALS
WHEREAS, the Borrowers, certain Subsidiaries of the Borrowers, the
Lenders and the Administrative Agent entered into that certain Amended and
Restated Credit Agreement, dated as of January 5, 1998, (as previously amended
from time to time, and together with all other documents and instruments
executed and delivered in connection therewith, the "Existing Credit
Agreement");
WHEREAS, the Borrowers desire to amend and restate the Existing
Credit Agreement to provide a revolving credit facility in an aggregate amount
of up to $550 million;
WHEREAS, the Guarantors have agreed to unconditionally guarantee all
the obligations of the Borrowers hereunder; and
WHEREAS, the Lenders party hereto have agreed to make the requested
amended and restated revolving credit facility available to the Borrowers on
the terms and conditions hereinafter set forth.
NOW, THEREFORE, IN CONSIDERATION of the premises and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
<PAGE>
SECTION 1
DEFINITIONS AND ACCOUNTING TERMS
--------------------------------
1.1 Definitions.
As used herein, the following terms shall have the meanings herein
specified unless the context otherwise requires. Defined terms herein shall
include in the singular number the plural and in the plural the singular:
"Adjusted Base Rate" means the Base Rate plus .25% per annum.
"Adjusted Eurodollar Rate" means the Eurodollar Rate plus
the Applicable Percentage.
"Adjusted NOI" means NOI less (a) an annual sum of $.50 per
square foot for all Properties and (b) all interest income of the
Combined Parties for the applicable period.
"Adjusted Total Assets" means Total Assets less the Project
Bell Properties held by Excluded Material Subsidiaries.
"Administrative Agent" means NationsBank, N.A. (or any
successor thereto) or any successor administrative agent appointed
pursuant to Section 10.9.
"Affiliate" means, with respect to any Person, any other
Person directly or indirectly controlling (including but not limited
to all directors and officers of such Person), controlled by or under
direct or indirect common control with such Person. A Person shall be
deemed to control a corporation, partnership, limited liability
company or real estate investment trust if such Person possesses,
directly or indirectly, the power (i) to vote 10% or more of the
securities having ordinary voting power for the election of directors
of such corporation, limited liability company or real estate
investment trust or to vote 10% or more of the partnership interests
of such partnership or (ii) to direct or cause direction of the
management and policies of such corporation or partnership, whether
through the ownership of voting securities, as managing or general
partner, by contract or otherwise.
"Agency Services Address" means NationsBank, N.A., 6610
Rockledge Drive, 6th Floor, Bethesda, Maryland 20817, Attn.: Eleanor
Mitchell-Wharton, or such other address as may be identified by
written notice from the Administrative Agent to the Borrowers.
"Annualized Adjusted NOI" means Adjusted NOI for the most
recent fiscal quarter multiplied times four.
"Annualized Capitalized Adjusted NOI" means Annualized
Adjusted NOI divided by the Capitalization Rate.
"Annualized Capitalized Modified Adjusted NOI" means
Annualized Modified Adjusted NOI divided by the Capitalization Rate.
2
<PAGE>
"Annualized Modified Adjusted NOI" means an amount equal to
(a) Adjusted NOI for the prior fiscal quarter for all Properties
owned during such entire fiscal quarter multiplied times four plus
(b) NOI for all Properties acquired during such fiscal quarter
multiplied by a fraction equal to 365/the number of days such
Property was owned by a Combined Party.
"Applicable Percentage" means:
(a) from the Effective Date until the earlier of
(i) March 31, 1999 or (ii) the date the Leverage Ratio, as
of the end of any fiscal quarter of the Credit Parties
subsequent to September 30, 1998, is less than or equal to
.55 to 1.0, 1.50%.
(b) Commencing on the date of the earlier of (i)
March 31, 1999 or (ii) the date the Leverage Ratio, as of
the end of any fiscal quarter of the Credit Parties
subsequent to September 30, 1998, is less than or equal to
.55 to 1.0:
(i) if (A) BRT or BOP does not have an Unsecured
Senior Debt Rating, or (B) BRT or BOP has an Unsecured Debt
Rating from S&P that is worse than BBB-, or (C) BRT or BOP
has an Unsecured Debt Rating from Moody's that is worse than
Baa3, the appropriate applicable percentages corresponding
to the Leverage Ratio in effect as of the most recent
Calculation Date as shown below:
------------------- ------------------ -----------------------------
Pricing Level Leverage Applicable Percentage for
Ratio Eurodollar Loans
------------------- ------------------ -----------------------------
I < .20 to 1.0 1.15%
------------------- ------------------ -----------------------------
II > .20 to 1.0 but 1.25%
< .30 to 1.0
------------------- ------------------ -----------------------------
III > .30 to 1.0 but 1.375%
< .55 to 1.0
------------------- ------------------ -----------------------------
IV > .55 to 1.0 1.75%
------------------- ------------------ -----------------------------
(ii) if (A) BRT or BOP has an Unsecured Senior Debt
Rating from either S&P or Moody's (or both), (B) neither
(b)(i)(B) nor (b)(i)(C) above is applicable and (C) the
Leverage Ratio is < .55 to 1.0, the appropriate applicable
percentages corresponding to the Unsecured Senior Debt
Ratings in effect as of the most recent Calculation Date as
shown below:
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----------------- ----------------------- --------------------------
Pricing Level Unsecured Senior Debt Applicable Percentage for
Rating Eurodollar Loans
----------------- ----------------------- --------------------------
I BBB or better from 1.00%
S&P, or Baa2 or
better from Moody's
or both if rated by
both Moody's and S&P
----------------- ----------------------- --------------------------
II BBB- from S&P or Baa3 1.15%
from Moody's or both
if rated by both
Moody's and S&P
----------------- ----------------------- --------------------------
The Applicable Percentage for Revolving Loans shall be
determined and adjusted on the date (each a "Calculation Date") (i)
if the Applicable Percentage is determined pursuant to clause (b)(i)
above, five Business Days after the date on which the Borrowers
provide the officer's certificate in accordance with the provisions
of Section 7.1(c); provided that if the Borrowers fail to provide the
officer's certificate required by Section 7.1(c) on or before the
date required by Section 7.1(c), the Applicable Percentage for
Revolving Loans from such date shall be based on Pricing Level III in
clause (b)(i) above until such time that an appropriate officer's
certificate is provided whereupon the Pricing Level shall be
determined by the then current Leverage Ratio or (ii) if the
Applicable Percentage is determined pursuant to clause (b)(ii) above,
the date BRT or BOP obtains an Unsecured Senior Debt Rating from S&P
or Moody's or the date there is a change in the Unsecured Senior Debt
Rating of BRT or BOP, in each case after the Borrowers provide
written notice and evidence to the Administrative Agent regarding
such Unsecured Debt Rating. Each Applicable Percentage shall be
effective from one Calculation Date until the next Calculation Date.
Any adjustment in the Applicable Percentage shall be applicable only
to new Revolving Loans made (and to continuations and conversions of
existing Revolving Loans).
The Borrowers shall promptly deliver to the Administrative
Agent, at the address set forth on Schedule 11.1 and at the Agency
Services Address, information regarding any change in the Unsecured
Senior Debt Rating or Leverage Ratio that would change the existing
Pricing Level as set forth above.
"Bankruptcy Code" means the Bankruptcy Code in Title 11 of
the United States Code, as amended, modified, succeeded or replaced
from time to time.
"Base Rate" means, for any day, the rate per annum equal to
the greater of (a) the Federal Funds Rate in effect on such day plus
1/2 of 1% or (b) the Prime Rate in effect on such day. Any change in
the Base Rate due to a change in the Prime Rate or the Federal Funds
Rate shall be effective on the effective date of such change in the
Prime Rate or the Federal Funds Rate, respectively.
"Base Rate Loan" means a Loan bearing interest based at a
rate determined by reference to the Base Rate.
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<PAGE>
"BOP" means Brandywine Operating Partnership, L.P., a
Delaware limited partnership, together with any successors and
permitted assigns.
"Borrowers" means BRT and BOP and "Borrower" means either
one of them.
"Bridge Facility" means that certain $150 million credit
facility, entered into as of the Closing Date, provided by
NationsBanc Mortgage Capital Corp. for the benefit of the Borrowers.
"BRT" means Brandywine Realty Trust, a Maryland real estate
investment trust, together with any successors and permitted assigns.
"Business Day" means any day other than a Saturday, a
Sunday, a legal holiday or a day on which banking institutions are
authorized or required by law or other governmental action to close
in Bethesda, Maryland, Charlotte, North Carolina or New York, New
York; provided that in the case of Eurodollar Loans, such day is also
a day on which dealings between banks are carried on in U.S. dollar
deposits in the London interbank market.
"Calculation Date" has the meaning set forth in the
definition of Applicable Percentage.
"Capital Expenditures" means all expenditures of the
Borrowers and their Subsidiaries which, in accordance with GAAP,
would be classified as Capital Expenditures, including, without
limitation, Capital Leases.
"Capital Lease" means, as applied to any Person, any lease
of any property (whether real, personal or mixed) by that Person as
lessee which, in accordance with GAAP, is or should be accounted for
as a capital lease on the balance sheet of that Person.
"Capitalization Rate" means, as of the Closing Date, 9.5%;
however, the Capitalization Rate shall be reviewed annually (but not
more often than annually) by the Lenders (beginning with the date one
year after the Closing Date) and shall be subject to adjustment by
the Required Lenders, in their sole discretion, based upon market
conditions for comparable property types; provided that the
Capitalization Rate cannot be adjusted by more than 1.25% annually.
"Cash Equivalents" means (a) securities issued or directly
and fully guaranteed or insured by the United States of America or
any agency or instrumentality thereof (provided that the full faith
and credit of the United States of America is pledged in support
thereof) having maturities of not more than twelve months from the
date of acquisition, (b) U.S. dollar denominated time and demand
deposits and certificates of deposit of (i) any Lender or any of its
Affiliates, (ii) any domestic commercial bank having capital and
surplus in excess of $500,000,000 or (iii) any bank whose short-term
commercial paper rating from S&P is at least A-1 or the equivalent
thereof or from Moody's is at least P-1 or the equivalent thereof
(any such bank being an "Approved Bank"), in each case with
maturities of not more than 270 days from the date of acquisition,
(c) commercial paper and variable
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<PAGE>
or fixed rate notes issued by any Approved Bank (or by the parent
company thereof) or any variable rate notes issued by, or guaranteed
by, any domestic corporation rated A-1 (or the equivalent thereof) or
better by S&P or P-1 (or the equivalent thereof) or better by Moody's
and maturing within six months of the date of acquisition, (d)
repurchase agreements with a bank or trust company (including any of
the Lenders) or securities dealer having capital and surplus in
excess of $500,000,000 for direct obligations issued by or fully
guaranteed by the United States of America in which a Credit Party
shall have a perfected first priority security interest (subject to
no other Liens) and having, on the date of purchase thereof, a fair
market value of at least 100% of the amount of the repurchase
obligations and (e) Investments, classified in accordance with GAAP
as current assets, in money market investment programs registered
under the Investment Company Act of 1940, as amended, which are
administered by financial institutions having capital of at least
$500,000,000 and the portfolios of which are limited to Investments
of the character described in the foregoing subdivisions (a) through
(d).
"Change of Control" means any of the following events:
(a) any "person" or "group" (within the meaning of Section
13(d) or 14(d) of the Exchange Act) has become, directly or
indirectly, the "beneficial owner" (as defined in Rules 13d-3 and
13d-5 under the Exchange Act, except that a Person shall be deemed to
have "beneficial ownership" of all shares that any such Person has
the right to acquire, whether such right is exercisable immediately
or only after the passage of time), by way of merger, consolidation
or otherwise, of 20% or more of the voting power of BRT on a
fully-diluted basis, after giving effect to the conversion and
exercise of all outstanding warrants, options and other securities of
BRT convertible into or exercisable for voting power of BRT (whether
or not such securities are then currently convertible or
exercisable); or
(b) BRT fails to directly own at least 75% of the aggregate
ownership interests in BOP.
"Closing Date" means the date hereof.
"Code" means the Internal Revenue Code of 1986, as amended,
and any successor statute thereto, as interpreted by the rules and
regulations issued thereunder, in each case as in effect from time to
time. References to sections of the Code shall be construed also to
refer to any successor sections.
"Collateral" has the meaning set forth in the Collateral
Documents.
"Collateral Documents" means the Pledge Agreements, the
Mortgage Documents and such other documents executed and delivered in
connection with the attachment and perfection of the Lenders'
security interest in the Collateral, including, without limitation
UCC financing statements and real estate title insurance policies as
necessary; provided that it is understood that such Collateral
Documents will be effective only during an appropriate Collateral
Period.
6
<PAGE>
"Collateral Effective Date" means (a) a Real Estate
Collateral Effective Date or (b) a Stock Collateral Effective Date.
"Collateral Period" means the period in time from a
Collateral Effective Date until a subsequent Collateral Termination
Date.
"Collateral Termination Date" means (a) with respect to the
Mortgages, any date after a Real Estate Collateral Effective Date in
which (i) the Leverage Ratio has been less than or equal to .55 to
1.0, as of the last day of a fiscal quarter of the Credit Parties,
for two consecutive fiscal quarters and (ii) no Default or Event of
Default exists, and (b) with respect to the Stock Collateral, any
date after a Stock Collateral Effective Date that (i) the Leverage
Ratio is less than or equal to .55 to 1.0 as of the last day of a
fiscal quarter of the Credit Parties and (ii) no Default or Event of
Default exists.
"Commitments" means the commitment of each Lender with
respect to the Revolving Committed Amount.
"Combined Parties" means the Credit Parties and their
Subsidiaries and all joint ventures or partnerships to which a Credit
Party or one of its Subsidiaries is a party.
"Credit Documents" means this Credit Agreement, the Notes,
the Collateral Documents and all other related agreements and
documents issued or delivered hereunder or thereunder or pursuant
hereto or thereto.
"Credit Exposure" has the meaning set forth in the
definition of Required Lenders in this Section 1.1.
"Credit Parties" means the Borrowers and the Guarantors and
"Credit Party" means any one of them.
"Debt Payments" means, as of the date of determination, for
the Combined Parties, the sum of (a) Interest Expense plus (b) all
payments of principal and any required prepayments on Funded Debt of
the Combined Parties (other than balloon payments), for the
applicable period, ending on the date of determination (including the
principal component of payments due on Capital Leases during the
applicable period ending on the date of determination) plus (c) any
letter of credit fees.
"Debt Service Coverage Ratio" means the ratio of (a)
Annualized Modified Adjusted NOI to (b) the Market Funded Debt
Payments.
"Default" means any event, act or condition which with
notice or lapse of time, or both, would constitute an Event of
Default.
"Defaulting Lender" means, at any time, any Lender that, (a)
has failed to make a Loan or purchase a Participation Interest
required pursuant to the terms of this Credit Agreement (but only for
so long as such Loan is not made or such Participation Interest is
not purchased), (b) has failed to pay to the Administrative Agent or
any Lender an amount
7
<PAGE>
owed by such Lender pursuant to the terms of this Credit Agreement
(but only for so long as such amount has not been repaid) or (c) has
been deemed insolvent or has become subject to a bankruptcy or
insolvency proceeding or to a receiver, trustee or similar official.
"Dollars" and "$" means dollars in lawful currency of the
United States of America.
"Effective Date" means the date, as specified by the
Administrative Agent, on which the conditions set forth in Section
5.1 shall have been fulfilled (or waived in the sole discretion of
the Lenders) and on which the initial Loans shall have been made
and/or the initial Letters of Credit shall have been issued.
"Eligible Assignee" means (a) any Lender or any Affiliate or
subsidiary of a Lender and (b) any other commercial bank, financial
institution, institutional lender or "accredited investor" (as
defined in Regulation D of the Securities and Exchange Commission)
with (i) total assets of at least $25 billion, (ii) a long term
unsecured debt rating of BBB+ or better from S&P or its equivalent
and (iii) an office in the United States. Neither the Borrower nor an
Affiliate of the Borrower shall qualify as an Eligible Assignee.
"Environmental Claim" means any investigation, written
notice, violation, written demand, written allegation, action, suit,
injunction, judgment, order, consent decree, penalty, fine, lien,
proceeding, or written claim whether administrative, judicial or
private in nature arising (a) pursuant to, or in connection with, an
actual or alleged violation of, any Environmental Law, (b) in
connection with any Hazardous Material, (c) from any assessment,
abatement, removal, remedial, corrective, or other response action in
connection with an Environmental Law or other order of a Governmental
Authority or (d) from any actual or alleged damage, injury, threat,
or harm to health, safety, natural resources, or the environment.
"Environmental Laws" means any current or future legal
requirement of any Governmental Authority pertaining to (a) the
protection of health, safety, and the indoor or outdoor environment,
(b) the conservation, management, or use of natural resources and
wildlife, (c) the protection or use of surface water and groundwater
or (d) the management, manufacture, possession, presence, use,
generation, transportation, treatment, storage, disposal, release,
threatened release, abatement, removal, remediation or handling of,
or exposure to, any hazardous or toxic substance or material or (e)
pollution (including any release to land surface water and
groundwater) and includes, without limitation, the Comprehensive
Environmental Response, Compensation, and Liability Act of 1980, as
amended by the Superfund Amendments and Reauthorization Act of 1986,
42 USC 9601 et seq., Solid Waste Disposal Act, as amended by the
Resource Conservation and Recovery Act of 1976 and Hazardous and
Solid Waste Amendment of 1984, 42 USC 6901 et seq., Federal Water
Pollution Control Act, as amended by the Clean Water Act of 1977, 33
USC 1251 et seq., Clean Air Act of 1966, as amended, 42 USC 7401 et
seq., Toxic Substances Control Act of 1976, 15 USC 2601 et seq.,
Hazardous Materials Transportation Act, 49 USC App. 1801 et seq.,
Occupational Safety and Health Act of 1970, as amended, 29 USC 651 et
seq., Oil Pollution Act of 1990, 33 USC 2701 et seq., Emergency
Planning and Community Right-to-Know Act of 1986, 42 USC 11001 et
seq., National Environmental Policy Act of 1969, 42 USC 4321 et seq.,
Safe Drinking Water Act of 1974, as amended, 42 USC 300(f) et seq.,
any analogous implementing or successor law, and any amendment, rule,
regulation, order, or directive issued thereunder.
8
<PAGE>
"Equity Issuance" means any issuance by a Credit Party to
any Person (other than another Credit Party) of shares of its capital
stock, common shares of beneficial interest or other equity
interests, including pursuant to the exercise of options or warrants
or pursuant to the conversion of any debt securities to equity;
provided that the definition of Equity Issuance as used herein shall
not include (a) issuances of equity to employees of a Credit Party to
the extent such issuances do not exceed $1,000,000 in any one
instance or $5,000,000, in the aggregate, during the term of this
Credit Agreement or (b) issuances of common stock for the sole
purpose of conversion or redemption of convertible preferred stock or
perpetual preferred stock.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended, and any successor statute thereto, as interpreted
by the rules and regulations thereunder, all as the same may be in
effect from time to time. References to sections of ERISA shall be
construed also to refer to any successor sections.
"ERISA Affiliate" means an entity, whether or not
incorporated, which is under common control with a Borrower or any of
its Subsidiaries within the meaning of Section 4001(a)(14) of ERISA,
or is a member of a group which includes a Borrower and which is
treated as a single employer under Sections 414(b) or (c) of the
Code.
"ERISA Event" means (i) with respect to any Plan, the
occurrence of a Reportable Event or the substantial cessation of
operations (within the meaning of Section 4062(e) of ERISA); (ii) the
withdrawal of a Borrower, any Subsidiary of a Borrower or any ERISA
Affiliate from a Multiple Employer Plan during a plan year in which
it was a substantial employer (as such term is defined in Section
4001(a)(2) of ERISA), or the termination of a Multiple Employer Plan;
(iii) the distribution of a notice of intent to terminate or the
actual termination of a Plan pursuant to Section 4041(a)(2) or 4041A
of ERISA; (iv) the institution of proceedings to terminate or the
actual termination of a Plan by the PBGC under Section 4042 of ERISA;
(v) any event or condition which might constitute grounds under
Section 4042 of ERISA for the termination of, or the appointment of a
trustee to administer, any Plan; (vi) the complete or partial
withdrawal of a Borrower, any Subsidiary of a Borrower or any ERISA
Affiliate from a Multiemployer Plan; (vii) the conditions for
imposition of a lien under Section 302(f) of ERISA exist with respect
to any Plan; or (viii) the adoption of an amendment to any Plan
requiring the provision of security to such Plan pursuant to Section
307 of ERISA.
"Eurodollar Loan" means a Loan bearing interest based at a
rate determined by reference to the Adjusted Eurodollar Rate.
"Eurodollar Rate" means, for the Interest Period for each
Eurodollar Loan comprising part of the same borrowing (including
conversions, extensions and renewals), a per annum interest rate
determined pursuant to the following formula:
9
<PAGE>
Eurodollar Rate = London Interbank Offered Rate
-----------------------------
1 - Eurodollar Reserve Percentage
"Eurodollar Reserve Percentage" means, for any day, that
percentage (expressed as a decimal) which is in effect from time to
time under Regulation D of the Board of Governors of the Federal
Reserve System (or any successor), as such regulation may be amended
from time to time, or any successor regulation, as the maximum
reserve requirement (including, without limitation, any basic,
supplemental, emergency, special, or marginal reserves) applicable
with respect to Eurodollar liabilities as that term is defined in
Regulation D (or against any other category of liabilities that
includes deposits by reference to which the interest rate of
Eurodollar Loans is determined) with respect to member banks of the
Federal Reserve System, whether or not any Lender has any Eurodollar
liabilities subject to such reserve requirement at that time.
Eurodollar Loans shall be deemed to constitute Eurodollar liabilities
and as such shall be deemed subject to reserve requirements without
benefits of credits for proration, exceptions or offsets that may be
available from time to time to a Lender. The Adjusted Eurodollar Rate
shall be adjusted automatically on and as of the effective date of
any change in the Eurodollar Reserve Percentage.
"Event of Default" means any of the events or circumstances
described in Section 9.1.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended, modified, succeeded or replaced from time to time, and the
rules and regulations promulgated thereunder.
"Excluded Material Subsidiaries" means the Material
Subsidiaries set forth on Schedule 1.1(c).
"Existing Bridge Facility" means that certain Promissory
Note, dated May 7, 1998, executed by the Borrowers in favor of
NationsBank, N.A., in the face amount of $150 million, and all
documents and instruments executed and delivered in connection
therewith.
"Existing Credit Agreement" has the meaning set forth in the
Recitals hereto.
"Existing Letters of Credit" means the letters of credit
described on Schedule 2.2(c).
"Extension of Credit" means, as to any Lender, the making of
a Loan by such Lender (or a participation therein by a Lender) or the
issuance of, or participation in, a Letter of Credit by such Lender.
"Federal Funds Rate" means, for any day, the rate per annum
(rounded upward, if necessary, to the nearest 1/100th of 1%) equal to
the weighted average of the rates on overnight Federal funds
transactions with members of the Federal Reserve System arranged by
Federal funds brokers on such day, as published by the Federal
Reserve Bank of New York on the Business Day next succeeding such
day; provided that (a) if such day is not a Business Day, the Federal
Funds Rate for such day shall be such rate on such transactions on
the next preceding Business Day and (b) if no such rate is so
published on such next preceding Business Day, the Federal Funds Rate
for such day shall be the average rate quoted to the Administrative
Agent on such day on such transactions as determined by the
Administrative Agent.
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<PAGE>
"Fee Letter" means that certain letter agreement, dated as
of July 30, 1998, between the Administrative Agent and BRT, as
amended, modified, supplemented or replaced from time to time.
"Fixed Charge Coverage Ratio" means, for any period, the
ratio of (a) Adjusted NOI for such period to (b) the sum of Debt
Payments for such period plus all dividends on preferred stock for
such period plus Letter of Credit Fees payable pursuant to Section
3.4(b)(i) for such period.
"Funded Debt" means, without duplication, the sum of (a) all
Indebtedness of the Combined Parties for borrowed money, (b) all
purchase money Indebtedness of the Combined Parties, (c) the
principal portion of all obligations of the Combined Parties under
Capital Leases, (d) all obligations, contingent or otherwise,
relative to the face amount of all letters of credit (other than
letters of credit supporting trade payables in the ordinary course of
business), whether or not drawn, and banker's acceptances issued for
the account of a Combined Party (it being understood that, to the
extent an undrawn letter of credit supports another obligation
consisting of Indebtedness, in calculating aggregated Funded Debt
only such other obligation shall be included), (e) all Guaranty
Obligations of the Combined Parties with respect to Funded Debt of
another Person, (f) all Funded Debt of another entity secured by a
Lien on any property of the Combined Parties whether or not such
Funded Debt has been assumed by a Combined Party, (g) all Funded Debt
of any partnership or unincorporated joint venture to the extent a
Combined Party is legally obligated or has a reasonable expectation
of being liable with respect thereto, net of any assets of such
partnership or joint venture, (h) the principal balance outstanding
under any synthetic lease, tax retention operating lease, off-balance
sheet loan or similar off-balance sheet financing product of a
Combined Party where such transaction is considered borrowed money
indebtedness for tax purposes but is classified as an operating lease
in accordance with GAAP, (i) all obligations of the Combined Parties
in respect of interest rate protection agreements, foreign currency
exchange agreements or other interest or exchange rate or commodity
price hedging agreements and (j) all take out loan commitments to the
extent such take out commitment is not supported by a financial
commitment from a third party containing standard terms and
conditions. The calculation of Funded Debt of the Combined Parties
shall be subject to Section 1.4.
"Funds From Operations", when used with respect to any
Person, shall have the meaning given to such term in, and shall be
calculated in accordance with, standards promulgated by the National
Association of Real Estate Investment Trusts in effect from time to
time.
"GAAP" means generally accepted accounting principles in the
United States applied on a consistent basis and subject to Section
1.3.
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<PAGE>
"Governmental Authority" means any Federal, state, local or
provincial court or governmental agency, authority, instrumentality
or regulatory body.
"Guarantors" means (a) the Material Subsidiaries of the
Borrowers, as of the Closing Date, other than the Excluded Material
Subsidiaries and (b) such other Persons who may from time to time
execute a Joinder Agreement (or otherwise consent in writing to
becoming a Guarantor hereunder), as required by Section 7.12 or
otherwise, in each case together with their successors and assigns.
"Guaranty Obligations" means, with respect to any Person,
without duplication, any obligations (other than endorsements in the
ordinary course of business of negotiable instruments for deposit or
collection) guaranteeing or intended to guarantee any Indebtedness of
any other Person in any manner, whether direct or indirect, and
including without limitation any obligation, whether or not
contingent, (a) to purchase any such Indebtedness or other obligation
or any property constituting security therefor, (b) to advance or
provide funds or other support for the payment or purchase of such
indebtedness or obligation or to maintain working capital, solvency
or other balance sheet condition of such other Person (including,
without limitation, maintenance agreements, comfort letters, take or
pay arrangements, put agreements or similar agreements or
arrangements) for the benefit of the holder of Indebtedness of such
other Person, (c) to lease or purchase property, securities or
services primarily for the purpose of assuring the owner of such
Indebtedness or (d) to otherwise assure or hold harmless the owner of
such Indebtedness or obligation against loss in respect thereof. The
amount of any Guaranty Obligation hereunder shall (subject to any
limitations set forth therein) be deemed to be an amount equal to the
outstanding principal amount (or maximum principal amount, if larger)
of the Indebtedness in respect of which such Guaranty Obligation is
made.
"Hazardous Materials" means any substance, material or waste
defined or regulated in or under any Environmental Laws.
"Incentive Stock Plan" means the BRT 1997 Long-Term
Incentive Plan, as amended from time to time, and any other equity
incentive plan hereafter established by BRT pursuant to which awards
of equity interests in BRT may be made to employees of BRT or a
Subsidiary.
"Indebtedness" of any Person means, without duplication, (a)
all obligations of such Person for borrowed money, (b) all
obligations of such Person evidenced by bonds, debentures, notes or
similar instruments, or upon which interest payments are customarily
made (c) all obligations of such Person under conditional sale or
other title retention agreements relating to property purchased by
such Person to the extent of the value of such property (other than
customary reservations or retentions of title under agreements with
suppliers entered into in the ordinary course of business), (d) all
obligations, other than intercompany items, of such Person issued or
assumed as the deferred purchase price of property or services
purchased by such Person which would appear as liabilities on a
balance sheet of such Person, (e) all Indebtedness of others secured
by (or for which the holder of such Indebtedness has an existing
right, contingent or otherwise, to be secured by) any Lien on, or
payable out of the proceeds of production from, property owned or
acquired
12
<PAGE>
by such Person, whether or not the obligations secured thereby have
been assumed, (f) all Guaranty Obligations of such Person, (g) the
principal portion of all obligations of such Person under (i) Capital
Leases and (ii) any synthetic lease, tax retention operating lease,
off-balance sheet loan or similar off-balance sheet financing product
of such Person where such transaction is considered borrowed money
indebtedness for tax purposes but is classified as an operating lease
in accordance with GAAP, (h) all obligations of such Person in
respect of interest rate protection agreements, foreign currency
exchange agreements, or other interest or exchange rate or commodity
price hedging agreements, (i) the maximum amount of all performance
and standby letters of credit issued or bankers' acceptances
facilities created for the account of such Person and, without
duplication, all drafts drawn thereunder (to the extent
unreimbursed), (j) all preferred stock issued by such Person and
required by the terms thereof to be redeemed, or for which mandatory
sinking fund payments are due, by a fixed date; provided that
Indebtedness shall not include outstanding convertible preferred
stock which carries a defined term if its conversion or redemption
occurs solely through the issuance of additional equity or from the
proceeds of an equity offering, (k) all obligations evidenced by take
out commitments, (l) the aggregate amount of uncollected accounts
receivables of such Person subject at such time to a sale of
receivables (or similar transaction) regardless of whether such
transaction is effected without recourse to such Person or in a
manner that would not be reflected on the balance sheet of such
Person in accordance with GAAP and (m) all obligations of such Person
to repurchase any securities which repurchase obligation is related
to the issuance thereof, including, without limitation, obligations
commonly known as residual equity appreciation potential shares.
Subject to the terms of Section 1.4, the Indebtedness of any Person
shall include the Indebtedness of any partnership or unincorporated
joint venture in which such Person is legally obligated or has a
reasonable expectation of being liable with respect thereto.
"Initial Revolving Loan Maturity Date" means September 30,
2001.
"Interest Coverage Ratio" means, for any period, the ratio
of (a) Adjusted NOI for such period to (b) Interest Expense for such
period.
"Interest Expense" means, for any period, with respect to
the Credit Parties and their Subsidiaries on a consolidated basis,
all net interest expense, whether paid or accrued (including that
portion applicable to Capital Leases in accordance with GAAP) plus
capitalized interest.
"Interest Payment Date" means (a) as to Base Rate Loans, the
last Business Day of each month and the Revolving Loan Maturity Date,
(b) as to Eurodollar Loans, the last day of the applicable Interest
Period and the Revolving Loan Maturity Date.
"Interest Period" means, as to Eurodollar Loans, a period of
one, two, three or six months' duration as the Borrowers may elect,
commencing, in each case, on the date of the borrowing (including
continuations and conversions thereof); provided, however, (a) if any
Interest Period would end on a day which is not a Business Day, such
Interest Period shall be extended to the next succeeding Business Day
(except that where the next succeeding Business Day falls in the next
succeeding calendar month, then on the next preceding Business Day),
(b) no Interest Period shall extend beyond the Revolving Loan
Maturity Date, (c) where an Interest Period begins on a day for which
there is no numerically corresponding day in the calendar month in
which the Interest Period is to end, such Interest Period shall end
on the last Business Day of such calendar month, and (d) no Interest
Period shall extend beyond the Initial Revolving Loan Maturity Date
unless the Revolving Loan Maturity Date has been extended pursuant to
Section 3.5(b).
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"Investment" in any Person means (a) the acquisition
(whether for cash, property, services, assumption of Indebtedness,
securities or otherwise) of assets, shares of capital stock, bonds,
notes, debentures, partnership, joint ventures or other ownership
interests or other securities of such other Person or (b) any deposit
with, or advance, loan or other extension of credit to, such Person
(other than deposits made in connection with the purchase of
equipment or other assets in the ordinary course of business) or (c)
any other capital contribution to or investment in such Person,
including, without limitation, any Guaranty Obligation (including any
support for a letter of credit issued on behalf of such Person)
incurred for the benefit of such Person.
"Issuing Lender" means NationsBank, N.A., any successor
Administrative Agent or any other Lender designated by the
Administrative Agent.
"Issuing Lender Fees" has the meaning set forth in Section
3.4(b)(ii).
"Joinder Agreement" means a Joinder Agreement substantially
in the form of Exhibit 7.12.
"Lender" means any of the Persons identified as a "Lender"
on the signature pages hereto, and any Person which may become a
Lender by way of assignment in accordance with the terms hereof,
together with their successors and permitted assigns.
"Letter of Credit" means a letter of credit issued for the
account of a Borrower by the Issuing Lender pursuant to Section 2.2
or any Existing Letter of Credit, as such letter of credit may be
amended, modified, extended, renewed or replaced.
"Letter of Credit Fees" has the meaning set forth in Section
3.4(b)(i).
"Leverage Ratio" means the ratio of (a) Funded Debt to (b)
the sum of Annualized Capitalized Modified Adjusted NOI plus all
unrestricted cash of the Combined Parties plus all Cash Equivalents
of the Combined Parties plus all tenant security deposits held by the
Combined Parties plus all amounts invested by the Combined Parties in
construction-in-process plus all mortgage note receivables of the
Combined Parties plus all net cash investments in opportunity funds
of the Combined Parties.
"Lien" means any mortgage, pledge, hypothecation,
assignment, deposit arrangement, security interest, encumbrance, lien
(statutory or otherwise), preference, priority or charge of any kind,
including, without limitation, any agreement to give any of the
foregoing, any conditional sale or other title retention agreement,
and any lease in the nature thereof.
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"Loan" or "Loans" means the Revolving Loans (or a portion of
any Revolving Loan), individually or collectively, as appropriate.
"LOC Documents" means, with respect to any Letter of Credit,
such Letter of Credit, any amendments thereto, any documents
delivered in connection therewith, any application therefor, and any
agreements, instruments, guarantees or other documents (whether
general in application or applicable only to such Letter of Credit)
governing or providing for (a) the rights and obligations of the
parties concerned or at risk or (b) any collateral security for such
obligations.
"LOC Obligations" means, at any time, the sum of (a) the
maximum amount which is, or at any time thereafter may become,
available to be drawn under Letters of Credit then outstanding,
assuming compliance with all requirements for drawings referred to in
such Letters of Credit plus (b) the aggregate amount of all drawings
under Letters of Credit honored by an Issuing Lender but not
theretofore reimbursed.
"LOC Participants" means the Lenders.
"London Interbank Offered Rate" means, for any Eurodollar
Loan for any Interest Period therefor, the rate per annum (rounded
upwards, if necessary, to the nearest 1/16 of 1%) appearing on
Telerate Page 3750 (or any successor page) as the London interbank
offered rate for deposits in Dollars at approximately 11:00 a.m.
(London time) two Business Days prior to the first day of such
Interest Period for a term comparable to such Interest Period;
provided, however, if more than one rate is specified on Telerate
Page 3750, the applicable rate shall be the arithmetic mean of all
such rates. If for any reason such rate is not available, the term
"London Interbank Offered Rate" shall mean, for any Eurodollar Loan
for any Interest Period therefor, the rate per annum (rounded
upwards, if necessary, to the nearest 1/16 of 1%) appearing on
Reuters Screen LIBO Page as the London interbank offered rate for
deposits in Dollars at approximately 11:00 a.m. (London time) two
Business Days prior to the first day of such Interest Period for a
term comparable to such Interest Period; provided, however, if more
than one rate is specified on Reuters Screen LIBO Page, the
applicable rate shall be the arithmetic mean of all such rates.
"Mandatory Borrowing" has the meaning set forth in Section
2.2(e).
"Market Funded Debt Payments" means the scheduled debt
payments that would have been due during a twelve month period with
respect to the Funded Debt of the Combined Parties as of the last day
of the prior fiscal quarter assuming a principal mortgage
amortization of 25 years and assuming the Market Interest Rate as in
effect on the date that the Market Funded Debt Payments are
calculated.
"Market Interest Rate" means an interest rate equal to the
greater of (a) the prior 30 day average of the most recent seven year
U.S. Treasury Note plus 2.00% per annum or (b) 8.50% per annum.
"Material Adverse Effect" means a material adverse effect on
(a) the business, assets, operations, condition (financial or
otherwise) or prospects of a Combined Party, (b) the ability of a
Credit Party to perform its respective obligations under this Credit
Agreement or any of the other Credit Documents, or (c) the validity
or enforceability of this Credit Agreement, any of the other Credit
Documents, or the rights and remedies of the Lenders hereunder or
thereunder taken as a whole.
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"Material Subsidiary" means a Subsidiary of a Credit Party
in which such Credit Party owns, directly or indirectly, more than
65% of the capital stock, partnership interests or other equity
interests.
"Moody's" means Moody's Investors Service, Inc., or any
successor or assignee of the business of such company in the business
of rating securities.
"Mortgages" has the meaning set forth in Section 7.17.
"Multiemployer Plan" means a Plan which is a multiemployer
plan as defined in Sections 3(37) or 4001(a)(3) of ERISA.
"Multiple Employer Plan" means a Plan (other than a
Multiemployer Plan) in which a Credit Party or any ERISA Affiliate
and at least one employer other than a Credit Party or any ERISA
Affiliate are contributing sponsors.
"Net Cash Proceeds" means the gross cash proceeds received
from an Equity Issuance net of actual transaction costs payable to
third parties.
"Net Income" means, for any period, the net income for such
period of the Combined Parties, as determined in accordance with
GAAP.
"Net Worth" means, as of any date, the net worth of Credit
Parties and their Subsidiaries on a consolidated basis, as determined
in accordance with GAAP.
"NMS" means NationsBanc Montgomery Securities LLC or any
successor thereto.
"NOI" means an amount equal to (a) Net Income for such
period (excluding the effect of any extraordinary or other non
recurring gains or losses or other non cash losses outside the
ordinary course of business) plus (b) an amount which in the
determination of Net Income for such period has been deducted for (i)
proceeds to minority interests, (ii) income taxes, (iii) depreciation
and amortization and (iv) Interest Expense, less (c) to the extent
not previously deducted in calculating Net Income for such period,
the greater of (i) actual management fee expenditures of the Combined
Parties or (ii) 3% of the total real estate revenue of the Combined
Parties.
"Non-Excluded Taxes" has the meaning set forth in Section
3.13.
"Note" or "Notes" means the Revolving Loan Notes,
individually or collectively, as appropriate.
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"Notice of Borrowing" means a request by the Borrowers for a
Revolving Loan, in the form of Exhibit 2.1(b).
"Notice of Continuation/Conversion" means a request by the
Borrowers to continue an existing Eurodollar Loan to a new Interest
Period or to convert a Eurodollar Loan to a Base Rate Loan or to
convert a Base Rate Loan to a Eurodollar Loan, in the form of Exhibit
2.1(e).
"Obligations" means, without duplication, all of the
obligations of the Credit Parties to the Lenders and the
Administrative Agent, whenever arising, under this Credit Agreement,
the Notes, the Collateral Documents, or any of the other Credit
Documents to which a Credit Party is a party.
"Participation Interest" means the Extension of Credit by a
Lender by way of a purchase of a participation in any Loans as
provided in Section 3.8 or in any Letters of Credit or LOC
Obligations as provided in Section 2.2.
"PBGC" means the Pension Benefit Guaranty Corporation
established pursuant to Subtitle A of Title IV of ERISA and any
successor thereof.
"Permitted Investments" means Investments which are (a) cash
or Cash Equivalents, (b) accounts receivable created, acquired or
made in the ordinary course of business and payable or dischargeable
in accordance with customary trade terms, (c) Investments by one
Credit Party in another Credit Party, (d) the acquisition of new
Properties; provided that the Credit Parties may not invest in
undeveloped land in excess of 5% of Total Assets, in the aggregate,
except for such undeveloped land that is adjacent to or contiguous
with other assets being acquired or assets already owned or such land
is part of a construction project approved by the Required Lenders,
has all necessary local permits and approvals and construction will
commence within six months of acquisition, (e) earnest money and
similar deposits in respect of Properties made in the ordinary course
of business, (f) Investments, as of the Effective Date, in the
Subsidiaries of the Credit Parties that own the Project Bell
Properties; provided that no additional Investments in such
Subsidiaries may occur after the Effective Date except as permitted
by clauses (g) and (h) below, (g) in addition to the Investments in
clause (f) above, Investments in Subsidiaries which are not Credit
Parties and Investments in joint ventures (whether or not
Subsidiaries) not to exceed, in the aggregate at any one time, 15% of
Adjusted Total Assets, (h) Investments not otherwise described in or
covered by the other subclauses of this definition (including,
without limitation, Investments in Persons that are not Subsidiaries
or joint ventures (whether or not Subsidiaries)), loans to officers,
directors and employees and repurchases of its capital stock
(including the repurchase of stock that is retired, cancelled or
terminated) or other ownership interests (including options, warrants
and stock appreciation rights) by a Borrower or any Subsidiary);
provided that (i) such Investments do not exceed, in the aggregate at
any one time, 10% of Adjusted Total Assets and (ii) such Investments,
together with the Investments referred to in the previous subclause
(g), do not exceed (in the aggregate at any one time) 20% of Adjusted
Total Assets.
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"Permitted Liens" means (a) Liens securing Obligations, (b)
Liens for taxes not yet due or Liens for taxes being contested in
good faith by appropriate proceedings for which adequate reserves
determined in accordance with GAAP have been established (and as to
which the property subject to any such Lien is not yet subject to
foreclosure, sale or loss on account thereof), (c) Liens in respect
of property imposed by law arising in the ordinary course of business
such as materialmens', mechanics', warehousemens', carriers',
landlords' and other nonconsensual statutory Liens which are not yet
due and payable or which are being contested in good faith by
appropriate proceedings for which adequate reserves determined in
accordance with GAAP have been established (and as to which the
property subject to any such Lien is not yet subject to foreclosure,
sale or loss on account thereof); (d) Liens arising from good faith
deposits in connection with or to secure performance of tenders,
bids, leases, government contracts, performance and return-of-money
bonds and other similar obligations incurred in the ordinary course
of business (other than obligations in respect of the payment of
borrowed money), (e) Liens arising from good faith deposits in
connection with or to secure performance of statutory obligations and
surety and appeal bonds, (f) easements, rights-of-way, restrictions
(including zoning restrictions), matters of plat, minor defects or
irregularities in title and other similar charges or encumbrances
not, in any material respect, impairing the use of the encumbered
property for its intended purposes, (g) judgment Liens that would not
constitute an Event of Default, (h) Liens arising by virtue of any
statutory or common law provision relating to bankers' liens, rights
of setoff or similar rights as to deposit accounts or other funds
maintained with a creditor depository institution, (i) Liens on
Properties as indicated on Schedule 8.5 if such Lien is incurred on
or before March 31, 1999, (j) Liens in connection with Indebtedness
permitted by Section 8.1(d); provided that if such Lien is created
with respect to a Property that was previously unencumbered (other
than such Liens permitted pursuant to clause (i) above), (A) the
Borrowers shall give the Administrative Agent prior written notice of
the creation of such Lien and (B) after giving effect to such Lien,
(x) the Credit Parties shall be in compliance on a Pro Forma Basis
with the financial covenants set forth in Section 7.2 and (y) no
Default or Event of Default shall exist (and the Borrowers shall
deliver a certificate to that effect) and (k) Liens existing on the
date hereof and identified on Schedule 8.2; provided that no such
Lien shall extend to any property other than the property subject
thereto on the Closing Date.
"Person" means any individual, partnership, joint venture,
firm, corporation, limited liability company, association, trust or
other enterprise (whether or not incorporated), or any Governmental
Authority.
"Plan" means any employee benefit plan (as defined in
Section 3(3) of ERISA) which is covered by ERISA and with respect to
which a Borrower or any ERISA Affiliate is (or, if such plan were
terminated at such time, would under Section 4069 of ERISA be deemed
to be) an "employer" within the meaning of Section 3(5) of ERISA.
"Pledge Agreements" means any Pledge Agreement executed and
delivered by a Credit Party in favor of the Administrative Agent, for
the benefit of the Lenders, to secure its obligations under the
Credit Documents, as amended, modified, extended, renewed or replaced
from time to time; provided that it is understood that the Pledge
Agreements will be effective only during a Collateral Period.
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"Prime Rate" means the per annum rate of interest
established from time to time by the Administrative Agent at its
principal office in Charlotte, North Carolina (or such other
principal office of the Administrative Agent as communicated in
writing to the Borrowers and the Lenders) as its Prime Rate. Any
change in the interest rate resulting from a change in the Prime Rate
shall become effective as of 12:01 a.m. of the Business Day on which
each change in the Prime Rate is announced by the Administrative
Agent. The Prime Rate is a reference rate used by the Administrative
Agent in determining interest rates on certain loans and is not
intended to be the lowest rate of interest charged on any extension
of credit to any debtor.
"Pro Forma Basis" means with respect to (a) the sale of a
Property or the sale of an equity interest in a Credit Party or (b)
the creation of a Lien on a Property, that such sale or creation of
Lien shall be deemed to have occurred as of the first day of the four
fiscal quarter period ending as of the last day of the most recent
fiscal quarter for which the Lenders have received the financial
information required by Section 7.1(b).
"Project Bell Properties" means the Properties set forth on
Schedule 1.1(b).
"Properties" means all real properties owned by the Credit
Parties and their Subsidiaries whether directly or through a joint
venture investment.
"Real Estate Collateral Effective Date" means the date the
financial information required by Section 7.1(c), for the quarterly
period ending March 31, 1999, is delivered by the Borrowers to the
Administrative Agent, if the Leverage Ratio, as of March 31, 1999, is
greater than .55 to 1.0, unless all of the Lenders agree in writing
that a Real Estate Collateral Effective Date shall not occur;
provided that the Real Estate Collateral Effective Date shall occur
automatically on May 15, 1999 if the Borrowers do not deliver such
financial information regarding the Leverage Ratio, as of March 31,
1999, on or before May 15, 1999.
"Regulation D, U, or X" means Regulation D, U or X,
respectively, of the Board of Governors of the Federal Reserve System
as from time to time in effect and any successor to all or a portion
thereof.
"REIT" means a real estate investment trust as defined in
Sections 856-860 of the Code.
"Reportable Event" means any of the events set forth in
Section 4043(c) of ERISA, other than those events as to which the
notice requirement has been waived by regulation.
"Required Lenders" means the Administrative Agent together
with the Lenders whose aggregate Credit Exposure (as hereinafter
defined) constitutes at least 66 2/3% of the Credit Exposure of all
Lenders at such time; provided, however, that if any Lender shall be
a Defaulting Lender at such time then there shall be excluded from
the determination of Required Lenders the aggregate principal amount
of Credit Exposure of such Lender at such time. For purposes of the
preceding sentence, the term "Credit Exposure" as applied to each
Lender shall mean (a) at any time prior to the termination of the
Commitments, the sum of the Revolving Loan Commitment Percentage of
such Lender multiplied by the Revolving Committed Amount and (b) at
any time after the termination of the Commitments, the sum of (i) the
principal balance of the outstanding Loans of such Lender plus (ii)
such Lender's Participation Interests in the face amount of the
outstanding Letters of Credit.
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"Requirement of Law" means, as to any Person, the articles
or certificate of incorporation and by-laws or other organizational
or governing documents of such Person, and any law, treaty, rule or
regulation or final, non-appealable determination of an arbitrator or
a court or other Governmental Authority, in each case applicable to
or binding upon such Person or to which any of its material property
is subject.
"Revolving Committed Amount" means FIVE HUNDRED FIFTY
MILLION DOLLARS ($550,000,000).
"Revolving Loan Commitment Percentage" means, for each
Lender, the percentage identified as its Revolving Loan Commitment
Percentage on Schedule 1.1(a), as such percentage may be modified in
connection with any assignment made in accordance with the provisions
of Section 11.3.
"Revolving Loan Maturity Date" means the Initial Revolving
Loan Maturity Date or, if extended by the Borrowers pursuant to
Section 3.5(b), September 30, 2002.
"Revolving Loans" means the Revolving Loans made to the
Borrowers pursuant to Section 2.1.
"Revolving Note" or "Revolving Notes" means the promissory
notes of the Borrowers in favor of each of the Lenders evidencing the
Revolving Loans provided pursuant to Section 2.1, individually or
collectively, as appropriate, as such promissory notes may be
amended, modified, supplemented, extended, renewed or replaced from
time to time and as evidenced in the form of Exhibit 2.1(g).
"S&P" means Standard & Poor's Ratings Group, a division of
McGraw Hill, Inc., or any successor or assignee of the business of
such division in the business of rating securities.
"Secured Debt" means all Funded Debt of the Combined Parties
that is subject to a Lien in favor of the creditor holding such
Funded Debt; provided that any Funded Debt owed to the Lenders
hereunder shall be considered to be Unsecured Debt even if a Lien has
been granted in favor of the Lenders.
"Secured Debt Ratio" means the ratio of (a) Secured Debt to
(b) Annualized Capitalized Modified Adjusted NOI plus, to the extent
Secured Debt includes Funded Debt on construction-in-process, total
construction costs with respect to such construction-in-process.
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"Securities Act" means the Securities Act of 1933, as
amended, modified, succeeded or replaced from time to time, and the
rules and regulations promulgated thereunder.
"Single Employer Plan" means any Plan which is covered by
Title IV of ERISA, but which is not a Multiemployer Plan or a
Multiple Employer Plan.
"Solvent" means, with respect to any Person as of a
particular date, that on such date (a) such Person is able to pay its
debts and other liabilities, contingent obligations and other
commitments as they mature in the normal course of business, (b) such
Person does not intend to, and does not believe that it will, incur
debts or liabilities beyond such Person's ability to pay as such
debts and liabilities mature in their ordinary course, (c) such
Person is not engaged in a business or a transaction, and is not
about to engage in a business or a transaction, for which such
Person's assets would constitute unreasonably small capital after
giving due consideration to the prevailing practice in the industry
in which such Person is engaged or is to engage, (d) the fair value
of the assets of such Person is greater than the total amount of
liabilities, including, without limitation, contingent liabilities,
of such Person and (e) the present fair saleable value of the assets
of such Person is not less than the amount that will be required to
pay the probable liability of such Person on its debts as they become
absolute and matured. In computing the amount of contingent
liabilities at any time, it is intended that such liabilities will be
computed at the amount which, in light of all the facts and
circumstances existing at such time, represents the amount that can
reasonably be expected to become an actual or matured liability.
"Stock Collateral" means the Collateral set forth in the
Pledge Agreements.
"Stock Collateral Effective Date" means, if the Obligations
are not secured at that time by the Mortgages, (a) any date
subsequent to March 30, 1999 that the Leverage Ratio is greater than
.55 to 1.0 or (b) any date that there is a breach of any of the
covenants set forth in Section 7.2; provided that, in each case, a
Stock Collateral Effective Date shall not have been deemed to occur
unless (x) the Required Lenders agree that a Stock Collateral
Effective Date shall occur and (y) the Agent provides written
notification to the Borrowers in accordance with Section 11.1 that a
Stock Collateral Effective Date has occurred.
"Subsidiary" means, as to any Person, (a) any corporation
more than 50% of whose stock of any class or classes having by the
terms thereof ordinary voting power to elect a majority of the
directors of such corporation (irrespective of whether or not at the
time, any class or classes of such corporation shall have or might
have voting power by reason of the happening of any contingency) is
at the time owned by such Person directly or indirectly through
Subsidiaries, and (b) any partnership, association, joint venture,
limited liability company, trust or other entity in which such Person
directly or indirectly through Subsidiaries has more than a 50%
equity interest at any time.
"Termination Event" means (a) with respect to any Single
Employer Plan, the occurrence of a Reportable Event or the
substantial cessation of operations (within the meaning of Section
4062(e) of ERISA); (b) the withdrawal of any Credit Party or any of
its Subsidiaries or any ERISA Affiliate from a Multiple Employer Plan
during a plan year in which it was a substantial employer (as such
term is defined in Section 4001(a)(2) of ERISA), or the termination
of a Multiple Employer Plan; (c) the distribution of a notice of
intent to terminate or the actual termination of a Plan pursuant to
Section 4041(a)(2) or 4041A of ERISA; (d) the institution of
proceedings to terminate or the actual termination of a Plan by the
PBGC under Section 4042 of ERISA; (e) any event or condition which
might reasonably constitute grounds under Section 4042 of ERISA for
the termination of, or the appointment of a trustee to administer,
any Plan; or (f) the complete or partial withdrawal of any Credit
Party or any of its Subsidiaries or any ERISA Affiliate from a
Multiemployer Plan.
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"Total Assets" means all assets of the Credit Parties and
their Subsidiaries on a consolidated basis, as determined in
accordance with GAAP.
"Unencumbered Cash Flow Ratio" means the ratio of (a)
Annualized Modified Adjusted NOI with respect to Unsecured Properties
to (b) Market Funded Debt Payments on Unsecured Debt.
"Unsecured Debt" means the sum of all Funded Debt of the
Combined Parties that was incurred, and continues to be outstanding,
without granting a Lien to the creditor holding such Funded Debt;
provided that all Funded Debt of the Combined Parties owing to the
Lenders under this Credit Agreement shall be considered to be
Unsecured Debt even if a Lien has been granted in favor of the
Lenders.
"Unsecured Debt Ratio" means the ratio of (a) Annualized
Capitalized Modified Adjusted NOI with respect to all Unsecured
Properties to (b) Unsecured Debt.
"Unsecured Properties" means all Properties that are not
subject to a Lien other than (a) nonconsensual Permitted Liens and
(b) Liens in favor of the Lenders.
"Unsecured Senior Debt Rating" means a debt rating provided
by S&P or Moody's with respect to the unsecured senior long term debt
of BRT or BOP.
"Unused Commitment" means, for any period, the amount by
which (a) the then applicable aggregate Revolving Committed Amount
exceeds (b) the daily average sum for such period of the outstanding
aggregate principal amount of all Revolving Loans plus the aggregate
amount of LOC Obligations outstanding.
"Unused Fees" means the fees payable to the Lenders pursuant
to Section 3.4(a).
"Year 2000 Problem" means any risk that any computer
hardware, software or other equipment used by a Credit Party or any
of its Subsidiaries (or by any of its suppliers or vendors that is
material to its business) will not function as effectively and
reliably on and after January 1, 2000 as it does prior to January 1,
2000, to the extent such risk would cause or be reasonably expected
to cause a Material Adverse Effect.
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1.2 Computation of Time Periods and Other Definition Provisions.
For purposes of computation of periods of time hereunder, the word
"from" means "from and including" and the words "to" and "until" each mean "to
but excluding." References in this Credit Agreement to "Articles", "Sections",
"Schedules" or "Exhibits" shall be to Articles, Sections, Schedules or
Exhibits of or to this Credit Agreement unless otherwise specifically
provided.
1.3 Accounting Terms.
Except as otherwise expressly provided herein, all accounting terms
used herein shall be interpreted, and all financial statements and
certificates and reports as to financial matters required to be delivered to
the Lenders hereunder shall be prepared, in accordance with GAAP applied on a
consistent basis. All financial statements delivered to the Lenders hereunder
shall be accompanied by a statement from the Borrowers that GAAP has not
changed since the most recent financial statements delivered by the Borrowers
to the Lenders or if GAAP has changed describing such changes in detail and
explaining how such changes affect the financial statements. All calculations
made for the purposes of determining compliance with this Credit Agreement
shall (except as otherwise expressly provided herein) be made by application
of GAAP applied on a basis consistent with the most recent annual or quarterly
financial statements delivered pursuant to Section 7.1 (or, prior to the
delivery of the first financial statements pursuant to Section 7.1, consistent
with the financial statements described in Section 5.1(f)); provided, however,
if (a) the Borrowers shall object to determining such compliance on such basis
at the time of delivery of such financial statements due to any change in GAAP
or the rules promulgated with respect thereto or (b) the Administrative Agent
or the Required Lenders shall so object in writing within 60 days after
delivery of such financial statements (or after the Lenders have been informed
of the change in GAAP affecting such financial statements, if later), then
such calculations shall be made on a basis consistent with the most recent
financial statements delivered by the Borrowers to the Lenders as to which no
such objection shall have been made.
1.4 Joint Venture Investments.
With respect to any ownership of a Property by a Credit Party or one
of its Subsidiaries through a joint venture (a) NOI, Adjusted NOI, Annualized
Adjusted NOI, Annualized Capitalized Adjusted NOI, Annualized Modified
Adjusted NOI and Annualized Capitalized Modified Adjusted NOI shall be
calculated in accordance with such Credit Party's (or Subsidiary's) ownership
interest in the net cash flow of such joint venture and (b) Indebtedness and
Funded Debt shall be calculated as follows: (i) if the Indebtedness of such
joint venture is recourse to such Credit Party (or Subsidiary), then the
amount of such Indebtedness or Funded Debt that is recourse to such Credit
Party (or Subsidiary), and (ii) if the Indebtedness of such joint venture is
not recourse to such Credit Party (or Subsidiary), then such Credit Party's
(or Subsidiary's) pro rata interest in such Indebtedness or Funded Debt.
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SECTION 2
CREDIT FACILITY
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2.1 Revolving Loans.
(a) Revolving Loan Commitment. Subject to the terms and
conditions set forth herein, each Lender severally agrees to make
revolving loans (each a "Revolving Loan" and collectively the
"Revolving Loans") to the Borrowers, in Dollars, at any time and from
time to time, during the period from and including the Effective Date
to but not including the Revolving Loan Maturity Date or such earlier
date if the Revolving Committed Amount has been terminated as
provided herein; provided, however, that (i) the sum of the aggregate
principal amount of Revolving Loans outstanding plus the aggregate
amount of LOC Obligations outstanding shall not exceed the Revolving
Committed Amount, (ii) with respect to each individual Lender, the
Lender's pro rata share of outstanding Revolving Loans plus such
Lender's pro rata share of outstanding LOC obligations shall not
exceed such Lender's Revolving Loan Commitment Percentage of the
Revolving Committed Amount, and (iii) the aggregate principal amount
of Revolving Loans advanced for construction and development of
Properties shall not exceed at any one time (A) for such Properties
that are less than 50% preleased, $50,000,000 and (B) for all such
Properties, $100,000,000. Subject to the terms of this Credit
Agreement (including Section 3.3), the Borrowers may borrow, repay
and reborrow Revolving Loans. The Administrative Agent shall keep a
record of the purpose for which each of the Loans was advanced (and
of repayments applied thereto), which record shall be conclusive
absent prima facie error.
(b) Method of Borrowing for Revolving Loans. By no later
than 11:00 a.m. (i) one Business Day prior to the date of the
requested borrowing of Revolving Loans that will be Base Rate Loans
or (ii) three Business Days prior to the date of the requested
borrowing of Revolving Loans that will be Eurodollar Loans, the
Borrowers shall submit an irrevocable written Notice of Borrowing in
the form of Exhibit 2.1(b) to the Administrative Agent setting forth
(A) the amount requested, (B) whether such Revolving Loans shall be
Base Rate Loans or Eurodollar Loans, (C) with respect to Revolving
Loans that will be Eurodollar Loans, the Interest Period applicable
thereto; provided, however, that prior to December 31, 1998, or such
earlier date as agreed to by the Administrative Agent, the Borrowers
may not, without the consent of the Administrative Agent, request any
Interest Period for Eurodollar Loans other than a one-month Interest
Period, (D) the purpose of the proceeds of the Revolving Loans and
(E) certification that the Borrowers have complied in all respects
with Section 5.2.
(c) Funding of Revolving Loans. Upon receipt of a Notice of
Borrowing, the Administrative Agent shall promptly inform the Lenders
as to the terms thereof. Each Lender shall make its Revolving Loan
Commitment Percentage of the requested Revolving Loans available to
the Administrative Agent by 1:00 p.m. on the date specified in the
Notice of Borrowing by deposit, in Dollars, of immediately available
funds at the offices of the Administrative Agent at its principal
office in Charlotte, North Carolina or at such other address as the
Administrative Agent may designate in writing. The amount of the
requested Revolving Loans will then be made available to the
Borrowers by the Administrative Agent by crediting the account of the
Borrowers on the books of such office of the Administrative Agent, to
the extent the amount of such Revolving Loans are made available to
the Administrative Agent.
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No Lender shall be responsible for the failure or delay by
any other Lender in its obligation to make Revolving Loans hereunder;
provided, however, that the failure of any Lender to fulfill its
obligations hereunder shall not relieve any other Lender of its
obligations hereunder. Unless the Administrative Agent shall have
been notified by any Lender prior to the date of any such Revolving
Loan that such Lender does not intend to make available to the
Administrative Agent its portion of the Revolving Loans to be made on
such date, the Administrative Agent may assume that such Lender has
made such amount available to the Administrative Agent on the date of
such Revolving Loans, and the Administrative Agent in reliance upon
such assumption, may (in its sole discretion but without any
obligation to do so) make available to the Borrowers a corresponding
amount. If such corresponding amount is not in fact made available to
the Administrative Agent, the Administrative Agent shall be able to
recover such corresponding amount from such Lender. If such Lender
does not pay such corresponding amount forthwith upon the
Administrative Agent's demand therefor, the Administrative Agent will
promptly notify the Borrowers, and the Borrowers shall immediately
pay such corresponding amount to the Administrative Agent. The
Administrative Agent shall also be entitled to recover from the
Lender or the Borrowers, as the case may be, interest on such
corresponding amount in respect of each day from the date such
corresponding amount was made available by the Administrative Agent
to the Borrowers to the date such corresponding amount is recovered
by the Administrative Agent at a per annum rate equal to (i) from the
Borrowers at the applicable rate for such Revolving Loan pursuant to
the Notice of Borrowing and (ii) from a Lender at the Federal Funds
Rate.
(d) Reduction or Termination of Revolving Committed Amount.
Upon at least three Business Days' notice, the Borrowers shall have
the right to permanently terminate or reduce the aggregate unused
amount of the Revolving Committed Amount at any time or from time to
time; provided that (i) each partial reduction shall be in an
aggregate amount at least equal to $5,000,000 and in integral
multiples of $1,000,000 above such amount and (ii) no reduction shall
be made which would reduce the Revolving Committed Amount to an
amount less than the aggregate amount of outstanding Revolving Loans
plus the aggregate amount of outstanding LOC Obligations. Any
reduction in (or termination of) the Revolving Committed Amount shall
be permanent and may not be reinstated. The Administrative Agent
shall immediately notify the Lenders of any reduction in the
Revolving Committed Amount.
(e) Continuations and Conversions. The Borrowers shall have
the option, on any Business Day, to continue existing Eurodollar
Loans for a subsequent Interest Period, to convert Base Rate Loans
into Eurodollar Loans, or to convert Eurodollar Loans into Base Rate
Loans; provided, however, that (i) each such continuation or
conversion must be requested by the Borrowers pursuant to a written
Notice of Continuation/Conversion, in the form of Exhibit 2.1(e), in
compliance with the terms set forth below, (ii) except as provided in
Section 3.11, Eurodollar Loans may only be continued or converted on
the last day of the
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Interest Period applicable thereto, (iii) Eurodollar Loans may not be
continued nor may Base Rate Loans be converted into Eurodollar Loans
during the existence and continuation of a Default or Event of
Default and (iv) any request to continue a Eurodollar Loan that fails
to comply with the terms hereof or any failure to request a
continuation of a Eurodollar Loan at the end of an Interest Period
shall result in a conversion of such Eurodollar Loan to a Base Rate
Loan on the last day of the applicable Interest Period. Each
continuation or conversion must be requested by the Borrowers no
later than 11:00 a.m. (A) one Business Day prior to the date for a
requested conversion of a Eurodollar Loan to a Base Rate Loan or (B)
three Business Days prior to the date for a requested continuation of
a Eurodollar Loan or conversion of a Base Rate Loan to a Eurodollar
Loan, in each case pursuant to a written Notice of
Continuation/Conversion submitted to the Administrative Agent which
shall set forth (x) whether the Borrowers wish to continue or convert
such Loans and (y) if the request is to continue a Eurodollar Loan or
convert a Loan to a Eurodollar Loan, the Interest Period applicable
thereto; provided that prior to December 31, 1998, the Borrowers may
not, without the consent of the Administrative Agent, request any
Interest Period for Eurodollar Loans other than a one-month Interest
Period.
(f) Minimum Amounts/Restrictions on Loans. Each request for
a borrowing, conversion or continuation shall be subject to the
requirements that (i) each Eurodollar Loan shall be in a minimum
amount of $1,000,000 and in integral multiples of $100,000 in excess
thereof, (ii) each Base Rate Loan shall be in a minimum amount of
$500,000 (and integral multiples of $100,000 in excess thereof) or
the remaining amount available under the Revolving Committed Amount,
(iii) no more than six Loans shall be made during any one month and
(iv) no more than eight Eurodollar Loans shall be outstanding at any
one time. For the purposes of this Section, all Eurodollar Loans with
the same Interest Periods beginning on the same date shall be
considered as one Eurodollar Loan, but Eurodollar Loans with
different Interest Periods, even if they begin on the same date,
shall be considered as separate Eurodollar Loans.
(g) Notes. The Revolving Loans made by each Lender shall be
evidenced by a duly executed promissory note of the Borrowers to each
Lender in the face amount of its Revolving Loan Commitment Percentage
of the Revolving Committed Amount in substantially the form of
Exhibit 2.1(g).
2.2 Letter of Credit Subfacility.
(a) Issuance. Subject to the terms and conditions hereof and
of the LOC Documents, if any, and any other terms and conditions
which the Issuing Lender may reasonably require (so long as such
terms and conditions do not impose any financial obligation on or
require any Lien (not otherwise contemplated by this Credit
Agreement) to be given by any Credit Party or conflict with any
obligation of, or detract from any action which may be taken by, any
Credit Party or its Subsidiaries under this Credit Agreement), the
Issuing Lender shall from time to time upon request issue (from the
Effective Date to the Revolving Loan Maturity Date and in a form
reasonably acceptable to the Issuing Lender), in Dollars, and the LOC
Participants shall participate in, Letters of Credit for the account
of the Credit Parties or any of their Subsidiaries; provided,
however, that (i) the aggregate amount of LOC Obligations shall not
at any time exceed SIXTY FIVE MILLION
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DOLLARS ($65,000,000), (ii) the sum of the aggregate amount of LOC
Obligations outstanding plus Revolving Loans outstanding shall not
exceed the Revolving Committed Amount and (iii) with respect to each
individual LOC Participant, the LOC Participant's pro rata share of
outstanding Revolving Loans plus its pro rata share of outstanding
LOC Obligations shall not exceed such LOC Participant's Revolving
Loan Commitment Percentage of the Revolving Committed Amount. The
Issuing Lender may require the issuance and expiry date of each
Letter of Credit to be a Business Day. Each Letter of Credit shall be
either (x) a standby letter of credit issued to support the
obligations (including pension or insurance obligations), contingent
or otherwise, of a Credit Party or any of its Subsidiaries, or (y) a
commercial letter of credit in respect of the purchase of goods or
services by a Credit Party or any of its Subsidiaries in the ordinary
course of business. Except as otherwise expressly agreed upon by all
the LOC Participants, no Letter of Credit shall have an original
expiry date more than one year from the date of issuance or shall
have an expiry date beyond the Revolving Loan Maturity Date. Each
Letter of Credit shall comply with the related LOC Documents. Each
Letter of Credit shall be deemed to remain outstanding until it has
expired or the original documents evidencing such Letter of Credit
have been returned to the Issuing Lender.
(b) Notice and Reports. The request for the issuance of a
Letter of Credit shall be submitted to the Issuing Lender at least
three Business Days prior to the requested date of issuance. The
Issuing Lender will, at least quarterly and more frequently upon
request, provide to the Administrative Agent for dissemination to the
Lenders a detailed report specifying the Letters of Credit which are
then issued and outstanding and any activity with respect thereto
which may have occurred since the date of the prior report, and
including therein, among other things, the account party, the
beneficiary, the face amount, and the expiry date as well as any
payments or expirations which may have occurred. The Issuing Lender
will further provide to the Administrative Agent, promptly upon
request, copies of the Letters of Credit and the other LOC Documents.
(c) Participations.
(i) Each LOC Participant acknowledges and confirms
that it has a Participation Interest in the liability of the
Issuing Lender under each Existing Letter of Credit in an
amount equal to its Revolving Loan Commitment Percentage of
such Existing Letters of Credit. The Credit Parties'
reimbursement obligations in respect of each Existing Letter
of Credit, and each LOC Participant's obligations in
connection therewith, shall be governed by the terms of this
Credit Agreement.
(ii) Each LOC Participant, upon issuance of a
Letter of Credit, shall be deemed to have purchased without
recourse a risk participation from the Issuing Lender in
such Letter of Credit and each LOC Document related thereto
and the rights and obligations arising thereunder and any
collateral relating thereto, in each case in an amount equal
to its Revolving Loan Commitment Percentage of the
obligations under such Letter of Credit, and shall
absolutely, unconditionally and irrevocably assume, as
primary obligor and not as surety, and be obligated to pay
to the Issuing Lender therefor and discharge when due, its
Revolving Loan Commitment Percentage of the obligations
arising under such Letter of Credit. Without limiting the
scope and nature of each LOC Participant's participation in
any Letter of Credit, to the extent that the Issuing Lender
has not been reimbursed as required hereunder or under any
such Letter of Credit, each such LOC Participant shall pay
to the Issuing Lender its Revolving Loan Commitment
Percentage of such unreimbursed drawing in same day funds on
the day of notification by the Issuing Lender of an
unreimbursed drawing pursuant to the provisions of
subsection (d) or (e) hereof. The obligation of each LOC
Participant to so reimburse the Issuing Lender shall be
absolute and unconditional and shall not be affected by the
occurrence of a Default, an Event of Default or any other
occurrence or event. Any such reimbursement shall not
relieve or otherwise impair the obligation of the Borrowers
to reimburse the Issuing Lender under any Letter of Credit,
together with interest as hereinafter provided.
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(d) Reimbursement. In the event of any drawing under any
Letter of Credit, the Issuing Lender will promptly notify the
Borrowers. Unless the Borrowers shall promptly notify the Issuing
Lender of its intent to otherwise reimburse the Issuing Lender, the
Borrowers shall be deemed to have requested a Revolving Loan at a per
annum rate equal to the rate for Base Rate Loans in the amount of the
drawing, the proceeds of which will be used to satisfy the
reimbursement obligations. The Borrowers shall reimburse the Issuing
Lender on the day of drawing under any Letter of Credit either with
the proceeds of such Revolving Loan obtained hereunder or otherwise
in same day funds as provided herein or in the LOC Documents. If the
Borrowers shall fail to reimburse the Issuing Lender as provided
hereinabove, the unreimbursed amount of such drawing shall bear
interest at a per annum rate equal to the rate for Base Rate Loans
plus two percent (2%). The Borrowers' reimbursement obligations
hereunder shall be absolute and unconditional under all circumstances
irrespective of (but without waiver of) any rights of set-off,
counterclaim or defense to payment the applicable account party or
the Borrowers may claim or have against an Issuing Lender, the
Administrative Agent, the Lenders, the beneficiary of the Letter of
Credit drawn upon or any other Person, including without limitation,
any defense based on any failure of the applicable account party or
the Borrowers to receive consideration or the legality, validity,
regularity or unenforceability of the Letter of Credit. The Issuing
Lender will promptly notify the LOC Participants of the amount of any
unreimbursed drawing and each LOC Participant shall promptly pay to
the Issuing Lender, in Dollars and in immediately available funds,
the amount of such LOC Participant's Revolving Loan Commitment
Percentage of such unreimbursed drawing. Such payment shall be made
on the day such notice is received by such Lender from the Issuing
Lender if such notice is received at or before 2:00 p.m., otherwise
such payment shall be made at or before 12:00 Noon on the Business
Day next succeeding the day such notice is received. If such LOC
Participant does not pay such amount to the Issuing Lender in full
upon such request, such LOC Participant shall, on demand, pay to the
Issuing Lender interest on the unpaid amount during the period from
the date the LOC Participant received the notice regarding the
unreimbursed drawing until such LOC Participant pays such amount to
the Issuing Lender in full at a rate per annum equal to, if paid
within two Business Days of the date of drawing, the Federal Funds
Rate and thereafter at a rate equal to the Base Rate. Each LOC
Participant's obligation to make such payment to the Issuing Lender,
and the right of the Issuing Lender to receive the same, shall be
absolute and unconditional, shall not be affected by any circumstance
whatsoever and without regard to the termination of this Credit
Agreement or the Commitments hereunder, the existence of a Default or
Event of Default or the acceleration of the obligations hereunder and
shall be made without any offset, abatement, withholding or reduction
whatsoever. Simultaneously with the making of each such payment by a
LOC Participant to the Issuing Lender, such LOC Participant shall,
automatically and without any further action on the part of the
Issuing Lender or such LOC Participant, acquire a participation in an
amount equal to such payment (excluding the portion of such payment
constituting interest owing to the Issuing Lender) in the related
unreimbursed drawing portion of the LOC Obligation and in the
interest thereon and in the related LOC Documents, and shall have a
ratable interest in the Issuing Lender's claim against the Borrowers
with respect thereto.
