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SENIOR SECURED REVOLVING CREDIT AGREEMENT
$100,000,000
DATED AS OF MAY 28, 1998
BETWEEN
CORPORATE OFFICE PROPERTIES, L.P.,
as Borrower,
CORPORATE OFFICE PROPERTIES TRUST,
as Guarantor,
ANY MORTGAGED PROPERTY SUBSIDIARY
which may now be or hereafter become a
party to this Agreement,
collectively, as Loan Parties
and
BANKERS TRUST COMPANY,
and each other lender
which may hereafter become a
party to this Agreement pursuant
to Section 8.1.1
collectively, as Lenders
and
BANKERS TRUST COMPANY,
as Agent
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SENIOR SECURED REVOLVING CREDIT AGREEMENT
TABLE OF CONTENTS
Page
ARTICLE 1 INTERPRETATION.......................... 2
1.1 Appendix of Defined Terms.................................................... 2
1.2 Accounting Terms; Utilization of GAAP for Purposes
of Calculations Under Agreement; Pro Forma................................... 2
1.3 Certain References, Captions, Persons, and
Expressions.................................................................. 2
1.4 Drafter...................................................................... 2
1.5 Knowledge.................................................................... 3
ARTICLE 2 THE REVOLVING CREDIT FACILITY.................. 3
2.1 Commitment; Loans; Notes..................................................... 3
2.1.1 Commitments..................................................... 3
2.1.2 Borrowing Mechanics............................................. 3
2.2 [Intentionally Deleted]...................................................... 4
2.3 Disbursement of Funds........................................................ 5
2.4 The Register................................................................. 6
2.5 Maturity..................................................................... 7
2.6 Extension of Maturity Date................................................... 7
2.7 Interest on the Loans........................................................ 7
2.7.1 Rates of Interest............................................... 7
2.7.2 Interest Periods................................................ 7
2.7.3 Interest Payments............................................... 8
2.7.4 Conversion/Continuation......................................... 8
2.7.5 Default Rate Interest........................................... 9
2.7.6 Computation of Interest......................................... 10
2.8 Fees......................................................................... 10
2.8.1 Unused Commitment Fees.......................................... 10
2.8.2 Fee Letter...................................................... 11
2.9 Repayments and Prepayments; General Provisions
Regarding Payments........................................................... 11
2.9.1 Prepayments and Unscheduled Reductions in
Commitment...................................................... 11
2.9.2 Application of Payments to Principal and
Interest........................................................ 12
2.9.3 General Provisions Regarding Payments........................... 12
2.9.4 Application of Proceeds of Collateral and
Payments Under COPT Guaranty and Mortgaged
Property Subsidiary Guaranty.................................... 13
2.10 Use of Loan Proceeds......................................................... 15
2.10.1 Loans........................................................... 15
2.10.2 Margin Regulations.............................................. 15
2.11 Special Provisions Governing LIBOR Rate Loans................................ 15
2.11.1 Determination of Applicable Interest Rate....................... 15
2.11.2 Inability to Determine Applicable Interest
Rate............................................................ 15
2.11.3 Illegality or Impracticability of LIBOR
Rate............................................................ 15
2.11.4 Compensation For Breakage or Non-
Commencement of Interest Periods................................ 16
(i)
Page
2.11.5 Booking of LIBOR Rate Loans..................................... 17
2.11.6 Assumptions Concerning Funding of LIBOR
Rate Loans...................................................... 17
2.12 Increased Costs; Taxes; Capital Adequacy..................................... 17
2.12.1 Compensation for Increased Costs and Taxes...................... 17
2.12.2 Withholding of Taxes............................................ 18
2.12.3 Capital Adequacy Adjustment..................................... 20
2.12.4 Obligation of Lender to Mitigate................................ 21
2.13 Addition of Mortgaged Properties............................................. 21
2.13.1 Addition of Mortgaged Properties................................ 21
2.14 Releases of Mortgaged Properties............................................. 23
2.14.1 Mortgaged Properties............................................ 23
2.14.2 Effect of Release............................................... 25
2.14.3 Revised Schedules............................................... 25
2.15 Substitutions of Mortgaged Properties........................................ 25
2.15.1 Substitution......................................................... 25
2.16 Issuance of Letters of Credit and Lenders'
Purchase of Participations Therein........................................... 25
2.16.1 Letters of Credit............................................... 25
2.16.2 Mechanics of Issuance........................................... 26
2.16.3 Lenders' Purchase of Participations in
Letters of Credit............................................... 28
2.17 Letter of Credit Fees........................................................ 28
---------------------
2.18 Drawings and Reimbursement of Amounts Paid Under
Letters of Credit............................................................ 29
2.18.1 Responsibility of Issuing Lender With
Respect to Drawings............................................. 29
2.18.2 Reimbursement by Borrower of Amounts Paid
Under Letters of Credit......................................... 29
2.19 Payment by Lenders of Unreimbursed Amounts Paid
Under Letters of Credit...................................................... 30
2.19.1 Payment by Lenders.............................................. 30
2.19.2 Distribution to Lenders of Reimbursements
Received From Borrower.......................................... 30
2.20 Interest on Amounts Paid Under Letters of Credit............................. 31
2.20.1 Payment of Interest by Borrower................................. 31
2.20.2 Distribution of Interest Payments by
Issuing Lender.................................................. 31
2.21 Obligations Absolute......................................................... 32
2.22 Indemnification; Nature of Issuing Lenders'
Duties....................................................................... 33
2.22.1 Indemnification................................................. 33
2.22.2 Nature of Issuing Lenders' Duties............................... 33
2.23 Increased Costs and Taxes Relating to Letters of
Credit....................................................................... 34
ARTICLE 3 CONDITIONS PRECEDENT....................... 35
3.1 Conditions to Effectiveness of Commitments................................... 35
3.1.1 Corporate Documents............................................. 35
3.1.2 Partnership Documents........................................... 36
3.1.3 Operating Statements............................................ 37
3.1.4 Officer's Certificates.......................................... 37
3.1.5 No Material Adverse Effect...................................... 38
(ii)
Page
3.1.6 Security Interests.............................................. 38
3.1.7 Insurance....................................................... 41
3.1.8 Management Agreements. ......................................... 41
3.1.9 Material Leases; Tenant Estoppel
Certificates; Tenant Subordination
Agreements...................................................... 41
3.1.10 Environmental Audits............................................ 42
3.1.11 Engineering Reports............................................. 43
3.1.12 Appraisals...................................................... 43
3.1.13 Opinions of Loan Parties' Counsel............................... 43
3.1.14 Opinion of Agent's Counsel...................................... 43
3.1.15 No Adverse Litigation........................................... 43
3.1.16 Existing Indebtedness........................................... 44
3.1.17 Contingent Obligations.......................................... 44
3.1.18 Payment of Fees and Expenses.................................... 44
3.1.19 Completion of Proceedings....................................... 44
3.1.20 Other Documents................................................. 44
3.2 Conditions to All Loans...................................................... 44
3.2.1 Notice of Borrowing............................................. 44
3.2.2 Other Conditions................................................ 44
3.3 Conditions to Letters of Credit.............................................. 46
ARTICLE 4 REPRESENTATIONS AND WARRANTIES.................. 46
4.1 Formation/Organization, Powers, Qualification,
Good Standing, Business and Subsidiaries..................................... 46
4.1.1 Organization and Powers......................................... 46
4.1.2 Qualification and Good Standing................................. 47
4.1.3 Conduct of Business............................................. 47
4.2 Authorization of Borrowing, etc.............................................. 47
4.2.1 Authorization of Borrowing...................................... 47
4.2.2 No Conflict..................................................... 47
4.2.3 Governmental Consents........................................... 48
4.2.4 Binding Obligation.............................................. 48
4.3 Financial Condition; No Material Adverse Effect;
Contingent Obligations....................................................... 48
4.3.1 Financial Condition............................................. 48
4.3.2 No Material Adverse Effect...................................... 49
4.3.3 Contingent Obligations.......................................... 49
4.4 Properties; Agreements; Licenses............................................. 49
4.4.1 Title to Mortgaged Properties; Liens............................ 49
4.4.2 Material Leases................................................. 50
4.5 Litigation; Adverse Facts.................................................... 50
4.6 Taxes........................................................................ 51
4.6.1 Payment of Taxes................................................ 51
4.6.2 REIT Status..................................................... 51
4.6.3 Foreign Person.................................................. 51
4.6.4 Classification as a Partnership................................. 51
4.7 Performance of Agreements; Materially Adverse
Agreements................................................................... 51
4.8 Governmental Regulation; Securities Activities............................... 52
4.9 Employee Benefit Plans....................................................... 52
4.10 Certain Fees................................................................. 52
4.11 Solvency..................................................................... 53
(iii)
Page
4.12 Disclosure................................................................... 53
4.13 Liens on the Collateral...................................................... 54
4.13.1 General......................................................... 54
4.13.2 Mortgages....................................................... 54
4.13.3 Assignments of Rents and Leases................................. 54
4.13.4 Mechanics' Liens................................................ 55
4.13.5 Filings and Recordings.......................................... 55
4.14 Zoning; Authorizations....................................................... 55
4.14.1 Zoning.......................................................... 55
4.14.2 Authorizations.................................................. 55
4.15 Physical Condition; Encroachment............................................. 56
4.16 Insurance.................................................................... 56
4.17 Leases....................................................................... 56
4.18 Environmental Reports; Engineering Reports;
Appraisals; Market Studies................................................... 57
4.19 No Condemnation or Casualty.................................................. 57
4.20 Utilities and Access......................................................... 57
4.21 Wetlands..................................................................... 58
4.22 Labor Matters................................................................ 58
4.23 Employment and Labor Agreements.............................................. 58
ARTICLE 5 AFFIRMATIVE COVENANTS...................... 58
5.1 Financial Statements and Other Reports....................................... 58
5.2 Entity Existence; Financial Matters; Control................................. 66
5.2.1 Entity Existence................................................ 66
5.2.2 Financial Matters............................................... 66
5.2.3 Change in Control............................................... 66
5.2.4 Employment of Controlling Principals............................ 67
5.3 Qualified Income Covenant; Common Stock...................................... 67
5.4 Taxes and Claims............................................................. 67
5.5 Maintenance of Properties; Repair; Alteration................................ 68
5.6 Inspection; the Agent; Appraisals............................................ 68
5.6.1 Inspection...................................................... 68
5.6.2 Appraisals...................................................... 69
5.7 Compliance with Laws, Authorizations, etc.................................... 69
5.8 Performance of Loan Documents................................................ 70
5.9 Payment of Liens............................................................. 70
5.9.1 Removal by Loan Parties......................................... 70
5.9.2 Removal by the Agent............................................ 70
5.9.3 Title Searches.................................................. 70
5.10 Insurance.................................................................... 71
5.10.1 Risks to be Insured............................................. 71
5.10.2 Policy Provisions............................................... 75
5.10.3 Increases in Coverage........................................... 76
5.10.4 Payment of Proceeds............................................. 76
5.10.5 Delivery of Counterpart Policies; Evidence...................... 76
5.10.6 Replacement or Renewal Policies................................. 77
5.10.7 Material Change in Policy....................................... 77
5.10.8 Separate Insurance.............................................. 77
5.11 Casualty and Condemnation; Restoration....................................... 77
5.11.1 Notice of Casualty.............................................. 77
5.11.2 Insurance Proceeds.............................................. 78
(iv)
Page
5.11.3 Notice of Condemnation; Negotiation and
Settlement of Claims............................................ 79
5.11.4 Condemnation Proceeds........................................... 79
5.11.5 Election to Release/Restore..................................... 80
5.11.6 Restoration..................................................... 82
5.11.7 Engineer's Inspection........................................... 85
5.12 Renovations.................................................................. 85
5.12.1 Notice of Renovation; Renovation Plans.......................... 85
5.12.2 Conduct of Renovation........................................... 86
5.12.3 Completion Certificate.......................................... 86
5.12.4 Engineer's Inspection........................................... 86
5.13 Intentionally Omitted........................................................ 86
5.14 ▇▇▇▇▇▇▇▇ Clause.............................................................. 86
5.15 Further Assurances........................................................... 87
5.15.1 Assurances...................................................... 87
5.15.2 Filing and Recording Obligations................................ 88
5.15.3 Costs of Defending and Upholding the Lien....................... 88
5.15.4 Costs of Enforcement............................................ 89
ARTICLE 6 NEGATIVE COVENANTS........................ 89
6.1 Indebtedness of Loan Parties................................................. 89
6.2 Liens and Related Matters.................................................... 90
6.2.1 Prohibition on Liens............................................ 90
6.2.2 No Further Negative Pledges..................................... 90
6.3 Investments.................................................................. 91
6.4 Contingent Obligations....................................................... 91
6.5 Distributions................................................................ 92
6.6 Financial Covenants.......................................................... 92
6.6.1 Consolidated Tangible Net Worth................................. 92
6.6.2 Minimum Mortgaged Property Interest
Coverage........................................................ 92
6.6.3 Minimum Consolidated Interest Coverage.......................... 93
6.6.4 Maximum Consolidated Unhedged Floating
Rate Debt....................................................... 93
6.6.5 Maximum Consolidated Total Indebtedness......................... 93
6.7 Fundamental Changes.......................................................... 93
6.8 Zoning and Contract Changes and Compliance................................... 95
6.9 No Joint Assessment; Separate Lots........................................... 95
6.10 Transactions with Affiliated Persons......................................... 95
6.11 Sale or Discount of Receivables.............................................. 96
6.12 Ownership of Mortgaged Property Subsidiaries................................. 96
6.13 Conduct of Business.......................................................... 96
6.13.1 Conduct of Business............................................. 96
6.14 Properties................................................................... 97
6.14.1 Transfer of Mortgaged Properties................................ 97
6.14.2 Suburban Office Properties...................................... 97
6.15 Management Agreements; Material Leases....................................... 97
6.16 Changes in Certain Obligations and Documents;
Issuance of Equity Securities................................................ 98
6.16.1 Credit Agreement................................................ 98
6.16.2 Equity Securities............................................... 98
6.16.3 Organization Documents.......................................... 98
6.17 Fiscal Year.................................................................. 98
(v)
Page
ARTICLE 7 EVENTS OF DEFAULT; REMEDIES................... 98
7.1 Events of Default............................................................ 98
7.1.1 Failure to Make Payments When Due............................... 99
7.1.2 Other Defaults Under Loan Documents............................. 99
7.1.3 Default in Other Agreements..................................... 99
7.1.4 Breach of Warranty..............................................100
7.1.5 Invalidity of Loan Document; Failure of
Security; Repudiation of Obligations............................100
7.1.6 Prohibited Transfers............................................100
7.1.7 Involuntary Bankruptcy; Appointment of
Receiver, etc...................................................100
7.1.8 Voluntary Bankruptcy; Appointment of
Receiver, etc...................................................101
7.1.9 Judgments and Attachments.......................................101
7.1.10 Dissolution.....................................................101
7.1.11 Material Adverse Effect.........................................102
7.1.12 Default under Term Loan.........................................102
7.2 Certain Remedies.............................................................102
ARTICLE 8 MISCELLANEOUS..........................105
8.1 Assignments and Participations in Commitments and
Loans........................................................................105
8.1.1 General.........................................................105
8.1.2 Participations..................................................105
8.1.3 Assignments to Federal Reserve Banks............................106
8.1.4 Information.....................................................106
8.1.5 Pro Rata Assignments and Participations.........................106
8.3 Indemnity....................................................................108
8.3.1 Indemnity.........................................................108
8.3.2 Procedure.........................................................109
8.3.3 Contribution......................................................110
8.3.4 No Limitation.....................................................111
8.3.5 Independence of Indemnity; No Enlargement.........................111
8.4 No Joint Venture or Partnership..............................................111
8.5 Ratable Sharing..............................................................111
8.6 Amendments and Waivers.......................................................112
8.7 Independence of Covenants....................................................113
8.8 Notices......................................................................114
8.9 Survival of Representations, Warranties and
Agreements...................................................................114
8.10 Agent's Discretion...........................................................114
8.11 Obligations Several; Independent Nature of the
Lenders' Rights..............................................................114
8.12 Remedies of Loan Parties.....................................................115
8.13 Maximum Amount...............................................................115
8.14 Marshalling; Payments Set Aside..............................................116
8.15 Severability.................................................................116
8.16 Headings.....................................................................117
8.17 Applicable Law...............................................................117
8.18 Successors and Assigns.......................................................117
8.19 Consent to Jurisdiction and Service of Process...............................118
8.20 Waiver of Jury Trial.........................................................118
8.21 Counterparts; Effectiveness..................................................119
(vi)
Page
8.22 Material Inducement..........................................................119
8.23 Entire Agreement.............................................................119
8.24 Additional Mortgaged Property Subsidiaries...................................120
ARTICLE 9 AGENT..............................120
9.1 Appointment..................................................................120
9.2 Powers; General Immunity.....................................................121
9.2.1 Duties Specified................................................121
9.2.2 No Responsibility for Certain Matters...........................121
9.2.3 Exculpatory Provisions..........................................121
9.2.4 Agent Entitled to Act as Lender.................................122
9.3 Representations and Warranties; No Responsibility
For Appraisal of Creditworthiness............................................122
9.4 Right to Indemnity...........................................................123
9.5 Payee of Note Treated as Owner...............................................123
9.6 Security Documents, Etc......................................................124
9.6.1 Security Documents..............................................124
9.6.2 Lender Action...................................................124
9.7 Successor Agent..............................................................125
(vii)
EXHIBITS
Exhibit A Form of Note
Exhibit B Form of Notice of Borrowing
Exhibit C Form of Notice of Conversion/Continuation
Exhibit D Form of Compliance Certificate
Exhibit E Form of Borrowing Base Certificate
Exhibit F Form of Addition Certificate
Exhibit G Form of Assignment Agreement
Exhibit H Form of Issuance of Letter of Credit
(viii)
SCHEDULES
Schedule 1.1 A Interests of Loan Parties in Mortgaged
Properties
Schedule 1.1 B Interests of Loan Parties in Other Properties
Schedule 4.1.1 COPT and Subsidiary Jurisdictions
Schedule 4.3.1 Unreported Material Contingent Obligations,
etc.