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(e) Repayment with Revolving Loans. On any day on which the
Borrowers shall have requested, or been deemed to have requested, a
Revolving Loan borrowing to reimburse a drawing under a Letter of
Credit (as set forth in clause (d) above), the Administrative Agent
shall give notice to the applicable Lenders that a Revolving Loan has
been requested or deemed requested in connection with a drawing under
a Letter of Credit, in which case a Revolving Loan borrowing
comprised solely of Base Rate Loans (each such borrowing, a
"Mandatory Borrowing") shall be immediately made from all applicable
Lenders (without giving effect to any termination of the Commitments
pursuant to Section 9.2) pro rata based on each Lender's respective
Revolving Loan Commitment Percentage and the proceeds thereof shall
be paid directly to the Issuing Lender for application to the
respective LOC Obligations. Each such Lender hereby irrevocably
agrees to make such Revolving Loans immediately upon any such request
or deemed request on account of each such Mandatory Borrowing in the
amount and in the manner specified in the preceding sentence and on
the same such date notwithstanding (i) the amount of Mandatory
Borrowing may not comply with the minimum amount for borrowings of
Revolving Loans otherwise required hereunder, (ii) whether any
conditions specified in Section 5.2 are then satisfied, (iii) whether
a Default or Event of Default then exists, (iv) failure of any such
request or deemed request for Revolving Loans to be made by the time
otherwise required hereunder, (v) the date of such Mandatory
Borrowing, or (vi) any reduction in the Revolving Committed Amount or
any termination of the Commitments. In the event that any Mandatory
Borrowing cannot for any reason be made on the date otherwise
required above (including, without limitation, as a result of the
commencement of a proceeding under the Bankruptcy Code with respect
to a Credit Party), then each such Lender hereby agrees that it shall
forthwith fund (as of the date the Mandatory Borrowing would
otherwise have occurred, but adjusted for any payments received from
the Borrowers on or after such date and prior to such purchase) its
Participation Interest in the outstanding LOC Obligations; provided,
further, that in the event any Lender shall fail to fund its
Participation Interest on the day the Mandatory Borrowing would
otherwise have occurred, then the amount of such Lender's unfunded
Participation Interest therein shall bear interest payable to the
Issuing Lender upon demand, at the rate equal to, if paid within two
Business Days of such date, the Federal Funds Rate, and thereafter at
a rate equal to the Base Rate.
(f) Modification and Extension. The issuance of any
supplement, modification, amendment, renewal, or extensions to any
Letter of Credit shall, for purposes hereof, be treated in all
respects the same as the issuance of a new Letter of Credit
hereunder; provided that the fees to be paid pursuant to Section
3.4(b)(i) shall only be due if the expiration date of such Letter of
Credit is extended.
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(g) Uniform Customs and Practices. The Issuing Lender may
have the Letters of Credit be subject to The Uniform Customs and
Practice for Documentary Credits, as published as of the date of
issue by the International Chamber of Commerce (Publication No. 500
or the most recent publication, the "UCP"), in which case the UCP may
be incorporated therein and deemed in all respects to be a part
thereof.
(h) Responsibility of Issuing Lender. It is expressly
understood and agreed as between the Lenders that the obligations of
the Issuing Lender hereunder to the LOC Participants are only those
expressly set forth in this Credit Agreement and that the Issuing
Lender shall be entitled to assume that the conditions precedent set
forth in Section 5.2 have been satisfied unless it shall have
acquired actual knowledge that any such condition precedent has not
been satisfied; provided, however, that nothing set forth in this
Section 2.2 shall be deemed to prejudice the right of any LOC
Participant to recover from the Issuing Lender any amounts made
available by such LOC Participant to the Issuing Lender pursuant to
this Section 2.2 in the event that it is determined by a court of
competent jurisdiction that the payment with respect to a Letter of
Credit constituted gross negligence or willful misconduct on the part
of the Issuing Lender.
(i) Conflict with LOC Documents. In the event of any
conflict between this Credit Agreement and any LOC Document, this
Credit Agreement shall govern.
(j) Indemnification of Issuing Lender.
(i) In addition to its other obligations under this
Credit Agreement, the Credit Parties hereby agree to
protect, indemnify, pay and save the Issuing Lender harmless
from and against any and all claims, demands, liabilities,
damages, losses, costs, charges and expenses (including
reasonable attorneys' fees) that the Issuing Lender may
incur or be subject to as a consequence, direct or indirect,
of (A) the issuance of any Letter of Credit or (B) the
failure of the Issuing Lender to honor a drawing under a
Letter of Credit as a result of any act or omission, whether
rightful or wrongful, of any present or future de jure or de
facto Governmental Authority (all such acts or omissions,
herein called "Government Acts").
(ii) As between the Credit Parties and the Issuing
Lender, the Credit Parties shall assume all risks of the
acts, omissions or misuse of any Letter of Credit by the
beneficiary thereof. The Issuing Lender shall not be
responsible for: (A) the form, validity, sufficiency,
accuracy, genuineness or legal effect of any document
submitted by any Credit Party in connection with the
application for and issuance of any Letter of Credit, even
if it should in fact prove to be in any or all respects
invalid, insufficient, inaccurate, fraudulent or forged; (B)
the validity or sufficiency of any instrument transferring
or assigning or purporting to transfer or assign any Letter
of Credit or the rights or benefits thereunder or proceeds
thereof, in whole or in part, that may prove to be invalid
or ineffective for any reason; (C) failure of the
beneficiary of a Letter of Credit to comply fully with
conditions required in order to
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draw upon a Letter of Credit; (D) errors, omissions,
interruptions or delays in transmission or delivery of any
messages, by mail, cable, telegraph, telex or otherwise,
whether or not they be in cipher; (E) errors in
interpretation of technical terms; (F) any loss or delay in
the transmission or otherwise of any document required to be
delivered to the Issuing Lender in order to make a drawing
under a Letter of Credit or of the proceeds thereof; and (G)
any consequences arising from causes beyond the control of
the Issuing Lender, including, without limitation, any
Government Acts. None of the above shall affect, impair, or
prevent the vesting of the Issuing Lender's rights or powers
hereunder.
(iii) In furtherance and extension and not in
limitation of the specific provisions hereinabove set forth,
any action taken or omitted by the Issuing Lender, under or
in connection with any Letter of Credit or the related
certificates, if taken or omitted in good faith, shall not
put the Issuing Lender under any resulting liability to the
Credit Parties. It is the intention of the parties that this
Credit Agreement shall be construed and applied to protect
and indemnify the Issuing Lender against any and all risks
involved in the issuance of the Letters of Credit, all of
which risks are hereby assumed by the Credit Parties,
including, without limitation, any and all risks of the acts
or omissions, whether rightful or wrongful, of any present
or future Government Acts. The Issuing Lender shall not, in
any way, be liable for any failure by the Issuing Lender or
anyone else to pay any drawing under any Letter of Credit as
a result of any Government Acts or any other cause beyond
the control of the Issuing Lender.
(iv) Nothing in this subsection (j) is intended to
limit the reimbursement obligation of the Credit Parties
contained in this Section 2.2. The obligations of the Credit
Parties under this subsection (j) shall survive the
termination of this Credit Agreement. No act or omission of
any current or prior beneficiary of a Letter of Credit shall
in any way affect or impair the rights of the Issuing Lender
to enforce any right, power or benefit under this Credit
Agreement.
(v) Notwithstanding anything to the contrary
contained in this subsection (j), the Credit Parties shall
have no obligation to indemnify the Issuing Lender in
respect of any liability incurred by the Issuing Lender
arising solely out of the gross negligence or willful
misconduct of the Issuing Lender. Nothing in this Agreement
shall relieve the Issuing Lender of any liability to the
Credit Parties in respect of any action taken by the Issuing
Lender which action constitutes gross negligence or willful
misconduct of the Issuing Lender or a violation of the UCP
or Uniform Commercial Code (as applicable).
2.3 Joint and Several Liability of the Borrowers.
(a) Each of the Borrowers is accepting joint and several
liability hereunder in consideration of the financial accommodation
to be provided by the Lenders under this Credit Agreement, for the
mutual benefit, directly and indirectly, of each of the Borrowers and
in consideration of the undertakings of each of the Borrowers to
accept joint and several liability for the obligations of each of
them.
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(b) Each of the Borrowers jointly and severally hereby
irrevocably and unconditionally accepts, not merely as a surety but
also as a co-debtor, joint and several liability with the other
Borrowers with respect to the payment and performance of all of the
Obligations arising under this Credit Agreement and the other Credit
Documents, it being the intention of the parties hereto that all the
Obligations shall be the joint and several obligations of each of the
Borrowers without preferences or distinction among them.
(c) If and to the extent that any of the Borrowers shall
fail to make any payment with respect to any of the obligations
hereunder as and when due or to perform any of such obligations in
accordance with the terms thereof, then in each such event, the other
Borrowers will make such payment with respect to, or perform, such
obligation.
(d) The obligations of each Borrower under the provisions of
this Section 2.3 constitute full recourse obligations of such
Borrower, enforceable against it to the full extent of its properties
and assets.
(e) Except as otherwise expressly provided herein, to the
extent permitted by law, each Borrower hereby waives notice of
acceptance of its joint and several liability, notice of occurrence
of any Default or Event of Default (except to the extent notice is
expressly required to be given pursuant to the terms of this Credit
Agreement), or of any demand for any payment under this Credit
Agreement, notice of any action at any time taken or omitted by the
Administrative Agent or the Lenders under or in respect of any of the
Obligations hereunder, any requirement of diligence and, generally,
all demands, notices and other formalities of every kind in
connection with this Credit Agreement. Each Borrower hereby assents
to, and waives notice of, any extension or postponement of the time
for the payment of any of the Obligations hereunder, the acceptance
of any partial payment thereon, any waiver, consent or other action
or acquiescence by the Administrative Agent or the Lenders at any
time or times in respect of any default by any Borrower in the
performance or satisfaction of any term, covenant, condition or
provision of this Credit Agreement, any and all other indulgences
whatsoever by the Administrative Agent or the Lenders in respect of
any of the Obligations hereunder, and the taking, addition,
substitution or release, in whole or in part, at any time or times,
of any security for any of such Obligations or the addition,
substitution or release, in whole or in part, of any Borrower.
Without limiting the generality of the foregoing, each Borrower
assents to any other action or delay in acting or any failure to act
on the part of the Administrative Agent or the Lenders, including,
without limitation, any failure strictly or diligently to assert any
right or to pursue any remedy or to comply fully with applicable laws
or regulations thereunder which might, but for the provisions of this
Section 2.3, afford grounds for terminating, discharging or relieving
such Borrower, in whole or in part, from any of its obligations under
this Section 2.3, it being the intention of each Borrower that, so
long as any of the Obligations hereunder remain unsatisfied, the
obligations of such Borrower under this Section 2.3 shall not be
discharged except by performance and then only to the extent of such
performance. The obligations of each Borrower under this Section 2.3
shall not be diminished or rendered unenforceable by any winding up,
reorganization, arrangement, liquidation, reconstruction or similar
proceeding with respect to any reconstruction or similar proceeding
with respect to any Borrower or a Lender. The joint and several
liability of the Borrowers hereunder shall continue in full force and
effect notwithstanding any absorption, merger, amalgamation or any
other change whatsoever in the name, membership, constitution or
place of formation of any Borrower or any of the Lenders.
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(f) The provisions of this Section 2.3 are made for the
benefit of the Lenders and their successors and assigns, and may be
enforced by them from time to time against any of the Borrowers as
often as occasion therefor may arise and without requirement on the
part of the Lenders first to marshall any of its claims or to
exercise any of its rights against the other Borrower or to exhaust
any remedies available to it against the other Borrower or to resort
to any other source or means of obtaining payment of any of the
Obligations hereunder or to elect any other remedy. The provisions of
this Section 2.3 shall remain in effect until all the Obligations
hereunder shall have been paid in full or otherwise fully satisfied.
If at any time, any payment, or any part thereof, made in respect of
any of the Obligations, is rescinded or must otherwise be restored or
returned by the Lenders upon the insolvency, bankruptcy or
reorganization of any of the Borrowers, or otherwise, the provisions
of this Section 2.3 will forthwith be reinstated and in effect as
though such payment had not been made.
(g) Notwithstanding any provision to the contrary contained
herein or in any of the other Credit Documents, to the extent the
obligations of any Borrower shall be adjudicated to be invalid or
unenforceable for any reason (including, without limitation, because
of any applicable state or federal law relating to fraudulent
conveyances or transfers) then the obligations of such Borrower
hereunder shall be limited to the maximum amount that is permissible
under applicable law (whether federal or state and including, without
limitation, the Bankruptcy Code).
2.4 Appointment of BOP.
BRT hereby appoints BOP to act as its agent for all purposes under
this Credit Agreement (including, without limitation, with respect to all
matters related to the borrowing and repayment of Loans) and agrees that (i)
BOP may execute such documents on behalf of BRT as BOP deems appropriate in
its sole discretion and BRT shall be obligated by all of the terms of any such
document executed on its behalf, (ii) any notice or communication delivered by
the Administrative Agent or the Lender to BOP shall be deemed delivered to BRT
and (iii) the Administrative Agent or the Lender may accept, and be permitted
to rely on, any document, instrument or agreement executed by BOP on behalf of
BRT.
2.5 Non-Recourse.
Notwithstanding anything herein to the contrary, no recourse shall be
had against Brandywine Realty Services Partnership or any past, present or
future shareholder, officer, director or trustee of BRT for any obligation of
the Credit Parties under the Credit Documents, or for any claim based thereon
or otherwise in respect thereof; provided, however, that this Section 2.5
shall not restrict or limit any claim against any such Person arising out of
or occurring with respect to fraud or any intentional misrepresentation or any
act or omission that is willful or wanton or constitutes gross negligence or
willful misconduct.
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SECTION 3
GENERAL PROVISIONS APPLICABLE TO LOANS AND LETTERS OF CREDIT
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3.1 Interest.
(a) Interest Rate. All Base Rate Loans shall accrue interest
at the Adjusted Base Rate. All Eurodollar Loans shall accrue interest
at the Adjusted Eurodollar Rate.
(b) Default Rate of Interest. Upon the occurrence, and
during the continuance, of an Event of Default, the principal of and,
to the extent permitted by law, interest on the Loans and any other
amounts owing hereunder or under the other Credit Documents
(including without limitation fees and expenses) shall bear interest,
payable on demand, at a per annum rate equal to four percent (4%)
plus the rate which would otherwise be applicable (or if no rate is
applicable, then the rate for Base Rate Loans plus four percent (4%)
per annum); provided that unless the Loans have been accelerated,
interest, including the default rate of interest, shall only be due
and payable on the Interest Payment Dates.
(c) Interest Payments. Interest on Loans shall be due and
payable in arrears on each Interest Payment Date. If an Interest
Payment Date falls on a date which is not a Business Day, such
Interest Payment Date shall be deemed to be the succeeding Business
Day, except that in the case of Eurodollar Loans where the succeeding
Business Day falls in the succeeding calendar month, then on the
preceding Business Day.
3.2 Place and Manner of Payments.
All payments of principal, interest, fees, expenses and other amounts
to be made by a Borrower under this Agreement shall be received not later than
2:00 p.m. on the date when due, in Dollars and in immediately available funds,
by the Administrative Agent at its offices in Charlotte, North Carolina or the
Issuing Lender at its applicable address. Payments received after such time
shall be deemed to have been received on the next Business Day. The Borrowers
shall, at the time it makes any payment under this Agreement, specify to the
Administrative Agent or Issuing Lender, as applicable, the Loans, Letters of
Credit, fees or other amounts payable by the Borrowers hereunder to which such
payment is to be applied (and in the event that it fails to specify, or if
such application would be inconsistent with the terms hereof, the
Administrative Agent shall, subject to Section 3.7, distribute such payment to
the Lenders in such manner as the Administrative Agent may deem appropriate).
The Administrative Agent will distribute any such payment to the Lenders on
the day received if such payment is received prior to 2:00 p.m.; otherwise the
Administrative Agent will distribute such payment to the Lenders on the next
succeeding Business Day. Whenever any payment hereunder shall be stated to be
due on a day which is not a Business Day, the due date thereof shall be
extended to the next succeeding Business Day (subject to accrual of interest
and fees for the period of such extension), except that in the case of
Eurodollar Loans, if the extension would cause the payment to be made in the
next following calendar month, then such payment shall instead be made on the
next preceding Business Day.
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3.3 Prepayments.
(a) Voluntary Prepayments. The Borrowers shall have the
right to prepay Loans in whole or in part from time to time without
premium or penalty; provided, however, that (i) Eurodollar Loans may
only be prepaid on three Business Days' prior written notice to the
Administrative Agent and any prepayment of Eurodollar Loans will be
subject to Section 3.14 and (ii) each such partial prepayment of
Loans shall be in the minimum principal amount of $1,000,000 and
integral multiples of $100,000 in excess thereof.
(b) Mandatory Prepayments.
(i) Revolving Committed Amount. If at any
time (other than if consented to in writing by the Lenders)
the aggregate amount of Revolving Loans outstanding plus LOC
Obligations outstanding exceeds the Revolving Committed
Amount, the Borrowers shall promptly forward to the
Administrative Agent an amount such that the amount of
Revolving Loans outstanding plus LOC Obligations outstanding
does not exceed the Revolving Committed Amount (to be
applied as set forth in Section 3.3(c) below).
(ii) Equity Offerings. Upon receipt by a
Borrower or any of its Subsidiaries of the proceeds from an
Equity Issuance, the Borrowers shall immediately forward
100% of the Net Cash Proceeds (if any) to the Administrative
Agent as a prepayment of the Loans (to be applied as set
forth in Section 3.3(c) below).
(c) Application of Prepayments. All amounts required to be
paid pursuant to this Section 3.3 shall be applied first to Base Rate
Loans and then to Eurodollar Loans in direct order of Interest Period
maturities. All prepayments hereunder shall be subject to Section
3.14; provided that prepayments required to be made pursuant to
Section 3.3(b)(ii) that repay a Eurodollar Loan within 30 days of the
last day of its Interest Period shall not be subject to Section 3.14.
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3.4 Fees.
(a) Unused Fees. In consideration of the Revolving Committed
Amount being made available by the Lenders hereunder, the Borrowers
agree to pay to the Administrative Agent, for the pro rata benefit of
each Lender (based on each Lender's Revolving Loan Commitment
Percentage of the Revolving Committed Amount and based on the number
of days that each Lender was a Lender during the prior fiscal
quarter), a fee equal to (i) if the average Unused Commitment during
the prior fiscal quarter (or during such applicable portion of the
prior fiscal quarter if a Lender was not a Lender during the entire
fiscal quarter) is less than 50% of the Revolving Committed Amount,
.15% per annum on the Unused Commitment and (ii) if the average
Unused Commitment during the prior fiscal quarter (or during such
applicable portion of the prior fiscal quarter if a Lender was not a
Lender during the entire fiscal quarter) is equal to or greater than
50% of the Revolving Committed Amount, .20% per annum on the Unused
Commitment (the "Unused Fees"). The accrued Unused Fees shall
commence to accrue on the Effective Date and shall be due and payable
in arrears on the first day of each fiscal quarter of the Borrowers
(as well as on the Revolving Loan Maturity Date and on any date that
the Revolving Committed Amount is reduced) for the immediately
preceding fiscal quarter (or portion thereof), beginning with the
first of such dates to occur after the Effective Date.
(b) Letter of Credit Fees.
(i) Letter of Credit Fees. In consideration of the
issuance of Letters of Credit hereunder, the Borrowers agree
to pay to the Issuing Lender, for the pro rata benefit of
the applicable Lenders (based on each Lender's Revolving
Loan Commitment Percentage of the Revolving Committed
Amount), a per annum fee (the "Letter of Credit Fees") equal
to 1.125% on the average daily maximum amount available to
be drawn under each such Letter of Credit from the date of
issuance to the date of expiration. The Letter of Credit
Fees will be payable in full on the date of issuance of the
Letter of Credit.
(ii) Issuing Lender Fees. In addition to the Letter
of Credit Fees payable pursuant to subsection (i) above, the
Borrowers shall pay to the Issuing Lender for its own
account, without sharing by the other Lenders, (A) a fee
equal to .125% per annum on the total sum of the undrawn
amounts of all Letters of Credit issued by the Issuing
Lender, such fee to be paid in full on the date of issuance
of the Letter of Credit and (B) the customary charges from
time to time to the Issuing Lender for its services in
connection with the issuance, amendment, payment, transfer,
administration, cancellation and conversion of, and drawings
under, Letters of Credit (collectively, the "Issuing Lender
Fees").
(c) Administrative Fees. The Borrowers agree to pay to the
Administrative Agent, for its own account, an annual fee as agreed to
between the Borrowers and the Administrative Agent in the Fee Letter.
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(d) Additional Fees. If on March 31, 1999, the Leverage
Ratio is greater than .55 to 1.0, the Borrowers shall pay to the
Administrative Agent, for the pro rata benefit of the Lenders, a fee
equal to .25% of the then Revolving Committed Amount.
3.5 Payment in full at Maturity; Extension of Maturity.
(a) On the Revolving Loan Maturity Date, the entire
outstanding principal balance of all Revolving Loans and all LOC
Obligations, together with accrued but unpaid interest and all other
sums owing with respect thereto, shall be due and payable in full,
unless accelerated sooner pursuant to Section 9.2.
(b) If on the Initial Revolving Loan Maturity Date (i) no
Default or Event of Default exists and is continuing and (ii) the
Borrowers pay to the Administrative Agent, for the pro rata benefit
of the Lenders, an extension fee equal to .20% of the then Revolving
Committed Amount, the Borrowers may elect to extend the Revolving
Loan Maturity Date to September 30, 2002. The Borrowers shall give
written notice to the Administrative Agent of its desire to effect
such election at least 30 days, but no more than 90 days, prior to
the Initial Revolving Loan Maturity Date.
3.6 Computations of Interest and Fees.
(a) Except for Base Rate Loans which shall be calculated on
the basis of a 365 or 366 day year as the case may be, all
computations of interest and fees hereunder shall be made on the
basis of the actual number of days elapsed over a year of 360 days.
Interest shall accrue from and include the date of borrowing (or
continuation or conversion) but exclude the date of payment.
(b) It is the intent of the Lenders and the Credit Parties
to conform to and contract in strict compliance with applicable usury
law from time to time in effect. All agreements between the Lenders
and the Credit Parties are hereby limited by the provisions of this
paragraph which shall override and control all such agreements,
whether now existing or hereafter arising and whether written or
oral. In no way, nor in any event or contingency (including but not
limited to prepayment or acceleration of the maturity of any
obligation), shall the interest taken, reserved, contracted for,
charged, or received under this Credit Agreement, under the Notes or
otherwise, exceed the maximum nonusurious amount permissible under
applicable law. If, from any possible construction of any of the
Credit Documents or any other document, interest would otherwise be
payable in excess of the maximum nonusurious amount, any such
construction shall be subject to the provisions of this paragraph and
such interest shall be automatically reduced to the maximum
nonusurious amount permitted under applicable law, without the
necessity of execution of any amendment or new document. If any
Lender shall ever receive anything of value which is characterized as
interest on the Loans under applicable law and which would, apart
from this provision, be in excess of the maximum lawful amount, an
amount equal to the amount which would have been excessive interest
shall, without penalty, be applied to the reduction of the principal
amount owing on the Loans and not to the payment of interest, or
refunded to the Credit Parties or the other payor thereof if and to
the extent such amount which would have been excessive exceeds such
unpaid principal amount of the Loans. The right to
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demand payment of the Loans or any other indebtedness evidenced by
any of the Credit Documents does not include the right to receive any
interest which has not otherwise accrued on the date of such demand,
and the Lenders do not intend to charge or receive any unearned
interest in the event of such demand. All interest paid or agreed to
be paid to the Lenders with respect to the Loans shall, to the extent
permitted by applicable law, be amortized, prorated, allocated, and
spread throughout the full stated term (including any renewal or
extension) of the Loans so that the amount of interest on account of
such indebtedness does not exceed the maximum nonusurious amount
permitted by applicable law.
3.7 Pro Rata Treatment.
Except to the extent otherwise provided herein:
(a) Loans. Each Revolving Loan borrowing, each payment or
prepayment of principal of any Loan, each payment of fees (other than
the Administrative Fees, the Issuing Lender Fees and, as set forth in
Section 3.4(a), the Unused Fees), each reduction of the Revolving
Committed Amount, and each conversion or continuation of any Loan,
shall (except as otherwise provided in Section 3.11) be allocated pro
rata among the Lenders in accordance with the respective Revolving
Loan Commitment Percentages of such Lenders (or, if the Commitments
of such Lenders have expired or been terminated, in accordance with
the respective principal amounts of the outstanding Loans and
Participation Interests of such Lenders); provided that, if any
Lender shall have failed to pay its applicable pro rata share of any
Revolving Loan, then any amount to which such Lender would otherwise
be entitled pursuant to this Section 3.7 shall instead be payable to
the Administrative Agent until the share of such Loan not funded by
such Lender has been repaid; provided further, that in the event any
amount paid to any Lender pursuant to this Section 3.7 is rescinded
or must otherwise be returned by the Administrative Agent, each
Lender shall, upon the request of the Administrative Agent, repay to
the Administrative Agent the amount so paid to such Lender, with
interest for the period commencing on the date such payment is
returned by the Administrative Agent until the date the
Administrative Agent receives such repayment at a rate per annum
equal to, during the period to but excluding the date two Business
Days after such request, the Federal Funds Rate, and thereafter, at
the Base Rate plus two percent (2%) per annum.
(b) Letters of Credit. Each payment of unreimbursed drawings
in respect of LOC Obligations shall be allocated to each LOC
Participant pro rata in accordance with its Revolving Loan Commitment
Percentage; provided that, if any LOC Participant shall have failed
to pay its applicable pro rata share of any drawing under any Letter
of Credit, then any amount to which such LOC Participant would
otherwise be entitled pursuant to this subsection (b) shall instead
be payable to the Issuing Lender until the share of such unreimbursed
drawing not funded by such Lender has been repaid; provided further,
that in the event any amount paid to any LOC Participant pursuant to
this subsection (b) is rescinded or must otherwise be returned by the
Issuing Lender, each LOC Participant shall, upon the request of the
Issuing Lender, repay to the Administrative Agent for the account of
the Issuing Lender the amount so paid to such LOC Participant, with
interest for the period commencing on the date such payment is
returned by the Issuing Lender
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until the date the Issuing Lender receives such repayment at a rate
per annum equal to, during the period to but excluding the date two
Business Days after such request, the Federal Funds Rate, and
thereafter, the Base Rate plus two percent (2%) per annum.
3.8 Sharing of Payments.
The Lenders agree among themselves that, except to the extent
otherwise provided herein, in the event that any Lender shall obtain payment
in respect of any Loan or any other obligation owing to such Lender under this
Credit Agreement through the exercise of a right of setoff, banker's lien or
counterclaim, or pursuant to a secured claim under Section 506 of the
Bankruptcy Code or other security or interest arising from, or in lieu of,
such secured claim, received by such Lender under any applicable bankruptcy,
insolvency or other similar law or otherwise, or by any other means, in excess
of its pro rata share of such payment as provided for in this Credit
Agreement, such Lender shall promptly pay in cash or purchase from the other
Lenders a participation in such Loans and other obligations in such amounts,
and make such other adjustments from time to time, as shall be equitable to
the end that all Lenders share such payment in accordance with their
respective ratable shares as provided for in this Credit Agreement. The
Lenders further agree among themselves that if payment to a Lender obtained by
such Lender through the exercise of a right of setoff, banker's lien,
counterclaim or other event as aforesaid shall be rescinded or must otherwise
be restored, each Lender which shall have shared the benefit of such payment
shall, by payment in cash or a repurchase of a participation theretofore sold,
return its share of that benefit (together with its share of any accrued
interest payable with respect thereto) to each Lender whose payment shall have
been rescinded or otherwise restored. The Credit Parties agree that any Lender
so purchasing such a participation may, to the fullest extent permitted by
law, exercise all rights of payment, including setoff, banker's lien or
counterclaim, with respect to such participation as fully as if such Lender
were a holder of such Loan or other obligation in the amount of such
participation. Except as otherwise expressly provided in this Credit
Agreement, if any Lender shall fail to remit to the Administrative Agent or
any other Lender an amount payable by such Lender to the Administrative Agent
or such other Lender pursuant to this Credit Agreement on the date when such
amount is due, such payments shall be made together with interest thereon for
each date from the date such amount is due until the date such amount is paid
to the Administrative Agent or such other Lender at a rate per annum equal to
the Federal Funds Rate. If under any applicable bankruptcy, insolvency or
other similar law, any Lender receives a secured claim in lieu of a setoff to
which this Section 3.8 applies, such Lender shall, to the extent practicable,
exercise its rights in respect of such secured claim in a manner consistent
with the rights of the Lenders under this Section 3.8 to share in the benefits
of any recovery on such secured claim.
3.9 Capital Adequacy.
If, after the date hereof, any Lender has determined that the
adoption or the becoming effective of, or any change in, or any change by any
Governmental Authority, central bank or comparable agency charged with the
interpretation or administration thereof in the interpretation or
administration of, any applicable law, rule or regulation regarding capital
adequacy, or compliance by such Lender, or its parent corporation, with any
request or directive regarding capital adequacy (whether or not having the
force of law) of any such authority, central bank or comparable agency, has or
would have the effect of reducing the rate of return on such Lender's (or
parent corporation's) capital or assets as a consequence of its commitments or
obligations hereunder to a level below that
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which such Lender, or its parent corporation, could have achieved but for such
adoption, effectiveness, change or compliance (taking into consideration such
Lender's (or parent corporation's) policies with respect to capital adequacy),
then, upon notice from such Lender to the Borrowers and the Administrative
Agent, the Borrowers shall be obligated to pay to such Lender such additional
amount or amounts as will compensate such Lender on an after-tax basis (after
taking into account applicable deductions and credits in respect of the amount
indemnified) for such reduction. Each determination by any such Lender of
amounts owing under this Section shall, absent manifest error, be conclusive
and binding on the parties hereto. This covenant shall survive the termination
of this Credit Agreement and the payment of the Loans and all other amounts
payable hereunder.
3.10 Inability To Determine Interest Rate.
If prior to the first day of any Interest Period, the Administrative
Agent shall have determined in good faith (which determination shall be
conclusive and binding upon the Borrowers) that, by reason of circumstances
affecting the relevant market, adequate and reasonable means do not exist for
ascertaining the Adjusted Eurodollar Rate for such Interest Period, the
Administrative Agent shall give telecopy or telephonic notice thereof to the
Borrowers and the Lenders as soon as practicable thereafter, and will also
give prompt written notice to the Borrowers when such conditions no longer
exist. If such notice is given (a) any Eurodollar Loans requested to be made
on the first day of such Interest Period shall be made as Base Rate Loans and
(b) any Loans that were to have been converted on the first day of such
Interest Period to or continued as Eurodollar Loans shall be converted to or
continued as Base Rate Loans. Until such notice has been withdrawn by the
Administrative Agent, no further Eurodollar Loans shall be made or continued
as such, nor shall the Borrowers have the right to convert Base Rate Loans to
Eurodollar Loans.
3.11 Illegality.
Notwithstanding any other provision herein, if the adoption of or any
change in any Requirement of Law or in the interpretation or application
thereof occurring after the Closing Date shall make it unlawful for any Lender
to make or maintain Eurodollar Loans as contemplated by this Credit Agreement,
(a) such Lender shall promptly give written notice of such circumstances to
the Borrowers and the Administrative Agent (which notice shall be promptly
withdrawn whenever such circumstances no longer exist), (b) the commitment of
such Lender hereunder to make Eurodollar Loans, continue Eurodollar Loans as
such and convert a Base Rate Loan to Eurodollar Loans shall forthwith be
cancelled and, until such time as it shall no longer be unlawful for such
Lender to make or maintain Eurodollar Loans, such Lender shall then have a
commitment only to make a Base Rate Loan when a Eurodollar Loan is requested
and (c) such Lender's Loans then outstanding as Eurodollar Loans, if any,
shall be converted automatically to Base Rate Loans on the respective last
days of the then current Interest Periods with respect to such Loans or within
such earlier period as required by law. If any such conversion of a Eurodollar
Loan occurs on a day which is not the last day of the then current Interest
Period with respect thereto, the Borrowers shall pay to such Lender such
amounts, if any, as may be required pursuant to Section 3.14; provided that no
such payments shall be required if the conversion of a Eurodollar Loan occurs
within 30 days of the last day of the Interest Period of such Eurodollar Loan.
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3.12 Requirements of Law.
If the adoption of or any change in any Requirement of Law or in the
interpretation or application thereof applicable to any Lender, or compliance
by any Lender with any request or directive (whether or not having the force
of law) from any central bank or other Governmental Authority, in each case
made subsequent to the Closing Date (or, if later, the date on which such
Lender becomes a Lender):
(a) shall subject such Lender to any tax of any kind
whatsoever with respect to any Letter of Credit, any Eurodollar Loans
made by it or its obligation to make Eurodollar Loans, or change the
basis of taxation of payments to such Lender in respect thereof
(except for Non-Excluded Taxes covered by Section 3.13 (including
Non-Excluded Taxes imposed solely by reason of any failure of such
Lender to comply with its obligations under Section 3.13(b)) and
changes in taxes measured by or imposed upon the overall net income,
or franchise tax (imposed in lieu of such net income tax), of such
Lender or its applicable lending office, branch, or any affiliate
thereof);
(b) shall impose, modify or hold applicable any reserve,
special deposit, compulsory loan or similar requirement against
assets held by, deposits or other liabilities in or for the account
of, advances, loans or other extensions of credit by, or any other
acquisition of funds by, any office of such Lender which is not
otherwise included in the determination of the Adjusted Eurodollar
Rate hereunder; or
(c) shall impose on such Lender any other condition
(excluding any tax of any kind whatsoever);
and the result of any of the foregoing is to increase the cost to such Lender,
by an amount which such Lender deems to be material, of making, converting
into, continuing or maintaining Eurodollar Loans or issuing or participating
in Letters of Credit or to reduce any amount receivable hereunder in respect
thereof, then, in any such case, upon notice to the Borrowers from such
Lender, through the Administrative Agent, in accordance herewith, the
Borrowers shall be obligated to promptly pay such Lender, upon its demand, any
additional amounts necessary to compensate such Lender on an after-tax basis
(after taking into account applicable deductions and credits in respect of the
amount indemnified) for such increased cost or reduced amount receivable,
provided that, in any such case, the Borrowers may elect to convert the
Eurodollar Loans made by such Lender hereunder to Base Rate Loans by giving
the Administrative Agent at least one Business Day's notice of such election,
in which case the Borrowers shall promptly pay to such Lender, upon demand,
without duplication, such amounts, if any, as may be required pursuant to
Section 3.14. If any Lender becomes entitled to claim any additional amounts
pursuant to this Section 3.12, it shall provide prompt notice thereof to the
Borrowers, through the Administrative Agent, certifying (x) that one of the
events described in this Section 3.12 has occurred and describing in
reasonable detail the nature of such event, (y) as to the increased cost or
reduced amount resulting from such event and (z) as to the additional amount
demanded by such Lender and a reasonably detailed explanation of the
calculation thereof. Such a certificate as to any additional amounts payable
pursuant to this Section 3.12 submitted by such Lender, through the
Administrative Agent, to the Borrowers shall be conclusive and binding on the
parties hereto in the absence of manifest error. This covenant shall survive
the termination of this Credit Agreement and the payment of the Loans and all
other amounts payable hereunder.
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3.13 Taxes.
(a) Except as provided below in this Section 3.13, all
payments made by the Borrowers under this Credit Agreement and any
Notes shall be made free and clear of, and without deduction or
withholding for or on account of, any present or future income, stamp
or other taxes, levies, imposts, duties, charges, fees, deductions or
withholdings, now or hereafter imposed, levied, collected, withheld
or assessed by any court, or governmental body, agency or other
official, excluding taxes measured by or imposed upon the overall net
income of any Lender or its applicable lending office, or any branch
or affiliate thereof, and all franchise taxes, branch taxes, taxes on
doing business or taxes on the overall capital or net worth of any
Lender or its applicable lending office, or any branch or affiliate
thereof, in each case imposed in lieu of net income taxes: (i) by the
jurisdiction under the laws of which such Lender, applicable lending
office, branch or affiliate is organized or is located, or in which
its principal executive office is located, or any nation within which
such jurisdiction is located or any political subdivision thereof; or
(ii) by reason of any connection between the jurisdiction imposing
such tax and such Lender, applicable lending office, branch or
affiliate other than a connection arising solely from such Lender
having executed, delivered or performed its obligations, or received
payment under or enforced, this Credit Agreement or any Notes. If any
such non-excluded taxes, levies, imposts, duties, charges, fees,
deductions or withholdings ("Non-Excluded Taxes") are required to be
withheld from any amounts payable to the Administrative Agent or any
Lender hereunder or under any Notes, (A) the amounts so payable to
the Administrative Agent or such Lender shall be increased to the
extent necessary to yield to the Administrative Agent or such Lender
(after payment of all Non-Excluded Taxes) interest on any such other
amounts payable hereunder at the rates or in the amounts specified in
this Credit Agreement and any Notes, provided, however, that the
Borrowers shall be entitled to deduct and withhold any Non-Excluded
Taxes and shall not be required to increase any such amounts payable
to any Lender that is not organized under the laws of the United
States of America or a state thereof if such Lender fails to comply
with the requirements of paragraph (b) of this Section 3.13 whenever
any Non-Excluded Taxes are payable by the Borrowers, and (B) as
promptly as possible after requested the Borrowers shall send to the
Administrative Agent for its own account or for the account of such
Lender, as the case may be, a certified copy of an original official
receipt received by the Borrowers showing payment thereof. If the
Borrowers fail to pay any Non-Excluded Taxes when due to the
appropriate taxing authority or fails to remit to the Administrative
Agent the required receipts or other required documentary evidence,
the Borrowers shall indemnify the Administrative Agent and any Lender
for any incremental taxes, interest or penalties that may become
payable by the Administrative Agent or any Lender as a result of any
such failure. The agreements in this subsection shall survive the
termination of this Credit Agreement and the payment of the Loans and
all other amounts payable hereunder.
(b) Each Lender that is not incorporated under the laws of
the United States of America or a state thereof shall:
(i) (A) on or before the date of any payment by
the Borrowers under this Credit Agreement or Notes to such
Lender, deliver to the Borrowers and the
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Administrative Agent (x) two duly completed copies of United
States Internal Revenue Service Form 1001 or 4224, or
successor applicable form, as the case may be, certifying
that it is entitled to receive payments under this Credit
Agreement and any Notes without deduction or withholding of
any United States federal income taxes and (y) an Internal
Revenue Service Form W-8 or W-9, or successor applicable
form, as the case may be, certifying that it is entitled to
an exemption from United States backup withholding tax;
(B) deliver to the Borrowers and the
Administrative Agent two further copies of any such form or
certification on or before the date that any such form or
certification expires or becomes obsolete and after the
occurrence of any event requiring a change in the most
recent form previously delivered by it to the Borrowers; and
(C) obtain such extensions of time for
filing and complete such forms or certifications as may
reasonably be requested by the Borrowers or the
Administrative Agent; or
(ii) in the case of any such Lender that is
not a "bank" within the meaning of Section 881(c)(3)(A) of
the Internal Revenue Code, (A) represent to the Borrowers
(for the benefit of the Borrowers and the Administrative
Agent) that it is not a bank within the meaning of Section
881(c)(3)(A) of the Internal Revenue Code, (B) agree to
furnish to the Borrowers, on or before the date of any
payment by the Borrowers, with a copy to the Administrative
Agent, two accurate and complete original signed copies of
Internal Revenue Service Form W-8, or successor applicable
form certifying to such Lender's legal entitlement at the
date of such certificate to an exemption from U.S.
withholding tax under the provisions of Section 881(c) of
the Internal Revenue Code with respect to payments to be
made under this Credit Agreement and any Notes (and to
deliver to the Borrowers and the Administrative Agent two
further copies of such form on or before the date it expires
or becomes obsolete and after the occurrence of any event
requiring a change in the most recently provided form and,
if necessary, obtain any extensions of time reasonably
requested by the Borrowers or the Administrative Agent for
filing and completing such forms), and (C) agree, to the
extent legally entitled to do so, upon reasonable request by
the Borrowers, to provide to the Borrowers (for the benefit
of the Borrowers and the Administrative Agent) such other
forms as may be reasonably required in order to establish
the legal entitlement of such Lender to an exemption from
withholding with respect to payments under this Credit
Agreement and any Notes.
Notwithstanding the above, if any change in treaty, law or regulation
has occurred after the date such Person becomes a Lender hereunder
which renders all such forms inapplicable or which would prevent such
Lender from duly completing and delivering any such form with respect
to it and such Lender so advises the Borrowers and the Administrative
Agent then such Lender shall be exempt from such requirements. Each
Person that shall become a Lender or a participant of a Lender
pursuant to Section 11.3 shall, upon the effectiveness of the related
transfer, be required to provide all of the forms, certifications and
statements
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required pursuant to this subsection (b); provided that in the case
of a participant of a Lender, the obligations of such participant of
a Lender pursuant to this subsection (b) shall be determined as if
the participant of a Lender were a Lender except that such
participant of a Lender shall furnish all such required forms,
certifications and statements to the Lender from which the related
participation shall have been purchased.
3.14 Compensation.
Except as expressly set forth in Section 3.3(c), the Borrowers
promise to indemnify each Lender and to hold each Lender harmless from any
loss or expense which such Lender may sustain or incur as a consequence of (a)
default by the Borrowers in making a borrowing of, conversion into or
continuation of Eurodollar Loans after the Borrowers have given a notice
requesting the same in accordance with the provisions of this Credit
Agreement, (b) default by the Borrowers in making any prepayment of a
Eurodollar Loan after the Borrowers have given a notice thereof in accordance
with the provisions of this Credit Agreement and (c) the making of a
prepayment of Eurodollar Loans on a day which is not the last day of an
Interest Period with respect thereto. Such indemnification shall be calculated
by the Administrative Agent and may include an amount equal to (i) the amount
of interest which would have accrued on the amount so prepaid, or not so
borrowed, converted or continued, for the period from the date of such
prepayment or of such failure to borrow, convert or continue to the last day
of the applicable Interest Period (or, in the case of a failure to borrow,
convert or continue, the Interest Period that would have commenced on the date
of such failure) in each case at the applicable rate of interest for such
Eurodollar Loans provided for herein minus (ii) the amount of interest which
would have accrued to such Lender on such amount by placing such amount on
deposit for a comparable period with leading banks in the interbank Eurodollar
market. The agreements in this Section shall survive the termination of this
Credit Agreement and the payment of the Loans and all other amounts payable
hereunder. Notwithstanding the foregoing, any prepayment of a Eurodollar Loan
made hereunder (as a result of a mandatory requirement of this Credit
Agreement) within thirty (30) days of the end of the Interest Period with
respect to such Eurodollar Loan, shall not be subject to this Section 3.14.
3.15 Mitigation; Mandatory Assignment.
Each Lender shall use reasonable efforts to avoid or mitigate any
increased cost or suspension of the availability of an interest rate under
Sections 3.9 through 3.14 inclusive to the greatest extent practicable
(including transferring the Loans to another lending office or affiliate of a
Lender) unless, in the opinion of such Lender, such efforts would be likely to
have an adverse effect upon it. In the event a Lender makes a request to the
Borrowers for additional payments in accordance with Sections 3.9, 3.10, 3.11,
3.12, 3.13 or 3.14 or a Lender becomes a Defaulting Lender, then, provided
that no Default or Event of Default has occurred and is continuing at such
time, the Borrowers may, at their own expense (such expense to include any
transfer fee payable to the Administrative Agent under Section 11.3(b) and any
expense pursuant to Section 3.14), and in their sole discretion, require such
Lender to transfer and assign in whole (but not in part), without recourse (in
accordance with and subject to the terms and conditions of Section 11.3(b)),
all of its interests, rights and obligations under this Credit Agreement to an
assignee which shall assume such assigned obligations (which assignee may be
another Lender, if a Lender accepts such assignment); provided that (a) such
assignment shall not conflict with any law, rule or regulation or order of any
court or other governmental authority and (b) the
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Borrowers or such assignee shall have paid to the assigning Lender in
immediately available funds the principal of and interest accrued to the date
of such payment on the portion of the Loans hereunder held by such assigning
Lender and all other amounts owed to such assigning Lender hereunder,
including amounts owed pursuant to Sections 3.9 through 3.14.
SECTION 4
GUARANTY
--------
4.1 Guaranty of Payment.
Subject to Section 4.7 below, each of the Guarantors hereby, jointly
and severally, unconditionally guarantees to each Lender, the prompt payment
of the Obligations in full when due (whether at stated maturity, as a
mandatory prepayment, by acceleration or otherwise). This Guaranty is a
guaranty of payment and not of collection and is a continuing guaranty and
shall apply to all Obligations whenever arising.
4.2 Obligations Unconditional.
The obligations of the Guarantors hereunder are absolute and
unconditional, irrespective of the value, genuineness, validity, regularity or
enforceability of any of the Credit Documents or any other agreement or
instrument referred to therein, to the fullest extent permitted by applicable
law, irrespective of any other circumstance whatsoever which might otherwise
constitute a legal or equitable discharge or defense of a surety or guarantor.
Each Guarantor agrees that this Guaranty may be enforced by the Lenders
without the necessity at any time of resorting to or exhausting any other
security or collateral and without the necessity at any time of having
recourse to the Notes or any other of the Credit Documents or any collateral,
if any, hereafter securing the Obligations or otherwise and each Guarantor
hereby waives the right to require the Lenders to proceed against the
Borrowers or any other Person (including a co-guarantor) or to require the
Lenders to pursue any other remedy or enforce any other right. Each Guarantor
further agrees that it shall have no right of subrogation, indemnity,
reimbursement or contribution against the Borrowers or any other Guarantor of
the Obligations for amounts paid under this Guaranty until such time as the
Lenders have been paid in full, all Commitments under the Credit Agreement
have been terminated and no Person or Governmental Authority shall have any
right to request any return or reimbursement of funds from the Lenders in
connection with monies received under the Credit Documents. Each Guarantor
further agrees that nothing contained herein shall prevent the Lenders from
suing on the Notes or any of the other Credit Documents or foreclosing its
security interest in or Lien on any collateral, if any, securing the
Obligations or from exercising any other rights available to it under this
Credit Agreement, the Notes, any other of the Credit Documents, or any other
instrument of security, if any, and the exercise of any of the aforesaid
rights and the completion of any foreclosure proceedings shall not constitute
a discharge of any of any Guarantor's obligations hereunder; it being the
purpose and intent of each Guarantor that its obligations hereunder shall be
absolute, independent and unconditional under any and all circumstances.
Neither any Guarantor's obligations under this Guaranty nor any remedy for the
enforcement thereof shall be impaired, modified, changed or released in any
manner whatsoever by an impairment, modification, change, release or
limitation of the liability of the Borrowers or by reason of the bankruptcy or
insolvency of
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the Borrowers. Each Guarantor waives any and all notice of the creation,
renewal, extension or accrual of any of the Obligations and notice of or proof
of reliance of by the Administrative Agent or any Lender upon this Guarantee
or acceptance of this Guarantee. The Obligations, and any of them, shall
conclusively be deemed to have been created, contracted or incurred, or
renewed, extended, amended or waived, in reliance upon this Guarantee. All
dealings between the Borrowers and any of the Guarantors, on the one hand, and
the Administrative Agent and the Lenders, on the other hand, likewise shall be
conclusively presumed to have been had or consummated in reliance upon this
Guarantee. The Guarantors further agree to all rights of set-off as set forth
in Section 11.2.
4.3 Modifications.
Each Guarantor agrees that (a) all or any part of the security now or
hereafter held for the Credit Party Obligations, if any, may be exchanged,
compromised or surrendered from time to time; (b) the Lenders shall not have
any obligation to protect, perfect, secure or insure any such security
interests, liens or encumbrances now or hereafter held, if any, for the
Obligations or the properties subject thereto; (c) the time or place of
payment of the Obligations may be changed or extended, in whole or in part, to
a time certain or otherwise, and may be renewed or accelerated, in whole or in
part; (d) the Borrowers and any other party liable for payment under the
Credit Documents may be granted indulgences generally; (e) any of the
provisions of the Notes or any of the other Credit Documents may be modified,
amended or waived; (f) any party (including any co-guarantor) liable for the
payment thereof may be granted indulgences or be released; and (g) any deposit
balance for the credit of the Borrowers or any other party liable for the
payment of the Obligations or liable upon any security therefor may be
released, in whole or in part, at, before or after the stated, extended or
accelerated maturity of the Obligations, all without notice to or further
assent by such Guarantor, which shall remain bound thereon, notwithstanding
any such exchange, compromise, surrender, extension, renewal, acceleration,
modification, indulgence or release.
4.4 Waiver of Rights.
Each Guarantor expressly waives to the fullest extent permitted by
applicable law: (a) notice of acceptance of this Guaranty by the Lenders and
of all extensions of credit to the Borrowers by the Lenders; (b) presentment
and demand for payment or performance of any of the Obligations; (c) protest
and notice of dishonor or of default (except as specifically required in the
Credit Agreement) with respect to the Obligations or with respect to any
security therefor; (d) notice of the Lenders obtaining, amending, substituting
for, releasing, waiving or modifying any security interest, lien or
encumbrance, if any, hereafter securing the Obligations, or the Lenders'
subordinating, compromising, discharging or releasing such security interests,
liens or encumbrances, if any; and (e) all other notices to which such
Guarantor might otherwise be entitled.
4.5 Reinstatement.
The obligations of the Guarantors under this Section 4 shall be
automatically reinstated if and to the extent that for any reason any payment
by or on behalf of any Person in respect of the Obligations is rescinded or
must be otherwise restored by any holder of any of the Obligations, whether as
a result of any proceedings in bankruptcy or reorganization or otherwise, and
each Guarantor agrees that it will indemnify the Administrative Agent and each
Lender on demand for
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all reasonable costs and expenses (including, without limitation, reasonable
fees of counsel) incurred by the Administrative Agent or such Lender in
connection with such rescission or restoration, including any such costs and
expenses incurred in defending against any claim alleging that such payment
constituted a preference, fraudulent transfer or similar payment under any
bankruptcy, insolvency or similar law.
4.6 Remedies.
The Guarantors agree that, as between the Guarantors, on the one
hand, and the Administrative Agent and the Lenders, on the other hand, the
Obligations may be declared to be forthwith due and payable as provided in
Section 9 (and shall be deemed to have become automatically due and payable in
the circumstances provided in Section 9) notwithstanding any stay, injunction
or other prohibition preventing such declaration (or preventing such
Obligations from becoming automatically due and payable) as against any other
Person and that, in the event of such declaration (or such Obligations being
deemed to have become automatically due and payable), such Obligations
(whether or not due and payable by any other Person) shall forthwith become
due and payable by the Guarantors. The Guarantors agree that during any
Collateral Period their obligations hereunder may be secured in accordance
with the terms of the Collateral Documents and that the Lenders may exercise
their remedies thereunder in accordance with the terms thereof.
4.7 Limitation of Guaranty.
Notwithstanding any provision to the contrary contained herein or in
any of the other Credit Documents, to the extent the obligations of any
Guarantor shall be adjudicated to be invalid or unenforceable for any reason
(including, without limitation, because of any applicable state or federal law
relating to fraudulent conveyances or transfers) then the obligations of such
Guarantor hereunder shall be limited to the maximum amount that is permissible
under applicable law (whether federal or state and including, without
limitation, the Bankruptcy Code).
4.8 Rights of Contribution.
The Credit Parties agree among themselves that, in connection with
payments made hereunder, each Credit Party shall have contribution rights
against the other Credit Parties as permitted under applicable law. Such
contribution rights shall be subordinate and subject in right of payment to
the obligations of the Credit Parties under the Credit Documents and no Credit
Party shall exercise such rights of contribution until all Credit Party
Obligations have been paid in full and the Commitments terminated.
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SECTION 5
CONDITIONS PRECEDENT
--------------------
5.1 Closing Conditions.
The obligation of the Lenders to enter into this Credit Agreement and
make the initial Extensions of Credit is subject to satisfaction of the
following conditions:
(a) Executed Credit Documents. Receipt by the Administrative
Agent of duly executed copies of: (i) this Credit Agreement; (ii) the
Notes; (iii) the Pledge Agreements; and (iv) all other Credit
Documents required to be delivered on or before the Effective Date,
each in form and substance reasonably acceptable to the
Administrative Agent in its sole discretion.
(b) Partnership Documents. With respect to each Credit Party
that is a partnership, receipt by the Administrative Agent of the
following:
(i) Authorization. Authorization of the general
partner(s) of such Credit Party, as of the Closing Date,
approving and adopting the Credit Documents to be executed
by such Credit Party and authorizing the execution and
delivery thereof.
(ii) Partnership Agreements. Certified copies of
the partnership agreement of such Credit Party, together
with all amendments thereto.
(iii) Certificates of Good Standing or Existence.
Certificate of good standing or existence for such Credit
Party issued as of a recent date by its state of
organization and each other state where the failure to
qualify or be in good standing could have a Material Adverse
Effect.
(iv) Incumbency. An incumbency certificate of the
general partner(s) of such Credit Party, certified by a
secretary or assistant secretary of such general partner to
be true and correct as of the Closing Date.
(c) Corporate Documents. With respect to each Credit Party
that is a corporation, receipt by the Administrative Agent
of the following:
(i) Charter Documents. Copies of the articles or
certificates of incorporation or other charter documents of
each such Credit Party certified to be true and complete as
of a recent date by the appropriate Governmental Authority
of the state or other jurisdiction of its incorporation and
certified by a secretary or assistant secretary of such
Credit Party to be true and correct as of the Closing Date.
(ii) Bylaws. A copy of the bylaws of each such
Credit Party certified by a secretary or assistant secretary
of such Credit Party to be true and correct as of the
Effective Date.
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(iii) Resolutions. Copies of resolutions approving
and adopting the Credit Documents to which it is a party,
the transactions contemplated therein and authorizing
execution and delivery thereof, certified by a secretary or
assistant secretary of such Credit Party to be true and
correct and in full force and effect as of the Effective
Date.
(iv) Good Standing. Copies of (A) certificates of
good standing, existence or their equivalent with respect to
such Credit Party certified as of a recent date by the
appropriate Governmental Authorities of the state or other
jurisdiction of incorporation and each other jurisdiction in
which the failure to so qualify and be in good standing
could have a Material Adverse Effect and (B) to the extent
available, a certificate indicating payment of all corporate
franchise taxes certified as of a recent date by the
appropriate governmental taxing authorities.
(v) Incumbency. An incumbency certificate of such
Credit Party certified by a secretary or assistant secretary
of such Credit Party to be true and correct as of the
Effective Date.
(d) Limited Liability Company Documents. With respect to
each Credit Party that is a limited liability company, receipt by the
Administrative Agent of the following:
(i) Certificate of Formation. A copy of the
certificate of formation of such Credit Party certified to
be true and complete by the appropriate Governmental
Authority of the state or jurisdiction of its formation and
certified by the sole member of such Credit Party to be true
and correct as of the Closing Date.
(ii) LLC Agreement. A copy of the LLC Agreement of
such Credit Party certified by the sole member of such
Credit Party to be true and correct as of the Closing Date.
(iii) Resolutions. Copies of resolutions approving
and adopting the Credit Documents to which it is a party,
the transactions contemplated therein and authorizing
execution and delivery thereof.
(iv) Good Standing. Copies of certificates of good
standing, existence of their equivalent with respect to such
Credit Party certified as of a recent date by the
appropriate Governmental Authorities of the state or other
jurisdiction of formation and each other jurisdiction in
which the failure to so qualify and be in good standing
could have a Material Adverse Effect.
(e) Trust Documents. With respect to each Credit Party that
is a REIT, receipt by the Administrative Agent of the following:
(i) Declaration of Trust. A copy of the Declaration
of Trust of such Credit Party certified to be true and
complete by the appropriate Governmental Authority of the
state or jurisdiction of its formation and certified by the
trustee of such Credit Party to be true and correct as of
the Closing Date.
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(ii) Bylaws. A copy of the Bylaws of such Credit
Party certified by the trustee of such Credit Party to be
true and complete as of the Closing Date.
(iii) Resolutions. Copies of the resolutions of the
Board of Trustees of such Credit Party approving and
adopting the Credit Documents to which it is a party, the
transactions contemplated therein and authorizing execution
and delivery thereof.
(iv) Good Standing. Copies of certificates of good
standing, existence of their equivalent with respect to such
Credit Party certified as of a recent date by the
appropriate Governmental Authorities of the state or other
jurisdiction of formation and each other jurisdiction in
which the failure to so qualify and be in good standing
could have a Material Adverse Effect.
(f) Financial Statements. Receipt and approval by the
Lenders of: (i) the consolidated financial statements of the Credit
Parties and their Subsidiaries for each of the three years ending
December 31, 1995, 1996 and 1997, to the extent available, including
balance sheets and income and cash flow statements, audited by
nationally recognized independent public accountants and containing
an unqualified opinion of such firm that such statements present
fairly, in all material respects, the consolidated financial position
and results of operations of such Person, and are prepared in
conformity with GAAP, and (ii) interim consolidated financial
statements of the Credit Parties and their Subsidiaries for the six
months ending June 30, 1998, including balance sheets and income and
cash flow statements, accompanied by a certificate of the chief
financial officer of BRT to the effect that such annual Financial
Statements fairly present in all material respects the financial
condition of the Credit Parties and their Subsidiaries and have been
prepared in accordance with GAAP, subject to changes resulting from
audit and normal year-end audit adjustments.
(g) Financial Projections and Other Information. Receipt and
approval by the Lenders of (i) financial projections for the Combined
Parties, (ii) summary financial projections for each Property, for
the calendar year ending 1998, in a form acceptable to the Lenders,
and such other financial information as the Lenders may require and
(iii) pro forma financial statements of the Credit Parties and their
Subsidiaries, including a balance sheet, an income statement and a
cash flow statement, giving effect to the acquisition of the Project
Bell Properties, together with a certificate showing compliance with
the financial covenants in Section 7.2 after giving effect to such
acquisition.
(h) Opinion of Counsel. Receipt by the Administrative Agent
of opinions (which shall cover, among other things, authority,
legality, validity, binding effect and enforceability), satisfactory
to the Administrative Agent, addressed to the Administrative Agent on
behalf of the Lenders and dated as of the Closing Date, from legal
counsel to the Credit Parties.
(i) Material Adverse Effect. There shall not have occurred a
change since June 30, 1998 that has had or could reasonably be
expected to have a Material Adverse Effect.
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(j) Litigation. There shall not exist any pending or
threatened action, suit, investigation or proceeding against a Credit
Party or any of their Subsidiaries that would have or would
reasonably be expected to have a Material Adverse Effect.
(k) Officer's Certificates. The Administrative Agent shall
have received a certificate on behalf of the Credit Parties as of the
Closing Date stating that (i) the Credit Parties and each of their
Subsidiaries are in compliance with all existing material financial
obligations, (ii) no action, suit, investigation or proceeding is
pending or threatened in any court or before any arbitrator or
governmental instrumentality that purports to effect a Credit Party
or any transaction contemplated by the Credit Documents, if such
action, suit, investigation or proceeding could have or could be
reasonably expected to have a Material Adverse Effect, (iii) the
financial statements and information delivered pursuant to Section
5.1(f) and (g) were prepared in good faith and using reasonable
assumptions and (iv) immediately after giving effect to this Credit
Agreement, the other Credit Documents and all the transactions
contemplated therein to occur on such date, (A) each of the Credit
Parties is Solvent, (B) no Default or Event of Default exists, (C)
all representations and warranties contained herein and in the other
Credit Documents are true and correct in all material respects, and
(D) the Credit Parties and their Subsidiaries are in compliance as of
June 30, 1998 (on a pro forma basis giving effect to the acquisition
of the Project Bell Properties) with each of the financial covenants
set forth in Section 7.2.
(l) Fees and Expenses. Payment by the Borrowers of all fees
and expenses owed by them to the Lenders and the Administrative
Agent, including, without limitation, payment to the Administrative
Agent of the fees set forth herein and in the Fee Letter.
(m) Consents and Approvals. All governmental, shareholder,
partner and third-party consents and approvals necessary or, in the
opinion of the Administrative Agent, desirable in connection with the
Loans and the transactions contemplated under the Credit Documents
shall have been duly obtained and shall be in full force and effect,
and a copy of each such consent or approval shall have been delivered
to the Administrative Agent.
(n) Due Diligence. Completion by the Lenders of all due
diligence with respect to the Combined Parties, including, but not
limited to, a review of all existing Indebtedness of the Combined
Parties and all Properties, including, but not limited to, the
Project Bell Properties.
(o) Existing Credit Agreements. Receipt by the
Administrative Agent of satisfactory evidence of the repayment of all
loans and obligations under the Existing Credit Agreement and the
Existing Bridge Facility and the termination of the commitments
thereunder.
(p) Acquisition. Receipt by the Administrative Agent of evidence that
the Borrowers have acquired (or are simultaneously acquiring), on terms
acceptable to the Administrative Agent, the Project Bell Properties for a
price not to exceed $620 million.
(q) Other. Receipt by the Lenders of such other documents,
instruments, agreements or information as reasonably and timely
requested by any Lender, including, but not limited to, information
regarding litigation, tax, accounting, labor, insurance, pension
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liabilities (actual or contingent), real estate leases, material
contracts, debt agreements, property ownership and contingent
liabilities of the Credit Parties and their Subsidiaries.
5.2 Conditions to All Extensions of Credit.
In addition to the conditions precedent stated elsewhere herein, the
Lenders shall not be obligated to make Loans nor shall an Issuing Lender be
required to issue or extend a Letter of Credit unless:
(a) Delivery of Notice. The Borrowers shall have delivered
(i) in the case of a Loan, a Notice of Borrowing, duly executed and
completed, by the time specified in Section 2.1 and (ii) in the case
of any Letter of Credit, the Issuing Lender shall have received an
appropriate request for issuance in accordance with the provisions of
Section 2.2.
(b) Representations and Warranties. The representations and
warranties made by the Credit Parties in any Credit Document are true
and correct in all material respects at and as if made as of such
date except to the extent they expressly relate to an earlier date.
(c) No Default. No Default or Event of Default shall exist
or be continuing either prior to or after giving effect thereto.
(d) Availability. Immediately after giving effect to the
making of the requested Revolving Loan (and the application of the
proceeds thereof), or the issuance of a Letter of Credit, as the case
may be, (i) the sum of the Revolving Loans outstanding plus LOC
Obligations outstanding shall not exceed the Revolving Committed
Amount less, for any Property under construction and development that
is less than 50% preleased, the construction and development costs
remaining to be incurred for such Property unless and until outside
construction financing for the project is obtained (plus the amount
of the requested Revolving Loan if such Revolving Loan is being used
for such construction and development costs), and (ii) the aggregate
principal amount of Revolving Loans advanced for construction and
development of Properties shall not exceed (A) for such Properties
that are less than 50% preleased, $50,000,000 and (B) for all such
Properties, $100,000,000.
(e) Development and Construction. If the proceeds of the
requested Revolving Loan are to be used for development and
construction of a Property, the Borrowers have notified the
Administrative Agent with respect thereto.
(f) Restrictions on Loans. After giving effect to the making
of the requested Revolving Loan, the Borrowers shall be in compliance
with the terms of Section 2.1(f).
The delivery of each Notice of Borrowing shall constitute a representation and
warranty by the Borrowers of the correctness of the matters specified in
subsections (b), (c), (d), (e) and (f) above.
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SECTION 6
REPRESENTATIONS AND WARRANTIES
------------------------------
The Credit Parties hereby represent to the Administrative Agent and
each Lender that:
6.1 Financial Condition.
The financial statements delivered to the Lenders pursuant to Section
5.1(d) and Section 7.1(a) and (b): (a) have been prepared in accordance with
GAAP and (b) present fairly the consolidated financial condition, results of
operations and cash flows of the Credit Parties and their Subsidiaries as of
such date and for such periods. Since June 30, 1998, there has been no sale,
transfer or other disposition by any Credit Party or any of their Subsidiaries
of any material part of the business or property of the Credit Parties and
their Subsidiaries, taken as a whole, and no purchase or other acquisition by
any of them of any business or property (including any capital stock of any
other Person) material in relation to the consolidated financial condition of
the Credit Parties and their Subsidiaries, taken as a whole, in each case,
which, is not (i) reflected in the most recent financial statements delivered
to the Lenders pursuant to Section 5.1(f) and Section 7.1 or in the notes
thereto or (ii) otherwise permitted by the terms of this Credit Agreement and
communicated to the Administrative Agent.
6.2 No Material Change.
Since the later of June 30, 1998 or the date of the last Revolving
Loan made under this Credit Agreement, there has been no development or event
relating to or affecting a Combined Party which has had or would be reasonably
expected to have a Material Adverse Effect.
6.3 Organization and Good Standing.
Each Credit Party (a) is either a partnership, a corporation, a
limited liability company or a REIT duly organized, validly existing and in
good standing under the laws of the State (or other jurisdiction) of its
organization or formation, (b) is duly qualified and in good standing as a
foreign partnership, a foreign corporation, a foreign limited liability
company or a foreign REIT and authorized to do business in every other
jurisdiction unless the failure to be so qualified, in good standing or
authorized would not have or would not be expected to have a Material Adverse
Effect and (c) has the power and authority to own its properties and to carry
on its business as now conducted and as proposed to be conducted.
6.4 Due Authorization.
Each Credit Party (a) has the power and authority to execute, deliver
and perform this Credit Agreement and the other Credit Documents to which it
is a party and to incur the obligations herein and therein provided for and
(b) is duly authorized to, and has been authorized by all necessary action, to
execute, deliver and perform this Credit Agreement and the other Credit
Documents to which it is a party.
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6.5 No Conflicts.
Neither the execution and delivery of the Credit Documents, nor the
consummation of the transactions contemplated therein, nor the performance of
or compliance with the terms and provisions thereof by a Credit Party will (a)
violate or conflict with any provision of its organizational documents, (b)
violate, contravene or materially conflict with any Requirement of Law or any
other law, regulation (including, without limitation, Regulation U or
Regulation X), order, writ, judgment, injunction, decree or permit applicable
to it, (c) violate, contravene or conflict with contractual provisions of, or
cause an event of default under, any indenture, loan agreement, mortgage, deed
of trust, contract or other agreement or instrument to which it is a party or
by which it may be bound, the violation of which would have or would be
reasonably expected to have a Material Adverse Effect, or (d) result in or
require the creation of any Lien upon or with respect to its properties.
6.6 Consents.
Except for consents, approvals and authorizations which have been
obtained, no consent, approval, authorization or order of, or filing,
registration or qualification with, any court or Governmental Authority or
third party in respect of any Credit Party is required in connection with the
execution, delivery or performance of this Credit Agreement or any of the
other Credit Documents by such Credit Party.
6.7 Enforceable Obligations.
This Credit Agreement and the other Credit Documents have been duly
executed and delivered and constitute legal, valid and binding obligations of
each Credit Party enforceable against such Credit Party in accordance with
their respective terms, except as may be limited by bankruptcy or insolvency
laws or similar laws affecting creditors' rights generally or by general
equitable principles.
6.8 No Default.
No Combined Party is in default in any respect under any contract,
lease, loan agreement, indenture, mortgage, security agreement or other
agreement or obligation to which it is a party or by which any of its
properties is bound which default would have or would be reasonably expected
to have a Material Adverse Effect. No Default or Event of Default has occurred
or exists except as previously disclosed in writing to the Lenders.
6.9 Ownership.
Each Combined Party is the owner of, and has good and marketable
title to, all of its respective assets and none of such assets is subject to
any Lien other than Permitted Liens.
6.10 Indebtedness.
The Combined Parties have no Indebtedness except as otherwise
permitted by this Credit Agreement.
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6.11 Litigation.
There are no actions, suits or legal, equitable, arbitration or
administrative proceedings, pending or, to the knowledge of any Credit Party,
threatened against, a Combined Party which would have or would be reasonably
expected to have a Material Adverse Effect.
6.12 Taxes.
Each Credit Party, and each of its Subsidiaries, has filed, or caused
to be filed, all tax returns (federal, state, local and foreign) required to
be filed and has paid (a) all amounts of taxes shown thereon to be due
(including interest and penalties) and (b) all other taxes, fees, assessments
and other governmental charges (including mortgage recording taxes,
documentary stamp taxes and intangibles taxes) owing by it, except for such
taxes (i) which are not yet delinquent or (ii) that are being contested in
good faith and by proper proceedings, and against which adequate reserves are
being maintained in accordance with GAAP. No Credit Party is aware of any
proposed tax assessments against it or any of its Subsidiaries.
6.13 Compliance with Law.
Each Combined Party is in compliance with all Requirements of Law and
all other laws, rules, regulations, orders and decrees (including without
limitation Environmental Laws) applicable to it, or to its properties, unless
such failure to comply would not have or would not be reasonably expected to
have a Material Adverse Effect. No Requirement of Law would be reasonably
expected to cause a Material Adverse Effect.
6.14 Compliance with ERISA.
Except as would not result in or be reasonably expected to result in
a Material Adverse Effect:
(a) During the five-year period prior to the date on which
this representation is made or deemed made: (i) no ERISA Event has
occurred, and, to the best of each Credit Party's, each Subsidiary of
a Credit Party's and each ERISA Affiliate's knowledge, no event or
condition has occurred or exists as a result of which any ERISA Event
could reasonably be expected to occur, with respect to any Plan; (ii)
no "accumulated funding deficiency," as such term is defined in
Section 302 of ERISA and Section 412 of the Code, whether or not
waived, has occurred with respect to any Plan; (iii) each Plan has
been maintained, operated, and funded in compliance with its own
terms and in material compliance with the provisions of ERISA, the
Code, and any other applicable federal or state laws; and (iv) no
Lien in favor or the PBGC or a Plan has arisen or is reasonably
likely to arise on account of any Plan.
(b) The actuarial present value of all "benefit liabilities"
(as defined in Section 4001(a)(16) of ERISA), whether or not vested,
under each Single Employer Plan, as of the last annual valuation date
prior to the date on which this representation is made or deemed made
(determined, in each case, in accordance with Financial Accounting
Standards Board
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Statement 87, utilizing the actuarial assumptions used in such Plan's
most recent actuarial valuation report), did not exceed as of such
valuation date the fair market value of the assets of such Plan.
(c) No Credit Party, Subsidiary of a Credit Party or ERISA
Affiliate has incurred, or, to the best of each such party's
knowledge, is reasonably expected to incur, any withdrawal liability
under ERISA to any Multiemployer Plan or Multiple Employer Plan. No
Credit Party, Subsidiary of a Credit Party or ERISA Affiliate would
become subject to any withdrawal liability under ERISA if any such
party were to withdraw completely from all Multiemployer Plans and
Multiple Employer Plans as of the valuation date most closely
preceding the date on which this representation is made or deemed
made. No Credit Party, Subsidiary of a Credit Party or ERISA
Affiliate has received any notification that any Multiemployer Plan
is in reorganization (within the meaning of Section 4241 of ERISA),
is insolvent (within the meaning of Section 4245 of ERISA), or has
been terminated (within the meaning of Title IV of ERISA), and no
Multiemployer Plan is, to the best of each such party's knowledge,
reasonably expected to be in reorganization, insolvent, or
terminated.
(d) No prohibited transaction (within the meaning of Section
406 of ERISA or Section 4975 of the Code) or breach of fiduciary
responsibility has occurred with respect to a Plan which has
subjected or may subject any Credit Party, any Subsidiary of a Credit
Party or any ERISA Affiliate to any liability under Sections 406,
409, 502(i), or 502(l) of ERISA or Section 4975 of the Code, or under
any agreement or other instrument pursuant to which any Credit Party,
any Subsidiary of a Credit Party or any ERISA Affiliate has agreed or
is required to indemnify any person against any such liability.
(e) No Credit Party, Subsidiary of a Credit Party nor any of
their ERISA Affiliates has material liability with respect to
"expected post-retirement benefit obligations" within the meaning of
the Financial Accounting Standards Board Statement 106. Each Plan
which is a welfare plan (as defined in Section 3(1) of ERISA) to
which Sections 601-609 of ERISA and Section 4980B of the Code apply
has been administered in compliance in all material respects with
such sections.
6.15 Organization Structure/Subsidiaries.
As of the Closing Date, (a) Schedule 6.15 is a complete and accurate
organization chart of the Combined Parties, and (b) no Credit Party has any
Subsidiaries or owns an interest, directly or indirectly, in any joint
venture, except as set forth on Schedule 6.15. During any Collateral Period in
which the Lenders receive Stock Collateral, Schedule 6.15 shall be amended to
include the amount and percentages of equity interests outstanding with
respect to each Subsidiary of a Credit Party and such other information
regarding the ownership interests as reasonably requested by the
Administrative Agent. The outstanding equity interest of all Subsidiaries of
the Credit Parties are validly issued, fully paid and non-assessable and are
owned by the Credit Parties free and clear of all Liens. Schedule 6.15 shall
be updated as of the end of each fiscal quarter as set forth in Section
7.1(c).
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6.16 Use of Proceeds; Margin Stock.
The proceeds of the Loans hereunder will be used solely for the
purposes specified in Section 7.10. None of the proceeds of the Loans will be
used in a manner that would violate Regulation U, Regulation X, or Regulation
T. No proceeds of the Loans hereunder will be used for the acquisition of
another Person unless the board of directors (or other comparable governing
body) or stockholders (or other equity owners), as appropriate, of such Person
has approved such acquisition.
6.17 Government Regulation.
No Credit Party, nor any of its Subsidiaries, is subject to
regulation under the Public Utility Holding Company Act of 1935, the Federal
Power Act, the Investment Company Act of 1940 or the Interstate Commerce Act,
each as amended. In addition, no Credit Party, nor any of its Subsidiaries, is
(a) an "investment company" registered or required to be registered under the
Investment Company Act of 1940, as amended, or controlled by such a company,
or (b) a "holding company," or a "Subsidiary company" of a "holding company,"
or an "affiliate" of a "holding company" or of a "Subsidiary" or a "holding
company," within the meaning of the Public Utility Holding Company Act of
1935, as amended. No director, executive officer or principal shareholder of a
Credit Party or any of its Subsidiaries is a director, executive officer or
principal shareholder of any Lender. For the purposes hereof the terms
"director," "executive officer" and "principal shareholder" (when used with
reference to any Lender) have the respective meanings assigned thereto in
Regulation O issued by the Board of Governors of the Federal Reserve System.
6.18 Environmental Matters.
(a) Except as would not have or be reasonably expected to
have a Material Adverse Effect:
(i) Each of the Properties and all operations
at the Properties are in material compliance with all
applicable Environmental Laws, and there is no violation of
any Environmental Law with respect to the Properties or the
businesses operated by a Credit Party or any of its
Subsidiaries (the "Businesses"), and there are no conditions
relating to the Businesses or Properties that would be
reasonably expected to give rise to liability under any
applicable Environmental Laws.
(ii) No Credit Party, nor any of its
Subsidiaries, has received any written notice of, or inquiry
from any Governmental Authority regarding, any violation,
alleged violation, non-compliance, liability or potential
liability regarding Hazardous Materials or compliance with
Environmental Laws with regard to any of the Properties or
the Businesses, nor does any Credit Party or any of its
Subsidiaries have knowledge that any such notice is being
threatened.
(iii) Hazardous Materials have not been
transported or disposed of from the Properties, or
generated, treated, stored or disposed of at, on or under
any of the Properties or any other location, in each case
by, or on behalf or with the permission of, any Credit Party
or any of its Subsidiaries in a manner that would reasonably
be expected to give rise to liability under any applicable
Environmental Law.
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(iv) No judicial proceeding or governmental or
administrative action is pending or, to the knowledge of any
Credit Party or any of its Subsidiaries, threatened, under
any Environmental Law to which any Credit Party or any of
its Subsidiaries is or will be named as a party, nor are
there any consent decrees or other decrees, consent orders,
administrative orders or other orders, or other
administrative or judicial requirements outstanding under
any Environmental Law with respect to any Credit Party or
any of its Subsidiaries, the Properties or the Businesses,
in any amount reportable under the federal Comprehensive
Environmental Response, Compensation and Liability Act or
any analogous state law, except releases in compliance with
any Environmental Laws.
(v) There has been no release or threat of
release of Hazardous Materials at or from the Properties, or
arising from or related to the operations (including,
without limitation, disposal) of a Credit Party or any of
its Subsidiaries in connection with the Properties or
otherwise in connection with the Businesses except in
compliance with Environmental Laws.
(vi) None of the Properties contains, or to
the best of our knowledge has previously contained, any
Hazardous Materials at, on or under the Properties in
amounts or concentrations that, if released, constitute or
constituted a violation of, or could give rise to liability
under, Environmental Laws.
(vii) No Credit Party, nor any of its
Subsidiaries, has assumed any liability of any Person (other
than another Borrower) under any Environmental Law.
(b) Each Credit Party, and each of its Subsidiaries, has
adopted procedures that are designed to (i) ensure that each such
party, any of its operations and each of the properties owned or
leased by such party remains in compliance with applicable
Environmental Laws and (ii) minimize any liabilities or potential
liabilities that each such party, any of its operations and each of
the properties owned or leased by each such party may have under
applicable Environmental Laws.
6.19 Solvency.
Each Credit Party, is and, after consummation of the transactions
contemplated by this Credit Agreement, will be Solvent.
6.20 Investments.
All Investments of the Credit Parties and their Subsidiaries are
Permitted Investments.
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6.21 Location of Properties.
As of the Closing Date, set forth on Schedule 6.21 is (a) a list of
all Properties (with street address, county and state where located) and the
owner of such Property (b) a list of all Unsecured Properties. Schedule 6.21
shall be updated as of the end of each fiscal quarter as set forth in Section
7.1(c).
6.22 Disclosure.
Neither this Credit Agreement nor any financial statements delivered
to the Lenders nor any other document, certificate or statement furnished to
the Lenders by or on behalf of any Credit Party in connection with the
transactions contemplated hereby contains any untrue statement of a material
fact or omits to state a material fact necessary in order to make the
statements contained therein or herein not misleading in light of the
circumstances in which made; provided, however, that the Credit Parties make
no representation or warranty regarding the information delivered pursuant to
Section 7.1(i).
6.23 Licenses, etc.
The Combined Parties have obtained, and hold in full force and
effect, all franchises, licenses, permits, certificates, authorizations,
qualifications, accreditations, easements, rights of way and other rights,
consents and approvals which are necessary for the operation of their
respective businesses as presently conducted, except where the failure to
obtain the same would not have or would not reasonably be expected to have a
Material Adverse Effect.
6.24 No Burdensome Restrictions.
No Combined Party is a party to any agreement or instrument or
subject to any other obligation or any charter or corporate restriction or any
provision of any applicable law, rule or regulation which, individually or in
the aggregate, would have or would be reasonably expected to have a Material
Adverse Effect.
6.25 Year 2000 Compliance.
Each Credit Party reasonably believes that the Year 2000 Problem has
been appropriately addressed by it and the Year 2000 Problem will not exist
with respect to it or any other Combined Party on and after January 1, 2000,
to the extent such Year 2000 Problem would cause or be reasonably expected to
cause a Material Adverse Effect.
6.26 Excluded Material Subsidiaries.
With respect to the Excluded Material Subsidiaries:
(a) Brandywine Holdings I, Inc. holds a nominal interest in
BOP to ensure that BOP will at all times have at least two partners,
and has no other activity and owns no other assets.
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(b) Brandywine Holdings II and Brandywine Holdings III have
no assets or activity and are in the process of being dissolved.
(c) Brandywine Realty Services Corporation ("BRSCO")
provides services to BOP and is Subsidiaries, as well as third
parties, but does not own any Properties. Although BOP owns ninety
five percent of the financial interest in BRSCO through ownership of
preferred and common interests, substantially all of the common
equity in BRSCO is held by a partnership in which neither BOP nor BRT
has any ownership.
(d) Each of the remaining Excluded Materials Subsidiaries is
an entity which is subject to provisions in its charter documents
that require it to be a "bankruptcy remote" or "single purpose"
entity and therefore prohibit it from, among other things,
guaranteeing or becoming jointly and severally liable for the
Indebtedness of others.
SECTION 7
AFFIRMATIVE COVENANTS
---------------------
Each Credit Party hereby covenants and agrees that so long as this
Credit Agreement is in effect and until the Loans and LOC Obligations,
together with interest and fees and other obligations then due and payable
hereunder, have been paid in full and the Commitments and Letters of Credit
hereunder shall have terminated:
7.1 Information Covenants.
The Borrowers will furnish, or cause to be furnished, to the
Administrative Agent and each of the Lenders:
(a) Annual Financial Statements. As soon as available, and
in any event within 90 days after the close of each fiscal year of
the Credit Parties, a consolidated balance sheet and income statement
of the Credit Parties and their Subsidiaries as of the end of such
fiscal year, together with related consolidated statements of
operations and retained earnings and of cash flows for such fiscal
year, setting forth in comparative form consolidated figures for the
preceding fiscal year, all such financial information described above
to be in reasonable form and detail and audited by independent
certified public accountants of recognized national standing
reasonably acceptable to the Administrative Agent and whose opinion
shall be to the effect that such financial statements have been
prepared in accordance with GAAP (except for changes with which such
accountants concur) and shall not be limited as to the scope of the
audit or qualified in any manner.
(b) Quarterly Financial Statements. As soon as available,
and in any event within 45 days after the close of each fiscal
quarter of the Credit Parties, a consolidated balance sheet and
income statement of the Credit Parties and their Subsidiaries, as of
the end of such fiscal quarter, together with related consolidated
statements of operations and
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retained earnings and of cash flows for such fiscal quarter in each
case setting forth in comparative form consolidated figures for (A)
the corresponding period of the preceding fiscal year and (B)
management's proposed budget for such period, all such financial
information described above to be in reasonable form and detail and
reasonably acceptable to the Administrative Agent, and accompanied by
a certificate of the chief financial officer of BOP to the effect
that such quarterly financial statements fairly present in all
material respects the financial condition of the Credit Parties and
their Subsidiaries and have been prepared in accordance with GAAP,
subject to changes resulting from audit and normal year-end audit
adjustments.
(c) Officer's Certificate. At the time of delivery of the
financial statements provided for in Sections 7.1(a) and 7.1(b)
above, a certificate of the chief financial officer of BRT,
substantially in the form of Exhibit 7.1(c), (i) demonstrating
compliance with the financial covenants contained in Section 7.2 by
calculation thereof as of the end of each such fiscal period, (ii)
stating that no Default or Event of Default exists, or if any Default
or Event of Default does exist, specifying the nature and extent
thereof and what action the Borrowers propose to take with respect
thereto, (iii) providing information regarding (A) Investments in a
manner to demonstrate compliance with Section 8.6, (B) construction
and development projects in a manner to demonstrate compliance with
Section 8.12 and (C) dividends and redemption of shares in a manner
to demonstrate compliance with Section 8.7 and (iv) updating Schedule
6.15 and Schedule 6.21 as appropriate.
(d) Accountant's Certificate. Within the period for delivery
of the annual financial statements provided in Section 7.1(a), a
certificate of the accountants conducting the annual audit stating
that they have reviewed this Credit Agreement and stating further
whether, in the course of their audit, they have become aware of any
Default or Event of Default and, if any such Default or Event of
Default exists, specifying the nature and extent thereof.
(e) Annual Information and Projections. Within 30 days after
the end of each fiscal year of the Credit Parties, all such financial
information regarding the Credit Parties and their Subsidiaries and
specifically regarding the Properties, as the Administrative Agent
shall reasonably request, including, but not limited to, partnership
and joint venture agreements, property cash flow projections,
property budgets, actual and budgeted capital expenditures, operating
statements (current year and immediately preceding year, if the
Property existed as a Property in the immediately preceding year),
mortgage information, rent rolls, lease expiration reports, leasing
status reports, note payable summary, bullet note summary, equity
funding requirements, contingent liability summary, line of credit
summary, line of credit collateral summary, wrap note or note
receivable summary, schedule of outstanding letters of credit,
summary of cash and cash equivalents, projection of management and
leasing fees and overhead budgets.
(f) Auditor's Reports. Promptly upon receipt thereof, a copy
of any "management letter" submitted by independent accountants to
any Credit Party or any of its Subsidiaries in connection with any
annual, interim or special audit of the books of such Credit Party or
any of its Subsidiaries.
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(g) Reports. Promptly upon transmission or receipt thereof,
(i) copies of any filings and registrations with, and reports to or
from, the Securities and Exchange Commission, or any successor
agency, and copies of all financial statements, proxy statements,
notices and reports as any Credit Party or any of its Subsidiaries
shall send to its shareholders or partners generally, (ii) copies of
all income tax returns filed by a Credit Party and (iii) upon the
written request of the Administrative Agent, all reports and written
information to and from the United States Environmental Protection
Agency, or any state or local agency responsible for environmental
matters, the United States Occupational Health and Safety
Administration, or any state or local agency responsible for health
and safety matters, or any successor agencies or authorities
concerning environmental, health or safety matters; provided,
however, that if any such transmissions are done electronically, the
Borrowers shall instead promptly notify the Administrative Agent of
same and provide information on how to retrieve such information.
(h) Notices. Upon a Credit Party obtaining knowledge
thereof, such Credit Party will give written notice to the
Administrative Agent immediately of (i) the occurrence of an event or
condition consisting of a Default or Event of Default, specifying the
nature and existence thereof and what action the Credit Parties
propose to take with respect thereto, and (ii) the occurrence of any
of the following with respect to any Credit Party or any of its
Subsidiaries (A) the pendency or commencement of any litigation,
arbitral or governmental proceeding against any Credit Party or any
of its Subsidiaries which if adversely determined would have or would
be reasonably expected to have a Material Adverse Effect, (B) the
institution of any proceedings against any Credit Party or any of its
Subsidiaries with respect to, or the receipt of notice by such Person
of potential liability or responsibility for violation, or alleged
violation of any federal, state or local law, rule or regulation,
including but not limited to, Environmental Laws, the violation of
which would have or would be reasonably expected to have a Material
Adverse Effect, (C) the occurrence of any default or nonpayment of
nonrecourse Indebtedness of a Credit Party in an aggregate principal
amount in excess of $10,000,000 or (D) any information that a Credit
Party may have a Year 2000 Problem on or after January 1, 2000.
(i) ERISA. Upon a Credit Party or any ERISA Affiliate
obtaining knowledge thereof, the Credit Parties will give written
notice to the Administrative Agent promptly (and in any event within
five Business Days) of: (i) any event or condition, including, but
not limited to, any Reportable Event, that constitutes, or might
reasonably lead to, a ERISA Event; (ii) with respect to any
Multiemployer Plan, the receipt of notice as prescribed in ERISA or
otherwise of any withdrawal liability assessed against a Credit Party
or any ERISA Affiliate, or of a determination that any Multiemployer
Plan is in reorganization or insolvent (both within the meaning of
Title IV of ERISA); (iii) the failure to make full payment on or
before the due date (including extensions) thereof of all amounts
which a Credit Party or any ERISA Affiliate is required to contribute
to each Plan pursuant to its terms and as required to meet the
minimum funding standard set forth in ERISA and the Code with respect
thereto; or (iv) any change in the funding status of any Plan that
could have a Material Adverse Effect; together, with a description of
any such event or condition or a copy of any such notice and a
statement by the chief financial officer of a Credit Party briefly
setting forth the details regarding such event, condition, or notice,
and the action, if any, which has been or is being taken or is
proposed to be taken by a Credit Party or any
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ERISA Affiliate with respect thereto. Promptly upon request, the
Credit Parties shall furnish the Administrative Agent and the Lenders
with such additional information concerning any Plan as may be
reasonably requested, including, but not limited to, copies of each
annual report/return (Form 5500 series), as well as all schedules and
attachments thereto required to filed with the Department of Labor
and/or the Internal Revenue Service pursuant to ERISA and the Code,
respectively, for each "plan year" (within the meaning of Section
3(39) of ERISA).
(j) Environmental.
(i) Subsequent to a notice from any
Governmental Authority that would reasonably cause concern
or during the existence of an Event of Default, and upon the
written request of the Administrative Agent, the Credit
Parties will furnish or cause to be furnished to the
Administrative Agent, at the Credit Parties' expense, an
updated report of an environmental assessment of reasonable
scope, form and depth, including, where appropriate,
invasive soil or groundwater sampling, by a consultant
reasonably acceptable to the Administrative Agent as to the
nature and extent of the presence of any Hazardous Materials
on any Property and as to the compliance by the Credit
Parties and with Environmental Laws. If the Credit Parties
fail to deliver such an environmental report within
seventy-five (75) days after receipt of such written request
then the Administrative Agent may arrange for same, and the
Credit Parties hereby grant to the Administrative Agent and
its representatives access to the Properties and a license
of a scope reasonably necessary to undertake such an
assessment (including, where appropriate, invasive soil or
groundwater sampling). The reasonable cost of any assessment
arranged for by the Administrative Agent pursuant to this
provision will be payable by the Credit Parties on demand
and, during any Collateral Period, added to the obligations
secured by the Collateral Documents.
(ii) Each of the Credit Parties and their
Subsidiaries will conduct and complete all investigations,
studies, sampling, and testing and all remedial, removal,
and other actions necessary to address all Hazardous
Materials on, from, or affecting any Property to the extent
necessary to be in compliance with all Environmental Laws
and all other applicable federal, state, and local laws,
regulations, rules and policies and with the orders and
directives of all Governmental Authorities exercising
jurisdiction over such Property to the extent any failure
would have or would be reasonably expected to have a
Material Adverse Effect.
(k) Year 2000 Information. Upon the written request of the
Administrative Agent, such information, assurances and documentation
(including, but not limited to, the results of internal and external
audit reports prepared in connection therewith) reasonably acceptable
to the Administrative Agent that the Credit Parties and their
Subsidiaries will take all reasonable appropriate actions to prevent
a Year 2000 Problem on or after January 1, 2000.
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(l) Other Information. With reasonable promptness upon any
such request, such other information regarding the Properties or
regarding the business, assets or financial condition of the Credit
Parties and their Subsidiaries as the Administrative Agent or any
Lender may reasonably request.
7.2 Financial Covenants.
(a) Debt Service Coverage Ratio. The Debt Service Coverage
Ratio, as of the end of each fiscal quarter of the Credit Parties,
shall be greater than or equal to 1.50 to 1.0.
(b) Interest Coverage Ratio. The Interest Coverage Ratio, as
of the end of each fiscal quarter of Credit Parties for the twelve
month period ending on such date, shall be greater than or equal to
2.25 to 1.0.
(c) Fixed Charge Coverage Ratio. The Fixed Charge Coverage
Ratio, as of the end of each fiscal quarter of the Credit Parties for
the twelve month period ending on such date, shall be greater than or
equal to 1.75 to 1.0.
(d) Net Worth. At all times, the Net Worth of the Credit
Parties and their Subsidiaries on a consolidated basis shall be
greater than or equal to the sum of (i) $700,000,000 plus (ii) 85% of
the Net Cash Proceeds from all Equity Issuances (other than Equity
Issuances referred to in the following subclause (iii)) plus (iii)
85% of the actual increase in Net Worth (if any) resulting from an
Equity Issuance made in connection with an Incentive Stock Plan.
(e) Leverage Ratio. Prior to the earlier of (i) the Leverage
Ratio, at the end of any fiscal quarter of the Credit Parties
subsequent to September 30, 1998, being less than or equal to .55 to
1.0. or (ii) one year following the Closing Date, (the earlier of
such dates referred to herein as the "Leverage Ratio Change Date")
the Leverage Ratio, as of the end of each fiscal quarter of the
Credit Parties, shall be less than or equal to .625 to 1.0.
Subsequent to the Leverage Ratio Change Date, the Leverage Ratio, as
of the end of each fiscal quarter of the Credit Parties, shall be
less than or equal to .55 to 1.0.
(f) Unsecured Debt Ratio. The Unsecured Debt Ratio, as of
the end of each fiscal quarter of the Credit Parties, shall be
greater than or equal to the following ratios for the following
periods:
(i) From the Closing Date to March 31, 1999, 1.6 to
1.0;
(ii) From April 1, 1999 to June 30, 1999, 1.8
to 1.0; and
(iii) From July 1, 1999 and thereafter
2.0 to 1.0.
(g) Secured Debt Ratio. The Secured Debt Ratio, as of the
end of each fiscal quarter of the Credit Parties, shall be less than
or equal to the following ratios for the following periods:
(i) From the Closing Date to March 31, 1999, .40 to
1.0;
(ii) From April 1, 1999 to June 30, 1999, .35
to 1.0; and
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(iii) From July 1, 1999 and thereafter
.30 to 1.0.
(h) Unencumbered Cash Flow Ratio. The Unencumbered Cash Flow
Ratio, as of the end of each fiscal quarter of the Credit Parties,
shall be greater than or equal to the following ratios for the
following periods:
(i) From the Closing Date to September 30, 1999,
1.5 to 1.0;
(ii) From October 1, 1999 to September 30, 2000,
1.6 to 1.0; and
(iii) From October 1, 2000 and thereafter, 1.65
to 1.0.
(i) Credit Party Assets. At all times, at least 50% of Total
Assets must be owned by the Credit Parties.
7.3 Preservation of Existence.
Each of the Credit Parties will do all things necessary to preserve
and keep in full force and effect its existence, rights, franchises and
authority except as permitted by Section 8.4; provided that a Credit Party may
dissolve if it has no assets at the time of dissolution. Without limiting the
generality of the foregoing, BRT will do all things necessary to maintain its
status as a REIT.
7.4 Books and Records.
Each of the Credit Parties will, and will cause its Subsidiaries to,
keep complete and accurate books and records of its transactions in accordance
with good accounting practices on the basis of GAAP (including the
establishment and maintenance of appropriate reserves).
7.5 Compliance with Law.
Each of the Credit Parties will, and will cause its Subsidiaries to,
comply in all material respects with all material laws, rules, regulations and
orders, and all applicable material restrictions imposed by all Governmental
Authorities, applicable to it and its property (including, without limitation,
Environmental Laws and ERISA).
7.6 Payment of Taxes and Other Indebtedness.
Each of the Credit Parties will, and will cause its Subsidiaries to,
pay, settle or discharge (a) all taxes, assessments and governmental charges
or levies imposed upon it, or upon its income or profits, or upon any of its
properties, before they shall become delinquent, (b) all lawful claims
(including claims for labor, materials and supplies) which, if unpaid, might
give rise to a Lien upon any of its properties, and (c) except as prohibited
hereunder, all of its other Indebtedness as it shall become due; provided,
however, that a Credit Party or any of its Subsidiaries shall not be required
to pay any such tax, assessment, charge, levy, claim or Indebtedness which is
being contested in good faith by appropriate proceedings and as to which
adequate reserves therefor have been established in accordance with GAAP,
unless the failure to make any such payment (i) would give
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rise to an immediate right to foreclose on a Lien securing such amounts or
(ii) would have a Material Adverse Effect.
7.7 Insurance.
Each of the Credit Parties will, and will cause its Subsidiaries to,
at all times maintain in full force and effect insurance (including worker's
compensation insurance, liability insurance, casualty insurance and business
interruption insurance) in such amounts, covering such risks and liabilities
and with such deductibles or self-insurance retentions as are in accordance
with normal industry practice.
7.8 Maintenance of Assets.
Each of the Credit Parties will, and will cause its Subsidiaries to,
maintain and preserve its Properties and all other assets in good repair,
working order and condition, normal wear and tear excepted, and will make, or
cause to be made, in the Properties and other assets, from time to time, all
repairs, renewals, replacements, extensions, additions, betterments and
improvements thereto as may be needed or proper, to the extent and in the
manner customary for companies in similar businesses.
7.9 Performance of Obligations.
Each of the Credit Parties will, and will cause its Subsidiaries to,
perform in all material respects all of its obligations under the terms of all
material agreements, indentures, mortgages, security agreements or other debt
instruments to which it is a party or by which it is bound.
7.10 Use of Proceeds.
The Credit Parties will use the proceeds of the Loans solely (a) to
refinance the Indebtedness under the Existing Credit Agreement, (b) to repay
the Existing Bridge Facility, (c) to acquire Properties, (d) to renovate
existing Properties, (e) to develop and construct Properties subject to the
limitations set forth in this Credit Agreement and (f) for general working
capital in the ordinary course (including the payment of dividends if such
payment is otherwise in compliance with the terms of this Credit Agreement);
provided that it is understood that proceeds of Loans may not be used to
acquire undeveloped land, if after giving effect to such acquisition, the
Credit Parties' aggregate ownership of undeveloped land exceeds 5% of Total
Assets, unless such land is adjacent or contiguous with other assets being
acquired or already owned or such land is part of a construction project
approved by the Required Lenders and has all necessary local permits and
approvals and construction will commence within six months of acquisition. The
Credit Parties will use the Letters of Credit solely for the purposes set
forth in Section 2.2(a).
7.11 Audits/Inspections.
Upon reasonable notice and during normal business hours, each Credit
Party will, and will cause its Subsidiaries to, permit representatives
appointed by the Administrative Agent, including, without limitation,
independent accountants, agents, attorneys and appraisers to visit and inspect
such Credit Party's or other Combined Party's property, including, without
limitation, the Properties
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and the Collateral, including its books and records, its accounts receivable
and inventory, its facilities and its other business assets, and to make
photocopies or photographs thereof and to write down and record any
information such representative obtains and shall permit the Administrative
Agent or its representatives to investigate and verify the accuracy of
information provided to the Lenders, and to discuss all such matters with the
officers, employees and representatives of the Credit Parties, their
Subsidiaries and any other Combined Party.
7.12 Additional Credit Parties.
At any time a Person that is not a Credit Party becomes a Material
Subsidiary of a Credit Party (other than, subject to Section 7.2(i), Excluded
Material Subsidiaries or any entity which is subject to provisions in its
charter documents that prohibit it from guaranteeing or becoming jointly and
severally liable for the Indebtedness of others), the Borrowers shall notify
the Administrative Agent and promptly thereafter (but in any event within 30
days after such Person becomes a Material Subsidiary of a Credit Party): (a)
execute a Joinder Agreement in substantially the form of Exhibit 7.12, (b)
execute an appropriate pledge agreement in substantially the form of the
Pledge Agreements (or a joinder to an existing Pledge Agreement) and otherwise
in a form reasonably acceptable to the Administrative Agent, which pledge
agreement will be effective only during an appropriate Collateral Period and
which will obligate the Borrowers to, within 10 days after the occurrence of a
Stock Collateral Effective Date (or within 30 days of the notice referred to
above if such Collateral Period shall have begun and shall then be
continuing), cause all of the capital stock (or other equity interest) of such
Person to be delivered to the Administrative Agent (together with undated
stock powers, if applicable, signed in blank) and pledged to the
Administrative Agent, (c) unless a Collateral Termination Date has occurred
with respect to the Mortgages, execute such Mortgages as are necessary with
respect to any Property owned by such Person and if the Real Estate Collateral
Effective Date has occurred (and an appropriate Collateral Termination Date
has not occurred), such surveys, flood certificates and other documents,
agreements and instruments as requested by the Administrative Agent; provided
that such Mortgage and related documents shall not be required with respect to
any Property that is subject to a Permitted Lien as set forth in clause (j) of
the definition of Permitted Liens, and (d) deliver such other documentation as
the Administrative Agent may reasonably request in connection with the
foregoing, including, without limitation, information regarding the real
property owned by such Person, including title and environmental reports,
certified resolutions and other organizational and authorizing documents of
such Person and favorable opinions of counsel to such Person (which shall
cover, among other things, the legality, validity, binding effect and
enforceability of the documentation referred to above), and, if a Collateral
Period shall exist, appropriate UCC-1 financing statements all in form,
content and scope reasonably satisfactory to the Administrative Agent.
7.13 Interest Rate Protection Agreements.
If for any consecutive period of 30 days or more Eurodollar Loans
constitute less than 75% of the aggregate principal amount of all outstanding
Revolving Loans, then the Borrowers shall enter into interest rate protection
agreements in form and substance acceptable to the Administrative Agent.
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7.14 Collateral Effective Date.
(a) Real Estate Collateral Effective Date. Upon the
occurrence of the Real Estate Collateral Effective Date, the
Mortgages shall be released from escrow and filed in the appropriate
jurisdictions and there shall be added to Section 6 a new
representation and warranty in the form set forth on Schedule 7.14.
Within 90 days following the Real Estate Collateral Effective Date,
the Borrowers shall deliver to the Administrative Agent, in form and
substance reasonably satisfactory to the Administrative Agent:
(i) such UCC-1 fixture filings as are necessary
with respect to each Property.
(ii) an opinion of counsel in the state in which
each Property is located with respect to the
enforceability of the Mortgages, standard
remedies with respect thereto and sufficiency
of the form of UCC-1 financing statements to
be recorded or filed in such state and such
other matters as the Administrative Agent may
request, in form and substance reasonably
satisfactory to the Administrative Agent.
(iii) ALTA or other appropriate form mortgagee
title insurance policies (the "Mortgage
Policies") issued by a title insurance
company acceptable to the Administrative
Agent (the "Title Insurance Company"), in an
amount reasonably satisfactory to the
Administrative Agent with respect to each
parcel of Property, assuring the
Administrative Agent that the applicable
Mortgages create valid and enforceable
mortgage liens on the respective Properties,
free and clear of all defects and
encumbrances except Permitted Liens, which
Mortgage Policies shall be in form and
substance reasonably satisfactory to the
Administrative Agent and containing such
endorsements as shall be reasonably
satisfactory to the Administrative Agent and
for any other matters that the Administrative
Agent may request, and providing affirmative
insurance and such reinsurance as the
Administrative Agent may request, all of the
foregoing in form and substance reasonably
satisfactory to the Administrative Agent.
(iv) Surveys. Maps or plats of an as-built survey
of the sites of the Properties certified to
the Administrative Agent and the Title
Insurance Company in a manner reasonably
satisfactory to them, dated a date
satisfactory to the Administrative Agent and
the Title Insurance Company by an independent
professional licensed land surveyor
reasonably satisfactory to the Administrative
Agent and the Title Insurance Company, which
maps or plats and the surveys on which they
are based shall be sufficient to delete any
standard printed survey exception contained
in the applicable title policy and be made in
accordance with the Minimum Standard Detail
Requirements for Land Title Surveys jointly
established and adopted
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by the American Land Title Association and
the American Congress on Surveying and
Mapping in 1992, and, without limiting the
generality of the foregoing, there shall be
surveyed and shown on such maps, plats or
surveys the following: (A) the locations on
such sites of all the buildings, structures
and other improvements and the established
building setback lines; (B) the lines of
streets abutting the sites and width thereof;
(C) all access and other easements
appurtenant to the sites necessary to use the
sites; (D) all roadways, paths, driveways,
easements, encroachments and overhanging
projections and similar encumbrances
affecting the site, whether recorded,
apparent from a physical inspection of the
sites or otherwise known to the surveyor; (E)
any encroachments on any adjoining property
by the building structures and improvements
on the sites; and (F) if the site is
described as being on a filed map, a legend
relating the survey to said map.
(v) Flood Certificates. Certification from a
registered engineer or land surveyor or other
evidence reasonably acceptable to the
Administrative Agent that none of the
improvements on the Properties are located
within any area designated by the Director of
the Federal Emergency Management Agency as a
"special flood hazard" area or if any
improvements on the Properties are located
within a "special flood hazard" area,
evidence of a flood insurance policy from a
company and in an amount reasonably
satisfactory to the Administrative Agent for
the applicable portion of the premises,
naming the Administrative Agent, for the
benefit of the Lenders, as mortgagee.
(vi) Environmental Reports. Environmental
assessment reports and related documents with
respect to all Properties reasonably
acceptable to the Administrative Agent.
(vii) Valuations. A real estate valuation for each
of the Properties reasonably acceptable to
the Administrative Agent.
(b) Stock Collateral Effective Date. Upon the occurrence of
a Stock Collateral Effective Date and during the ensuing Collateral
Period, the Pledge Agreements shall be in full force and effect and
the Administrative Agent, on behalf of the Lenders, shall have a Lien
on the Collateral described in the Pledge Agreements and there shall
be added to Section 6 a new representation and warranty in the form
set forth on Schedule 7.14(b). Within ten Business Days following the
Stock Collateral Effective Date, the Borrowers shall deliver to the
Administrative Agent, in form and substance reasonably satisfactory
to the Administrative Agent:
(i) all stock certificates evidencing the stock
pledged to the Administrative Agent pursuant
to the Pledge Agreements, together with duly
executed in blank undated stock powers
attached thereto.
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(ii) duly executed UCC financing statements for
each appropriate jurisdiction as is
necessary, in the Administrative Agent's sole
discretion, to perfect the Lenders' security
interest in the Stock Collateral.
(iii) an opinion of counsel addressed to the
Administrative Agent, on behalf of the
Lenders, covering such issues as reasonably
requested by the Administrative Agent,
including the attachment and perfection of
the Liens in favor of the Lenders.
7.15 Construction.
With respect to any construction and development engaged in by the
Combined Parties, the Credit Parties shall or shall cause another Person to:
(a) comply with all applicable regulations and codes and (b) complete all such
construction and development in accordance with approved plans and
specifications.
7.16 Acquisitions.
If at the time a Credit Party or one of its Subsidiaries anticipates
making an Investment or an acquisition in excess of $20 million there are any
Revolving Loans outstanding or LOC Obligations outstanding, then ten Business
Days prior to such Credit Party (or Subsidiary) making such Investment or
acquisition, the Borrowers shall provide the Administrative Agent written
notice of such Investment or acquisition, together with a certification as to
compliance with the terms of the Credit Agreement, including, without
limitation, Section 7.2, after giving effect to such Investment or
acquisition. If there are no Revolving Loans or LOC Obligations are
outstanding, the Borrowers shall give the Administrative Agent written notice
of such Investment or acquisition by a Credit Party within five Business Days
after the occurrence of such Investment or acquisition.
7.17 Mortgage Documents.
On or before December 31, 1998, the Credit Parties shall provide to
the Administrative Agent fully executed and notarized mortgages, deeds of
trust or deeds to secure debt (each a "Mortgage" and collectively the
"Mortgages") encumbering the fee interest of the Credit Parties in the
Unsecured Properties in substantially the form of Exhibit 7.17, with such
changes as are necessary to comply with various state laws. The Mortgages
shall be placed in escrow and shall not be effective until the Real Estate
Collateral Effective Date. If the Real Estate Collateral Effective Date does
not occur on or before May 15, 1999 in accordance with the terms hereof, the
Mortgages shall be released to the Borrowers.
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SECTION 8
NEGATIVE COVENANTS
------------------
Each Credit Party hereby covenants and agrees that so long as this
Credit Agreement is in effect and until the Loans and LOC Obligations,
together with interest, fees and other obligations hereunder, have been paid
in full and the Commitments and Letters of Credit hereunder shall have
terminated:
8.1 Indebtedness.
No Credit Party will, nor will it permit any Combined Party to,
contract, create, incur, assume or permit to exist any Indebtedness, except:
(a) Indebtedness arising under this Credit Agreement and the
other Credit Documents;
(b) Indebtedness owing from one Credit Party to another
Credit Party;
(c) Indebtedness in respect of current accounts payable and
accrued expenses incurred in the ordinary course of business; and
(d) Other Indebtedness as long as, prior to and after giving
effect thereto, the Credit Parties are otherwise in compliance with
the terms of this Credit Agreement.
8.2 Liens.
No Credit Party will, nor will it permit any of its Subsidiaries to,
contract, create, incur, assume or permit to exist any Lien with respect to
(a) any Unsecured Properties, unless after giving affect to the creation of
such Lien (i) the Credit Parties are in compliance on a Pro Forma Basis with
the financial covenants set forth in Section 7.2 and (ii) no Default or Event
of Default or (b) any of its other Properties or any other assets of any kind
(whether real or personal, tangible or intangible), whether now owned or after
acquired, except for Permitted Liens.
8.3 Nature of Business.
No Credit Party will, nor will it permit any of its Subsidiaries to,
alter the character of its business from that conducted as of the Closing Date
or engage in any business other than the business conducted as of the Closing
Date.
8.4 Consolidation and Merger.
No Credit Party will enter into any transaction of merger or
consolidation or liquidate, wind up or dissolve itself (or suffer any
liquidation or dissolution); provided that notwithstanding the foregoing
provisions of this Section 8.4, (a) any Credit Party may be merged or
consolidated with or into another Credit Party; provided that (i) if the
transaction is between a Borrower and another Credit Party such Borrower is
the continuing or surviving entity; (ii) the Administrative Agent is
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given prior written notice of such action, and the Credit Parties execute and
deliver such documents, instruments and certificates as the Administrative
Agent may reasonably request; (iii) after giving effect thereto no Default or
Event of Default exists; and (iv) during any Collateral Period, the Lenders
continue to have a first priority perfected Lien on the appropriate Collateral
and (b) upon prior written notification to the Administrative Agent, as long
as no Default or Event of Default exists, a Credit Party that has no assets
and no revenues may be dissolved.
8.5 Sale or Lease of Assets.
(a) No Property may be conveyed, sold, leased, transferred or
otherwise disposed of except (i) the Properties as indicated on Schedule 8.5
as long as such conveyance, sale, lease, transfer or other disposal occurs on
or before March 31, 1999 or (ii) such other Properties if, after giving effect
thereto, (A) the Credit Parties are in compliance on a Pro Forma Basis with
the financial covenants set forth in Section 7.2 and (B) no Default or Event
of Default exists.
(b) No equity interest in any Credit Party may be conveyed, sold,
transferred or otherwise disposed of except (i) the transfers of equity
interests as indicated on Schedule 8.5 as long as such conveyance, sale,
transfer or disposal occurs on or before March 31, 1999 or (ii) such other
equity interests if, after giving effect thereto (i) the Credit Parties are in
compliance on a Pro Forma Basis with the financial covenants set forth in
Section 7.2 and (ii) no Default or Event of Default exists; provided that any
sale of an equity interest in a Borrower is subject to Section 9.1(i). Upon
the sale of an equity interest in a Guarantor in conformance with the terms
hereof, if after the sale of such equity interest such Guarantor is no longer
a Material Subsidiary the Lenders agree to release such Guarantor from its
obligations hereunder.
8.6 Advances, Investments and Loans.
Neither the Credit Parties nor any of their Subsidiaries will (a)
make any Investments except for Permitted Investments or (b) so long as
Brandywine Realty Services Partnership ("BRSP") is named in Section 2.5, make
any Investments in BRSP (whether or not such Investment would otherwise be a
Permitted Investment) or otherwise cause or permit BRSP to be a Subsidiary of
any Credit Party.
8.7 Restricted Payments.
(a) No Credit Party will, directly or indirectly, declare or
pay any dividends or make any other distribution upon any of its
shares of beneficial interests or any shares of its capital stock of
any class or with respect to any of its partnership interests that
exceeds, in the aggregate, 90% of Funds From Operations earned
subsequent to the Effective Date; provided that (i) any Subsidiary of
a Credit Party may pay dividends or make distributions to its parent
and (ii) BRT may pay such dividends as is necessary to maintain its
status as a REIT.
(b) Except as permitted by Section 8.6 and except for the
conversion of partnership units of BOP into cash or into shares of
beneficial interest of BRT, no Credit Party will, nor will it permit
any of its Subsidiaries to, at any time, for cash, purchase, redeem
or otherwise acquire or retire or make any provisions for redemption,
acquisition or retirement of any shares of its capital stock of any
class or any warrants or options to purchase any such shares or with
respect to any of its partnership interests.
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8.8 Transactions with Affiliates.
No Credit Party will, nor will it permit any of its Subsidiaries to,
enter into any transaction or series of transactions, whether or not in the
ordinary course of business, with any officer, director, shareholder,
Subsidiary or Affiliate other than on terms and conditions substantially as
favorable as would be obtainable in a comparable arm's-length transaction with
a Person other than an officer, director, shareholder, Subsidiary or
Affiliate.
8.9 Fiscal Year; Organizational Documents.
No Credit Party will (a) change its fiscal year or (b) change its
articles or certificate of incorporation, its bylaws, its declaration of
trust, its limited liability company agreement, its articles or certificate of
partnership or partnership agreement or any other organization or formation
documents in any manner that would have an adverse effect of the rights of the
Lenders under the Credit Documents; provided that (i) BRT may take such
action, with prior written notice to the Administrative Agent, as is necessary
to maintain its status as a REIT and (ii) the Credit Parties will provide
prompt written notice of any change to be made in compliance with the terms of
this Section 8.9.
8.10 Limitations.
No Credit Party will, nor will it permit any of its Subsidiaries to,
directly or indirectly, create or otherwise cause, incur, assume, suffer or
permit to exist or become effective any consensual encumbrance or restriction
of any kind on the ability of any such Person to pay any Indebtedness owed to
the Credit Parties.
8.11 Other Negative Pledges.
The Credit Parties will not enter into, assume or become subject to
any agreement prohibiting or otherwise restricting the creation or assumption
of any Lien upon its properties or assets, whether now owned or hereafter
acquired, or requiring the grant of any security for such obligation if
security is given for some other obligation except as provided under the
Credit Documents.
8.12 Construction and Development.
The Credit Parties shall not engage in construction and development
projects in which the total project costs of all such concurrent construction
and development projects exceed, in the aggregate at any one time, 15% of
Total Assets (it being understood and agreed for purposes of this Section 8.12
that a project shall be considered under construction and/or development until
a certificate of occupancy therefore (or other similar certificate) shall have
been issued by the applicable Governmental Authority).
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SECTION 9
EVENTS OF DEFAULT
-----------------
9.1 Events of Default.
An Event of Default shall exist upon the occurrence of any of the
following specified events (each an "Event of Default"):
(a) Payment. The Credit Parties shall default in the payment
(i) when due of any principal amount of any Loans or any
reimbursement obligation arising from drawings under Letters of
Credit or (ii) within three days of when due of any interest on the
Loans or any fees or other amounts owing hereunder, under any of the
other Credit Documents or in connection herewith.
(b) Representations. Any representation, warranty or
statement made or deemed to be made by any Credit Party herein, in
any of the other Credit Documents, or in any statement or certificate
delivered or required to be delivered pursuant hereto or thereto
shall prove untrue in any material respect on the date as of which it
was made or deemed to have been made.
(c) Covenants. Any Credit Party shall:
(i) default in the due performance or
observance of any term, covenant or agreement contained in
Sections 7.2, 7.3, 7.10, 7.11, 7.12, 7.14, 7.17 or 8.1
through 8.12 inclusive; provided that if the Credit Parties
fail to comply with Section 7.2(e) solely as a result of a
change in the Capitalization Rate by the Lenders, a Default
or an Event of Default shall not exist unless the Credit
Parties also fail to comply with Section 7.2(e) as of the
last day of any subsequent fiscal quarter of the Credit
Parties; or
(ii) default in the due performance or
observance by it of any term, covenant or agreement
contained in Section 7.1 and such default shall continue
unremedied for a period of five Business Days after the
earlier of a Credit Party becoming aware of such default or
notice thereof given by the Administrative Agent; or
(iii) default in the due performance or
observance by it of any term, covenant or agreement (other
than those referred to in subsections (a), (b) or (c)(i) or
(ii) of this Section 9.1) contained in this Credit Agreement
and such default shall continue unremedied for a period of
at least 30 days after the earlier of a Credit Party
becoming aware of such default or notice thereof given by
the Administrative Agent.
(d) Other Credit Documents. (i) Any Credit Party shall
default in the due performance or observance of any term, covenant or
agreement in any of the other Credit Documents and such default shall
continue unremedied for a period of at least 30 days after
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the earlier of a Credit Party becoming aware of such default or
notice thereof given by the Administrative Agent, or (ii) any Credit
Document (or any provision of any Credit Document, including Section
4 of the Credit Agreement) shall fail to be in full force and effect
or any Credit Party shall so assert or any Credit Document shall fail
to give the Administrative Agent and/or the Lenders the security
interests, liens, rights, powers and privileges purported to be
created thereby.
(e) Bankruptcy, etc. The occurrence of any of the following
with respect to any Credit Party or any of its Subsidiaries (i) a
court or governmental agency having jurisdiction in the premises
shall enter a decree or order for relief in respect of any Credit
Party or any of its Subsidiaries in an involuntary case under any
applicable bankruptcy, insolvency or other similar law now or
hereafter in effect, or appoint a receiver, liquidator, assignee,
custodian, trustee, sequestrator or similar official of any Credit
Party or any of its Subsidiaries or for any substantial part of its
property or ordering the winding up or liquidation of its affairs; or
(ii) an involuntary case under any applicable bankruptcy, insolvency
or other similar law now or hereafter in effect is commenced against
any Credit Party or any of its Subsidiaries and such petition remains
unstayed and in effect for a period of 60 consecutive days; or (iii)
any Credit Party or any of its Subsidiaries shall commence a
voluntary case under any applicable bankruptcy, insolvency or other
similar law now or hereafter in effect, or consent to the entry of an
order for relief in an involuntary case under any such law, or
consent to the appointment or taking possession by a receiver,
liquidator, assignee, custodian, trustee, sequestrator or similar
official of such Person or any substantial part of its property or
make any general assignment for the benefit of creditors; or (iv) any
Credit Party or any of its Subsidiaries shall admit in writing its
inability to pay its debts generally as they become due or any action
shall be taken by such Person in furtherance of any of the aforesaid
purposes.
(f) Defaults under Other Agreements. With respect to any
recourse Indebtedness (other than Indebtedness outstanding under this
Credit Agreement) of any Credit Party or any of its Subsidiaries in
an aggregate principal amount in excess of $10,000,000, (i) a Credit
Party or one of its Subsidiaries shall (A) default in any payment
(beyond the applicable grace period with respect thereto, if any)
with respect to any such recourse Indebtedness, or (B) default (after
giving effect to any applicable grace period) in the observance or
performance of any term, covenant or agreement relating to such
recourse Indebtedness or contained in any instrument or agreement
evidencing, securing or relating thereto, or any other event or
condition shall occur or condition exist, the effect of which default
or other event or condition is to cause, or permit, the holder or
holders of such recourse Indebtedness (or trustee or agent on behalf
of such holders) to cause (determined without regard to whether any
notice or lapse of time is required) any such recourse Indebtedness
to become due prior to its stated maturity; or (ii) any such recourse
Indebtedness shall be declared due and payable, or required to be
prepaid other than by a regularly scheduled required prepayment prior
to the stated maturity thereof; or (iii) any such Indebtedness shall
mature and remain unpaid. With respect to any nonrecourse
Indebtedness of any Credit Party or any of its Subsidiaries in an
aggregate principal amount in excess of $20,000,000, a default in
payment (whether by acceleration or otherwise) shall occur and such
payment default is not cured or waived within sixty days after the
occurrence thereof.
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(g) Judgments. One or more judgments, orders, or decrees
shall be entered against any one or more of the Credit Party
involving a liability of $10,000,000 or more, in the aggregate (to
the extent not paid or covered by insurance provided by a carrier who
has acknowledged coverage), and such judgments, orders or decrees (i)
are the subject of any enforcement proceeding commenced by any
creditor or (ii) shall continue unsatisfied, undischarged and
unstayed for a period ending on the first to occur of (A) the last
day on which such judgment, order or decree becomes final and
unappealable or (B) 20 days.
(h) ERISA Events. The occurrence of any of the following
events or conditions, unless such event or occurrence would not have
or be reasonably expected to have a Material Adverse Effect: (1) any
"accumulated funding deficiency," as such term is defined in Section
302 of ERISA and Section 412 of the Code, whether or not waived,
shall exist with respect to any Plan, or any lien shall arise on the
assets of a Credit Party or any ERISA Affiliate in favor of the PBGC
or a Plan; (2) an ERISA Event shall occur with respect to a Single
Employer Plan, which is, in the reasonable opinion of the
Administrative Agent, likely to result in the termination of such
Plan for purposes of Title IV of ERISA; (3) an ERISA Event shall
occur with respect to a Multiemployer Plan or Multiple Employer Plan,
which is, in the reasonable opinion of the Administrative Agent,
likely to result in (i) the termination of such Plan for purposes of
Title IV of ERISA, or (ii) a Credit Party or any ERISA Affiliate
incurring any liability in connection with a withdrawal from,
reorganization of (within the meaning of Section 4241 of ERISA), or
insolvency (within the meaning of Section 4245 of ERISA) of such
Plan; or (4) any prohibited transaction (within the meaning of
Section 406 of ERISA or Section 4975 of the Code) or breach of
fiduciary responsibility shall occur which may subject a Credit Party
or any ERISA Affiliate to any liability under Sections 406, 409,
502(i), or 502(l) of ERISA or Section 4975 of the Code, or under any
agreement or other instrument pursuant to which a Credit Party or any
ERISA Affiliate has agreed or is required to indemnify any person
against any such liability.
(i) Ownership. There shall occur a Change of Control.
(j) Management. Gerard Sweeney is no longer active in the
management of the Credit Parties and their Subsidiaries; provided
that upon the death or disability of Gerard Sweeney, the Credit
Parties and their Subsidiaries shall have six months to provide the
Administrative Agent with substitute personnel as replacement; such
substitute personnel to be acceptable to the Administrative Agent in
its sole reasonable discretion.
(k) REIT Status. BRT does not maintain its REIT status or is
no longer deemed to be a REIT.
(l) Bridge Facility. An Event of Default (as defined in the
Bridge Facility) occurs.
9.2 Acceleration; Remedies.
Upon the occurrence of an Event of Default, and at any time
thereafter unless and until such Event of Default has been waived in writing
by the Required Lenders (or the Lenders as may be required hereunder), the
Administrative Agent shall, upon the request and direction of Lenders
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whose aggregate Credit Exposure constitutes at least 66 2/3% of the Credit
Exposure of all Lenders, by written notice to the Borrowers, take any of the
following actions without prejudice to the rights of the Administrative Agent
or any Lender to enforce its claims against the Borrowers, except as otherwise
specifically provided for herein:
(a) Termination of Commitments. Declare the Commitments
terminated whereupon the Commitments shall be immediately terminated.
(b) Acceleration of Loans. Declare the unpaid principal of
and any accrued interest in respect of all Loans, any reimbursement
obligations arising from drawings under Letters of Credit and any and
all other indebtedness or obligations of any and every kind owing by
a Credit Party to any of the Lenders hereunder to be due whereupon
the same shall be immediately due and payable without presentment,
demand, protest or other notice of any kind, all of which are hereby
waived by the Credit Parties.
(c) Cash Collateral. Direct the Credit Parties to pay (and
the Credit Parties agree that upon receipt of such notice, or upon
the occurrence of an Event of Default under Section 9.1(e), they will
immediately pay) to the Administrative Agent additional cash, to be
held by the Administrative Agent, for the benefit of the Lenders, in
a cash collateral account as additional security for the LOC
Obligations in respect of subsequent drawings under all then
outstanding Letters of Credit in an amount equal to the maximum
aggregate amount which may be drawn under all Letters of Credits then
outstanding.
(d) Enforcement of Rights. Enforce any and all rights and
interests created and existing under the Credit Documents, including,
without limitation, all rights and remedies existing under the
Collateral Documents or against a Guarantor and all rights of
set-off.
Notwithstanding the foregoing, if an Event of Default specified in Section
9.1(e) shall occur, then the Commitments shall automatically terminate and all
Loans, all accrued interest in respect thereof, all accrued and unpaid fees,
all reimbursement obligations under Letters of Credit and all other
indebtedness or obligations owing to the Lenders hereunder shall immediately
become due and payable without the giving of any notice or other action by the
Administrative Agent or the Lenders, which notice or other action is expressly
waived by the Credit Parties.
Notwithstanding the fact that enforcement powers reside primarily with the
Administrative Agent, each Lender has, to the extent permitted by law, a
separate right of payment and shall be considered a separate "creditor"
holding a separate "claim" within the meaning of Section 101(5) of the
Bankruptcy Code or any other insolvency statute.
9.3 Allocation of Payments After Event of Default.
Notwithstanding any other provisions of this Credit Agreement, after
the occurrence and during the continuance of an Event of Default, all amounts
collected or received by the Administrative Agent, or any Lender on account of
amounts outstanding under any of the Credit Documents, or in respect of the
Collateral, shall be paid over or delivered as follows:
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FIRST, to the payment of all reasonable out-of-pocket costs
and expenses (including without limitation reasonable attorneys'
fees) of the Administrative Agent in connection with enforcing the
rights of the Lenders under the Credit Documents and any protective
advances made by the Administrative Agent with respect to the
Collateral pursuant to the terms of the Collateral Documents;
SECOND, to payment of any fees owed to the Administrative
Agent;
THIRD, to the payment of all reasonable out-of-pocket costs
and expenses, (including, without limitation, reasonable attorneys'
fees) of each of the Lenders in connection with enforcing its rights
under the Credit Documents;
FOURTH, to the payment of all accrued fees and interest
payable to the Lenders hereunder;
FIFTH, to the payment of the outstanding principal amount of
the Loans, and unreimbursed drawings under Letters of Credit, to the
payment or cash collateralization of the outstanding LOC Obligations
pro rata, as set forth below;
SIXTH, to all other obligations which shall have become due
and payable under the Credit Documents and not repaid pursuant to
clauses "FIRST" through "FIFTH" above; and
SEVENTH, to the payment of the surplus, if any, to whoever
may be lawfully entitled to receive such surplus.
In carrying out the foregoing, (a) amounts received shall be applied in the
numerical order provided until exhausted prior to application to the next
succeeding category; (b) each of the Lenders shall receive an amount equal to
its pro rata share (based on the proportion that the then outstanding Loans
and LOC Obligations held by such Lender bears to the aggregate then
outstanding Loans and LOC Obligations) of amounts available to be applied
pursuant to clauses "THIRD", "FOURTH," "FIFTH," and "SIXTH" above and (c) to
the extent that any amounts available for distribution pursuant to clause
"FIFTH" above are attributable to the issued by undrawn amount of outstanding
Letters of Credit, such amounts shall be held by the Administrative Agent in a
cash collateral account and applied (x) first, to reimburse the Issuing Lender
from time to time for any drawings under such Letters of Credit and (y) then,
following the expiration of all Letters of Credit, to all other obligations of
the types described in clauses "FIFTH" and "SIXTH" above in the manner
provided in this Section 9.3.
SECTION 10
AGENCY PROVISIONS
-----------------
10.1 Appointment.
Each Lender hereby designates and appoints NationsBank, N.A. as
Administrative Agent of such Lender to act as specified herein and the other
Credit Documents, and each such Lender
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hereby authorizes the Administrative Agent, as the agent for such Lender, to
take such action on its behalf under the provisions of this Credit Agreement
and the other Credit Documents and to exercise such powers and perform such
duties as are expressly delegated by the terms hereof and of the other Credit
Documents, together with such other powers as are reasonably incidental
thereto. Notwithstanding any provision to the contrary elsewhere herein and in
the other Credit Documents, the Administrative Agent shall not have any duties
or responsibilities, except those expressly set forth herein and therein, or
any fiduciary relationship with any Lender, and no implied covenants,
functions, responsibilities, duties, obligations or liabilities shall be read
into this Credit Agreement or any of the other Credit Documents, or shall
otherwise exist against the Administrative Agent. The provisions of this
Section are solely for the benefit of the Administrative Agent and the Lenders
and none of the Credit Parties shall have any rights as a third party
beneficiary of the provisions hereof. In performing its functions and duties
under this Credit Agreement and the other Credit Documents, the Administrative
Agent shall act solely as an agent of the Lenders and does not assume and
shall not be deemed to have assumed any obligation or relationship of agency
or trust with or for any Credit Parties.
10.2 Delegation of Duties.
The Administrative Agent may execute any of its duties hereunder or
under the other Credit Documents by or through agents or attorneys-in-fact and
shall be entitled to advice of counsel concerning all matters pertaining to
such duties. The Administrative Agent shall not be responsible for the
negligence or misconduct of any agents or attorneys-in-fact selected by it
with reasonable care.
10.3 Exculpatory Provisions.
Neither the Administrative Agent nor any of its officers, directors,
employees, agents, attorneys-in-fact or affiliates shall be (a) liable for any
action lawfully taken or omitted to be taken by it or such Person under or in
connection herewith or in connection with any of the other Credit Documents
(except for its or such Person's own gross negligence or willful misconduct)
or (b) responsible in any manner to any of the Lenders for any recitals,
statements, representations or warranties made by any of the Credit Parties
contained herein or in any of the other Credit Documents or in any
certificate, report, document, financial statement or other written or oral
statement referred to or provided for in, or received by the Administrative
Agent under or in connection herewith or in connection with the other Credit
Documents, or enforceability or sufficiency therefor of any of the other
Credit Documents, or for any failure of the Credit Parties to perform their
obligations hereunder or thereunder. The Administrative Agent shall not be
responsible to any Lender for the effectiveness, genuineness, validity,
enforceability, collectibility or sufficiency of this Credit Agreement, or any
of the other Credit Documents or for any representations, warranties, recitals
or statements made herein or therein or made by the Credit Parties in any
written or oral statement or in any financial or other statements,
instruments, reports, certificates or any other documents in connection
herewith or therewith furnished or made by the Administrative Agent to the
Lenders or by or on behalf of the Credit Parties to the Administrative Agent
or any Lender or be required to ascertain or inquire as to the performance or
observance of any of the terms, conditions, provisions, covenants or
agreements contained herein or therein or as to the use of the proceeds of the
Loans or the use of the Letters of Credit or of the existence or possible
existence of any Default or Event of Default or to inspect the properties,
books or records
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of the Credit Parties. The Administrative Agent is not a trustee for the
Lenders and owes no fiduciary duty to the Lenders.
10.4 Reliance on Communications.
The Administrative Agent shall be entitled to rely, and shall be
fully protected in relying, upon any note, writing, resolution, notice,
consent, certificate, affidavit, letter, cablegram, telegram, telecopy, telex
or teletype message, statement, order or other document or conversation
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 (including, without limitation, counsel to any of the Credit Parties,
independent accountants and other experts selected by the Administrative Agent
with reasonable care). The Administrative Agent may deem and treat each Lender
as the owner of its interests hereunder for all purposes unless a written
notice of assignment, negotiation or transfer thereof shall have been filed
with the Administrative Agent in accordance with Section 11.3(b). The
Administrative Agent shall be fully justified in failing or refusing to take
any action under this Credit Agreement or under any of the other Credit
Documents unless it shall first receive such advice or concurrence of the
Required Lenders as it deems appropriate or it shall first be indemnified to
its satisfaction by the Lenders 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 Administrative Agent shall in all cases be fully protected in
acting, or in refraining from acting, hereunder or under any of the other
Credit Documents in accordance with a request of the Required Lenders (or to
the extent specifically provided in Section 11.6, all the Lenders) and such
request and any action taken or failure to act pursuant thereto shall be
binding upon all the Lenders (including their successors and assigns).
10.5 Notice of Default.
The Administrative Agent shall not be deemed to have knowledge or
notice of the occurrence of any Default or Event of Default hereunder unless
the Administrative Agent has received notice from a Lender or a Credit Party
referring to the Credit Document, describing such Default or Event of Default
and stating that such notice is a "notice of default." In the event that the
Administrative Agent receives such a notice, the Administrative Agent shall
give prompt notice thereof to the Lenders. The Administrative Agent shall take
such action with respect to such Default or Event of Default as shall be
reasonably directed by the Required Lenders.
10.6 Non-Reliance on Administrative Agent and Other Lenders.
Each Lender expressly acknowledges that neither the Administrative
Agent, NMS nor any of their officers, directors, employees, agents,
attorneys-in-fact or affiliates has made any representations or warranties to
it and that no act by the Administrative Agent, NMS or any affiliate thereof
hereinafter taken, including any review of the affairs of any Credit Party,
shall be deemed to constitute any representation or warranty by the
Administrative Agent or NMS to any Lender. Each Lender represents to the
Administrative Agent and NMS that it has, independently and without reliance
upon the Administrative Agent or NMS or any other Lender, and based on such
documents and information as it has deemed appropriate, made its own appraisal
of and investigation into the business, assets, operations, property,
financial and other conditions, prospects and creditworthiness of the Credit
Parties and made its own decision to make its Loans hereunder and enter into
this
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Credit Agreement. Each Lender also represents that it will, independently
and without reliance upon the Administrative Agent, NMS or any other Lender,
and based on such documents and information as it shall deem appropriate at
the time, continue to make its own credit analysis, appraisals and decisions
in taking or not taking action under this Credit Agreement, and to make such
investigation as it deems necessary to inform itself as to the business,
assets, operations, property, financial and other conditions, prospects and
creditworthiness of the Credit Parties. Except for notices, reports and other
documents expressly required to be furnished to the Lenders by the
Administrative Agent hereunder, the Administrative Agent and NMS shall not
have any duty or responsibility to provide any Lender with any credit or other
information concerning the business, operations, assets, property, financial
or other conditions, prospects or creditworthiness of the Credit Parties which
may come into the possession of the Administrative Agent, NMS or any of their
officers, directors, employees, agents, attorneys-in-fact or affiliates.
10.7 Indemnification.
The Lenders agree to indemnify the Administrative Agent in its
capacity as such (to the extent not reimbursed by the Credit Parties and
without limiting the obligation of the Credit Parties to do so), ratably
according to their respective Commitments (or if the Commitments have expired
or been terminated, in accordance with the respective principal amounts of
outstanding Loans and Participation Interest of the Lenders), from and against
any and all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind whatsoever
which may at any time (including without limitation at any time following
payment in full of the Obligations) be imposed on, incurred by or asserted
against the Administrative Agent in its capacity as such in any way relating
to or arising out of this Credit Agreement or the other Credit Documents or
any documents contemplated by or referred to herein or therein or the
transactions contemplated hereby or thereby or any action taken or omitted by
the Administrative Agent under or in connection with any of the foregoing;
provided that no Lender shall be liable for the payment of any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements resulting from the gross negligence or
willful misconduct of the Administrative Agent. If any indemnity furnished to
the Administrative Agent for any purpose shall, in the opinion of the
Administrative Agent, be insufficient or become impaired, the Administrative
Agent may call for additional indemnity and cease, or not commence, to do the
acts indemnified against until such additional indemnity is furnished. The
agreements in this Section shall survive the payment of the Obligations and
all other amounts payable hereunder and under the other Credit Documents.
10.8 Administrative Agent in Its Individual Capacity.
The Administrative Agent and its affiliates may make loans to, accept
deposits from and generally engage in any kind of business with the Credit
Parties as though the Administrative Agent were not the Administrative Agent
hereunder. With respect to the Loans made and Letters of Credit issued and all
obligations owing to it, the Administrative Agent shall have the same rights
and powers under this Credit Agreement as any Lender and may exercise the same
as though it were not the Administrative Agent, and the terms "Lender" and
"Lenders" shall include the Administrative Agent in its individual capacity.
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10.9 Successor Agent.
The Administrative Agent may, at any time, resign upon 20 days
written notice to the Lenders. Upon any such resignation, the Required Lenders
shall have the right to appoint a successor Administrative Agent. If no
successor Administrative Agent shall have been so appointed by the Required
Lenders, and shall have accepted such appointment, within 45 days after the
notice of resignation, then the retiring Administrative Agent shall select a
successor Administrative Agent provided such successor is a Lender hereunder
or an Eligible Assignee. Upon the acceptance of any appointment as the
Administrative Agent hereunder by a successor, such successor Administrative
Agent shall thereupon succeed to and become vested with all the rights,
powers, privileges and duties of the retiring Administrative Agent, and the
retiring Administrative Agent shall be discharged from its duties and
obligations as the Administrative Agent, as appropriate, under this Credit
Agreement and the other Credit Documents and the provisions of this Section
10.9 shall inure to its benefit as to any actions taken or omitted to be taken
by it while it was the Administrative Agent under this Credit Agreement.
SECTION 11
MISCELLANEOUS
-------------
11.1 Notices.
Except as otherwise expressly provided herein, all notices and other
communications shall have been duly given and shall be effective (a) when
delivered, (b) when transmitted via telecopy (or other facsimile device) to
the number set out below, (c) the Business Day following the day on which the
same has been delivered prepaid to a reputable national overnight air courier
service, or (d) the third Business Day following the day on which the same is
sent by certified or registered mail, postage prepaid, in each case to the
respective parties at the address or telecopy numbers set forth on Schedule
11.1, or at such other address as such party may specify by written notice to
the other parties hereto.
11.2 Right of Set-Off.
In addition to any rights now or hereafter granted under applicable
law or otherwise, and not by way of limitation of any such rights, upon the
occurrence of an Event of Default and the commencement of remedies described
in Section 9.2, each Lender is authorized at any time and from time to time,
without presentment, demand, protest or other notice of any kind (all of which
rights being hereby expressly waived), to set-off and to appropriate and apply
any and all deposits (general or special) and any other indebtedness at any
time held or owing by such Lender (including, without limitation, branches,
agencies or Affiliates of such Lender wherever located) to or for the credit
or the account of any Credit Party against obligations and liabilities of such
Credit Party to the Lenders hereunder, under the Notes, the other Credit
Documents or otherwise, irrespective of whether the Administrative Agent or
the Lenders shall have made any demand hereunder and although such
obligations, liabilities or claims, or any of them, may be contingent or
unmatured, and any such set-off shall be deemed to have been made immediately
upon the occurrence of an Event of Default even though such charge is made or
entered on the books of such
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Lender subsequent thereto. The Credit Parties hereby agree that any Person
purchasing a participation in the Loans and Commitments hereunder pursuant to
Section 11.3(c) or 3.8 may exercise all rights of set-off with respect to its
participation interest as fully as if such Person were a Lender hereunder.
11.3 Benefit of Agreement.
(a) Generally. This Credit Agreement shall be binding upon
and inure to the benefit of and be enforceable by the respective
successors and assigns of the parties hereto; provided that none of
the Credit Parties may assign and transfer any of its interests
(except as permitted by Sections 8.4 or 8.5) without the prior
written consent of the Lenders; and provided further that the rights
of each Lender to transfer, assign or grant participations in its
rights and/or obligations hereunder shall be limited as set forth
below in subsections (b) and (c) of this Section 11.3.
Notwithstanding the above (including anything set forth in
subsections (b) and (c) of this Section 11.3), nothing herein shall
restrict, prevent or prohibit any Lender from (A) pledging its Loans
hereunder to a Federal Reserve Bank in support of borrowings made by
such Lender from such Federal Reserve Bank, or (B) granting
assignments or participations in such Lender's Loans and/or
Commitments hereunder to its parent company and/or to any Affiliate
of such Lender or to any existing Lender or Affiliate thereof.
(b) Assignments. In addition to the assignments permitted by
Section 11.3(a), each Lender may, with the prior written consent of
the Borrowers and the Administrative Agent (provided that no consent
of the Borrowers shall be required during the existence and
continuation of an Event of Default), which consent shall not be
unreasonably withheld or delayed, assign all or a portion of its
rights and obligations hereunder pursuant to an assignment agreement
substantially in the form of Exhibit 11.3 to one or more Eligible
Assignees; provided that (i) any such assignment shall be in a
minimum aggregate amount of $10,000,000 of the Commitments and in
integral multiples of $1,000,000 above such amount (or the remaining
amount of Commitments held by such Lender) and (ii) each such
assignment shall be of a constant, not varying, percentage of all of
the assigning Lender's rights and obligations under the Commitment
being assigned. Any assignment hereunder shall be effective upon
satisfaction of the conditions set forth above and delivery to the
Administrative Agent of a duly executed assignment agreement together
with a transfer fee of $3,500 payable to the Administrative Agent for
its own account. Upon the effectiveness of any such assignment, the
assignee shall become a "Lender" for all purposes of this Credit
Agreement and the other Credit Documents and, to the extent of such
assignment, the assigning Lender shall be relieved of its obligations
hereunder to the extent of the Loans and Commitment components being
assigned. The Borrowers agree that upon notice of any such assignment
and surrender of the appropriate Note or Notes, it will promptly
provide to the assigning Lender and to the assignee separate
promissory notes in the amount of their respective interests
substantially in the form of the original Note or Notes (but with
notation thereon that it is given in substitution for and replacement
of the original Note or Notes or any replacement notes thereof).
By executing and delivering an assignment agreement in accordance
with this Section 11.3(b), the assigning Lender thereunder and the
assignee thereunder shall be deemed to
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confirm to and agree with each other and the other parties hereto as
follows: (i) such assigning Lender warrants that it is the legal and
beneficial owner of the interest being assigned thereby free and
clear of any adverse claim and the assignee warrants that it is an
Eligible Assignee; (ii) except as set forth in clause (i) above, such
assigning Lender makes no representation or warranty and assumes no
responsibility with respect to any statements, warranties or
representations made in or in connection with this Credit Agreement,
any of the other Credit Documents or any other instrument or document
furnished pursuant hereto or thereto, or the execution, legality,
validity, enforceability, genuineness, sufficiency or value of this
Credit Agreement, any of the other Credit Documents or any other
instrument or document furnished pursuant hereto or thereto or the
financial condition of any Credit Party or the performance or
observance by any Credit Party of any of its obligations under this
Credit Agreement, any of the other Credit Documents or any other
instrument or document furnished pursuant hereto or thereto; (iii)
such assignee represents and warrants that it is legally authorized
to enter into such assignment agreement; (iv) such assignee confirms
that it has received a copy of this Credit Agreement, the other
Credit Documents and such other documents and information as it has
deemed appropriate to make its own credit analysis and decision to
enter into such assignment agreement; (v) such assignee will
independently and without reliance upon the Administrative Agent,
such assigning Lender or any other Lender, 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 Credit Agreement and the other Credit Documents;
(vi) such assignee appoints and authorizes the Administrative Agent
to take such action on its behalf and to exercise such powers under
this Credit Agreement or any other Credit Document as are delegated
to the Administrative Agent by the terms hereof or thereof, together
with such powers as are reasonably incidental thereto; and (vii) such
assignee agrees that it will perform in accordance with their terms
all the obligations which by the terms of this Credit Agreement and
the other Credit Documents are required to be performed by it as a
Lender.
(c) Participations. Each Lender may sell, transfer, grant or
assign participations in all or any part of such Lender's interests
and obligations hereunder; provided that (i) such selling Lender
shall remain a "Lender" for all purposes under this Credit Agreement
(such selling Lender's obligations under the Credit Documents
remaining unchanged) and the participant shall not constitute a
Lender hereunder, (ii) no such participant shall have, or be granted,
rights to approve any amendment or waiver relating to this Credit
Agreement or the other Credit Documents except to the extent any such
amendment or waiver would (A) reduce the principal of or rate of
interest on or fees in respect of any Loans in which the participant
is participating or increase any Commitments with respect thereto, or
(B) postpone the date fixed for any payment of principal (including
the extension of the final maturity of any Loan or the date of any
mandatory prepayment), interest or fees in which the participant is
participating, (iii) sub-participations by the participant (except to
an Affiliate, parent company or Affiliate of a parent company of the
participant) shall be prohibited and (iv) any such participations
shall be in a minimum aggregate amount of $10,000,000 of the
Commitments and in integral multiples of $1,000,000 in excess
thereof. In the case of any such participation, the participant shall
not have any rights under this Credit Agreement or the other Credit
Documents (the participant's rights against the selling Lender in
respect of such participation to be those set forth in the
participation agreement with such Lender creating such participation)
and all amounts payable by the Credit Parties hereunder shall be
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determined as if such Lender had not sold such participation;
provided, however, that such participant shall be entitled to receive
additional amounts under Sections 3.9, 3.12, 3.13 and 3.14 to the
same extent that the Lender from which such participant acquired its
participation would be entitled to the benefit of such cost
protection provisions.
11.4 No Waiver; Remedies Cumulative.
No failure or delay on the part of the Administrative Agent or any
Lender in exercising any right, power or privilege hereunder or under any
other Credit Document and no course of dealing between the Credit Parties and
the Administrative Agent or any Lender shall operate as a waiver thereof; nor
shall any single or partial exercise of any right, power or privilege
hereunder or under any other Credit Document preclude any other or further
exercise thereof or the exercise of any other right, power or privilege
hereunder or thereunder. The rights and remedies provided herein are
cumulative and not exclusive of any rights or remedies which the
Administrative Agent or any Lender would otherwise have. No notice to or
demand on any Credit Party in any case shall entitle any Credit Party to any
other or further notice or demand in similar or other circumstances or
constitute a waiver of the rights of the Administrative Agent or the Lenders
to any other or further action in any circumstances without notice or demand.
11.5 Payment of Expenses; Indemnification.
The Credit Parties agree to: (a) pay all reasonable out-of-pocket
costs and expenses of (i) the Administrative Agent and NMS in connection with
(A) the negotiation, preparation, execution and delivery, syndication and
administration of this Credit Agreement and the other Credit Documents and the
documents and instruments referred to therein (including, without limitation,
the reasonable fees and expenses of Moore & Van Allen, special counsel to the
Administrative Agent, and (B) any amendment, waiver or consent relating hereto
and thereto including, but not limited to, any such amendments, waivers or
consents resulting from or related to any work-out, renegotiation or
restructure relating to the performance by the Credit Parties under this
Credit Agreement, and (ii) the Administrative Agent and the Lenders in
connection with (A) enforcement of the Credit Documents and the documents and
instruments referred to therein, including, without limitation, in connection
with any such enforcement, the reasonable fees and disbursements of counsel
for the Administrative Agent and each of the Lenders, and (B) any bankruptcy
or insolvency proceeding of a Credit Party of any of its Subsidiaries, and (b)
indemnify the Administrative Agent, NMS and each Lender, its officers,
directors, employees, representatives and agents from and hold each of them
harmless against any and all losses, liabilities, claims, damages or expenses
incurred by any of them as a result of, or arising out of, or in any way
related to, or by reason of, any investigation, litigation or other proceeding
(whether or not the Administrative Agent, NMS or any Lender is a party
thereto) related to (i) the entering into and/or performance of any Credit
Document or the use of proceeds of any Loans (including other extensions of
credit) hereunder or the consummation of any other transactions contemplated
in any Credit Document, including, without limitation, the reasonable fees and
disbursements of counsel incurred in connection with any such investigation,
litigation or other proceeding (but excluding any such losses, liabilities,
claims, damages or expenses to the extent incurred by reason of gross
negligence or willful misconduct on the part of the Person to be indemnified),
(ii) any Environmental Claim and (iii) any claims for Non-Excluded Taxes.
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11.6 Amendments, Waivers and Consents.
Neither this Credit Agreement nor any other Credit Document nor any
of the terms hereof or thereof may be amended, changed, waived, discharged or
terminated unless such amendment, change, waiver, discharge or termination is
in writing and signed by the Required Lenders and the Credit Parties; provided
that no such amendment, change, waiver, discharge or termination shall without
the consent of each Lender affected thereby:
(a) extend the final maturity of any Loan or any portion
thereof or postpone any other date fixed for any payment of principal
(other than in accordance with Section 3.5(b));
(b) reduce the rate or extend the time of payment of
interest (other than as a result of waiving the applicability of any
post-default increase in interest rates) thereon or fees hereunder;
(c) reduce or waive the principal amount of any Loan;
(d) increase the Commitment of a Lender over the amount
thereof in effect (it being understood and agreed that a waiver of
any Default or Event of Default or a waiver of any mandatory
reduction in the Commitments shall not constitute a change in the
terms of any Commitment of any Lender);
(e) release a Borrower from its obligations, or all or
substantially all of the Guarantors from their obligations, under the
Credit Documents; provided that the Administrative Agent may release
a Guarantor if an equity interest in a Guarantor is transferred in
accordance with Section 8.5 or equity is issued in accordance with
Section 11.20;
(f) except upon a Collateral Termination Date, release all
or substantially all of the Collateral securing the Obligations;
(g) amend, modify or waive any provision of this Section or
Section 3.4(a), 3.4(b), 3.7, 3.8, 3.9, 3.10, 3.11, 3.12, 3.13, 3.14,
5.2, 9.1(a), 11.2, 11.3 or 11.5;
(h) reduce any percentage specified in, or otherwise modify,
the definition of Required Lenders; or
(i) consent to the assignment or transfer by a Borrower of
any of its rights and obligations under (or in respect of) the Credit
Documents.
If any amendment, waiver or consent with respect to the Credit Documents has
been delivered in writing to a Lender by the Administrative Agent, and such
amendment waiver or consent requires only the approval of the Required Lenders
to become effective, then such Lender shall have ten Business Days from the
date of receipt of such amendment, waiver or consent to respond thereto.
Failure of a Lender to timely respond to such amendment, waiver or consent
shall be deemed an approval by such Lender to such amendment, waiver or
consent.
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No provision of Section 2.2 may be amended or modified without the consent of
the Issuing Lender. No provision of Section 10 may be amended or modified
without the consent of the Administrative Agent.
Notwithstanding the fact that the consent of all the Lenders is required in
certain circumstances as set forth above, (x) each Lender is entitled to vote
as such Lender sees fit on any reorganization plan that affects the Loans or
the Letters of Credit, and each Lender acknowledges that the provisions of
Section 1126(c) of the Bankruptcy Code supersedes the unanimous consent
provisions set forth herein and (y) the Required Lenders may consent to allow
a Credit Party to use cash collateral in the context of a bankruptcy or
insolvency proceeding.
11.7 Counterparts/Telecopy.
This Credit Agreement may be executed in any number of counterparts,
each of which when so executed and delivered shall be an original, but all of
which shall constitute one and the same instrument. Delivery of executed
counterparts by telecopy shall be as effective as an original and shall
constitute a representation that an original will be delivered.