Schedule 4.4.1 Rights of First Refusal, etc.
Schedule 4.4.2 Material Leases
Schedule 4.5 Litigation
Schedule 4.7 Materially Adverse Agreements
Schedule 5.2.3 Minimum Shareholdings of Controlling Principals
Schedule 5.5 Certain Capital Expenditures
Schedule 6.1.8 Indebtedness
Schedule 6.3 Investments
Schedule 6.14.2 Excluded Real Property Assets
Schedule 6.16.2 Equity Securities
Schedule 8.24 Mortgaged Property Subsidiary Counterpart
(ix)
SENIOR SECURED REVOLVING CREDIT AGREEMENT
This SENIOR SECURED REVOLVING CREDIT AGREEMENT is dated as of May 28,
1998 and entered into among CORPORATE OFFICE PROPERTIES, L.P., a Delaware
limited partnership ("Borrower"), CORPORATE OFFICE PROPERTIES TRUST, a Maryland
real estate investment trust ("COPT"), any Mortgaged Property Subsidiary which
may now be or hereafter become a party to this Agreement, BANKERS TRUST COMPANY
and each other lender which may hereafter become a party to this Agreement
pursuant to Section 8.1.1 (individually, a "Lender" and collectively, the
"Lenders") and BANKERS TRUST COMPANY, as agent for the Lenders (in such
capacity, the "Agent").
R E C I T A L S
A. The Loan Parties desire that the Lenders extend to Borrower a
revolving credit facility, the proceeds of which will be used to provide
financing for (i) the acquisition, construction, renovation and leasing of real
property located in the United States and (ii) general business purposes.
B. Certain of the Loan Parties desire to grant Liens in certain
collateral in favor of the Agent for the benefit of the Lenders to secure its
obligations under this Agreement, the Notes and the other Loan Documents.
C. COPT and the Mortgage Property Subsidiaries desire to guaranty the
obligations of Borrower under this Agreement, the Notes and the other Loan
Documents.
D. The making of the Loans and the issuance of Letters of Credit
contemplated by this Agreement are of substantial benefit to the Loan Parties.
NOW, THEREFORE, in consideration of the premises and the agreements,
provisions and covenants herein contained, the Loan Parties, the Lenders and the
Agent agree as follows:
ARTICLE 1
INTERPRETATION
This Agreement and the other Loan Documents shall be construed and
interpreted in accordance with this Article 1.
1.1 Appendix of Defined Terms.
Appendix I to this Agreement, incorporated herein by this reference,
defines certain terms contained therein which are used in this Agreement and the
other Loan Documents. Such terms shall have the meanings ascribed to them in
Appendix I when used in this Agreement or the other Loan Documents with initial
capital letters.
1.2 Accounting Terms; Utilization of GAAP for Purposes of
Calculations Under Agreement; Pro Forma.
Except as otherwise expressly provided in this Agreement, all
accounting terms not otherwise defined herein shall have the meanings assigned
to them in conformity with GAAP. Financial statements and other information
required to be delivered by Borrower to the Agent for distribution to the
Lenders pursuant to Section shall be prepared in accordance with GAAP as in
effect at the time of such preparation. Except as otherwise expressly provided
herein, calculations in connection with the definitions, covenants and other
provisions of this Agreement shall utilize accounting principles and policies in
conformity with those used to prepare the financial statements referred to in
Section .
1.3 Certain References, Captions, Persons, and Expressions.
In any Loan Document, except as otherwise specified therein: (a) all
references to Articles, Sections, clauses, Recitals, Exhibits, Schedules or
Attachments refer to those contained in or annexed to such Loan Document; (b)
all titles or captions are used for convenience and reference only and do not
limit or affect the meaning or effect of the provisions following them; (c) all
references in a Loan Document to any Person, other than Borrower or any of its
Affiliates, includes the successors and assigns of such Person; (d) "includes",
"including" and similar terms mean "includes/including without limitation"; and
(e) whenever the context so requires, the neuter gender includes the masculine
or feminine and the singular number includes the plural, and vice versa.
1.4 Drafter.
No inference against or in favor of any party to any Loan Document
shall be drawn from the fact that such party or its counsel has drafted any
portion of any Loan Document.
2
1.5 Knowledge.
As used in this Agreement or in any other Loan Document, the phrases
"to the actual knowledge", "to the knowledge of" and any variations thereof
shall mean, as of any date of determination and after inquiry that would be made
by a prudent operator of a business such as the business of the person making
the representation or an owner and manager of properties such as the Mortgaged
Properties owning or managing such Mortgaged Properties for its own account, the
actual knowledge or awareness, as of such date, of (i) ▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇▇▇ ▇.
▇▇▇▇▇▇ III and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, (ii) or, at such times as any of such persons
are not officers or directors of the relevant entity, the persons who occupy the
offices of such person or such entity's Chairman of the Board of Trustees, Chief
Executive Officer, and such other officers as shall from time to time perform
the functions that are performed by the foregoing officers as of the date of
this Agreement. Each Loan Party represents and warrants for itself only that the
foregoing Persons have primary executive and administrative responsibility for
its operations and assets and that in the performance of their duties in the
ordinary course of business one or more of such Persons would customarily have
knowledge of the matters referred to herein.
ARTICLE 2
THE REVOLVING CREDIT FACILITY
2.1 Commitment; Loans; Notes.
2.1.1 Commitments. Subject to the terms and conditions of this
Agreement and in reliance upon the representations and warranties of the Loan
Parties herein set forth, each Lender hereby severally agrees, subject to the
limitations set forth below with respect to the maximum amount of Loans
permitted to be outstanding from time to time, to lend to Borrower from time to
time during the period from the Closing Date to but excluding the Maturity Date
an aggregate amount not exceeding such Lender's Pro Rata Share of the aggregate
amount of the Commitments to be used for the purposes identified in Section
2.10.1.
Each Lender's Commitment shall expire on the Maturity Date and all
Loans and all other amounts owed hereunder with respect to the Loans and the
Commitments shall be paid in full no later than the Maturity Date.
Anything contained in this Agreement to the contrary notwithstanding,
the Loans and the Commitments shall be subject to the limitations that the sum
of: (a) aggregate principal amount of the outstanding Loans plus (b) the Letter
of Credit Usage shall not exceed the Available Amount then in effect.
2.1.2 Borrowing Mechanics. Borrower shall be permitted to request a
Loan pursuant to this Section 2.1.2 only four times
3
during any 30 day period. Whenever Borrower desires that the Lenders make Loans,
it shall deliver to the Agent a Notice of Borrowing no later than 10:00 A.M.
(New York time) at least three Business Days in advance of the proposed Funding
Date with respect to a LIBOR Rate Loan or, in the case of a Loan bearing
interest with reference to the Base Rate, one Business Day in advance of the
proposed Funding Date.
Each Notice of Borrowing shall specify (i) the proposed Funding Date
(which shall be a Business Day), (ii) the amount of Loans requested (which in
the case of Libor Rate Loans shall be in an aggregate minimum amount of
$1,000,000), (iii) whether such Loans shall be Base Rate Loans or LIBOR Rate
Loans, (iv) if such Loans are LIBOR Rate Loans, the initial Interest Period
applicable thereto, (v) that not more than three other Funding Dates shall have
occurred within the 30 days next preceding the proposed Funding Date, and (vi)
that the amount of the proposed Loans will not cause the sum of: (a) aggregate
principal amount of the outstanding Loans (after giving effect to such proposed
Loans) plus (b) the Letter of Credit Usage to exceed the Available Amount then
in effect.
Borrower may give the Agent telephonic notice by the required time of
any proposed Loan under this Section 2.1.2; provided, however, that such notice
shall be promptly confirmed in writing by delivery of a Notice of Borrowing to
the Agent on or before the applicable Funding Date. Neither the Agent nor any
Lender shall incur any liability to Borrower in acting upon any telephonic
notice referred to above that the Agent believes in good faith to have been
given by a duly Authorized Officer or other Person authorized to borrow on
behalf of Borrower or for otherwise acting in good faith under this Section
2.1.2, and upon funding of Loans by the Lenders in accordance with this
Agreement pursuant to any such telephonic notice Borrower shall have effected
Loans hereunder.
Borrower shall notify the Agent (who shall notify the Lenders) prior to
the funding of any Loans in the event that any of the matters to which Borrower
is required to certify in the applicable Notice of Borrowing is no longer true
and correct as of the applicable Funding Date, and the acceptance by Borrower of
the proceeds of any Loans shall constitute a re-certification by Borrower, as of
the applicable Funding Date, as to the matters to which Borrower is required to
certify in the applicable Notice of Borrowing.
Except as otherwise provided in Sections 2.11.2 and 2.11.3, a Notice of
Borrowing for a LIBOR Rate Loan (or telephonic notice in lieu thereof) shall be
irrevocable on and after the related Interest Rate Determination Date, and
Borrower shall be bound to make a borrowing in accordance therewith.
2.2 [Intentionally Deleted]
4
2.3 Disbursement of Funds.
All Loans under this Agreement shall be made by the Lenders
simultaneously and proportionately to their respective Pro Rata Shares, it being
understood that no Lender shall be responsible for any default by any other
Lender in that other Lender's obligation to make a Loan requested hereunder nor
shall the Commitment of any Lender be increased or decreased as a result of a
default by any other Lender in that other Lender's obligation to make a Loan
requested hereunder. After receipt by the Agent of a Notice of Borrowing
pursuant to Section 2.1.2 (or telephonic notice in lieu thereof), the Agent
shall promptly notify (and, if the Notice of Borrowing is received by the Agent
by 10:00 A.M. (New York time) on any day, in any event by 2:00 P.M. of such day)
each Lender of the proposed borrowing. Each Lender shall make the amount of its
Loan available to the Agent, in same day funds, at the office of the Agent
located at One Bankers Trust Plaza, New York, New York, not later than 12:00
Noon (New York time) on the applicable Funding Date in same day funds in
Dollars. Upon satisfaction or waiver of the conditions precedent specified in
Sections 3.1 (in the case of Loans made on the first Funding Date) and 3.2 (in
the case of all Loans), the Agent shall make the proceeds of such Loans
available to the applicable Borrower on the applicable Funding Date by causing
an amount of same day funds (in Dollars) equal to the proceeds of all such Loans
received by the Agent from the Lenders to be transferred to the account
designated in the Notice of Borrowing.
Unless the Agent shall have been notified by any Lender prior to the
Funding Date for any Loans that such Lender does not intend to make available to
the Agent the amount of such Lender's Loan requested on such Funding Date, the
Agent may assume that such Lender has made such amount available to the Agent on
such Funding Date and the Agent may, in its sole discretion, but shall not be
obligated to, make available to Borrower a corresponding amount on such Funding
Date. If such corresponding amount is not in fact made available to the Agent by
such Lender, the Agent shall be entitled to recover such corresponding amount on
demand from such Lender together with interest thereon, for each day from such
Funding Date until the date such amount is paid to the Agent, at the Federal
Funds Effective Rate for three Business Days and thereafter at the Base Rate. If
such Lender does not pay such corresponding amount forthwith upon the Agent's
demand therefor, the Agent shall promptly notify Borrower and Borrower shall
immediately pay such corresponding amount to the Agent together with interest
thereon, for each day from such Funding Date until the date such amount is paid
to the Agent, at the rate payable under this Agreement for Base Rate Loans.
Nothing in this Section 2.3 shall be deemed to relieve any Lender from its
obligation to fulfill its Commitment hereunder or to prejudice any rights that
Borrower may have against any Lender as a result of any default by such Lender
hereunder.
5
2.4 The Register.
2.4.1 The Agent shall maintain, at its address referred to
in Section 8.8 a register for the recordation of the names and
addresses of the Lenders and the Commitment and Loans of each Lender
from time to time (the "Register"). The Borrower, the Agent and the
Lenders may treat each Person whose name is recorded in the Register as
a Lender hereunder for all purposes of this Agreement. The Register
shall be available for inspection by Borrower or any Lender at any
reasonable time and from time to time upon reasonable prior notice.
2.4.2 The Agent shall record in the Register the
Commitment and the Loans from time to time of each Lender, and each
repayment or prepayment in respect of the principal amount of the Loans
of each Lender. Any such recordation shall be conclusive and binding on
Borrower and each Lender, absent manifest error; provided, however,
that failure to make any such recordation, or any error in such
recordation, shall not affect Borrower's Obligations in respect of the
applicable Loans.
2.4.3 Each Lender shall record on its internal records
(including any promissory note described in Section 2.4.4) the amount
of each Loan made by it and each payment in respect thereof. Any such
recordation shall be conclusive and binding on Borrower, absent
manifest error; provided, however, that failure to make any such
recordation, or any error in such recordation, shall not affect
Borrower's Obligations in respect of the applicable Loans; provided
further, however, that in the event of any inconsistency between the
Register and any Lender's records, the recordations in the Register
shall govern.
2.4.4 Any Lender may, by notice to the Agent and Borrower,
request that all or part of the principal amount of Borrower's Loans
from such Lender and such Lender's Commitment hereunder be evidenced by
Notes. Within three Business Days of a Borrower's receipt of such
notice, Borrower shall execute and deliver to the Agent for delivery to
the appropriate Lender a Note in the amount(s) of such Lender's
Commitment payable to the notifying Lender or, if so specified in such
notice, any Person who is an assignee of such Lender pursuant to
Section 8.1 hereof. If the foreclosure or other enforcement of any
Mortgage or any other Security Document requires the presentation of a
Note evidencing the Obligations secured by such Security Document and
Borrower fails or refuses to comply with a request for such Note, then
a copy of this Agreement may be presented in lieu of such a Note.
6
2.5 Maturity.
The aggregate outstanding principal balance of the Loans, together with
accrued interest thereon and all other amounts payable by Borrower under the
terms of the Loan Documents, shall be due and payable on the Maturity Date.
2.6 Extension of Maturity Date.
At any time prior to the date that is 90 days before the second
Anniversary, Borrower may deliver a written notice to the Agent requesting that
the Maturity Date be extended from the second Anniversary to the third
Anniversary and, if such notice is delivered, the Maturity Date shall be so
extended if the following conditions are satisfied:
(i) as of the second Anniversary, no Event of Default or
Potential Event of Default shall have occurred and be continuing and
Borrower shall have delivered an Officers' Certificate certifying
thereto; and
(ii) on or prior to the second Anniversary, Borrower shall
have paid to the Agent in immediately available funds, for distribution
to the Lenders in accordance with their Pro Rata Shares, a fee equal to
0.25% of the aggregate amount of the Commitments as of the second
Anniversary.
2.7 Interest on the Loans.
2.7.1 Rates of Interest. Subject to the provisions of Sections 2.7.5,
2.11 and 2.12, each Loan shall bear interest on the unpaid principal amount
thereof from the date made to but not including maturity (whether by
acceleration or otherwise) at a rate determined by reference to the Adjusted
LIBOR Rate or the Base Rate, as applicable; provided, however, that in the event
that any LIBOR Rate Loan is to be made on a day when there are already five (5)
Interest Periods outstanding, such Loan shall bear interest at a rate determined
by reference to the Base Rate, notwithstanding any contrary notice from
Borrower. The basis for determining the interest rate with respect to any Loan
shall be changed from time to time in accordance with Section 2.7.4.
Subject to the provisions of Sections 2.7.5, 2.9.1 and 2.12, the Loans
shall bear interest to but not including maturity as follows:
(i) if a Base Rate Loan, then at a rate equal to the
Base Rate.
(ii) if a LIBOR Rate Loan, then at the sum of the Adjusted LIBOR
Rate plus 1.75%.