11.8 Headings.
The headings of the sections and subsections hereof are provided for
convenience only and shall not in any way affect the meaning or construction
of any provision of this Credit Agreement.
11.9 Defaulting Lender.
Each Lender understands and agrees that if such Lender is a
Defaulting Lender then notwithstanding the provisions of Section 11.6 it shall
not be entitled to vote on any matter requiring the consent of the Required
Lenders or to object to any matter requiring the consent of all the Lenders;
provided, however, that all other benefits and obligations under the Credit
Documents shall apply to such Defaulting Lender.
11.10 Survival of Indemnification and Representations and
Warranties.
All indemnities set forth herein and all representations and
warranties made herein shall survive the execution and delivery of this Credit
Agreement, the making of the Loans, the issuance of the Letters of Credit and
the repayment of the Loans and other obligations and the termination of the
Commitments hereunder.
11.11 Governing Law; Jurisdiction.
(a) THIS AGREEMENT AND THE OTHER CREDIT DOCUMENTS AND THE
RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER AND THEREUNDER SHALL
BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF NORTH CAROLINA. Any legal action or proceeding
with respect to this Agreement or any other Credit Document may be
brought in the courts of the State of North Carolina in Mecklenburg
County, or of the United States for the Western
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District of North Carolina and, by execution and delivery of this
Credit Agreement, each Credit Party hereby irrevocably accepts for
itself and in respect of its property, generally and unconditionally,
the jurisdiction of such courts. Each Credit Party further
irrevocably consents to the service of process out of any of the
aforementioned courts in any such action or proceeding by the mailing
of copies thereof by registered or certified mail, postage prepaid,
to it at the address for notices pursuant to Section 11.1, such
service to become effective 15 days after such mailing. Nothing
herein shall affect the right of a Lender to serve process in any
other manner permitted by law or to commence legal proceedings or to
otherwise proceed against a Credit Party in any other jurisdiction.
Each Credit Party agrees that a final judgment in any action or
proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided
by law; provided that nothing in this Section 11.11(a) is intended to
impair a Credit Party's right under applicable law to appeal or seek
a stay of any judgment.
(b) Each Credit Party hereby irrevocably waives any
objection which it may now or hereafter have to the laying of venue
of any of the aforesaid actions or proceedings arising out of or in
connection with this Credit Agreement or any other Credit Document
brought in the courts referred to in subsection (a) hereof and hereby
further irrevocably waives and agrees not to plead or claim in any
such court that any such action or proceeding brought in any such
court has been brought in an inconvenient forum.
11.12 Waiver of Jury Trial.
EACH OF THE PARTIES TO THIS AGREEMENT HEREBY IRREVOCABLY WAIVES ALL
RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT
OF OR RELATING TO THIS CREDIT AGREEMENT, ANY OF THE OTHER CREDIT DOCUMENTS OR
THE TRANSACTIONS CONTEMPLATED HEREBY.
11.13 Time.
All references to time herein shall be references to Eastern Standard
Time or Eastern Daylight Time, as the case may be, unless specified otherwise.
11.14 Severability.
If any provision of any of the Credit Documents is determined to be
illegal, invalid or unenforceable, such provision shall be fully severable and
the remaining provisions shall remain in full force and effect and shall be
construed without giving effect to the illegal, invalid or unenforceable
provisions.
11.15 Entirety.
This Credit Agreement together with the other Credit Documents
represent the entire agreement of the parties hereto and thereto, and
supersede all prior agreements and understandings,
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oral or written, if any, including any commitment letters or correspondence
relating to the Credit Documents or the transactions contemplated herein and
therein.
11.16 Binding Effect.
(a) This Credit Agreement shall become effective at such
time when all of the conditions set forth in Section 5.1 have been
satisfied or waived by the Lenders and it shall have been executed by
the Credit Parties and the Administrative Agent, and the
Administrative Agent shall have received copies hereof (telefaxed or
otherwise) which, when taken together, bear the signatures of each
Lender, and thereafter this Credit Agreement shall be binding upon
and inure to the benefit of the Credit Parties, the Administrative
Agent and each Lender and their respective successors and assigns.
Upon this Credit Agreement becoming effective, the Existing Credit
Agreement and the Existing Bridge Facility shall be deemed terminated
and the Credit Parties and the lenders party to the Existing Credit
Agreement or the Existing Bridge Facility shall no longer have any
obligations thereunder (other than those obligations in the Existing
Credit Agreement and the Existing Bridge Facility that expressly
survive the termination of the Existing Credit Agreement).
(b) This Credit Agreement shall be a continuing agreement
and shall remain in full force and effect until all Loans, LOC
Obligations, interest, fees and other Obligations have been paid in
full and all Commitments and Letters of Credit have been terminated.
Upon termination, the Credit Parties shall have no further
obligations (other than the indemnification provisions that survive)
under the Credit Documents; provided that should any payment, in
whole or in part, of the Obligations be rescinded or otherwise
required to be restored or returned by the Administrative Agent or
any Lender, whether as a result of any proceedings in bankruptcy or
reorganization or otherwise, then the Credit Documents shall
automatically be reinstated and all amounts required to be restored
or returned and all costs and expenses incurred by the Administrative
Agent or Lender in connection therewith shall be deemed included as
part of the Obligations.
11.17 Confidentiality.
Each Lender agrees that it will use its reasonable best efforts to
keep confidential and to cause any representative designated under Section
7.11 to keep confidential any non-public information from time to time
supplied to it under any Credit Document; provided, however, that nothing
herein shall prevent the disclosure of any such information to (a) the extent
a Lender in good faith believes such disclosure is required by Requirement of
Law, (b) counsel for a Lender or to its accountants, (c) bank examiners or
auditors or comparable Persons, (d) any affiliate of a Lender, (e) any other
Lender, or any assignee, transferee or participant, or any potential assignee,
transferee or participant, of all or any portion of any Lender's rights under
this Agreement who is notified of the confidential nature of the information
or (f) any other Person in connection with any litigation to which any one or
more of the Lenders is a party; and provided further that no Lender shall have
any obligation under this Section 11.17 to the extent any such information
becomes available on a non-confidential basis from a source other than a
Credit Party or that any information becomes publicly available other than by
a breach of this Section 11.17.
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11.18 Collateral Termination Date.
(a) Mortgages. Upon an applicable Collateral Termination Date with
respect to the Mortgages:
(i) The Liens evidenced by the Mortgages shall be released
and all covenants and other agreements contained in the Mortgages
shall no longer be effective and shall otherwise cease and be of no
further force and effect;
(ii) The Administrative Agent shall, at the expense of the
Borrowers, execute and deliver such releases of Mortgages and Uniform
Commercial Code termination statements to evidence the releases
described in clause (i) above;
(iii) The representation and warranty set forth on Schedule
7.14 shall no longer be deemed to be included in the Credit Agreement
(except as required by Section 7.14(b)).
(b) Stock Collateral. Upon an applicable Collateral Termination Date
with respect to the Stock Collateral and until the occurrence of a subsequent
Stock Collateral Effective Date:
(i) The pledges and grants of security interests pursuant to
the Pledge Agreements, and the covenants and other agreements
contained therein, shall no longer be effective and shall otherwise
cease and be of no further force and effect;
(ii) The Administrative Agent shall, at the expense of the
Borrowers, (A) return all items described in Section 7.14(b) to the
applicable Credit Party and (B) execute and deliver such Uniform
Commercial Code termination statements to evidence the termination
described in clause (i) above; and
(iii) The representation and warranty set forth on Schedule
7.14 shall no longer be deemed to be included in this Credit
Agreement (except as required by Section 7.14(a)).
Notwithstanding any provisions of this Section 11.18(b) to the
contrary, if, after a Collateral Termination Date, a Stock Collateral
Effective Date shall occur again, then the provisions of Section 7.14(b) again
shall apply and the Credit Parties shall take such actions, as requested by
the Administrative Agent, to ensure the Lenders have a first priority
perfected security interest in the Stock Collateral.
11.19 Further Assurances.
The Credit Parties agree, upon the request of the Administrative
Agent, to promptly take such actions as are necessary to carry out the intent
of this Credit Agreement and the other Credit Documents, including, but not
limited to, such actions as are necessary to ensure that, during any
Collateral Period, the Lenders have a perfected security interest in the
Collateral subject to no Liens other than Permitted Liens.
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11.20 Release of Guarantors.
If a Guarantor issues equity and as a result thereof such Guarantor
is no longer a Material Subsidiary, then as long as after giving effect to the
issuance of such equity the Credit Parties will be in compliance with Section
7.2(i), the Lenders agree to release such Guarantor from its obligations
hereunder.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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Each of the parties hereto has caused a counterpart of this Second
Amended and Restated Credit Agreement to be duly executed and delivered as of
the date first above written.
BORROWERS: BRANDYWINE REALTY TRUST,
- --------- a Maryland real estate investment trust
By: /s/ Gerard H. Sweeney
---------------------------------------------
Name: Gerard H. Sweeney
Title: President and Chief Executive Officer
BRANDYWINE OPERATING PARTNERSHIP,
L.P., a Delaware limited partnership
By: Brandywine Realty Trust, a Maryland
real estate investment trust, its
general partner
By: /s/ Gerard H. Sweeney
---------------------------------
Name: Gerard H. Sweeney
Title: President and Chief
Executive Officer
<PAGE>
GUARANTORS: LC/N HORSHAM LIMITED PARTNERSHIP, a
- ---------- Pennsylvania limited partnership
By: Witmer Operating Partnership I, L.P., a Delaware
limited partnership, its general partner
By: Brandywine Witmer, L.L.C., a Pennsylvania
limited liability company, its general partner
By: Brandywine Operating Partnership, L.P., a
Delaware limited partnership, its sole
member
By: Brandywine Realty Trust, a
Maryland real estate investment
trust, its general partner
LC/N KEITH VALLEY LIMITED PARTNERSHIP I, a
Pennsylvania limited partnership
By: Witmer Operating Partnership I, L.P., a Delaware
limited partnership, its general partner
By: Brandywine Witmer, L.L.C., a Pennsylvania limited
liability company, its general partner
By: Brandywine Operating Partnership, L.P., a
Delaware limited partnership, its sole
member
By: Brandywine Realty Trust, a
Maryland real estate investment
trust, its general partner
<PAGE>
NICHOLS LANSDALE LIMITED PARTNERSHIP III,
a Pennsylvania limited partnership
By: Witmer Operating Partnership I, L.P., a Delaware
limited partnership, its general partner
By: Brandywine Witmer L.L.C., a Pennsylvania
limited liability company, its general partner
By: Brandywine Operating Partnership, L.P., a
Delaware limited partnership, its sole
member
By: Brandywine Realty Trust, a
Maryland real estate investment
trust, its general partner
NEWTECH III LIMITED PARTNERSHIP, a
Pennsylvania limited partnership
By: Witmer Operating Partnership I, L.P., a Delaware
limited partnership, its general partner
By: Brandywine Witmer L.L.C., a Pennsylvania
limited liability company, its general partner
By: Brandywine Operating Partnership, L.P., a
Delaware limited partnership, its sole
member
By: Brandywine Realty Trust, a
Maryland real estate investment
trust, its general partner
<PAGE>
WITMER OPERATING PARTNERSHIP I, L.P., a
Delaware limited partnership
By: Brandywine Witmer, L.L.C., a Pennsylvania
limited liability company, its general partner
By: Brandywine Operating Partnership, L.P., a
Delaware limited partnership, its sole member
By: Brandywine Realty Trust, a Maryland real
estate investment trust, its general
partner
NEWTECH IV LIMITED PARTNERSHIP, a
Pennsylvania limited partnership
By: Witmer Operating Partnership I, L.P., a Delaware
limited partnership, its general partner
By: Brandywine Witmer, L.L.C., a Pennsylvania
limited liability company, its general partner
By: Brandywine Operating Partnership, L.P., a
Delaware limited partnership, its sole
member
By: Brandywine Realty Trust, a
Maryland real estate investment
trust, its general partner
<PAGE>
C/N OAKLANDS LIMITED PARTNERSHIP I, a
Pennsylvania limited partnership
By: Witmer Operating Partnership I, L.P., a Delaware
limited partnership, its general partner
By: Brandywine Witmer, L.L.C., a Pennsylvania
limited liability company, its general partner
By: Brandywine Operating Partnership, L.P., a
Delaware limited partnership, its sole
member
By: Brandywine Realty Trust, a
Maryland real estate investment
trust, its general partner
FIFTEEN HORSHAM, L.P., a Pennsylvania limited
partnership
By: Witmer Operating Partnership I, L.P., a Delaware
limited partnership, its general partner
By: Brandywine Witmer, L.L.C., a Pennsylvania
limited liability company, its general partner
By: Brandywine Operating Partnership, L.P., a
Delaware limited partnership, its sole
member
By: Brandywine Realty Trust, a
Maryland real estate investment
trust, its general partner
<PAGE>
C/N LEEDOM LIMITED PARTNERSHIP II, a
Pennsylvania limited partnership
By: Brandywine Operating Partnership, L.P., a
Delaware limited partnership, its general partner
By: Brandywine Realty Trust, a Maryland
real estate investment trust, its
general partner
C/N IRON RUN LIMITED PARTNERSHIP III, a
Pennsylvania limited partnership
By: Brandywine Operating Partnership, L.P., a
Delaware limited partnership, its general partner
By: Brandywine Realty Trust, a Maryland
real estate investment trust, its
general partner
C/N OAKLANDS LIMITED PARTNERSHIP III, a
Pennsylvania limited partnership
By: Brandywine Operating Partnership, L.P., a
Delaware limited partnership, its general partner
By: Brandywine Realty Trust, a Maryland
real estate investment trust, its
general partner
IRON RUN LIMITED PARTNERSHIP V, a
Pennsylvania limited partnership
By: Brandywine Operating Partnership, L.P., a
Delaware limited partnership, its general partner
By: Brandywine Realty Trust, a Maryland
real estate investment trust, its
general partner
<PAGE>
BRANDYWINE TB I, L.P., a Pennsylvania limited
partnership
By: Brandywine TB I, L.L.C., a Pennsylvania limited
liability company, its general partner
By: Brandywine Operating Partnership, L.P., a
Delaware limited partnership, its sole member
By: Brandywine Realty Trust, a Maryland real
estate investment trust, its general
partner
BRANDYWINE TB II, L.P., a Pennsylvania limited
partnership
By: Brandywine TB II, L.L.C., a Pennsylvania limited
liability company, its general partner
By: Brandywine Operating Partnership, L.P., a
Delaware limited partnership, its sole member
By: Brandywine Realty Trust, a Maryland real
estate investment trust, its general
partner
BRANDYWINE TB III, L.P., a Pennsylvania limited
partnership
By: Brandywine TB III, L.L.C., a Pennsylvania limited
liability company, its general partner
By: Brandywine Operating Partnership, L.P., a
Delaware limited partnership, its sole member
By: Brandywine Realty Trust, a Maryland real
estate investment trust, its general
partner
<PAGE>
BRANDYWINE TB VI, L.P., a Pennsylvania limited
partnership
By: Brandywine TB VI, L.L.C., a Pennsylvania limited
liability company, its general partner
By: Brandywine Operating Partnership, L.P., a
Delaware limited partnership, its sole member
By: Brandywine Realty Trust, a Maryland real
estate investment trust, its general
partner
BRANDYWINE DOMINION, L.P., a Pennsylvania limited
partnership
By: Brandywine Dominion, L.L.C., a Pennsylvania limited
liability company, its general partner
By: Brandywine Operating Partnership, L.P., a
Delaware limited partnership, its sole member
By: Brandywine Realty Trust, a Maryland real
estate investment trust, its general
partner
BRANDYWINE P.M., L.P., a Pennsylvania limited partnership
By: Brandywine P.M., L.L.C., a Pennsylvania limited
liability company, its general partner
By: Brandywine Operating Partnership, L.P., a
Delaware limited partnership, its sole member
By: Brandywine Realty Trust, a Maryland real
estate investment trust, its general
partner
<PAGE>
BRANDYWINE I.S., L.P., a Pennsylvania limited
partnership
By: Brandywine I.S., L.L.C., a Pennsylvania limited
liability company, its general partner
By: Brandywine Operating Partnership, L.P., a
Delaware limited partnership, its sole member
By: Brandywine Realty Trust, a Maryland real
estate investment trust, its general
partner
BRANDYWINE CENTRAL, L.P., a Pennsylvania
limited partnership
By: Brandywine F.C., L.P., a Pennsylvania limited
partnership, its general partner
By: Brandywine F.C., L.L.C., a Pennsylvania limited
liability company, its general partner
By: Brandywine Operating Partnership, L.P., a
Delaware limited partnership, its sole
member
By: Brandywine Realty Trust, a
Maryland real estate investment
trust, its general partner
<PAGE>
APPOP 2, L.P., a Delaware limited partnership
By: AAP Sub Three, Inc., a Delaware corporation, one of
its general partners
By: Atlantic American Properties Trust, a Maryland
real estate investment trust, its sole
shareholder
By: Brandywine Operating Partnership, L.P., a
Delaware limited partnership, its sole
shareholder
By: Brandywine Realty Trust, a Maryland real
estate investment trust, its general
partner
By: AAPOP Umbrella, L.P., a Delaware limited partnership,
one of its general partners
By: AAP Sub Two, Inc., a Delaware corporation, one
of its general partners
By: Atlantic American Properties Trust, a
Maryland real estate investment trust, its
sole shareholder
By: Brandywine Operating Partnership, L.P., a
Delaware limited partnership, its sole
shareholder
By: Brandywine Realty Trust, a
Maryland real estate investment
trust, its general partner
By: Atlantic American Properties Trust, a Maryland real
estate investment trust, one of its general partners
By: Brandywine Operating Partnership, L.P., a
Delaware limited partnership, its sole
shareholder
By: Brandywine Realty Trust, a Maryland real
estate investment trust, its general
partner
<PAGE>
BRANDYWINE F.C., L.P., a Pennsylvania
limited partnership
By: Brandywine F.C., L.L.C., a Pennsylvania limited
liability company, its general partner
By: Brandywine Operating Partnership, L.P., a
Delaware limited partnership, its sole member
By: Brandywine Realty Trust, a Maryland real
estate investment trust, its general
partner
BRANDYWINE REALTY PARTNERS, a
Pennsylvania general partnership
By: Brandywine Operating Partnership, L.P., a
Delaware limited partnership, one of its
partners
By: Brandywine Realty Trust, a
Maryland real estate investment
trust, its general partner
BRANDYWINE ACQUISITIONS, LLC, a
Delaware limited liability company
By: Brandywine Operating Partnership, L.P., a Delaware
limited partnership, its sole member
By: Brandywine Realty Trust, a Maryland real estate
investment trust, its general partner
<PAGE>
BRANDYWINE MAIN STREET, LLC, a
Delaware limited liability company
By: Brandywine Operating Partnership, L.P., a Delaware
limited partnership, one of its members
By: Brandywine Realty Trust, a Maryland real estate
investment trust, its general partner
By: Brandywine Acquisitions, LLC, a Delaware limited
liability company, one of its members
By: Brandywine Operating Partnership, L.P., a
Delaware limited partnership, its sole member
By: Brandywine Realty Trust, a Maryland real
estate investment trust, its general
partner
1100 BRANDYWINE, LLC, a Delaware limited liability
company
By: Brandywine Operating Partnership, L.P., a Delaware
limited partnership, its sole member
By: Brandywine Realty Trust, a Maryland real estate
investment trust, its general partner
BRANDYWINE LEASING, LLC, a Delaware limited liability
company
By: Brandywine Operating Partnership, L.P., a Delaware
limited partnership, its sole member
By: Brandywine Realty Trust, a Maryland real estate
investment trust, its general partner
<PAGE>
BRANDYWINE TB I, L.L.C., a Pennsylvania limited
liability company
By: Brandywine Operating Partnership, L.P., a Delaware
limited partnership, its sole member
By: Brandywine Realty Trust, a Maryland real estate
investment trust, its general partner
BRANDYWINE TB II, L.L.C., a Pennsylvania limited
liability company
By: Brandywine Operating Partnership, L.P., a Delaware
limited partnership, its sole member
By: Brandywine Realty Trust, a Maryland real estate
investment trust, its general partner
BRANDYWINE TB III, L.L.C., a Pennsylvania limited
liability company
By: Brandywine Operating Partnership, L.P., a Delaware
limited partnership, its sole member
By: Brandywine Realty Trust, a Maryland real estate
investment trust, its general partner
BRANDYWINE TB VI, L.L.C., a Pennsylvania limited
liability company
By: Brandywine Operating Partnership, L.P., a Delaware
limited partnership, its sole member
By: Brandywine Realty Trust, a Maryland real estate
investment trust, its general partner
BRANDYWINE WITMER, L.L.C., a Pennsylvania limited
liability company
By: Brandywine Operating Partnership, L.P., a Delaware
limited partnership, its sole member
By: Brandywine Realty Trust, a Maryland real estate
investment trust, its general partner
<PAGE>
BRANDYWINE DOMINION, L.L.C., a Pennsylvania limited
liability company
By: Brandywine Operating Partnership, L.P., a Delaware
limited partnership, its sole member
By: Brandywine Realty Trust, a Maryland real estate
investment trust, its general partner
BRANDYWINE P.M., L.L.C., a Pennsylvania limited liability
company
By: Brandywine Operating Partnership, L.P., a Delaware
limited partnership, its sole member
By: Brandywine Realty Trust, a Maryland real estate
investment trust, its general partner
BRANDYWINE I.S., L.L.C., a Pennsylvania limited liability
company
By: Brandywine Operating Partnership, L.P., a Delaware
limited partnership, its sole member
By: Brandywine Realty Trust, a Maryland real estate
investment trust, its general partner
BRANDYWINE F.C., L.L.C., a Pennsylvania limited liability
company
By: Brandywine Operating Partnership, L.P., a Delaware
limited partnership, its sole member
By: Brandywine Realty Trust, a Maryland real estate
investment trust, its general partner
<PAGE>
BRANDYWINE TRENTON URBAN RENEWAL, L.L.C., a Delaware
limited liability company
By: Brandywine Operating Partnership, L.P., a Delaware
limited partnership, its sole member
By: Brandywine Realty Trust, a Maryland real estate
investment trust, its general partner
BRANDYWINE DABNEY, L.L.C., a Delaware limited liability
company
By: Brandywine Operating Partnership, L.P., a Delaware
limited partnership, its sole member
By: Brandywine Realty Trust, a Maryland real estate
investment trust, its general partner
BRANDYWINE AXINN I, LLC, a Delaware limited liability
company
By: Brandywine Operating Partnership, L.P., a Delaware
limited partnership, its sole member
By: Brandywine Realty Trust, a Maryland real estate
investment trust, its general partner
BRANDYWINE AXINN II, LLC, a Delaware limited liability
company
By: Brandywine Operating Partnership, L.P., a Delaware
limited partnership, its sole member
By: Brandywine Realty Trust, a Maryland real estate
investment trust, its general partner
<PAGE>
APP SUB THREE, INC., a Delaware corporation
By: /s/ Gerard H. Sweeney
---------------------------------------------
Gerard H. Sweeney
President and Chief Executive Officer of
each of the above-named entities
<PAGE>
LENDERS:
NATIONSBANK, N.A., acting in its capacity
as Administrative Agent and individually as a Lender
By: /s/ Nationsbank, N.A.
------------------------------------------
Name:
------------------------------------------
Title:
------------------------------------------
<PAGE>
EXHIBIT 10.2
PLEDGE AGREEMENT
THIS PLEDGE AGREEMENT (this "Pledge Agreement") is entered into as of
September 28, 1998 among BRANDYWINE REALTY TRUST ("BRT"), a Maryland real
estate investment trust, and BRANDYWINE OPERATING PARTNERSHIP, L.P., ("BOP"),
a Delaware limited partnership (collectively, the "Borrowers"), certain
Subsidiaries of the Borrowers as set forth on the signature pages hereto and
as may from time to time become a party hereto (individually a "Guarantor,"
and collectively the "Guarantors"; together with the Borrower, individually a
"Pledgor," and collectively the "Pledgors") and NATIONSBANK, N.A., in its
capacity as administrative agent (in such capacity, the "Administrative
Agent") for the lenders from time to time party to the Credit Agreement
described below (the "Lenders").
RECITALS
WHEREAS, pursuant to that certain Second Amended and Restated Credit
Agreement dated as of the date hereof (as amended, modified, extended, renewed
or replaced from time to time, the "Credit Agreement") among the Borrower, the
Guarantors, the Lenders and the Administrative Agent, the Lenders have agreed
to make Loans and issue Letters of Credit upon the terms and subject to the
conditions set forth therein; and
WHEREAS, it is a condition precedent to the effectiveness of the
Credit Agreement and the obligations of the Lenders to make their respective
Loans and to issue Letters of Credit under the Credit Agreement that the
Pledgors shall have executed and delivered this Pledge Agreement to the
Administrative Agent for the ratable benefit of the Lenders.
NOW, THEREFORE, in consideration of these premises and other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:
1. Definitions. Unless otherwise defined herein, capitalized terms used
herein shall have the meanings ascribed to such terms in the Credit Agreement.
2. Pledge and Grant of Security Interest. Subject to Section 27
hereof, to secure the prompt payment and performance in full when due, whether
by lapse of time or otherwise, of the Pledgor Obligations (as defined in
Section 3 hereof), each Pledgor hereby pledges and assigns to the
Administrative Agent, for the benefit of the Lenders, and grants to the
Administrative Agent, for the benefit of the Lenders, a continuing security
interest in any and all right, title and interest of such Pledgor in and to
the following, whether now owned or existing or owned, acquired, or arising
hereafter (collectively, the "Collateral"):
(a) Pledged Shares. 100% of the issued and outstanding shares of
capital stock owned by such Pledgor of each Material Subsidiary which
is a corporation as more fully
<PAGE>
described on Schedule 2(a) attached hereto (collectively, together
with any shares of capital stock described in Sections 2(d) and 2(e)
below, the "Pledged Shares").
(b) Pledged Membership Interests. 100% of the membership interests
owned by such Pledgor of each Material Subsidiary which is a limited
liability company as more fully described on Schedule 2(a) attached
hereto (collectively, together with any membership interests
described in Sections 2(d) and 2(e) below, the "Pledged Membership
Interests").
(c) Pledged Partnership Interests. 100% of the partnership
interests or units owned by such Pledgor of each Material Subsidiary
which is a partnership as more fully described on Schedule 2(a)
attached hereto (collectively, together with any partnership
interests or units described in Section 2(e) below, the "Pledged
Partnership Interests").
(d) Included Equity Interests. The Pledged Shares, Pledged
Membership Interests and Pledged Partnership Interests shall include,
but not be limited to:
(i) any shares, membership interests, partnership interests or
units, securities or equity interests of any kind representing
a dividend, distribution or return on equity upon or in respect
of the Pledged Shares, Pledged Membership Interests or Pledged
Partnership Interests, respectively, or resulting from a split,
revision, reclassification or other exchange therefor, and any
subscriptions, warrants, rights or options issued to the holder
of, or otherwise in respect of, the Pledged Shares, Pledged
Membership Interests or Pledged Partnership Interests; and
(ii) without affecting the obligations of such Pledgor under
any provision prohibiting such action hereunder, in the event
of any consolidation or merger in which a Subsidiary of such
Pledgor is not the surviving entity, 100% of the equity
interests (whether shares of stock, membership interests,
partnership interests, partnership units or otherwise) owned by
such Pledgor of the successor entity formed by or resulting
from such consolidation or merger.
(e) Additional Equity Interests. 100% of any equity interests
(whether capital stock, membership interests, partnership interests
or units or otherwise) owned by such Pledgor of any Person which
hereafter becomes a Material Subsidiary (other than Excluded Material
Subsidiaries), including, without limitation, any certificates
representing such equity interests.
(f) Proceeds. All proceeds and products of the foregoing, however
and whenever acquired and in whatever form.
Without limiting the generality of the foregoing, it is hereby
specifically understood and agreed that a Pledgor may from time to time
hereafter deliver additional shares of stock,
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membership interests or partnership interests or units to the Administrative
Agent as collateral security for the Pledgor Obligations. Upon delivery to the
Administrative Agent, such additional shares of stock, membership interests or
partnership interests or units shall be deemed to be part of the Collateral of
such Pledgor and shall be subject to the terms of this Pledge Agreement whether
or not Schedule 2(a) is amended to refer to such additional shares.
3. Security for Pledgor Obligations. The security interest created
hereby in the Collateral of each Pledgor constitutes continuing collateral
security for all of the following, whether now existing or hereafter incurred
(the "Pledgor Obligations"):
(a) In the case of the Borrower, the prompt performance and
observance by the Borrower of all obligations of the Borrower under
the Credit Agreement, the Notes, this Pledge Agreement and the other
Credit Documents to which the Borrower is a party;
(b) In the case of the Guarantors, subject to clause (c) of
Section 26 hereof, the prompt performance and observance by such
Guarantor of all obligations of such Guarantor under the Credit
Agreement, this Pledge Agreement and the other Credit Documents to
which such Guarantor is a party, including, without limitation, its
guaranty obligations arising under Section 4 of the Credit Agreement;
and
(c) All other indebtedness, liabilities and obligations of any kind
or nature, now existing or hereafter arising, owing from any Pledgor to
any Lender or the Administrative Agent pursuant to or in connection
with a transaction contemplated by the Credit Agreement or the other
Credit Documents, howsoever evidenced, created, incurred or acquired,
whether primary, secondary, direct, contingent, or joint and several,
including, without limitation, all obligations and liabilities incurred
in connection with collecting and enforcing the Pledgor Obligations.
4. Delivery of the Collateral. Each Pledgor hereby agrees that, upon
a Collateral Effective Date and for the duration of the ensuing Collateral
Period:
(a) Delivery. Each Pledgor shall deliver to the Administrative Agent
(i) promptly upon the occurrence of such Collateral Effective Date, all
certificates representing the Pledged Shares, Pledged Membership
Interests and/or Pledged Partnership Interests of such Pledgor and (ii)
promptly upon the receipt thereof by or on behalf of a Pledgor, all
other certificates and instruments constituting Collateral of a
Pledgor. Prior to delivery to the Administrative Agent, all such
certificates and instruments constituting Collateral of a Pledgor shall
be held in trust by such Pledgor for the benefit of the Administrative
Agent pursuant hereto. All such certificates shall be delivered in
suitable form for transfer by delivery or shall be accompanied by duly
executed instruments of transfer or assignment in blank, substantially
in the form provided in Exhibit 4(a) attached hereto, or such similar
form as requested by the Administrative Agent.
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(b) Additional Securities. If such Pledgor shall receive by virtue
of its being or having been the owner of any Collateral, any (i)
certificate representing any share of stock, membership interest,
partnership interest, partnership unit or other equity interest,
including without limitation, any certificate representing a dividend
or distribution in connection with any increase or reduction of
capital, reclassification, merger, consolidation, sale of assets,
combination of equity interests, splits, spin-offs or split-offs,
promissory note or other instrument; (ii) option or right, whether as
an addition to, substitution for, or an exchange for, any Collateral or
otherwise; (iii) dividends payable in securities; or (iv) distributions
of securities in connection with a partial or total liquidation,
dissolution or reduction of capital, capital surplus or paid-in
surplus, then such Pledgor shall receive such certificate, instrument,
option, right or distribution in trust for the benefit of the
Administrative Agent, shall segregate it from such Pledgor's other
property and shall deliver it forthwith to the Administrative Agent in
the exact form received together with any necessary endorsement and/or
appropriate stock power duly executed in blank, substantially in the
form provided in Exhibit 4(a), to be held by the Administrative Agent
as Collateral and as further collateral security for the Pledgor
Obligations.
(c) Financing Statements. Each Pledgor shall execute and deliver to
the Administrative Agent such Uniform Commercial Code or other
applicable financing statements as may be reasonably requested by the
Administrative Agent in order to perfect and protect the security
interest created hereby in the Collateral of such Pledgor.
5. Representations and Warranties. Each Pledgor hereby represents and
warrants to the Administrative Agent, for the benefit of the Lenders, that so
long as any of the Pledgor Obligations remain outstanding or any Credit
Document is in effect or any Loan or Letter of Credit shall remain
outstanding, and until all of the Commitments shall have been terminated:
(a) Authorization of Pledged Shares. The Pledged Shares, Pledged
Membership Interests and Pledged Partnership Interests are duly
authorized and validly issued, are fully paid and nonassessable and are
not subject to the preemptive rights of any Person. All other equity
interests constituting Collateral will be duly authorized and validly
issued, fully paid and nonassessable and not subject to the preemptive
rights of any Person.
(b) Title. Each Pledgor has good and indefeasible title to the
Collateral of such Pledgor and will at all times be the legal and
beneficial owner of such Collateral free and clear of any Lien, other
than Permitted Liens. There exists no "adverse claim" within the
meaning of Section 8-302 of the Uniform Commercial Code as in effect in
the State of North Carolina (the "UCC") with respect to the Pledged
Shares, Pledged Membership Interests or Pledged Partnership Interests
of such Pledgor.
(c) Exercising of Rights. The exercise by the Administrative Agent
of its rights and remedies hereunder will not violate any law or
governmental regulation or any material contractual restriction binding
on or affecting a Pledgor or any of its property.
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(d) Pledgor's Authority. No authorization, approval or action by,
and no notice or filing with any Governmental Authority or with the
issuer of any Pledged Shares, Pledged Membership Interests or Pledged
Partnership Interests is required either (i) for the pledge made by a
Pledgor or for the granting of the security interest by a Pledgor
pursuant to this Pledge Agreement or (ii) for the exercise by the
Administrative Agent or the Lenders of their rights and remedies
hereunder (except as may be required by laws affecting the offering and
sale of securities).
(e) Security Interest/Priority. This Pledge Agreement creates a
valid security interest in favor of the Administrative Agent, for the
benefit of the Lenders, in the Collateral. The taking possession by the
Administrative Agent of the certificates representing the Pledged
Shares, Pledged Membership Interests and Pledged Partnership Interests
and all other certificates and instruments constituting Collateral and
the filing or registration with the appropriate governmental office
with respect thereto will perfect and establish the first priority of
the Administrative Agent's security interest in the Pledged Shares,
Pledged Membership Interests and Pledged Partnership Interests and, in
all other Collateral represented by such Pledged Shares, Pledged
Membership Interests and Pledged Partnership Interests and instruments
securing the Pledgor Obligations. Except as set forth in this Section
5(e), no action is necessary to perfect or otherwise protect such
security interest.
(f) No Other Equity Interests. No Pledgor owns any shares of stock,
membership interests or partnership interests or units required to be
pledged hereunder other than as set forth on Schedule 2(a) attached
hereto.
(g) Name; Chief Executive Office; Books and Records. Each Pledgor's
legal name is as shown in this Pledge Agreement and no Pledgor has in
the past four months changed its name or been a party to a merger,
consolidation or other change in structure. Each Pledgor's chief
executive office and chief place of business are (and for the prior
four months have been) located at the locations set forth on Schedule
5(g) hereto, and each Pledgor keeps its books and records at such
locations.
6. Covenants. Each Pledgor hereby covenants, that so long as any of
the Pledgor Obligations remain outstanding or any Credit Document is in effect
or any Loan or Letter of Credit shall remain outstanding, and until all of the
Commitments shall have been terminated, such Pledgor shall:
(a) Books and Records. Mark its books and records (and shall cause
the issuer of the Pledged Shares, Pledged Membership Interests and
Pledged Partnership Interests of such Pledgor to mark its books and
records) to reflect the security interest granted to the Administrative
Agent, for the benefit of the Lenders, pursuant to this Pledge
Agreement.
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<PAGE>
(b) Defense of Title. Warrant and defend title to and ownership of
the Collateral of such Pledgor at its own expense against the claims
and demands of all other parties claiming an interest therein, keep the
Collateral free from all Liens, except for Permitted Liens, and not
sell, exchange, transfer, assign, lease or otherwise dispose of
Collateral of such Pledgor or any interest therein, except as permitted
under the Credit Agreement and the other Credit Documents.
(c) Further Assurances. Promptly execute and deliver at its expense
all further instruments and documents and take all further action that
may be necessary and desirable or that the Administrative Agent may
reasonably request in order to (i) perfect and protect the security
interest created hereby in the Collateral of such Pledgor (including
without limitation any and all action necessary to satisfy the
Administrative Agent that the Administrative Agent has obtained a first
priority perfected security interest in any capital stock, membership
interest, partnership interest or partnership unit); (ii) enable the
Administrative Agent to exercise and enforce its rights and remedies
hereunder in respect of the Collateral of such Pledgor; and (iii)
otherwise effect the purposes of this Pledge Agreement, including,
without limitation and if requested by the Administrative Agent upon
the occurrence and during the continuation of an Event of Default,
delivering to the Administrative Agent irrevocable proxies in respect
of the Collateral of such Pledgor.
(d) Amendments. Not make or consent to any amendment or other
modification or waiver with respect to any of the Collateral of such
Pledgor or enter into any agreement or allow to exist any restriction
with respect to any of the Collateral of such Pledgor other than
pursuant hereto or as may be permitted under the Credit Agreement.
(e) Compliance with Securities Laws. File all reports and other
information now or hereafter required to be filed by such Pledgor with
the United States Securities and Exchange Commission and any other
state, federal or foreign agency in connection with the ownership of
the Collateral of such Pledgor.
(f) Change in Location. Not, without providing 30 days prior written
notice to the Administrative Agent and without filing such amendments
to any previously filed financing statements as the Administrative
Agent may require, (a) change the location of its chief executive
office and chief place of business (as well as its books and records)
from the locations set forth on Schedule 5(g) hereto or (b) change its
name or be party to a merger, consolidation or other change in
structure.
7. Advances by Lenders. On failure of any Pledgor to perform any of the
covenants and agreements contained herein, the Administrative Agent may, at its
sole option and in its sole discretion, perform the same and in so doing may
expend such sums as the Administrative Agent may reasonably deem advisable in
the performance thereof, including, without limitation, the payment of any
insurance premiums, the payment of any taxes, a payment to obtain a release of a
Lien or potential Lien, expenditures made in defending against any adverse claim
and all other expenditures which the Administrative Agent or the Lenders may
make for the protection of the
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<PAGE>
security hereof or which it or they may be compelled to make by operation of
law. All such sums and amounts so expended shall be repayable by the Pledgors on
a joint and several basis promptly upon timely notice thereof and demand
therefor, shall constitute additional Pledgor Obligations and shall bear
interest from the date said amounts are expended at the default rate specified
in Section 3.1(b) of the Credit Agreement for Revolving Loans that are Base Rate
Loans. No such performance of any covenant or agreement by the Administrative
Agent or the Lenders on behalf of any Pledgor, and no such advance or
expenditure therefor, shall relieve the Pledgors of any default under the terms
of this Pledge Agreement or any other Credit Documents. The Lenders may make any
payment hereby authorized in accordance with any bill, statement or estimate
procured from the appropriate public office or holder of the claim to be
discharged without inquiry into the accuracy of such bill, statement or estimate
or into the validity of any tax assessment, sale, forfeiture, tax lien, title or
claim except to the extent such payment is being contested in good faith by a
Pledgor in appropriate proceedings and against which adequate reserves are being
maintained in accordance with GAAP.
8. Events of Default. The occurrence of an event which under the Credit
Agreement would constitute an Event of Default shall be an Event of Default
hereunder (an "Event of Default").
9. Remedies.
(a) General Remedies. Upon the occurrence of an Event of Default and
during the continuation thereof, the Administrative Agent and the
Lenders shall have, in respect of the Collateral of any Pledgor, in
addition to the rights and remedies provided herein, in the Credit
Documents or by law, the rights and remedies of a secured party under
the UCC or any other applicable law.
(b) Sale of Collateral. Upon the occurrence of an Event of Default
and during the continuation thereof, without limiting the generality of
this Section and upon reasonable notice, the Administrative Agent may,
in its sole discretion, sell or otherwise dispose of or realize upon
the Collateral, or any part thereof, in one or more parcels, at public
or private sale, at any exchange or broker's board or elsewhere, at
such price or prices and on such other terms as the Administrative
Agent may deem commercially reasonable, for cash, credit or for future
delivery or otherwise in accordance with applicable law. To the extent
permitted by law, any Lender may in such event bid for the purchase of
such securities. Each Pledgor agrees that, to the extent notice of sale
shall be required by law (unless the Pledgor has waived notice in
writing), any requirement of reasonable notice shall be met if notice,
specifying the place of any public sale or the time after which any
private sale is to be made, is personally served on or mailed, postage
prepaid, to such Pledgor, in accordance with the notice provisions of
Section 11.1 of the Credit Agreement at least ten days before the time
of such sale. The Administrative Agent shall not be obligated to make
any sale of Collateral of such Pledgor regardless of notice of sale
having been given. The Administrative Agent may adjourn any public or
private sale from time to time by announcement at the time and place
fixed therefor, and
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<PAGE>
such sale may, without further notice, be made at the time and place to
which it was so adjourned.
(c) Private Sale. Upon the occurrence of an Event of Default and
during the continuation thereof, the Pledgors recognize that the
Administrative Agent may deem it impracticable to effect a public sale
of all or any part of the Pledged Shares, Pledged Membership Interests
and/or Pledged Partnership Interests or any of the securities
constituting Collateral and that the Administrative Agent may,
therefore, determine to make one or more private sales of any such
securities to a restricted group of purchasers who will be obligated to
agree, among other things, to acquire such securities for their own
account, for investment and not with a view to the distribution or
resale thereof. Each Pledgor acknowledges that any such private sale
may be at prices and on terms less favorable to the seller than the
prices and other terms which might have been obtained at a public sale
and, notwithstanding the foregoing, agrees that the price received in a
private sale, in and of itself, shall not constitute grounds that the
sale was made in a commercially unreasonable manner. Furthermore, the
Pledgor acknowledges that the Administrative Agent shall have no
obligation to delay sale of any such securities for the period of time
necessary to permit the issuer of such securities to register such
securities for public sale under the Securities Act of 1933. Each
Pledgor further acknowledges and agrees that any offer to sell such
securities which has been (i) publicly advertised on a bona fide basis
in a newspaper or other publication of general circulation in the
financial community of New York, New York or Philadelphia, Pennsylvania
(to the extent that such offer may be advertised without prior
registration under the Securities Act of 1933), or (ii) made privately
in the manner described above shall be deemed to involve a "public
sale" under the UCC, notwithstanding that such sale may not constitute
a "public offering" under the Securities Act of 1933, and the
Administrative Agent may, in such event, bid for the purchase of such
securities.
(d) Retention of Collateral. In addition to the rights and remedies
hereunder, upon the occurrence of an Event of Default, the
Administrative Agent may, after providing the notices required by
Section 9-505(2) of the UCC or otherwise complying with the
requirements of applicable law of the relevant jurisdiction (unless the
Pledgor objects thereto in accordance with applicable law), retain all
or any portion of the Collateral in satisfaction of the Pledgor
Obligations. Unless and until the Administrative Agent shall have
provided such notices, however, the Administrative Agent shall not be
deemed to have retained any Collateral in satisfaction of any Pledgor
Obligations for any reason.
(e) Deficiency. In the event that the proceeds of any sale,
collection or realization are insufficient to pay all amounts to which
the Administrative Agent or the Lenders are legally entitled, the
Pledgors shall be jointly and severally liable for the deficiency,
together with interest thereon at the default rate specified in Section
3.1(b) of the Credit Agreement for Revolving Loans that are Base Rate
Loans, together with the costs of collection and the reasonable fees of
any attorneys employed by the Administrative Agent to collect such
deficiency. Any surplus remaining after the full
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payment and satisfaction of the Pledgor Obligations shall be returned
to the Pledgors or to whomsoever a court of competent jurisdiction
shall determine to be entitled thereto.
10. Rights of the Administrative Agent.
(a) Power of Attorney. In addition to other powers of attorney
contained herein, each Pledgor hereby designates and appoints the
Administrative Agent, on behalf of the Lenders, and each of its
designees or agents as attorney-in-fact of such Pledgor, irrevocably
and with power of substitution, with authority to take any or all of
the following actions upon the occurrence and during the continuance of
an Event of Default:
(i) to demand, collect, settle, compromise, adjust and give
discharges and releases concerning the Collateral of such Pledgor,
all as the Administrative Agent may reasonably determine;
(ii) to commence and prosecute any actions at any court for
the purposes of collecting any of the Collateral of such Pledgor
and enforcing any other right in respect thereof;
(iii) to defend, settle or compromise any action brought and,
in connection therewith, give such discharge or release as the
Administrative Agent may deem reasonably appropriate;
(iv) to pay or discharge taxes, liens, security interests, or
other encumbrances levied or placed on or threatened against the
Collateral of such Pledgor;
(v) to direct any parties liable for any payment under any
of the Collateral to make payment of any and all monies due and to
become due thereunder directly to the Administrative Agent or as
the Administrative Agent shall direct;
(vi) to receive payment of and receipt for any and all
monies, claims, and other amounts due and to become due at any time
in respect of or arising out of any Collateral of such Pledgor;
(vii) to sign and endorse any drafts, assignments, proxies,
stock powers, verifications, notices and other documents relating
to the Collateral of such Pledgor;
(viii) to settle, compromise or adjust any suit, action or
proceeding described above and, in connection therewith, to give
such discharges or releases as the Administrative Agent may deem
reasonably appropriate;
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(ix) to execute and deliver all assignments, conveyances,
statements, financing statements, renewal financing statements,
pledge agreements, affidavits, notices and other agreements,
instruments and documents that the Administrative Agent may
determine necessary in order to perfect and maintain the security
interests and liens granted in this Pledge Agreement and in order
to fully consummate all of the transactions contemplated therein;
(x) to exchange any of the Collateral of such Pledgor or
other property upon any merger, consolidation, reorganization,
recapitalization or other readjustment of the issuer thereof and,
in connection therewith, deposit any of the Collateral of such
Pledgor with any committee, depository, transfer agent, registrar
or other designated agency upon such terms as the Administrative
Agent may determine;
(xi) to vote for a resolution, or to sign an instrument in
writing, sanctioning the transfer of any or all of the Pledged
Shares, Pledged Membership Interests and/or Pledged Partnership
Interests of such Pledgor into the name of the Administrative Agent
or one or more of the Lenders or into the name of any transferee to
whom the Pledged Shares, Pledged Membership Interests and/or
Pledged Partnership Interests of such Pledgor or any part thereof
may be sold pursuant to Section 9 hereof; and
(xii) to do and perform all such other acts and things as the
Administrative Agent may reasonably deem to be necessary, proper or
convenient in connection with the Collateral of such Pledgor.
This power of attorney is a power coupled with an interest and shall be
irrevocable (i) for so long as any of the Pledgor Obligations remain
outstanding, any Credit Document is in effect or any Loan or Letter of
Credit shall remain outstanding and (ii) until all of the Commitments
shall have been terminated. The Administrative Agent shall be under no
duty to exercise or withhold the exercise of any of the rights, powers,
privileges and options expressly or implicitly granted to the
Administrative Agent in this Pledge Agreement, and shall not be liable
for any failure to do so or any delay in doing so. The Administrative
Agent shall not be liable for any act or omission or for any error of
judgment or any mistake of fact or law in its individual capacity or
its capacity as attorney-in-fact except acts or omissions resulting
from its gross negligence or willful misconduct. This power of attorney
is conferred on the Administrative Agent solely to protect, preserve
and realize upon its security interest in Collateral.
(b) Performance by the Administrative Agent of Pledgor's
Obligations. If any Pledgor fails to perform any agreement or
obligation contained herein, the Administrative Agent itself may
perform, or cause performance of, such agreement or obligation, and
the expenses of the Administrative Agent incurred in connection
therewith shall be payable by the Pledgors on a joint and several
basis pursuant to Section 26 hereof.
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(c) Assignment by the Administrative Agent. The Administrative
Agent may from time to time assign the Pledgor Obligations and any
portion thereof and/or the Collateral and any portion thereof, and the
assignee shall be entitled to all of the rights and remedies of the
Administrative Agent under this Pledge Agreement in relation thereto.
(d) The Administrative Agent's Duty of Care. Other than the
exercise of reasonable care to assure the safe custody of the
Collateral while being held by the Administrative Agent hereunder, the
Administrative Agent shall have no duty or liability to preserve rights
pertaining thereto, it being understood and agreed that each of the
Pledgors shall be responsible for preservation of all rights in the
Collateral of such Pledgor, and the Administrative Agent shall be
relieved of all responsibility for Collateral upon surrendering it or
tendering the surrender of it to the Pledgors. The Administrative Agent
shall be deemed to have exercised reasonable care in the custody and
preservation of the Collateral in its possession if such Collateral is
accorded treatment substantially equal to that which the Administrative
Agent accords its own property, which shall be no less than the
treatment employed by a reasonable and prudent agent in the industry,
it being understood that the Administrative Agent shall not have
responsibility for (i) ascertaining or taking action with respect to
calls, conversions, exchanges, maturities, tenders or other matters
relating to any Collateral, whether or not the Administrative Agent has
or is deemed to have knowledge of such matters; or (ii) taking any
necessary steps to preserve rights against any parties with respect to
any Collateral.
(e) Voting Rights in Respect of the Collateral.
(i) So long as no Event of Default shall have occurred and
be continuing, to the extent permitted by law, each Pledgor may
exercise any and all voting and other consensual rights pertaining
to the Collateral of such Pledgor or any part thereof for any
purpose not inconsistent with the terms of this Pledge Agreement or
the Credit Agreement; and
(ii) Upon the occurrence and during the continuance of an
Event of Default, all rights of a Pledgor to exercise the voting
and other consensual rights which it would otherwise be entitled to
exercise pursuant to paragraph (i) of this Section shall cease and
all such rights shall thereupon become vested in the Administrative
Agent which shall then have the sole right to exercise such voting
and other consensual rights.
(f) Dividend Rights in Respect of the Collateral.
(i) So long as no Event of Default shall have occurred and
be continuing and subject to Section 4(b) hereof, each Pledgor may
receive and retain any and all dividends (other than stock
dividends and other dividends constituting Collateral which are
addressed hereinabove) or interest paid in respect of the
Collateral to the extent they are allowed under the Credit
Agreement.
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(ii) Upon the occurrence and during the continuance of an
Event of Default:
(A) all rights of a Pledgor to receive the dividends
and interest payments which it would otherwise be authorized
to receive and retain pursuant to paragraph (i) of this
Section shall cease and all such rights shall thereupon be
vested in the Administrative Agent which shall then have the
sole right to receive and hold as Collateral such dividends
and interest payments; and
(B) all dividends and interest payments which are
received by a Pledgor contrary to the provisions of paragraph
(A) of this subsection shall be received in trust for the
benefit of the Administrative Agent, shall be segregated from
other property or funds of such Pledgor, and shall be
forthwith paid over to the Administrative Agent as Collateral
in the exact form received, to be held by the Administrative
Agent as Collateral and as further collateral security for
the Pledgor Obligations.
(g) Release of Collateral. The Administrative Agent may release any
of the Collateral from this Pledge Agreement or may substitute any of
the Collateral for other Collateral without altering, varying or
diminishing in any way the force, effect, lien, pledge or security
interest of this Pledge Agreement as to any Collateral not expressly
released or substituted, and this Pledge Agreement shall continue as a
first priority lien on all Collateral not expressly released or
substituted.
11. Rights of Required Lenders. All rights of the Administrative Agent
hereunder, if not exercised by the Administrative Agent, may be exercised by
the Required Lenders.
12. Application of Proceeds. Upon the occurrence and during the
continuance of an Event of Default, any payments in respect of the Pledgor
Obligations and any proceeds of any Collateral, when received by the
Administrative Agent or any of the Lenders in cash or its equivalent, will be
applied in reduction of the Pledgor Obligations in the order set forth in
Section 9.3 of the Credit Agreement, and each Pledgor irrevocably waives the
right to direct the application of such payments and proceeds and acknowledges
and agrees that the Administrative Agent shall have the continuing and exclusive
right to apply and reapply any and all such payments and proceeds in the
Administrative Agent's sole discretion, notwithstanding any entry to the
contrary upon any of its books and records.
13. Costs of Counsel. At all times hereafter, the Pledgors agree to
promptly pay upon demand any and all reasonable costs and expenses of the
Administrative Agent or the Lenders, (a) as required under Section 11.5 of the
Credit Agreement and (b) as necessary to protect the Collateral or to exercise
any rights or remedies under this Pledge Agreement or with respect to any
Collateral. All of the foregoing costs and expenses shall constitute Pledgor
Obligations hereunder.
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<PAGE>
14. Continuing Agreement.
(a) This Pledge Agreement shall be a continuing agreement in
every respect and shall remain in full force and effect during each
Collateral Period so long as any of the Pledgor Obligations remain
outstanding or any Credit Document is in effect or any Loan or Letter
of Credit shall remain outstanding, and until all of the Commitments
thereunder shall have terminated (other than any obligations with
respect to the indemnities and the representations and warranties set
forth in the Credit Documents). Upon a Collateral Termination Date or
upon such payment and termination, this Pledge Agreement shall no
longer be effective until another Collateral Effective Date occurs
and the Administrative Agent and the Lenders shall, upon the request
and at the expense of the Pledgors, forthwith release all of its
liens and security interests hereunder and shall execute and deliver
all Uniform Commercial Code termination statements and/or other
documents reasonably requested by the Pledgors evidencing such
termination. Notwithstanding the foregoing all releases and
indemnities provided hereunder shall survive termination of this
Pledge Agreement or any period which is not a Collateral Effective
Period, subject to the provisions of the Credit Agreement.
(b) This Pledge Agreement shall continue to be effective or be
automatically reinstated, as the case may be, if at any time payment,
in whole or in part, of any of the Pledgor Obligations is rescinded or
must otherwise be restored or returned by the Administrative Agent or
any Lender as a preference, fraudulent conveyance or otherwise under
any bankruptcy, insolvency or similar law, all as though such payment
had not been made; provided that in the event payment of all or any
part of the Pledgor Obligations is rescinded or must be restored or
returned, all reasonable costs and expenses (including without
limitation any reasonable legal fees and disbursements) incurred by the
Administrative Agent or any Lender in defending and enforcing such
reinstatement shall be deemed to be included as a part of the Pledgor
Obligations.
15. Amendments; Waivers; Modifications. This Pledge Agreement and the
provisions hereof may not be amended, waived, modified, changed, discharged or
terminated except as set forth in Section 11.6 of the Credit Agreement.
16. Successors in Interest. This Pledge Agreement shall create a
continuing security interest in the Collateral and shall be binding upon each
Pledgor, its successors and assigns and shall inure, together with the rights
and remedies of the Administrative Agent and the Lenders hereunder, to the
benefit of the Administrative Agent and the Lenders and their successors and
permitted assigns; provided, however, that none of the Pledgors may assign its
rights or delegate its duties hereunder other than (a) with the prior written
consent of each Lender or the Required Lenders, as required by the Credit
Agreement, or (b) as otherwise permitted under the terms of the Credit
Agreement. To the fullest extent permitted by law, each Pledgor hereby releases
the Administrative Agent and each Lender, and its successors and assigns, from
any liability for any act or omission relating to this Pledge Agreement or the
Collateral, except for any liability arising
-13-
<PAGE>
from the gross negligence or willful misconduct of the Administrative Agent, or
such Lender, or its officers, employees or agents.
17. Notices. All notices required or permitted to be given under this
Pledge Agreement shall be in conformance with Section 11.1 of the Credit
Agreement.
18. Counterparts. This Pledge Agreement may be executed in any number
of counterparts, each of which where so executed and delivered shall be an
original, but all of which shall constitute one and the same instrument. It
shall not be necessary in making proof of this Pledge Agreement to produce or
account for more than one such counterpart.
19. Headings. The headings of the sections and subsections hereof are
provided for convenience only and shall not in any way affect the meaning or
construction of any provision of this Pledge Agreement.
20. Governing Law; Submission to Jurisdiction; Venue.
(a) THIS PLEDGE AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE
PARTIES HEREUNDER SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NORTH CAROLINA. Any legal
action or proceeding with respect to this Security Agreement may be
brought in the courts of the State of North Carolina, or of the United
States for the Western District of North Carolina, and, by execution
and delivery of this Security Agreement, each Pledgor hereby
irrevocably accepts for itself and in respect of its property,
generally and unconditionally, the jurisdiction of such courts. Each
Pledgor further irrevocably consents to the service of process out of
any of the aforementioned courts in any such action or proceeding by
the mailing of copies thereof by registered or certified mail, postage
prepaid, to it at the address for notices pursuant to Section 11.1 of
the Credit Agreement, such service to become effective 15 days after
such mailing. Nothing herein shall affect the right of the
Administrative Agent to serve process in any other manner permitted by
law or to commence legal proceedings or to otherwise proceed against
any Pledgor in any other jurisdiction. Each Pledgor agrees that a final
judgment in any action or proceeding shall be conclusive and may be
enforced in other jurisdictions by suit on the judgment or in any other
manner provided by law; provided that nothing in this Section 20 is
intended to impair a Pledgor's right under applicable law to appeal or
seek a stay of any judgment.
(b) Each Pledgor hereby irrevocably waives any objection which it
may now or hereafter have to the laying of venue of any of the
aforesaid actions or proceedings arising out of or in connection with
this Pledge Agreement brought in the courts referred to in subsection
(a) hereof and hereby further irrevocably waives and agrees not to
plead or claim in any such court that any such action or proceeding
brought in any such court has been brought in an inconvenient forum.
-14-
<PAGE>
21. Waiver of Jury Trial. TO THE EXTENT PERMITTED BY APPLICABLE LAW,
EACH OF THE PARTIES TO THIS PLEDGE AGREEMENT HEREBY IRREVOCABLY WAIVES ALL RIGHT
TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR
RELATING TO THIS PLEDGE AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
22. Severability. If any provision of any of the Pledge Agreement is
determined to be illegal, invalid or unenforceable, such provision shall be
fully severable and the remaining provisions shall remain in full force and
effect and shall be construed without giving effect to the illegal, invalid or
unenforceable provisions.
23. Entirety. This Pledge Agreement and the other Credit Documents
represent the entire agreement of the parties hereto and thereto, and supersede
all prior agreements and understandings, oral or written, if any, including any
commitment letters or correspondence relating to the Credit Documents or the
transactions contemplated herein and therein.
24. Survival. Subject to the provisions of the Credit Agreement, all
representations and warranties of the Pledgors hereunder shall survive the
execution and delivery of this Pledge Agreement and the other Credit Documents,
the delivery of the Notes and the making of the Loans and the issuance of the
Letters of Credit under the Credit Agreement.
25. Other Security. To the extent that any of the Pledgor Obligations
are now or hereafter secured by property other than the Collateral (including,
without limitation, real and other personal property owned by a Pledgor), or by
a guarantee, endorsement or property of any other Person, then the
Administrative Agent and the Lenders shall have the right to proceed against
such other property, guarantee or endorsement upon the occurrence of any Event
of Default, and the Administrative Agent and the Lenders have the right, in
their sole discretion, to determine which rights, security, liens, security
interests or remedies the Administrative Agent and the Lenders shall at any time
pursue, relinquish, subordinate, modify or take with respect thereto, without in
any way modifying or affecting any of them or any of the Administrative Agent's
and the Lenders' rights or the Pledgor Obligations under this Pledge Agreement,
under any other of the Credit Documents.
26. Joint and Several Obligations of Pledgors.
(a) Each of the Pledgors is accepting joint and several liability
hereunder in consideration of the financial accommodation to be
provided by the Lenders under the Credit Agreement, for the mutual
benefit, directly and indirectly, of each of the Pledgors and in
consideration of the undertakings of each of the Pledgors to accept
joint and several liability for the obligations of each of them.
(b) Each of the Pledgors jointly and severally hereby irrevocably
and unconditionally accepts, not merely as a surety but also as a
co-debtor, joint and several liability with the other Pledgors with
respect to the payment and performance of all of the Pledgor
Obligations arising under this Pledge Agreement and the other Credit
-15-
<PAGE>
Documents, it being the intention of the parties hereto that all the
Pledgor Obligations shall be the joint and several obligations of each
of the Pledgors without preferences or distinction among them.
(c) Notwithstanding any provision to the contrary contained herein
or in any other of the Credit Documents, to the extent the obligations
of a Guarantor shall be adjudicated to be invalid or unenforceable for
any reason (including, without limitation, because of any applicable
state or federal law relating to fraudulent conveyances or transfers)
then the obligations of each Guarantor hereunder shall be limited to
the maximum amount that is permissible under applicable law (whether
federal or state and including, without limitation, the Bankruptcy
Code).
27. Effective Date. Notwithstanding anything in this Pledge Agreement
to the contrary, (a) neither the pledges and grants of security interests
pursuant to Section 2 hereof, nor any of the covenants and other agreements
contained herein, shall become effective until a Collateral Effective Date or be
effective other than during a Collateral Period; provided that on any such
Collateral Effective Date such pledges, grants of security interests, covenants
and other agreements shall become effective immediately and without any further
action on the part of any of the parties hereto and shall remain effective
during the ensuing Collateral Period; and (b) none of the schedules referred to
herein shall be required to be completed or delivered to the Administrative
Agent until a Collateral Effective Date; provided that on any such Collateral
Effective Date, such schedules shall immediately be completed and delivered to
the Administrative Agent and thereafter such schedules (as they may be amended
from time to time) shall constitute a part of this Pledge Agreement.
[remainder of page intentionally left blank]
-16-
<PAGE>
Each of the parties hereto has caused a counterpart of this Pledge
Agreement to be duly executed and delivered as of the date first above
written.
BORROWERS: BRANDYWINE REALTY TRUST,
a Maryland real estate investment trust
By: /s/ Gerard H. Sweeney
-----------------------------------------------------
Name: Gerard H. Sweeney
Title: President and Chief Executive Officer
BRANDYWINE OPERATING PARTNERSHIP,
L.P., a Delaware limited partnership
By: Brandywine Realty Trust, a Maryland
real estate investment trust, its general
partner
By: /s/ Gerard H. Sweeney
--------------------------------------
Name: Gerard H. Sweeney
Title: President and Chief
Executive Officer
<PAGE>
GUARANTORS: LC/N HORSHAM LIMITED PARTNERSHIP, a
Pennsylvania limited partnership
By: Witmer Operating Partnership I, L.P., a Delaware
limited partnership, its general partner
By: Brandywine Witmer, L.L.C., a Pennsylvania
limited liability company, its general partner
By: Brandywine Operating Partnership, L.P., a
Delaware limited partnership, its sole
member
By: Brandywine Realty Trust, a
Maryland real estate investment
trust, its general partner
LC/N KEITH VALLEY LIMITED PARTNERSHIP I, a
Pennsylvania limited partnership
By: Witmer Operating Partnership I, L.P., a Delaware limited
partnership, its general partner
By: Brandywine Witmer, L.L.C., a Pennsylvania limited
liability company, its general partner
By: Brandywine Operating Partnership, L.P., a
Delaware limited partnership, its sole
member
By: Brandywine Realty Trust, a
Maryland real estate investment
trust, its general partner
<PAGE>
NICHOLS LANSDALE LIMITED PARTNERSHIP III,
a Pennsylvania limited partnership
By: Witmer Operating Partnership I, L.P., a Delaware
limited partnership, its general partner
By: Brandywine Witmer L.L.C., a Pennsylvania
limited liability company, its general partner
By: Brandywine Operating Partnership, L.P., a
Delaware limited partnership, its sole
member
By: Brandywine Realty Trust, a
Maryland real estate investment
trust, its general partner
NEWTECH III LIMITED PARTNERSHIP, a
Pennsylvania limited partnership
By: Witmer Operating Partnership I, L.P., a Delaware
limited partnership, its general partner
By: Brandywine Witmer L.L.C., a Pennsylvania
limited liability company, its general partner
By: Brandywine Operating Partnership, L.P., a
Delaware limited partnership, its sole
member
By: Brandywine Realty Trust, a
Maryland real estate investment
trust, its general partner
<PAGE>
WITMER OPERATING PARTNERSHIP I, L.P., a
Delaware limited partnership
By: Brandywine Witmer, L.L.C., a Pennsylvania
limited liability company, its general partner
By: Brandywine Operating Partnership, L.P., a Delaware
limited partnership, its sole member
By: Brandywine Realty Trust, a Maryland real
estate investment trust, its general
partner
NEWTECH IV LIMITED PARTNERSHIP, a
Pennsylvania limited partnership
By: Witmer Operating Partnership I, L.P., a Delaware
limited partnership, its general partner
By: Brandywine Witmer, L.L.C., a Pennsylvania
limited liability company, its general partner
By: Brandywine Operating Partnership, L.P., a
Delaware limited partnership, its sole
member
By: Brandywine Realty Trust, a
Maryland real estate investment
trust, its general partner
<PAGE>
C/N OAKLANDS LIMITED PARTNERSHIP I, a
Pennsylvania limited partnership
By: Witmer Operating Partnership I, L.P., a Delaware
limited partnership, its general partner
By: Brandywine Witmer, L.L.C., a Pennsylvania
limited liability company, its general partner
By: Brandywine Operating Partnership, L.P., a
Delaware limited partnership, its sole
member
By: Brandywine Realty Trust, a
Maryland real estate investment
trust, its general partner
FIFTEEN HORSHAM, L.P., a Pennsylvania limited
partnership
By: Witmer Operating Partnership I, L.P., a Delaware
limited partnership, its general partner
By: Brandywine Witmer, L.L.C., a Pennsylvania
limited liability company, its general partner
By: Brandywine Operating Partnership, L.P., a
Delaware limited partnership, its sole
member
By: Brandywine Realty Trust, a
Maryland real estate investment
trust, its general partner
<PAGE>
C/N LEEDOM LIMITED PARTNERSHIP II, a
Pennsylvania limited partnership
By: Brandywine Operating Partnership, L.P., a
Delaware limited partnership, its general partner
By: Brandywine Realty Trust, a Maryland
real estate investment trust, its
general partner
C/N IRON RUN LIMITED PARTNERSHIP III, a
Pennsylvania limited partnership
By: Brandywine Operating Partnership, L.P., a
Delaware limited partnership, its general partner
By: Brandywine Realty Trust, a Maryland
real estate investment trust, its
general partner
C/N OAKLANDS LIMITED PARTNERSHIP III, a
Pennsylvania limited partnership
By: Brandywine Operating Partnership, L.P., a
Delaware limited partnership, its general partner
By: Brandywine Realty Trust, a Maryland
real estate investment trust, its
general partner
IRON RUN LIMITED PARTNERSHIP V, a
Pennsylvania limited partnership
By: Brandywine Operating Partnership, L.P., a
Delaware limited partnership, its general partner
By: Brandywine Realty Trust, a Maryland
real estate investment trust, its
general partner
<PAGE>
BRANDYWINE TB I, L.P., a Pennsylvania limited
partnership
By: Brandywine TB I, L.L.C., a Pennsylvania limited liability
company, its general partner
By: Brandywine Operating Partnership, L.P., a Delaware
limited partnership, its sole member
By: Brandywine Realty Trust, a Maryland real
estate investment trust, its general
partner
BRANDYWINE TB II, L.P., a Pennsylvania limited
partnership
By: Brandywine TB II, L.L.C., a Pennsylvania limited liability
company, its general partner
By: Brandywine Operating Partnership, L.P., a Delaware
limited partnership, its sole member
By: Brandywine Realty Trust, a Maryland real
estate investment trust, its general
partner
BRANDYWINE TB III, L.P., a Pennsylvania limited
partnership
By: Brandywine TB III, L.L.C., a Pennsylvania limited liability
company, its general partner
By: Brandywine Operating Partnership, L.P., a Delaware
limited partnership, its sole member
By: Brandywine Realty Trust, a Maryland real
estate investment trust, its general
partner
<PAGE>
BRANDYWINE TB VI, L.P., a Pennsylvania limited
partnership
By: Brandywine TB VI, L.L.C., a Pennsylvania limited liability
company, its general partner
By: Brandywine Operating Partnership, L.P., a Delaware
limited partnership, its sole member
By: Brandywine Realty Trust, a Maryland real
estate investment trust, its general
partner
BRANDYWINE DOMINION, L.P., a Pennsylvania limited partnership
By: Brandywine Dominion, L.L.C., a Pennsylvania limited
liability company, its general partner
By: Brandywine Operating Partnership, L.P., a Delaware
limited partnership, its sole member
By: Brandywine Realty Trust, a Maryland real
estate investment trust, its general
partner
BRANDYWINE P.M., L.P., a Pennsylvania limited partnership
By: Brandywine P.M., L.L.C., a Pennsylvania limited liability
company, its general partner
By: Brandywine Operating Partnership, L.P., a Delaware
limited partnership, its sole member
By: Brandywine Realty Trust, a Maryland real
estate investment trust, its general
partner
<PAGE>
BRANDYWINE I.S., L.P., a Pennsylvania limited
partnership
By: Brandywine I.S., L.L.C., a Pennsylvania limited liability
company, its general partner
By: Brandywine Operating Partnership, L.P., a Delaware
limited partnership, its sole member
By: Brandywine Realty Trust, a Maryland real
estate investment trust, its general
partner
BRANDYWINE CENTRAL, L.P., a Pennsylvania
limited partnership
By: Brandywine F.C., L.P., a Pennsylvania limited partnership,
its general partner
By: Brandywine F.C., L.L.C., a Pennsylvania limited
liability company, its general partner
By: Brandywine Operating Partnership, L.P., a
Delaware limited partnership, its sole
member
By: Brandywine Realty Trust, a
Maryland real estate investment
trust, its general partner
<PAGE>
APPOP 2, L.P., a Delaware limited partnership
By: AAP Sub Three, Inc., a Delaware corporation, one of its
general partners
By: Atlantic American Properties Trust, a Maryland real
estate investment trust, its sole shareholder
By: Brandywine Operating Partnership, L.P., a
Delaware limited partnership, its sole shareholder
By: Brandywine Realty Trust, a Maryland real
estate investment trust, its general
partner
By: AAPOP Umbrella, L.P., a Delaware limited partnership,
one of its general partners
By: AAP Sub Two, Inc., a Delaware corporation, one of its
general partners
By: Atlantic American Properties Trust, a Maryland
real estate investment trust, its sole shareholder
By: Brandywine Operating Partnership, L.P., a
Delaware limited partnership, its sole
shareholder
By: Brandywine Realty Trust, a
Maryland real estate investment
trust, its general partner
By: Atlantic American Properties Trust, a Maryland real
estate investment trust, one of its general partners
By: Brandywine Operating Partnership, L.P., a
Delaware limited partnership, its sole shareholder
By: Brandywine Realty Trust, a Maryland real
estate investment trust, its general
partner
<PAGE>
BRANDYWINE F.C., L.P., a Pennsylvania
limited partnership
By: Brandywine F.C., L.L.C., a Pennsylvania limited liability
company, its general partner
By: Brandywine Operating Partnership, L.P., a Delaware
limited partnership, its sole member
By: Brandywine Realty Trust, a Maryland real
estate investment trust, its general
partner
BRANDYWINE REALTY PARTNERS, a
Pennsylvania general partnership
By: Brandywine Operating Partnership, L.P., a
Delaware limited partnership, one of its
partners
By: Brandywine Realty Trust, a
Maryland real estate investment
trust, its general partner
BRANDYWINE ACQUISITIONS, LLC, a
Delaware limited liability company
By: Brandywine Operating Partnership, L.P., a Delaware limited
partnership, its sole member
By: Brandywine Realty Trust, a Maryland real estate
investment trust, its general partner
<PAGE>
BRANDYWINE MAIN STREET, LLC, a
Delaware limited liability company
By: Brandywine Operating Partnership, L.P., a Delaware limited
partnership, one of its members
By: Brandywine Realty Trust, a Maryland real estate
investment trust, its general partner
By: Brandywine Acquisitions, LLC, a Delaware limited
liability company, one of its members
By: Brandywine Operating Partnership, L.P.,
a Delaware limited partnership, its sole member
By: Brandywine Realty Trust, a Maryland real
estate investment trust, its general
partner
1100 BRANDYWINE, LLC, a Delaware limited liability company
By: Brandywine Operating Partnership, L.P., a Delaware limited
partnership, its sole member
By: Brandywine Realty Trust, a Maryland real estate
investment trust, its general partner
BRANDYWINE LEASING, LLC, a Delaware limited liability company
By: Brandywine Operating Partnership, L.P., a Delaware limited
partnership, its sole member
By: Brandywine Realty Trust, a Maryland real estate
investment trust, its general partner
<PAGE>
BRANDYWINE TB I, L.L.C., a Pennsylvania limited liability
company
By: Brandywine Operating Partnership, L.P., a Delaware limited
partnership, its sole member
By: Brandywine Realty Trust, a Maryland real estate
investment trust, its general partner
BRANDYWINE TB II, L.L.C., a Pennsylvania limited
liability company
By: Brandywine Operating Partnership, L.P., a
Delaware limited partnership, its sole member
By: Brandywine Realty Trust, a Maryland real estate
investment trust, its general partner
BRANDYWINE TB III, L.L.C., a Pennsylvania
limited liability company
By: Brandywine Operating Partnership, L.P., a Delaware limited
partnership, its sole member
By: Brandywine Realty Trust, a Maryland real estate
investment trust, its general partner
BRANDYWINE TB VI, L.L.C., a Pennsylvania limited liability
company
By: Brandywine Operating Partnership, L.P., a Delaware limited
partnership, its sole member
By: Brandywine Realty Trust, a Maryland real estate
investment trust, its general partner
BRANDYWINE WITMER, L.L.C., a Pennsylvania limited liability
company
By: Brandywine Operating Partnership, L.P., a Delaware limited
partnership, its sole member
By: Brandywine Realty Trust, a Maryland real estate
investment trust, its general partner
<PAGE>
BRANDYWINE DOMINION, L.L.C., a Pennsylvania limited liability
company
By: Brandywine Operating Partnership, L.P., a Delaware limited
partnership, its sole member
By: Brandywine Realty Trust, a Maryland real estate
investment trust, its general partner
BRANDYWINE P.M., L.L.C., a Pennsylvania limited liability
company
By: Brandywine Operating Partnership, L.P., a Delaware limited
partnership, its sole member
By: Brandywine Realty Trust, a Maryland real estate
investment trust, its general partner
BRANDYWINE I.S., L.L.C., a Pennsylvania limited liability
company
By: Brandywine Operating Partnership, L.P., a Delaware limited
partnership, its sole member
By: Brandywine Realty Trust, a Maryland real estate
investment trust, its general partner
BRANDYWINE F.C., L.L.C., a Pennsylvania limited liability
company
By: Brandywine Operating Partnership, L.P., a Delaware limited
partnership, its sole member
By: Brandywine Realty Trust, a Maryland real estate
investment trust, its general partner
<PAGE>
BRANDYWINE TRENTON URBAN RENEWAL, L.L.C., a Delaware limited
liability company
By: Brandywine Operating Partnership, L.P., a Delaware limited
partnership, its sole member
By: Brandywine Realty Trust, a Maryland real estate
investment trust, its general partner
BRANDYWINE DABNEY, L.L.C., a Delaware limited liability
company
By: Brandywine Operating Partnership, L.P., a Delaware limited
partnership, its sole member
By: Brandywine Realty Trust, a Maryland real estate
investment trust, its general partner
BRANDYWINE AXINN I, LLC, a Delaware limited liability company
By: Brandywine Operating Partnership, L.P., a Delaware limited
partnership, its sole member
By: Brandywine Realty Trust, a Maryland real estate
investment trust, its general partner
BRANDYWINE AXINN II, LLC, a Delaware limited liability company
By: Brandywine Operating Partnership, L.P., a Delaware limited
partnership, its sole member
By: Brandywine Realty Trust, a Maryland real estate
investment trust, its general partner
<PAGE>
APP SUB THREE, INC., a Delaware corporation
By: /s/ Gerard H. Sweeney
--------------------------------
Gerard H. Sweeney
President and Chief Executive Officer of
each of the above-named entities
<PAGE>
Accepted and agreed to in Charlotte, North Carolina as of the date
first above written.
NATIONSBANK, N.A., as Administrative Agent
By: /s/ Nationsbank, N.A.
-------------------------------------------
Name:
Title:
<PAGE>
EXHIBIT 10.3
CREDIT AGREEMENT
among
BRANDYWINE REALTY TRUST
and
BRANDYWINE OPERATING PARTNERSHIP, L.P.
as Borrowers
and
THE SUBSIDIARIES OF THE BORROWERS
as Guarantors
and
THE LENDERS IDENTIFIED HEREIN
and
NATIONSBANC MONTGOMERY SECURITIES LLC
as Lead Arranger and Book Manager
and
NATIONSBANC MORTGAGE CAPITAL CORP.
as Administrative Agent
DATED AS OF SEPTEMBER 28, 1998
<PAGE>
<TABLE>
<CAPTION>
TABLE OF CONTENTS
Page
----
<S> <C>
SECTION 1 DEFINITIONS AND ACCOUNTING TERMS.......................................................................1
1.2 Computation of Time Periods and Other Definition Provisions.........................................19
1.3 Accounting Terms....................................................................................19
1.4 Joint Venture Investments...........................................................................19
SECTION 2 CREDIT FACILITY.......................................................................................20
2.1 Loans...............................................................................................20
2.3 Joint and Several Liability of the Borrowers........................................................22
2.4 Appointment of BOP..................................................................................24
2.5 Non-Recourse........................................................................................24
SECTION 3 GENERAL PROVISIONS APPLICABLE TO LOANS AND LETTERS OF CREDIT..........................................24
3.1 Interest...........................................................................................24
3.2 Place and Manner of Payments.......................................................................25
3.5 Payment in full at Maturity........................................................................26
3.6 Computations of Interest and Fees..................................................................26
3.7 Pro Rata Treatment.................................................................................27
3.8 Sharing of Payments................................................................................27
3.9 Capital Adequacy...................................................................................28
3.10 Inability To Determine Interest Rate...............................................................28
3.11 Illegality.........................................................................................29
3.12 Requirements of Law................................................................................29
3.13 Taxes..............................................................................................30
3.14 Compensation.......................................................................................32
3.15 Mitigation; Mandatory Assignment...................................................................33
SECTION 4 GUARANTY..............................................................................................33
4.1 Guaranty of Payment.................................................................................33
4.2 Obligations Unconditional...........................................................................33
4.3 Modifications.......................................................................................34
4.4 Waiver of Rights....................................................................................35
4.5 Reinstatement.......................................................................................35
4.6 Remedies............................................................................................35
4.7 Limitation of Guaranty..............................................................................36
4.8 Rights of Contribution..............................................................................36
SECTION 5 CONDITIONS PRECEDENT..................................................................................36
5.1 Closing Conditions..................................................................................36
5.2 Conditions to All Extensions of Credit..............................................................40
SECTION 6 REPRESENTATIONS AND WARRANTIES........................................................................41
6.1 Financial Condition.................................................................................41
6.2 No Material Change..................................................................................41
6.3 Organization and Good Standing......................................................................41
</TABLE>
i
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
6.4 Due Authorization..................................................................................41
6.5 No Conflicts.......................................................................................42
6.6 Consents...........................................................................................42
6.7 Enforceable Obligations............................................................................42
6.8 No Default.........................................................................................42
6.9 Ownership..........................................................................................42
6.10 Indebtedness.......................................................................................43
6.11 Litigation.........................................................................................43
6.12 Taxes..............................................................................................43
6.13 Compliance with Law................................................................................43
6.14 Compliance with ERISA..............................................................................43
6.15 Organization Structure/Subsidiaries................................................................44
6.16 Use of Proceeds; Margin Stock......................................................................45
6.17 Government Regulation..............................................................................45
6.18 Environmental Matters..............................................................................45
6.19 Solvency...........................................................................................46
6.20 Investments........................................................................................47
6.21 Location of Properties.............................................................................47
6.22 Disclosure.........................................................................................47
6.23 Licenses, etc......................................................................................47
6.24 No Burdensome Restrictions.........................................................................47
6.25 Year 2000 Compliance...............................................................................47
6.26 Excluded Material Subsidiaries.....................................................................47
SECTION 7 AFFIRMATIVE COVENANTS.................................................................................48
7.1 Information Covenants..............................................................................48
7.2 Financial Covenants................................................................................52
7.3 Preservation of Existence..........................................................................53
7.4 Books and Records..................................................................................53
7.5 Compliance with Law................................................................................53
7.6 Payment of Taxes and Other Indebtedness............................................................53
7.7 Insurance..........................................................................................54
7.8 Maintenance of Assets..............................................................................54
7.9 Performance of Obligations.........................................................................54
7.10 Use of Proceeds....................................................................................54
7.11 Audits/Inspections.................................................................................55
7.12 Additional Credit Parties..........................................................................55
7.13 Interest Rate Protection Agreements................................................................55
7.14 [Intentionally Omitted]............................................................................55
7.15 Construction.......................................................................................55
7.16 Acquisitions.......................................................................................56
SECTION 8 NEGATIVE COVENANTS....................................................................................56
8.1 Indebtedness........................................................................................56
8.2 Liens...............................................................................................56
8.3 Nature of Business..................................................................................57
8.4 Consolidation and Merger............................................................................57
8.5 Sale or Lease of Assets.............................................................................57
</TABLE>
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<TABLE>
<CAPTION>
<S> <C>
8.6 Advances, Investments and Loans....................................................................57
8.7 Restricted Payments................................................................................58
8.8 Transactions with Affiliates.......................................................................58
8.9 Fiscal Year; Organizational Documents..............................................................58
8.10 Limitations........................................................................................58
8.11 Other Negative Pledges.............................................................................59
8.12 Construction and Development.......................................................................59
SECTION 9 EVENTS OF DEFAULT.....................................................................................59
9.1 Events of Default...................................................................................59
9.2 Acceleration; Remedies..............................................................................62
9.3 Allocation of Payments After Event of Default.......................................................63
SECTION 10 AGENCY PROVISIONS....................................................................................64
10.1 Appointment........................................................................................64
10.2 Delegation of Duties...............................................................................64
10.3 Exculpatory Provisions.............................................................................64
10.4 Reliance on Communications.........................................................................65
10.5 Notice of Default..................................................................................65
10.6 Non-Reliance on Administrative Agent and Other Lenders.............................................66
10.7 Indemnification....................................................................................66
10.8 Administrative Agent in Its Individual Capacity....................................................67
10.9 Successor Agent....................................................................................67
SECTION 11 MISCELLANEOUS........................................................................................67
11.1 Notices...........................................................................................67
11.2 Right of Set-Off..................................................................................68
11.3 Benefit of Agreement..............................................................................68
11.4 No Waiver; Remedies Cumulative....................................................................70
11.5 Payment of Expenses; Indemnification..............................................................70
11.6 Amendments, Waivers and Consents..................................................................71
11.7 Counterparts/Telecopy.............................................................................72
11.8 Headings..........................................................................................72
11.9 Defaulting Lender.................................................................................72
11.10 Survival of Indemnification and Representations and Warranties....................................73
11.11 Governing Law; Jurisdiction.......................................................................73
11.12 Waiver of Jury Trial..............................................................................73
11.13 Time..............................................................................................74
11.14 Severability......................................................................................74
11.15 Entirety..........................................................................................74
11.16 Binding Effect....................................................................................74
11.17 Confidentiality...................................................................................75
11.18 [Intentionally Omitted]...........................................................................75
11.19 Further Assurances................................................................................75
11.20 Release of Guarantors.............................................................................75
</TABLE>
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SCHEDULES
- ---------
Schedule 1.1(a) Commitment Percentages
Schedule 1.1(b) Project Bell Properties
Schedule 1.1(c) Excluded Material Subsidiaries
Schedule 6.15 Organization Structure/Subsidiaries
Schedule 6.21 Properties
Schedule 8.2 Existing Liens
Schedule 8.5 Preapproved Transactions
Schedule 11.1 Notices
EXHIBITS
- --------
Exhibit 2.1(b) Form of Notice of Borrowing
Exhibit 2.1(e) Form of Notice of Continuation/Conversion
Exhibit 2.1(g) Form of Note
Exhibit 7.1(c) Form of Officer's Certificate
Exhibit 7.12 Form of Joinder Agreement
Exhibit 11.3 Form of Assignment Agreement
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CREDIT AGREEMENT
THIS CREDIT AGREEMENT (this "Credit Agreement") is entered into as of
September 28, 1998 among BRANDYWINE REALTY TRUST ("BRT"), a Maryland real
estate investment trust and BRANDYWINE OPERATING PARTNERSHIP, L.P. ("BOP"), a
Delaware limited partnership (collectively the "Borrowers"), certain
Subsidiaries of the Borrowers as Guarantors, the Lenders (as defined herein),
NATIONSBANC MONTGOMERY SECURITIES LLC as Lead Arranger and Book Manager and
NATIONSBANC MORTGAGE CAPITAL CORP., as Administrative Agent for the Lenders
(the "Administrative Agent").
RECITALS
WHEREAS, the Borrowers desire to borrow up to $150 million from the
Lenders on a short term basis;
WHEREAS, the Guarantors have agreed to unconditionally guarantee all
the obligations of the Borrowers hereunder; and
WHEREAS, the Lenders party hereto have agreed to make the requested
bridge facility available to the Borrowers on the terms and conditions
hereinafter set forth.
NOW, THEREFORE, IN CONSIDERATION of the premises and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
SECTION 1
DEFINITIONS AND ACCOUNTING TERMS
1.1 Definitions.
As used herein, the following terms shall have the meanings herein
specified unless the context otherwise requires. Defined terms herein shall
include in the singular number the plural and in the plural the singular:
"Additional Fee Letter" means that certain fee letter, dated
as of the Closing Date, between the Borrowers and the Administrative
Agent, as amended, modified, supplemented or replaced from time to
time.
"Adjusted Base Rate" means the Base Rate plus .25% per annum.
"Adjusted Eurodollar Rate" means the Eurodollar Rate plus
2.0% per annum.
<PAGE>
"Adjusted NOI" means NOI less (a) an annual sum of $.50 per
square foot for all Properties and (b) all interest income of the
Combined Parties for the applicable period.
"Adjusted Total Assets" means Total Assets less the Project
Bell Properties held by Excluded Material Subsidiaries.
"Administrative Agent" means NationsBanc Mortgage Capital
Corp. (or any successor thereto) or any successor administrative
agent appointed pursuant to Section 10.9.
"Affiliate" means, with respect to any Person, any other
Person directly or indirectly controlling (including but not limited
to all directors and officers of such Person), controlled by or under
direct or indirect common control with such Person. A Person shall be
deemed to control a corporation, partnership, limited liability
company or real estate investment trust if such Person possesses,
directly or indirectly, the power (i) to vote 10% or more of the
securities having ordinary voting power for the election of directors
of such corporation, limited liability company or real estate
investment trust or to vote 10% or more of the partnership interests
of such partnership or (ii) to direct or cause direction of the
management and policies of such corporation or partnership, whether
through the ownership of voting securities, as managing or general
partner, by contract or otherwise.
"Agency Services Address" means NationsBanc Mortgage Capital
Corp., 6610 Rockledge Drive, 6th Floor, Bethesda, Maryland 20817,
Attn.: Eleanor Mitchell-Wharton, or such other address as may be
identified by written notice from the Administrative Agent to the
Borrowers.
"Annualized Adjusted NOI" means Adjusted NOI for the most
recent fiscal quarter multiplied times four.
"Annualized Capitalized Adjusted NOI" means Annualized
Adjusted NOI divided by the Capitalization Rate.
"Annualized Capitalized Modified Adjusted NOI" means
Annualized Modified Adjusted NOI divided by the Capitalization Rate.
"Annualized Modified Adjusted NOI" means an amount equal to
(a) Adjusted NOI for the prior fiscal quarter for all Properties
owned during such entire fiscal quarter multiplied times four plus
(b) NOI for all Properties acquired during such fiscal quarter
multiplied by a fraction equal to 365/the number of days such
Property was owned by a Combined Party.
"Bankruptcy Code" means the Bankruptcy Code in Title 11 of
the United States Code, as amended, modified, succeeded or replaced
from time to time.
"Base Rate" means, for any day, the rate per annum equal to
the greater of (a) the Federal Funds Rate in effect on such day plus
1/2 of 1% or (b) the Prime Rate in effect on
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<PAGE>
such day. Any change in the Base Rate due to a change in the Prime Rate
or the Federal Funds Rate shall be effective on the effective date of
such change in the Prime Rate or the Federal Funds Rate, respectively.
"Base Rate Loan" means a Loan bearing interest based at a
rate determined by reference to the Base Rate.
"BOP" means Brandywine Operating Partnership, L.P., a
Delaware limited partnership, together with any successors and
permitted assigns.
"Borrowers" means BRT and BOP and "Borrower" means either
one of them.
"BRT" means Brandywine Realty Trust, a Maryland real estate
investment trust, together with any successors and permitted assigns.
"Business Day" means any day other than a Saturday, a
Sunday, a legal holiday or a day on which banking institutions are
authorized or required by law or other governmental action to close
in Bethesda, Maryland, Charlotte, North Carolina or New York, New
York; provided that in the case of Eurodollar Loans, such day is also
a day on which dealings between banks are carried on in U.S. dollar
deposits in the London interbank market.
"Capital Expenditures" means all expenditures of the
Borrowers and their Subsidiaries which, in accordance with GAAP,
would be classified as Capital Expenditures, including, without
limitation, Capital Leases.
"Capital Lease" means, as applied to any Person, any lease
of any property (whether real, personal or mixed) by that Person as
lessee which, in accordance with GAAP, is or should be accounted for
as a capital lease on the balance sheet of that Person.
"Capitalization Rate" means, as of the Closing Date, 9.5%;
however, the Capitalization Rate shall be reviewed annually (but not
more often than annually) by the Lenders (beginning with the date one
year after the Closing Date) and shall be subject to adjustment by
the Required Lenders, in their sole discretion, based upon market
conditions for comparable property types; provided that the
Capitalization Rate cannot be adjusted by more than 1.25% annually.
"Cash Equivalents" means (a) securities issued or directly
and fully guaranteed or insured by the United States of America or
any agency or instrumentality thereof (provided that the full faith
and credit of the United States of America is pledged in support
thereof) having maturities of not more than twelve months from the
date of acquisition, (b) U.S. dollar denominated time and demand
deposits and certificates of deposit of (i) any Lender or any of its
Affiliates, (ii) any domestic commercial bank having capital and
surplus in excess of $500,000,000 or (iii) any bank whose short-term
commercial paper rating from S&P is at least A-1 or the equivalent
thereof or from Moody's is at least P-1 or the equivalent thereof
(any such bank being an "Approved Bank"), in each case with
maturities of not more than 270 days from the date of acquisition,
(c) commercial paper and variable
3
<PAGE>
or fixed rate notes issued by any Approved Bank (or by the parent
company thereof) or any variable rate notes issued by, or guaranteed
by, any domestic corporation rated A-1 (or the equivalent thereof) or
better by S&P or P-1 (or the equivalent thereof) or better by Moody's
and maturing within six months of the date of acquisition, (d)
repurchase agreements with a bank or trust company (including any of
the Lenders) or securities dealer having capital and surplus in excess
of $500,000,000 for direct obligations issued by or fully guaranteed by
the United States of America in which a Credit Party shall have a
perfected first priority security interest (subject to no other Liens)
and having, on the date of purchase thereof, a fair market value of at
least 100% of the amount of the repurchase obligations and (e)
Investments, classified in accordance with GAAP as current assets, in
money market investment programs registered under the Investment
Company Act of 1940, as amended, which are administered by financial
institutions having capital of at least $500,000,000 and the portfolios
of which are limited to Investments of the character described in the
foregoing subdivisions (a) through (d).
"Change of Control" means any of the following events:
(a) any "person" or "group" (within the meaning of Section
13(d) or 14(d) of the Exchange Act) has become, directly or
indirectly, the "beneficial owner" (as defined in Rules 13d-3 and
13d-5 under the Exchange Act, except that a Person shall be deemed to
have "beneficial ownership" of all shares that any such Person has
the right to acquire, whether such right is exercisable immediately
or only after the passage of time), by way of merger, consolidation
or otherwise, of 20% or more of the voting power of BRT on a
fully-diluted basis, after giving effect to the conversion and
exercise of all outstanding warrants, options and other securities of
BRT convertible into or exercisable for voting power of BRT (whether
or not such securities are then currently convertible or
exercisable); or
(b) BRT fails to directly own at least 75% of the aggregate
ownership interests in BOP.
"Closing Date" means the date hereof.
"Code" means the Internal Revenue Code of 1986, as amended,
and any successor statute thereto, as interpreted by the rules and
regulations issued thereunder, in each case as in effect from time to
time. References to sections of the Code shall be construed also to
refer to any successor sections.
"Committed Amount" means ONE HUNDRED FIFTY MILLION DOLLARS
($150,000,000).
"Commitment Percentage" means, for each Lender, the
percentage identified as its Commitment Percentage on Schedule
1.1(a), as such percentage may be modified in connection with any
assignment made in accordance with the provisions of Section 11.3.
4
<PAGE>
"Commitments" means the commitment of each Lender with
respect to the Committed Amount.
"Combined Parties" means the Credit Parties and their
Subsidiaries and all joint ventures or partnerships to which a Credit
Party or one of its Subsidiaries is a party.
"Credit Documents" means this Credit Agreement, the Notes,
and all other related agreements and documents issued or delivered
hereunder or thereunder or pursuant hereto or thereto.
"Credit Exposure" has the meaning set forth in the
definition of Required Lenders in this Section 1.1.
"Credit Parties" means the Borrowers and the Guarantors and
"Credit Party" means any one of them.
"Debt Payments" means, as of the date of determination, for
the Combined Parties, the sum of (a) Interest Expense plus (b) all
payments of principal and any required prepayments on Funded Debt of
the Combined Parties (other than balloon payments), for the
applicable period, ending on the date of determination (including the
principal component of payments due on Capital Leases during the
applicable period ending on the date of determination) plus (c) any
letter of credit fees.
"Debt Service Coverage Ratio" means the ratio of (a)
Annualized Modified Adjusted NOI to (b) the Market Funded Debt
Payments.
"Default" means any event, act or condition which with
notice or lapse of time, or both, would constitute an Event of
Default.
"Defaulting Lender" means, at any time, any Lender that, (a)
has failed to make a Loan or purchase a Participation Interest
required pursuant to the terms of this Credit Agreement (but only for
so long as such Loan is not made or such Participation Interest is
not purchased), (b) has failed to pay to the Administrative Agent or
any Lender an amount owed by such Lender pursuant to the terms of
this Credit Agreement (but only for so long as such amount has not
been repaid) or (c) has been deemed insolvent or has become subject
to a bankruptcy or insolvency proceeding or to a receiver, trustee or
similar official.
"Dollars" and "$" means dollars in lawful currency of the
United States of America.
"Effective Date" means the date, as specified by the
Administrative Agent, on which the conditions set forth in Section
5.1 shall have been fulfilled (or waived in the sole discretion of
the Lenders) and on which the initial Loans shall have been made
and/or the initial Letters of Credit shall have been issued.
5
<PAGE>
"Eligible Assignee" means (a) any Lender or any Affiliate or
subsidiary of a Lender and (b) any other commercial bank, financial
institution, institutional lender or "accredited investor" (as
defined in Regulation D of the Securities and Exchange Commission)
with (i) total assets of at least $25 billion, (ii) a long term
unsecured debt rating of BBB+ or better from S&P or its equivalent
and (iii) an office in the United States. Neither the Borrower nor an
Affiliate of the Borrower shall qualify as an Eligible Assignee.
"Environmental Claim" means any investigation, written
notice, violation, written demand, written allegation, action, suit,
injunction, judgment, order, consent decree, penalty, fine, lien,
proceeding, or written claim whether administrative, judicial or
private in nature arising (a) pursuant to, or in connection with, an
actual or alleged violation of, any Environmental Law, (b) in
connection with any Hazardous Material, (c) from any assessment,
abatement, removal, remedial, corrective, or other response action in
connection with an Environmental Law or other order of a Governmental
Authority or (d) from any actual or alleged damage, injury, threat,
or harm to health, safety, natural resources, or the environment.
"Environmental Laws" means any current or future legal
requirement of any Governmental Authority pertaining to (a) the
protection of health, safety, and the indoor or outdoor environment,
(b) the conservation, management, or use of natural resources and
wildlife, (c) the protection or use of surface water and groundwater
or (d) the management, manufacture, possession, presence, use,
generation, transportation, treatment, storage, disposal, release,
threatened release, abatement, removal, remediation or handling of,
or exposure to, any hazardous or toxic substance or material or (e)
pollution (including any release to land surface water and
groundwater) and includes, without limitation, the Comprehensive
Environmental Response, Compensation, and Liability Act of 1980, as
amended by the Superfund Amendments and Reauthorization Act of 1986,
42 USC 9601 et seq., Solid Waste Disposal Act, as amended by the
Resource Conservation and Recovery Act of 1976 and Hazardous and
Solid Waste Amendment of 1984, 42 USC 6901 et seq., Federal Water
Pollution Control Act, as amended by the Clean Water Act of 1977, 33
USC 1251 et seq., Clean Air Act of 1966, as amended, 42 USC 7401 et
seq., Toxic Substances Control Act of 1976, 15 USC 2601 et seq.,
Hazardous Materials Transportation Act, 49 USC App. 1801 et seq.,
Occupational Safety and Health Act of 1970, as amended, 29 USC 651 et
seq., Oil Pollution Act of 1990, 33 USC 2701 et seq., Emergency
Planning and Community Right-to-Know Act of 1986, 42 USC 11001 et
seq., National Environmental Policy Act of 1969, 42 USC 4321 et seq.,
Safe Drinking Water Act of 1974, as amended, 42 USC 300(f) et seq.,
any analogous implementing or successor law, and any amendment, rule,
regulation, order, or directive issued thereunder.
"Equity Issuance" means any issuance by a Credit Party to
any Person (other than another Credit Party) of shares of its capital
stock, common shares of beneficial interest or other equity
interests, including pursuant to the exercise of options or warrants
or pursuant to the conversion of any debt securities to equity;
provided that the definition of Equity Issuance as used herein shall
not include (a) issuances of equity to employees of a Credit Party to
the extent such issuances do not exceed $1,000,000 in any one
instance or $5,000,000, in the aggregate, during the term of this
Credit Agreement or (b) issuances of
6
<PAGE>
common stock for the sole purpose of conversion or redemption of
convertible preferred stock or perpetual preferred stock.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended, and any successor statute thereto, as interpreted
by the rules and regulations thereunder, all as the same may be in
effect from time to time. References to sections of ERISA shall be
construed also to refer to any successor sections.
"ERISA Affiliate" means an entity, whether or not
incorporated, which is under common control with a Borrower or any of
its Subsidiaries within the meaning of Section 4001(a)(14) of ERISA,
or is a member of a group which includes a Borrower and which is
treated as a single employer under Sections 414(b) or (c) of the
Code.
"ERISA Event" means (i) with respect to any Plan, the
occurrence of a Reportable Event or the substantial cessation of
operations (within the meaning of Section 4062(e) of ERISA); (ii) the
withdrawal of a Borrower, any Subsidiary of a Borrower or any ERISA
Affiliate from a Multiple Employer Plan during a plan year in which
it was a substantial employer (as such term is defined in Section
4001(a)(2) of ERISA), or the termination of a Multiple Employer Plan;
(iii) the distribution of a notice of intent to terminate or the
actual termination of a Plan pursuant to Section 4041(a)(2) or 4041A
of ERISA; (iv) the institution of proceedings to terminate or the
actual termination of a Plan by the PBGC under Section 4042 of ERISA;
(v) any event or condition which might constitute grounds under
Section 4042 of ERISA for the termination of, or the appointment of a
trustee to administer, any Plan; (vi) the complete or partial
withdrawal of a Borrower, any Subsidiary of a Borrower or any ERISA
Affiliate from a Multiemployer Plan; (vii) the conditions for
imposition of a lien under Section 302(f) of ERISA exist with respect
to any Plan; or (viii) the adoption of an amendment to any Plan
requiring the provision of security to such Plan pursuant to Section
307 of ERISA.
"Eurodollar Loan" means a Loan bearing interest based at a
rate determined by reference to the Adjusted Eurodollar Rate.
"Eurodollar Rate" means, for the Interest Period for each
Eurodollar Loan comprising part of the same borrowing (including
conversions, extensions and renewals), a per annum interest rate
determined pursuant to the following formula:
Eurodollar Rate = London Interbank Offered Rate
---------------------------------
1 - Eurodollar Reserve Percentage
"Eurodollar Reserve Percentage" means, for any day, that
percentage (expressed as a decimal) which is in effect from time to
time under Regulation D of the Board of Governors of the Federal
Reserve System (or any successor), as such regulation may be amended
from time to time, or any successor regulation, as the maximum
reserve requirement (including, without limitation, any basic,
supplemental, emergency, special, or marginal reserves) applicable
with respect to Eurodollar liabilities as that term is defined in
Regulation D (or against any other category of liabilities that
includes deposits by reference to which the
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<PAGE>
interest rate of Eurodollar Loans is determined) with respect to member
banks of the Federal Reserve System, whether or not any Lender has any
Eurodollar liabilities subject to such reserve requirement at that
time. Eurodollar Loans shall be deemed to constitute Eurodollar
liabilities and as such shall be deemed subject to reserve requirements
without benefits of credits for proration, exceptions or offsets that
may be available from time to time to a Lender. The Adjusted Eurodollar
Rate shall be adjusted automatically on and as of the effective date of
any change in the Eurodollar Reserve Percentage.
"Event of Default" means any of the events or circumstances
described in Section 9.1.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended, modified, succeeded or replaced from time to time, and the
rules and regulations promulgated thereunder.
"Excluded Material Subsidiaries" means the Material
Subsidiaries set forth on Schedule 1.1(c).
"Existing Bridge Facility" means that certain Promissory
Note, dated May 7, 1998, executed by the Borrowers in favor of
NationsBank, N.A., in the face amount of $150 million, and all
documents and instruments executed and delivered in connection
therewith.
"Extension of Credit" means, as to any Lender, the making of
a Loan by such Lender (or a participation therein by a Lender).
"Federal Funds Rate" means, for any day, the rate per annum
(rounded upward, if necessary, to the nearest 1/100th of 1%) equal to
the weighted average of the rates on overnight Federal funds
transactions with members of the Federal Reserve System arranged by
Federal funds brokers on such day, as published by the Federal
Reserve Bank of New York on the Business Day next succeeding such
day; provided that (a) if such day is not a Business Day, the Federal
Funds Rate for such day shall be such rate on such transactions on
the next preceding Business Day and (b) if no such rate is so
published on such next preceding Business Day, the Federal Funds Rate
for such day shall be the average rate quoted to the Administrative
Agent on such day on such transactions as determined by the
Administrative Agent.
"Fee Letter" means that certain letter agreement, dated as
of July 30, 1998, between the Administrative Agent and BRT, as
amended, modified, supplemented or replaced from time to time.
"Fixed Charge Coverage Ratio" means, for any period, the
ratio of (a) Adjusted NOI for such period to (b) the sum of Debt
Payments for such period plus all dividends on preferred stock for
such period plus Letter of Credit Fees payable pursuant to Section
3.4(b)(i) of the Senior Credit Agreement for such period.
8
<PAGE>
"Funded Debt" means, without duplication, the sum of (a) all
Indebtedness of the Combined Parties for borrowed money, (b) all
purchase money Indebtedness of the Combined Parties, (c) the
principal portion of all obligations of the Combined Parties under
Capital Leases, (d) all obligations, contingent or otherwise,
relative to the face amount of all letters of credit (other than
letters of credit supporting trade payables in the ordinary course of
business), whether or not drawn, and banker's acceptances issued for
the account of a Combined Party (it being understood that, to the
extent an undrawn letter of credit supports another obligation
consisting of Indebtedness, in calculating aggregated Funded Debt
only such other obligation shall be included), (e) all Guaranty
Obligations of the Combined Parties with respect to Funded Debt of
another Person, (f) all Funded Debt of another entity secured by a
Lien on any property of the Combined Parties whether or not such
Funded Debt has been assumed by a Combined Party, (g) all Funded Debt
of any partnership or unincorporated joint venture to the extent a
Combined Party is legally obligated or has a reasonable expectation
of being liable with respect thereto, net of any assets of such
partnership or joint venture, (h) the principal balance outstanding
under any synthetic lease, tax retention operating lease, off-balance
sheet loan or similar off-balance sheet financing product of a
Combined Party where such transaction is considered borrowed money
indebtedness for tax purposes but is classified as an operating lease
in accordance with GAAP, (i) all obligations of the Combined Parties
in respect of interest rate protection agreements, foreign currency
exchange agreements or other interest or exchange rate or commodity
price hedging agreements and (j) all take out loan commitments to the
extent such take out commitment is not supported by a financial
commitment from a third party containing standard terms and
conditions. The calculation of Funded Debt of the Combined Parties
shall be subject to Section 1.4.
"Funds From Operations", when used with respect to any
Person, shall have the meaning given to such term in, and shall be
calculated in accordance with, standards promulgated by the National
Association of Real Estate Investment Trusts in effect from time to
time.
"GAAP" means generally accepted accounting principles in the
United States applied on a consistent basis and subject to Section
1.3.
"Governmental Authority" means any Federal, state, local or
provincial court or governmental agency, authority, instrumentality
or regulatory body.
"Guarantors" means (a) the Material Subsidiaries of the
Borrowers, as of the Closing Date, other than the Excluded Material
Subsidiaries and (b) such other Persons who may from time to time
execute a Joinder Agreement (or otherwise consent in writing to
becoming a Guarantor hereunder), as required by Section 7.12 or
otherwise, in each case together with their successors and assigns.
"Guaranty Obligations" means, with respect to any Person,
without duplication, any obligations (other than endorsements in the
ordinary course of business of negotiable instruments for deposit or
collection) guaranteeing or intended to guarantee any Indebtedness of
any other Person in any manner, whether direct or indirect, and
including
9
<PAGE>
without limitation any obligation, whether or not contingent, (a) to
purchase any such Indebtedness or other obligation or any property
constituting security therefor, (b) to advance or provide funds or
other support for the payment or purchase of such indebtedness or
obligation or to maintain working capital, solvency or other balance
sheet condition of such other Person (including, without limitation,
maintenance agreements, comfort letters, take or pay arrangements, put
agreements or similar agreements or arrangements) for the benefit of
the holder of Indebtedness of such other Person, (c) to lease or
purchase property, securities or services primarily for the purpose of
assuring the owner of such Indebtedness or (d) to otherwise assure or
hold harmless the owner of such Indebtedness or obligation against loss
in respect thereof. The amount of any Guaranty Obligation hereunder
shall (subject to any limitations set forth therein) be deemed to be an
amount equal to the outstanding principal amount (or maximum principal
amount, if larger) of the Indebtedness in respect of which such
Guaranty Obligation is made.
"Hazardous Materials" means any substance, material or waste
defined or regulated in or under any Environmental Laws.
"Incentive Stock Plan" means the BRT 1997 Long-Term
Incentive Plan, as amended from time to time, and any other equity
incentive plan hereafter established by BRT pursuant to which awards
of equity interests in BRT may be made to employees of BRT or a
Subsidiary.
"Indebtedness" of any Person means, without duplication, (a)
all obligations of such Person for borrowed money, (b) all
obligations of such Person evidenced by bonds, debentures, notes or
similar instruments, or upon which interest payments are customarily
made (c) all obligations of such Person under conditional sale or
other title retention agreements relating to property purchased by
such Person to the extent of the value of such property (other than
customary reservations or retentions of title under agreements with
suppliers entered into in the ordinary course of business), (d) all
obligations, other than intercompany items, of such Person issued or
assumed as the deferred purchase price of property or services
purchased by such Person which would appear as liabilities on a
balance sheet of such Person, (e) all Indebtedness of others secured
by (or for which the holder of such Indebtedness has an existing
right, contingent or otherwise, to be secured by) any Lien on, or
payable out of the proceeds of production from, property owned or
acquired by such Person, whether or not the obligations secured
thereby have been assumed, (f) all Guaranty Obligations of such
Person, (g) the principal portion of all obligations of such Person
under (i) Capital Leases and (ii) any synthetic lease, tax retention
operating lease, off-balance sheet loan or similar off-balance sheet
financing product of such Person where such transaction is considered
borrowed money indebtedness for tax purposes but is classified as an
operating lease in accordance with GAAP, (h) all obligations of such
Person in respect of interest rate protection agreements, foreign
currency exchange agreements, or other interest or exchange rate or
commodity price hedging agreements, (i) the maximum amount of all
performance and standby letters of credit issued or bankers'
acceptances facilities created for the account of such Person and,
without duplication, all drafts drawn thereunder (to the extent
unreimbursed), (j) all preferred stock issued by such Person and
required by the terms thereof to be redeemed, or for which mandatory
sinking fund
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payments are due, by a fixed date; provided that Indebtedness shall
not include outstanding convertible preferred stock which carries a
defined term if its conversion or redemption occurs solely through
the issuance of additional equity or from the proceeds of an equity
offering, (k) all obligations evidenced by take out commitments, (l)
the aggregate amount of uncollected accounts receivables of such
Person subject at such time to a sale of receivables (or similar
transaction) regardless of whether such transaction is effected
without recourse to such Person or in a manner that would not be
reflected on the balance sheet of such Person in accordance with
GAAP and (m) all obligations of such Person to repurchase any
securities which repurchase obligation is related to the issuance
thereof, including, without limitation, obligations commonly known
as residual equity appreciation potential shares. Subject to the
terms of Section 1.4, the Indebtedness of any Person shall include
the Indebtedness of any partnership or unincorporated joint venture
in which such Person is legally obligated or has a reasonable
expectation of being liable with respect thereto.
"Interest Coverage Ratio" means, for any period, the ratio
of (a) Adjusted NOI for such period to (b) Interest Expense for such
period.
"Interest Expense" means, for any period, with respect to
the Credit Parties and their Subsidiaries on a consolidated basis,
all net interest expense, whether paid or accrued (including that
portion applicable to Capital Leases in accordance with GAAP) plus
capitalized interest.
"Interest Payment Date" means (a) as to Base Rate Loans, the
last Business Day of each month and the Maturity Date, (b) as to
Eurodollar Loans, the last day of the applicable Interest Period and
the Maturity Date.
"Interest Period" means, as to Eurodollar Loans, a period of
one, two, three or six months' duration as the Borrowers may elect,
commencing, in each case, on the date of the borrowing (including
continuations and conversions thereof); provided, however, (a) if any
Interest Period would end on a day which is not a Business Day, such
Interest Period shall be extended to the next succeeding Business Day
(except that where the next succeeding Business Day falls in the next
succeeding calendar month, then on the next preceding Business Day),
(b) no Interest Period shall extend beyond the Maturity Date, and (c)
where an Interest Period begins on a day for which there is no
numerically corresponding day in the calendar month in which the
Interest Period is to end, such Interest Period shall end on the last
Business Day of such calendar month.
"Investment" in any Person means (a) the acquisition
(whether for cash, property, services, assumption of Indebtedness,
securities or otherwise) of assets, shares of capital stock, bonds,
notes, debentures, partnership, joint ventures or other ownership
interests or other securities of such other Person or (b) any deposit
with, or advance, loan or other extension of credit to, such Person
(other than deposits made in connection with the purchase of
equipment or other assets in the ordinary course of business) or (c)
any other capital contribution to or investment in such Person,
including, without limitation, any Guaranty Obligation (including any
support for a letter of credit issued on behalf of such Person)
incurred for the benefit of such Person.
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"Joinder Agreement" means a Joinder Agreement substantially
in the form of Exhibit 7.12.
"Lender" means any of the Persons identified as a "Lender"
on the signature pages hereto, and any Person which may become a
Lender by way of assignment in accordance with the terms hereof,
together with their successors and permitted assigns.
"Leverage Ratio" means the ratio of (a) Funded Debt to (b)
the sum of Annualized Capitalized Modified Adjusted NOI plus all
unrestricted cash of the Combined Parties plus all Cash Equivalents
of the Combined Parties plus all tenant security deposits held by the
Combined Parties plus all amounts invested by the Combined Parties in
construction-in-process plus all mortgage note receivables of the
Combined Parties plus all net cash investments in opportunity funds
of the Combined Parties.
"Lien" means any mortgage, pledge, hypothecation,
assignment, deposit arrangement, security interest, encumbrance, lien
(statutory or otherwise), preference, priority or charge of any kind,
including, without limitation, any agreement to give any of the
foregoing, any conditional sale or other title retention agreement,
and any lease in the nature thereof.
"Loans" means the loans made to the Borrowers pursuant to
Section 2.1.
"London Interbank Offered Rate" means, for any Eurodollar
Loan for any Interest Period therefor, the rate per annum (rounded
upwards, if necessary, to the nearest 1/16 of 1%) appearing on
Telerate Page 3750 (or any successor page) as the London interbank
offered rate for deposits in Dollars at approximately 11:00 a.m.
(London time) two Business Days prior to the first day of such
Interest Period for a term comparable to such Interest Period;
provided, however, if more than one rate is specified on Telerate
Page 3750, the applicable rate shall be the arithmetic mean of all
such rates. If for any reason such rate is not available, the term
"London Interbank Offered Rate" shall mean, for any Eurodollar Loan
for any Interest Period therefor, the rate per annum (rounded
upwards, if necessary, to the nearest 1/16 of 1%) appearing on
Reuters Screen LIBO Page as the London interbank offered rate for
deposits in Dollars at approximately 11:00 a.m. (London time) two
Business Days prior to the first day of such Interest Period for a
term comparable to such Interest Period; provided, however, if more
than one rate is specified on Reuters Screen LIBO Page, the
applicable rate shall be the arithmetic mean of all such rates.
"Market Funded Debt Payments" means the scheduled debt
payments that would have been due during a twelve month period with
respect to the Funded Debt of the Combined Parties as of the last day
of the prior fiscal quarter assuming a principal mortgage
amortization of 25 years and assuming the Market Interest Rate as in
effect on the date that the Market Funded Debt Payments are
calculated.
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"Market Interest Rate" means an interest rate equal to the
greater of (a) the prior 30 day average of the most recent seven year
U.S. Treasury Note plus 2.00% per annum or (b) 8.50% per annum.
"Material Adverse Effect" means a material adverse effect on
(a) the business, assets, operations, condition (financial or
otherwise) or prospects of a Combined Party, (b) the ability of a
Credit Party to perform its respective obligations under this Credit
Agreement or any of the other Credit Documents, or (c) the validity
or enforceability of this Credit Agreement, any of the other Credit
Documents, or the rights and remedies of the Lenders hereunder or
thereunder taken as a whole.
"Material Subsidiary" means a Subsidiary of a Credit Party
in which such Credit Party owns, directly or indirectly, more than
65% of the capital stock, partnership interests or other equity
interests.
"Maturity Date" means March 31, 1999.
"Moody's" means Moody's Investors Service, Inc., or any
successor or assignee of the business of such company in the business
of rating securities.
"Multiemployer Plan" means a Plan which is a multiemployer
plan as defined in Sections 3(37) or 4001(a)(3) of ERISA.
"Multiple Employer Plan" means a Plan (other than a
Multiemployer Plan) in which a Credit Party or any ERISA Affiliate
and at least one employer other than a Credit Party or any ERISA
Affiliate are contributing sponsors.
"Net Cash Proceeds" means the gross cash proceeds received
from an Equity Issuance net of actual transaction costs payable to
third parties.
"Net Income" means, for any period, the net income for such
period of the Combined Parties, as determined in accordance with
GAAP.
"Net Worth" means, as of any date, the net worth of Credit
Parties and their Subsidiaries on a consolidated basis, as determined
in accordance with GAAP.
"NMS" means NationsBanc Montgomery Securities LLC or any
successor thereto.
"NOI" means an amount equal to (a) Net Income for such
period (excluding the effect of any extraordinary or other non
recurring gains or losses or other non cash losses outside the
ordinary course of business) plus (b) an amount which in the
determination of Net Income for such period has been deducted for (i)
proceeds to minority interests, (ii) income taxes, (iii) depreciation
and amortization and (iv) Interest Expense, less (c) to the extent
not previously deducted in calculating Net Income for such period,
the greater of (i) actual management fee expenditures of the Combined
Parties or (ii) 3% of the total real estate revenue of the Combined
Parties.
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"Non-Excluded Taxes" has the meaning set forth in
Section 3.13.
"Note" or "Notes" means the promissory notes of the
Borrowers in favor of each of the Lenders evidencing the Loans
provided pursuant to Section 2.1, individually or collectively, as
appropriate, as such promissory notes may be amended, modified,
supplemented, extended, renewed or replaced from time to time and as
evidenced in the form of Exhibit 2.1(g).
"Notice of Borrowing" means a request by the Borrowers for a
Loan, in the form of Exhibit 2.1(b).
"Notice of Continuation/Conversion" means a request by the
Borrowers to continue an existing Eurodollar Loan to a new Interest
Period or to convert a Eurodollar Loan to a Base Rate Loan or to
convert a Base Rate Loan to a Eurodollar Loan, in the form of Exhibit
2.1(e).
"Obligations" means, without duplication, all of the
obligations of the Credit Parties to the Lenders and the
Administrative Agent, whenever arising, under this Credit Agreement,
the Notes, or any of the other Credit Documents to which a Credit
Party is a party.
"Participation Interest" means the Extension of Credit by a
Lender by way of a purchase of a participation in any Loans as
provided in Section 3.8.
"PBGC" means the Pension Benefit Guaranty Corporation
established pursuant to Subtitle A of Title IV of ERISA and any
successor thereof.
"Permitted Investments" means Investments which are (a) cash
or Cash Equivalents, (b) accounts receivable created, acquired or
made in the ordinary course of business and payable or dischargeable
in accordance with customary trade terms, (c) Investments by one
Credit Party in another Credit Party, (d) the acquisition of new
Properties; provided that the Credit Parties may not invest in
undeveloped land in excess of 5% of Total Assets, in the aggregate,
except for such undeveloped land that is adjacent to or contiguous
with other assets being acquired or assets already owned or such land
is part of a construction project approved by the Required Lenders,
has all necessary local permits and approvals and construction will
commence within six months of acquisition, (e) earnest money and
similar deposits in respect of Properties made in the ordinary course
of business, (f) Investments, as of the Effective Date, in the
Subsidiaries of the Credit Parties that own the Project Bell
Properties; provided that no additional Investments in such
Subsidiaries may occur after the Effective Date except as permitted
by clauses (g) and (h) below, (g) in addition to the Investments in
clause (f) above, Investments in Subsidiaries which are not Credit
Parties and Investments in joint ventures (whether or not
Subsidiaries) not to exceed, in the aggregate at any one time, 15% of
Adjusted Total Assets, (h) Investments not otherwise described in or
covered by the other subclauses of this definition (including,
without limitation, Investments in Persons that are not Subsidiaries
or joint ventures (whether or not
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Subsidiaries)), loans to officers, directors and employees and
repurchases of its capital stock (including the repurchase of stock
that is retired, cancelled or terminated) or other ownership interests
(including options, warrants and stock appreciation rights) by a
Borrower or any Subsidiary); provided that (i) such Investments do not
exceed, in the aggregate at any one time, 10% of Adjusted Total Assets
and (ii) such Investments, together with the Investments referred to in
the previous subclause (g), do not exceed (in the aggregate at any one
time) 20% of Adjusted Total Assets.
"Permitted Liens" means (a) Liens securing Obligations, (b)
Liens for taxes not yet due or Liens for taxes being contested in
good faith by appropriate proceedings for which adequate reserves
determined in accordance with GAAP have been established (and as to
which the property subject to any such Lien is not yet subject to
foreclosure, sale or loss on account thereof), (c) Liens in respect
of property imposed by law arising in the ordinary course of business
such as materialmens', mechanics', warehousemens', carriers',
landlords' and other nonconsensual statutory Liens which are not yet
due and payable or which are being contested in good faith by
appropriate proceedings for which adequate reserves determined in
accordance with GAAP have been established (and as to which the
property subject to any such Lien is not yet subject to foreclosure,
sale or loss on account thereof); (d) Liens arising from good faith
deposits in connection with or to secure performance of tenders,
bids, leases, government contracts, performance and return-of-money
bonds and other similar obligations incurred in the ordinary course
of business (other than obligations in respect of the payment of
borrowed money), (e) Liens arising from good faith deposits in
connection with or to secure performance of statutory obligations and
surety and appeal bonds, (f) easements, rights-of-way, restrictions
(including zoning restrictions), matters of plat, minor defects or
irregularities in title and other similar charges or encumbrances
not, in any material respect, impairing the use of the encumbered
property for its intended purposes, (g) judgment Liens that would not
constitute an Event of Default, (h) Liens arising by virtue of any
statutory or common law provision relating to bankers' liens, rights
of setoff or similar rights as to deposit accounts or other funds
maintained with a creditor depository institution, (i) Liens on the
Properties as indicated on Schedule 8.5 if such Lien is incurred on
or before March 31, 1999 (j) Liens in connection with Indebtedness
permitted by Section 8.1(d); provided that if such Lien is created
with respect to a Property that was previously unencumbered (other
than such Liens permitted pursuant to clause (i) above), (A) the
Borrowers shall give the Administrative Agent prior written notice of
the creation of such Lien and (B) after giving effect to such Lien,
(x) the Credit Parties shall be in compliance on a Pro Forma Basis
with the financial covenants set forth in Section 7.2 and (y) no
Default or Event of Default shall exist (and the Borrowers shall
deliver a certificate to that effect) and (k) Liens existing on the
date hereof and identified on Schedule 8.2; provided that no such
Lien shall extend to any property other than the property subject
thereto on the Closing Date.
"Person" means any individual, partnership, joint venture,
firm, corporation, limited liability company, association, trust or
other enterprise (whether or not incorporated), or any Governmental
Authority.
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"Plan" means any employee benefit plan (as defined in
Section 3(3) of ERISA) which is covered by ERISA and with respect to
which a Borrower or any ERISA Affiliate is (or, if such plan were
terminated at such time, would under Section 4069 of ERISA be deemed
to be) an "employer" within the meaning of Section 3(5) of ERISA.
"Prime Rate" means the per annum rate of interest
established from time to time by the Administrative Agent at its
principal office in Charlotte, North Carolina (or such other
principal office of the Administrative Agent as communicated in
writing to the Borrowers and the Lenders) as its Prime Rate. Any
change in the interest rate resulting from a change in the Prime Rate
shall become effective as of 12:01 a.m. of the Business Day on which
each change in the Prime Rate is announced by the Administrative
Agent. The Prime Rate is a reference rate used by the Administrative
Agent in determining interest rates on certain loans and is not
intended to be the lowest rate of interest charged on any extension
of credit to any debtor.
"Pro Forma Basis" means with respect to (a) the sale of a
Property or the sale of an equity interest in a Credit Party or (b)
the creation of a Lien on a Property, that such sale or creation of
Lien shall be deemed to have occurred as of the first day of the four
fiscal quarter period ending as of the last day of the most recent
fiscal quarter for which the Lenders have received the financial
information required by Section 7.1(b).
"Project Bell Properties" means the Properties set forth on
Schedule 1.1(b).
"Properties" means all real properties owned by the Credit
Parties and their Subsidiaries whether directly or through a joint
venture investment.
"Regulation D, U, or X" means Regulation D, U or X,
respectively, of the Board of Governors of the Federal Reserve System
as from time to time in effect and any successor to all or a portion
thereof.
"REIT" means a real estate investment trust as defined in
Sections 856-860 of the Code.
"Reportable Event" means any of the events set forth in
Section 4043(c) of ERISA, other than those events as to which the
notice requirement has been waived by regulation.
"Required Lenders" means the Administrative Agent together
with the Lenders whose aggregate Credit Exposure (as hereinafter
defined) constitutes at least 66 2/3% of the Credit Exposure of all
Lenders at such time; provided, however, that if any Lender shall be
a Defaulting Lender at such time then there shall be excluded from
the determination of Required Lenders the aggregate principal amount
of Credit Exposure of such Lender at such time. For purposes of the
preceding sentence, the term "Credit Exposure" as applied to each
Lender shall mean (a) at any time prior to the termination of the
Commitments, the sum of the Commitment Percentage of such Lender
multiplied by the Committed Amount and (b) at any time after the
termination of the Commitments, the sum of the principal balance of
the outstanding Loans of such Lender.
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"Requirement of Law" means, as to any Person, the articles
or certificate of incorporation and by-laws or other organizational
or governing documents of such Person, and any law, treaty, rule or
regulation or final, non-appealable determination of an arbitrator or
a court or other Governmental Authority, in each case applicable to
or binding upon such Person or to which any of its material property
is subject.
"S&P" means Standard & Poor's Ratings Group, a division of
McGraw Hill, Inc., or any successor or assignee of the business of
such division in the business of rating securities.
"Secured Debt" means all Funded Debt of the Combined Parties
that is subject to a Lien in favor of the creditor holding such
Funded Debt; provided that any Funded Debt owed to the Lenders
hereunder shall be considered to be Unsecured Debt even if a Lien has
been granted in favor of the Lenders.
"Secured Debt Ratio" means the ratio of (a) Secured Debt to
(b) Annualized Capitalized Modified Adjusted NOI plus, to the extent
Secured Debt includes Funded Debt on construction-in-process, total
construction costs with respect to such construction-in-process.
"Securities Act" means the Securities Act of 1933, as
amended, modified, succeeded or replaced from time to time, and the
rules and regulations promulgated thereunder.
"Senior Credit Agreement" means that certain Second Amended
and Restated Credit Agreement, dated as of the date hereof, among the
Borrowers, the Guarantors, NationsBank, N.A., as Administrative
Agent, and the lenders party thereto.
"Single Employer Plan" means any Plan which is covered by
Title IV of ERISA, but which is not a Multiemployer Plan or a
Multiple Employer Plan.
"Solvent" means, with respect to any Person as of a
particular date, that on such date (a) such Person is able to pay its
debts and other liabilities, contingent obligations and other
commitments as they mature in the normal course of business, (b) such
Person does not intend to, and does not believe that it will, incur
debts or liabilities beyond such Person's ability to pay as such
debts and liabilities mature in their ordinary course, (c) such
Person is not engaged in a business or a transaction, and is not
about to engage in a business or a transaction, for which such
Person's assets would constitute unreasonably small capital after
giving due consideration to the prevailing practice in the industry
in which such Person is engaged or is to engage, (d) the fair value
of the assets of such Person is greater than the total amount of
liabilities, including, without limitation, contingent liabilities,
of such Person and (e) the present fair saleable value of the assets
of such Person is not less than the amount that will be required to
pay the probable liability of such Person on its debts as they become
absolute and matured. In computing the amount of contingent
liabilities at any time, it is intended that such liabilities will be
computed at the amount which, in light of all
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the facts and circumstances existing at such time, represents the
amount that can reasonably be expected to become an actual or matured
liability.
"Subsidiary" means, as to any Person, (a) any corporation
more than 50% of whose stock of any class or classes having by the
terms thereof ordinary voting power to elect a majority of the
directors of such corporation (irrespective of whether or not at the
time, any class or classes of such corporation shall have or might
have voting power by reason of the happening of any contingency) is
at the time owned by such Person directly or indirectly through
Subsidiaries, and (b) any partnership, association, joint venture,
limited liability company, trust or other entity in which such Person
directly or indirectly through Subsidiaries has more than a 50%
equity interest at any time.
"Termination Event" means (a) with respect to any Single
Employer Plan, the occurrence of a Reportable Event or the
substantial cessation of operations (within the meaning of Section
4062(e) of ERISA); (b) the withdrawal of any Credit Party or any of
its Subsidiaries or any ERISA Affiliate from a Multiple Employer Plan
during a plan year in which it was a substantial employer (as such
term is defined in Section 4001(a)(2) of ERISA), or the termination
of a Multiple Employer Plan; (c) the distribution of a notice of
intent to terminate or the actual termination of a Plan pursuant to
Section 4041(a)(2) or 4041A of ERISA; (d) the institution of
proceedings to terminate or the actual termination of a Plan by the
PBGC under Section 4042 of ERISA; (e) any event or condition which
might reasonably constitute grounds under Section 4042 of ERISA for
the termination of, or the appointment of a trustee to administer,
any Plan; or (f) the complete or partial withdrawal of any Credit
Party or any of its Subsidiaries or any ERISA Affiliate from a
Multiemployer Plan.
"Total Assets" means all assets of the Credit Parties and
their Subsidiaries on a consolidated basis, as determined in
accordance with GAAP.
"Unencumbered Cash Flow Ratio" means the ratio of (a)
Annualized Modified Adjusted NOI with respect to Unsecured Properties
to (b) Market Funded Debt Payments on Unsecured Debt.
"Unsecured Debt" means the sum of all Funded Debt of the
Combined Parties that was incurred, and continues to be outstanding,
without granting a Lien to the creditor holding such Funded Debt;
provided that all Funded Debt of the Combined Parties owing to the
Lenders under this Credit Agreement shall be considered to be
Unsecured Debt even if a Lien has been granted in favor of the
Lenders.
"Unsecured Debt Ratio" means the ratio of (a) Annualized
Capitalized Modified Adjusted NOI with respect to all Unsecured
Properties to (b) Unsecured Debt.
"Unsecured Properties" means all Properties that are not
subject to a Lien other than nonconsensual Permitted Liens and (b)
Liens in favor of the Lenders.
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"Year 2000 Problem" means any risk that any computer
hardware, software or other equipment used by a Credit Party or any
of its Subsidiaries (or by any of its suppliers or vendors that is
material to its business) will not function as effectively and
reliably on and after January 1, 2000 as it does prior to January 1,
2000, to the extent such risk would cause or be reasonably expected
to cause a Material Adverse Effect.
1.2 Computation of Time Periods and Other Definition Provisions.
For purposes of computation of periods of time hereunder, the word
"from" means "from and including" and the words "to" and "until" each mean "to
but excluding." References in this Credit Agreement to "Articles", "Sections",
"Schedules" or "Exhibits" shall be to Articles, Sections, Schedules or
Exhibits of or to this Credit Agreement unless otherwise specifically
provided.
1.3 Accounting Terms.
Except as otherwise expressly provided herein, all accounting terms
used herein shall be interpreted, and all financial statements and
certificates and reports as to financial matters required to be delivered to
the Lenders hereunder shall be prepared, in accordance with GAAP applied on a
consistent basis. All financial statements delivered to the Lenders hereunder
shall be accompanied by a statement from the Borrowers that GAAP has not
changed since the most recent financial statements delivered by the Borrowers
to the Lenders or if GAAP has changed describing such changes in detail and
explaining how such changes affect the financial statements. All calculations
made for the purposes of determining compliance with this Credit Agreement
shall (except as otherwise expressly provided herein) be made by application
of GAAP applied on a basis consistent with the most recent annual or quarterly
financial statements delivered pursuant to Section 7.1 (or, prior to the
delivery of the first financial statements pursuant to Section 7.1, consistent
with the financial statements described in Section 5.1(f)); provided, however,
if (a) the Borrowers shall object to determining such compliance on such basis
at the time of delivery of such financial statements due to any change in GAAP
or the rules promulgated with respect thereto or (b) the Administrative Agent
or the Required Lenders shall so object in writing within 60 days after
delivery of such financial statements (or after the Lenders have been informed
of the change in GAAP affecting such financial statements, if later), then
such calculations shall be made on a basis consistent with the most recent
financial statements delivered by the Borrowers to the Lenders as to which no
such objection shall have been made.
1.4 Joint Venture Investments.
With respect to any ownership of a Property by a Credit Party or one
of its Subsidiaries through a joint venture (a) NOI, Adjusted NOI, Annualized
Adjusted NOI, Annualized Capitalized Adjusted NOI, Annualized Modified
Adjusted NOI and Annualized Capitalized Modified Adjusted NOI shall be
calculated in accordance with such Credit Party's (or Subsidiary's) ownership
interest in the net cash flow of such joint venture and (b) Indebtedness and
Funded Debt shall be calculated as follows: (i) if the Indebtedness of such
joint venture is recourse to such Credit Party (or Subsidiary), then the
amount of such Indebtedness or Funded Debt that is recourse to such Credit
Party (or Subsidiary), and (ii) if the Indebtedness of such joint venture is
not recourse to such Credit Party (or Subsidiary), then such Credit Party's
(or Subsidiary's) pro rata interest in such Indebtedness or Funded Debt.
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SECTION 2
CREDIT FACILITY
2.1 Loans.
(a) Loan Commitment. Subject to the terms and conditions set
forth herein, each Lender severally agrees to make loans (each a
"Loan" and collectively the "Loans") to the Borrowers, in Dollars, at
any time and from time to time, during the period from and including
the Effective Date to but not including the Maturity Date or such
earlier date if the Committed Amount has been terminated as provided
herein; provided, however, that (i) the sum of the aggregate
principal amount of Loans advanced hereunder shall not exceed the
Committed Amount and (ii) with respect to each individual Lender, the
Lender's pro rata share of outstanding Loans shall not exceed such
Lender's Commitment Percentage of the Committed Amount.
(b) Method of Borrowing for Loans. By no later than 11:00
a.m. (i) one Business Day prior to the date of the requested
borrowing of Loans that will be Base Rate Loans or (ii) three
Business Days prior to the date of the requested borrowing of Loans
that will be Eurodollar Loans, the Borrowers shall submit an
irrevocable written Notice of Borrowing in the form of Exhibit 2.1(b)
to the Administrative Agent setting forth (A) the amount requested,
(B) whether such Loans shall be Base Rate Loans or Eurodollar Loans,
(C) with respect to Loans that will be Eurodollar Loans, the Interest
Period applicable thereto; provided, however, that prior to December
31, 1998, or such earlier date as agreed to by the Administrative
Agent, the Borrowers may not, without the consent of the
Administrative Agent, request any Interest Period for Eurodollar
Loans other than a one-month Interest Period, (D) the purpose of the
proceeds of the Loans and (E) certification that the Borrowers have
complied in all respects with Section 5.2.
(c) Funding of Loans. Upon receipt of a Notice of Borrowing,
the Administrative Agent shall promptly inform the Lenders as to the
terms thereof. Each Lender shall make its Loan Commitment Percentage
of the requested Loans available to the Administrative Agent by 1:00
p.m. on the date specified in the Notice of Borrowing by deposit, in
Dollars, of immediately available funds at the offices of the
Administrative Agent at its principal office in Charlotte, North
Carolina or at such other address as the Administrative Agent may
designate in writing. The amount of the requested Loans will then be
made available to the Borrowers by the Administrative Agent by
crediting the account of the Borrowers on the books of such office of
the Administrative Agent, to the extent the amount of such Loans are
made available to the Administrative Agent.
No Lender shall be responsible for the failure or delay by
any other Lender in its obligation to make Loans hereunder; provided,
however, that the failure of any Lender to
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fulfill its obligations hereunder shall not relieve any other Lender
of its obligations hereunder. Unless the Administrative Agent shall
have been notified by any Lender prior to the date of any such Loan
that such Lender does not intend to make available to the
Administrative Agent its portion of the Loans to be made on such
date, the Administrative Agent may assume that such Lender has made
such amount available to the Administrative Agent on the date of such
Loans, and the Administrative Agent in reliance upon such assumption,
may (in its sole discretion but without any obligation to do so) make
available to the Borrowers a corresponding amount. If such
corresponding amount is not in fact made available to the
Administrative Agent, the Administrative Agent shall be able to
recover such corresponding amount from such Lender. If such Lender
does not pay such corresponding amount forthwith upon the
Administrative Agent's demand therefor, the Administrative Agent will
promptly notify the Borrowers, and the Borrowers shall immediately
pay such corresponding amount to the Administrative Agent. The
Administrative Agent shall also be entitled to recover from the
Lender or the Borrowers, as the case may be, interest on such
corresponding amount in respect of each day from the date such
corresponding amount was made available by the Administrative Agent
to the Borrowers to the date such corresponding amount is recovered
by the Administrative Agent at a per annum rate equal to (i) from the
Borrowers at the applicable rate for such Loan pursuant to the Notice
of Borrowing and (ii) from a Lender at the Federal Funds Rate.
(d) [Intentionally Omitted]
(e) Continuations and Conversions. The Borrowers shall have
the option, on any Business Day, to continue existing Eurodollar
Loans for a subsequent Interest Period, to convert Base Rate Loans
into Eurodollar Loans, or to convert Eurodollar Loans into Base Rate
Loans; provided, however, that (i) each such continuation or
conversion must be requested by the Borrowers pursuant to a written
Notice of Continuation/Conversion, in the form of Exhibit 2.1(e), in
compliance with the terms set forth below, (ii) except as provided in
Section 3.11, Eurodollar Loans may only be continued or converted on
the last day of the Interest Period applicable thereto, (iii)
Eurodollar Loans may not be continued nor may Base Rate Loans be
converted into Eurodollar Loans during the existence and continuation
of a Default or Event of Default and (iv) any request to continue a
Eurodollar Loan that fails to comply with the terms hereof or any
failure to request a continuation of a Eurodollar Loan at the end of
an Interest Period shall result in a conversion of such Eurodollar
Loan to a Base Rate Loan on the last day of the applicable Interest
Period. Each continuation or conversion must be requested by the
Borrowers no later than 11:00 a.m. (A) one Business Day prior to the
date for a requested conversion of a Eurodollar Loan to a Base Rate
Loan or (B) three Business Days prior to the date for a requested
continuation of a Eurodollar Loan or conversion of a Base Rate Loan
to a Eurodollar Loan, in each case pursuant to a written Notice of
Continuation/Conversion submitted to the Administrative Agent which
shall set forth (x) whether the Borrowers wish to continue or convert
such Loans and (y) if the request is to continue a Eurodollar Loan or
convert a Loan to a Eurodollar Loan, the Interest Period applicable
thereto; provided that prior to December 31, 1998, the Borrowers may
not, without the consent of the Administrative Agent, request any
Interest Period for Eurodollar Loans other than a one-month Interest
Period.
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(f) Minimum Amounts/Restrictions on Loans. Each request for
a borrowing, conversion or continuation shall be subject to the
requirements that (i) each Eurodollar Loan shall be in a minimum
amount of $1,000,000 and in integral multiples of $100,000 in excess
thereof, (ii) each Base Rate Loan shall be in a minimum amount of
$500,000 (and integral multiples of $100,000 in excess thereof) or
the remaining amount available under the Committed Amount, (iii) no
more than six Loans shall be made during any one month and (iv) no
more than eight Eurodollar Loans shall be outstanding at any one
time. For the purposes of this Section, all Eurodollar Loans with the
same Interest Periods beginning on the same date shall be considered
as one Eurodollar Loan, but Eurodollar Loans with different Interest
Periods, even if they begin on the same date, shall be considered as
separate Eurodollar Loans.
(g) Notes. The Loans made by each Lender shall be evidenced
by a duly executed promissory note of the Borrowers to each Lender in
the face amount of its Loan Commitment Percentage of the Committed
Amount in substantially the form of Exhibit 2.1(g).
2.2 [Intentionally Omitted]
2.3 Joint and Several Liability of the Borrowers.
(a) Each of the Borrowers is accepting joint and several
liability hereunder in consideration of the financial accommodation
to be provided by the Lenders under this Credit Agreement, for the
mutual benefit, directly and indirectly, of each of the Borrowers and
in consideration of the undertakings of each of the Borrowers to
accept joint and several liability for the obligations of each of
them.
(b) Each of the Borrowers jointly and severally hereby
irrevocably and unconditionally accepts, not merely as a surety but
also as a co-debtor, joint and several liability with the other
Borrowers with respect to the payment and performance of all of the
Obligations arising under this Credit Agreement and the other Credit
Documents, it being the intention of the parties hereto that all the
Obligations shall be the joint and several obligations of each of the
Borrowers without preferences or distinction among them.
(c) If and to the extent that any of the Borrowers shall
fail to make any payment with respect to any of the obligations
hereunder as and when due or to perform any of such obligations in
accordance with the terms thereof, then in each such event, the other
Borrowers will make such payment with respect to, or perform, such
obligation.
(d) The obligations of each Borrower under the provisions of
this Section 2.3 constitute full recourse obligations of such
Borrower, enforceable against it to the full extent of its properties
and assets.
(e) Except as otherwise expressly provided herein, to the
extent permitted by law, each Borrower hereby waives notice of
acceptance of its joint and several liability,
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notice of occurrence of any Default or Event of Default (except to
the extent notice is expressly required to be given pursuant to the
terms of this Credit Agreement), or of any demand for any payment
under this Credit Agreement, notice of any action at any time taken
or omitted by the Administrative Agent or the Lenders under or in
respect of any of the Obligations hereunder, any requirement of
diligence and, generally, all demands, notices and other formalities
of every kind in connection with this Credit Agreement. Each Borrower
hereby assents to, and waives notice of, any extension or
postponement of the time for the payment of any of the Obligations
hereunder, the acceptance of any partial payment thereon, any waiver,
consent or other action or acquiescence by the Administrative Agent
or the Lenders at any time or times in respect of any default by any
Borrower in the performance or satisfaction of any term, covenant,
condition or provision of this Credit Agreement, any and all other
indulgences whatsoever by the Administrative Agent or the Lenders in
respect of any of the Obligations hereunder, and the taking,
addition, substitution or release, in whole or in part, at any time
or times, of any security for any of such Obligations or the
addition, substitution or release, in whole or in part, of any
Borrower. Without limiting the generality of the foregoing, each
Borrower assents to any other action or delay in acting or any
failure to act on the part of the Administrative Agent or the
Lenders, including, without limitation, any failure strictly or
diligently to assert any right or to pursue any remedy or to comply
fully with applicable laws or regulations thereunder which might, but
for the provisions of this Section 2.3, afford grounds for
terminating, discharging or relieving such Borrower, in whole or in
part, from any of its obligations under this Section 2.3, it being
the intention of each Borrower that, so long as any of the
Obligations hereunder remain unsatisfied, the obligations of such
Borrower under this Section 2.3 shall not be discharged except by
performance and then only to the extent of such performance. The
obligations of each Borrower under this Section 2.3 shall not be
diminished or rendered unenforceable by any winding up,
reorganization, arrangement, liquidation, reconstruction or similar
proceeding with respect to any reconstruction or similar proceeding
with respect to any Borrower or a Lender. The joint and several
liability of the Borrowers hereunder shall continue in full force and
effect notwithstanding any absorption, merger, amalgamation or any
other change whatsoever in the name, membership, constitution or
place of formation of any Borrower or any of the Lenders.
(f) The provisions of this Section 2.3 are made for the
benefit of the Lenders and their successors and assigns, and may be
enforced by them from time to time against any of the Borrowers as
often as occasion therefor may arise and without requirement on the
part of the Lenders first to marshall any of its claims or to
exercise any of its rights against the other Borrower or to exhaust
any remedies available to it against the other Borrower or to resort
to any other source or means of obtaining payment of any of the
Obligations hereunder or to elect any other remedy. The provisions of
this Section 2.3 shall remain in effect until all the Obligations
hereunder shall have been paid in full or otherwise fully satisfied.
If at any time, any payment, or any part thereof, made in respect of
any of the Obligations, is rescinded or must otherwise be restored or
returned by the Lenders upon the insolvency, bankruptcy or
reorganization of any of the Borrowers, or otherwise, the provisions
of this Section 2.3 will forthwith be reinstated and in effect as
though such payment had not been made.
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(g) Notwithstanding any provision to the contrary contained
herein or in any of the other Credit Documents, to the extent the
obligations of any Borrower shall be adjudicated to be invalid or
unenforceable for any reason (including, without limitation, because
of any applicable state or federal law relating to fraudulent
conveyances or transfers) then the obligations of such Borrower
hereunder shall be limited to the maximum amount that is permissible
under applicable law (whether federal or state and including, without
limitation, the Bankruptcy Code).
2.4 Appointment of BOP.
BRT hereby appoints BOP to act as its agent for all purposes under
this Credit Agreement (including, without limitation, with respect to all
matters related to the borrowing and repayment of Loans) and agrees that (i)
BOP may execute such documents on behalf of BRT as BOP deems appropriate in
its sole discretion and BRT shall be obligated by all of the terms of any such
document executed on its behalf, (ii) any notice or communication delivered by
the Administrative Agent or the Lender to BOP shall be deemed delivered to BRT
and (iii) the Administrative Agent or the Lender may accept, and be permitted
to rely on, any document, instrument or agreement executed by BOP on behalf of
BRT.
2.5 Non-Recourse.
Notwithstanding anything herein to the contrary, no recourse shall be
had against Brandywine Realty Services Partnership or any past, present or
future shareholder, officer, director or trustee of BRT for any obligation of
the Credit Parties under the Credit Documents, or for any claim based thereon
or otherwise in respect thereof; provided, however, that this Section 2.5
shall not restrict or limit any claim against any such Person arising out of
or occurring with respect to fraud or any intentional misrepresentation or any
act or omission that is willful or wanton or constitutes gross negligence or
willful misconduct.
SECTION 3
GENERAL PROVISIONS APPLICABLE TO LOANS AND LETTERS OF CREDIT
3.1 Interest.
(a) Interest Rate. All Base Rate Loans shall accrue interest
at the Adjusted Base Rate. All Eurodollar Loans shall accrue interest
at the Adjusted Eurodollar Rate.
(b) Default Rate of Interest. Upon the occurrence, and
during the continuance, of an Event of Default, the principal of and,
to the extent permitted by law, interest on the Loans and any other
amounts owing hereunder or under the other Credit Documents
(including without limitation fees and expenses) shall bear interest,
payable on demand, at a per annum rate equal to four percent
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(4%) plus the rate which would otherwise be applicable (or if no rate
is applicable, then the rate for Base Rate Loans plus four percent (4%)
per annum); provided that unless the Loans have been accelerated,
interest, including the default rate of interest, shall only be due and
payable on the Interest Payment Dates.
(c) Interest Payments. Interest on Loans shall be due and
payable in arrears on each Interest Payment Date. If an Interest
Payment Date falls on a date which is not a Business Day, such
Interest Payment Date shall be deemed to be the succeeding Business
Day, except that in the case of Eurodollar Loans where the succeeding
Business Day falls in the succeeding calendar month, then on the
preceding Business Day.
3.2 Place and Manner of Payments.
All payments of principal, interest, fees, expenses and other amounts
to be made by a Borrower under this Agreement shall be received not later than
2:00 p.m. on the date when due, in Dollars and in immediately available funds,
by the Administrative Agent at its offices in Charlotte, North Carolina or the
Issuing Lender at its applicable address. Payments received after such time
shall be deemed to have been received on the next Business Day. The Borrowers
shall, at the time it makes any payment under this Agreement, specify to the
Administrative Agent or Issuing Lender, as applicable, the Loans, Letters of
Credit, fees or other amounts payable by the Borrowers hereunder to which such
payment is to be applied (and in the event that it fails to specify, or if
such application would be inconsistent with the terms hereof, the
Administrative Agent shall, subject to Section 3.7, distribute such payment to
the Lenders in such manner as the Administrative Agent may deem appropriate).
The Administrative Agent will distribute any such payment to the Lenders on
the day received if such payment is received prior to 2:00 p.m.; otherwise the
Administrative Agent will distribute such payment to the Lenders on the next
succeeding Business Day. Whenever any payment hereunder shall be stated to be
due on a day which is not a Business Day, the due date thereof shall be
extended to the next succeeding Business Day (subject to accrual of interest
and fees for the period of such extension), except that in the case of
Eurodollar Loans, if the extension would cause the payment to be made in the
next following calendar month, then such payment shall instead be made on the
next preceding Business Day.
3.3 Voluntary Prepayments.
The Borrowers shall have the right to prepay Loans in whole or in
part from time to time without premium or penalty; provided, however, that (a)
Eurodollar Loans may only be prepaid on three Business Days' prior written
notice to the Administrative Agent and any prepayment of Eurodollar Loans will
be subject to Section 3.14 and (b) each such partial prepayment of Loans shall
be in the minimum principal amount of $1,000,000 and integral multiples of
$100,000 in excess thereof.
3.4 Fees.
The Borrowers agree to timely pay to the Administrative Agent the
fees as set forth in the Additional Fee Letter.
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3.5 Payment in full at Maturity.
On the Maturity Date, the entire outstanding principal
balance of all Loans, together with accrued but unpaid interest and all other
sums owing with respect thereto, shall be due and payable in full, unless
accelerated sooner pursuant to Section 9.2.
3.6 Computations of Interest and Fees.
(a) Except for Base Rate Loans which shall be calculated on
the basis of a 365 or 366 day year as the case may be, all
computations of interest and fees hereunder shall be made on the
basis of the actual number of days elapsed over a year of 360 days.
Interest shall accrue from and include the date of borrowing (or
continuation or conversion) but exclude the date of payment.