2.7.2 Interest Periods. In connection with each LIBOR
Rate Loan, Borrower shall, pursuant to the applicable Notice of
7
Borrowing or Notice of Conversion/Continuation, as the case may be, select an
interest period (each an "Interest Period") to be applicable to such Loan, which
Interest Period shall be at Borrower's option a one, two or three month period;
provided, however, that:
(i) the initial Interest Period of any LIBOR Rate Loan shall
commence on the Funding Date in respect of such Loan;
(ii) each successive Interest Period shall commence on the day
on which the next preceding Interest Period expires;
(iii) if an Interest Period would otherwise expire on a day that
is not a Business Day, such Interest Period shall expire on the next
succeeding Business Day; provided, however, that, if any Interest
Period would otherwise expire on a day that is not a Business Day but
is a day of the month after which no further Business Day occurs in
such month, such Interest Period shall expire on the next preceding
Business Day;
(iv) any Interest Period that begins on the last Business Day of
a calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such Interest
Period) shall, subject to clause (v) of this Section 2.7.2, end on the
last Business Day of a calendar month;
(v) no Interest Period with respect to any portion of the
Loans shall extend beyond the Maturity Date;
(vi) there shall be no more than five (5) Interest Periods
outstanding at any time;
(vii) if five Interest Periods are outstanding, at least one
Interest Period shall be either (a) a one month Interest Period or (b)
an Interest Period with less than 30 days remaining; and
(viii) in the event Borrower shall fail to specify an Interest
Period for a LIBOR Rate Loan in the applicable Notice of Borrowing or
Notice of Conversion/Continuation, Borrower shall be deemed to have
selected an Interest Period of one month.
2.7.3 Interest Payments. Subject to the provisions of Sections 2.7.5,
interest on the Loans shall be payable monthly in arrears on and to each Payment
Date, upon any prepayment of the Loans (to the extent accrued on the amount
being prepaid) and at the Maturity Date.
2.7.4 Conversion/Continuation. Subject to the provisions of Sections
2.7.5 and 2.11, Borrower may elect from time to time to convert a Base Rate
Loan, or a portion thereof,
8
to a LIBOR Rate Loan subject to the requirements set forth in Section 2.7.2.
Upon the expiration of any Interest Period applicable to a LIBOR Rate Loan,
Borrower may elect to continue such Loan, or a portion thereof, as a LIBOR Rate
Loan, subject to the requirements set forth in Section 2.7.2, or to convert such
Loan, or a portion thereof, to a Base Rate Loan. Borrower shall deliver a Notice
of Conversion/Continuation to the Agent no later than 10:00 A.M. (New York) at
least one Business Day in advance of the proposed conversion date (in the case
of a conversion to a Base Rate Loan) and at least three Business Days in advance
of the proposed conversion/continuation date (in the case of a conversion to, or
a continuation of, a LIBOR Rate Loan). A Notice of Conversion/Continuation shall
specify (i) the proposed conversion/continuation date (which shall be a Business
Day), (ii) the amount and type of the Loan to be converted/continued, (iii) in
the case of a conversion to, or a continuation of, a LIBOR Rate Loan, the
requested Interest Period, and (iv) in the case of a conversion to, or a
continuation of, a LIBOR Rate Loan, that no Potential Event of Default or Event
of Default has occurred and is continuing. In lieu of delivering the
above-described Notice of Conversion/Continuation, Borrower may give the Agent
telephonic notice by the required time of any proposed conversion/continuation
under this Section 2.7.4, provided, however, that such notice shall be promptly
confirmed in writing by delivery of a Notice of Conversion/Continuation to the
Agent on or before the proposed conversion/continuation date. Upon receipt of
written or telephonic notice of any proposed conversion/continuation under this
Section 2.7.4, the Agent shall promptly transmit such notice by telefacsimile or
telephone to each Lender.
Neither the Agent nor any Lender shall incur any liability to Borrower
in acting upon any telephonic notice referred to above that the Agent believes
in good faith to have been given by a duly Authorized Officer or other Person
authorized to act on behalf of Borrower or for otherwise acting in good faith
under this Section 2.7.4, and upon conversion or continuation of the applicable
basis for determining the interest rate with respect to any Loans in accordance
with this Agreement pursuant to any such telephonic notice Borrower shall have
effected a conversion or continuation, as the case may be, hereunder.
Except as otherwise provided in Sections 2.7.5, 2.11 and 2.12, a Notice
of Conversion/Continuation for conversion to, or continuation of, a LIBOR Rate
Loan (or telephonic notice in lieu thereof) shall be irrevocable on and after
the related Interest Rate Determination Date, and Borrower shall be bound to
effect a conversion or continuation in accordance therewith.
2.7.5 Default Rate Interest. During the continuation of any Event of
Default, the outstanding principal amount of all Loans and, to the extent
permitted by applicable law, any interest payments thereon not paid when due
(other than any excess interest payable solely pursuant to this Section 2.7.5)
9
and any fees and other amounts then due and payable hereunder, shall thereafter
bear interest (including post-petition interest in any proceeding under the
Bankruptcy Code or other applicable bankruptcy or insolvency laws) payable upon
demand at a rate that is 2% per annum in excess of the interest rate otherwise
payable under this Agreement with respect to the applicable Loans (or, in the
case of any such fees and other amounts, at a rate which is 2% per annum in
excess of the interest rate otherwise payable under this Agreement for Base Rate
Loans); provided, however, that, in the case of LIBOR Rate Loans, if such Event
of Default is continuing, upon the expiration of the Interest Period in effect
at the time any such increase in interest rate is effective, such LIBOR Rate
Loans shall thereupon become Base Rate Loans and shall thereafter bear interest
payable upon demand at a rate which is 2% per annum in excess of the interest
rate otherwise payable under this Agreement for Base Rate Loans. Payment or
acceptance of the increased rates of interest provided for in this Section 2.7.5
is not a permitted alternative to timely payment and shall not constitute a
waiver of any Event of Default or otherwise prejudice or limit any rights or
remedies of the Agent or any Lender.
2.7.6 Computation of Interest. Interest on the Loans shall be computed
(a) in the case of Base Rate Loans, on the basis of a 365-day or 366-day year,
as the case may be, and (b) in the case of LIBOR Rate Loans, on the basis of a
360-day year, in each case for the actual number of days elapsed in the period
during which it accrues. In computing interest on any Loans, the date of the
making of such Loan or the first day of an Interest Period applicable to such
Loan shall be included, and the date of repayment of such Loan or the expiration
date of an Interest Period applicable to such Loan shall be excluded; provided,
however, that if a Loan is repaid on the same day on which it is made, one day's
interest shall be paid on that Loan.
2.8 Fees.
2.8.1 Unused Commitment Fees. Borrower agrees to pay to the Agent, for
distribution to each Lender in proportion to that Lender's Pro Rata Share,
unused commitment fees for the period from and including the Closing Date to and
excluding the Maturity Date, equal to (i) the average of the daily unused
portion of the Commitments, multiplied by (ii) 0.25% per annum, such unused
commitment fees to be calculated on the basis of a 360-day year and the actual
number of days elapsed. Anything contained in this Agreement to the contrary
notwithstanding, for purposes of calculating the unused commitment fees payable
by Borrower pursuant to this Section 2.8.1, the "unused portion of the
Commitments," as of any date of determination, shall be an amount equal to the
average daily amount by which the aggregate of the Commitments exceeds the sum
of: (a) the aggregate principal amount of the Loans outstanding plus (b) the
Letter of Credit Usage during the applicable calendar quarter or portion
thereof. The unused commitment fee shall be payable as provided in this
10
Section 2.8.1 notwithstanding that the then Available Amount may be less than
the amount of the Commitments. An unused commitment fee shall be payable
quarterly in arrears on the fifth day of each calendar quarter or portion
thereof during the term hereof, with a final payment due on the Maturity Date.
2.8.2 Fee Letter. Borrower shall pay the fees described
in the Fee Letter in accordance with the terms thereof.
2.9 Repayments and Prepayments; General Provisions Regarding
Payments.
2.9.1 Prepayments and Unscheduled Reductions in
Commitment.
2.9.1.1 Voluntary Prepayments. Borrower may, upon not less
than one Business Day's prior written or telephonic notice, in the case
of Base Rate Loans, and three Business Days' prior written or
telephonic notice in the case of LIBOR Rate Loans, in each case
confirmed in writing to the Agent (which notice the Agent will promptly
transmit by telecopy, telex or telephone to each Lender), at any time
and from time to time prepay any Loans on any Business Day in whole or
in part in an aggregate minimum amount of $1,000,000 and integral
multiples of $500,000 in excess of that amount (or, if less, the total
amount of all outstanding Loans); provided, however, that in the event
a LIBOR Rate Loan is prepaid on a day other than the last day of the
Interest Period applicable thereto, such prepayment shall be
accompanied by the payment of any amounts payable under Section 2.11.
Notice of prepayment having been given as aforesaid, the principal
amount of the Loans specified in such notice shall become due and
payable on the prepayment date specified therein; provided, however,
that in the case of any such withdrawal, Borrower shall promptly pay
all amounts then due to the Lenders pursuant to Section 2.11. Any such
voluntary prepayment shall be applied as specified in Section 2.9.1.5.
Amounts prepaid pursuant to this Section 2.9.1.1 may be reborrowed
pursuant to Section 2.1.1.
2.9.1.2 Voluntary Reductions of Commitment. Borrower may, upon
not less than three Business Days' prior written or telephonic notice
confirmed in writing to the Agent (which notice the Agent will promptly
transmit by telecopy, telex or telephone to each Lender), at any time
and from time to time terminate in whole or permanently reduce in part,
without premium or penalty, the Commitments in an amount up to the
amount by which the Commitments exceed the sum of: (a) the aggregate
principal amount of the then outstanding Loans plus (b) the Letter of
Credit Usage; provided, however, that any such partial reduction of the
Commitments shall be in an aggregate minimum amount of $1,000,000 and
integral multiples of $1,000,000 in excess of that amount. Borrower's
notice to the Agent shall designate
11
the date (which shall be a Business Day) of such termination or
reduction and the amount of any partial reduction, and such termination
or reduction of the Commitments shall be effective on the date
specified in Borrower's notice and shall reduce the Commitment of each
Lender proportionately to its Pro Rata Share.
2.9.1.3 Reductions in Borrowing Base Due to Casualty,
Condemnation or Disposition of a Mortgaged Property. If there shall
occur a casualty or Taking with respect to any Mortgaged Property (or
any portion thereof) or a sale or other permanent disposition of such
Mortgaged Property, with respect to which occurrence a prepayment is
required to be made, then the Borrowing Base shall be recomputed as of
such date, after giving effect to any Release.
2.9.1.4 Prepayments Due to Borrowing Base. If at any time the
aggregate principal amount of the then outstanding Loans exceeds the
Borrowing Base then in effect, as demonstrated by a Borrowing Base
Certificate delivered (or required to be delivered) pursuant to Section
5.1.2, Borrower shall prepay the Loans in an amount equal to such
excess not later than 15 Business Days after the date that such
Borrowing Base Certificate shall have been delivered (or, if such
Borrowing Base Certificate shall not have been delivered timely or at
all, on the last day that such Borrowing Base Certificate is permitted
by Section 5.1.2 to be delivered). Any mandatory prepayments pursuant
to this Section 2.9.1.4 shall be applied as specified in Section
2.9.1.5.
2.9.1.5 Application of Prepayments. Each prepayment of the
Loans shall be applied first to Base Rate Loans to the full extent
thereof before application to LIBOR Rate Loans, in each case in a
manner which minimizes the amount of any payments required to be made
by Borrower pursuant to Section 2.11.4, unless some other application
is mutually acceptable to Borrower and the Lenders.
2.9.2 Application of Payments to Principal and Interest. All payments
in respect of the principal amount of the Loans shall include payment of accrued
interest on the principal amount being repaid or prepaid, and all such payments
shall be applied to the payment of unpaid interest before application to
principal.
2.9.3 General Provisions Regarding Payments.
2.9.3.1 Manner and Time of Payment. All payments by Borrower
of principal, interest, fees and other Obligations hereunder and under
the Notes and the other Loan Documents shall be made in same day funds
and without defense, setoff or counterclaim, free of any restriction or
condition, and delivered to the Agent not later than 12:00 Noon (New
York
12
time) on the date due at its office located at One Bankers Trust Plaza,
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ for the account of the
Lenders; funds received by the Agent after that time shall be deemed to
have been paid on the next succeeding Business Day.
2.9.3.2 Apportionment of Payments. Aggregate principal and
interest payments shall be apportioned among all outstanding Loans to
which such payments relate, in each case proportionately to the
Lenders' respective Pro Rata Shares. The Agent shall promptly
distribute to each Lender, at the address as such Lender may request,
its Pro Rata Share of all such payments received by the Agent and the
unused commitment fees of such Lender when received by the Agent
pursuant to Section 2.8.1. Notwithstanding the foregoing provisions of
this Section 2.9.3.2, if, pursuant to the provisions of Section 2.11.3,
any Affected Lender makes Base Rate Loans in lieu of its Pro Rata Share
of any LIBOR Rate Loans, the Agent shall give effect thereto in
apportioning payments received thereafter.
2.9.3.3 Payments on Business Days. Whenever any payment to be
made hereunder shall be stated to be due on a day that is not a
Business Day, such payment shall be made on the next succeeding
Business Day and such extension of time shall be included in the
computation of the payment of interest hereunder.
2.9.3.4 Notation of Payment. Each Lender agrees that before
disposing of the Note held by it, or any part thereof (other than by
granting participations therein), that Lender will make a notation
thereon of all Loans evidenced by that Note and all principal payments
previously made thereon and of the date to which interest thereon has
been paid; provided, however, that the failure to make (or any error in
the making of) a notation of any Loan made under such Note shall not
limit or otherwise affect the obligations of any Loan Party hereunder
or under such Note with respect to any Loan or any payments of
principal or interest on such Note.
2.9.4 Application of Proceeds of Collateral and Payments
Under COPT Guaranty and Mortgaged Property Subsidiary Guaranty.
(i) Application of Proceeds of Collateral. All proceeds
received by the Agent in respect of any sale of, collection from, or
other realization upon all or any part of the Collateral under any
Collateral Document may, in the discretion of the Agent, be held by the
Agent as Collateral for, and/or (then or at any time thereafter)
applied in full or in part by the Agent against, the obligations
secured by such Collateral Document in the following order of priority:
(a) To the payment of all costs and expenses of
such sale, collection or other realization, including
13
reasonable compensation to the Agent and its agents and
counsel, and all other expenses, liabilities and advances made
or incurred by the Agent in connection therewith, and all
amounts for which the Agent is entitled to indemnification
under such Collateral Document and all advances made by the
Agent thereunder for the account of the applicable Loan Party,
and to the payment of all costs and expenses paid or incurred
by the Agent in connection with the exercise of any right or
remedy under such Collateral Document, all in accordance with
the terms of this Agreement and such Collateral Document;
(b) thereafter, to the extent of any excess of such
proceeds, to the payment of all other Obligations for the
ratable benefit of the holders thereof; and
(c) thereafter, to the extent of any excess of such
proceeds, to the payment to or upon the order of such Loan
Party or to whosoever may be lawfully entitled to receive the
same or as a court of competent jurisdiction may direct.
(ii) Application of Payments Under COPT Guaranty and/or
Mortgaged Property Subsidiary Guaranty. All payments received by the
Agent under the COPT Guaranty and/or any Mortgaged Property Subsidiary
Guaranty shall be applied promptly from time to time by the Agent in
the following
order of priority:
(a) To the payment of the costs and expenses of any
collection or other realization under the COPT Guaranty or
such Mortgaged Property Subsidiary Guaranty, as applicable,
including reasonable compensation to the Agent and its agents
and counsel, and all expenses, liabilities and advances made
or incurred by the Agent in connection therewith, all in
accordance with the terms of this Agreement, the COPT Guaranty
and/or such Mortgaged Property Subsidiary Guaranty, as
applicable;
(b) thereafter, to the extent of any excess of such
payments, to the payment of all other Obligations guaranteed
by the COPT Guaranty or such Mortgaged Property Subsidiary
Guaranty, as applicable, for the ratable benefit of the
holders thereof; and
(c) thereafter, to the extent of any excess of such
payments, to the payment to COPT or the applicable Mortgaged
Property Subsidiary Guarantor, as applicable, or to whosoever
may be lawfully entitled to receive the same or as a court of
competent jurisdiction may direct.
14
2.10 Use of Loan Proceeds.
2.10.1 Loans. Subject to the other provisions of this Agreement, the
proceeds of the Loans shall be applied by Borrower for the general business
purposes of Borrower.
2.10.2 Margin Regulations. No portion of the proceeds of any Loan under
this Agreement shall be used by any Loan Party or any of its Subsidiaries in any
manner that might cause the borrowing to violate Regulation U, Regulation T or
Regulation X of the Board of Governors of the Federal Reserve System or any
other regulation of such Board or to violate the Exchange Act, in each case as
in effect on the date or dates of such borrowing.
2.11 Special Provisions Governing LIBOR Rate Loans.
Notwithstanding any other provision of this Agreement to the contrary,
the following provisions shall govern with respect to the LIBOR Rate Loans as to
the matters covered:
2.11.1 Determination of Applicable Interest Rate. As
soon as practicable after 10:00 A.M. (New York time) on each
Interest Rate Determination Date, the Agent shall determine the
Adjusted LIBOR Rate for the applicable Interest Period and shall
promptly give notice thereof (in writing or by telephone
confirmed in writing) to Borrower and each Lender. The Agent's
determination shall be final, conclusive and binding upon all
parties, absent manifest error.
2.11.2 Inability to Determine Applicable Interest Rate. If on any
Interest Rate Determination Date the Agent determines in good faith that by
reason of circumstances affecting the interbank LIBOR market, adequate and fair
means do not exist for ascertaining the interest rate applicable to such Loans
on the basis provided for in the definition of Adjusted LIBOR Rate, the Agent
shall on such date give notice to Borrower of such determination, whereupon (i)
no Loans may be made as, or converted to LIBOR Rate Loans until such time as the
Agent notifies Borrower and the Lenders that the circumstances giving rise to
such notice no longer exist and (ii) any Notice of Borrowing or Notice of
Conversion/Continuation given by Borrower with respect to the Loans in respect
of which such determination was made shall be deemed to contain a request that
such Loans be made as or converted to Base Rate Loans. The Agent's determination
shall be final and conclusive and binding upon all parties hereto, absent
manifest error.
2.11.3 Illegality or Impracticability of LIBOR Rate. If at any time any
Lender determines in good faith that the making, maintaining or continuation of
its LIBOR Rate Loans (i) has become unlawful as a result of compliance by such
Lender in good faith with any law, treaty, governmental rule, regulation,
guideline or order (or would conflict with any such treaty, governmental rule,
regulation, guideline or order not having the force
15
of law even though the failure to comply therewith would not be unlawful) which
was adopted or became effective after the date of this Agreement or (ii) has
become impracticable, or would cause such Lender material hardship, as a result
of contingencies occurring after the date of this Agreement which materially and
adversely affect the interbank LIBOR market, or the position of such Lender in
that market, then, and in any such event, such Lender shall be an "Affected
Lender" and it shall on that date give notice (by telefacsimile or by telephone
confirmed in writing) to Borrower and the Agent of such determination.
Thereafter, (a) the obligation of the Affected Lender to make Loans as, or to
convert Loans to LIBOR Rate Loans shall be suspended until such notice shall be
withdrawn by the Affected Lender, (b) to the extent such determination by the
Affected Lender relates to a LIBOR Rate Loan then being requested by Borrower to
be made or continued hereunder, the Affected Lender shall make such Loan as, or
convert such Loan to, as applicable, a Base Rate Loan, (c) the Affected Lender's
obligation to maintain its outstanding LIBOR Rate Loans (the "Affected Loans")
shall be terminated at the earlier to occur of the expiration of the Interest
Period then in effect with respect to the LIBOR Rate Loans or when required by
law and (d) the Affected Loans shall automatically convert into Base Rate Loans
on the date of such termination. Except as provided in the immediately preceding
sentence, nothing in this section 2.11.3 shall affect the obligation of any
Lender other than an Affected Lender to make or maintain Loans as, or to convert
Loans to, LIBOR Rate Loans in accordance with the terms of this Agreement. Once
the conditions causing a Lender to be an Affected Lender no longer exist, such
Lender shall, promptly after it becomes aware thereof, withdraw the notice that
it is an Affected Lender by giving notice (by telecopy or by telephone confirmed
in writing) to Borrower and the Agent and such Lender's obligations to make
LIBOR Rate Loans hereunder shall be immediately reinstated. Any Lender's
determination shall be final and conclusive and binding upon all parties hereto,
absent manifest error, but shall be made only after consultation with the Agent.
2.11.4 Compensation For Breakage or Non-Commencement of Interest
Periods. Borrower shall compensate each Lender, upon written request by such
Lender setting forth the basis for requesting such amounts, for all reasonable
costs, expenses and liabilities (including any interest paid by such Lender to
lenders of funds borrowed by it to make or carry its LIBOR Rate Loans and any
costs, expense or liability sustained by such Lender in connection with the
liquidation or re-employment of such funds) which such Lender may sustain: (i)
if for any reason a borrowing, or a conversion to or continuation of any LIBOR
Rate Loan does not occur on a date specified therefor in a Notice of Borrowing
or a Notice of Conversion/Continuance, as applicable, or a telephonic request
for borrowing, or a conversion to or continuation of any LIBOR Rate Loan does
not occur on the date specified therefor, (ii) if any prepayment or other
principal payment or any conversion of any of its LIBOR Rate Loans occurs
16
on a date that is not the last day of an Interest Period applicable to that
Loan, (iii) if any prepayment (including any prepayment pursuant to Section
2.9.1.1 or Section 2.9.1.4) or other principal payment of any of its LIBOR Rate
Loans is not made by Borrower on any date specified in a notice of prepayment
given by Borrower or (iv) as a consequence of any other default by Borrower in
repayment of its LIBOR Rate Loans when required by the terms of this Agreement.
2.11.5 Booking of LIBOR Rate Loans. Any Lender may make, carry or
transfer the LIBOR Rate Loans at, to, or for the account of any of its branch
offices or the office of an Affiliate of such Lender, provided that at the time
of such making or transfer Borrower would not thereby be made subject to (x)
suspension of the applicability of the LIBOR Rate Loans under Section 2.11.3,
(y) payment obligations under Section 2.12.1, or (z) withholding for Taxes under
Section 2.12.2.
2.11.6 Assumptions Concerning Funding of LIBOR Rate Loans. Calculation
of all amounts payable to a Lender under this Agreement shall be made as though
such Lender had actually funded each of its relevant LIBOR Rate Loans through
the purchase of a LIBOR deposit bearing interest at the rate obtained pursuant
to clause (i) of the definition of Adjusted LIBOR Rate in an amount equal to the
amount of such LIBOR Rate Loan and having a maturity comparable to the relevant
Interest Period and through the transfer of such LIBOR deposit from an offshore
office of such Lender to a domestic office of such Lender located in the United
States of America. Nevertheless, such Lender may fund each of its LIBOR Rate
Loans in any manner it sees fit and the foregoing assumptions shall be utilized
only for the purposes of calculating amounts payable under this Agreement.
2.12 Increased Costs; Taxes; Capital Adequacy.
2.12.1 Compensation for Increased Costs and Taxes. Subject to Section
2.12.2 (which shall be controlling with respect to the matters covered thereby),
if any Lender shall in good faith determine that any law, treaty or governmental
rule, regulation or order, or any change therein or in the governmental
interpretation, administration or application thereof (including the adoption of
any new law, treaty or governmental rule, regulation or order), or any
determination of a Governmental Authority, in each case that becomes effective
after the date hereof, or compliance by such Lender with any guideline, request
or directive issued or made after the date hereof by any central bank or other
Governmental Authority or quasi-governmental authority (whether or not having
the force of law):
(a) subjects such Lender (or its applicable lending office) to
any additional Tax (other than any Tax on the overall net income of
such Lender), with respect to this Agreement or any of its obligations
hereunder or any payments to such Lender (or its applicable lending
office)
17
of principal, interest, fees or any other amount payable
hereunder;
(b) imposes, modifies or holds applicable any reserve
(including any marginal, emergency, supplemental, special or other
reserve), special deposit, compulsory loan, FDIC insurance or similar
requirement against assets held by, or deposits or other liabilities in
or for the account of, or advances or loans by, or other credit
extended by, or any other acquisition of funds by, any office of such
Lender (other than any such reserve or other requirements with respect
to LIBOR Rate Loans that are already reflected in the definition of
Adjusted Eurodollar Rate); or
(c) imposes any other condition (other than with respect to a
Tax matter) on or affecting such Lender (or its applicable lending
office) or its obligations hereunder or the interbank LIBOR market;
and the result of any of the foregoing is to increase the cost to such Lender of
agreeing to make, making or maintaining Loans hereunder then bearing the
Adjusted LIBOR Rate or to reduce any amount received or receivable by such
Lender (or its applicable lending office) with respect thereto; then, in any
such case, Borrower shall promptly pay to such Lender, upon receipt of the
statement referred to in the next sentence, such additional amount or amounts
(in the form of an increased rate of, or a different method of calculating,
interest or otherwise as such Lender in its sole discretion shall determine) as
may be necessary to compensate such Lender for any such increased cost or
reduction in amounts received or receivable hereunder. Such Lender shall deliver
to Borrower a written statement setting forth in reasonable detail the basis for
calculating the additional amounts owed to such Lender under this Section
2.12.1, which statement shall be conclusive and binding upon all parties hereto
absent manifest error.
2.12.2 Withholding of Taxes.
2.12.2.1 Payments to Be Free and Clear. All sums payable by
Borrower under this Agreement and the other Loan Documents shall be
paid free and clear of and (except to the extent required by law)
without any deduction or withholding on account of any Tax (excluding
(i) Taxes imposed on the Agent's or any Lender's overall net income or
measured by Lender's net or gross income, net receipts or net worth or
(ii) franchise Taxes imposed on Lender by a jurisdiction in which (a)
such Lender is organized, (b) such Lender is doing business or (c) such
Lender's applicable lending office is located, and which franchise
Taxes would not have been imposed but for such organization, doing
business or lending office of such Lender) imposed, levied, collected,
withheld or assessed by or within the United States of America or any
political subdivision in or of the United States of America
18
or any other jurisdiction from or to which a payment is made
by or on behalf of Borrower.
2.12.2.2 Grossing-up of Payments. If Borrower or any other
Loan Party is required by law to make any deduction or withholding on
account of any such Tax from any sum paid or payable by Borrower to the
Agent or any Lender under any of the Loan Documents:
(a) Borrower shall notify the Agent of any
such requirement or any change in any such requirement
promptly after Borrower becomes aware of it;
(b) Borrower shall pay any such Tax before
the date on which penalties attach thereto, such payment to be
made (if the liability to pay is imposed on Borrower) for its
own account or (if that liability is imposed on such Lender)
on behalf of and in the name of the Agent or such Lender;
(c) the sum payable by Borrower in respect
of which such deduction, withholding or payment is required
shall be increased to the extent necessary to ensure that,
after the making of that deduction, withholding or payment,
the Agent or such Lender, as the case may be, receives on the
due date a net sum equal to what it would have received had no
such deduction, withholding or payment been required or made;
and
(d) within 30 days after paying any sum from
which it is required by law to make any deduction or
withholding, and within 30 days after the due date of payment
of any Tax which it is required by Section 2.13.2.2(b) above
to pay, Borrower shall deliver to the Agent evidence
satisfactory to the other affected parties of such deduction,
withholding or payment and of the remittance thereof to the
relevant taxing or other authority;
provided, however, that no such additional amount shall be required to
be paid to any Lender under clause (c) above except to the extent that
any change after the date hereof (in the case of the Lender listed on
the signature page hereof) or after the date such Lender became a
Lender pursuant to Section (in the case of each other Lender) in any
such requirement for a deduction, withholding or payment shall result
in an increase in the rate of such deduction, withholding or payment
from that in effect at the date of this Agreement (in the case of the
Lender listed on the signature page hereof) or at the date such Lender
became a Lender pursuant to Section (in the case of each other Lender)
in respect of payments to such Lender.
19
2.12.2.3 U.S. Tax Certificates. Each Lender that is organized
under the laws of the United States of America or any state or
political subdivision thereof or the District of Columbia shall deliver
to Borrower a properly completed and duly executed Internal Revenue
Service Form W-9 on the date on which it becomes a Lender (including
pursuant to Section 8.1). Each Lender that is organized under the laws
of any jurisdiction other than the United States of America or any
state or other political subdivision thereof or the District of
Columbia shall deliver to Borrower, on the date on which it becomes a
Lender pursuant to Section , such certificates, documents or other
evidence, properly completed and duly executed by such Lender
(including Internal Revenue Service Form W-8 and Form 1001 or Form 4224
or any other certificate or statement of exemption required by Treasury
Regulations Section 1.1441-4(a) or Section 1.1441-6(c) or any successor
thereto) to establish that such Lender is not subject to deduction or
withholding of United States federal income tax under Section 1441,
1442 or 3406 of the Internal Revenue Code or otherwise (or under any
comparable provisions of any successor statute) with respect to any
payments to such Lender of principal, interest, fees or other amounts
payable under any of the Loan Documents. Each Lender further agrees to
deliver additional Internal Revenue Service Forms W-8, W-9, 1001, 4224
(or successor forms, or such other certificates, documents or evidence,
completed as aforesaid, and establishing that such Lender is not so
subject to deduction or withholding) (i) promptly following the
occurrence of any event requiring a change in a form previously
delivered by it to Borrower and (ii) such extensions or renewals as may
reasonably be requested by the Borrower.
2.12.2.4 Refunds, etc. If any Lender receives a refund in
respect of any Taxes paid by Borrower pursuant to Section 2.12.2.2(b),
it shall promptly pay such refund and any interest paid with respect
thereto.
2.12.3 Capital Adequacy Adjustment. If any Lender shall have reasonably
determined that the adoption, effectiveness, phase-in or applicability (after
the date of this Agreement) of any law, rule or regulation (or any provision
thereof) regarding capital adequacy, or any change therein or in the
interpretation or administration thereof by any Governmental Authority,
including any central bank or comparable agency charged with the interpretation
or administration thereof, or compliance by any Lender (or its applicable
lending office) with any guideline, request or directive regarding capital
adequacy (whether or not having the force of law (after the date of this
Agreement)) of any such Governmental Authority, has or would have the effect of
reducing the rate of return on the capital of such Lender or any corporation
controlling such Lender as a consequence of, or with reference to, such Lender's
interest in the Loans or other obligations hereunder with respect to the Loans
to a level below
20
that which such Lender or such controlling corporation could have achieved but
for such adoption, effectiveness, phase-in, applicability, change or compliance
(taking into consideration the policies of such Lender or such controlling
corporation with regard to capital adequacy), then from time to time, within
five Business Days after receipt by Borrower from such Lender of the statement
referred to in the next sentence, Borrower shall pay to such Lender such
additional amount or amounts as will compensate such Lender or such controlling
corporation on an after-tax basis for such reduction. Such Lender shall deliver
to Borrower (with a copy to the Agent) a written statement, setting forth in
reasonable detail the basis of the calculation of such additional amounts, which
statement shall be conclusive and binding upon all parties hereto absent
manifest error. Nothing in this Section 2.12.3 shall require the Borrower to
make any payments in respect of Taxes; the Borrower's obligation to indemnify
for Lender Taxes shall be limited to its obligations under Section 2.12.2.
2.12.4 Obligation of Lender to Mitigate. Each Lender agrees that, as
promptly as practicable after the officer of such Lender responsible for
administering the Loans becomes aware of the occurrence of an event or the
existence of a condition that would entitle such Lender to (x) become an
Affected Lender, (y) receive payments under Section 2.12.1, or (z) require
Borrower to make payments under Section 2.12.2, it will, to the extent not
inconsistent with its formally-adopted internal policies of general application
and any applicable legal or regulatory restrictions, use reasonable efforts to
(i) maintain the Loans or interest of such Lender through another lending office
of such Lender, or (ii) take such other measures as such Lender may deem
reasonable, if as a result thereof the effect of the matters described in
clauses (x), (y) and (z) above would be materially reduced and if, as determined
by such Lender in its reasonable judgment, the making, funding or maintaining of
the Loans through such other lending office or in accordance with such other
measures, as the case may be, would not otherwise materially adversely affect
the Loans or the interests of such Lender; provided, however, that such Lender
will not be obligated to utilize such other lending office pursuant to this
Section unless Borrower agrees to pay all incremental expenses incurred by such
Lender as a result of utilizing such other lending office as described in clause
(i) above. A certificate as to the amount of any such expenses payable by
Borrower pursuant to this Section 2.12.4 (setting forth in reasonable detail the
basis for requesting such amount) submitted by such Lender to Borrower (with a
copy to the Agent) shall be conclusive absent manifest error.