(b) It is the intent of the Lenders and the Credit Parties
to conform to and contract in strict compliance with applicable usury
law from time to time in effect. All agreements between the Lenders
and the Credit Parties are hereby limited by the provisions of this
paragraph which shall override and control all such agreements,
whether now existing or hereafter arising and whether written or
oral. In no way, nor in any event or contingency (including but not
limited to prepayment or acceleration of the maturity of any
obligation), shall the interest taken, reserved, contracted for,
charged, or received under this Credit Agreement, under the Notes or
otherwise, exceed the maximum nonusurious amount permissible under
applicable law. If, from any possible construction of any of the
Credit Documents or any other document, interest would otherwise be
payable in excess of the maximum nonusurious amount, any such
construction shall be subject to the provisions of this paragraph and
such interest shall be automatically reduced to the maximum
nonusurious amount permitted under applicable law, without the
necessity of execution of any amendment or new document. If any
Lender shall ever receive anything of value which is characterized as
interest on the Loans under applicable law and which would, apart
from this provision, be in excess of the maximum lawful amount, an
amount equal to the amount which would have been excessive interest
shall, without penalty, be applied to the reduction of the principal
amount owing on the Loans and not to the payment of interest, or
refunded to the Credit Parties or the other payor thereof if and to
the extent such amount which would have been excessive exceeds such
unpaid principal amount of the Loans. The right to demand payment of
the Loans or any other indebtedness evidenced by any of the Credit
Documents does not include the right to receive any interest which
has not otherwise accrued on the date of such demand, and the Lenders
do not intend to charge or receive any unearned interest in the event
of such demand. All interest paid or agreed to be paid to the Lenders
with respect to the Loans shall, to the extent permitted by
applicable law, be amortized, prorated, allocated, and spread
throughout the full stated term (including any renewal or extension)
of the Loans so that the amount of interest on account of such
indebtedness does not exceed the maximum nonusurious amount permitted
by applicable law.
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3.7 Pro Rata Treatment.
Each Loan borrowing, each payment or prepayment of principal
of any Loan, and each conversion or continuation of any Loan, shall (except as
otherwise provided in Section 3.11) be allocated pro rata among the Lenders in
accordance with the respective Commitment Percentages of such Lenders (or, if
the Commitments of such Lenders have expired or been terminated, in accordance
with the respective principal amounts of the outstanding Loans and
Participation Interests of such Lenders); provided that, if any Lender shall
have failed to pay its applicable pro rata share of any Loan, then any amount
to which such Lender would otherwise be entitled pursuant to this Section 3.7
shall instead be payable to the Administrative Agent until the share of such
Loan not funded by such Lender has been repaid; provided further, that in the
event any amount paid to any Lender pursuant to this Section 3.7 is rescinded
or must otherwise be returned by the Administrative Agent, each Lender shall,
upon the request of the Administrative Agent, repay to the Administrative
Agent the amount so paid to such Lender, with interest for the period
commencing on the date such payment is returned by the Administrative Agent
until the date the Administrative Agent receives such repayment at a rate per
annum equal to, during the period to but excluding the date two Business Days
after such request, the Federal Funds Rate, and thereafter, at the Base Rate
plus two percent (2%) per annum.
3.8 Sharing of Payments.
The Lenders agree among themselves that, except to the extent
otherwise provided herein, in the event that any Lender shall obtain payment
in respect of any Loan or any other obligation owing to such Lender under this
Credit Agreement through the exercise of a right of setoff, banker's lien or
counterclaim, or pursuant to a secured claim under Section 506 of the
Bankruptcy Code or other security or interest arising from, or in lieu of,
such secured claim, received by such Lender under any applicable bankruptcy,
insolvency or other similar law or otherwise, or by any other means, in excess
of its pro rata share of such payment as provided for in this Credit
Agreement, such Lender shall promptly pay in cash or purchase from the other
Lenders a participation in such Loans and other obligations in such amounts,
and make such other adjustments from time to time, as shall be equitable to
the end that all Lenders share such payment in accordance with their
respective ratable shares as provided for in this Credit Agreement. The
Lenders further agree among themselves that if payment to a Lender obtained by
such Lender through the exercise of a right of setoff, banker's lien,
counterclaim or other event as aforesaid shall be rescinded or must otherwise
be restored, each Lender which shall have shared the benefit of such payment
shall, by payment in cash or a repurchase of a participation theretofore sold,
return its share of that benefit (together with its share of any accrued
interest payable with respect thereto) to each Lender whose payment shall have
been rescinded or otherwise restored. The Credit Parties agree that any Lender
so purchasing such a participation may, to the fullest extent permitted by
law, exercise all rights of payment, including setoff, banker's lien or
counterclaim, with respect to such participation as fully as if such Lender
were a holder of such Loan or other obligation in the amount of such
participation. Except as otherwise expressly provided in this Credit
Agreement, if any Lender shall fail to remit to the Administrative Agent or
any other Lender an amount payable by such Lender to the Administrative Agent
or such other Lender pursuant to this Credit Agreement on the date when such
amount is due, such payments shall be made together with interest thereon for
each date from the date such amount is due until the date such amount is paid
to the Administrative Agent or such
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other Lender at a rate per annum equal to the Federal Funds Rate. If under any
applicable bankruptcy, insolvency or other similar law, any Lender receives a
secured claim in lieu of a setoff to which this Section 3.8 applies, such Lender
shall, to the extent practicable, exercise its rights in respect of such secured
claim in a manner consistent with the rights of the Lenders under this Section
3.8 to share in the benefits of any recovery on such secured claim.
3.9 Capital Adequacy.
If, after the date hereof, any Lender has determined that the
adoption or the becoming effective of, or any change in, or any change by any
Governmental Authority, central bank or comparable agency charged with the
interpretation or administration thereof in the interpretation or
administration of, any applicable law, rule or regulation regarding capital
adequacy, or compliance by such Lender, or its parent corporation, with any
request or directive regarding capital adequacy (whether or not having the
force of law) of any such authority, central bank or comparable agency, has or
would have the effect of reducing the rate of return on such Lender's (or
parent corporation's) capital or assets as a consequence of its commitments or
obligations hereunder to a level below that which such Lender, or its parent
corporation, could have achieved but for such adoption, effectiveness, change
or compliance (taking into consideration such Lender's (or parent
corporation's) policies with respect to capital adequacy), then, upon notice
from such Lender to the Borrowers and the Administrative Agent, the Borrowers
shall be obligated to pay to such Lender such additional amount or amounts as
will compensate such Lender on an after-tax basis (after taking into account
applicable deductions and credits in respect of the amount indemnified) for
such reduction. Each determination by any such Lender of amounts owing under
this Section shall, absent manifest error, be conclusive and binding on the
parties hereto. This covenant shall survive the termination of this Credit
Agreement and the payment of the Loans and all other amounts payable
hereunder.
3.10 Inability To Determine Interest Rate.
If prior to the first day of any Interest Period, the Administrative
Agent shall have determined in good faith (which determination shall be
conclusive and binding upon the Borrowers) that, by reason of circumstances
affecting the relevant market, adequate and reasonable means do not exist for
ascertaining the Adjusted Eurodollar Rate for such Interest Period, the
Administrative Agent shall give telecopy or telephonic notice thereof to the
Borrowers and the Lenders as soon as practicable thereafter, and will also
give prompt written notice to the Borrowers when such conditions no longer
exist. If such notice is given (a) any Eurodollar Loans requested to be made
on the first day of such Interest Period shall be made as Base Rate Loans and
(b) any Loans that were to have been converted on the first day of such
Interest Period to or continued as Eurodollar Loans shall be converted to or
continued as Base Rate Loans. Until such notice has been withdrawn by the
Administrative Agent, no further Eurodollar Loans shall be made or continued
as such, nor shall the Borrowers have the right to convert Base Rate Loans to
Eurodollar Loans.
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3.11 Illegality.
Notwithstanding any other provision herein, if the adoption of or any
change in any Requirement of Law or in the interpretation or application
thereof occurring after the Closing Date shall make it unlawful for any Lender
to make or maintain Eurodollar Loans as contemplated by this Credit Agreement,
(a) such Lender shall promptly give written notice of such circumstances to
the Borrowers and the Administrative Agent (which notice shall be promptly
withdrawn whenever such circumstances no longer exist), (b) the commitment of
such Lender hereunder to make Eurodollar Loans, continue Eurodollar Loans as
such and convert a Base Rate Loan to Eurodollar Loans shall forthwith be
canceled and, until such time as it shall no longer be unlawful for such
Lender to make or maintain Eurodollar Loans, such Lender shall then have a
commitment only to make a Base Rate Loan when a Eurodollar Loan is requested
and (c) such Lender's Loans then outstanding as Eurodollar Loans, if any,
shall be converted automatically to Base Rate Loans on the respective last
days of the then current Interest Periods with respect to such Loans or within
such earlier period as required by law. If any such conversion of a Eurodollar
Loan occurs on a day which is not the last day of the then current Interest
Period with respect thereto, the Borrowers shall pay to such Lender such
amounts, if any, as may be required pursuant to Section 3.14; provided that no
such payments shall be required if the conversion of a Eurodollar Loan occurs
within 30 days of the last day of the Interest Period of such Eurodollar Loan.
3.12 Requirements of Law.
If the adoption of or any change in any Requirement of Law or in the
interpretation or application thereof applicable to any Lender, or compliance
by any Lender with any request or directive (whether or not having the force
of law) from any central bank or other Governmental Authority, in each case
made subsequent to the Closing Date (or, if later, the date on which such
Lender becomes a Lender):
(a) shall subject such Lender to any tax of any kind
whatsoever with respect to any Eurodollar Loans made by it or its
obligation to make Eurodollar Loans, or change the basis of taxation
of payments to such Lender in respect thereof (except for
Non-Excluded Taxes covered by Section 3.13 (including Non-Excluded
Taxes imposed solely by reason of any failure of such Lender to
comply with its obligations under Section 3.13(b)) and changes in
taxes measured by or imposed upon the overall net income, or
franchise tax (imposed in lieu of such net income tax), of such
Lender or its applicable lending office, branch, or any affiliate
thereof);
(b) shall impose, modify or hold applicable any reserve,
special deposit, compulsory loan or similar requirement against
assets held by, deposits or other liabilities in or for the account
of, advances, loans or other extensions of credit by, or any other
acquisition of funds by, any office of such Lender which is not
otherwise included in the determination of the Adjusted Eurodollar
Rate hereunder; or
(c) shall impose on such Lender any other condition
(excluding any tax of any kind whatsoever);
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and the result of any of the foregoing is to increase the cost to such Lender,
by an amount which such Lender deems to be material, of making, converting
into, continuing or maintaining Eurodollar Loans or issuing or participating
in Letters of Credit or to reduce any amount receivable hereunder in respect
thereof, then, in any such case, upon notice to the Borrowers from such
Lender, through the Administrative Agent, in accordance herewith, the
Borrowers shall be obligated to promptly pay such Lender, upon its demand, any
additional amounts necessary to compensate such Lender on an after-tax basis
(after taking into account applicable deductions and credits in respect of the
amount indemnified) for such increased cost or reduced amount receivable,
provided that, in any such case, the Borrowers may elect to convert the
Eurodollar Loans made by such Lender hereunder to Base Rate Loans by giving
the Administrative Agent at least one Business Day's notice of such election,
in which case the Borrowers shall promptly pay to such Lender, upon demand,
without duplication, such amounts, if any, as may be required pursuant to
Section 3.14. If any Lender becomes entitled to claim any additional amounts
pursuant to this Section 3.12, it shall provide prompt notice thereof to the
Borrowers, through the Administrative Agent, certifying (x) that one of the
events described in this Section 3.12 has occurred and describing in
reasonable detail the nature of such event, (y) as to the increased cost or
reduced amount resulting from such event and (z) as to the additional amount
demanded by such Lender and a reasonably detailed explanation of the
calculation thereof. Such a certificate as to any additional amounts payable
pursuant to this Section 3.12 submitted by such Lender, through the
Administrative Agent, to the Borrowers shall be conclusive and binding on the
parties hereto in the absence of manifest error. This covenant shall survive
the termination of this Credit Agreement and the payment of the Loans and all
other amounts payable hereunder.
3.13 Taxes.
(a) Except as provided below in this Section 3.13, all
payments made by the Borrowers under this Credit Agreement and any
Notes shall be made free and clear of, and without deduction or
withholding for or on account of, any present or future income, stamp
or other taxes, levies, imposts, duties, charges, fees, deductions or
withholdings, now or hereafter imposed, levied, collected, withheld
or assessed by any court, or governmental body, agency or other
official, excluding taxes measured by or imposed upon the overall net
income of any Lender or its applicable lending office, or any branch
or affiliate thereof, and all franchise taxes, branch taxes, taxes on
doing business or taxes on the overall capital or net worth of any
Lender or its applicable lending office, or any branch or affiliate
thereof, in each case imposed in lieu of net income taxes: (i) by the
jurisdiction under the laws of which such Lender, applicable lending
office, branch or affiliate is organized or is located, or in which
its principal executive office is located, or any nation within which
such jurisdiction is located or any political subdivision thereof; or
(ii) by reason of any connection between the jurisdiction imposing
such tax and such Lender, applicable lending office, branch or
affiliate other than a connection arising solely from such Lender
having executed, delivered or performed its obligations, or received
payment under or enforced, this Credit Agreement or any Notes. If any
such non-excluded taxes, levies, imposts, duties, charges, fees,
deductions or withholdings ("Non-Excluded Taxes") are required to be
withheld from any amounts payable to the Administrative Agent or any
Lender hereunder or under any Notes, (A) the amounts so payable to
the Administrative Agent or such Lender shall be increased to the
extent necessary to yield to the Administrative Agent or such Lender
(after payment of all Non-Excluded Taxes) interest on any such other
amounts
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payable hereunder at the rates or in the amounts specified in
this Credit Agreement and any Notes, provided, however, that the
Borrowers shall be entitled to deduct and withhold any Non-Excluded
Taxes and shall not be required to increase any such amounts payable
to any Lender that is not organized under the laws of the United
States of America or a state thereof if such Lender fails to comply
with the requirements of paragraph (b) of this Section 3.13 whenever
any Non-Excluded Taxes are payable by the Borrowers, and (B) as
promptly as possible after requested the Borrowers shall send to the
Administrative Agent for its own account or for the account of such
Lender, as the case may be, a certified copy of an original official
receipt received by the Borrowers showing payment thereof. If the
Borrowers fail to pay any Non-Excluded Taxes when due to the
appropriate taxing authority or fails to remit to the Administrative
Agent the required receipts or other required documentary evidence,
the Borrowers shall indemnify the Administrative Agent and any Lender
for any incremental taxes, interest or penalties that may become
payable by the Administrative Agent or any Lender as a result of any
such failure. The agreements in this subsection shall survive the
termination of this Credit Agreement and the payment of the Loans and
all other amounts payable hereunder.
(b) Each Lender that is not incorporated under the laws of
the United States of America or a state thereof shall:
(i) (A) on or before the date of any payment by
the Borrowers under this Credit Agreement or Notes to such
Lender, deliver to the Borrowers and the Administrative
Agent (x) two duly completed copies of United States
Internal Revenue Service Form 1001 or 4224, or successor
applicable form, as the case may be, certifying that it is
entitled to receive payments under this Credit Agreement and
any Notes without deduction or withholding of any United
States federal income taxes and (y) an Internal Revenue
Service Form W-8 or W-9, or successor applicable form, as
the case may be, certifying that it is entitled to an
exemption from United States backup withholding tax;
(B) deliver to the Borrowers and the
Administrative Agent two further copies of any such form or
certification on or before the date that any such form or
certification expires or becomes obsolete and after the
occurrence of any event requiring a change in the most
recent form previously delivered by it to the Borrowers; and
(C) obtain such extensions of time for
filing and complete such forms or certifications as may
reasonably be requested by the Borrowers or the
Administrative Agent; or
(ii) in the case of any such Lender that is
not a "bank" within the meaning of Section 881(c)(3)(A) of
the Internal Revenue Code, (A) represent to the Borrowers
(for the benefit of the Borrowers and the Administrative
Agent) that it is not a bank within the meaning of Section
881(c)(3)(A) of the Internal Revenue Code, (B) agree to
furnish to the Borrowers, on or before the date of any
payment by the Borrowers, with a copy to the Administrative
Agent, two accurate and complete
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original signed copies of Internal Revenue Service Form W-8,
or successor applicable form certifying to such Lender's
legal entitlement at the date of such certificate to an
exemption from U.S. withholding tax under the provisions of
Section 881(c) of the Internal Revenue Code with respect to
payments to be made under this Credit Agreement and any
Notes (and to deliver to the Borrowers and the
Administrative Agent two further copies of such form on or
before the date it expires or becomes obsolete and after the
occurrence of any event requiring a change in the most
recently provided form and, if necessary, obtain any
extensions of time reasonably requested by the Borrowers or
the Administrative Agent for filing and completing such
forms), and (C) agree, to the extent legally entitled to do
so, upon reasonable request by the Borrowers, to provide to
the Borrowers (for the benefit of the Borrowers and the
Administrative Agent) such other forms as may be reasonably
required in order to establish the legal entitlement of such
Lender to an exemption from withholding with respect to
payments under this Credit Agreement and any Notes.
Notwithstanding the above, if any change in treaty, law or regulation
has occurred after the date such Person becomes a Lender hereunder
which renders all such forms inapplicable or which would prevent such
Lender from duly completing and delivering any such form with respect
to it and such Lender so advises the Borrowers and the Administrative
Agent then such Lender shall be exempt from such requirements. Each
Person that shall become a Lender or a participant of a Lender
pursuant to Section 11.3 shall, upon the effectiveness of the related
transfer, be required to provide all of the forms, certifications and
statements required pursuant to this subsection (b); provided that in
the case of a participant of a Lender, the obligations of such
participant of a Lender pursuant to this subsection (b) shall be
determined as if the participant of a Lender were a Lender except
that such participant of a Lender shall furnish all such required
forms, certifications and statements to the Lender from which the
related participation shall have been purchased.
3.14 Compensation.
Except as expressly set forth in Section 3.3(c), the Borrowers
promise to indemnify each Lender and to hold each Lender harmless from any
loss or expense which such Lender may sustain or incur as a consequence of (a)
default by the Borrowers in making a borrowing of, conversion into or
continuation of Eurodollar Loans after the Borrowers have given a notice
requesting the same in accordance with the provisions of this Credit
Agreement, (b) default by the Borrowers in making any prepayment of a
Eurodollar Loan after the Borrowers have given a notice thereof in accordance
with the provisions of this Credit Agreement and (c) the making of a
prepayment of Eurodollar Loans on a day which is not the last day of an
Interest Period with respect thereto. Such indemnification shall be calculated
by the Administrative Agent and may include an amount equal to (i) the amount
of interest which would have accrued on the amount so prepaid, or not so
borrowed, converted or continued, for the period from the date of such
prepayment or of such failure to borrow, convert or continue to the last day
of the applicable Interest Period (or, in the case of a failure to borrow,
convert or continue, the Interest Period that would have commenced on the date
of such failure) in each case at the applicable rate of interest for such
Eurodollar Loans provided for herein minus (ii) the amount of interest which
would have accrued to such Lender on
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such amount by placing such amount on deposit for a comparable period with
leading banks in the interbank Eurodollar market. The agreements in this Section
shall survive the termination of this Credit Agreement and the payment of the
Loans and all other amounts payable hereunder. Notwithstanding the foregoing,
any prepayment of a Eurodollar Loan made hereunder (as a result of a mandatory
requirement of this Credit Agreement) within thirty (30) days of the end of the
Interest Period with respect to such Eurodollar Loan, shall not be subject to
this Section 3.14.
3.15 Mitigation; Mandatory Assignment.
Each Lender shall use reasonable efforts to avoid or mitigate any
increased cost or suspension of the availability of an interest rate under
Sections 3.9 through 3.14 inclusive to the greatest extent practicable
(including transferring the Loans to another lending office or affiliate of a
Lender) unless, in the opinion of such Lender, such efforts would be likely to
have an adverse effect upon it. In the event a Lender makes a request to the
Borrowers for additional payments in accordance with Sections 3.9, 3.10, 3.11,
3.12, 3.13 or 3.14 or a Lender becomes a Defaulting Lender, then, provided
that no Default or Event of Default has occurred and is continuing at such
time, the Borrowers may, at their own expense (such expense to include any
transfer fee payable to the Administrative Agent under Section 11.3(b) and any
expense pursuant to Section 3.14), and in their sole discretion, require such
Lender to transfer and assign in whole (but not in part), without recourse (in
accordance with and subject to the terms and conditions of Section 11.3(b)),
all of its interests, rights and obligations under this Credit Agreement to an
assignee which shall assume such assigned obligations (which assignee may be
another Lender, if a Lender accepts such assignment); provided that (a) such
assignment shall not conflict with any law, rule or regulation or order of any
court or other governmental authority and (b) the Borrowers or such assignee
shall have paid to the assigning Lender in immediately available funds the
principal of and interest accrued to the date of such payment on the portion
of the Loans hereunder held by such assigning Lender and all other amounts
owed to such assigning Lender hereunder, including amounts owed pursuant to
Sections 3.9 through 3.14.
SECTION 4
GUARANTY
4.1 Guaranty of Payment.
Subject to Section 4.7 below, each of the Guarantors hereby, jointly
and severally, unconditionally guarantees to each Lender, the prompt payment
of the Obligations in full when due (whether at stated maturity, as a
mandatory prepayment, by acceleration or otherwise). This Guaranty is a
guaranty of payment and not of collection and is a continuing guaranty and
shall apply to all Obligations whenever arising.
4.2 Obligations Unconditional.
The obligations of the Guarantors hereunder are absolute and
unconditional, irrespective of the value, genuineness, validity, regularity or
enforceability of any of the Credit Documents or any
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other agreement or instrument referred to therein, to the fullest extent
permitted by applicable law, irrespective of any other circumstance whatsoever
which might otherwise constitute a legal or equitable discharge or defense of a
surety or guarantor. Each Guarantor agrees that this Guaranty may be enforced by
the Lenders without the necessity at any time of resorting to or exhausting any
other security or collateral and without the necessity at any time of having
recourse to the Notes or any other of the Credit Documents or any collateral,
if any, hereafter securing the Obligations or otherwise and each Guarantor
hereby waives the right to require the Lenders to proceed against the
Borrowers or any other Person (including a co-guarantor) or to require the
Lenders to pursue any other remedy or enforce any other right. Each Guarantor
further agrees that it shall have no right of subrogation, indemnity,
reimbursement or contribution against the Borrowers or any other Guarantor of
the Obligations for amounts paid under this Guaranty until such time as the
Lenders have been paid in full, all Commitments under the Credit Agreement
have been terminated and no Person or Governmental Authority shall have any
right to request any return or reimbursement of funds from the Lenders in
connection with monies received under the Credit Documents. Each Guarantor
further agrees that nothing contained herein shall prevent the Lenders from
suing on the Notes or any of the other Credit Documents or foreclosing its
security interest in or Lien on any collateral, if any, securing the
Obligations or from exercising any other rights available to it under this
Credit Agreement, the Notes, any other of the Credit Documents, or any other
instrument of security, if any, and the exercise of any of the aforesaid
rights and the completion of any foreclosure proceedings shall not constitute
a discharge of any of any Guarantor's obligations hereunder; it being the
purpose and intent of each Guarantor that its obligations hereunder shall be
absolute, independent and unconditional under any and all circumstances.
Neither any Guarantor's obligations under this Guaranty nor any remedy for the
enforcement thereof shall be impaired, modified, changed or released in any
manner whatsoever by an impairment, modification, change, release or
limitation of the liability of the Borrowers or by reason of the bankruptcy or
insolvency of the Borrowers. Each Guarantor waives any and all notice of the
creation, renewal, extension or accrual of any of the Obligations and notice
of or proof of reliance of by the Administrative Agent or any Lender upon this
Guarantee or acceptance of this Guarantee. The Obligations, and any of them,
shall conclusively be deemed to have been created, contracted or incurred, or
renewed, extended, amended or waived, in reliance upon this Guarantee. All
dealings between the Borrowers and any of the Guarantors, on the one hand, and
the Administrative Agent and the Lenders, on the other hand, likewise shall be
conclusively presumed to have been had or consummated in reliance upon this
Guarantee. The Guarantors further agree to all rights of set-off as set forth
in Section 11.2.
4.3 Modifications.
Each Guarantor agrees that (a) all or any part of the security now or
hereafter held for the Credit Party Obligations, if any, may be exchanged,
compromised or surrendered from time to time; (b) the Lenders shall not have
any obligation to protect, perfect, secure or insure any such security
interests, liens or encumbrances now or hereafter held, if any, for the
Obligations or the properties subject thereto; (c) the time or place of
payment of the Obligations may be changed or extended, in whole or in part, to
a time certain or otherwise, and may be renewed or accelerated, in whole or in
part; (d) the Borrowers and any other party liable for payment under the
Credit Documents may be granted indulgences generally; (e) any of the
provisions of the Notes or any of the other Credit Documents may be modified,
amended or waived; (f) any party (including any co-guarantor) liable
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for the payment thereof may be granted indulgences or be released; and (g) any
deposit balance for the credit of the Borrowers or any other party liable for
the payment of the Obligations or liable upon any security therefor may be
released, in whole or in part, at, before or after the stated, extended or
accelerated maturity of the Obligations, all without notice to or further
assent by such Guarantor, which shall remain bound thereon, notwithstanding
any such exchange, compromise, surrender, extension, renewal, acceleration,
modification, indulgence or release.
4.4 Waiver of Rights.
Each Guarantor expressly waives to the fullest extent permitted by
applicable law: (a) notice of acceptance of this Guaranty by the Lenders and
of all extensions of credit to the Borrowers by the Lenders; (b) presentment
and demand for payment or performance of any of the Obligations; (c) protest
and notice of dishonor or of default (except as specifically required in the
Credit Agreement) with respect to the Obligations or with respect to any
security therefor; (d) notice of the Lenders obtaining, amending, substituting
for, releasing, waiving or modifying any security interest, lien or
encumbrance, if any, hereafter securing the Obligations, or the Lenders'
subordinating, compromising, discharging or releasing such security interests,
liens or encumbrances, if any; and (e) all other notices to which such
Guarantor might otherwise be entitled.
4.5 Reinstatement.
The obligations of the Guarantors under this Section 4 shall be
automatically reinstated if and to the extent that for any reason any payment
by or on behalf of any Person in respect of the Obligations is rescinded or
must be otherwise restored by any holder of any of the Obligations, whether as
a result of any proceedings in bankruptcy or reorganization or otherwise, and
each Guarantor agrees that it will indemnify the Administrative Agent and each
Lender on demand for all reasonable costs and expenses (including, without
limitation, reasonable fees of counsel) incurred by the Administrative Agent
or such Lender in connection with such rescission or restoration, including
any such costs and expenses incurred in defending against any claim alleging
that such payment constituted a preference, fraudulent transfer or similar
payment under any bankruptcy, insolvency or similar law.
4.6 Remedies.
The Guarantors agree that, as between the Guarantors, on the one
hand, and the Administrative Agent and the Lenders, on the other hand, the
Obligations may be declared to be forthwith due and payable as provided in
Section 9 (and shall be deemed to have become automatically due and payable in
the circumstances provided in Section 9) notwithstanding any stay, injunction
or other prohibition preventing such declaration (or preventing such
Obligations from becoming automatically due and payable) as against any other
Person and that, in the event of such declaration (or such Obligations being
deemed to have become automatically due and payable), such Obligations
(whether or not due and payable by any other Person) shall forthwith become
due and payable by the Guarantors.
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4.7 Limitation of Guaranty.
Notwithstanding any provision to the contrary contained herein or in
any of the other Credit Documents, to the extent the obligations of any
Guarantor shall be adjudicated to be invalid or unenforceable for any reason
(including, without limitation, because of any applicable state or federal law
relating to fraudulent conveyances or transfers) then the obligations of such
Guarantor hereunder shall be limited to the maximum amount that is permissible
under applicable law (whether federal or state and including, without
limitation, the Bankruptcy Code).
4.8 Rights of Contribution.
The Credit Parties agree among themselves that, in connection with
payments made hereunder, each Credit Party shall have contribution rights
against the other Credit Parties as permitted under applicable law. Such
contribution rights shall be subordinate and subject in right of payment to
the obligations of the Credit Parties under the Credit Documents and no Credit
Party shall exercise such rights of contribution until all Credit Party
Obligations have been paid in full and the Commitments terminated.
SECTION 5
CONDITIONS PRECEDENT
5.1 Closing Conditions.
The obligation of the Lenders to enter into this Credit Agreement and
make the initial Extensions of Credit is subject to satisfaction of the
following conditions:
(a) Executed Credit Documents. Receipt by the Administrative
Agent of duly executed copies of: (i) this Credit Agreement; (ii) the
Notes; and (iii) all other Credit Documents required to be delivered
on or before the Effective Date, each in form and substance
reasonably acceptable to the Administrative Agent in its sole
discretion.
(b) Partnership Documents. With respect to each Credit Party
that is a partnership, receipt by the Administrative Agent of the
following:
(i) Authorization. Authorization of the general
partner(s) of such Credit Party, as of the Closing Date,
approving and adopting the Credit Documents to be executed
by such Credit Party and authorizing the execution and
delivery thereof.
(ii) Partnership Agreements. Certified copies of
the partnership agreement of such Credit Party, together
with all amendments thereto.
(iii) Certificates of Good Standing or Existence.
Certificate of good standing or existence for such Credit
Party issued as of a recent date by its state of
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organization and each other state where the failure to qualify
or be in good standing could have a Material Adverse Effect.
(iv) Incumbency. An incumbency certificate of the
general partner(s) of such Credit Party, certified by a
secretary or assistant secretary of such general partner to
be true and correct as of the Closing Date.
(c) Corporate Documents. With respect to each Credit Party
that is a corporation, receipt by the Administrative Agent
of the following:
(i) Charter Documents. Copies of the articles or
certificates of incorporation or other charter documents of
each such Credit Party certified to be true and complete as
of a recent date by the appropriate Governmental Authority
of the state or other jurisdiction of its incorporation and
certified by a secretary or assistant secretary of such
Credit Party to be true and correct as of the Closing Date.
(ii) Bylaws. A copy of the bylaws of each such
Credit Party certified by a secretary or assistant secretary
of such Credit Party to be true and correct as of the
Effective Date.
(iii) Resolutions. Copies of resolutions approving
and adopting the Credit Documents to which it is a party,
the transactions contemplated therein and authorizing
execution and delivery thereof, certified by a secretary or
assistant secretary of such Credit Party to be true and
correct and in full force and effect as of the Effective
Date.
(iv) Good Standing. Copies of (A) certificates of
good standing, existence or their equivalent with respect to
such Credit Party certified as of a recent date by the
appropriate Governmental Authorities of the state or other
jurisdiction of incorporation and each other jurisdiction in
which the failure to so qualify and be in good standing
could have a Material Adverse Effect and (B) to the extent
available, a certificate indicating payment of all corporate
franchise taxes certified as of a recent date by the
appropriate governmental taxing authorities.
(v) Incumbency. An incumbency certificate of such
Credit Party certified by a secretary or assistant secretary
of such Credit Party to be true and correct as of the
Effective Date.
(d) Limited Liability Company Documents. With respect to
each Credit Party that is a limited liability company, receipt by the
Administrative Agent of the following:
(i) Certificate of Formation. A copy of the
certificate of formation of such Credit Party certified to
be true and complete by the appropriate Governmental
Authority of the state or jurisdiction of its formation and
certified by the sole member of such Credit Party to be true
and correct as of the Closing Date.
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(ii) LLC Agreement. A copy of the LLC Agreement of
such Credit Party certified by the sole member of such
Credit Party to be true and correct as of the Closing Date.
(iii) Resolutions. Copies of resolutions approving
and adopting the Credit Documents to which it is a party,
the transactions contemplated therein and authorizing
execution and delivery thereof.
(iv) Good Standing. Copies of certificates of good
standing, existence of their equivalent with respect to such
Credit Party certified as of a recent date by the
appropriate Governmental Authorities of the state or other
jurisdiction of formation and each other jurisdiction in
which the failure to so qualify and be in good standing
could have a Material Adverse Effect.
(e) Trust Documents. With respect to each Credit Party that
is a REIT, receipt by the Administrative Agent of the following:
(i) Declaration of Trust. A copy of the Declaration
of Trust of such Credit Party certified to be true and
complete by the appropriate Governmental Authority of the
state or jurisdiction of its formation and certified by the
trustee of such Credit Party to be true and correct as of
the Closing Date.
(ii) Bylaws. A copy of the Bylaws of such Credit
Party certified by the trustee of such Credit Party to be
true and complete as of the Closing Date.
(iii) Resolutions. Copies of the resolutions of the
Board of Trustees of such Credit Party approving and
adopting the Credit Documents to which it is a party, the
transactions contemplated therein and authorizing execution
and delivery thereof.
(iv) Good Standing. Copies of certificates of good
standing, existence of their equivalent with respect to such
Credit Party certified as of a recent date by the
appropriate Governmental Authorities of the state or other
jurisdiction of formation and each other jurisdiction in
which the failure to so qualify and be in good standing
could have a Material Adverse Effect.
(f) Financial Statements. Receipt and approval by the
Lenders of: (i) the consolidated financial statements of the Credit
Parties and their Subsidiaries for each of the three years ending
December 31, 1995, 1996 and 1997, to the extent available, including
balance sheets and income and cash flow statements, audited by
nationally recognized independent public accountants and containing
an unqualified opinion of such firm that such statements present
fairly, in all material respects, the consolidated financial position
and results of operations of such Person, and are prepared in
conformity with GAAP, and (ii) interim consolidated financial
statements of the Credit Parties and their Subsidiaries for the six
months ending June 30, 1998, including balance sheets and income and
cash flow statements, accompanied by a certificate of the chief
financial officer of BRT to the effect
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that such annual Financial Statements fairly present in all material
respects the financial condition of the Credit Parties and their
Subsidiaries and have been prepared in accordance with GAAP, subject to
changes resulting from audit and normal year-end audit adjustments.
(g) Financial Projections and Other Information. Receipt and
approval by the Lenders of (i) financial projections for the Combined
Parties, (ii) summary financial projections for each Property, for
the calendar year ending 1998, in a form acceptable to the Lenders,
and such other financial information as the Lenders may require and
(iii) pro forma financial statements of the Credit Parties and their
Subsidiaries, including a balance sheet, an income statement and a
cash flow statement, giving effect to the acquisition of the Project
Bell Properties, together with a certificate showing compliance with
the financial covenants in Section 7.2 after giving effect to such
acquisition.
(h) Opinion of Counsel. Receipt by the Administrative Agent
of opinions (which shall cover, among other things, authority,
legality, validity, binding effect and enforceability), satisfactory
to the Administrative Agent, addressed to the Administrative Agent on
behalf of the Lenders and dated as of the Closing Date, from legal
counsel to the Credit Parties.
(i) Material Adverse Effect. There shall not have occurred a
change since June 30, 1998 that has had or could reasonably be
expected to have a Material Adverse Effect.
(j) Litigation. There shall not exist any pending or
threatened action, suit, investigation or proceeding against a Credit
Party or any of their Subsidiaries that would have or would
reasonably be expected to have a Material Adverse Effect.
(k) Officer's Certificates. The Administrative Agent shall
have received a certificate on behalf of the Credit Parties as of the
Closing Date stating that (i) the Credit Parties and each of their
Subsidiaries are in compliance with all existing material financial
obligations, (ii) no action, suit, investigation or proceeding is
pending or threatened in any court or before any arbitrator or
governmental instrumentality that purports to effect a Credit Party
or any transaction contemplated by the Credit Documents, if such
action, suit, investigation or proceeding could have or could be
reasonably expected to have a Material Adverse Effect, (iii) the
financial statements and information delivered pursuant to Section
5.1(f) and (g) were prepared in good faith and using reasonable
assumptions and (iv) immediately after giving effect to this Credit
Agreement, the other Credit Documents and all the transactions
contemplated therein to occur on such date, (A) each of the Credit
Parties is Solvent, (B) no Default or Event of Default exists, (C)
all representations and warranties contained herein and in the other
Credit Documents are true and correct in all material respects, and
(D) the Credit Parties and their Subsidiaries are in compliance as of
June 30, 1998 (on a pro forma basis giving effect to the acquisition
of the Project Bell Properties) with each of the financial covenants
set forth in Section 7.2.
(l) Fees and Expenses. Payment by the Borrowers of all fees
and expenses owed by them to the Lenders and the Administrative
Agent, including, without limitation, payment to the Administrative
Agent of the fees set forth herein and in the Fee Letter.
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(m) Consents and Approvals. All governmental, shareholder,
partner and third-party consents and approvals necessary or, in the
opinion of the Administrative Agent, desirable in connection with the
Loans and the transactions contemplated under the Credit Documents
shall have been duly obtained and shall be in full force and effect,
and a copy of each such consent or approval shall have been delivered
to the Administrative Agent.
(n) Due Diligence. Completion by the Lenders of all due
diligence with respect to the Combined Parties, including, but not
limited to, a review of all existing Indebtedness of the Combined
Parties and all Properties, including, but not limited to, the
Project Bell Properties.
(o) Senior Credit Agreement. Receipt by the Administrative
Agent of satisfactory evidence that the Borrowers have entered into
(or are simultaneously entering into) the Senior Credit Agreement on
terms acceptable to the Administrative Agent
(p) Acquisition. Receipt by the Administrative Agent of
evidence that the Borrowers have acquired (or are simultaneously
acquiring), on terms acceptable to the Administrative Agent, the
Project Bell Properties for a price not to exceed $620 million.
(q) Other. Receipt by the Lenders of such other documents,
instruments, agreements or information as reasonably and timely
requested by any Lender, including, but not limited to, information
regarding litigation, tax, accounting, labor, insurance, pension
liabilities (actual or contingent), real estate leases, material
contracts, debt agreements, property ownership and contingent
liabilities of the Credit Parties and their Subsidiaries.
5.2 Conditions to All Extensions of Credit.
In addition to the conditions precedent stated elsewhere herein, the
Lenders shall not be obligated to make Loans unless:
(a) Delivery of Notice. The Borrowers shall have delivered a
Notice of Borrowing, duly executed and completed, by the time
specified in Section 2.1.
(b) Representations and Warranties. The representations and
warranties made by the Credit Parties in any Credit Document are true
and correct in all material respects at and as if made as of such
date except to the extent they expressly relate to an earlier date.
(c) No Default. No Default or Event of Default shall exist
or be continuing either prior to or after giving effect thereto.
(d) Availability. Immediately after giving effect to the
making of the requested Loan, the aggregate amount of Loans advanced
hereunder shall be less than or equal to $150,000,000.
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The delivery of each Notice of Borrowing shall constitute a representation and
warranty by the Borrowers of the correctness of the matters specified in
subsections (b), (c), and (d) above.
SECTION 6
REPRESENTATIONS AND WARRANTIES
The Credit Parties hereby represent to the Administrative Agent and
each Lender that:
6.1 Financial Condition.
The financial statements delivered to the Lenders pursuant to Section
5.1(d) and Section 7.1(a) and (b): (a) have been prepared in accordance with
GAAP and (b) present fairly the consolidated financial condition, results of
operations and cash flows of the Credit Parties and their Subsidiaries as of
such date and for such periods. Since June 30, 1998, there has been no sale,
transfer or other disposition by any Credit Party or any of their Subsidiaries
of any material part of the business or property of the Credit Parties and
their Subsidiaries, taken as a whole, and no purchase or other acquisition by
any of them of any business or property (including any capital stock of any
other Person) material in relation to the consolidated financial condition of
the Credit Parties and their Subsidiaries, taken as a whole, in each case,
which, is not (i) reflected in the most recent financial statements delivered
to the Lenders pursuant to Section 5.1(f) and Section 7.1 or in the notes
thereto or (ii) otherwise permitted by the terms of this Credit Agreement and
communicated to the Administrative Agent.
6.2 No Material Change.
Since the later of June 30, 1998 or the date of the last Loan made
under this Credit Agreement, there has been no development or event relating
to or affecting a Combined Party which has had or would be reasonably expected
to have a Material Adverse Effect.
6.3 Organization and Good Standing.
Each Credit Party (a) is either a partnership, a corporation, a
limited liability company or a REIT duly organized, validly existing and in
good standing under the laws of the State (or other jurisdiction) of its
organization or formation, (b) is duly qualified and in good standing as a
foreign partnership, a foreign corporation, a foreign limited liability
company or a foreign REIT and authorized to do business in every other
jurisdiction unless the failure to be so qualified, in good standing or
authorized would not have or would not be expected to have a Material Adverse
Effect and (c) has the power and authority to own its properties and to carry
on its business as now conducted and as proposed to be conducted.
6.4 Due Authorization.
Each Credit Party (a) has the power and authority to execute, deliver
and perform this Credit Agreement and the other Credit Documents to which it
is a party and to incur the obligations herein
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and therein provided for and (b) is duly authorized to, and has been authorized
by all necessary action, to execute, deliver and perform this Credit Agreement
and the other Credit Documents to which it is a party.
6.5 No Conflicts.
Neither the execution and delivery of the Credit Documents, nor the
consummation of the transactions contemplated therein, nor the performance of
or compliance with the terms and provisions thereof by a Credit Party will (a)
violate or conflict with any provision of its organizational documents, (b)
violate, contravene or materially conflict with any Requirement of Law or any
other law, regulation (including, without limitation, Regulation U or
Regulation X), order, writ, judgment, injunction, decree or permit applicable
to it, (c) violate, contravene or conflict with contractual provisions of, or
cause an event of default under, any indenture, loan agreement, mortgage, deed
of trust, contract or other agreement or instrument to which it is a party or
by which it may be bound, the violation of which would have or would be
reasonably expected to have a Material Adverse Effect, or (d) result in or
require the creation of any Lien upon or with respect to its properties.
6.6 Consents.
Except for consents, approvals and authorizations which have been
obtained, no consent, approval, authorization or order of, or filing,
registration or qualification with, any court or Governmental Authority or
third party in respect of any Credit Party is required in connection with the
execution, delivery or performance of this Credit Agreement or any of the
other Credit Documents by such Credit Party.
6.7 Enforceable Obligations.
This Credit Agreement and the other Credit Documents have been duly
executed and delivered and constitute legal, valid and binding obligations of
each Credit Party enforceable against such Credit Party in accordance with
their respective terms, except as may be limited by bankruptcy or insolvency
laws or similar laws affecting creditors' rights generally or by general
equitable principles.
6.8 No Default.
No Combined Party is in default in any respect under any contract,
lease, loan agreement, indenture, mortgage, security agreement or other
agreement or obligation to which it is a party or by which any of its
properties is bound which default would have or would be reasonably expected
to have a Material Adverse Effect. No Default or Event of Default has occurred
or exists except as previously disclosed in writing to the Lenders.
6.9 Ownership.
Each Combined Party is the owner of, and has good and marketable
title to, all of its respective assets and none of such assets is subject to
any Lien other than Permitted Liens.
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6.10 Indebtedness.
The Combined Parties have no Indebtedness except as otherwise
permitted by this Credit Agreement.
6.11 Litigation.
There are no actions, suits or legal, equitable, arbitration or
administrative proceedings, pending or, to the knowledge of any Credit Party,
threatened against, a Combined Party which would have or would be reasonably
expected to have a Material Adverse Effect.
6.12 Taxes.
Each Credit Party, and each of its Subsidiaries, has filed, or caused
to be filed, all tax returns (federal, state, local and foreign) required to
be filed and has paid (a) all amounts of taxes shown thereon to be due
(including interest and penalties) and (b) all other taxes, fees, assessments
and other governmental charges (including mortgage recording taxes,
documentary stamp taxes and intangibles taxes) owing by it, except for such
taxes (i) which are not yet delinquent or (ii) that are being contested in
good faith and by proper proceedings, and against which adequate reserves are
being maintained in accordance with GAAP. No Credit Party is aware of any
proposed tax assessments against it or any of its Subsidiaries.
6.13 Compliance with Law.
Each Combined Party is in compliance with all Requirements of Law and
all other laws, rules, regulations, orders and decrees (including without
limitation Environmental Laws) applicable to it, or to its properties, unless
such failure to comply would not have or would not be reasonably expected to
have a Material Adverse Effect. No Requirement of Law would be reasonably
expected to cause a Material Adverse Effect.
6.14 Compliance with ERISA.
Except as would not result in or be reasonably expected to result in
a Material Adverse Effect:
(a) During the five-year period prior to the date on which
this representation is made or deemed made: (i) no ERISA Event has
occurred, and, to the best of each Credit Party's, each Subsidiary of
a Credit Party's and each ERISA Affiliate's knowledge, no event or
condition has occurred or exists as a result of which any ERISA Event
could reasonably be expected to occur, with respect to any Plan; (ii)
no "accumulated funding deficiency," as such term is defined in
Section 302 of ERISA and Section 412 of the Code, whether or not
waived, has occurred with respect to any Plan; (iii) each Plan has
been maintained, operated, and funded in compliance with its own
terms and in material compliance with the provisions of ERISA, the
Code, and any other applicable federal or state laws; and (iv) no
Lien in favor or the PBGC or a Plan has arisen or is reasonably
likely to arise on account of any Plan.
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(b) The actuarial present value of all "benefit liabilities"
(as defined in Section 4001(a)(16) of ERISA), whether or not vested,
under each Single Employer Plan, as of the last annual valuation date
prior to the date on which this representation is made or deemed made
(determined, in each case, in accordance with Financial Accounting
Standards Board Statement 87, utilizing the actuarial assumptions
used in such Plan's most recent actuarial valuation report), did not
exceed as of such valuation date the fair market value of the assets
of such Plan.
(c) No Credit Party, Subsidiary of a Credit Party or ERISA
Affiliate has incurred, or, to the best of each such party's
knowledge, is reasonably expected to incur, any withdrawal liability
under ERISA to any Multiemployer Plan or Multiple Employer Plan. No
Credit Party, Subsidiary of a Credit Party or ERISA Affiliate would
become subject to any withdrawal liability under ERISA if any such
party were to withdraw completely from all Multiemployer Plans and
Multiple Employer Plans as of the valuation date most closely
preceding the date on which this representation is made or deemed
made. No Credit Party, Subsidiary of a Credit Party or ERISA
Affiliate has received any notification that any Multiemployer Plan
is in reorganization (within the meaning of Section 4241 of ERISA),
is insolvent (within the meaning of Section 4245 of ERISA), or has
been terminated (within the meaning of Title IV of ERISA), and no
Multiemployer Plan is, to the best of each such party's knowledge,
reasonably expected to be in reorganization, insolvent, or
terminated.
(d) No prohibited transaction (within the meaning of Section
406 of ERISA or Section 4975 of the Code) or breach of fiduciary
responsibility has occurred with respect to a Plan which has
subjected or may subject any Credit Party, any Subsidiary of a Credit
Party or any ERISA Affiliate to any liability under Sections 406,
409, 502(i), or 502(l) of ERISA or Section 4975 of the Code, or under
any agreement or other instrument pursuant to which any Credit Party,
any Subsidiary of a Credit Party or any ERISA Affiliate has agreed or
is required to indemnify any person against any such liability.
(e) No Credit Party, Subsidiary of a Credit Party nor any of
their ERISA Affiliates has material liability with respect to
"expected post-retirement benefit obligations" within the meaning of
the Financial Accounting Standards Board Statement 106. Each Plan
which is a welfare plan (as defined in Section 3(1) of ERISA) to
which Sections 601-609 of ERISA and Section 4980B of the Code apply
has been administered in compliance in all material respects with
such sections.
6.15 Organization Structure/Subsidiaries.
As of the Closing Date, (a) Schedule 6.15 is a complete and accurate
organization chart of the Combined Parties, and (b) no Credit Party has any
Subsidiaries or owns an interest, directly or indirectly, in any joint
venture, except as set forth on Schedule 6.15. The outstanding equity interest
of all Subsidiaries of the Credit Parties are validly issued, fully paid and
non-assessable and
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are owned by the Credit Parties free and clear of all Liens. Schedule 6.15 shall
be updated as of the end of each fiscal quarter as set forth in Section 7.1(c).
6.16 Use of Proceeds; Margin Stock.
The proceeds of the Loans hereunder will be used solely for the
purposes specified in Section 7.10. None of the proceeds of the Loans will be
used in a manner that would violate Regulation U, Regulation X, or Regulation
T. No proceeds of the Loans hereunder will be used for the acquisition of
another Person unless the board of directors (or other comparable governing
body) or stockholders (or other equity owners), as appropriate, of such Person
has approved such acquisition.
6.17 Government Regulation.
No Credit Party, nor any of its Subsidiaries, is subject to
regulation under the Public Utility Holding Company Act of 1935, the Federal
Power Act, the Investment Company Act of 1940 or the Interstate Commerce Act,
each as amended. In addition, no Credit Party, nor any of its Subsidiaries, is
(a) an "investment company" registered or required to be registered under the
Investment Company Act of 1940, as amended, or controlled by such a company,
or (b) a "holding company," or a "Subsidiary company" of a "holding company,"
or an "affiliate" of a "holding company" or of a "Subsidiary" or a "holding
company," within the meaning of the Public Utility Holding Company Act of
1935, as amended. No director, executive officer or principal shareholder of a
Credit Party or any of its Subsidiaries is a director, executive officer or
principal shareholder of any Lender. For the purposes hereof the terms
"director," "executive officer" and "principal shareholder" (when used with
reference to any Lender) have the respective meanings assigned thereto in
Regulation O issued by the Board of Governors of the Federal Reserve System.
6.18 Environmental Matters.
(a) Except as would not have or be reasonably expected to
have a Material Adverse Effect:
(i) Each of the Properties and all operations
at the Properties are in material compliance with all
applicable Environmental Laws, and there is no violation of
any Environmental Law with respect to the Properties or the
businesses operated by a Credit Party or any of its
Subsidiaries (the "Businesses"), and there are no conditions
relating to the Businesses or Properties that would be
reasonably expected to give rise to liability under any
applicable Environmental Laws.
(ii) No Credit Party, nor any of its
Subsidiaries, has received any written notice of, or inquiry
from any Governmental Authority regarding, any violation,
alleged violation, non-compliance, liability or potential
liability regarding Hazardous Materials or compliance with
Environmental Laws with regard to any of the Properties or
the Businesses, nor does any Credit Party or any of its
Subsidiaries have knowledge that any such notice is being
threatened.
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(iii) Hazardous Materials have not been
transported or disposed of from the Properties, or
generated, treated, stored or disposed of at, on or under
any of the Properties or any other location, in each case
by, or on behalf or with the permission of, any Credit Party
or any of its Subsidiaries in a manner that would reasonably
be expected to give rise to liability under any applicable
Environmental Law.
(iv) No judicial proceeding or governmental or
administrative action is pending or, to the knowledge of any
Credit Party or any of its Subsidiaries, threatened, under
any Environmental Law to which any Credit Party or any of
its Subsidiaries is or will be named as a party, nor are
there any consent decrees or other decrees, consent orders,
administrative orders or other orders, or other
administrative or judicial requirements outstanding under
any Environmental Law with respect to any Credit Party or
any of its Subsidiaries, the Properties or the Businesses,
in any amount reportable under the federal Comprehensive
Environmental Response, Compensation and Liability Act or
any analogous state law, except releases in compliance with
any Environmental Laws.
(v) There has been no release or threat of
release of Hazardous Materials at or from the Properties, or
arising from or related to the operations (including,
without limitation, disposal) of a Credit Party or any of
its Subsidiaries in connection with the Properties or
otherwise in connection with the Businesses except in
compliance with Environmental Laws.
(vi) None of the Properties contains, or to
the best of our knowledge has previously contained, any
Hazardous Materials at, on or under the Properties in
amounts or concentrations that, if released, constitute or
constituted a violation of, or could give rise to liability
under, Environmental Laws.
(vii) No Credit Party, nor any of its
Subsidiaries, has assumed any liability of any Person (other
than another Borrower) under any Environmental Law.
(b) Each Credit Party, and each of its Subsidiaries, has
adopted procedures that are designed to (i) ensure that each such
party, any of its operations and each of the properties owned or
leased by such party remains in compliance with applicable
Environmental Laws and (ii) minimize any liabilities or potential
liabilities that each such party, any of its operations and each of
the properties owned or leased by each such party may have under
applicable Environmental Laws.
6.19 Solvency.
Each Credit Party, is and, after consummation of the transactions
contemplated by this Credit Agreement, will be Solvent.
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6.20 Investments.
All Investments of the Credit Parties and their Subsidiaries are
Permitted Investments.
6.21 Location of Properties.
As of the Closing Date, set forth on Schedule 6.21 is (a) a list of
all Properties (with street address, county and state where located) and the
owner of such Property (b) a list of all Unsecured Properties. Schedule 6.21
shall be updated as of the end of each fiscal quarter as set forth in Section
7.1(c).
6.22 Disclosure.
Neither this Credit Agreement nor any financial statements delivered
to the Lenders nor any other document, certificate or statement furnished to
the Lenders by or on behalf of any Credit Party in connection with the
transactions contemplated hereby contains any untrue statement of a material
fact or omits to state a material fact necessary in order to make the
statements contained therein or herein not misleading in light of the
circumstances in which made; provided, however, that the Credit Parties make
no representation or warranty regarding the information delivered pursuant to
Section 7.1(i).
6.23 Licenses, etc.
The Combined Parties have obtained, and hold in full force and
effect, all franchises, licenses, permits, certificates, authorizations,
qualifications, accreditations, easements, rights of way and other rights,
consents and approvals which are necessary for the operation of their
respective businesses as presently conducted, except where the failure to
obtain the same would not have or would not reasonably be expected to have a
Material Adverse Effect.
6.24 No Burdensome Restrictions.
No Combined Party is a party to any agreement or instrument or
subject to any other obligation or any charter or corporate restriction or any
provision of any applicable law, rule or regulation which, individually or in
the aggregate, would have or would be reasonably expected to have a Material
Adverse Effect.
6.25 Year 2000 Compliance.
Each Credit Party reasonably believes that the Year 2000 Problem has
been appropriately addressed by it and the Year 2000 Problem will not exist
with respect to it or any other Combined Party on and after January 1, 2000,
to the extent such Year 2000 Problem would cause or be reasonably expected to
cause a Material Adverse Effect.
6.26 Excluded Material Subsidiaries.
With respect to the Excluded Material Subsidiaries:
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(a) Brandywine Holdings I, Inc. holds a nominal interest in
BOP to ensure that BOP will at all times have at least two partners,
and has no other activity and owns no other assets.
(b) Brandywine Holdings II and Brandywine Holdings III have
no assets or activity and are in the process of being dissolved.
(c) Brandywine Realty Services Corporation ("BRSCO")
provides services to BOP and is Subsidiaries, as well as third
parties, but does not own any Properties. Although BOP owns ninety
five percent of the financial interest in BRSCO through ownership of
preferred and common interests, substantially all of the common
equity in BRSCO is held by a partnership in which neither BOP nor BRT
has any ownership.
(d) Each of the remaining Excluded Materials Subsidiaries is
an entity which is subject to provisions in its charter documents
that require it to be a "bankruptcy remote" or "single purpose"
entity and therefore prohibit it from, among other things,
guaranteeing or becoming jointly and severally liable for the
Indebtedness of others.
SECTION 7
AFFIRMATIVE COVENANTS
Each Credit Party hereby covenants and agrees that so long as this
Credit Agreement is in effect and until the Loans, together with interest and
fees and other obligations then due and payable hereunder, have been paid in
full and the Commitments shall have terminated:
7.1 Information Covenants.
The Borrowers will furnish, or cause to be furnished, to the
Administrative Agent and each of the Lenders:
(a) Annual Financial Statements. As soon as available, and
in any event within 90 days after the close of each fiscal year of
the Credit Parties, a consolidated balance sheet and income statement
of the Credit Parties and their Subsidiaries as of the end of such
fiscal year, together with related consolidated statements of
operations and retained earnings and of cash flows for such fiscal
year, setting forth in comparative form consolidated figures for the
preceding fiscal year, all such financial information described above
to be in reasonable form and detail and audited by independent
certified public accountants of recognized national standing
reasonably acceptable to the Administrative Agent and whose opinion
shall be to the effect that such financial statements have been
prepared in accordance with GAAP (except for changes with which such
accountants concur) and shall not be limited as to the scope of the
audit or qualified in any manner.
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(b) Quarterly Financial Statements. As soon as available,
and in any event within 45 days after the close of each fiscal
quarter of the Credit Parties, a consolidated balance sheet and
income statement of the Credit Parties and their Subsidiaries, as of
the end of such fiscal quarter, together with related consolidated
statements of operations and retained earnings and of cash flows for
such fiscal quarter in each case setting forth in comparative form
consolidated figures for (A) the corresponding period of the
preceding fiscal year and (B) management's proposed budget for such
period, all such financial information described above to be in
reasonable form and detail and reasonably acceptable to the
Administrative Agent, and accompanied by a certificate of the chief
financial officer of BOP to the effect that such quarterly financial
statements fairly present in all material respects the financial
condition of the Credit Parties and their Subsidiaries and have been
prepared in accordance with GAAP, subject to changes resulting from
audit and normal year-end audit adjustments.
(c) Officer's Certificate. At the time of delivery of the
financial statements provided for in Sections 7.1(a) and 7.1(b)
above, a certificate of the chief financial officer of BRT,
substantially in the form of Exhibit 7.1(c), (i) demonstrating
compliance with the financial covenants contained in Section 7.2 by
calculation thereof as of the end of each such fiscal period, (ii)
stating that no Default or Event of Default exists, or if any Default
or Event of Default does exist, specifying the nature and extent
thereof and what action the Borrowers propose to take with respect
thereto, (iii) providing information regarding (A) Investments in a
manner to demonstrate compliance with Section 8.6, (B) construction
and development projects in a manner to demonstrate compliance with
Section 8.12 and (C) dividends and redemption of shares in a manner
to demonstrate compliance with Section 8.7 and (iv) updating Schedule
6.15 and Schedule 6.21 as appropriate.
(d) Accountant's Certificate. Within the period for delivery
of the annual financial statements provided in Section 7.1(a), a
certificate of the accountants conducting the annual audit stating
that they have reviewed this Credit Agreement and stating further
whether, in the course of their audit, they have become aware of any
Default or Event of Default and, if any such Default or Event of
Default exists, specifying the nature and extent thereof.
(e) Annual Information and Projections. Within 30 days after
the end of each fiscal year of the Credit Parties, all such financial
information regarding the Credit Parties and their Subsidiaries and
specifically regarding the Properties, as the Administrative Agent
shall reasonably request, including, but not limited to, partnership
and joint venture agreements, property cash flow projections,
property budgets, actual and budgeted capital expenditures, operating
statements (current year and immediately preceding year, if the
Property existed as a Property in the immediately preceding year),
mortgage information, rent rolls, lease expiration reports, leasing
status reports, note payable summary, bullet note summary, equity
funding requirements, contingent liability summary, line of credit
summary, line of credit collateral summary, wrap note or note
receivable summary, schedule of outstanding letters of credit,
summary of cash and cash equivalents, projection of management and
leasing fees and overhead budgets.
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(f) Auditor's Reports. Promptly upon receipt thereof, a copy
of any "management letter" submitted by independent accountants to
any Credit Party or any of its Subsidiaries in connection with any
annual, interim or special audit of the books of such Credit Party or
any of its Subsidiaries.
(g) Reports. Promptly upon transmission or receipt thereof,
(i) copies of any filings and registrations with, and reports to or
from, the Securities and Exchange Commission, or any successor
agency, and copies of all financial statements, proxy statements,
notices and reports as any Credit Party or any of its Subsidiaries
shall send to its shareholders or partners generally, (ii) copies of
all income tax returns filed by a Credit Party and (iii) upon the
written request of the Administrative Agent, all reports and written
information to and from the United States Environmental Protection
Agency, or any state or local agency responsible for environmental
matters, the United States Occupational Health and Safety
Administration, or any state or local agency responsible for health
and safety matters, or any successor agencies or authorities
concerning environmental, health or safety matters; provided,
however, that if any such transmissions are done electronically, the
Borrowers shall instead promptly notify the Administrative Agent of
same and provide information on how to retrieve such information.
(h) Notices. Upon a Credit Party obtaining knowledge
thereof, such Credit Party will give written notice to the
Administrative Agent immediately of (i) the occurrence of an event or
condition consisting of a Default or Event of Default, specifying the
nature and existence thereof and what action the Credit Parties
propose to take with respect thereto, and (ii) the occurrence of any
of the following with respect to any Credit Party or any of its
Subsidiaries (A) the pendency or commencement of any litigation,
arbitral or governmental proceeding against any Credit Party or any
of its Subsidiaries which if adversely determined would have or would
be reasonably expected to have a Material Adverse Effect, (B) the
institution of any proceedings against any Credit Party or any of its
Subsidiaries with respect to, or the receipt of notice by such Person
of potential liability or responsibility for violation, or alleged
violation of any federal, state or local law, rule or regulation,
including but not limited to, Environmental Laws, the violation of
which would have or would be reasonably expected to have a Material
Adverse Effect, (C) the occurrence of any default or nonpayment of
nonrecourse Indebtedness of a Credit Party in an aggregate principal
amount in excess of $10,000,000 or (D) any information that a Credit
Party may have a Year 2000 Problem on or after January 1, 2000.
(i) ERISA. Upon a Credit Party or any ERISA Affiliate
obtaining knowledge thereof, the Credit Parties will give written
notice to the Administrative Agent promptly (and in any event within
five Business Days) of: (i) any event or condition, including, but
not limited to, any Reportable Event, that constitutes, or might
reasonably lead to, a ERISA Event; (ii) with respect to any
Multiemployer Plan, the receipt of notice as prescribed in ERISA or
otherwise of any withdrawal liability assessed against a Credit Party
or any ERISA Affiliate, or of a determination that any Multiemployer
Plan is in reorganization or insolvent (both within the meaning of
Title IV of ERISA); (iii) the failure to make full payment on or
before the due date (including extensions) thereof of all amounts
which a Credit Party or any ERISA Affiliate is required to contribute
to each Plan pursuant to its
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terms and as required to meet the minimum funding standard set forth
in ERISA and the Code with respect thereto; or (iv) any change in the
funding status of any Plan that could have a Material Adverse Effect;
together, with a description of any such event or condition or a copy
of any such notice and a statement by the chief financial officer of
a Credit Party briefly setting forth the details regarding such
event, condition, or notice, and the action, if any, which has been
or is being taken or is proposed to be taken by a Credit Party or any
ERISA Affiliate with respect thereto. Promptly upon request, the
Credit Parties shall furnish the Administrative Agent and the Lenders
with such additional information concerning any Plan as may be
reasonably requested, including, but not limited to, copies of each
annual report/return (Form 5500 series), as well as all schedules and
attachments thereto required to filed with the Department of Labor
and/or the Internal Revenue Service pursuant to ERISA and the Code,
respectively, for each "plan year" (within the meaning of Section
3(39) of ERISA).
(j) Environmental.
(i) Subsequent to a notice from any
Governmental Authority that would reasonably cause concern
or during the existence of an Event of Default, and upon the
written request of the Administrative Agent, the Credit
Parties will furnish or cause to be furnished to the
Administrative Agent, at the Credit Parties' expense, an
updated report of an environmental assessment of reasonable
scope, form and depth, including, where appropriate,
invasive soil or groundwater sampling, by a consultant
reasonably acceptable to the Administrative Agent as to the
nature and extent of the presence of any Hazardous Materials
on any Property and as to the compliance by the Credit
Parties and with Environmental Laws. If the Credit Parties
fail to deliver such an environmental report within
seventy-five (75) days after receipt of such written request
then the Administrative Agent may arrange for same, and the
Credit Parties hereby grant to the Administrative Agent and
its representatives access to the Properties and a license
of a scope reasonably necessary to undertake such an
assessment (including, where appropriate, invasive soil or
groundwater sampling). The reasonable cost of any assessment
arranged for by the Administrative Agent pursuant to this
provision will be payable by the Credit Parties on demand.
(ii) Each of the Credit Parties and their
Subsidiaries will conduct and complete all investigations,
studies, sampling, and testing and all remedial, removal,
and other actions necessary to address all Hazardous
Materials on, from, or affecting any Property to the extent
necessary to be in compliance with all Environmental Laws
and all other applicable federal, state, and local laws,
regulations, rules and policies and with the orders and
directives of all Governmental Authorities exercising
jurisdiction over such Property to the extent any failure
would have or would be reasonably expected to have a
Material Adverse Effect.
(k) Year 2000 Information. Upon the written request of the
Administrative Agent, such information, assurances and documentation
(including, but not limited to, the
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results of internal and external audit reports prepared in connection
therewith) reasonably acceptable to the Administrative Agent that the
Credit Parties and their Subsidiaries will take all reasonable
appropriate actions to prevent a Year 2000 Problem on or after
January 1, 2000.
(l) Other Information. With reasonable promptness upon any
such request, such other information regarding the Properties or
regarding the business, assets or financial condition of the Credit
Parties and their Subsidiaries as the Administrative Agent or any
Lender may reasonably request.
7.2 Financial Covenants.
(a) Debt Service Coverage Ratio. The Debt Service Coverage
Ratio, as of the end of each fiscal quarter of the Credit Parties,
shall be greater than or equal to 1.50 to 1.0.
(b) Interest Coverage Ratio. The Interest Coverage Ratio, as
of the end of each fiscal quarter of Credit Parties for the twelve
month period ending on such date, shall be greater than or equal to
2.25 to 1.0.
(c) Fixed Charge Coverage Ratio. The Fixed Charge Coverage
Ratio, as of the end of each fiscal quarter of the Credit Parties for
the twelve month period ending on such date, shall be greater than or
equal to 1.75 to 1.0.
(d) Net Worth. At all times, the Net Worth of the Credit
Parties and their Subsidiaries on a consolidated basis shall be
greater than or equal to the sum of (i) $700,000,000 plus (ii) 85% of
the Net Cash Proceeds from all Equity Issuances (other than Equity
Issuances referred to in the following subclause (iii)) plus (iii)
85% of the actual increase in Net Worth (if any) resulting from an
Equity Issuance made in connection with an Incentive Stock Plan.
(e) Leverage Ratio. Prior to the earlier of (i) the Leverage
Ratio, at the end of any fiscal quarter of the Credit Parties
subsequent to September 30, 1998, being less than or equal to .55 to
1.0. or (ii) one year following the Closing Date, (the earlier of
such dates referred to herein as the "Leverage Ratio Change Date")
the Leverage Ratio, as of the end of each fiscal quarter of the
Credit Parties, shall be less than or equal to .625 to 1.0.
Subsequent to the Leverage Ratio Change Date, the Leverage Ratio, as
of the end of each fiscal quarter of the Credit Parties, shall be
less than or equal to .55 to 1.0.
(f) Unsecured Debt Ratio. The Unsecured Debt Ratio, as of
the end of each fiscal quarter of the Credit Parties, shall be
greater than or equal to the following ratios for the following
periods:
(i) From the Closing Date to March 31, 1999, 1.6 to 1.0;
(ii) From April 1, 1999 to June 30, 1999, 1.8 to 1.0; and
(iii) From July 1, 1999 and thereafter 2.0 to 1.0.
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(g) Secured Debt Ratio. The Secured Debt Ratio, as of the
end of each fiscal quarter of the Credit Parties, shall be less than
or equal to the following ratios for the following periods:
(i) From the Closing Date to March 31, 1999, .40 to 1.0;
(ii) From April 1, 1999 to June 30, 1999, .35 to 1.0; and
(iii) From July 1, 1999 and thereafter .30 to 1.0.
(h) Unencumbered Cash Flow Ratio. The Unencumbered Cash Flow
Ratio, as of the end of each fiscal quarter of the Credit Parties,
shall be greater than or equal to the following ratios for the
following periods:
(i) From the Closing Date to September 30, 1999, 1.5 to
1.0;
(ii) From October 1, 1999 to September 30, 2000, 1.6 to
1.0; and
(iii) From October 1, 2000 and thereafter, 1.65 to 1.0.
(i) Credit Party Assets. At all times, at least 50% of Total
Assets must be owned by the Credit Parties.
7.3 Preservation of Existence.
Each of the Credit Parties will do all things necessary to preserve
and keep in full force and effect its existence, rights, franchises and
authority except as permitted by Section 8.4; provided that a Credit Party may
dissolve if it has no assets at the time of dissolution. Without limiting the
generality of the foregoing, BRT will do all things necessary to maintain its
status as a REIT.
7.4 Books and Records.
Each of the Credit Parties will, and will cause its Subsidiaries to,
keep complete and accurate books and records of its transactions in accordance
with good accounting practices on the basis of GAAP (including the
establishment and maintenance of appropriate reserves).
7.5 Compliance with Law.
Each of the Credit Parties will, and will cause its Subsidiaries to,
comply in all material respects with all material laws, rules, regulations and
orders, and all applicable material restrictions imposed by all Governmental
Authorities, applicable to it and its property (including, without limitation,
Environmental Laws and ERISA).
7.6 Payment of Taxes and Other Indebtedness.
Each of the Credit Parties will, and will cause its Subsidiaries to,
pay, settle or discharge (a) all taxes, assessments and governmental charges
or levies imposed upon it, or upon its income or profits, or upon any of its
properties, before they shall become delinquent, (b) all lawful claims
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(including claims for labor, materials and supplies) which, if unpaid, might
give rise to a Lien upon any of its properties, and (c) except as prohibited
hereunder, all of its other Indebtedness as it shall become due; provided,
however, that a Credit Party or any of its Subsidiaries shall not be required
to pay any such tax, assessment, charge, levy, claim or Indebtedness which is
being contested in good faith by appropriate proceedings and as to which
adequate reserves therefor have been established in accordance with GAAP,
unless the failure to make any such payment (i) would give rise to an
immediate right to foreclose on a Lien securing such amounts or (ii) would
have a Material Adverse Effect.
7.7 Insurance.
Each of the Credit Parties will, and will cause its Subsidiaries to,
at all times maintain in full force and effect insurance (including worker's
compensation insurance, liability insurance, casualty insurance and business
interruption insurance) in such amounts, covering such risks and liabilities
and with such deductibles or self-insurance retentions as are in accordance
with normal industry practice.
7.8 Maintenance of Assets.
Each of the Credit Parties will, and will cause its Subsidiaries to,
maintain and preserve its Properties and all other assets in good repair,
working order and condition, normal wear and tear excepted, and will make, or
cause to be made, in the Properties and other assets, from time to time, all
repairs, renewals, replacements, extensions, additions, betterments and
improvements thereto as may be needed or proper, to the extent and in the
manner customary for companies in similar businesses.
7.9 Performance of Obligations.
Each of the Credit Parties will, and will cause its Subsidiaries to,
perform in all material respects all of its obligations under the terms of all
material agreements, indentures, mortgages, security agreements or other debt
instruments to which it is a party or by which it is bound.
7.10 Use of Proceeds.
The Credit Parties will use the proceeds of the Loans solely to
acquire office and industrial properties (and in no event shall be used to
repay Indebtedness of the Credit Parties or their Subsidiaries or for the
development and construction of any Properties).
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7.11 Audits/Inspections.
Upon reasonable notice and during normal business hours, each Credit
Party will, and will cause its Subsidiaries to, permit representatives
appointed by the Administrative Agent, including, without limitation,
independent accountants, agents, attorneys and appraisers to visit and inspect
such Credit Party's or other Combined Party's property, including, without
limitation, the Properties, including its books and records, its accounts
receivable and inventory, its facilities and its other business assets, and to
make photocopies or photographs thereof and to write down and record any
information such representative obtains and shall permit the Administrative
Agent or its representatives to investigate and verify the accuracy of
information provided to the Lenders, and to discuss all such matters with the
officers, employees and representatives of the Credit Parties, their
Subsidiaries and any other Combined Party.
7.12 Additional Credit Parties.
At any time a Person that is not a Credit Party becomes a Material
Subsidiary of a Credit Party (other than, subject to Section 7.2(i), Excluded
Material Subsidiaries or any entity which is subject to provisions in its
charter documents that prohibit it from guaranteeing or becoming jointly and
severally liable for the Indebtedness of others), the Borrowers shall notify
the Administrative Agent and promptly thereafter (but in any event within 30
days after such Person becomes a Material Subsidiary of a Credit Party): (a)
execute a Joinder Agreement in substantially the form of Exhibit 7.12 and (b)
deliver such other documentation as the Administrative Agent may reasonably
request in connection with the foregoing, including, without limitation,
certified resolutions and other organizational and authorizing documents of
such Person and favorable opinions of counsel to such Person (which shall
cover, among other things, the legality, validity, binding effect and
enforceability of the documentation referred to above), all in form, content
and scope reasonably satisfactory to the Administrative Agent.
7.13 Interest Rate Protection Agreements.
If for any consecutive period of 30 days or more Eurodollar Loans
constitute less than 75% of the aggregate principal amount of all outstanding
Loans, then the Borrowers shall enter into interest rate protection agreements
in form and substance acceptable to the Administrative Agent.
7.14 [Intentionally Omitted]
7.15 Construction.
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With respect to any construction and development engaged in by the
Combined Parties, the Credit Parties shall or shall cause another Person to:
(a) comply with all applicable regulations and codes and (b) complete all such
construction and development in accordance with approved plans and
specifications.
7.16 Acquisitions.
If at the time a Credit Party or one of its Subsidiaries anticipates
making an Investment or an acquisition in excess of $20 million there are any
Loans outstanding, then ten Business Days prior to such Credit Party (or
Subsidiary) making such Investment or acquisition, the Borrowers shall provide
the Administrative Agent written notice of such Investment or acquisition,
together with a certification as to compliance with the terms of the Credit
Agreement, including, without limitation, Section 7.2, after giving effect to
such Investment or acquisition. If there are no Loans outstanding, the
Borrowers shall give the Administrative Agent written notice of such
Investment or acquisition by a Credit Party within five Business Days after
the occurrence of such Investment or acquisition.
SECTION 8
NEGATIVE COVENANTS
Each Credit Party hereby covenants and agrees that so long as this
Credit Agreement is in effect and until the Loans, together with interest,
fees and other obligations hereunder, have been paid in full and the
Commitments hereunder shall have terminated:
8.1 Indebtedness.
No Credit Party will, nor will it permit any Combined Party to,
contract, create, incur, assume or permit to exist any Indebtedness, except:
(a) Indebtedness arising under this Credit Agreement and the
other Credit Documents;
(b) Indebtedness owing from one Credit Party to another
Credit Party;
(c) Indebtedness in respect of current accounts payable and
accrued expenses incurred in the ordinary course of business; and
(d) Other Indebtedness as long as, prior to and after giving
effect thereto, the Credit Parties are otherwise in compliance with the terms
of this Credit Agreement.