2.13 Addition of Mortgaged Properties.
2.13.1 Addition of Mortgaged Properties. Borrower may, with the prior
written approval of Lenders having or holding more than 66.67% of the sum of the
aggregate Commitments of all Lenders, which approval may be granted, withheld,
conditioned or
21
delayed in their sole discretion, add one or more Properties which are not
Mortgaged Properties immediately prior to the time of such addition (each, an
"Additional Mortgaged Property") as Mortgaged Properties; provided that, in any
event:
(i) as of such Addition Date, such Additional Mortgaged
Property shall be owned by Borrower or, if approved by the Requisite
Lenders (including the Agent), a Mortgaged Property Subsidiary;
provided that such Mortgaged Property Subsidiary shall have executed a
Mortgaged Property Subsidiary Guaranty or a counterpart of the
Mortgaged Property Subsidiary Guaranty, as the case may be, and a
counterpart of this Agreement, the Environmental Indemnity and the
Security Agreement;
(ii) each Additional Mortgaged Property shall include the entire
fee interest in a suburban office building, located in the United
States of America and otherwise be of a type, quality and character
consistent with Borrower's business plan and strategy;
(iii) at least 30 days (or such shorter period as shall be
acceptable to the Agent) before the proposed Addition Date, Borrower,
at its expense, shall deliver to the Agent the Property Information
with respect to such Additional Mortgaged Property, which Property
Information shall be satisfactory in form and substance to the
Requisite Lenders (including the Agent) in their sole discretion;
(iv) if such Additional Mortgaged Property is the subject of an
acquisition, all Investments and Guaranties to be made by the Loan
Parties and their respective Subsidiaries in connection with the
proposed acquisition shall be permitted pursuant to Sections 6.3 and
6.4;
(v) at least two (2) days before such Addition Date, Borrower,
at its expense, shall deliver to the Agent the following with respect
to the applicable Additional Mortgaged Property:
(a) an Officer's Certificate of Borrower setting
forth a schedule of insurance with respect to each of the
insurance policies required pursuant to Section 5.10, and the
Agent shall be satisfied with the nature and scope of such
insurance policies and each such insurance policy shall name
the Agent, on behalf of the Lenders, as loss payee, or as
additional insured, as the case may be,
(b) an Addition Certificate in reasonable detail
satisfactory to the Agent,
(c) supplements to the Schedules to this
Agreement, the Environmental Indemnity and the Security
22
Agreement reflecting the designation of such Additional
Mortgaged Property, which Schedules shall be reasonably
acceptable to the Agent,
(d) each of the other documents and satisfy each of
the other conditions set forth in Sections 3.1.1 (if
applicable, with respect to a Mortgaged Property Subsidiary),
3.1.2 (if applicable, with respect to a Mortgaged Property
Subsidiary), 3.1.6, 3.1.7, 3.1.8, 3.1.9, 3.1.10, 3.1.11,
3.1.12 and 3.1.16 with respect to such Additional Mortgaged
Property,
(e) an Appraisal with respect to such Additional
Mortgaged Property, which Appraisal shall be satisfactory in
form and substance to the Agent,
(f) executed or certified, conformed copies of any
applicable Acquisition Agreement, and such other documents,
certificates and opinions executed and delivered by or on
behalf of COPT or any of its Subsidiaries as the Agent or any
Lender may reasonably request,
(g) a Borrowing Base Certificate setting forth in
reasonable detail the computation of the Borrowing Base as of
the Addition Date and after giving effect to such Additional
Mortgaged Property, and
(h) payment pursuant to Section 8.2 of the expenses
incurred by the Agent or any Lender in connection with the
matters subject to this Section 2.13.
2.14 Releases of Mortgaged Properties.
2.14.1 Mortgaged Properties. At any time and from time to time after
the Closing Date, in connection with the sale or other permanent disposition of
any Mortgaged Property, but subject to Section 2.15, Borrower may obtain a
Release of the Lien of the Security Documents in respect of all, but except as
provided below not a portion of, such Mortgaged Property subject to the
following terms and conditions on the applicable Release Date; provided that no
Mortgaged Property shall be Released within three months of the Addition Date of
such Mortgaged Property:
(i) Borrower shall have delivered written notice to the Agent
(a) not less than 30 days (or such shorter period as shall be
acceptable to the Agent) prior to the proposed Release Date specifying
the proposed Release Date and such Mortgaged Property and (b) not less
than five (5) days prior to the actual Release Date specifying such
actual Release Date and such Mortgaged Property;
23
(ii) no Event of Default or Potential Event of Default shall
have occurred and be continuing as of the date of the delivery of the
notice pursuant to clause (i) above (other than any which will be cured
by such Release and, if applicable, the application of proceeds in
connection therewith) and no Event of Default or Potential Event of
Default shall be continuing as of the Release Date after giving effect
to such Release;
(iii) concurrently with such Release, the Borrowing Base shall be
recomputed by giving effect to such Release;
(iv) Borrower shall have prepaid the Loans in the amount
required by Section 2.9.1.4;
(v) Borrower shall have delivered to the Agent and the Lenders
(a) an Officer's Certificate dated the Release Date, certifying as to
the matters referred to in clause (ii) above, and (b) a Borrowing Base
Certificate setting forth in reasonable detail the computation of the
Borrowing Base as of the Release Date and after giving effect to such
Release;
(vi) Borrower, at its sole cost and expense, shall have (a) with
respect to any partial Release of the Lien of the Security Documents in
respect of such Mortgaged Property, delivered to the Agent one or more
endorsements to the Title Policy in respect of such Mortgaged Property
insuring that, after giving effect to such partial Release and with
respect to the portion of such Mortgaged Property which is not being
Released, the Liens created by the applicable Mortgage and insured
under such Title Policy are in full force and effect and unaffected by
such partial Release as to the remaining portion of such Mortgaged
Property, (b) prepared any and all documents and instruments necessary
to effect such Release, all of which shall be satisfactory in form and
substance to the Agent, and (c) paid all reasonable costs and expenses
incurred by the Agent and its counsel in connection with the review,
execution and delivery of the release documents; and
(vii) all other proceedings taken or to be taken in connection with
such Release and all documents incidental thereto shall be satisfactory
in form and substance to the Agent and the Agent's counsel. The Agent
and such counsel shall have received all such counterpart originals or
certified copies of such documents as the Agent may reasonably request
and counsel for the Agent shall have received such documents and
evidence that such counsel shall require in order to establish
compliance with the conditions set forth in this Section 2.14.
Borrower may obtain a Release of the Lien of the Security Documents in respect
of a portion of any Mortgaged Property, if title to such portion has been
permanently Taken, by complying
24
with the foregoing terms and conditions on the applicable Release
Date.
2.14.2 Effect of Release. Upon any Release of any Mortgaged Property in
accordance with this Section 2.14, such Property shall cease to be a Mortgaged
Property for the purposes of this Agreement (other than for purposes of any
indemnity contained herein or in any of the other Loan Documents to the extent
such indemnification applies to such Mortgaged Property).
2.14.3 Revised Schedules. Upon the Release of any Mortgaged Property
pursuant to this Section 2.14, Borrower shall deliver to the Agent revised
Schedules to this Agreement, the Environmental Indemnity and the Security
Agreement, as applicable, reflecting the Release of such Mortgaged Property,
which Schedules shall be reasonably satisfactory to the Agent and shall become
effective upon the date of such Release.
2.15 Substitutions of Mortgaged Properties.
2.15.1 Substitution. At any time and from time to time after the
Closing Date, in connection with the removal of any Mortgaged Property for any
reason other than the sale or other permanent disposition of such Mortgaged
Property permitted pursuant to Section 2.14, Borrower may, with the prior
written approval of the Requisite Lenders (including the Agent), which approval
may be granted, withheld, conditioned or delayed in their sole discretion,
substitute an Additional Mortgaged Property for a Mortgaged Property subject to
the following terms and conditions:
(i) Borrower shall satisfy the terms and conditions set forth
in Section 2.13 (other than Section 2.13.1(v)(g)) with respect to the
Additional Mortgaged Property;
(ii) Borrower shall satisfy the terms and conditions set forth
in Section 2.14 (other than Sections 2.14.1(iii), 2.14.1(iv) or
2.14.1(v)(b)) with respect to the Mortgaged Property to be Released;
(iii) Borrower, at its expense, shall deliver to the Agent a
Borrowing Base Certificate setting forth in reasonable detail the
computation of the Borrowing Base as of the Addition Date and after
giving effect to such Additional Mortgaged Property and such Mortgaged
Property
being Released.
2.16 Issuance of Letters of Credit and Lenders' Purchase of
Participations Therein.
2.16.1 Letters of Credit. In addition to Borrower requesting that
Lenders make Loans pursuant to Section 2.1.1, Borrower may request, in
accordance with the provisions of this Section 2.16.1, from time to time during
the period from the
25
Closing Date to but excluding the date that is ten (10) days prior to the
Maturity Date, that one or more Lenders issue Letters of Credit for the account
of Borrower for the purposes specified in the definition of Letters of Credit.
Subject to the terms and conditions of this Agreement and in reliance upon the
representations and warranties of Borrower herein set forth, any one or more
Lenders may, but (except as provided in Section 2.16.2.2) shall not be obligated
to, issue such Letters of Credit in accordance with the provisions of this
Section 2.16.1; provided that Borrower shall not request that any Lender issue
(and no Lender shall issue):
(i) any Letter of Credit if, after giving effect to such
issuance, the sum of: (a) the aggregate principal amount of the
outstanding Loans plus (b) the Letter of Credit Usage would exceed the
Available Amount then in effect;
(ii) any Letter of Credit if, after giving effect to such
issuance, the Letter of Credit Usage would exceed $5,000,000;
(iii) any Letter of Credit having an expiration date later than
the earlier of (a) the Business Day prior to the Maturity Date and (b)
the date which is one year from the date of issuance of such Letter of
Credit; provided that the immediately preceding clause (b) shall not
prevent any Issuing Lender from agreeing that a Letter of Credit will
automatically be extended for one or more successive periods not to
exceed one year each unless such Issuing Lender elects not to extend
for any such additional period; and provided, further that such Issuing
Lender shall elect not to extend such Letter of Credit if it has
knowledge that an Event of Default has occurred and is continuing (and
has not been waived in accordance with Section 8.6) at the time such
Issuing Lender must elect whether or not to allow such extension; or
(iv) any Letter of Credit denominated in a currency other than
Dollars.
2.16.2 Mechanics of Issuance.
2.16.2.1 Notice of Issuance. Whenever Borrower desires the
issuance of a Letter of Credit, it shall deliver to Agent a Notice of
Issuance of Letter of Credit no later than 12:00 Noon (New York City
time) at least three Business Days (or in each case such shorter period
as may be agreed to by the Issuing Lender in any particular instance)
in advance of the proposed date of issuance. The Notice of Issuance of
Letter of Credit shall specify (a) the proposed date of issuance (which
shall be a Business Day), (b) the face amount of the Letter of Credit,
(c) the expiration date of the Letter of Credit, (d) the name and
address of the
26
beneficiary, and (e) either the verbatim text of the proposed Letter of
Credit or the proposed terms and conditions thereof, including a
precise description of any documents to be presented by the beneficiary
which, if presented by the beneficiary on or prior to the expiration
date of the Letter of Credit, would require the Issuing Lender to make
payment under the Letter of Credit; provided that the Issuing Lender,
in its reasonable discretion, may require changes in the text of the
proposed Letter of Credit or any such documents.
Borrower shall notify the applicable Issuing Lender
(and the Agent, if the Agent is not such Issuing Lender) prior to the
issuance of any Letter of Credit in the event that any of the matters
to which Borrower is required to certify in the applicable Notice of
Issuance of Letter of Credit is no longer true and correct as of the
proposed date of issuance of such Letter of Credit, and upon the
issuance of any Letter of Credit Borrower shall be deemed to have
recertified, as of the date of such issuance, as to the matters to
which Borrower is required to certify in the applicable Notice of
Issuance of Letter of Credit.
2.16.2.2 Determination of Issuing Lender. Upon receipt by the
Agent of a Notice of Issuance of Letter of Credit pursuant to Section
2.16.2.1 requesting the issuance of a Letter of Credit, in the event
the Agent elects to issue such Letter of Credit, the Agent shall
promptly so notify Borrower, and the Agent shall be the Issuing Lender
with respect thereto. In the event that the Agent, in its sole
discretion, elects not to issue such Letter of Credit, the Agent shall
promptly so notify Borrower, whereupon Borrower may request any other
Lender to issue such Letter of Credit by delivering to such Lender a
copy of the applicable Notice of Issuance of Letter of Credit. Any
Lender so requested to issue such Letter of Credit shall promptly
notify Borrower and the Agent whether or not, in its sole discretion,
it has elected to issue such Letter of Credit, and any such Lender
which so elects to issue such Letter of Credit shall be the Issuing
Lender with respect thereto. In the event that all other Lenders shall
have declined to issue such Letter of Credit, notwithstanding the prior
election of the Agent not to issue such Letter of Credit, the Agent
shall be obligated to issue such Letter of Credit and shall be the
Issuing Lender with respect thereto notwithstanding the fact that the
Letter of Credit Usage with respect to such Letter of Credit and with
respect to all other Letters of Credit issued by the Agent, when
aggregated with the Agent's outstanding Loans, may exceed the Agent's
Commitment then in effect.
2.16.2.3 Issuance of Letter of Credit. Upon satisfaction or
waiver (in accordance with Section 8.6) of the conditions set forth in
Section 3.3, the Issuing Lender
27
shall issue the requested Letter of Credit in accordance with the
Issuing Lender's standard operating procedures.
2.16.2.4 Notification to Lenders. Upon the issuance of any
Letter of Credit the applicable Issuing Lender shall promptly notify
the Agent and each other Lender of such issuance, which notice may, if
so requested by a Lender, be accompanied by a copy of such Letter of
Credit. Promptly after receipt of such notice (or, if the Agent is the
Issuing Lender, together with such notice), the Agent shall notify each
Lender of the amount of such Lender's respective participation in such
Letter of Credit, determined in accordance with subsection 2.16.3.
2.16.2.5 Reports to Lenders. Within 15 days after the end of
each calendar quarter ending after the Closing Date, so long as any
Letter of Credit shall have been outstanding during such calendar
quarter, each Issuing Lender shall deliver to each other Lender a
report setting forth for such calendar quarter the daily aggregate
amount available to be drawn under the Letters of Credit issued by such
Issuing Lender that were outstanding during such calendar quarter.
2.16.3 Lenders' Purchase of Participations in Letters of Credit.
Immediately upon the issuance of each Letter of Credit, each Lender shall be
deemed to, and hereby agrees to, have irrevocably purchased from the Issuing
Lender a participation in such Letter of Credit and any drawings honored
thereunder in an amount equal to such Lender's Pro Rata Share of the maximum
amount which is or at any time may become available to be drawn thereunder.
2.17 Letter of Credit Fees.
Borrower agrees to pay the following amounts with respect to
Letters of Credit issued hereunder:
(i) with respect to each Letter of Credit, (a) a fronting fee,
payable directly to the applicable Issuing Lender for its own account,
equal to the greater of (X) $500 and (Y) 0.125% per annum of the daily
amount available to be drawn under such Letter of Credit and (b) a
letter of credit fee, payable to the Agent for the account of Lenders,
equal to 1.75% per annum of the daily amount available to be drawn
under such Letter of Credit, each such fronting fee or letter of credit
fee to be payable in arrears on and to (but excluding) each March 15,
June 15, September 15 and December 15 of each year and computed on the
basis of a 360-day year for the actual number of days elapsed; and
(ii) with respect to the issuance, amendment or transfer of each
Letter of Credit and each payment of a drawing made thereunder (without
duplication of the fees payable under clause (i) above), documentary
and processing
28
charges payable directly to the applicable Issuing Lender for its own
account in accordance with such Issuing Lender's standard schedule for
such charges in effect at the time of such issuance, amendment,
transfer or payment, as the case may be.
For purposes of calculating any fees payable under clause (i) of this Section
2.16.3 the daily amount available to be drawn under any Letter of Credit shall
be determined as of the close of business on any date of determination. Promptly
upon receipt by the Agent of any amount described in clause (i)(b) of this
Section 2.17, the Agent shall distribute to each Lender its Pro Rata Share of
such amount.
2.18 Drawings and Reimbursement of Amounts Paid Under Letters of
Credit.
2.18.1 Responsibility of Issuing Lender With Respect to Drawings. In
determining whether to honor any drawing under any Letter of Credit by the
beneficiary thereof, the Issuing Lender shall be responsible only to examine the
documents delivered under such Letter of Credit with reasonable care so as to
ascertain whether they appear on their face to be in accordance with the terms
and conditions of such Letter of Credit.
2.18.2 Reimbursement by Borrower of Amounts Paid Under Letters of
Credit. In the event an Issuing Lender has determined to honor a drawing under a
Letter of Credit issued by it, such Issuing Lender shall immediately notify
Borrower and the Agent, and Borrower shall reimburse such Issuing Lender on the
date on which such drawing is honored (the "Reimbursement Date") in an amount in
Dollars and in same day funds equal to the amount of such honored drawing;
provided that, anything contained in this Agreement to the contrary
notwithstanding, (i) unless Borrower shall have notified the Agent and such
Issuing Lender prior to 10:00 A.M. (New York City time) on the date such drawing
is honored that Borrower intends to reimburse such Issuing Lender for the amount
of such honored drawing with funds other than the proceeds of Loans, Borrower
shall be deemed to have given a timely Notice of Borrowing to the Agent
requesting Lenders to make Loans that are Base Rate Loans on the Reimbursement
Date in an amount in Dollars equal to the amount of such honored drawing and
(ii) subject to satisfaction or waiver of the conditions specified in Section
3.2.2, Lenders shall, on the Reimbursement Date, make Loans that are Base Rate
Loans in the amount of such honored drawing, the proceeds of which shall be
applied directly by the Agent to reimburse such Issuing Lender for the amount of
such honored drawing; and provided, further that if for any reason proceeds of
Loans are not received by such Issuing Lender on the Reimbursement Date in an
amount equal to the amount of such honored drawing, Borrower shall reimburse
such Issuing Lender, on demand, in an amount in same day funds equal to the
excess of the amount of such honored drawing over the aggregate amount of such
Loans, if any, which are so received. Nothing in
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this Section 2.18 shall be deemed to relieve any Lender from its obligation to
make Loans on the terms and conditions set forth in this Agreement, and Borrower
shall retain any and all rights it may have against any Lender resulting from
the failure of such Lender to make such Loans under this Section 2.18.
2.19 Payment by Lenders of Unreimbursed Amounts Paid Under
Letters of Credit.
2.19.1 Payment by Lenders. In the event that Borrower shall
fail for any reason to reimburse any Issuing Lender as provided in
Section 2.18 in an amount equal to the amount of any drawing honored by
such Issuing Lender under a Letter of Credit issued by it, such Issuing
Lender shall promptly notify each other Lender of the unreimbursed
amount of such honored drawing and of such other Lender's respective
participation therein based on such Lender's Pro Rata Share. Each
Lender shall make available to such Issuing Lender an amount equal to
its respective participation, in Dollars and in same day funds, at the
office of such Issuing Lender specified in such notice, not later than
12:00 Noon (New York City time) on the first business day (under the
laws of the jurisdiction in which such office of such Issuing Lender is
located) after the date notified by such Issuing Lender. In the event
that any Lender fails to make available to such Issuing Lender on such
business day the amount of such Lender's participation in such Letter
of Credit as provided in this Section 2.19, such Issuing Lender shall
be entitled to recover such amount on demand from such Lender together
with interest thereon at the rate customarily used by such Issuing
Lender for the correction of errors among banks for three Business Days
and thereafter at the Base Rate. Nothing in this Section 2.19 shall be
deemed to prejudice the right of any Lender to recover from any Issuing
Lender any amounts made available by such Lender to such Issuing Lender
pursuant to this Section 2.19 in the event that it is determined by the
final judgment of a court of competent jurisdiction that the payment
with respect to a Letter of Credit by such Issuing Lender in respect of
which payment was made by such Lender constituted gross negligence or
willful misconduct on the part of such Issuing Lender.
2.19.2 Distribution to Lenders of Reimbursements Received From
Borrower. In the event any Issuing Lender shall have been reimbursed by
other Lenders pursuant to Section 2.19.1 for all or any portion of any
drawing honored by such Issuing Lender under a Letter of Credit issued
by it, such Issuing Lender shall distribute to each other Lender which
has paid all amounts payable by it under Section 2.19.1 with respect to
such honored drawing such other Lender's Pro Rata Share of all payments
subsequently received by such Issuing Lender from Borrower in
reimbursement of such honored drawing when such payments are
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received. Any such distribution shall be made to a Lender at its
primary address set forth below its name on the appropriate signature
page hereof or at such other address as such Lender may request.
2.20 Interest on Amounts Paid Under Letters of Credit.
2.20.1 Payment of Interest by Borrower. Borrower agrees to pay
to each Issuing Lender, with respect to drawings honored under any
Letters of Credit issued by it, interest on the amount paid by such
Issuing Lender in respect of each such honored drawing from the date
such drawing is honored to but excluding the date such amount is
reimbursed by Borrower (including any such reimbursement out of the
proceeds of Loans pursuant to Section 2.18.2) at a rate equal to (a)
for the period from the date such drawing is honored to but excluding
the Reimbursement Date, the rate then in effect under this Agreement
with respect to Loans that are Base Rate Loans and (b) thereafter, a
rate which is 2% per annum in excess of the rate of interest otherwise
payable under this Agreement with respect to Loans that are Base Rate
Loans. Interest payable pursuant to this Section 2.20.1 shall be
computed on the basis of a 365-day or 366- day year, as the case may
be, for the actual number of days elapsed in the period during which it
accrues and shall be payable on demand or, if no demand is made, on the
date on which the related drawing under a Letter of Credit is
reimbursed in full.
2.20.2 Distribution of Interest Payments by Issuing Lender.
Promptly upon receipt by any Issuing Lender of any payment of interest
pursuant to Section 2.20.1 with respect to a drawing honored under a
Letter of Credit issued by it, (a) such Issuing Lender shall distribute
to each other Lender, out of the interest received by such Issuing
Lender in respect of the period from the date such drawing is honored
to but excluding the date on which such Issuing Lender is reimbursed
for the amount of such drawing (including any such reimbursement out of
the proceeds of Loans pursuant to Section 2.18.2), the amount that such
other Lender would have been entitled to receive in respect of the
letter of credit fee that would have been payable in respect of such
Letter of Credit for such period pursuant to Section 2.17 if no drawing
had been honored under such Letter of Credit, and (b) in the event such
Issuing Lender shall have been reimbursed by other Lenders pursuant to
Section 2.19.1 for all or any portion of such honored drawing, such
Issuing Lender shall distribute to each other Lender which has paid all
amounts payable by it under Section 2.19.1 with respect to such honored
drawing such other Lender's Pro Rata Share of any interest received by
such Issuing Lender in respect of that portion of such honored drawing
so reimbursed by other Lenders for the period from the date on which
such Issuing Lender was so
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reimbursed by other Lenders to but excluding the date on which such
portion of such honored drawing is reimbursed by Borrower. Any such
distribution shall be made to a Lender at its primary address set forth
below its name on the appropriate signature page hereof or at such
other address as such Lender may request.
2.21 Obligations Absolute.
The obligation of Borrower to reimburse each Issuing Lender
for drawings honored under the Letters of Credit issued by it and to repay any
Loans made by Lenders pursuant to Section 2.18.2 and the obligations of Lenders
under Section 2.19.1 shall be unconditional and irrevocable and shall be paid
strictly in accordance with the terms of this Agreement under all circumstances
including, without limitation, any of the following circumstances:
(i) any lack of validity or enforceability of any
Letter of Credit;
(ii) the existence of any claim, set-off, defense or other right
which Borrower or any Lender may have at any time against a beneficiary
or any transferee of any Letter of Credit (or any Persons for whom any
such transferee may be acting), any Issuing Lender or other Lender or
any other Person or, in the case of a Lender, against Borrower, whether
in connection with this Agreement, the transactions contemplated herein
or any unrelated transaction (including any underlying transaction
between any of the Loan Parties or one of their Subsidiaries and the
beneficiary for which any Letter of Credit was procured);
(iii) any draft or other document presented under any Letter of
Credit proving to be forged, fraudulent, invalid or insufficient in any
respect or any statement therein being untrue or inaccurate in any
respect;
(iv) payment by the applicable Issuing Lender under any Letter
of Credit against presentation of a draft or other document which does
not substantially comply with the terms of such Letter of Credit;
(v) any adverse change in the business, operations,
properties, assets, condition (financial or otherwise) or prospects of
any of the Loan Parties or any of their Subsidiaries;
(vi) any breach of this Agreement or any other Loan Document by
any party thereto;
(vii) any other circumstance or happening whatsoever,
whether or not similar to any of the foregoing; or
32
(viii) the fact that an Event of Default or a Potential Event of
Default shall have occurred and be continuing;
provided, in each case, that payment by the applicable Issuing Lender under the
applicable Letter of Credit shall not have constituted gross negligence or
willful misconduct of such Issuing Lender under the circumstances in question
(as determined by a final judgment of a court of competent jurisdiction).
2.22 Indemnification; Nature of Issuing Lenders' Duties.
2.22.1 Indemnification. In addition to amounts payable as provided in
Section 2.23, Borrower hereby agrees to protect, indemnify, pay and save
harmless each Issuing Lender from and against any and all claims, demands,
liabilities, damages, losses, costs, charges and expenses (including reasonable
fees, expenses and disbursements of counsel and allocated costs of internal
counsel) which such Issuing Lender may incur or be subject to as a consequence,
direct or indirect, of (i) the issuance of any Letter of Credit by such Issuing
Lender, other than as a result of (a) the gross negligence or willful misconduct
of such Issuing Lender as determined by a final judgment of a court of competent
jurisdiction or (b) subject to the following clause (ii), the wrongful dishonor
by such Issuing Lender of a proper demand for payment made under any Letter of
Credit issued by it or (ii) the failure of such Issuing Lender to honor a
drawing under any such Letter of Credit as a result of any act or omission,
whether rightful or wrongful, of any present or future de jure or de facto
government or governmental authority (all such acts or omissions herein called
"Governmental Acts").
2.22.2 Nature of Issuing Lenders' Duties. As between Borrower and any
Issuing Lender, Borrower assumes all risks of the acts and omissions of, or
misuse of the Letters of Credit issued by such Issuing Lender by, the respective
beneficiaries of such Letters of Credit. In furtherance and not in limitation of
the foregoing, such Issuing Lender shall not be responsible for: (i) the form,
validity, sufficiency, accuracy, genuineness or legal effect of any document
submitted by any party in connection with the application for and issuance of
any such Letter of Credit, even if it should in fact prove to be in any or all
respects invalid, insufficient, inaccurate, fraudulent or forged; (ii) the
validity or sufficiency of any instrument transferring or assigning or
purporting to transfer or assign any such Letter of Credit or the rights or
benefits thereunder or proceeds thereof, in whole or in part, which may prove to
be invalid or ineffective for any reason; (iii) failure of the beneficiary of
any such Letter of Credit to comply fully with any conditions required in order
to draw upon such Letter of Credit; (iv) 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; (v) errors in
interpretation of technical terms; (vi) any loss or delay in the
33
transmission or otherwise of any document required in order to make a drawing
under any such Letter of Credit or of the proceeds thereof; (vii) the
misapplication by the beneficiary of any such Letter of Credit of the proceeds
of any drawing under such Letter of Credit; or (viii) any consequences arising
from causes beyond the control of such Issuing Lender, including without
limitation any Governmental Acts, and none of the above shall affect or impair,
or prevent the vesting of, any of such Issuing Lender's rights or powers
hereunder.
In furtherance and extension and not in limitation of the
specific provisions set forth in the first paragraph of this Section 2.22.2, any
action taken or omitted by any Issuing Lender under or in connection with the
Letters of Credit issued by it or any documents and certificates delivered
thereunder, if taken or omitted in good faith, shall not put such Issuing Lender
under any resulting liability to Borrower.
Notwithstanding anything to the contrary contained in this
Section 2.22, Borrower shall retain any and all rights it may have against any
Issuing Lender for any liability arising solely out of the gross negligence or
willful misconduct of such Issuing Lender, as determined by a final judgment of
a court of competent jurisdiction.
2.23 Increased Costs and Taxes Relating to Letters of Credit.
Subject to the provisions of Section 2.12.2 (which shall be
controlling with respect to the matters covered thereby), in the event that any
Issuing Lender or Lender shall determine (which determination shall, absent
manifest error, be final and conclusive and binding upon all parties hereto)
that any law, treaty or governmental rule, regulation or order, or any change
therein or in the interpretation, administration or application thereof
(including the introduction of any new law, treaty or governmental rule,
regulation or order), or any determination of a court or governmental authority,
in each case that becomes effective after the date hereof, or compliance by any
Issuing Lender or Lender with any guideline, request or directive issued or made
after the date hereof by any central bank or other governmental or
quasi-governmental authority (whether or not having the force of law):
(i) subjects such Issuing Lender or Lender (or its applicable
lending or letter of credit office) to any additional Tax (other than
any Tax on the overall net income of such Issuing Lender or Lender)
with respect to the issuing or maintaining of any Letters of Credit or
the purchasing or maintaining of any participations therein or any
other obligations under Section 2.16 through 2.23, inclusive, whether
directly or by such being imposed on or suffered by any particular
Issuing Lender;
34
(ii) imposes, modifies or holds applicable any reserve
(including without limitation any marginal, emergency, supplemental,
special or other reserve), special deposit, compulsory loan, FDIC
insurance or similar requirement in respect of any Letters of Credit
issued by any Issuing Lender or participations therein purchased by any
Lender; or
(iii) imposes any other condition (other than with respect to a
Tax matter) on or affecting such Issuing Lender or Lender (or its
applicable lending or letter of credit office) regarding Sections 2.16
through 2.23, inclusive, or any Letter of Credit or any participation
therein;
and the result of any of the foregoing is to increase the cost to such Issuing
Lender or Lender of agreeing to issue, issuing or maintaining any Letter of
Credit or agreeing to purchase, purchasing or maintaining any participation
therein or to reduce any amount received or receivable by such Issuing Lender or
Lender (or its applicable lending or letter of credit office) with respect
thereto; then, in any case, Borrower shall promptly pay to such Issuing Lender
or Lender, upon receipt of the statement referred to in the next sentence, such
additional amount or amounts as may be necessary to compensate such Issuing
Lender or Lender for any such increased cost or reduction in amounts received or
receivable hereunder. Such Issuing Lender or Lender shall deliver to Borrower a
written statement, setting forth in reasonable detail the basis for calculating
the additional amounts owed to such Issuing Lender or Lender under this Section
2.23, which statement shall be conclusive and binding upon all parties hereto
absent manifest error.
ARTICLE 3
CONDITIONS PRECEDENT
3.1 Conditions to Effectiveness of Commitments.
The obligations of the Lenders to make Loans and to issue Letters of
Credit under this Agreement are conditioned upon the prior or concurrent
satisfaction, at the expense of Borrower, of the conditions specified in this
Section , in each case as reasonably determined by the Agent;
3.1.1 Corporate Documents. Each Loan Party (including any Mortgaged
Property Subsidiary) that is a corporation, trust, or limited liability company
and each corporate, trust and limited liability company general partner of a
Loan Party shall deliver or cause to be delivered to the Agent (with sufficient
originally executed copies for each Lender and the Agent's counsel) the
following, each dated the Closing Date or the Addition Date, as applicable,
unless otherwise noted:
3.1.1.1 executed originals of each Loan Document to
which it is a party;
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3.1.1.2 certified copies of its Certificate of
Incorporation/Declaration of Trust/Articles of Organization, together
with a good standing certificate (including verification, where
generally available, of tax good standing) from the Secretary of State
(or similar official) of its jurisdiction of incorporation/formation
and each other state in which an applicable Mortgaged Property is
located), each dated not more than 60 days prior to the Closing Date or
the Addition Date, as applicable;
3.1.1.3 copies of its Bylaws, certified as of the Closing
Date or the Addition Date, as applicable, by its corporate/trust
secretary or an assistant secretary if a corporation or trust, and
copies of its limited liability company agreement, certified as of the
Closing Date or the Addition Date, as applicable, by the manager of the
limited liability company if a limited liability company;
3.1.1.4 if a corporation or trust, resolutions of its Board
of Directors/Board of Trustees approving and authorizing (a) the
execution, delivery and performance of each Loan Document to which it
is a party and (b) the consummation of the transactions contemplated
hereby and thereby, in each case certified as of the Closing Date or
the Addition Date, as applicable, by its corporate/trust secretary or
an assistant secretary as being in full force and effect without
modification or amendment; and
3.1.1.5 signature and incumbency certificates of its
officers executing this Agreement and the other Loan Documents to which
it is a party.
3.1.2 Partnership Documents. Each Loan Party (including a Mortgaged
Property Subsidiary) that is a partnership shall deliver to the Agent (with
sufficient originally executed copies for each Lender and the Agent's counsel)
the following, each dated the Closing Date or the Addition Date, as applicable,
unless otherwise noted:
3.1.2.1 executed originals of each Loan Document to which
it is a party;
3.1.2.2 a conformed copy of its partnership agreement,
certified by each general partner of such partnership as of the Closing
Date or the Addition Date, as applicable, as being in full force and
effect without modification or amendment;
3.1.2.3 its Certificate of Limited Partnership, certified by
the Secretary of State (or similar official) of its jurisdiction of
formation and a certificate of existence or good standing, as the case
may be, from the Secretary of State (or similar official) of such
jurisdiction, each dated not more than 60 days prior to the Closing
Date or the
36
Addition Date, as applicable, and a good standing certificate or
certificate of existence, as the case may be, from the Secretary of
State (or similar official) of each state or other jurisdiction in
which an applicable Mortgaged Property is located;
3.1.2.4 all documents of such Loan Party and its partners
(to the extent required by the applicable organizational documents)
approving or authorizing (a) the execution, delivery and performance of
the Loan Documents to which it is a party, and (b) the consummation of
the transactions contemplated hereby and thereby, each certified as of
the Closing Date or the Addition Date, as applicable, by the general
partner of such Loan Party; and
3.1.2.5 a signature and incumbency certificate of the
Person(s) executing on behalf of such Loan Party any Loan Documents.
3.1.3 Operating Statements. Borrower shall have delivered to the Agent
the following information, current as of a date not less than 45 days before the
Closing Date or the Addition Date, as applicable, and each in form and substance
satisfactory to the Agent:
3.1.3.1 current Rent Rolls for each Mortgaged Property;
3.1.3.2 quarterly operating statements for each Mortgaged
Property in the form referred to in Section 5.1.3;
3.1.3.3 current operating plans and budgets for each Mortgaged
Property, with a year to date analysis of variations from such plans
and budgets; and
3.1.3.4 current capital expense budgets for each Mortgaged
Property, with a year to date analysis of variations from such budgets.
3.1.4 Officer's Certificates. Each Loan Party shall have delivered to
the Agent an Officers' Certificate of the Chief Executive Officer or the Chief
Financial Officer of such Loan Party, or its general partner, certifying as to
the following:
3.1.4.1 the accuracy of the financial and operating
statements delivered to the Agent as of the Closing Date;
3.1.4.2 the Consolidated Tangible Net Worth of COPT and its
Subsidiaries as of March 31, 1998, as adjusted for additional issuances
of equity Securities of COPT or any of its Subsidiaries since that date
in a manner acceptable to Agent;
37
3.1.4.3 since December 31, 1997, no Material Adverse
Effect has occurred; and
3.1.4.4 a Borrowing Base Certificate, together with a
calculation of the Borrowing Base attached thereto in a form reasonably
satisfactory to the Agent and a Compliance Certificate, together with a
calculation testing compliance with financial and monetary covenants
attached thereto, in a form reasonably satisfactory to the Agent, each
as of the Closing Date.