8.2 Liens.
No Credit Party will, nor will it permit any of its Subsidiaries to,
contract, create, incur, assume or permit to exist any Lien with respect to
(a) any Unsecured Properties, unless after giving affect to the creation of
such Lien (i) the Credit Parties are in compliance on a Pro Forma Basis with
the financial covenants set forth in Section 7.2 and (ii) no Default or Event
of Default or (b) any of its other Properties or any other assets of any kind
(whether real or personal, tangible or intangible), whether now owned or after
acquired, except for Permitted Liens.
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8.3 Nature of Business.
No Credit Party will, nor will it permit any of its Subsidiaries to,
alter the character of its business from that conducted as of the Closing Date
or engage in any business other than the business conducted as of the Closing
Date.
8.4 Consolidation and Merger.
No Credit Party will enter into any transaction of merger or
consolidation or liquidate, wind up or dissolve itself (or suffer any
liquidation or dissolution); provided that notwithstanding the foregoing
provisions of this Section 8.4, (a) any Credit Party may be merged or
consolidated with or into another Credit Party; provided that (i) if the
transaction is between a Borrower and another Credit Party such Borrower is
the continuing or surviving entity; (ii) the Administrative Agent is given
prior written notice of such action, and the Credit Parties execute and
deliver such documents, instruments and certificates as the Administrative
Agent may reasonably request; and (iii) after giving effect thereto no Default
or Event of Default exists; and (b) upon prior written notification to the
Administrative Agent, as long as no Default or Event of Default exists, a
Credit Party that has no assets and no revenues may be dissolved.
8.5 Sale or Lease of Assets.
(a) No Property may be conveyed, sold, leased, transferred or
otherwise disposed of except (i) the Properties as indicated on Schedule 8.5
as long as such conveyance, sale, lease, transfer or other disposal occurs on
or before March 31, 1999 or (ii) such other Properties if, after giving effect
thereto, (A) the Credit Parties are in compliance on a Pro Forma Basis with
the financial covenants set forth in Section 7.2 and (B) no Default or Event
of Default exists.
(b) No equity interest in any Credit Party may be conveyed, sold,
transferred or otherwise disposed of except (i) the transfers of equity
interests as indicated on Schedule 8.5 as long as such conveyance, sale,
transfer or other disposal occurs on or before March 31, 1999 or (ii) such
other equity interests if, after giving effect thereto (i) the Credit Parties
are in compliance on a Pro Forma Basis with the financial covenants set forth
in Section 7.2 and (ii) no Default or Event of Default exists; provided that
any sale of an equity interest in a Borrower is subject to Section 9.1(i).
Upon the sale of an equity interest in a Guarantor in conformance with the
terms hereof, if after the sale of such equity interest such Guarantor is no
longer a Material Subsidiary the Lenders agree to release such Guarantor from
its obligations hereunder.
8.6 Advances, Investments and Loans.
Neither the Credit Parties nor any of their Subsidiaries will (a)
make any Investments except for Permitted Investments or (b) so long as
Brandywine Realty Services Partnership ("BRSP") is named in Section 2.5, make
any Investments in BRSP (whether or not such Investment would otherwise be a
Permitted Investment) or otherwise cause or permit BRSP to be a Subsidiary of
any Credit Party.
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8.7 Restricted Payments.
(a) No Credit Party will, directly or indirectly, declare or
pay any dividends or make any other distribution upon any of its
shares of beneficial interests or any shares of its capital stock of
any class or with respect to any of its partnership interests that
exceeds, in the aggregate, 90% of Funds From Operations earned
subsequent to the Effective Date; provided that (i) any Subsidiary of
a Credit Party may pay dividends or make distributions to its parent
and (ii) BRT may pay such dividends as is necessary to maintain its
status as a REIT.
(b) Except as permitted by Section 8.6 and except for the
conversion of partnership units of BOP into cash or into shares of
beneficial interest of BRT, no Credit Party will, nor will it permit
any of its Subsidiaries to, at any time, for cash, purchase, redeem
or otherwise acquire or retire or make any provisions for redemption,
acquisition or retirement of any shares of its capital stock of any
class or any warrants or options to purchase any such shares or with
respect to any of its partnership interests.
8.8 Transactions with Affiliates.
No Credit Party will, nor will it permit any of its Subsidiaries to,
enter into any transaction or series of transactions, whether or not in the
ordinary course of business, with any officer, director, shareholder,
Subsidiary or Affiliate other than on terms and conditions substantially as
favorable as would be obtainable in a comparable arm's-length transaction with
a Person other than an officer, director, shareholder, Subsidiary or
Affiliate.
8.9 Fiscal Year; Organizational Documents.
No Credit Party will (a) change its fiscal year or (b) change its
articles or certificate of incorporation, its bylaws, its declaration of
trust, its limited liability company agreement, its articles or certificate of
partnership or partnership agreement or any other organization or formation
documents in any manner that would have an adverse effect of the rights of the
Lenders under the Credit Documents; provided that (i) BRT may take such
action, with prior written notice to the Administrative Agent, as is necessary
to maintain its status as a REIT and (ii) the Credit Parties will provide
prompt written notice of any change to be made in compliance with the terms of
this Section 8.9.
8.10 Limitations.
No Credit Party will, nor will it permit any of its Subsidiaries to,
directly or indirectly, create or otherwise cause, incur, assume, suffer or
permit to exist or become effective any consensual encumbrance or restriction
of any kind on the ability of any such Person to pay any Indebtedness owed to
the Credit Parties.
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8.11 Other Negative Pledges.
The Credit Parties will not enter into, assume or become subject to
any agreement prohibiting or otherwise restricting the creation or assumption
of any Lien upon its properties or assets, whether now owned or hereafter
acquired, or requiring the grant of any security for such obligation if
security is given for some other obligation except as provided under the
Credit Documents.
8.12 Construction and Development.
The Credit Parties shall not engage in construction and development
projects in which the total project costs of all such concurrent construction
and development projects exceed, in the aggregate at any one time, 15% of
Total Assets (it being understood and agreed for purposes of this Section 8.12
that a project shall be considered under construction and/or development until
a certificate of occupancy therefore (or other similar certificate) shall have
been issued by the applicable Governmental Authority).
SECTION 9
EVENTS OF DEFAULT
9.1 Events of Default.
An Event of Default shall exist upon the occurrence of any of the
following specified events (each an "Event of Default"):
(a) Payment. The Credit Parties shall default in the payment
(i) when due of any principal amount of any Loans or any
reimbursement obligation arising from drawings under Letters of
Credit or (ii) within three days of when due of any interest on the
Loans or any fees or other amounts owing hereunder, under any of the
other Credit Documents or in connection herewith.
(b) Representations. Any representation, warranty or
statement made or deemed to be made by any Credit Party herein, in
any of the other Credit Documents, or in any statement or certificate
delivered or required to be delivered pursuant hereto or thereto
shall prove untrue in any material respect on the date as of which it
was made or deemed to have been made.
(c) Covenants. Any Credit Party shall:
(i) default in the due performance or
observance of any term, covenant or agreement contained in
Sections 7.2, 7.3, 7.10, 7.11, 7.12, 7.14 or 8.1 through
8.12 inclusive; provided that if the Credit Parties fail to
comply with Section 7.2(e) solely as a result of a change in
the Capitalization Rate by the Lenders, a Default or an
Event of Default shall not exist unless the Credit Parties
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also fail to comply with Section 7.2(e) as of the last day
of any subsequent fiscal quarter of the Credit Parties; or
(ii) default in the due performance or
observance by it of any term, covenant or agreement
contained in Section 7.1 and such default shall continue
unremedied for a period of five Business Days after the
earlier of a Credit Party becoming aware of such default or
notice thereof given by the Administrative Agent; or
(iii) default in the due performance or
observance by it of any term, covenant or agreement (other
than those referred to in subsections (a), (b) or (c)(i) or
(ii) of this Section 9.1) contained in this Credit Agreement
and such default shall continue unremedied for a period of
at least 30 days after the earlier of a Credit Party
becoming aware of such default or notice thereof given by
the Administrative Agent.
(d) Other Credit Documents. (i) Any Credit Party shall
default in the due performance or observance of any term, covenant or
agreement in any of the other Credit Documents and such default shall
continue unremedied for a period of at least 30 days after the
earlier of a Credit Party becoming aware of such default or notice
thereof given by the Administrative Agent, or (ii) any Credit
Document (or any provision of any Credit Document, including Section
4 of the Credit Agreement) shall fail to be in full force and effect
or any Credit Party shall so assert or any Credit Document shall fail
to give the Administrative Agent and/or the Lenders the security
interests, liens, rights, powers and privileges purported to be
created thereby.
(e) Bankruptcy, etc. The occurrence of any of the following
with respect to any Credit Party or any of its Subsidiaries (i) a
court or governmental agency having jurisdiction in the premises
shall enter a decree or order for relief in respect of any Credit
Party or any of its Subsidiaries in an involuntary case under any
applicable bankruptcy, insolvency or other similar law now or
hereafter in effect, or appoint a receiver, liquidator, assignee,
custodian, trustee, sequestrator or similar official of any Credit
Party or any of its Subsidiaries or for any substantial part of its
property or ordering the winding up or liquidation of its affairs; or
(ii) an involuntary case under any applicable bankruptcy, insolvency
or other similar law now or hereafter in effect is commenced against
any Credit Party or any of its Subsidiaries and such petition remains
unstayed and in effect for a period of 60 consecutive days; or (iii)
any Credit Party or any of its Subsidiaries shall commence a
voluntary case under any applicable bankruptcy, insolvency or other
similar law now or hereafter in effect, or consent to the entry of an
order for relief in an involuntary case under any such law, or
consent to the appointment or taking possession by a receiver,
liquidator, assignee, custodian, trustee, sequestrator or similar
official of such Person or any substantial part of its property or
make any general assignment for the benefit of creditors; or (iv) any
Credit Party or any of its Subsidiaries shall admit in writing its
inability to pay its debts generally as they become due or any action
shall be taken by such Person in furtherance of any of the aforesaid
purposes.
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(f) Defaults under Other Agreements. With respect to any
recourse Indebtedness (other than Indebtedness outstanding under this
Credit Agreement) of any Credit Party or any of its Subsidiaries in
an aggregate principal amount in excess of $10,000,000, (i) a Credit
Party or one of its Subsidiaries shall (A) default in any payment
(beyond the applicable grace period with respect thereto, if any)
with respect to any such recourse Indebtedness, or (B) default (after
giving effect to any applicable grace period) in the observance or
performance of any term, covenant or agreement relating to such
recourse Indebtedness or contained in any instrument or agreement
evidencing, securing or relating thereto, or any other event or
condition shall occur or condition exist, the effect of which default
or other event or condition is to cause, or permit, the holder or
holders of such recourse Indebtedness (or trustee or agent on behalf
of such holders) to cause (determined without regard to whether any
notice or lapse of time is required) any such recourse Indebtedness
to become due prior to its stated maturity; or (ii) any such recourse
Indebtedness shall be declared due and payable, or required to be
prepaid other than by a regularly scheduled required prepayment prior
to the stated maturity thereof; or (iii) any such Indebtedness shall
mature and remain unpaid. With respect to any nonrecourse
Indebtedness of any Credit Party or any of its Subsidiaries in an
aggregate principal amount in excess of $20,000,000, a default in
payment (whether by acceleration or otherwise) shall occur and such
payment default is not cured or waived within sixty days after the
occurrence thereof.
(g) Judgments. One or more judgments, orders, or decrees
shall be entered against any one or more of the Credit Party
involving a liability of $10,000,000 or more, in the aggregate (to
the extent not paid or covered by insurance provided by a carrier who
has acknowledged coverage), and such judgments, orders or decrees (i)
are the subject of any enforcement proceeding commenced by any
creditor or (ii) shall continue unsatisfied, undischarged and
unstayed for a period ending on the first to occur of (A) the last
day on which such judgment, order or decree becomes final and
unappealable or (B) 20 days.
(h) ERISA Events. The occurrence of any of the following
events or conditions, unless such event or occurrence would not have
or be reasonably expected to have a Material Adverse Effect: (1) any
"accumulated funding deficiency," as such term is defined in Section
302 of ERISA and Section 412 of the Code, whether or not waived,
shall exist with respect to any Plan, or any lien shall arise on the
assets of a Credit Party or any ERISA Affiliate in favor of the PBGC
or a Plan; (2) an ERISA Event shall occur with respect to a Single
Employer Plan, which is, in the reasonable opinion of the
Administrative Agent, likely to result in the termination of such
Plan for purposes of Title IV of ERISA; (3) an ERISA Event shall
occur with respect to a Multiemployer Plan or Multiple Employer Plan,
which is, in the reasonable opinion of the Administrative Agent,
likely to result in (i) the termination of such Plan for purposes of
Title IV of ERISA, or (ii) a Credit Party or any ERISA Affiliate
incurring any liability in connection with a withdrawal from,
reorganization of (within the meaning of Section 4241 of ERISA), or
insolvency (within the meaning of Section 4245 of ERISA) of such
Plan; or (4) any prohibited transaction (within the meaning of
Section 406 of ERISA or Section 4975 of the Code) or breach of
fiduciary responsibility shall occur which may subject a Credit Party
or any ERISA Affiliate to any liability under Sections 406, 409,
502(i), or 502(l) of ERISA or Section 4975 of the Code,
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or under any agreement or other instrument pursuant to which a Credit
Party or any ERISA Affiliate has agreed or is required to indemnify any
person against any such liability.
(i) Ownership. There shall occur a Change of Control.
(j) Management. Gerard Sweeney is no longer active in the
management of the Credit Parties and their Subsidiaries; provided
that upon the death or disability of Gerard Sweeney, the Credit
Parties and their Subsidiaries shall have six months to provide the
Administrative Agent with substitute personnel as replacement; such
substitute personnel to be acceptable to the Administrative Agent in
its sole reasonable discretion.
(k) REIT Status. BRT does not maintain its REIT status or is
no longer deemed to be a REIT.
(l) Senior Credit Agreement. An Event of Default (as defined
in the Senior Credit Agreement) occurs.
9.2 Acceleration; Remedies.
Upon the occurrence of an Event of Default, and at any time
thereafter unless and until such Event of Default has been waived in writing
by the Required Lenders (or the Lenders as may be required hereunder), the
Administrative Agent shall, upon the request and direction of Lenders whose
aggregate Credit Exposure constitutes at least 66 2/3% of the Credit Exposure
of all Lenders, by written notice to the Borrowers, take any of the following
actions without prejudice to the rights of the Administrative Agent or any
Lender to enforce its claims against the Borrowers, except as otherwise
specifically provided for herein:
(a) Termination of Commitments. Declare the Commitments
terminated whereupon the Commitments shall be immediately terminated.
(b) Acceleration of Loans. Declare the unpaid principal of
and any accrued interest in respect of all Loans, any reimbursement
obligations arising from drawings under Letters of Credit and any and
all other indebtedness or obligations of any and every kind owing by
a Credit Party to any of the Lenders hereunder to be due whereupon
the same shall be immediately due and payable without presentment,
demand, protest or other notice of any kind, all of which are hereby
waived by the Credit Parties.
(c) Enforcement of Rights. Enforce any and all rights and
interests created and existing under the Credit Documents, including,
without limitation, all rights and remedies against a Guarantor and
all rights of set-off.
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Notwithstanding the foregoing, if an Event of Default specified in Section
9.1(e) shall occur, then the Commitments shall automatically terminate and all
Loans, all accrued interest in respect thereof, all accrued and unpaid fees,
and all other indebtedness or obligations owing to the Lenders hereunder shall
immediately become due and payable without the giving of any notice or other
action by the Administrative Agent or the Lenders, which notice or other
action is expressly waived by the Credit Parties.
Notwithstanding the fact that enforcement powers reside primarily with the
Administrative Agent, each Lender has, to the extent permitted by law, a
separate right of payment and shall be considered a separate "creditor"
holding a separate "claim" within the meaning of Section 101(5) of the
Bankruptcy Code or any other insolvency statute.
9.3 Allocation of Payments After Event of Default.
Notwithstanding any other provisions of this Credit Agreement, after
the occurrence and during the continuance of an Event of Default, all amounts
collected or received by the Administrative Agent, or any Lender on account of
amounts outstanding under any of the Credit Documents, shall be paid over or
delivered as follows:
FIRST, to the payment of all reasonable out-of-pocket costs
and expenses (including without limitation reasonable attorneys'
fees) of the Administrative Agent in connection with enforcing the
rights of the Lenders under the Credit Documents;
SECOND, to payment of any fees owed to the Administrative
Agent;
THIRD, to the payment of all reasonable out-of-pocket costs
and expenses, (including, without limitation, reasonable attorneys'
fees) of each of the Lenders in connection with enforcing its rights
under the Credit Documents;
FOURTH, to the payment of all accrued fees and interest
payable to the Lenders hereunder;
FIFTH, to the payment of the outstanding principal amount of
the Loans, pro rata, as set forth below;
SIXTH, to all other obligations which shall have become due
and payable under the Credit Documents and not repaid pursuant to
clauses "FIRST" through "FIFTH" above; and
SEVENTH, to the payment of the surplus, if any, to whoever
may be lawfully entitled to receive such surplus.
In carrying out the foregoing, (a) amounts received shall be applied in the
numerical order provided until exhausted prior to application to the next
succeeding category; and (b) each of the Lenders shall receive an amount equal
to its pro rata share (based on the proportion that the then outstanding Loans
held by such Lender bears to the aggregate then outstanding Loans) of amounts
available to be applied pursuant to clauses "THIRD", "FOURTH," "FIFTH," and
"SIXTH" above.
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SECTION 10
AGENCY PROVISIONS
10.1 Appointment.
Each Lender hereby designates and appoints NationsBanc Mortgage
Capital Corp. as Administrative Agent of such Lender to act as specified
herein and the other Credit Documents, and each such Lender hereby authorizes
the Administrative Agent, as the agent for such Lender, to take such action on
its behalf under the provisions of this Credit Agreement and the other Credit
Documents and to exercise such powers and perform such duties as are expressly
delegated by the terms hereof and of the other Credit Documents, together with
such other powers as are reasonably incidental thereto. Notwithstanding any
provision to the contrary elsewhere herein and in the other Credit Documents,
the Administrative Agent shall not have any duties or responsibilities, except
those expressly set forth herein and therein, or any fiduciary relationship
with any Lender, and no implied covenants, functions, responsibilities,
duties, obligations or liabilities shall be read into this Credit Agreement or
any of the other Credit Documents, or shall otherwise exist against the
Administrative Agent. The provisions of this Section are solely for the
benefit of the Administrative Agent and the Lenders and none of the Credit
Parties shall have any rights as a third party beneficiary of the provisions
hereof. In performing its functions and duties under this Credit Agreement and
the other Credit Documents, the Administrative Agent shall act solely as an
agent of the Lenders and does not assume and shall not be deemed to have
assumed any obligation or relationship of agency or trust with or for any
Credit Parties.
10.2 Delegation of Duties.
The Administrative Agent may execute any of its duties hereunder or
under the other Credit Documents by or through agents or attorneys-in-fact and
shall be entitled to advice of counsel concerning all matters pertaining to
such duties. The Administrative Agent shall not be responsible for the
negligence or misconduct of any agents or attorneys-in-fact selected by it
with reasonable care.
10.3 Exculpatory Provisions.
Neither the Administrative Agent nor any of its officers, directors,
employees, agents, attorneys-in-fact or affiliates shall be (a) liable for any
action lawfully taken or omitted to be taken by it or such Person under or in
connection herewith or in connection with any of the other Credit Documents
(except for its or such Person's own gross negligence or willful misconduct)
or (b) responsible in any manner to any of the Lenders for any recitals,
statements, representations or warranties made by any of the Credit Parties
contained herein or in any of the other Credit Documents or in any
certificate, report, document, financial statement or other written or oral
statement referred to or provided for in, or received by the Administrative
Agent under or in connection herewith or in connection with the other Credit
Documents, or enforceability or sufficiency therefor of any of the other
Credit Documents, or for any failure of the Credit Parties to
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perform their obligations hereunder or thereunder. The Administrative Agent
shall not be responsible to any Lender for the effectiveness, genuineness,
validity, enforceability, collectibility or sufficiency of this Credit
Agreement, or any of the other Credit Documents or for any representations,
warranties, recitals or statements made herein or therein or made by the Credit
Parties in any written or oral statement or in any financial or other
statements, instruments, reports, certificates or any other documents in
connection herewith or therewith furnished or made by the Administrative Agent
to the Lenders or by or on behalf of the Credit Parties to the Administrative
Agent or any Lender or be required to ascertain or inquire as to the performance
or observance of any of the terms, conditions, provisions, covenants or
agreements contained herein or therein or as to the use of the proceeds of the
Loans or the use of the Letters of Credit or of the existence or possible
existence of any Default or Event of Default or to inspect the properties,
books or records of the Credit Parties. The Administrative Agent is not a
trustee for the Lenders and owes no fiduciary duty to the Lenders.
10.4 Reliance on Communications.
The Administrative Agent shall be entitled to rely, and shall be
fully protected in relying, upon any note, writing, resolution, notice,
consent, certificate, affidavit, letter, cablegram, telegram, telecopy, telex
or teletype message, statement, order or other document or conversation
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 (including, without limitation, counsel to any of the Credit Parties,
independent accountants and other experts selected by the Administrative Agent
with reasonable care). The Administrative Agent may deem and treat each Lender
as the owner of its interests hereunder for all purposes unless a written
notice of assignment, negotiation or transfer thereof shall have been filed
with the Administrative Agent in accordance with Section 11.3(b). The
Administrative Agent shall be fully justified in failing or refusing to take
any action under this Credit Agreement or under any of the other Credit
Documents unless it shall first receive such advice or concurrence of the
Required Lenders as it deems appropriate or it shall first be indemnified to
its satisfaction by the Lenders 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 Administrative Agent shall in all cases be fully protected in
acting, or in refraining from acting, hereunder or under any of the other
Credit Documents in accordance with a request of the Required Lenders (or to
the extent specifically provided in Section 11.6, all the Lenders) and such
request and any action taken or failure to act pursuant thereto shall be
binding upon all the Lenders (including their successors and assigns).
10.5 Notice of Default.
The Administrative Agent shall not be deemed to have knowledge or
notice of the occurrence of any Default or Event of Default hereunder unless
the Administrative Agent has received notice from a Lender or a Credit Party
referring to the Credit Document, describing such Default or Event of Default
and stating that such notice is a "notice of default." In the event that the
Administrative Agent receives such a notice, the Administrative Agent shall
give prompt notice thereof to the Lenders. The Administrative Agent shall take
such action with respect to such Default or Event of Default as shall be
reasonably directed by the Required Lenders.
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10.6 Non-Reliance on Administrative Agent and Other Lenders.
Each Lender expressly acknowledges that neither the Administrative
Agent, NMS nor any of their officers, directors, employees, agents,
attorneys-in-fact or affiliates has made any representations or warranties to
it and that no act by the Administrative Agent, NMS or any affiliate thereof
hereinafter taken, including any review of the affairs of any Credit Party,
shall be deemed to constitute any representation or warranty by the
Administrative Agent or NMS to any Lender. Each Lender represents to the
Administrative Agent and NMS that it has, independently and without reliance
upon the Administrative Agent or NMS or any other Lender, and based on such
documents and information as it has deemed appropriate, made its own appraisal
of and investigation into the business, assets, operations, property,
financial and other conditions, prospects and creditworthiness of the Credit
Parties and made its own decision to make its Loans hereunder and enter into
this Credit Agreement. Each Lender also represents that it will, independently
and without reliance upon the Administrative Agent, NMS or any other Lender,
and based on such documents and information as it shall deem appropriate at
the time, continue to make its own credit analysis, appraisals and decisions
in taking or not taking action under this Credit Agreement, and to make such
investigation as it deems necessary to inform itself as to the business,
assets, operations, property, financial and other conditions, prospects and
creditworthiness of the Credit Parties. Except for notices, reports and other
documents expressly required to be furnished to the Lenders by the
Administrative Agent hereunder, the Administrative Agent and NMS shall not
have any duty or responsibility to provide any Lender with any credit or other
information concerning the business, operations, assets, property, financial
or other conditions, prospects or creditworthiness of the Credit Parties which
may come into the possession of the Administrative Agent, NMS or any of their
officers, directors, employees, agents, attorneys-in-fact or affiliates.
10.7 Indemnification.
The Lenders agree to indemnify the Administrative Agent in its
capacity as such (to the extent not reimbursed by the Credit Parties and
without limiting the obligation of the Credit Parties to do so), ratably
according to their respective Commitments (or if the Commitments have expired
or been terminated, in accordance with the respective principal amounts of
outstanding Loans and Participation Interest of the Lenders), from and against
any and all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind whatsoever
which may at any time (including without limitation at any time following
payment in full of the Obligations) be imposed on, incurred by or asserted
against the Administrative Agent in its capacity as such in any way relating
to or arising out of this Credit Agreement or the other Credit Documents or
any documents contemplated by or referred to herein or therein or the
transactions contemplated hereby or thereby or any action taken or omitted by
the Administrative Agent under or in connection with any of the foregoing;
provided that no Lender shall be liable for the payment of any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements resulting from the gross negligence or
willful misconduct of the Administrative Agent. If any indemnity furnished to
the Administrative Agent for any purpose shall, in the opinion of the
Administrative Agent, be insufficient or become impaired, the Administrative
Agent may call for additional indemnity and cease, or not commence, to do the
acts indemnified against until such additional indemnity is furnished. The
agreements in this Section
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shall survive the payment of the Obligations and all other amounts payable
hereunder and under the other Credit Documents.
10.8 Administrative Agent in Its Individual Capacity.
The Administrative Agent and its affiliates may make loans to, accept
deposits from and generally engage in any kind of business with the Credit
Parties as though the Administrative Agent were not the Administrative Agent
hereunder. With respect to the Loans made and Letters of Credit issued and all
obligations owing to it, the Administrative Agent shall have the same rights
and powers under this Credit Agreement as any Lender and may exercise the same
as though it were not the Administrative Agent, and the terms "Lender" and
"Lenders" shall include the Administrative Agent in its individual capacity.
10.9 Successor Agent.
The Administrative Agent may, at any time, resign upon 20 days
written notice to the Lenders. Upon any such resignation, the Required Lenders
shall have the right to appoint a successor Administrative Agent. If no
successor Administrative Agent shall have been so appointed by the Required
Lenders, and shall have accepted such appointment, within 45 days after the
notice of resignation, then the retiring Administrative Agent shall select a
successor Administrative Agent provided such successor is a Lender hereunder
or an Eligible Assignee. Upon the acceptance of any appointment as the
Administrative Agent hereunder by a successor, such successor Administrative
Agent shall thereupon succeed to and become vested with all the rights,
powers, privileges and duties of the retiring Administrative Agent, and the
retiring Administrative Agent shall be discharged from its duties and
obligations as the Administrative Agent, as appropriate, under this Credit
Agreement and the other Credit Documents and the provisions of this Section
10.9 shall inure to its benefit as to any actions taken or omitted to be taken
by it while it was the Administrative Agent under this Credit Agreement.
SECTION 11
MISCELLANEOUS
11.1 Notices.
Except as otherwise expressly provided herein, all notices and other
communications shall have been duly given and shall be effective (a) when
delivered, (b) when transmitted via telecopy (or other facsimile device) to
the number set out below, (c) the Business Day following the day on which the
same has been delivered prepaid to a reputable national overnight air courier
service, or (d) the third Business Day following the day on which the same is
sent by certified or registered mail, postage prepaid, in each case to the
respective parties at the address or telecopy numbers set forth on Schedule
11.1, or at such other address as such party may specify by written notice to
the other parties hereto.
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11.2 Right of Set-Off.
In addition to any rights now or hereafter granted under applicable
law or otherwise, and not by way of limitation of any such rights, upon the
occurrence of an Event of Default and the commencement of remedies described
in Section 9.2, each Lender is authorized at any time and from time to time,
without presentment, demand, protest or other notice of any kind (all of which
rights being hereby expressly waived), to set-off and to appropriate and apply
any and all deposits (general or special) and any other indebtedness at any
time held or owing by such Lender (including, without limitation, branches,
agencies or Affiliates of such Lender wherever located) to or for the credit
or the account of any Credit Party against obligations and liabilities of such
Credit Party to the Lenders hereunder, under the Notes, the other Credit
Documents or otherwise, irrespective of whether the Administrative Agent or
the Lenders shall have made any demand hereunder and although such
obligations, liabilities or claims, or any of them, may be contingent or
unmatured, and any such set-off shall be deemed to have been made immediately
upon the occurrence of an Event of Default even though such charge is made or
entered on the books of such Lender subsequent thereto. The Credit Parties
hereby agree that any Person purchasing a participation in the Loans and
Commitments hereunder pursuant to Section 11.3(c) or 3.8 may exercise all
rights of set-off with respect to its participation interest as fully as if
such Person were a Lender hereunder.
11.3 Benefit of Agreement.
(a) Generally. This Credit Agreement shall be binding upon
and inure to the benefit of and be enforceable by the respective
successors and assigns of the parties hereto; provided that none of
the Credit Parties may assign and transfer any of its interests
(except as permitted by Sections 8.4 or 8.5) without the prior
written consent of the Lenders; and provided further that the rights
of each Lender to transfer, assign or grant participations in its
rights and/or obligations hereunder shall be limited as set forth
below in subsections (b) and (c) of this Section 11.3.
Notwithstanding the above (including anything set forth in
subsections (b) and (c) of this Section 11.3), nothing herein shall
restrict, prevent or prohibit any Lender from (A) pledging its Loans
hereunder to a Federal Reserve Bank in support of borrowings made by
such Lender from such Federal Reserve Bank, or (B) granting
assignments or participations in such Lender's Loans and/or
Commitments hereunder to its parent company and/or to any Affiliate
of such Lender or to any existing Lender or Affiliate thereof.
(b) Assignments. In addition to the assignments permitted by
Section 11.3(a), each Lender may, with the prior written consent of
the Borrowers and the Administrative Agent (provided that no consent
of the Borrowers shall be required during the existence and
continuation of an Event of Default), which consent shall not be
unreasonably withheld or delayed, assign all or a portion of its
rights and obligations hereunder pursuant to an assignment agreement
substantially in the form of Exhibit 11.3 to one or more Eligible
Assignees; provided that (i) any such assignment shall be in a
minimum aggregate amount of $10,000,000 of the Commitments and in
integral multiples of $1,000,000 above such amount (or the remaining
amount of Commitments held by such Lender) and (ii) each such
assignment shall be of a constant, not varying, percentage of all of
the assigning Lender's
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rights and obligations under the Commitment being assigned. Any
assignment hereunder shall be effective upon satisfaction of the
conditions set forth above and delivery to the Administrative Agent
of a duly executed assignment agreement together with a transfer fee
of $3,500 payable to the Administrative Agent for its own account.
Upon the effectiveness of any such assignment, the assignee shall
become a "Lender" for all purposes of this Credit Agreement and the
other Credit Documents and, to the extent of such assignment, the
assigning Lender shall be relieved of its obligations hereunder to
the extent of the Loans and Commitment components being assigned. The
Borrowers agree that upon notice of any such assignment and surrender
of the appropriate Note or Notes, it will promptly provide to the
assigning Lender and to the assignee separate promissory notes in the
amount of their respective interests substantially in the form of the
original Note or Notes (but with notation thereon that it is given in
substitution for and replacement of the original Note or Notes or any
replacement notes thereof).
By executing and delivering an assignment agreement in accordance
with this Section 11.3(b), the assigning Lender thereunder and the
assignee thereunder shall be deemed to confirm to and agree with each
other and the other parties hereto as follows: (i) such assigning
Lender warrants that it is the legal and beneficial owner of the
interest being assigned thereby free and clear of any adverse claim
and the assignee warrants that it is an Eligible Assignee; (ii)
except as set forth in clause (i) above, such assigning Lender makes
no representation or warranty and assumes no responsibility with
respect to any statements, warranties or representations made in or
in connection with this Credit Agreement, any of the other Credit
Documents or any other instrument or document furnished pursuant
hereto or thereto, or the execution, legality, validity,
enforceability, genuineness, sufficiency or value of this Credit
Agreement, any of the other Credit Documents or any other instrument
or document furnished pursuant hereto or thereto or the financial
condition of any Credit Party or the performance or observance by any
Credit Party of any of its obligations under this Credit Agreement,
any of the other Credit Documents or any other instrument or document
furnished pursuant hereto or thereto; (iii) such assignee represents
and warrants that it is legally authorized to enter into such
assignment agreement; (iv) such assignee confirms that it has
received a copy of this Credit Agreement, the other Credit Documents
and such other documents and information as it has deemed appropriate
to make its own credit analysis and decision to enter into such
assignment agreement; (v) such assignee will independently and
without reliance upon the Administrative Agent, such assigning Lender
or any other Lender, 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 Credit
Agreement and the other Credit Documents; (vi) such assignee appoints
and authorizes the Administrative Agent to take such action on its
behalf and to exercise such powers under this Credit Agreement or any
other Credit Document as are delegated to the Administrative Agent by
the terms hereof or thereof, together with such powers as are
reasonably incidental thereto; and (vii) such assignee agrees that it
will perform in accordance with their terms all the obligations which
by the terms of this Credit Agreement and the other Credit Documents
are required to be performed by it as a Lender.
(c) Participations. Each Lender may sell, transfer, grant or
assign participations in all or any part of such Lender's interests
and obligations hereunder; provided that (i) such
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selling Lender shall remain a "Lender" for all purposes under this
Credit Agreement (such selling Lender's obligations under the Credit
Documents remaining unchanged) and the participant shall not
constitute a Lender hereunder, (ii) no such participant shall have,
or be granted, rights to approve any amendment or waiver relating to
this Credit Agreement or the other Credit Documents except to the
extent any such amendment or waiver would (A) reduce the principal of
or rate of interest on or fees in respect of any Loans in which the
participant is participating or increase any Commitments with respect
thereto, or (B) postpone the date fixed for any payment of principal
(including the extension of the final maturity of any Loan or the
date of any mandatory prepayment), interest or fees in which the
participant is participating, (iii) sub-participations by the
participant (except to an Affiliate, parent company or Affiliate of a
parent company of the participant) shall be prohibited and (iv) any
such participations shall be in a minimum aggregate amount of
$10,000,000 of the Commitments and in integral multiples of
$1,000,000 in excess thereof. In the case of any such participation,
the participant shall not have any rights under this Credit Agreement
or the other Credit Documents (the participant's rights against the
selling Lender in respect of such participation to be those set forth
in the participation agreement with such Lender creating such
participation) and all amounts payable by the Credit Parties
hereunder shall be determined as if such Lender had not sold such
participation; provided, however, that such participant shall be
entitled to receive additional amounts under Sections 3.9, 3.12, 3.13
and 3.14 to the same extent that the Lender from which such
participant acquired its participation would be entitled to the
benefit of such cost protection provisions.
11.4 No Waiver; Remedies Cumulative.
No failure or delay on the part of the Administrative Agent or any
Lender in exercising any right, power or privilege hereunder or under any
other Credit Document and no course of dealing between the Credit Parties and
the Administrative Agent or any Lender shall operate as a waiver thereof; nor
shall any single or partial exercise of any right, power or privilege
hereunder or under any other Credit Document preclude any other or further
exercise thereof or the exercise of any other right, power or privilege
hereunder or thereunder. The rights and remedies provided herein are
cumulative and not exclusive of any rights or remedies which the
Administrative Agent or any Lender would otherwise have. No notice to or
demand on any Credit Party in any case shall entitle any Credit Party to any
other or further notice or demand in similar or other circumstances or
constitute a waiver of the rights of the Administrative Agent or the Lenders
to any other or further action in any circumstances without notice or demand.
11.5 Payment of Expenses; Indemnification.
The Credit Parties agree to: (a) pay all reasonable out-of-pocket
costs and expenses of (i) the Administrative Agent and NMS in connection with
(A) the negotiation, preparation, execution and delivery, syndication and
administration of this Credit Agreement and the other Credit Documents and the
documents and instruments referred to therein (including, without limitation,
the reasonable fees and expenses of Moore & Van Allen, special counsel to the
Administrative Agent, and (B) any amendment, waiver or consent relating hereto
and thereto including, but not limited to, any such amendments, waivers or
consents resulting from or related to any work-out, renegotiation or
restructure relating to the performance by the Credit Parties under this
Credit
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Agreement, and (ii) the Administrative Agent and the Lenders in connection with
(A) enforcement of the Credit Documents and the documents and instruments
referred to therein, including, without limitation, in connection with any such
enforcement, the reasonable fees and disbursements of counsel for the
Administrative Agent and each of the Lenders, and (B) any bankruptcy or
insolvency proceeding of a Credit Party of any of its Subsidiaries, and (b)
indemnify the Administrative Agent, NMS and each Lender, its officers,
directors, employees, representatives and agents from and hold each of them
harmless against any and all losses, liabilities, claims, damages or expenses
incurred by any of them as a result of, or arising out of, or in any way
related to, or by reason of, any investigation, litigation or other proceeding
(whether or not the Administrative Agent, NMS or any Lender is a party
thereto) related to (i) the entering into and/or performance of any Credit
Document or the use of proceeds of any Loans (including other extensions of
credit) hereunder or the consummation of any other transactions contemplated
in any Credit Document, including, without limitation, the reasonable fees and
disbursements of counsel incurred in connection with any such investigation,
litigation or other proceeding (but excluding any such losses, liabilities,
claims, damages or expenses to the extent incurred by reason of gross
negligence or willful misconduct on the part of the Person to be indemnified),
(ii) any Environmental Claim and (iii) any claims for Non-Excluded Taxes.
11.6 Amendments, Waivers and Consents.
Neither this Credit Agreement nor any other Credit Document nor any
of the terms hereof or thereof may be amended, changed, waived, discharged or
terminated unless such amendment, change, waiver, discharge or termination is
in writing and signed by the Required Lenders and the Credit Parties; provided
that no such amendment, change, waiver, discharge or termination shall without
the consent of each Lender affected thereby:
(a) extend the final maturity of any Loan or any portion
thereof or postpone any other date fixed for any payment of principal
(other than in accordance with Section 3.5(b));
(b) reduce the rate or extend the time of payment of
interest (other than as a result of waiving the applicability of any
post-default increase in interest rates) thereon or fees hereunder;
(c) reduce or waive the principal amount of any Loan;
(d) increase the Commitment of a Lender over the amount
thereof in effect (it being understood and agreed that a waiver of
any Default or Event of Default or a waiver of any mandatory
reduction in the Commitments shall not constitute a change in the
terms of any Commitment of any Lender);
(e) release a Borrower from its obligations, or all or
substantially all of the Guarantors from their obligations, under the
Credit Documents; provided that the Administrative Agent may release
a Guarantor if an equity interest in a Material Subsidiary is
transferred in accordance with Section 8.5 or equity is issued in
accordance with Section 11.20;
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(f) [Intentionally Omitted]
(g) amend, modify or waive any provision of this Section or
Section 3.4(a), 3.4(b), 3.7, 3.8, 3.9, 3.10, 3.11, 3.12, 3.13, 3.14,
5.2, 9.1(a), 11.2, 11.3 or 11.5;
(h) reduce any percentage specified in, or otherwise modify,
the definition of Required Lenders; or
(i) consent to the assignment or transfer by a Borrower of
any of its rights and obligations under (or in respect of) the Credit
Documents.
If any amendment, waiver or consent with respect to the Credit Documents has
been delivered in writing to a Lender by the Administrative Agent, and such
amendment waiver or consent requires only the approval of the Required Lenders
to become effective, then such Lender shall have ten Business Days from the
date of receipt of such amendment, waiver or consent to respond thereto.
Failure of a Lender to timely respond to such amendment, waiver or consent
shall be deemed an approval by such Lender to such amendment, waiver or
consent.
No provision of Section 2.2 may be amended or modified without the consent of
the Issuing Lender. No provision of Section 10 may be amended or modified
without the consent of the Administrative Agent.
Notwithstanding the fact that the consent of all the Lenders is required in
certain circumstances as set forth above, (x) each Lender is entitled to vote
as such Lender sees fit on any reorganization plan that affects the Loans or
the Letters of Credit, and each Lender acknowledges that the provisions of
Section 1126(c) of the Bankruptcy Code supersedes the unanimous consent
provisions set forth herein and (y) the Required Lenders may consent to allow
a Credit Party to use cash collateral in the context of a bankruptcy or
insolvency proceeding.
11.7 Counterparts/Telecopy.
This Credit Agreement may be executed in any number of counterparts,
each of which when so executed and delivered shall be an original, but all of
which shall constitute one and the same instrument. Delivery of executed
counterparts by telecopy shall be as effective as an original and shall
constitute a representation that an original will be delivered.
11.8 Headings.
The headings of the sections and subsections hereof are provided for
convenience only and shall not in any way affect the meaning or construction
of any provision of this Credit Agreement.
11.9 Defaulting Lender.
Each Lender understands and agrees that if such Lender is a
Defaulting Lender then notwithstanding the provisions of Section 11.6 it shall
not be entitled to vote on any matter requiring the consent of the Required
Lenders or to object to any matter requiring the consent of all
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the Lenders; provided, however, that all other benefits and obligations under
the Credit Documents shall apply to such Defaulting Lender.
11.10 Survival of Indemnification and Representations and Warranties.
All indemnities set forth herein and all representations and
warranties made herein shall survive the execution and delivery of this Credit
Agreement, the making of the Loans, the issuance of the Letters of Credit and
the repayment of the Loans and other obligations and the termination of the
Commitments hereunder.
11.11 Governing Law; Jurisdiction.
(a) THIS AGREEMENT AND THE OTHER CREDIT DOCUMENTS AND THE
RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER AND THEREUNDER SHALL
BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF NORTH CAROLINA. Any legal action or proceeding
with respect to this Agreement or any other Credit Document may be
brought in the courts of the State of North Carolina in Mecklenburg
County, or of the United States for the Western District of North
Carolina and, by execution and delivery of this Credit Agreement,
each Credit Party hereby irrevocably accepts for itself and in
respect of its property, generally and unconditionally, the
jurisdiction of such courts. Each Credit Party further irrevocably
consents to the service of process out of any of the aforementioned
courts in any such action or proceeding by the mailing of copies
thereof by registered or certified mail, postage prepaid, to it at
the address for notices pursuant to Section 11.1, such service to
become effective 15 days after such mailing. Nothing herein shall
affect the right of a Lender to serve process in any other manner
permitted by law or to commence legal proceedings or to otherwise
proceed against a Credit Party in any other jurisdiction. Each Credit
Party agrees that a final judgment in any action or proceeding shall
be conclusive and may be enforced in other jurisdictions by suit on
the judgment or in any other manner provided by law; provided that
nothing in this Section 11.11(a) is intended to impair a Credit
Party's right under applicable law to appeal or seek a stay of any
judgment.
(b) Each Credit Party hereby irrevocably waives any
objection which it may now or hereafter have to the laying of venue
of any of the aforesaid actions or proceedings arising out of or in
connection with this Credit Agreement or any other Credit Document
brought in the courts referred to in subsection (a) hereof and hereby
further irrevocably waives and agrees not to plead or claim in any
such court that any such action or proceeding brought in any such
court has been brought in an inconvenient forum.
11.12 Waiver of Jury Trial.
EACH OF THE PARTIES TO THIS AGREEMENT HEREBY IRREVOCABLY WAIVES ALL
RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR
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COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS CREDIT AGREEMENT, ANY OF THE
OTHER CREDIT DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY.
11.13 Time.
All references to time herein shall be references to Eastern Standard
Time or Eastern Daylight Time, as the case may be, unless specified otherwise.
11.14 Severability.
If any provision of any of the Credit Documents is determined to be
illegal, invalid or unenforceable, such provision shall be fully severable and
the remaining provisions shall remain in full force and effect and shall be
construed without giving effect to the illegal, invalid or unenforceable
provisions.
11.15 Entirety.
This Credit Agreement together with the other Credit Documents
represent the entire agreement of the parties hereto and thereto, and
supersede all prior agreements and understandings, oral or written, if any,
including any commitment letters or correspondence relating to the Credit
Documents or the transactions contemplated herein and therein.
11.16 Binding Effect.
(a) This Credit Agreement shall become effective at such
time when all of the conditions set forth in Section 5.1 have been
satisfied or waived by the Lenders and it shall have been executed by
the Credit Parties and the Administrative Agent, and the
Administrative Agent shall have received copies hereof (telefaxed or
otherwise) which, when taken together, bear the signatures of each
Lender, and thereafter this Credit Agreement shall be binding upon
and inure to the benefit of the Credit Parties, the Administrative
Agent and each Lender and their respective successors and assigns.
Upon this Credit Agreement becoming effective, the Existing Credit
Agreement and the Existing Bridge Facility shall be deemed terminated
and the Credit Parties and the lenders party to the Existing Credit
Agreement or the Existing Bridge Facility shall no longer have any
obligations thereunder (other than those obligations in the Existing
Credit Agreement and the Existing Bridge Facility that expressly
survive the termination of the Existing Credit Agreement).
(b) This Credit Agreement shall be a continuing agreement
and shall remain in full force and effect until all Loans, interest,
fees and other Obligations have been paid in full and all Commitments
have been terminated. Upon termination, the Credit Parties shall have
no further obligations (other than the indemnification provisions
that survive) under the Credit Documents; provided that should any
payment, in whole or in part, of the Obligations be rescinded or
otherwise required to be restored or returned by the Administrative
Agent or any Lender, whether as a result of any proceedings in
bankruptcy
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or reorganization or otherwise, then the Credit Documents
shall automatically be reinstated and all amounts required to be
restored or returned and all costs and expenses incurred by the
Administrative Agent or Lender in connection therewith shall be
deemed included as part of the Obligations.
11.17 Confidentiality.
Each Lender agrees that it will use its reasonable best efforts to
keep confidential and to cause any representative designated under Section
7.11 to keep confidential any non-public information from time to time
supplied to it under any Credit Document; provided, however, that nothing
herein shall prevent the disclosure of any such information to (a) the extent
a Lender in good faith believes such disclosure is required by Requirement of
Law, (b) counsel for a Lender or to its accountants, (c) bank examiners or
auditors or comparable Persons, (d) any affiliate of a Lender, (e) any other
Lender, or any assignee, transferee or participant, or any potential assignee,
transferee or participant, of all or any portion of any Lender's rights under
this Agreement who is notified of the confidential nature of the information
or (f) any other Person in connection with any litigation to which any one or
more of the Lenders is a party; and provided further that no Lender shall have
any obligation under this Section 11.17 to the extent any such information
becomes available on a non-confidential basis from a source other than a
Credit Party or that any information becomes publicly available other than by
a breach of this Section 11.17.
11.18 [Intentionally Omitted]
11.19 Further Assurances.
The Credit Parties agree, upon the request of the Administrative
Agent, to promptly take such actions as are necessary to carry out the intent
of this Credit Agreement and the other Credit Documents.
11.20 Release of Guarantors.
If a Guarantor issues equity and as a result thereof such Guarantor
is no longer a Material Subsidiary, then as long as after giving effect to the
issuance of such equity the Credit Parties will be in compliance with Section
7.2(i), the Lenders agree to release such Guarantor from its obligations
hereunder.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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Each of the parties hereto has caused a counterpart of this Credit
Agreement to be duly executed and delivered as of the date first above
written.
BORROWERS: BRANDYWINE REALTY TRUST,
- --------- a Maryland real estate investment trust
By: /s/ Gerard H. Sweeney
---------------------------
Name: Gerard H. Sweeney
Title: President and Chief Executive Officer
BRANDYWINE OPERATING PARTNERSHIP,
L.P., a Delaware limited partnership
By: Brandywine Realty Trust, a Maryland
real estate investment trust, its general
partner
By: /s/ Gerard H. Sweeney
-----------------------
Name: Gerard H. Sweeney
Title: President and Chief
Executive Officer
<PAGE>
GUARANTORS: LC/N HORSHAM LIMITED PARTNERSHIP, a
- ---------- Pennsylvania limited partnership
By: Witmer Operating Partnership I, L.P., a Delaware
limited partnership, its general partner
By: Brandywine Witmer, L.L.C., a Pennsylvania
limited liability company, its general
partner
By: Brandywine Operating Partnership, L.P., a
Delaware limited partnership, its sole
member
By: Brandywine Realty Trust, a
Maryland real estate investment
trust, its general partner
LC/N KEITH VALLEY LIMITED PARTNERSHIP I, a
Pennsylvania limited partnership
By: Witmer Operating Partnership I, L.P., a Delaware
limited partnership, its general partner
By: Brandywine Witmer, L.L.C., a Pennsylvania limited
liability company, its general partner
By: Brandywine Operating Partnership, L.P., a
Delaware limited partnership, its sole
member
By: Brandywine Realty Trust, a
Maryland real estate investment
trust, its general partner
<PAGE>
NICHOLS LANSDALE LIMITED PARTNERSHIP III,
a Pennsylvania limited partnership
By: Witmer Operating Partnership I, L.P.,
a Delaware limited partnership, its
general partner
By: Brandywine Witmer L.L.C., a
Pennsylvania limited liability
company, its general partner
By: Brandywine Operating
Partnership, L.P., a Delaware
limited partnership, its sole
member
By: Brandywine Realty Trust,
a Maryland real estate
investment trust, its
general partner
NEWTECH III LIMITED PARTNERSHIP, a
Pennsylvania limited partnership
By: Witmer Operating Partnership I, L.P.,
a Delaware limited partnership, its
general partner
By: Brandywine Witmer L.L.C., a
Pennsylvania limited liability
company, its general partner
By: Brandywine Operating
Partnership, L.P., a
Delaware limited partnership,
its sole member
By: Brandywine Realty Trust,
a Maryland real estate
investment trust, its
general partner
<PAGE>
WITMER OPERATING PARTNERSHIP I, L.P., a
Delaware limited partnership
By: Brandywine Witmer, L.L.C., a Pennsylvania
limited liability company, its general partner
By: Brandywine Operating Partnership, L.P., a
Delaware limited partnership, its sole member
By: Brandywine Realty Trust, a Maryland real
estate investment trust, its general
partner
NEWTECH IV LIMITED PARTNERSHIP, a
Pennsylvania limited partnership
By: Witmer Operating Partnership I, L.P., a Delaware
limited partnership, its general partner
By: Brandywine Witmer, L.L.C., a Pennsylvania
limited liability company, its general partner
By: Brandywine Operating Partnership, L.P., a
Delaware limited partnership, its sole
member
By: Brandywine Realty Trust, a
Maryland real estate investment
trust, its general partner
<PAGE>
C/N OAKLANDS LIMITED PARTNERSHIP I, a
Pennsylvania limited partnership
By: Witmer Operating Partnership I, L.P., a Delaware
limited partnership, its general partner
By: Brandywine Witmer, L.L.C., a Pennsylvania
limited liability company, its general partner
By: Brandywine Operating Partnership, L.P., a
Delaware limited partnership, its sole
member
By: Brandywine Realty Trust, a
Maryland real estate investment
trust, its general partner
FIFTEEN HORSHAM, L.P., a Pennsylvania limited
partnership
By: Witmer Operating Partnership I, L.P., a Delaware
limited partnership, its general partner
By: Brandywine Witmer, L.L.C., a Pennsylvania
limited liability company, its general partner
By: Brandywine Operating Partnership, L.P., a
Delaware limited partnership, its sole
member
By: Brandywine Realty Trust, a
Maryland real estate investment
trust, its general partner
<PAGE>
C/N LEEDOM LIMITED PARTNERSHIP II, a
Pennsylvania limited partnership
By: Brandywine Operating Partnership, L.P., a
Delaware limited partnership, its general partner
By: Brandywine Realty Trust, a Maryland
real estate investment trust, its
general partner
C/N IRON RUN LIMITED PARTNERSHIP III, a
Pennsylvania limited partnership
By: Brandywine Operating Partnership, L.P., a
Delaware limited partnership, its general partner
By: Brandywine Realty Trust, a Maryland
real estate investment trust, its
general partner
C/N OAKLANDS LIMITED PARTNERSHIP III, a
Pennsylvania limited partnership
By: Brandywine Operating Partnership, L.P., a
Delaware limited partnership, its general partner
By: Brandywine Realty Trust, a Maryland
real estate investment trust, its
general partner
IRON RUN LIMITED PARTNERSHIP V, a
Pennsylvania limited partnership
By: Brandywine Operating Partnership, L.P., a
Delaware limited partnership, its general partner
By: Brandywine Realty Trust, a Maryland
real estate investment trust, its
general partner
<PAGE>
BRANDYWINE TB I, L.P., a Pennsylvania limited
partnership
By: Brandywine TB I, L.L.C., a Pennsylvania
limited liability company, its general partner
By: Brandywine Operating Partnership, L.P., a
Delaware limited partnership, its sole
member
By: Brandywine Realty Trust, a Maryland
real estate investment trust, its
general partner
BRANDYWINE TB II, L.P., a Pennsylvania limited
partnership
By: Brandywine TB II, L.L.C., a Pennsylvania
limited liability ompany, its general partner
By: Brandywine Operating Partnership, L.P., a
Delaware limited partnership, its sole member
By: Brandywine Realty Trust, a Maryland
real estate investment trust, its
general partner
BRANDYWINE TB III, L.P., a Pennsylvania limited
partnership
By: Brandywine TB III, L.L.C., a Pennsylvania
limited liability company, its general partner
By: Brandywine Operating Partnership, L.P., a
Delaware limited partnership, its sole
member
By: Brandywine Realty Trust, a Maryland
real estate investment trust, its
general partner
<PAGE>
BRANDYWINE TB VI, L.P., a Pennsylvania limited
partnership
By: Brandywine TB VI, L.L.C., a Pennsylvania limited
liability company, its general partner
By: Brandywine Operating Partnership, L.P., a Delaware
limited partnership, its sole member
By: Brandywine Realty Trust, a Maryland real
estate investment trust, its general
partner
BRANDYWINE DOMINION, L.P., a Pennsylvania limited
partnership
By: Brandywine Dominion, L.L.C., a Pennsylvania limited
liability company, its general partner
By: Brandywine Operating Partnership, L.P., a Delaware
limited partnership, its sole member
By: Brandywine Realty Trust, a Maryland real
estate investment trust, its general
partner
BRANDYWINE P.M., L.P., a Pennsylvania limited partnership
By: Brandywine P.M., L.L.C., a Pennsylvania limited
liability company, its general partner
By: Brandywine Operating Partnership, L.P., a Delaware
limited partnership, its sole member
By: Brandywine Realty Trust, a Maryland real
estate investment trust, its general
partner
<PAGE>
BRANDYWINE I.S., L.P., a Pennsylvania limited
partnership
By: Brandywine I.S., L.L.C., a Pennsylvania limited
liability company, its general partner
By: Brandywine Operating Partnership, L.P., a Delaware
limited partnership, its sole member
By: Brandywine Realty Trust, a Maryland real
estate investment trust, its general
partner
BRANDYWINE CENTRAL, L.P., a Pennsylvania
limited partnership
By: Brandywine F.C., L.P., a Pennsylvania limited
partnership, its general partner
By: Brandywine F.C., L.L.C., a Pennsylvania limited
liability company, its general partner
By: Brandywine Operating Partnership, L.P., a
Delaware limited partnership, its sole
member
By: Brandywine Realty Trust, a
Maryland real estate investment
trust, its general partner
<PAGE>
APPOP 2, L.P., a Delaware limited partnership
By: AAP Sub Three, Inc., a Delaware corporation, one of
its general partners
By: Atlantic American Properties Trust, a Maryland
real estate investment trust, its sole shareholder
By: Brandywine Operating Partnership, L.P., a
Delaware limited partnership, its sole
shareholder
By: Brandywine Realty Trust, a Maryland real
estate investment trust, its general
partner
By: AAPOP Umbrella, L.P., a Delaware limited partnership,
one of its general partners
By: AAP Sub Two, Inc., a Delaware corporation, one of
its general partners
By: Atlantic American Properties Trust, a Maryland
real estate investment trust, its sole
shareholder
By: Brandywine Operating Partnership, L.P., a
Delaware limited partnership, its sole
shareholder
By: Brandywine Realty Trust, a
Maryland real estate investment
trust, its general partner
By: Atlantic American Properties Trust, a Maryland
real estate investment trust, one of its general
partners
By: Brandywine Operating Partnership, L.P., a
Delaware limited partnership, its sole
shareholder
By: Brandywine Realty Trust, a Maryland real
estate investment trust, its general
partner
<PAGE>
BRANDYWINE F.C., L.P., a Pennsylvania
limited partnership
By: Brandywine F.C., L.L.C., a Pennsylvania limited
liability company, its general partner
By: Brandywine Operating Partnership, L.P., a Delaware
limited partnership, its sole member
By: Brandywine Realty Trust, a Maryland real
estate investment trust, its general
partner
BRANDYWINE REALTY PARTNERS, a Pennsylvania
general partnership
By: Brandywine Operating Partnership, L.P., a
Delaware limited partnership, one of its
partners
By: Brandywine Realty Trust, a
Maryland real estate investment
trust, its general partner
BRANDYWINE ACQUISITIONS, LLC, a
Delaware limited liability company
By: Brandywine Operating Partnership, L.P., a Delaware
limited partnership, its sole member
By: Brandywine Realty Trust, a Maryland real estate
investment trust, its general partner
<PAGE>
BRANDYWINE MAIN STREET, LLC, a
Delaware limited liability company
By: Brandywine Operating Partnership, L.P., a Delaware
limited partnership, one of its members
By: Brandywine Realty Trust, a Maryland real estate
investment trust, its general partner
By: Brandywine Acquisitions, LLC, a Delaware limited
liability company, one of its members
By: Brandywine Operating Partnership, L.P., a Delaware
limited partnership, its sole member
By: Brandywine Realty Trust, a Maryland real
estate investment trust, its general
partner
1100 BRANDYWINE, LLC, a Delaware limited liability
company
By: Brandywine Operating Partnership, L.P., a Delaware
limited partnership, its sole member
By: Brandywine Realty Trust, a Maryland real estate
investment trust, its general partner
BRANDYWINE LEASING, LLC, a Delaware limited
liability company
By: Brandywine Operating Partnership, L.P., a Delaware
limited partnership, its sole member
By: Brandywine Realty Trust, a Maryland real estate
investment trust, its general partner
<PAGE>
BRANDYWINE TB I, L.L.C., a Pennsylvania limited
liability company
By: Brandywine Operating Partnership, L.P., a Delaware
limited partnership, its sole member
By: Brandywine Realty Trust, a Maryland real estate
investment trust, its general partner
BRANDYWINE TB II, L.L.C., a Pennsylvania limited
liability company
By: Brandywine Operating Partnership, L.P., a Delaware
limited partnership, its sole member
By: Brandywine Realty Trust, a Maryland real estate
investment trust, its general partner
BRANDYWINE TB III, L.L.C., a Pennsylvania limited
liability company
By: Brandywine Operating Partnership, L.P., a Delaware
limited partnership, its sole member
By: Brandywine Realty Trust, a Maryland real estate
investment trust, its general partner
BRANDYWINE TB VI, L.L.C., a Pennsylvania limited
liability company
By: Brandywine Operating Partnership, L.P., a Delaware
limited partnership, its sole member
By: Brandywine Realty Trust, a Maryland real estate
investment trust, its general partner
BRANDYWINE WITMER, L.L.C., a Pennsylvania
limited liability company
By: Brandywine Operating Partnership, L.P., a Delaware
limited partnership, its sole member
By: Brandywine Realty Trust, a Maryland real estate
investment trust, its general partner
<PAGE>
BRANDYWINE DOMINION, L.L.C., a Pennsylvania
limited liability company
By: Brandywine Operating Partnership, L.P., a Delaware
limited partnership, its sole member
By: Brandywine Realty Trust, a Maryland real estate
investment trust, its general partner
BRANDYWINE P.M., L.L.C., a Pennsylvania limited
liability company
By: Brandywine Operating Partnership, L.P., a Delaware
limited partnership, its sole member
By: Brandywine Realty Trust, a Maryland real estate
investment trust, its general partner
BRANDYWINE I.S., L.L.C., a Pennsylvania limited
liability company
By: Brandywine Operating Partnership, L.P., a Delaware
limited partnership, its sole member
By: Brandywine Realty Trust, a Maryland real estate
investment trust, its general partner
BRANDYWINE F.C., L.L.C., a Pennsylvania limited
liability company
By: Brandywine Operating Partnership, L.P., a Delaware
limited partnership, its sole member
By: Brandywine Realty Trust, a Maryland real estate
investment trust, its general partner
<PAGE>
BRANDYWINE TRENTON URBAN RENEWAL, L.L.C., a Delaware
limited liability company
By: Brandywine Operating Partnership, L.P., a Delaware
limited partnership, its sole member
By: Brandywine Realty Trust, a Maryland real estate
investment trust, its general partner
BRANDYWINE DABNEY, L.L.C., a Delaware limited
liability company
By: Brandywine Operating Partnership, L.P., a Delaware
limited partnership, its sole member
By: Brandywine Realty Trust, a Maryland real estate
investment trust, its general partner
BRANDYWINE AXINN I, LLC, a Delaware limited
liability company
By: Brandywine Operating Partnership, L.P., a Delaware
limited partnership, its sole member
By: Brandywine Realty Trust, a Maryland real estate
investment trust, its general partner
BRANDYWINE AXINN II, LLC, a Delaware limited
liability company
By: Brandywine Operating Partnership, L.P., a Delaware
limited partnership, its sole member
By: Brandywine Realty Trust, a Maryland real estate
investment trust, its general partner
<PAGE>
APP SUB THREE, INC., a Delaware corporation
By: /s/ Gerard H. Sweeney
---------------------------------------------
Gerard H. Sweeney
President and Chief Executive Officer of
each of the above-named entities
<PAGE>
LENDERS:
NATIONSBANC MORTGAGE CAPITAL CORP.,
acting in its capacity as Administrative Agent
and individually as a Lender
By: /s/ NationsBanc Mortgage Capital Corp.
-------------------------------------------
Name:
------------------------------------------
Title:
-----------------------------------------
<PAGE>
EXHIBIT 10.4
FOURTH AMENDMENT TO AMENDED AND RESTATED
AGREEMENT OF LIMITED PARTNERSHIP
OF
BRANDYWINE OPERATING PARTNERSHIP, L.P.
THIS FOURTH AMENDMENT, dated as of September 28, 1998 (the
"Amendment"), amends the Amended and Restated Agreement of Limited Partnership
Agreement (as heretofore amended to date, the "Partnership Agreement") of
BRANDYWINE OPERATING PARTNERSHIP, L.P., a Delaware limited partnership (the
"Partnership"). Capitalized terms used herein but not defined herein shall
have the meanings given to such terms in the Partnership Agreement.
BACKGROUND
A. Pursuant to the Partnership Agreement, Brandywine Realty
Trust (the "General Partner"), as the general partner of the Partnership, has
the power and authority to issue additional Partnership Interests and Units in
one or more newly created classes of Partnership Interests to persons on such
terms and conditions as the General Partner may deem appropriate.
B. The General Partner, pursuant to the exercise of such
power and authority and in accordance with the Partnership Agreement, has
determined to execute this Amendment to the Partnership Agreement to create a
new class of Partnership Interests designated as the Series A Preferred Mirror
Units having designations, preferences and other rights which are
substantially the same as the economic rights of the 7.25% Series A Cumulative
Convertible Preferred Shares of the General Partner (the "Series A Preferred
Shares") and to evidence the issuance of such additional Partnership Interests
to the General Partner in exchange for the General Partner's contribution to
the Partnership of the net proceeds of the sale of the Series A Preferred
Shares.
NOW, THEREFORE, in consideration of the mutual covenants and
agreements herein contained and other good and valuable consideration, the
receipt, adequacy and sufficiency of which are hereby acknowledged, the
parties hereto, intending to be legally bound, hereby amend the Partnership
Agreement as follows:
1. In accordance with the Partnership Agreement, the
Partnership Agreement is hereby amended to establish, and to issue to the
General Partner, the Series A Preferred Mirror Units having the designations,
preferences and other rights set forth below:
(a) Designation and Number. A class of Partnership
Interests designated as Series A Preferred Mirror Units is hereby established.
The number of Series A Preferred Mirror Units shall be 750,000 . The stated
value of each Series A Preferred Mirror Unit shall be $50.00 (the "Stated
Value").
(b) Rank. The Series A Preferred Mirror Units will,
with respect to distribution rights and rights upon liquidation, dissolution
or winding up of the Partnership, rank (a) senior to the Class A Units and all
Partnership Interests ranking junior to the Series A
<PAGE>
Preferred Mirror Units; (b) on a parity with all Partnership Interests issued
by the Partnership the terms of which specifically provide that such
Partnership Interests rank on a parity with the Series A Preferred Mirror
Units including the Partnership Interests designated as Class B Preferred
Units; and (c) junior to all Partnership Interests issued by the Partnership
the terms of which specifically provide that such Partnership Interests rank
senior to the Series A Preferred Mirror Units.
(c) Distributions.
(i) Pursuant to Section 6.1 of the
Partnership Agreement, holders of Series A Preferred Mirror Units shall be
entitled to receive, out of funds legally available therefor, cumulative
quarterly cash distributions equal to the amount of the cumulative quarterly
cash distributions payable on the Series A Preferred Shares. Such
distributions shall be payable quarterly in arrears on or before the date on
which distributions on the Series A Preferred Shares are payable (each a
"Series A Preferred Mirror Unit Distribution Payment Date").
(ii) No distributions on Series A
Preferred Mirror Units shall be authorized or paid or set apart for payment by
the Partnership at such time as the terms and provisions of any agreement of
the Partnership, including any agreement relating to its indebtedness,
prohibits such authorization, payment or setting apart for payment or provides
that such authorization, payment or setting apart for payment would constitute
a breach thereof, or a default thereunder, or if such authorization or payment
shall be restricted or prohibited by law.
(iii) Notwithstanding the foregoing,
distributions with respect to the Series A Preferred Mirror Units will accrue
whether or not the terms and provisions set forth in Section 1(c)(ii) at any
time prohibit the current payment of distributions, whether or not there are
funds legally available for such distributions and whether or not such
distributions are authorized. Accrued but unpaid distributions on the Series A
Preferred Mirror Units will accumulate as of the Series A Preferred Mirror
Unit Distribution Payment Date on which they first become payable.
(iv) When distributions are not paid in
full (or a sum sufficient for such full payment is not so set apart) upon the
Series A Preferred Mirror Units and any other Partnership Interests ranking on
a parity as to distributions with the Series A Preferred Mirror Units, all
distributions authorized upon the Series A Preferred Mirror Units and any
other Partnership Interests ranking on a parity as to distributions with the
Series A Preferred Mirror Units shall be authorized pro rata so that the
amount of distributions authorized per Partnership Unit of Series A Preferred
Mirror Units and such other Partnership Interests shall in all cases bear to
each other the same ratio that accrued distributions per Partnership Unit on
the Series A Preferred Mirror Units and such other Partnership Interests
(which shall not include any accrual in respect of unpaid distributions for
prior distribution periods if such other Partnership Interests do not have a
cumulative distribution) bear to each other. No interest, or sum of money in
lieu of
-2-
<PAGE>
interest, shall be payable in respect of any distribution payment or payments
on Series A Preferred Mirror Units which may be in arrears.
(v) Except as provided in Section
1(c)(iv), unless full cumulative distributions on the Series A Preferred
Mirror Units have been or contemporaneously are authorized and paid or
authorized and a sum sufficient for the payment thereof is set apart for
payment for all past distribution periods and the then current distribution
period, no distributions (other than in Partnership Interests ranking junior
to the Series A Preferred Mirror Units as to distributions and upon
liquidation) shall be authorized or paid or set aside for payment nor shall
any other distribution be authorized or made upon the Class A Units or any
other Partnership Interests ranking junior to or on a parity with the Series A
Preferred Mirror Units as to distributions or upon liquidation, nor shall any
Class A Units or any other Partnership Interests ranking junior to or on a
parity with the Series A Preferred Shares as to distributions or upon
liquidation be redeemed, purchased or otherwise acquired for any consideration
(or any moneys be paid to or made available for a sinking fund for the
redemption of any such units or other Partnership Interests) by the
Partnership or any other entity controlled directly or indirectly by the
Partnership (except by conversion into or exchange for Partnership Interests
ranking junior to the Series A Preferred Mirror Units as to distributions and
upon liquidation).
(vi) Holders of the Series A Preferred
Mirror Units shall not be entitled to any distribution, whether payable in
cash, property or Partnership Units in excess of full cumulative distributions
on the Series A Preferred Mirror Units as described above. Any distribution
payment made on the Series A Preferred Mirror Units shall first be credited
against the earliest accrued but unpaid distribution due with respect to such
Series A Preferred Mirror Units which remains payable.
(d) Liquidation Preference.
(i) Upon any voluntary or involuntary
liquidation, dissolution or winding up of the affairs of the Partnership, the
holders of Series A Preferred Mirror Units then outstanding are entitled to be
paid out of the assets of the Partnership available for distribution to the
Partners pursuant to Section 13.5(a) of the Partnership Agreement a
liquidation preference equal to the Stated Value per Series A Preferred Mirror
Unit, plus an amount equal to any accrued and unpaid distributions to the date
of payment, before any distribution of assets is made to holders of Class A
Units and GP Units or any other Partnership Interests that rank junior to the
Series A Preferred Mirror Units as to liquidation rights.
(ii) In the event that, upon any such
voluntary or involuntary liquidation, dissolution or winding up, the available
assets of the Partnership are insufficient to pay the amount of the
liquidating distributions on all outstanding Series A Preferred Mirror Units
and the corresponding amounts payable on all other Partnership Interests
ranking on a parity with the Series A Preferred Mirror Units in the
distribution of assets, then such assets shall be
-3-
<PAGE>
allocated among the Series A Preferred Mirror Units, as a class, and each
class or series of such other such Partnership Interests, as a class, in
proportion to the full liquidating distributions to which they would otherwise
be respectively entitled.
(iii) After payment of the full amount of
the liquidating distributions to which they are entitled, the holders of
Series A Preferred Mirror Units will have no right or claim to any of the
remaining assets of the Partnership.
(iv) The consolidation or merger of the
Partnership with or into any other partnership, corporation, trust or entity
or of any other partnership, corporation, trust or other entity with or into
the Partnership, or the sale, lease or conveyance of all or substantially all
of the property or business of the Partnership, shall not be deemed to
constitute a liquidation, dissolution or winding up of the Partnership for
purposes of this Section 1(d).
(e) Redemption. In connection with a redemption by
the General Partner, pursuant to the exercise of a Cash Redemption Right (as
defined in the General Partner's Declaration of Trust, as amended (the
"Declaration of Trust")), of any or all of the Series A Preferred Shares, the
Partnership shall provide cash to the General Partner for such purpose which
shall be equal to redemption price of the Series A Preferred Shares to be
redeemed and one Series A Preferred Mirror Unit shall be canceled with respect
to each Series A Preferred Share so redeemed. In connection with a redemption
by the General Partner, pursuant to the exercise of a Share Redemption Right
(as defined in the Declaration of Trust), of any or all of the Series A
Preferred Shares, the Partnership shall issue to the General Partner a number
of Class A Units equal to the number of Common Shares issued in payment of the
redemption price of the Class A Preferred Shares so redeemed, and one Series A
Preferred Mirror Unit for each Series A Preferred Share so redeemed shall be
canceled. From and after the date on which the Series A Preferred Shares are
redeemed, the Series A Preferred Mirror Units so canceled shall no longer be
outstanding and all rights hereunder, to distributions or otherwise, with
respect to such Series A Preferred Mirror Units shall cease.
(f) Conversion. In connection with, and at the time
of, the conversion of all or any Series A Preferred Shares into Common Shares,
a number of Series A Preferred Mirror Units equal to the number of Series A
Preferred Shares so converted shall be converted into a number of Class A
Units equal to the number of Common Shares issuable upon such conversion.
(g) Allocations. Allocations of the Partnership's
items of income, gain, loss and deduction shall be allocated among holders of
Series A Preferred Mirror Units in accordance with Article VII of the
Partnership Agreement.
-4-
<PAGE>
2. Section 13.5(a) of the Partnership Agreement is amending
redesignating subparagraph (iv) as subparagraph (v) and inserting the
following new subparagraph (iv):
(iv) Next, to the holders of Partnership Interests
that are entitled to any preference in distribution upon liquidation in
accordance with the rights of any such class or series of Partnership
Interests (and, within each such class or series, to each holder thereof pro
rata based on the proportion of the total number of outstanding units of such
class or series represented by such holder's units of such series or class);
and
3. Section 7.2 of the Partnership Agreement is amending by
inserting the following new subparagraph (g):
(g) Priority Allocation. All or a portion of the
Net Income of the Partnership for the Fiscal Year, if any, shall be specially
allocated to the Partners holding Series A Preferred Mirror Units and Series B
Preferred Units in proportion to the cumulative distributions each has
received pursuant to Sections 6.1, 6.2, and 13.5 hereof and, with respect to
the Partners holding Series A Preferred Mirror Units, Section 1(c) and 1(d) of
the Fourth Amendment to this Agreement or, with respect to Partners holding
Series B Preferred Units, Section 1.C and 1.D of the Fifth Amendment to this
Agreement, from the commencement of the Partnership to the end of such Fiscal
Year, in an amount equal to the excess, if any, of the sum of (i) the
aggregate Net Loss allocated to such Partners pursuant to Section 7.1(b)
hereof for all prior Fiscal Years, if any, and (ii) the aggregate
distributions received by such Partners pursuant to Sections 6.1, 6.2, and
13.5 of this Agreement and, with respect to Partners holding Series A
Preferred Mirror Units, Section 1(c) and 1(d) of the Fourth Amendment to this
Agreement or, with respect to Partners holding Series B Preferred Units,
Section 1C and 1D of the Fifth Amendment, from the commencement of the
Partnership to the end of such Fiscal Year, over the aggregate items of Net
Income allocated to such Partners pursuant to this Section 7.1(g) for all
prior Fiscal Years.
4. Except as expressly set forth in this Amendment to the
Partnership Agreement, the Partnership Agreement is hereby ratified and
confirmed in each and every respect.
-5-
<PAGE>
IN WITNESS WHEREOF, this Amendment to the Partnership
Agreement has been executed and delivered as of the date first above written.