3.1.5 No Material Adverse Effect. Since December 31, 1997, no condition
or event has occurred that has had or could reasonably be expected to have,
either individually or in the aggregate, a Material Adverse Effect.
3.1.6 Security Interests. On or before the Closing Date or the Addition
Date, as applicable, Borrower shall have taken or caused to be taken all such
actions as may be necessary or reasonably requested by the Agent to give the
Agent a valid, enforceable and perfected first priority Lien on or first
priority security interest in the Collateral owned by Borrower or, if
applicable, a Mortgaged Property Subsidiary as of the Closing Date or the
Addition Date, as applicable. Such actions shall include the following:
3.1.6.1 the delivery to the Agent of fully executed and
acknowledged counterparts of the Mortgage, the Assignment of Rents and
Leases, the Security Agreement and all other Security Documents with
respect to the Mortgaged Properties and the other Collateral owned by
Borrower or, if applicable, a Mortgaged Property Subsidiary as of the
Closing Date or the Addition Date, as applicable, and the delivery of
evidence satisfactory to the Agent that counterparts of the Mortgage,
the Assignment of Rents and Leases and all other of such documents as
the Agent desires to have recorded have been or will be recorded in all
places necessary or desirable to create and maintain (a) valid and
enforceable first priority Liens on the fee simple interests of
Borrower or, if applicable, a Mortgaged Property Subsidiary in the
Mortgaged Properties in favor of the Agent, on behalf of the Lenders,
as mortgagee (or as beneficiary in those jurisdictions where the Lien
is granted to a trustee for the benefit of the Agent, on behalf of the
Lenders), (b) valid and enforceable first priority Liens on the Rents
and Leases in favor of the Agent, on behalf of the Lenders, (c) valid
and enforceable first priority Liens in all fixtures at the Mortgaged
Properties, in favor of the Agent, on behalf of the Lenders, as secured
party, and (d) valid and enforceable first priority Liens in all other
items of Collateral owned by Borrower or, if applicable, a Mortgaged
Property Subsidiary as of the Closing Date or the Addition Date, as
applicable, in favor of the Agent, on behalf of the Lenders;
38
3.1.6.2 (a) the delivery to the Agent for filing pursuant to
the Security Documents of properly executed financing statements under
the Uniform Commercial Code (or any equivalent or similar legislation),
or any other documents required to be filed by other Applicable Laws,
satisfactory in form and substance to the Agent in each jurisdiction as
may be necessary to (in the Agent's reasonable judgment) effectively
perfect and maintain the security interests in the Collateral created
by the Security Documents executed by Borrower or, if applicable, a
Mortgaged Property Subsidiary and (b) the delivery of evidence that
such financing statements or other documents will have been or will be
recorded in all places necessary or desirable, in the reasonable
judgment of the Agent, to create and maintain valid and enforceable
first priority Liens on such Collateral in favor of the Agent, on
behalf of the Lenders;
3.1.6.3 the delivery to the Agent of a title commitment
(together with copies of all documents listed therein as exceptions to
title) dated not more than 40 days prior to the Closing Date or the
Addition Date, as applicable, with respect to each Mortgaged Property
and pro forma Title Policies dated not more than 20 days prior to the
Closing Date with respect to each such Mortgaged Property, each
reasonably satisfactory in form and substance to the Agent;
3.1.6.4 the delivery to the Agent of the Title Policies or
marked title commitments insuring fee simple title to each of the
Mortgaged Properties vested in Borrower or, if applicable, a Mortgaged
Property Subsidiary and insuring the first priority of the Liens
created under the Mortgages in an amount for each Mortgaged Property
equal to not less than (a) where interstate tie-in endorsements are not
available, the most recent Appraised Value with respect to such
Mortgaged Property, and (b) where interstate tie-in endorsements are
available, after giving effect to such tie-in endorsement, the lesser
of sixty-five percent (65%) of the aggregate most recent Appraised
Value of all "tied-in" Mortgaged Properties and $100,000,000, but in
any event in an amount sufficient to avoid any co-insurance of title
losses, in each case subject only to Permitted Encumbrances, and such
other title exceptions as are satisfactory to the Agent. Such Title
Policies shall be reinsured with title insurance companies acceptable
to the Agent in amounts as required by the Agent subject to facultative
reinsurance agreements in form satisfactory to the Agent. Such Title
Policies shall also contain such endorsements and affirmative insurance
provisions as the Agent may reasonably require and to the extent the
same are available in the applicable jurisdiction, including
"comprehensive" endorsements, revolving credit endorsements,
affirmative insurance against mechanic's liens, survey exceptions,
39
violations of covenants, conditions and restrictions, encroachments,
gap insurance, contiguity endorsements, tie-in endorsements, access
endorsements, "last-dollar" endorsements, survey endorsements,
contingent loss/first loss endorsements, variable rate mortgage
endorsements, and any other endorsements reasonably required by the
Agent to address issues raised by the Agent's due diligence or as a
matter of Applicable Law. In addition, Borrower shall have paid to the
Title Company and to the appropriate Governmental Authority all
expenses and premiums of the Title Company in connection with the
issuance of such Title Policies and in connection with any Loan
hereunder an amount equal to the recording and stamp taxes (including
mortgage recording, intangible and similar taxes) payable in connection
with recording each Mortgage, the Assignment of Rents and Leases in the
appropriate county land or recorder's offices or otherwise payable in
connection with any Loans hereunder;
3.1.6.5 the delivery to the Title Company of such certificates
and affidavits as the Title Company may reasonably require in
connection with the issuance of the Title Policies;
3.1.6.6 the delivery to the Agent of a Survey with respect to
each of the Mortgaged Properties, dated or redated to within 180 days
prior to the Closing Date or the Addition Date, as applicable, which
Surveys shall be reasonably satisfactory in form and substance to the
Agent;
3.1.6.7 unless a title insurance zoning endorsement is issued
to the Agent by the Title Company, the delivery to the Agent of a
letter, to the extent generally available, from the applicable
Governmental Authority with respect to each of the Mortgaged Properties
and reasonably satisfactory to the Agent stating that all Improvements
on each such Mortgaged Property have been constructed and are being
used and operated in material compliance with (a) all applicable
zoning, subdivision, local environmental, building and land use laws,
ordinances, rules and regulations of all Governmental Authorities or
quasi-governmental authorities having jurisdiction with respect to each
such Mortgaged Property and all applicable fire and building
maintenance codes, and (b) all building permits issued in respect of
each such Mortgaged Property for work then being conducted and the
certificate of occupancy (if available) for each such Mortgaged
Property;
3.1.6.8 the delivery to the Agent of an opinion of counsel in
each state or other jurisdiction in which Mortgaged Property is
located, dated the Closing Date or the Addition Date, as applicable,
addressed to the Agent and the Lenders and in form and substance
reasonably satisfactory to the Agent;
40
3.1.6.9 the delivery to the Agent of evidence reasonably
satisfactory to the Agent that all other filings, recordings and other
actions the Agent deems necessary or advisable to establish, perfect
and preserve the Liens granted to the Agent in the Collateral owned by
Borrower or, if applicable, a Mortgaged Property Subsidiary as of the
Closing Date or the Addition Date, as applicable, shall have been made.
3.1.7 Insurance. Borrower shall have delivered to the Agent (i)
duplicate originals or true and complete copies of each policy or other evidence
of insurance required by this Agreement evidencing (a) the issuance of such
policies, (b) that Borrower is not then in default in the payment of any premium
and (c) coverage which meets all of the requirements set forth in this
Agreement; and (ii) an Officers' Certificate dated the Closing Date or the
Addition Date, as applicable, to the effect that the insurance coverage required
by this Agreement is in full force and effect and that all premiums therefor
have been paid. To the maximum extent permitted by law, Borrower hereby
irrevocably waives, releases and discharges any and all rights of action,
demands and other claims of any kind or nature against the Agent or the Lenders
arising from any failure of the Agent or the Lenders to comply with the National
Flood Insurance Act of 1968 (42 U.S.C. ▇▇.▇▇. 4001, et seq.), the Flood Disaster
Protection Act of 1973 or the National Flood Insurance Reform Act of 1994,
including any failure of the Agent or the Lenders to provide Borrower with
written notification within ten (10) days prior to the Closing Date or the
Addition Date, as applicable, whether any Mortgaged Property is in a special
flood hazard area or whether federal disaster relief assistance will be
available in the event of flood damage to any Mortgaged Property.
3.1.8 Management Agreements. Borrower shall have delivered to the Agent
executed or conformed, certified copies of each of the Management Agreements and
all amendments thereto entered into on or before the Closing Date or the
Addition Date, as applicable, which Management Agreements shall be reasonably
satisfactory in form and substance to the Agent. The Management Agreements shall
be in full force and effect and no term or condition thereof shall have been
amended or modified, or waived in any material respect after the execution
thereof (other than the waiver of any Management Fee previously due and
payable).
3.1.9 Material Leases; Tenant Estoppel Certificates; Tenant
Subordination Agreements. Borrower shall have delivered to the Agent (i) a Rent
Roll for each Mortgaged Property, accompanied by an Officers' Certificate with
respect thereto, (ii) executed or conformed, certified copies of each Material
Lease with respect to each Mortgaged Property and all amendments thereto entered
into on or before the Closing Date or the Addition Date, as applicable, which
Material Leases shall be reasonably satisfactory in form and substance to the
Agent; the Material Leases, as so amended, shall be in full force and effect
41
and no term or condition thereof shall have been further amended or modified, or
waived after the execution thereof; and no Person shall have failed in any
material respect to perform any material obligation or covenant or satisfy any
material condition required by the Material Leases to be performed or complied
with on or before the Closing Date or the Addition Date, as applicable; and
(iii) original counterparts of Tenant Subordination Agreements and estoppel
certificates with respect to Leases demising at least 75% of the net rentable
square footage of each Mortgaged Property (and including all Material Leases)
(or such lesser requirement with respect to any Mortgaged Property as is
mutually acceptable to the Requisite Lenders (including the Agent)), reasonably
satisfactory in form and substance to the Agent, duly executed and delivered by
each Tenant party to such Material Lease.
3.1.10 Environmental Audits. Borrower shall have delivered to the Agent
evidence satisfactory to the Agent, in its sole discretion, that (i) there are
no material pending or threatened claims, suits, actions or proceedings arising
out of or relating to the existence of any Hazardous Materials at, in, on, from,
around or under any of the Mortgaged Properties; (ii) each such Mortgaged
Property is in compliance in all material respects with all applicable
Environmental Laws with respect to such Mortgaged Property; and (iii) no
Hazardous Materials exist at, in, on, from, around or under any such Mortgaged
Property, except in compliance in all material respects with applicable
Environmental Laws and all other Hazardous Materials have been removed from each
Mortgaged Property to the extent required by Applicable Law. Such evidence shall
include a comprehensive environmental audit (which shall include a Phase I
environmental audit and, either if recommended or suggested by an Approved
Environmental Consultant or, if not so recommended or suggested, if determined
by the Agent in its sole discretion to be necessary or desirable after
considering factors reasonably related to such determination, a Phase II
environmental audit), satisfactory in form and substance to the Agent, conducted
and certified by an Approved Environmental Consultant. Such evidence shall also
include (a) a reliance letter from such Approved Environmental Consultant with
respect to each such environmental audit addressed to the Agent and the Lenders,
which reliance letter shall be satisfactory in form and substance to the Agent,
(b) certification that all required approvals from all Governmental Authorities
having jurisdiction with respect to the environmental condition of the Mortgaged
Properties, if any, have been obtained, and (c) such other environmental
reports, inspections and investigations as the Agent shall in its sole
discretion require after considering factors reasonably related to such
determination, prepared, in each instance, by an Approved Environmental
Consultant, which approvals, reports, inspections and investigations shall be
satisfactory in form and substance to the Agent, in its sole discretion. On or
before the Closing Date or the Addition Date, as applicable, Borrower shall have
delivered to the Agent evidence satisfactory to the Agent, in its
42
sole discretion, that Borrower or, if applicable, the Mortgaged Property
Subsidiary has complied with the recommendations and suggestions of all
environmental consultant(s) referred to above.
3.1.11 Engineering Reports. Borrower shall have delivered to the Agent,
(i) a written Engineering Report with respect to each Mortgaged Property
prepared by an Engineer acceptable to the Agent, which Engineering Report shall
contain current repair recommendations for the first five years, and shall in
all other respects be reasonably satisfactory in form and substance to the
Agent; and (ii) a reliance letter from such Engineer with respect to each such
Engineering Report addressed to the Agent and the Lenders, which letter shall be
in form and substance reasonably satisfactory to the Agent.
3.1.12 Appraisals. The Agent shall have received (i) an Appraisal of
each Mortgaged Property prepared by an Appraiser designated by the Agent, which
Appraisal shall be reasonably satisfactory in form and substance to the Agent
and shall satisfy all applicable regulatory requirements; and (ii) copies of all
appraisals, market studies, and similar information with respect to each of the
Mortgaged Properties in the possession or under the control of the Loan Parties
or any of their respective Subsidiaries or partners.
3.1.13 Opinions of Loan Parties' Counsel. On the Closing Date Borrower
shall have delivered to the Agent and its counsel and the Lenders executed
copies of the favorable written opinion(s), dated as of the Closing Date, of
legal counsel(s) for the Loan Parties, which shall be in form and substance
reasonably approved by the Agent and its counsel and the Requisite Lenders.
3.1.14 Opinion of Agent's Counsel. The Lenders shall have received
executed copies of the favorable written opinion of O'Melveny & ▇▇▇▇▇ LLP,
counsel to the Agent, dated as of the Closing Date.
3.1.15 No Adverse Litigation. There shall not be pending or, to the
knowledge of Borrower, threatened, any action, suit, proceeding, governmental
investigation or arbitration against or affecting the Loan Parties or any of
their respective Subsidiaries, or any property of the Loan Parties or any of
their respective Subsidiaries that has not been disclosed by Borrower in writing
pursuant to Section prior to the execution of this Agreement and that is
reasonably likely to have a Material Adverse Effect, and there shall have
occurred no development not so disclosed in any such action, suit, proceeding,
governmental investigation or arbitration so disclosed, that, in either event,
in the reasonable opinion of the Agent, is likely to have a Material Adverse
Effect; and no injunction or other restraining order shall have been issued and
no hearing to cause an injunction or other restraining order to be issued shall
be pending or noticed with respect to any action, suit or proceeding seeking to
enjoin or otherwise prevent the consummation of, or to
43
recover any damages or obtain relief as a result of, the transactions
contemplated by this Agreement or the making of the Loans on the terms and
conditions contained in this Agreement and the other Loan Documents.
3.1.16 Existing Indebtedness. Borrower shall have caused the holders of
all Indebtedness secured by the Mortgaged Properties to deliver to the Agent and
the Title Company pay-off or demand letters and other similar materials with
respect to such Indebtedness sufficient to enable the Title Company to use the
proceeds of the loan to pay off such Indebtedness and obtain releases and
reconveyances of mortgages, fixture filings, financing statements and other
liens to enable the Title Company to deliver the required Title Policy.
3.1.17 Contingent Obligations. The Agent and the Lenders shall have
received and approved a list of any Contingent Obligations of the Loan Parties
in excess of $1,000,000 individually or $5,000,000 in the aggregate.
3.1.18 Payment of Fees and Expenses. Borrower shall have paid to the
Agent, for distribution (as appropriate) to the Lenders, the fees payable to the
Lenders and the expenses payable pursuant to Section 8.2.
3.1.19 Completion of Proceedings. All corporate, trust and other
proceedings taken or to be taken in connection with the transactions
contemplated hereby and all documents incidental thereto not previously found
acceptable by the Agent and its counsel shall be reasonably satisfactory in form
and substance to the Agent and such counsel, and the Agent and such counsel
shall have received all such counterpart originals or certified copies of such
documents as the Agent may reasonably request.
3.1.20 Other Documents. Each Loan Party shall have delivered to the
Agent such other information and documents as the Agent may reasonably request.
3.2 Conditions to All Loans.
The obligations of the Lenders to make Loans on each Funding Date are
subject to the following further conditions precedent:
3.2.1 Notice of Borrowing. The Agent shall have received before that
Funding Date, in accordance with the provisions of Section 2.1.2, an originally
executed Notice of Borrowing, in each case signed by an Authorized Officer of
Borrower or by any executive officer of Borrower designated by any of the
above-described officers on behalf of Borrower in a writing delivered to the
Agent.