GENERAL PARTNER:
BRANDYWINE REALTY TRUST
By: /s/ Gerard H. Sweeney
-----------------------------
Name: Gerard H. Sweeney
Its: President and Chief Executive Officer
-6-
<PAGE>
EXHIBIT 10.5
FIFTH AMENDMENT TO AMENDED AND RESTATED
AGREEMENT OF LIMITED PARTNERSHIP
OF
BRANDYWINE OPERATING PARTNERSHIP, L.P.
THIS FIFTH AMENDMENT, dated as of September 28, 1998 (the
"Amendment"), amends the Amended and Restated Agreement of Limited Partnership
Agreement (as heretofore amended to date, the "Partnership Agreement") of
BRANDYWINE OPERATING PARTNERSHIP, L.P., a Delaware limited partnership (the
"Partnership"). Capitalized terms used herein but not defined herein shall
have the meanings given to such terms in the Partnership Agreement.
BACKGROUND
Pursuant to the Partnership Agreement, Brandywine Realty Trust (the
"General Partner"), as the general partner of the Partnership, has the power
and authority to issue additional Partnership Interests and Units in one or
more newly created classes of Partnership Interests to persons on such terms
and conditions as the General Partner may deem appropriate.
The General Partner, pursuant to the exercise of such power and
authority and in accordance with the Partnership Agreement, has determined to
execute this Amendment to the Partnership Agreement to create a new class of
Partnership Interests to be designated as Series B Preferred Units and to
evidence the issuance of such additional Partnership Interests and the
admission of the other signatories hereto as Limited Partners of the
Partnership in exchange for certain contributions of interests in real estate
and real estate related assets that are being made to the Partnership on the
date hereof pursuant to that certain Purchase and Contribution Agreement,
dated as of August 6, 1998, among the Partnership and the other signatories
thereto.
NOW, THEREFORE, in consideration of the mutual covenants and
agreements herein contained and other good and valuable consideration, the
receipt, adequacy and sufficiency of which are hereby acknowledged, the
parties hereto, intending to be legally bound, hereby amend the Partnership
Agreement as follows:
1. In accordance with the Partnership Agreement, the Partnership
Agreement is hereby amended to establish, and to issue to the Persons set
forth on Schedule A attached hereto, the Series B Preferred Units having the
designations, preferences and other rights set forth below:
A. Designation and Number. A class of Partnership Interests
designated as Series B Preferred Units is hereby established. The number of
Series B Preferred Units shall be 1,950,000. The stated value of a Series B
Preferred Unit shall be $50.00 (the "Stated Value").
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B. Rank. The Series B Preferred Units shall, with respect to
distribution rights and rights upon liquidation, dissolution or winding up of
the Partnership, rank (i) senior to the Class A Units and to all Partnership
Interests ranking junior to the Series B Preferred Units; (ii) on a parity
with all Partnership Interests issued by the Partnership the terms of which
specifically provide that such Partnership Interests rank on a parity with the
Series B Preferred Units including the Partnership Interests designated as
Series A Preferred Mirror Units; and (iii) junior to all Partnership Interests
the terms of which specifically provide that such Partnership Interests rank
junior to the Series B Partnership Units.
C. Distributions.
(i) Pursuant to Section 6.1 of the Partnership Agreement, the
holders of Series B Preferred Units shall be entitled to receive, out of funds
legally available for that purpose, cumulative distributions payable in cash
in an amount per Series B Preferred Unit equal to the greater of (a) $0.9063
per quarter (equivalent to $3.625 per annum) or (b) the cash distributions
paid or payable on the number of Class A Units, or portion thereof, into which
a Series B Preferred Unit is convertible, in each case with appropriate
proration for partial quarters. The amount referred in clause (b) of this
subsection C(i) with respect to each Distribution Period (as defined in
subsection J below) shall be determined as of the applicable Distribution
Payment Date (as defined in subsection J below) by multiplying the number of
Class A Units, or portion thereof calculated to the fourth decimal point, into
which a Series B Preferred Unit would be convertible at the opening of
business on such Distribution Payment Date (based on the Conversion Price (as
defined in subsection G below) then in effect) by the quarterly cash
distribution payable or paid by the Partnership for such Distribution Period
in respect of a Class A Unit outstanding as of the record date for the payment
of distributions on the Class A Units with respect to such Distribution Period
or, if different, with respect to the most recent quarterly period for which
distributions with respect to the Class A Units have been declared by the
Partnership. Such distributions shall be cumulative from the Issue Date (as
defined in subsection J below), whether or not in any Distribution Period or
Periods such distributions shall be authorized or there shall be funds of the
Partnership legally available for the payment of such distributions, and shall
be payable quarterly in arrears on the Distribution Payment Dates, commencing
on the first Distribution Payment Date after the Issue Date. Each such
distribution shall be payable in arrears to the holders of record of the
Series B Preferred Units, as they appear on the records of the Partnership at
the close of business on a record date which shall be not less than 10 and not
more than 60 days prior to the applicable Distribution Payment Date and shall
be fixed by the Partnership, acting through the General Partner, to coincide
with the record date for the regular quarterly distributions, if any, payable
by the Partnership with respect to the Class A Units. Accumulated, accrued and
unpaid distributions for any past Distribution Periods may be authorized and
paid at any time, without reference to any regular Distribution Payment Date,
to holders of record on a given date, which date shall not precede by more
than 45 days the payment date thereof, as may be fixed by the Partnership,
acting through the General Partner. The amount of accumulated, accrued and
unpaid distributions on any Series B Preferred Unit, or fraction thereof,
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at any date shall be the amount of any distributions thereon calculated at the
applicable rate to and including such date, whether or not earned or
authorized, which have not been paid in cash. The amount of distributions
payable per Series B Preferred Unit for the initial Distribution Period, or
any other period shorter or longer than a full Distribution Period, shall be
computed ratably on the basis of four 90-day quarters and a 364-day year.
(ii) No distribution on the Series B Preferred Units shall be
authorized or paid or set apart for payment by the Partnership at such time as
the terms and provisions of any agreement of the Partnership, including any
agreement relating to its indebtedness, prohibits such authorization, payment
or setting apart for payment or provides that such authorization, payment or
setting apart for payment would constitute a breach thereof, or a default
thereunder, or if such authorization or payment shall be restricted or
prohibited by law. No interest, or sum of money in lieu of interest, shall be
payable in respect of any distribution payment or payments on the Series B
Preferred Units which may be in arrears.
Notwithstanding the foregoing, distributions on the Series B
Preferred Units shall accumulate whether or not any of the foregoing
restrictions exist, whether or not there are funds legally available for the
payment thereof and whether or not such distributions are authorized.
Accumulated but unpaid distributions on the Series B Preferred Units shall not
bear interest and holders of the Series B Preferred Units shall not be
entitled to any distributions in excess of full cumulative distributions. Any
distribution payment made on the Series B Preferred Units shall first be
credited against the earliest accumulated but unpaid distribution due with
respect to such Series B Preferred Units which remains payable.
(iii) Except as provided in subsection C(iv) below, no
distributions (other than in Class A Units or Partnership Interests ranking
junior to the Series B Preferred Units as to distributions and upon
liquidation, dissolution or winding up of the Partnership) shall be authorized
or paid or set aside for payment nor shall any other distribution be
authorized or made upon the Class A Units or any other Partnership Interests
ranking, as to distributions or upon liquidation, dissolution or winding up of
the Partnership, on a parity with or junior to the Series B Preferred Units
for any period unless full cumulative distributions have been or
contemporaneously are authorized and paid or authorized and a sum sufficient
for the payment thereof set apart for such payment on the Series B Preferred
Units for all past distribution periods and the then current distribution
period, nor shall any Class A Units, or any Partnership Interests ranking
junior to or on a parity with the Series B Preferred Units as to distributions
or upon liquidation, dissolution or winding up of the Partnership, be
redeemed, purchased or otherwise acquired for any consideration (or any monies
be paid to or made available for a sinking fund for the redemption of any such
Partnership Interests) by the Partnership or any other entity controlled
directly or indirectly by the Partnership (except by conversion into or
exchange for Partnership Interests ranking junior to the Series B Preferred
Units as to distributions and upon liquidation, dissolution or winding up of
the Partnership or for the repurchase of Class A Units held by employees,
officers or consultants of the
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Partnership (or their permitted transferees) that are subject to restrictive
share purchase agreements under which the Partnership has the option or
obligation to repurchase such shares upon the occurrence of certain events,
such as termination of employment).
(iv) When distributions are not paid in full (or a sum
sufficient for such full payment is not so set apart) upon the Series B
Preferred Units and any other Partnership Interests ranking on a parity as to
distributions with the Series B Preferred Units, all distributions authorized
with respect to the Series B Preferred Units and any other Partnership
Interests ranking on a parity as to distributions with the Series B Preferred
Units shall be authorized pro rata so that the amount of distributions
authorized with respect to the Series B Preferred Units and such other
Partnership Interests shall in all cases bear to each other the same ratio
that accumulated distributions with respect to the Series B Preferred Units
and such other Partnership Interests (which shall not include any accumulation
in respect of unpaid distributions for prior distribution periods if such
Partnership Interests do not have a cumulative distribution) bear to each
other.
(v) Holders of Series B Preferred Units shall not be entitled
to any distribution, whether payable in cash, property or shares, in excess of
full cumulative distributions on the Series B Preferred Units as described
above. Accumulated but unpaid distributions on the Series B Preferred Units
will accumulate as of the Distribution Payment Date on which they first become
payable.
D. Liquidation Preference.
(i) Upon any voluntary or involuntary liquidation, dissolution
or winding up of the affairs of the Partnership, the holders of the Series B
Preferred Units shall be entitled to receive out of the assets of the
Partnership available for distribution to the Partners pursuant to Section
13.5(a) of the Partnership Agreement a liquidation preference equal to the
Stated Value per Series B Preferred Unit, plus an amount equal to any
accumulated and unpaid distributions to the date of payment, before any
distribution of assets is made to holders of Class A Units, GP Units or any
other Partnership Interests that rank junior to the Series B Preferred Units
as to liquidation rights.
(ii) If upon any such voluntary or involuntary liquidation,
dissolution or winding up of the Partnership, the assets of the Partnership
are insufficient to pay the amount of such liquidating distributions on all
outstanding Series B Preferred Units and the corresponding amounts payable on
all other Partnership Interests ranking on a parity with the Series B
Preferred Units in the distribution of assets, then such assets shall be
allocated among the Series B Preferred Units, as a class, and each class or
series of such other Partnership Interests, as a class, in proportion to the
full liquidating distributions to which they would otherwise be respectively
entitled.
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(iii) Written notice of any such liquidation, dissolution or
winding up of the Partnership, stating the payment date or dates when, and the
place or places where, the amounts distributable in such circumstances shall
be payable, shall be given by first class mail, postage pre-paid, not less
than 30 nor more than 60 days prior to the payment date stated therein, to
each record holder of the Series B Preferred Units at the respective addresses
of such holders as the same shall appear on the records of the Partnership.
(iv) After payment of the full amount of the liquidating
distributions to which they are entitled, the holders of Series B Preferred
Units shall have no right or claim to any of the remaining assets of the
Partnership.
(v) None of a consolidation or merger of the Partnership with
or into any other partnership, corporation, trust or entity or of any other
partnership, corporation, trust or other entity with or into the Partnership,
or the sale, lease or conveyance of all or substantially all of the property
or business of the Partnership shall be considered a liquidation, dissolution
or winding up of the Partnership.
E. Redemption.
(i) Cash Redemption Right. On and after January 2, 2004 and, in
addition, at any time after the Issue Date that the Current Market Price (as
defined in subsection J below) of the Common Shares (as defined in subsection
J below) has equaled or exceeded 120% of the Conversion Price for any 60
consecutive Trading Days (as defined in subsection J below), the Partnership,
upon giving notice as provided below, may redeem the Series B Preferred Units,
in whole or in part, for a redemption price per Series B Preferred Unit
payable in cash equal to the Stated Value (the "Cash Redemption Right").
(ii) Class A Unit Redemption Right. If (i) at any time during
the period commencing on the Issue Date and ending on January 1, 2004, the
Current Market Price of the Common Shares has equaled or exceeded 120% of the
Conversion Price for any 60 consecutive Trading Days or (ii) at any time on or
after January 2, 2004, the Current Market Price of the Common Shares has
equaled or exceeded 110% of the Conversion Price for 60 consecutive Trading
Days, the Partnership, upon giving notice as provided below, may redeem the
Series B Preferred Units, in whole or in part, for such number of Class A
Units as equals the Stated Value of the Series B Preferred Units to be
redeemed divided by the Conversion Price as of the opening of business on the
date set for such redemption (the " Class A Unit Redemption Right").
(iii) Limitations on Redemption.
(a) The Partnership may exercise the Cash Redemption Right
provided that the redemption price (other than the portion thereof consisting
of accumulated
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and unpaid distributions) is payable solely out of the sale proceeds of other
Partnership Interests (or of rights or options to purchase Partnership
Interests) or proceeds contributed to the Partnership from the sale of equity
securities of the General Partner, and from no other source. For purposes of
the preceding sentence, "equity securities" means any equity securities,
shares, interest, participation or other ownership interests (however
designated) and any rights (other than debt securities convertible into or
exchangeable for equity securities) or options to purchase any of the
foregoing.
(b) If fewer than all of the outstanding Series B Preferred
Units are to be redeemed, the Series B Preferred Units to be redeemed shall be
determined pro rata or by lot or in such other manner as determined by the
Partnership, acting through the General Partner.
(c) Notwithstanding anything to the contrary contained herein,
unless full cumulative distributions on all Series B Preferred Units shall
have been or contemporaneously are authorized and paid or authorized and a sum
sufficient for the payment thereof set apart for payment for all past
distribution periods and the current distribution period, no Series B
Preferred Units shall be redeemed unless all outstanding Series B Preferred
Units are simultaneously redeemed or exchanged; provided, however, that the
foregoing shall not prevent the purchase or acquisition of Series B Preferred
Units pursuant to a purchase or exchange offer made on the same terms to
holders of all outstanding Series B Preferred Units. In addition, unless full
cumulative distributions on all outstanding Series B Preferred Units have been
or contemporaneously are authorized and paid or authorized and a sum
sufficient for the payment thereof set apart for payment for all past
distributions periods and the then current distribution period, the
Partnership shall not purchase or otherwise acquire directly or indirectly any
Series B Preferred Units or any Partnership Interests ranking junior to or on
a parity with the Series B Preferred Units as to distributions or upon
liquidation, dissolution or winding up of the Partnership (except by
conversion into or exchange for Partnership Interests ranking junior to the
Series B Preferred Units as to distributions and upon liquidation, dissolution
or winding up of the Partnership or for the repurchase of Class A Units held
by employees, officers or consultants of the Partnership (or their permitted
transferees) that are subject to restrictive share purchase agreements under
which the Partnership has the option or obligation to repurchase such shares
upon the occurrence of certain events, such as termination of employment).
(d) Immediately prior to any redemption of Series B Preferred
Units, the Partnership shall pay, in cash, any accumulated and unpaid
distributions through the Redemption Date (as defined in subsection E(iv)
below), unless a Redemption Date falls after a Distribution Record Date and on
or prior to the corresponding Distribution Payment Date, in which case each
holder of Series B Preferred Units at the close of business on such
Distribution Record Date shall be entitled to the distribution payable on such
Series B Preferred Units on the corresponding Distribution Payment Date
notwithstanding the redemption of such Series B Preferred Units on or prior to
such Distribution Payment Date. Except as provided above, the
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<PAGE>
Partnership will make no payment or allowance for unpaid distributions,
whether or not in arrears, on Series B Preferred Units for which a notice of
redemption has been given.
(iv) Procedures for Redemption.
(a) Notice of redemption shall be mailed, not less than 30 nor
more than 60 days, prior to the date fixed for redemption set forth in such
notice (the "Redemption Date") to each holder of record of Series B Preferred
Units to be redeemed, notifying such holder of the Partnership's election to
redeem such Series B Preferred Units. Such notice shall mailed to such
holder's address as the same appears on the records of the Partnership. No
failure to give such notice or any defect therein or in the mailing thereof
shall affect the validity of the proceedings for the redemption of any Series
B Preferred Units except as to the holder to whom notice was defective or not
given.
(b) In addition to any information required by law, such notice
shall state: (1) the Redemption Date, (2) with respect to the Cash Redemption
Right, the cash redemption price per Series B Preferred Unit and, with respect
to the Class A Unit Redemption Right, the number of Class A Units to be issued
with respect to each Series B Preferred Unit, (3) the number of Series B
Preferred Units to be redeemed (and, if fewer than all the Series B Preferred
Units are to be redeemed from such holder, the number of Series B Preferred
Units to be redeemed from such holder), (4) the place or places where
certificates for such Series B Preferred Units are to be surrendered for
payment of the redemption price in cash, with respect to the Cash Redemption
Right, and in certificates representing Class A Units, with respect to the
Share Redemption Right, (5) that distributions on the Series B Preferred Units
to be redeemed will cease to accumulate on such Redemption Date and (6) the
date upon which the holder's conversion rights, if any, as to such Series B
Preferred Units shall terminate.
(c) On or after the Redemption Date, each holder of Series B
Preferred Units to be redeemed shall present and surrender the certificates
evidencing its Series B Preferred Units to the Partnership at the place
designated in the notice of redemption and thereupon the redemption price (in
cash or Class A Units, as applicable) of such Series B Preferred Units shall
be paid to or on the order of the person whose name appears on such
certificate evidencing Series B Preferred Units as the owner thereof and each
surrendered certificate shall be canceled. If fewer than all the Series B
Preferred Units evidenced by any such surrendered certificate are to be
redeemed, a new certificate shall be issued evidencing the unredeemed Series B
Preferred Units.
(d) From and after the Redemption Date (unless the Partnership
defaults in payment of the redemption price), all distributions on the Series
B Preferred Units designated for redemption in such notice shall cease to
accumulate and all rights of the holders thereof, except the right to receive
the redemption price thereof (including all accumulated and
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unpaid distributions up to the Redemption Date), shall cease and terminate and
such Series B Preferred Units shall not thereafter be transferred (except with
the consent of the General Partner) on the Partnership's books, and such
Series B Preferred Units shall not be deemed to be outstanding for any purpose
whatsoever. At its election, the Partnership, acting through its General
Partner, prior to a Redemption Date, may irrevocably deposit the redemption
price (including accumulated and unpaid distributions) of the Series B
Preferred Units so called for redemption in trust for the holders thereof with
a bank or trust company, in which case the redemption notice to holders of the
Series B Preferred Units to be redeemed shall (i) state the date of such
deposit, (ii) specify the office of such bank or trust company as the place of
payment of the redemption price and (iii) require such holders to surrender
the certificates evidencing such Series B Preferred Units at such place on or
about the date fixed in such redemption notice (which may not be later than
the Redemption Date) against payment of the redemption price (including all
accumulated and unpaid distributions to the Redemption Date). At the close of
business on a Redemption Date relating to the Partnership's Class A Unit
Redemption Right, each holder of Series B Preferred Units to be so redeemed
(unless the Trust defaults in the delivery of the Class A Units payable on
such Redemption Date) shall be deemed to be the record holder of the number of
Class A Units into which such Series B Preferred Units are to be so redeemed,
regardless of whether such holder has surrendered the certificates evidencing
the Series B Preferred Units. Any monies or Class A Units so deposited which
remain unclaimed by the holders of the Series B Preferred Units at the end of
two years after the Redemption Date shall be returned by such bank or trust
company to the Trust.
F. Voting Rights.
(i) Holders of the Series B Preferred Units shall not have any
voting rights, except as described below.
(ii) Whenever distributions on any Series B Preferred Units
shall be in arrears for six or more quarterly periods (a "Preferred
Distribution Default"), the holders of the outstanding Series B Preferred
Units shall be entitled to elect two individuals (the "Preferred Unit
Representatives"), which individuals shall be entitled to vote on their behalf
on the matters set forth in subparagraph (iv) below. Such election shall be
held at a special meeting called by the holders of record of at least 10% of
the outstanding Series B Preferred Units.
(iii) If and when all accumulated distributions and the
distribution for the current distribution period on the Series B Preferred
Units shall have been paid in full or set aside for payment in full, the
holders of Series B Preferred Units, acting through the Preferred Unit
Representatives, shall be divested of the voting rights set forth in
subsection F(iv) below (subject to revesting in the event of each and every
Preferred Distribution Default) and the term of office of each Preferred Unit
Representative so elected shall terminate. So long as a Preferred Distribution
Default shall continue, any vacancy in the office of a Preferred Unit
Representative may be filled by written consent of the Preferred Unit
Representative remaining in office, or if there is no such remaining
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<PAGE>
representative, by vote of holders of a majority of the outstanding Series B
Preferred Units. Any Preferred Unit Representative may be removed at any time
with or without cause by the vote of, and shall not be removed otherwise than
by the vote of, the holders of record of a majority of the outstanding Series
B Preferred Units when they have the voting rights set forth in subsection
F(iv) below.
(iv) For so long as a Preferred Distribution Default shall
continue, any action to be taken by the Partnership at the direction of the
General Partner and as to which the General Partner may act only upon
authorization by its Board of Trustees (the "Board") may only be taken if such
action is approved by a majority in number of the members of Board and the
Preferred Unit Representatives voting together as a group.
(v) So long as any Series B Preferred Units remain outstanding,
the Partnership shall not, without the affirmative vote or consent of the
holders of at least two-thirds of Series B Preferred Units outstanding at the
time, given in person or by proxy, either in writing or at a meeting, (a)
authorize or create, or increase the authorized or issued amount of, any class
or series of Partnership Interests ranking prior to Series B Preferred Units
with respect to the payment of distributions or the distribution of assets
upon voluntary or involuntary liquidation, dissolution or winding up of the
Partnership or reclassify any previously designated Partnership Interests into
such Partnership Interests, or create, authorize or issue any obligation or
Partnership Interests convertible or exchangeable into or evidencing the right
to purchase any such Partnership Interests; or (b) amend, alter or repeal the
provisions of the Partnership Agreement, whether by merger, consolidation or
otherwise, or consummate a merger or consolidation involving the Partnership
(any such merger or consolidation, an "Event"), so as to materially and
adversely affect any right, preference, privilege or voting power of such
Series B Preferred Units or the holders thereof; provided, however, with
respect to the occurrence of any of the Events set forth in (b) above, the
occurrence of any such Event shall not be deemed to materially adversely
affect such rights, preferences, privileges or voting powers of holders of
Series B Preferred Units if immediately after any such Event (i) in which the
Partnership is the surviving entity, there are outstanding no equity
securities ranking as to distribution rights or liquidation preference senior
to the Series B Preferred Units other than the securities of the Partnership
outstanding prior to such Event, (ii) in which the Partnership is not the
surviving entity, as a result of the Event, the holders of the Series B
Preferred Units receive shares of stock or other equity securities with
preferences, rights and privileges substantially similar to the preferences,
rights and privileges of the Series B Preferred Units and there are
outstanding no shares of stock or other equity securities of the surviving
entity ranking as to distribution rights or liquidation preference senior to
the Series B Preferred Units other than the securities issued in respect of
securities of the Partnership outstanding prior to such Event or (iii) whether
or not the Partnership is the surviving entity, there are no outstanding
equity securities of the Partnership or its successor (other than securities
of the Partnership outstanding prior to such Event, or securities issued in
respect of securities of the Partnership outstanding prior to such Event)
ranking as to distribution rights or liquidation preference senior to the
Series B Preferred Units; and
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provided further that any increase in the amount of authorized Preferred Units
or the creation or issuance of any class or series of Preferred Units (other
than the Series B Preferred Units), in each case ranking on a parity with or
junior to the Series B Preferred Units with respect to payment of
distributions and the distribution of assets upon voluntary or involuntary
liquidation, dissolution or winding up of the Partnership, shall not be deemed
to materially and adversely affect such rights, preferences, privilege or
voting powers.
(vi) Notwithstanding anything to the contrary contained herein,
the creation or issuance of any series of Preferred Units that is subject to
mandatory redemption at a scheduled date or dates or that has the benefit of a
sinking fund or that is subject to redemption at the option of the Partnership
or the holder but that otherwise ranks on a parity with or junior to the
Series B Preferred Units with respect to payment of distributions and the
distribution of assets upon voluntary or involuntary liquidation, dissolution
or winding up of the Partnership shall not require the affirmative vote or
consent of all or any of the holders of the Series B Preferred Units.
(vii) The foregoing voting provisions shall not apply if, at or
prior to the time when the act with respect to which such vote would otherwise
be required shall be effected, all outstanding Series B Preferred Units shall
have been converted, redeemed or called for redemption upon proper notice and
sufficient funds or Class A Units, as applicable, shall have been deposited in
trust to effect such redemption.
G. Conversion.
(i) Each whole (but not fractional) Series B Preferred Unit
shall be convertible at any time, at the option of the holder thereof, into
such number of Class A Units as is equal to the quotient that results from
dividing (i) the sum of (X) the Stated Value plus (Y) accrued and unpaid
distributions on such Class B Preferred Unit (other than such accrued and
unpaid distributions that the General Partner elects to pay in cash at the
time of conversion) by (ii) a conversion price (the "Conversion Price") of
$28.00 per Series B Preferred Unit; provided, however, that if the average
Current Market Price of the Common Shares during the 60-Trading Day period
ending on December 31, 2003 is $23.00 or lower then the Conversion Price shall
automatically be reduced from $28.00 to $26.50, subject to adjustment as
described in subsection G(v) below; provided, further, that the right to
convert Series B Preferred Units called for redemption pursuant to subsection
E above shall terminate at the close of business on the Redemption Date,
unless the Partnership shall default in making payment of the redemption
price.
(ii) To exercise the conversion right, the holder of each
Series B Preferred Unit to be converted shall surrender the certificate
evidencing such Series B Preferred Unit, duly endorsed or assigned to the
Partnership or in blank, at the principal office of the Partnership
accompanied by written notice to the Partnership that the holder thereof
elects to convert such Series B Preferred Unit. Unless the Class A Units
issuable on conversion are to be issued in the same name
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as the name in which such Series B Preferred Unit is registered, in which case
the Partnership shall bear the related taxes, each Series B Preferred Unit
surrendered for conversion shall be accompanied by instruments of transfer, in
form satisfactory to the General Partner, duly executed by the holder or such
holder's duly authorized attorney and an amount sufficient to pay any transfer
or similar tax (or evidence reasonably satisfactory to the General Partner
demonstrating that such taxes have been paid).
(iii) Each conversion shall be deemed to have been effected
immediately prior to the close of business on the date on which the
certificates for Series B Preferred Units shall have been surrendered and such
notice (and if applicable, payment of an amount equal to the distribution
payable on such shares) received by the Partnership as aforesaid, and the
person or persons in whose name or names any certificate or certificates for
Class A Units shall be issuable upon such conversion shall be deemed to have
become the holder or holders of record of the Class A Units evidenced thereby
at such time on such date, and such conversion shall be at the Conversion
Price in effect at such time and on such date unless the unit transfer books
of the Partnership shall be closed on that date, in which event such person or
persons shall be deemed to have become such holder or holders of record at the
close of business on the next succeeding day on which such unit transfer books
are open, but such conversion shall be at the Conversion Price in effect on
the date on which such shares have been surrendered and such notice received
by the Partnership.
(iv) Holders of Series B Preferred Units at the close of
business on a Distribution Record Date shall be entitled to receive the
distribution payable on such Series B Preferred Units on the corresponding
Distribution Payment Date notwithstanding the conversion of such Series B
Preferred Units following such Distribution Record Date and prior to such
Distribution Payment Date. However, certificates evidencing Series B Preferred
Units surrendered for conversion during the period between the close of
business on any Distribution Record Date and ending with the opening of
business on the corresponding Distribution Payment Date (except shares
converted after the issuance of a notice of redemption with respect to a
Redemption Date during such period or coinciding with such Distribution
Payment Date) shall be accompanied by payment of an amount equal to the
distribution payable on such Series B Preferred Units on such Distribution
Payment Date. A holder of Series B Preferred Units on a Distribution Record
Date who (or whose transferee) tenders any such Series B Preferred Units for
conversion into Class A Units on such Distribution Payment Date shall receive
the distribution payable by the Partnership on such Series B Preferred Units
on such date, and the converting holder need not include payment of the amount
of such distribution upon surrender of certificates representing such Series B
Preferred Units for conversion. Except as provided above, the Partnership
shall make no payment or allowance for unpaid distributions, whether or not in
arrears, on converted Series B Preferred Units or for distribution on the
Class A Units that are issued upon such conversion.
As promptly as practicable after the surrender of certificates for
Series B Preferred Units as aforesaid, the Partnership shall issue and shall
deliver at such office to such holder, or on
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such holder's written order, a certificate or certificates for the number of
full Class A Units issuable upon the conversion of such Series B Preferred
Units in accordance with the provisions of this Subsection G.
(v) Reclassification of Class A Units; Conversion Price Adjustment.
(a) (1) In the event of any adjustment to the number of
outstanding Class A Units pursuant to Section 15.4 of the Partnership
Agreement, the Conversion Price in effect at the opening of business on the
day following the day on which such adjustment becomes effective shall be
adjusted so that the holder of any Series B Preferred Units thereafter
surrendered for conversion shall be entitled to receive the number of Class A
Units that such holder would have been entitled to receive after the effective
date of such adjustment had such Series B Preferred Units been converted
immediately prior to the effective date of such adjustment.
(2) If the Partnership shall after the Issue Date (A) pay or
make a distribution to all holders of its Class A Units and GP Units in Class
A Units and GP Units, as applicable, (B) subdivide its outstanding Class A
Units and GP Units into a greater number of units, (C) combine its outstanding
Class A Units and GP Units into a smaller number of units or (D) issue any
units by reclassification of its Class A Units and GP Units, in each case
other than in connection with an adjustment under Section 15.4 of the
Partnership Agreement (or any successor provision), the Conversion Price in
effect at the opening of business on the day following the date fixed for the
determination of holders of Class A Units and GP Units entitled to receive
such distribution or at the opening of business on the day following the day
on which such subdivision, combination or reclassification becomes effective,
as the case may be, shall be adjusted so that the holder of any Series B
Preferred Units thereafter surrendered for conversion shall be entitled to
receive the number of Class A Units that such holder would have owned or have
been entitled to receive after the happening of any of the events described
above had such Series B Preferred Units been converted immediately prior to
the record date in the case of a distribution or the effective date in the
case of a subdivision, combination or reclassification. An adjustment made
pursuant to this subsection (2) shall become effective immediately after the
opening of business on the day next following the record date (except as
provided in subsection G(v)(d) below) in the case of a distribution and shall
become effective immediately after the opening of business on the day next
following the effective date in the case of a subdivision, combination or
reclassification.
(b) (1) If the Trust shall issue after the Issue Date
rights, options or warrants to all holders of Common Shares entitling them
(for a period expiring within 45 days after the record date mentioned below)
to subscribe for or purchase Common Shares at a price per share less than the
Fair Market Value per Common Share on the record date fixed for the
determination of shareholders entitled to receive such rights, options or
warrants (any of the foregoing being hereinafter in this subsection (1)
sometimes called the "Securities"), then the Conversion Price shall be
adjusted so that it shall equal the price determined by multiplying (I) the
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Conversion Price in effect immediately prior to the close of business on the
record date fixed for the determination of shareholders entitled to receive
such distribution by (II) a fraction, the numerator of which shall be the sum
of (A) the number of Common Shares outstanding on the close of business on the
record date fixed for the determination of shareholders entitled to receive
such distribution and (B) the number of shares that the aggregate proceeds to
the Trust from the issuance and the exercise of such rights, options or
warrants for Common Shares would purchase at such Fair Market Value, and the
denominator of which shall be the sum of (A) the number of Common Shares
outstanding on the close of business on the record date fixed for the
determination of shareholders entitled to receive such distribution and (B)
the number of additional Common Shares offered for subscription or purchase
pursuant to such rights, options or warrants. Such adjustment shall become
effective immediately upon the opening of business on the business day next
following the record date fixed for the determination of shareholders entitled
to receive such distribution (subject to paragraph G(v)(d) below). In
determining whether any rights, options or warrants entitle the holders of
Common Shares to subscribe for or purchase Common Shares at less than such
Fair Market Value, there shall be taken into account any consideration
received by the Trust upon issuance and upon exercise of such rights, options
or warrants, the value of such consideration, if other than cash, to be
determined by the General Partner, whose determination shall be conclusive.
For the purposes of this subsection (1), the distribution of a Security, which
is distributed not only to the holders of the Common Shares on the record date
fixed for the determination of shareholders entitled to receive such
distribution of such Security, but also is distributed or distributable with
each Common Share issued or issuable upon redemption of each Class A Unit
issued or issuable upon redemption or conversion of Series B Preferred Units
after such determination date, shall not require an adjustment of the
Conversion Price pursuant to this subsection (1); provided that on the date,
if any, on which a person receiving Common Shares issued or issuable upon
redemption of Class A Units issued or issuable upon redemption or conversion
of Series B Preferred Units would no longer be entitled to receive such
Security with a Common Share (other than as a result of the termination of all
such Securities), a distribution of such Securities shall be deemed to have
occurred, and the Conversion Price shall be adjusted as provided in this
subsection (1) (and such day shall be deemed to be "the record date fixed for
the determination of the shareholders entitled to receive such distribution"
within the meaning of this subsection (1)). For the purposes of this
subsection (1), if in connection with the distribution of a Security to the
holders of the Common Shares an adjustment is made to the Conversion Price
pursuant to subsection G(v)(a)(1) above that reflects the anti-dilution
provisions of this subsection (1), no additional adjustment to the Conversion
Price need be made pursuant to this subsection (1). In the event that any such
rights, options or warrants expire unexercised or are canceled prior to
exercise, the Conversion Price (if previously adjusted on account of the
issuance of such rights, options or warrants) shall be adjusted so that it
shall equal the price it would have been had such rights, options or warrants
not been issued.
(2) If the Partnership shall issue after the Issue Date
rights, options or warrants to all holders of Class A Units and GP Units
entitling them (for a period expiring within 45 days after the record date
mentioned below) to subscribe for or purchase Class
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A Units or GP Units, as applicable, at a price per unit less than the fair
market value per Class A Unit (as determined by the General Partner, the
"Class A Unit Fair Market Value") on the record date fixed for the
determination of holders of Class A Units and GP Units entitled to receive
such rights, options or warrants (any of the foregoing being hereinafter in
this subsection (2) sometimes called the "Securities"), then the Conversion
Price shall be adjusted so that it shall equal the price determined by
multiplying (I) the Conversion Price in effect immediately prior to the close
of business on the record date fixed for the determination of holders of Class
A Units and GP Units entitled to receive such distribution by (II) a fraction,
the numerator of which shall be the sum of (A) the number of Class A Units and
GP Units outstanding on the close of business on the record date fixed for the
determination of holders of Class A Units and GP Units entitled to receive
such distribution and (B) the number of Class A Units that the aggregate
proceeds to the Partnership from the issuance and the exercise of such rights,
options or warrants issued to holders of Class A Units and GP Units would
purchase at such Class A Unit Fair Market Value, and the denominator of which
shall be the sum of (A) the number of Class A Units and GP Units outstanding
on the close of business on the record date fixed for the determination of
holders of Class A Units and GP Units entitled to receive such distribution
and (B) the number of additional Class A Units and GP Units offered for
subscription or purchase pursuant to such rights, options or warrants. Such
adjustment shall become effective immediately upon the opening of business on
the business day next following the record date fixed for the determination of
holders of Class A Units and GP Units entitled to receive such distribution
(subject to subsection G(v)(d) below). In determining whether any rights,
options or warrants entitle the holders of Class A Units and GP Units to
subscribe for or purchase Class A Units or GP Units, as applicable, at less
than such Class A Unit Fair Market Value, there shall be taken into account
any consideration received by the Partnership upon issuance and upon exercise
of such rights, options or warrants, the value of such consideration, if other
than cash, to be determined by the General Partner, whose determination shall
be conclusive. For the purposes of this subsection (2), the distribution of a
Security, which is distributed not only to the holders of the Class A Units
and GP Units on the record date fixed for the determination of holders of
Class A Unit and GP Units entitled to receive such distribution of such
Security, but also is distributed or distributable with each Class A Unit
delivered or deliverable to a person converting a Series B Preferred Unit or
having a Series B Preferred Unit redeemed after such determination date, shall
not require an adjustment of the Conversion Price pursuant to this subsection
(2); provided that on the date, if any, on which a person converting a Series
B Preferred Unit or having a Series B Preferred Unit redeemed would no longer
be entitled to receive such Security with a Class A Unit (other than as a
result of the termination of all such Securities), a distribution of such
Securities shall be deemed to have occurred, and the Conversion Price shall be
adjusted as provided in this subsection (2) (and such day shall be deemed to
be "the record date fixed for the determination of the holders of Class A
Units and GP Units entitled to receive such distribution" within the meaning
of this subsection (2)). For the purposes of this subsection (2), if in
connection with the distribution of a Security to the holders of the Class A
Units and GP Units an adjustment is made to the Conversion Price pursuant to
subsection G(v)(a) above that reflects the anti-dilution provisions of this
subsection (2), no additional adjustment to the Conversion Price need be made
pursuant to this subsection (2). In
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the event that any such rights, options or warrants expire unexercised or are
canceled prior to exercise, the Conversion Price (if previously adjusted on
account of the issuance of such rights, options or warrants) shall be adjusted
so that it shall equal the price it would have been had such rights, options
or warrants not been issued.
(c) (1) If the Trust shall distribute to all holders of its
Common Shares any evidence of its indebtedness or assets (excluding cash
distributions paid out of current or accumulated funds from operations to the
extent the same results in a payment of at least equal cash distributions to
the holders of Series B Preferred Units) or rights, options and warrants to
subscribe for or purchase any of its securities (excluding those rights,
options and warrants issued to all holders of Common Shares entitling them for
a period expiring within 45 days after the record date referred to in
subparagraph G(v)(b)(1) above to subscribe for or purchase Common Shares,
which rights, options and warrants are referred to in and treated under
subparagraph G(v)(b)(1) above) (any of the foregoing being hereinafter in this
subsection (1) sometimes called the "Securities"), then in each case the
Conversion Price shall be adjusted so that it shall equal the price determined
by multiplying (I) the Conversion Price in effect immediately prior to the
close of business on the record date fixed for the determination of
shareholders entitled to receive such distribution by (II) a fraction, the
numerator of which shall be the Fair Market Value per Common Share on the
record date fixed for the determination of shareholders entitled to receive
such distribution less the then fair market value (as determined by the
General Partner, whose determination shall be conclusive) of the portion of
the shares of beneficial interest or assets or evidences of indebtedness so
distributed or of such rights, options or warrants applicable to one Common
Share, and the denominator of which shall be the Fair Market Value per Common
Share on the record date fixed for the determination of shareholders entitled
to receive such distribution. Such adjustment shall become effective
immediately at the opening of business on the business day next following the
record date fixed for the determination of shareholders entitled to receive
such distribution (except as provided in subsection G(v)(d) below). For the
purposes of this subsection (1), the distribution of a Security, which is
distributed not only to the holders of the Common Shares on the record date
fixed for the determination of shareholders entitled to such distribution of
such Security, but also is distributed or distributable with each Common Share
issued or issuable upon redemption of each Class A Unit issued or issuable
upon redemption or conversion of Series B Preferred Units after such
determination date, shall not require an adjustment of the Conversion Price
pursuant to this subsection (1); provided that on the date, if any, on which a
person receiving Common Shares issued or issuable upon redemption of Class A
Units issued or issuable upon redemption or conversion of Series B Preferred
Units would no longer be entitled to receive such Security with a Common Share
(other than as a result of the termination of all such Securities), a
distribution of such Securities shall be deemed to have occurred, and the
Conversion Price shall be adjusted as provided in this subsection (1) (and
such day shall be deemed to be "the record date fixed for the determination of
the shareholders entitled to receive such distribution" within the meaning of
within the meaning of this subsection (1)). In the event that any such rights,
options or warrants expire unexercised or are canceled prior to exercise, the
Conversion Price (if previously
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adjusted on account of the issuance of such rights, options or warrants) shall
be adjusted so that it shall equal the price it would have been had such
rights, options or warrants not been issued.
(2) If the Partnership shall distribute to all holders of
its Class A Units and GP Units any LP Units (other than Class A Units) or
evidence of its indebtedness or assets (excluding cash distributions paid out
of current or accumulated funds from operations to the extent the same results
in a payment of at least equal cash distributions to the holders of Series B
Preferred Units) or rights, options and warrants to subscribe for or purchase
any LP Units (excluding those rights, options and warrants issued to all
holders of Class A Units and GP Units entitling them for a period expiring
within 45 days after the record date referred to in subsection G(v)(b)(2)
above to subscribe for or purchase Class A Units or GP Units, as applicable,
which rights, options and warrants are referred to in and treated under
subparagraph G(v)(b)(2) above)(any of the foregoing being hereinafter in this
subsection (2) sometimes called the "Securities"), then in each case the
Conversion Price shall be adjusted so that it shall equal the price determined
by multiplying (I) the Conversion Price in effect immediately prior to the
close of business on the record date fixed for the determination of holders of
Class A Units and GP Units entitled to receive such distribution by (II) a
fraction, the numerator of which shall be the Class A Fair Market Value per
Class A Unit on the record date fixed for the determination of holders of
Class A Units and GP Units entitled to receive such distribution less the then
fair market value (as determined by the General Partner, whose determination
shall be conclusive) of the portion of the LP Units or assets or evidences of
indebtedness so distributed or of such rights, options or warrants applicable
to one Class A Unit, and the denominator of which shall be the Class A Unit
Fair Market Value per Class A Unit on the record date fixed for the
determination of holders of Class A Units and GP Units entitled to receive
such distribution (except as provided in subsection G(v)(d) below). Such
adjustment shall become effective immediately at the opening of business on
the business day next following the record date fixed for the determination of
holders of Class A Units and GP Units entitled to receive such distribution.
For the purposes of this subsection (2), the distribution of a Security, which
is distributed not only to the holders of the Class A Units and GP Units on
the record date fixed for the determination of holders of Class A Unit and GP
Units entitled to receive such distribution of such Security, but also is
distributed or distributable with each Class A Unit delivered or deliverable
to a person converting a Series B Preferred Unit or having a Series B
Preferred Unit redeemed after such determination date, shall not require an
adjustment of the Conversion Price pursuant to this subsection (2); provided
that on the date, if any, on which a person converting a Series B Preferred
Unit or having a Series B Preferred Unit redeemed would no longer be entitled
to receive such Security with a Class A Unit (other than as a result of the
termination of all such Securities), a distribution of such Securities shall
be deemed to have occurred, and the Conversion Price shall be adjusted as
provided in this subsection (2) (and such day shall be deemed to be "the
record date fixed for the determination of the holders of Class A Units and GP
Units entitled to receive such distribution" within within the meaning of this
subsection (2)). In the event that any such rights, options or warrants expire
unexercised or are canceled prior to exercise, the Conversion
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<PAGE>
Price (if previously adjusted on account of the issuance of such rights,
options or warrants) shall be adjusted so that it shall equal the price it
would have been had such rights, options or warrants not been issued.
(d) In any case in which this subsection G(v) provides that
an adjustment shall become effective on the date next following the record
date for an event, the Partnership may defer until the occurrence of such
event (A) issuing to the holder of any Series B Preferred Units converted
after such record date and before the occurrence of such event the additional
Class A Units issuable upon such conversion by reason of the adjustment
required by such event over and above the Class A Units issuable upon such
conversion before giving effect to such adjustment and (B) fractionalizing any
Series B Preferred Units and/or paying to such holder any amount of cash in
lieu of any fraction.
(e) Notwithstanding anything to the contrary contained in
this subsection G(v), in the event that any event described in this subsection
G(v) has a simultaneous effect on the Common Shares and the Class A Units,
only one adjustment to the Conversion Price shall be made pursuant to this
subsection G(v) so long as such adjustment refelects the intended operation of
this subsection G(v). All decisions with respect to any adjustments to be made
to the Conversion Price upon the occurrence of any such events shall be made
by the General Partner in its reasonable discretion. In the case of any
ambiguity or uncertainty in the application of any provision of this
subsection G(v), the General Partner shall have the authority to interpret
such provision in such manner as it in good faith reasonably believes
correctly reflects the intended operation of such provision.
(f) No adjustment in the Conversion Price shall be required
unless such adjustment would require a cumulative increase or decrease of at
least 1% in such price; provided, however, that any adjustments that by reason
of this subsection (f) are not required to be made shall be carried forward
and taken into account in any subsequent adjustment until made; and provided,
further, that any adjustment shall be required and made in accordance with the
provisions of this subsection G(v) (other than this subsection (f)) not later
than such time as may be required in order to preserve the tax-free nature of
a distribution to the holders of Common Shares. Notwithstanding any other
provisions of this subsection G(v), the Partnership shall not be required to
make any adjustment of the Conversion Price as a result of the issuance of any
Common Shares by the Trust pursuant to any plan providing for the reinvestment
of distributions or interest payable on securities of the Trust and the
investment of additional optional amounts in Common Shares under such plan.
All calculations under this subsection G(v) shall be made to the nearest cent
with ($.005 being rounded upward) or to the nearest one-tenth of a share (with
.05 of a share being rounded upward), as the case may be. Anything in this
subsection G to the contrary notwithstanding, the Partnership shall be
entitled, to the extent permitted by law, to make such reductions in the
Conversion Price, in addition to those required by this subsection G, as the
General Partner in its discretion shall determine to be advisable in order
that any share distributions, subdivision of shares,
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reclassification or combination of shares, distribution of rights, options or
warrants to purchase shares or securities, or a distribution of other assets
(other than cash distributions) hereafter made by the Trust to its
shareholders shall not be taxable.
(g) If the Partnership shall be a party to any transaction
(including, without limitation, a merger or consolidation, sale of all or
substantially all of the Partnership's assets or (each of the foregoing being
referred to herein as a "Transaction"), in each case as a result of which
Class A Units shall be converted into the right to receive shares, stock,
securities or other property (including cash or any combination thereof), each
Series B Preferred Unit which is not converted into the right to receive
shares, stock, securities or other property in connection with such
Transaction shall thereafter be convertible into the kind and amount of
shares, stock, securities and other property (including cash or any
combination thereof) receivable upon the consummation of such Transaction by a
holder of that number of Class A Units into which one Series B Preferred Unit
was convertible immediately prior to such Transaction. The Partnership shall
not be a party to any Transaction unless the terms of such Transaction are
consistent with the provisions of this subsection G(v), and it shall not
consent or agree to the occurrence of any Transaction until the Partnership
has entered into an agreement with the successor or purchasing entity, as the
case may be, for the benefit of the holders of the Series B Preferred Units
that will contain provisions enabling the holders of the Series B Preferred
Units that remain outstanding after such Transaction to convert into the
consideration received by holders of Class A Units at the Conversion Price in
effect immediately prior to such Transaction. The provisions of this
subsection G(v) shall similarly apply to successive Transactions.
H. Transfer Restrictions. The Series B Preferred Units are subject
to the restrictions on transferability set forth in Article XI of the
Partnership Agreement. In addition, except to Affiliates of the Admitted
Partners (as defined below) or Lazard Freres Real Estate Investors, L.L.C. or
upon the written consent of the General Partner (such consent not to be
unreasonably withheld), none of the Series B Preferred Units, the Class A
Units issuable upon conversion or redemption of the Series B Preferred Units
(the "Underlying Class A Units"), nor the Common Shares issuable upon
redemption of the Underlying Class A Units may be sold, assigned, exchanged,
pledged or otherwise transferred prior to January 2, 2004; provided, however,
that (notwithstanding the restriction contained in this sentence, but subject
to the other restrictions on transfer applicable to such securities) the
Series B Preferred Units, the Underlying Class A Units and the Common Shares
issuable upon redemption of the Underlying Class A Units may be pledged to,
and, upon default of the obligations pursuant to which such securities are
pledged, if any, transferred to any lender (a "Lender") in connection with the
financing needs of Lazard Freres Real Estate Investors, L.L.C. and its
Affiliates, which Lender following any such transfer shall be subject to the
transfer restrictions of this subsection. This subsection H shall not restrict
a sale of the direct or indirect equity interests of the holders of the Series
B Preferred Units. Any Series B Preferred Units, Underlying Class A Units and
Common Shares issued upon redemption of Underlying Class A Units shall bear a
restrictive legend evidencing the transfer restrictions set forth in this
subsection H.
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I. Allocations. Allocations of the Partnership's items of income,
gain, loss and deduction shall be allocated among holders of Series B
Preferred Units in accordance with Article VII of the Partnership Agreement.
J. Definitions.
"Common Shares" shall mean the common shares of beneficial interest,
par value $.01 per share, of the Trust.
"Current Market Price" of publicly traded Common Shares or any other
class of shares of beneficial interest or other security of the Trust or any
other issuer for any day shall mean the last reported sales price, regular
way, on such day, or, if no sale takes place on such day, the average of the
reported closing bid and asked prices on such day, regular way, in either case
as reported on the New York Stock Exchange ("NYSE") or, if such security is
not listed or admitted for trading on the NYSE, on the principal national
securities exchange on which such security is listed or admitted for trading
or, if not listed or admitted for trading on any national securities exchange,
on the NASDAQ National Market or, if such security is not quoted on such
NASDAQ National Market, the average of the closing bid and asked prices on
such day in the over-the-counter market as reported by NASDAQ or, if bid and
asked prices for such security on such day shall not have been reported
through NASDAQ, the average of the bid and asked prices on such day as
furnished by any NYSE member firm regularly making a market in such security
selected for such purpose by Partnership, acting through the General Partner.
"Distribution Payment Date" shall mean, with respect to each
Distribution Period, the fifteenth day of January, April, July and October in
each year, commencing, on October 15, 1998; provided, however, that if any
Distribution Payment Date falls on any day other than a business day, the
distribution payment due on such Distribution Payment Date shall be paid on
the business day immediately following such Distribution Payment Date.
"Distribution Periods" shall mean quarterly distribution periods
commencing on January 1, April 1, July 1 and October 1 of each year and ending
on and including the day preceding the first day of the next succeeding
Distribution Period (other than the initial Distribution Period, which shall
commence on the Issue Date and end on and include September 30, 1998).
"Fair Market Value" shall mean the average of the daily Current
Market Prices per Common Share during the five consecutive Trading Days
selected by the General Partner commencing not more than 20 Trading Days
before, and ending not later than, the earlier of the day in question and the
day before the "ex" date with respect to the issuance or distribution
requiring such computation. The term " 'ex' date," when used with respect to
any issuance or distribution, means the first day on which the Common Shares
trade regular way, without the right to receive such
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issuance or distribution, on the exchange or in the market, as the case may
be, used to determine that day's Current Market Price.
"Issue Date" shall mean the date on which Series B Preferred Units
are first issued by the Partnership.
"Trading Day" shall mean any day on which the securities in question
are traded on the NYSE or, if such securities are not listed or admitted for
trading on the NYSE, on the principal national securities exchange on which
such securities are listed or admitted or, if not listed or admitted for
trading on any national securities exchange, on the NASDAQ National Market or,
if such securities are not quoted on such NASDAQ National Market, in the
applicable securities market in which the securities are traded.
The "Trust" means Brandywine Realty Trust, a Maryland real estate
investment trust.
2. The Partnership Agreement is hereby amended to reflect the
admission as a Limited Partners on the date hereof of the Persons set forth on
Schedule A attached hereto (the "Admitted Partners") and the ownership by such
Persons of the number of Series B Preferred Units listed opposite each
Person's name on Schedule A. Attached as Schedule B is a list of the Partners
of the Partnership prior to the admission of the Admitted Partners, together
with the number and class of Partnership Interests owned by such partners.
3. The "Redemption Right" granted to holders of Class A Units in
Article XV of the Partnership Agreement shall not be exercisable by the
holders of the Class A Units issuable upon redemption or conversion of Series
B Preferred Units until the first anniversary of the date hereof, except that
if a Change of Control (as defined below) of the General Partner occurs, the
foregoing restriction on exercise of the Redemption Right shall automatically
terminate with respect to all of such Class A Units.
As used herein, the term "Change of Control" shall mean:
(i) the acquisition in one or more transactions by any "Person"
(as the term person is used for purposes of Sections 13(d) or 14(d) of the
Exchange Act) of "Beneficial ownership" (within the meaning of Rule 13d-3
promulgated under the Exchange Act) of twenty-five percent (25%) or more of
the combined voting power of the General Partner's then outstanding voting
securities (the "Voting Securities"), provided that for purposes of this
clause (i) Voting Securities acquired directly from the General Partner by any
Person shall be excluded from the determination of such Person's Beneficial
ownership of Voting Securities (but such Voting Securities shall be included
in the calculation of the total number of Voting Securities then outstanding);
or
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(ii) approval by shareholders of the General Partner of:
(A) a merger, reorganization or consolidation involving the
General Partner if the shareholders of the General Partner immediately before
such merger, reorganization or consolidation do not or will not own directly
or indirectly immediately following such merger, reorganization or
consolidation, more than fifty percent (50%) of the combined voting power of
the outstanding voting securities of the General Partner resulting from or
surviving such merger, reorganization or consolidation in substantially the
same proportion as their ownership of the Voting Securities outstanding
immediately before such merger, reorganization or consolidation; or
(B) a complete liquidation or dissolution of the General
Partner; or
(C) an agreement for the sale or other disposition of all or
substantially all of the assets of the General Partner; or
(iii) acceptance by shareholders of the General Partner of shares
in a share exchange if the shareholders of the General Partner immediately
before such share exchange do not or will not own directly or indirectly
immediately following such share exchange more than fifty percent (50%) of the
combined voting power of the outstanding voting securities of the entity
resulting from or surviving such share exchange in substantially the same
proportion as their ownership of the Voting Securities outstanding immediately
before such share exchange.
4. By execution of this Amendment to the Partnership Agreement by the
General Partner, the Admitted Partners agree to be bound by each and every
term of the Partnership Agreement as amended from time to time in accordance
with the terms of the Partnership Agreement. The General Partner confirms that
the provisions in Section 18.1(a) of the Partnership Agreement shall apply to
the Admitted Partners notwithstanding Section 18.7 of the Partnership
Agreement.
5. On the date of this Amendment, each of the Admitted Partners shall
execute and deliver to Brandywine Realty Trust an Irrevocable Proxy coupled
with an Interest in the form set forth on Exhibit 1 hereto attached.
6. Except as expressly set forth in this Amendment to the Partnership
Agreement, the Partnership Agreement is hereby ratified and confirmed in each
and every respect.
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IN WITNESS WHEREOF, this Amendment to the Partnership
Agreement has been executed and delivered as of the date first above written.
GENERAL PARTNER:
BRANDYWINE REALTY TRUST
By:/s/ Gerard H. Sweeney
----------------------------------------
Name: Gerard H. Sweeny
Its: President and Chief Executive Officer
ADMITTED PARTNERS:
COMMONWEALTH ATLANTIC COMMONWEALTH ATLANTIC
OPERATING PROPERTIES INC. LAND IV INC.
By:/s/ Murry N. Gunty By:/s/ Murry N. Gunty
------------------------- ---------------------------
Name: Murry N. Gunty Name: Murry N. Gunty
Title: Vice President Title: Vice President
COMMONWEALTH ATLANTIC COMMONWEALTH ATLANTIC
LAND II INC. DEVELOPMENT INC.
By:/s/ Murry N. Gunty By:/s/ Murry N. Gunty
------------------------- ---------------------------
Name: Murry N. Gunty Name: Murry N. Gunty
Title: Vice President Title: Vice President
COMMONWEALTH ATLANTIC
LAND COMPANY
By:/s/ Murry N. Gunty
------------------------
Name: Murry N. Gunty
Title: Vice President
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SCHEDULE "A"
ADMITTED NUMBER OF SERIES B
PARTNERS PREFERRED UNITS
---------- -------------------
Commonwealth Atlantic Operating Properties Inc. 1,140,527
Commonwealth Atlantic Land IV Inc. 0
Commonwealth Atlantic Land II Inc. 283,731
Commonwealth Atlantic Development Inc. 43,725
Commonwealth Atlantic Land Company 82,017
<PAGE>
EXHIBIT 10.6
SIXTH AMENDMENT TO AMENDED AND RESTATED
AGREEMENT OF LIMITED PARTNERSHIP
OF
BRANDYWINE OPERATING PARTNERSHIP, L.P.
THIS SIXTH AMENDMENT, dated as of October 6, 1998 (the
"Amendment"), further amends the Amended and Restated Agreement of Limited
Partnership Agreement (as amended to date, the "Partnership Agreement") of
BRANDYWINE OPERATING PARTNERSHIP, L.P., a Delaware limited partnership (the
"Partnership"). Capitalized terms used herein but not defined herein shall have
the meanings given such terms in the Partnership Agreement.
BACKGROUND
A. Pursuant to the Partnership Agreement, Brandywine Realty Trust (the
"General Partner"), as the general partner of the Partnership, has the power and
authority to issue additional Partnership Interests to persons on such terms and
conditions as the General Partner may deem appropriate.
B. The General Partner, pursuant to the exercise of such power and
authority and in accordance with the Partnership Agreement, has determined to
execute this Amendment to the Partnership Agreement to evidence the issuance of
additional Partnership Interests and the admission of the other signatories
hereto as Limited Partners of the Partnership in exchange for certain
contributions of interests in real estate and real estate related assets that
are being made to the Partnership on the date hereof pursuant to a
"contribution" agreement (relating to properties owned by persons and entities
that include Donald E. Axinn and affiliates) among the Partnership and the other
signatories thereto.
NOW, THEREFORE, in consideration of the mutual covenants and
agreements herein contained and other good and valuable consideration, the
receipt, adequacy and sufficiency of which are hereby acknowledged, the parties
hereto, intending to be legally bound, hereby amend the Partnership Agreement as
follows:
1. The Partnership Agreement is hereby amended to reflect the
admission as a Limited Partner on the date hereof of the Persons set forth on
Schedule A attached hereto (the "Admitted Partners") and the ownership by such
Persons of the number of Class A Units listed opposite each Person's name on
Schedule A. Attached as Schedule B is a list of the Partners of the Partnership
prior to the admission of the Admitted Partners, together with the number and
class of Partnership Interests owned by such partners.
<PAGE>
2. The Partnership Interests issued hereby shall constitute
Class A Units; provided that any distribution to be received by the Admitted
Partners on the Class A Units issued to them on the date hereof on account of
the fiscal quarter in which they are admitted to the Partnership shall be
pro-rated to reflect the portion of the fiscal quarter of the Partnership for
which the Admitted Partners held such Class A Units and shall not be pro-rata in
accordance with their then Percentage Interests; provided further that the
Redemption Right granted to holders of Class A Units in Article XV of the
Partnership Agreement shall not be exercisable by the holders of the Class A
Units issued on the date hereof to the Admitted Partners until the first
anniversary of the date hereof, except that (i) if the holder of any such Class
A Units dies, such holder's estate shall thereupon be permitted to exercise the
Redemption Right with respect to all of such Class A Units held by it
notwithstanding the foregoing restriction and (ii) if a Change of Control (as
defined below) of the General Partner occurs, the foregoing restriction on
exercise of the Redemption Right shall automatically terminate with respect to
all of such Class A Units. Notwithstanding anything contained in the Partnership
Agreement or this Amendment, if the holder of Class A Units exercises its
Redemption Right and the General Partner or the holder reasonably believes that
the issuance of Common Shares in satisfaction of the Redemption Right would
require a notification and filing under the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended (the "HSR Act"), the obligation of the
Partnership and the General Partner to satisfy the Redemption Right may be
suspended until applicable filings with the Federal Trade Commission and the
Antitrust Division of the Department of Justice have been made and the
applicable waiting periods have expired. The General Partner agrees to use
commercially reasonable efforts to make any requisite filings under the HSR Act
in order to promptly obtain expiration of the applicable waiting periods, and
the Partnership and the applicable holder of Class A Units shall split equally
any filing fees that may be payable under the HSR Act.
3. As used herein, the term "Change of Control" shall mean
Change of Control" means:
(i) the acquisition in one or more transactions by any "Person" (as the
term person is used for purposes of Sections 13(d) or 14(d) of the
Exchange Act) of "Beneficial ownership" (within the meaning of Rule
13d-3 promulgated under the Exchange Act) of twenty-five percent
(25%) or more of the combined voting power of the General Partner's
then outstanding voting securities (the "Voting Securities"),
provided that for purposes of this clause (i) Voting Securities
acquired directly from the General Partner by any Person shall be
excluded from the determination of such Person's Beneficial ownership
of Voting Securities (but such Voting Securities shall be included in
the calculation of the total number of Voting Securities then
outstanding); or
(ii) approval by shareholders of the General Partner of:
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<PAGE>
(A) a merger, reorganization or consolidation involving the
General Partner if the shareholders of the General Partner
immediately before such merger, reorganization or
consolidation do not or will not own directly or indirectly
immediately following such merger, reorganization or
consolidation, more than fifty percent (50%) of the combined
voting power of the outstanding voting securities of the
General Partner resulting from or surviving such merger,
reorganization or consolidation in substantially the same
proportion as their ownership of the Voting Securities
outstanding immediately before such merger, reorganization or
consolidation; or
(B) a complete liquidation or dissolution of the General Partner;
or
(C) an agreement for the sale or other disposition of all or
substantially all of the assets of the General Partner; or
(iii) acceptance by shareholders of the General Partner of shares in a
share exchange if the shareholders of the General Partner immediately
before such share exchange do not or will not own directly or
indirectly immediately following such share exchange more than fifty
percent (50%) of the combined voting power of the outstanding voting
securities of the entity resulting from or surviving such share
exchange in substantially the same proportion as their ownership of
the Voting Securities outstanding immediately before such share
exchange.
4. By execution of this Amendment to the Partnership Agreement
by the General Partner, the Admitted Partners agree to be bound by each and
every term of the Partnership Agreement as amended from time to time in
accordance with the terms of the Partnership Agreement. The General Partner
confirms that the provisions in Section 18.1(a) of the Partnership Agreement
shall apply to the Admitted Partners notwithstanding Section 18.7 of the
Partnership Agreement.
5. On the date of this Amendment, each of the Admitted
Partners shall execute and deliver to Brandywine Realty Trust an Irrevocable
Proxy coupled with an Interest in the form set forth on Exhibit 1 hereto
attached.
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<PAGE>
6. Except as expressly set forth in this Amendment to the
Partnership Agreement, the Partnership Agreement is hereby ratified and
confirmed in each and every respect.
IN WITNESS WHEREOF, this Amendment to the Partnership
Agreement has been executed and delivered as of the date first above written.
GENERAL PARTNER:
BRANDYWINE REALTY TRUST
By: /s/ Gerard H. Sweney
----------------------------------------
Gerard H. Sweeney
President and Chief Executive Officer
ADMITTED PARTNERS:
/s/ Donald E. Axinn
--------------------------------------------
Donald E. Axinn, individually
Donald E. Axinn, Inc.
By: /s/ Donald E. Axinn
----------------------------------------
Donald E. Axinn, President and Secretary
Morris Green, individually
Arthur Eberstein, individually
Marion Eberstein, individually
Lennard Axinn, individually
Estate of Theodore Geffner
Howard Kantor, individually
Estate of Irving Hirschman
Leo Guthart, individually
Gloria Kantor, individually
Calvin Axinn, individually
By: /s/ Donald E. Axinn
----------------------------------------
Donald E. Axinn, attorney in fact
to each of the foregoing
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<PAGE>
SCHEDULE "A"
NUMBER OF
ADMITTED PARTNERSHIP
PARTNERS INTERESTS
Donald E. Axinn 928,651
Donald E. Axinn, Inc. 0
Morris Green 50,233
Arthur and Marion Eberstein, Joint Tenants 7,513
Lennard Axinn 2,156
Estate of Theodore Geffner 1,973
Howard Kantor 31,505
Estate of Irving Hirschman 1,488
Leo Guthart 876
Gloria Kantor 21,647
Richard Bernhard 40,927
Calvin Axinn 40,927
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<PAGE>
EXHIBIT 10.7
FIRST AMENDMENT TO CONTRIBUTION AGREEMENT
THIS FIRST AMENDMENT TO CONTRIBUTION AGREEMENT dated as of October 6,
1998 by and among BRANDYWINE OPERATING PARTNERSHIP, L.P., a Delaware limited
partnership having an address at Newtown Square Corporate Campus, 16 Campus
Boulevard, Suite 150, Newtown Square, PA 19073 (the "Partnership"), BRANDYWINE
REALTY TRUST, a Maryland real estate investment trust having an address at
Newtown Square Corporate Campus, 16 Campus Boulevard, Suite 150, Newtown Square,
PA 19073 (the "Trust"), DONALD E. AXINN, having an address c/o Donald E. Axinn
Companies, 131 Jericho Turnpike, Jericho, New York 11743 ("Axinn") and the other
contributors (the "Other Contributors", and, together with Axinn, the
"Contributors").
W I T N E S S E T H:
WHEREAS, the Partnership, the Trust and the Contributors entered into a
certain contribution agreement made as of the 10th day of July, 1998 (the
"Original Agreement") pursuant to which each of the Contributors agreed to sell
or contribute and the Partnership agreed to acquire or accept all of such
Contributors' right, title and interest in and to certain Property and Entity
Interests (as such terms are defined in the Original Agreement);
WHEREAS, in order to delete the Property at 125 Jericho Turnpike as a
Critical Property, the Original Agreement was modified pursuant to the terms of
a certain letter agreement between the Partnership, the Trust and Axinn dated
August 28, 1998 (the "Letter Agreement" and, together with the Original
Agreement, the "Contribution Agreement");
WHEREAS, the parties hereto desire to further amend and modify the
Contribution Agreement, subject to the terms and conditions hereinafter set
forth.
NOW, THEREFORE, for ten ($10.00) dollars and other good and valuable
consideration, the receipt and sufficiency which are hereby acknowledged, the
parties, intending to be legally bound, agree as follows:
1. ASSUMED MORTGAGE LOANS. Notwithstanding anything contained in the
Contribution Agreement to the contrary, the parties hereto agree that all of the
Mortgage Loans shall be treated as Subject-to Mortgage Loans (and not as Assumed
Mortgage Loans). All references in the Contribution Agreement to Assumed
Mortgage Loans and the requirement that the Partnership assume the Assumed
Mortgage Loans at the Closing are hereby deleted in their entirety.
<PAGE>
2. 125-131 JERICHO TURNPIKE. Axinn, the Contributor of the 125-131 Jericho
Turnpike, New York Property (the "Jericho Property"), the Partnership and the
Trust hereby agree that the Closing for the Jericho Property shall occur
simultaneously with the Old Country Road Closing. In addition, it is agreed
between Axinn, the Partnership and the Trust that, from and after the Initial
Closing to and including the Old Country Road Closing (the "Jericho Property
Interim Period"): (a)Axinn shall receive all of the operating income for the
Jericho Property and shall also be responsible for all operating expenses with
respect thereto; and (b) during the Jericho Property Interim Period, Brandywine
Realty Services Corporation ("BRSCO") shall manage the Jericho Property pursuant
to the form of Management Agreement attached hereto as Exhibit A, subject to the
right of BRSCO to terminate its obligations under such Management Agreement in
accordance with its terms. The obligations of the Partnership and the Trust to
acquire the Jericho Property are subject to compliance with the obligations of
the applicable Contributors, and satisfaction of the closing conditions
contained in the Contribution Agreement for the benefit of the Trust and
Partnership, including without limitation, updated tenant estoppel certificates.
In addition to the foregoing, leasing commissions, tenant improvements
allowances, capital expenditures and lease proposals, amendments and
modifications shall continue to be treated and subject to the Partnership's
approval in accordance with Paragraphs 7(e) and 18 (e) of the Contribution
Agreement.
3. 245 OLD COUNTRY ROAD. Axinn Ellipse Associates ("AEA"), the Contributor
of the 245 Old Country Road, Melville, New York Property (the "245 OCR
Property"), the Partnership and the Trust each hereby acknowledge that Citicorp,
the tenant at the 245 OCR Property ("Citicorp"), has an option to purchase the
245 OCR Property at certain times during the term of its lease with AEA (the
"Citicorp Purchase Option"). Axinn, on behalf of himself, AEA and the partners
of AEA, hereby agrees that the restrictions on the sale or transfer of property
in Paragraph 41(c) of the Contribution Agreement shall not apply in the event
Citicorp exercises the Citicorp Purchase Option. The Partnership and the Trust
hereby agree that, in the event Citicorp exercises the Citicorp Purchase Option,
the Partnership and the Trust shall take commercially reasonable action (such as
allowing AEA to guarantee additional debt of the Partnership and the Trust to
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<PAGE>
the extent the Trust and Partnership maintain such debt) in order to allow AEA
to seek to continue to defer recognition of gain for federal and state income
tax purposes in connection with the 245 OCR Property.
4. CONSIDERATION. The parties hereto agree that the last sentence of
Paragraph 3(c) of the Contribution Agreement is deleted in its entirety and the
following is inserted in lieu thereof:
"The parties agree that in all cases in which Participants of
the same Contributor have elected to receive different forms
of Consideration (ie. cash v. Units), such Contributor and
Participants shall contribute, assign, transfer and convey to
the Partnership (or its designee) and the Partnership shall
accept from each Participant partner or member of the
Contributor which owns such New York Property, all of such
Participant's Entity Interest in and to such Contributor."
5. REMOVAL OF CERTAIN PROPERTIES. The parties acknowledge and agree that
the properties located at 163-167 South Service Road, Plainview, New York, and
885 Waverly Avenue, Holtsville, New York, have been removed from the
transactions provided for in the Contribution Agreement, and the references in
the Contribution Agreement to such Properties, including the purchase price
payable for them, are hereby deleted.
6. CONFIRMATION OF CERTAIN MATTERS.
(a) Axinn hereby represents and warrants that all documents executed
and delivered by him at the Initial Closing being held on the date hereof under
the Contribution Agreement in his capacity as attorney-in-fact have been
executed and delivered by him pursuant to a valid and binding delegation of
authority which remains in full force and effect.
(b) Axinn hereby represents and warrants that the following corrections
are made to Schedule 1 to the Contribution Agreement: (i) the contents of the
box at the fourth row and second column of page 6 shall be restated in its
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<PAGE>
entirety to read "Axinn-New Durham Associates, a New Jersey general
partnership", and (ii) the contents of the box at the fourth row and fifth
column of page 6 shall be restated in its entirety to read "78.02".
(c) Axinn hereby represents and warrants that the partnership that owns
the Property known as 44 National Road, Edison, New Jersey is a general
partnership notwithstanding the reference to such entity as a limited
partnership in the agreement setting forth the partnership relationship among
the partners. Axinn agrees to hold the Trust and Partnership harmless against
any loss attributable to an entity being other than in the form set forth in the
Schedules to the Contribution Agreement or being governed by any law other than
the law set forth in the Schedules to the Contribution Agreement.
7. MAINTENANCE OF INSURANCE. The Contributors covenant and agree to
maintain, and timely pay all premiums due in connection with, replacement-cost,
all-risk casualty and comprehensive general liability insurance with respect to
the 31 Commercial, 263 Old Country Road, 131 Jericho Turnpike, 125 Jericho
Turnpike, 101 Paragon and 3 Paragon properties. All such insurance shall name
Brandywine Operating Partnership, L.P. as an additional insured, as its
interests may appear, with such coverage to be confirmed in a certificate of
insurance to be issued to Buyer within 15 days of the Initial Closing. The
aforesaid insurance may be canceled upon the transfer or contribution, as the
case may be, of such property to Buyer.
8. CHANGE TO CERTAIN DATES. The dates November 1, 1998, February 1,
1999, May 1, 1999 and August 1, 1999 referenced in Paragraph 14(a)(v) of the
Contribution Agreement are hereby changed to January 1, 1999, April 1, 1999,
July 1, 1999 and October 1, 1999.
9. INDUSTRIAL SITE RECOVERY ACT UNDERTAKING. Notwithstanding anything
to the contrary in the Contribution Agreement, with respect to the Property
located at 44 National Road, Edison, New Jersey, Axinn covenants to use
reasonable best efforts to obtain the appropriate approvals from the New Jersey
Department of Environmental Protection ("NJDEP") under ISRA, which may take the
form of one or more of the following: (i) NJDEP's approval of a Negative
Declaration Affidavit; (ii) a so called "No Further Action" letter; (iii)
NJDEP's approval of a De Minimis Quantity Exemption; (iv) NJDEP's approval of an
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<PAGE>
Expedited Review Application; (v) NJDEP's approval of a Remedial Action Workplan
or Remediation Agreement; or (vi) such other approvals or determinations which
may be available from NJDEP with respect to the applicable transaction. In
addition to the foregoing, Section 11(b)(10) shall be amended to include the
phrase "and all costs incurred and all liabilities arising in connection with
the non-compliance by Seller with ISRA in connection with the transfer of 44
National Road" between the words "thereof" and "regardless" in the 26th line of
Section 11(b).
10. MISCELLANEOUS. All capitalized terms not defined herein shall have
the same meaning ascribed to them in the Contribution Agreement. Except as
modified herein, all of the terms and conditions of the Contribution Agreement
shall remain unchanged and in full force and effect.
11. BINDING EFFECT. The terms and conditions of this First Amendment
shall be binding upon and shall inure to the benefit of the parties hereto and
their respective successors and assigns.
IN WITNESS WHEREOF, the parties have executed this First Amendment to
Contribution Agreement as of the day and year first above written.
BRANDYWINE OPERATING PARTNERSHIP, L.P.
BY: BRANDYWINE REALTY TRUST,
Its General Partner
BY: /s/ Gerard H. Sweeney
-----------------------------------
Title: President and
Chief Executive Officer
BRANDYWINE REALTY TRUST
BY: /s/ Gerard H. Sweeney
-----------------------------------
Title: President and
Chief Executive Officer
(Signatures Continued)
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<PAGE>
/s/ Donald E. Axinn
-----------------------------------
DONALD E. AXINN
/s/ Donald E. Axinn
------------------------------------
MORRIS L. GREEN
By: Donald E. Axinn, his
Attorney-in-Fact
AXINN AVENUE ASSOCIATES
AXINN ELLIPSE ASSOCIATES
AXINN-MELVILLE, LLP
AXINN EDISON ASSOCIATES
AXINN-NEW DURHAM ASSOCIATES
DONALD E. AXINN, L.L.C.
AXINN-BERNHARD ASSOCIATES
BY: /s/ Donald E. Axinn
-------------------------------------
Donald E. Axinn
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