3.2.2 Other Conditions. As of that Funding Date:
44
(i) the representations and warranties contained herein and in
the other Loan Documents shall be true and correct in all material
respects on and as of that Funding Date to the same extent as though
made on and as of that date, except to the extent such representations
and warranties specifically relate to an earlier date, in which case
such representations and warranties shall have been true and correct in
all material respects on and as of such earlier date;
(ii) no event shall have occurred and be continuing or would
result from the consummation of the borrowing contemplated by such
Notice of Borrowing that would constitute an Event of Default or a
Potential Event of Default;
(iii) each Loan Party shall have performed in all material
respects all agreements and satisfied all conditions which this
Agreement provides shall be performed or satisfied by it on or before
that Funding Date;
(iv) no order, judgment or decree of any arbitrator or
Governmental Authority shall purport to enjoin or restrain any Lender
from making the Loans to be made by it on that Funding Date;
(v) the making of the Loans requested on such Funding Date
shall not violate any law including, without limitation, Regulation T,
Regulation U or Regulation X of the Board of Governors of the Federal
Reserve System;
(vi) there shall not be pending or, to the knowledge of
Borrower, threatened, any action, suit, proceeding, governmental
investigation or arbitration against or affecting the Loan Parties or
their respective Subsidiaries that has not been disclosed by the Loan
Parties in writing pursuant to Section 4.5 or 5.1.15 prior to the
making of such Loans and that would be reasonably likely materially and
adversely to affect the Mortgaged Properties, taken as a whole, or that
would be reasonably likely to have a Material Adverse Effect, and there
shall have occurred no development not so disclosed in any such action,
suit, proceeding, governmental investigation or arbitration so
disclosed, that, in either event, in the opinion of the Agent, would be
reasonably likely to have a Material Adverse Effect; and no injunction
or other restraining order shall have been issued and no hearing to
cause an injunction or other restraining order to be issued shall be
pending or noticed with respect to any action, suit or proceeding
seeking to enjoin or otherwise prevent the consummation of, or to
recover any damages or obtain relief as a result of, the transactions
contemplated by this Agreement or the making of Loans hereunder; and
45
(vii) after giving effect to the proposed Loans, the Available
Amount shall not be less than the sum of: (a) the aggregate principal
amount of the then outstanding Loans plus (b) the Letter of Credit
Usage, and Borrower shall have delivered to the Agent the Borrowing
Base Certificate for the most recent calendar month as required
pursuant to Section 5.1.2.
3.3 Conditions to Letters of Credit.
The issuance of any Letter of Credit hereunder (whether or not
the applicable Issuing Lender is obligated to issue such Letter of Credit) is
subject to the following conditions precedent:
(i) On or before the date of issuance of the initial Letter of
Credit pursuant to this Agreement, the initial Loans shall have been
made.
(ii) On or before the date of issuance of such Letter of Credit,
the Agent shall have received, in accordance with the provisions of
Section 2.16.2.1, an originally executed Notice of Issuance of Letter
of Credit, in each case signed by an Authorized Officer of Borrower or
by any executive officer of Borrower designated by any of the
above-described officers on behalf of Borrower in a writing delivered
to the Agent, together with all other information specified in Section
2.16.2.1 and such other documents or information as the applicable
Issuing Lender may reasonably require in connection with the issuance
of such Letter of Credit.
(iii) On the date of issuance of such Letter of Credit, all
conditions precedent described in Section 3.2.2 shall be satisfied to
the same extent as if the issuance of such Letter of Credit were the
making of a Loan and the date of issuance of such Letter of Credit were
a Funding Date.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES
In order to induce the Agent and the Lenders to enter into this
Agreement and to make the Loans and to induce the Issuing Lenders to issue
Letters of Credit and to induce the other Lenders to purchase participations
therein, the Loan Parties represent and warrant to the Agent and the Lenders
that the following statements in this Article are true, correct and complete on
the Closing Date and on each Funding Date.
4.1 Formation/Organization, Powers, Qualification, Good
Standing, Business and Subsidiaries.
4.1.1 Organization and Powers. COPT and each of its Subsidiaries is a
trust/corporation/partnership/limited liability
46
company duly formed/organized, validly existing and in good standing under the
laws of its jurisdiction of formation/incorporation/organization (which
jurisdiction is set forth on Schedule annexed hereto). COPT and each such
Subsidiary has the requisite power and authority to own and operate its
properties, to carry on its business as now conducted and as proposed to be
conducted, to enter into the Loan Documents to which it is a party, to carry out
the transactions contemplated hereby and thereby. Borrower is a limited
partnership duly formed and validly existing under the laws of its jurisdiction
of organization (which jurisdiction is set forth on Schedule ) and has all
requisite partnership power and authority to own and operate its properties
(including the Mortgaged Properties owned by it), to carry on its business as
now conducted and proposed to be conducted, to enter into each Loan Document to
which it is a party and to carry out the transactions contemplated hereby and
thereby and to issue and pay the Notes.
4.1.2 Qualification and Good Standing. Each Loan Party is qualified to
do business and in good standing in every jurisdiction necessary to carry out
its business and operations, except in jurisdictions where the failure to be so
qualified or in good standing has not had and could not reasonably be expected
to have, either individually or in the aggregate, a Material Adverse Effect. The
jurisdictions in which each Loan Party and each of its respective Subsidiaries
owns property or otherwise conducts business as of the Closing Date are set
forth on Schedule annexed hereto.
4.1.3 Conduct of Business. The Loan Parties are engaged only in the
businesses permitted to be engaged in by them pursuant to Section 6.13.
4.2 Authorization of Borrowing, etc.
4.2.1 Authorization of Borrowing. The execution, delivery and
performance of this Agreement and the other Loan Documents to which each Loan
Party is a party and the issuance, delivery and payment of the Notes have been
duly authorized by all necessary corporate, partnership or other action on the
part of each Loan Party, as the case may be.
4.2.2 No Conflict. The execution, delivery and performance by each Loan
Party of each Loan Document to which it is a party and the consummation of the
transactions contemplated hereby and thereby to be performed by it do not and
will not (i) violate any provision of law applicable to any Loan Party, the
Declaration of Trust or Bylaws, partnership agreement, or other organizational
document of such Loan Party or any order, judgment or decree of any court or
other agency of government binding on such Loan Party, (ii) conflict with,
result in a breach of or constitute (with due notice or lapse of time or both) a
default under any Contractual Obligation of any Loan
47
Party, which default, individually or in the aggregate, could have a Material
Adverse Effect, (iii) result in or require the creation or imposition of any
Lien upon any of the properties or assets of any Loan Party or any of its
Subsidiaries (other than Liens securing the Obligations), or (iv) require any
approval of shareholders or any approval or consent of any Person under any
Contractual Obligation of any Loan Party the absence of which could reasonably
be expected to have, individually or in the aggregate, a Material Adverse
Effect, other than approvals or consents which will be or have been obtained on
or before the Closing Date or the applicable Funding Date, as the case may be,
and disclosed in writing to the Agent.
4.2.3 Governmental Consents. The execution, delivery and performance by
each Loan Party of each Loan Document to which it is a party and the
consummation of the transactions contemplated hereby and thereby to be performed
by it do not and will not require any registration with, consent or approval of,
or notice to, or other action to, with or by, any Governmental Authority, except
for (i) such of the foregoing which will have been made or obtained on or before
the Closing Date or the applicable Funding Date, as the case may be, and (ii)
the recordings and filings required to perfect the Liens granted pursuant to the
Security Documents. As of the Closing Date, all consents or approvals from or
notices to or filings with any federal, state, or other (domestic or foreign)
regulatory authorities required to be obtained on or before such date in
connection with the documents or transactions described or referred to in the
preceding sentence will have been accomplished in all material respects in
compliance in all material respects with all Applicable Laws. The consummation
of the transactions contemplated by this Agreement and the other Loan Documents
to be performed by the applicable Loan Parties do not and will not violate any
Applicable Law or regulation in any respect, except where such violation could
not reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect.
4.2.4 Binding Obligation. This Agreement is, and the other Loan
Documents when executed and delivered hereunder will be, the legally valid and
binding obligations of the applicable Loan Parties, enforceable against the
applicable Loan Parties in accordance with their respective terms, except as may
be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws
relating to or limiting creditors' rights generally, and by general principles
of equity (regardless of whether such enforceability is considered in a
proceeding in equity or law).
4.3 Financial Condition; No Material Adverse Effect; Contingent
Obligations.
4.3.1 Financial Condition. Borrower has heretofore delivered to the
Agent, at the Agent's request, the following financial statements and
information: (i) the audited balance sheet of COPT at December 31, 1997 and the
related consolidated
48
statements of income, shareholders' equity and cash flows of COPT for the 12
months then ended, (ii) the unaudited statements of Property Gross Revenues and
Property Operating Expenses for each of the Mortgaged Properties for the
calendar years ended December 31, 1997, and the two immediately prior calendar
years if available after Borrower's diligent efforts to obtain the same; and
(iii) the consolidated financial statements of COPT and its Subsidiaries
required to be delivered to the Agent pursuant to this Agreement. The statements
referred to in clause (i) of the preceding sentence were prepared in conformity
with GAAP and fairly present, in all material respects, the consolidated
financial position of COPT and its Subsidiaries as at the date thereof and the
consolidated results of operations of COPT and its Subsidiaries for the period
then ended, subject to changes resulting from audit and normal year end
adjustments. Except as set forth on Schedule 4.3.1 annexed hereto, COPT and its
Subsidiaries do not have any Contingent Obligation, contingent liability or
liability for taxes, long-term lease or other long-term commitment not
customarily involved in their respective businesses that is not reflected in the
foregoing financial statements or the notes thereto and which is material in
relation to the business, operations, properties, assets or condition (financial
or otherwise) of COPT and its Subsidiaries, taken as a whole.
4.3.2 No Material Adverse Effect. Since December 31, 1997, no
conditions or events have occurred that have had or could reasonably be expected
to have, either individually or in the aggregate, a Material Adverse Effect or
(ii) a material adverse effect on the Mortgaged Properties taken as a whole.
4.3.3 Contingent Obligations. As of the Closing Date, the Loan Parties
and their respective Subsidiaries will not be directly or indirectly liable with
respect to any Contingent Obligations, except as set forth on Schedule 4.3.3
annexed hereto and except for any Contingent Obligations which are not in excess
of $1,000,000 individually or $5,000,000 in the aggregate.
4.4 Properties; Agreements; Licenses.
4.4.1 Title to Mortgaged Properties; Liens. Each of Schedule 1.1A and
Schedule 1.1B correctly sets forth the interest of each Loan Party and each of
their respective Subsidiaries in each of the Mortgaged Properties and the other
Properties, respectively. There are no outstanding options, rights of first
refusal, rights of first offer or similar rights to purchase or otherwise
acquire Borrower's or, if applicable, any Mortgage Property Subsidiary's
interest in any such Mortgaged Property, other than as set forth on Schedule
4.4.1 annexed hereto. Borrower or, if applicable, a Mortgage Property Subsidiary
has good and marketable fee simple title to the Mortgaged Properties and good
title to the remainder of the Collateral purported to be owned by it, free and
clear of all Liens, in each case except Permitted Encumbrances and Liens
permitted under the Loan
49
Documents. All material fixtures, furnishings, attachments and equipment
necessary for the operation, use and occupancy of each such Mortgaged Property
have been installed or incorporated into such Mortgaged Property and Borrower
or, if applicable, a Mortgaged Property Subsidiary is the sole owner of all of
the same, free and clear of all chattel mortgages, conditional vendor's liens
and other liens, and security interests other than Permitted Encumbrances and
Liens permitted pursuant to Section 6.2. Except as heretofore disclosed in
writing by Borrower to the Agent, no tax liens have been filed against Borrower
and/or any of the Mortgaged Properties, other than Liens for non-delinquent real
property taxes.
4.4.2 Material Leases. Each Material Lease with respect to each
Mortgaged Property and all amendments thereto that have been or shall be entered
into on or before the Closing Date are listed on Schedule annexed hereto. The
Material Leases, as so amended, shall be in full force and effect and no term or
condition thereof has been further amended or modified, or waived after the
execution thereof except in accordance with this Agreement; and no Person will
have failed in any respect to perform any obligation or covenant or satisfy any
condition required by the Material Leases to be performed or complied with,
except where failure to so comply will not then have had and could not
reasonably be expected to have, either individually or in the aggregate, a
Material Adverse Effect.
4.5 Litigation; Adverse Facts.
Except as set forth in Schedule 4.5 annexed hereto, there is no
action, suit, proceeding, arbitration or governmental investigation at law or
in equity or before or by any Governmental Authority, or to the knowledge of
any of the Loan Parties, changes to Applicable Law, pending or, to the
knowledge of any of the Loan Parties, threatened against or affecting any
Loan Party or any of its Subsidiaries, any Mortgaged Property or any other
property of such Loan Party or any of its respective Subsidiaries that has
had, or could reasonably be expected to have, either individually or in the
aggregate, a Material Adverse Effect. No Loan Party nor any of its
Subsidiaries is (i) in violation in any material respect of any Applicable
Law or (ii) subject to or in default with respect to any Applicable Law in
either case that has had, or could reasonably be expected to have, either
individually or in the aggregate, a Material Adverse Effect. Except as set
forth on Schedule 4.5, to the knowledge of the Loan Parties, there are no
pending or threatened actions, suits or proceedings to revoke, attack,
invalidate, rescind or modify the zoning affecting any Mortgaged Property or
any Authorizations heretofore issued with respect to any Mortgaged Property
or asserting that such Authorizations or the zoning affecting any Mortgaged
Property or any other property of any Loan Party or any of its Subsidiaries
do not permit the continued use of such Mortgaged Property or property as
contemplated by the Loan Documents. Except as set forth on Schedule 4.5, to
the
50
knowledge of the Loan Parties, no Person has asserted any claimed violation of
Applicable Laws arising from the operation, use or occupancy of the Mortgaged
Properties which has not been cured which has had, or could reasonably be
expected to have, either individually or in the aggregate, a Material Adverse
Effect.
4.6 Taxes.
4.6.1 Payment of Taxes. Except to the extent set forth on the financial
statements delivered pursuant to this Agreement, all material federal, state and
local Tax returns and reports relating to any Loan Party or any of its
Subsidiaries or the Mortgaged Properties required to be filed have been timely
filed, and, except as permitted under Section 5.4.1, all material Taxes,
Impositions, assessments, fees and other governmental charges upon any Loan
Party or any of its Subsidiaries or upon the Mortgaged Properties which are due
and payable have been paid prior to delinquency. No Loan Party knows of any
proposed Tax assessment against any of its Subsidiaries or the Mortgaged
Properties that could reasonably be expected to have, either individually or in
the aggregate, a Material Adverse Effect. No Loan Party nor any of its
Subsidiaries (i) has executed or filed with the Internal Revenue Service or any
other Governmental Authority any agreement or other document that remains in
effect extending, or having the effect of extending, the period for assessment
or collection of any Taxes, assessments, fees or other governmental charges or
(ii) has any obligation under any written Tax sharing agreement or agreement
regarding payments in lieu of Taxes (other than obligations pursuant to
partnership agreements to make distributions of cash for the payment of taxes).
4.6.2 REIT Status. Since January 1, 1992, which is the date from which
COPT's predecessor first qualified as a REIT under the Internal Revenue Code,
COPT has at all times maintained its qualification as a REIT under the Internal
Revenue Code.
4.6.3 Foreign Person. None of the Loan Parties is a "foreign person"
within the meaning of Section 1445 or 7701 of the Internal Revenue Code.
4.6.4 Classification as a Partnership. Borrower is properly classified
as a partnership for federal income tax purposes.
4.7 Performance of Agreements; Materially Adverse Agreements.
No Loan Party nor any of its Subsidiaries is in default in the
performance, observance or fulfillment of any of the material obligations,
covenants or conditions contained in any Contractual Obligation, and no
condition exists that, with the giving of notice or the lapse of time or both,
would constitute such a default, except where the consequences, direct or
indirect, of such default or defaults, if any, could not reasonably be expected
to have, either individually or in the aggregate, a
51
Material Adverse Effect. Except as disclosed on Schedule annexed hereto, no Loan
Party nor any of its Subsidiaries is a party to or otherwise subject to any
agreement or instrument (other than the Loan Documents), any charge or other
internal restriction or any Contractual Obligation which by its terms or effect
(i) prohibits or restricts such Loan Party or Subsidiary from acquiring, loaning
or disposing of any Mortgaged Property or other asset, or any interest therein,
or acquiring or entering into, or providing any services under any management
agreement or (ii) otherwise restricts the conduct by such Loan Party or any of
its Subsidiaries of any business, except in each case where the consequences,
direct or indirect, of any violation thereof could not reasonably be expected to
have, either individually or in the aggregate, a Material Adverse Effect. No
Loan Party nor any of its Subsidiaries is a party to or is otherwise subject to
any agreement or instrument, any charter or other internal restriction or any
Contractual Obligation which has had, or could reasonably be expected to have,
either individually or in the aggregate, a Material Adverse Effect.
4.8 Governmental Regulation; Securities Activities.
No Loan Party nor any of its Subsidiaries is subject to regulation
under the Public Utility Holding Company Act of 1935, the Federal Power Act, the
Interstate Commerce Act or the Investment Company Act of 1940 or under any other
federal or state statute or regulation which could limit its ability to incur
Indebtedness or which could otherwise render all or any portion of the
Obligations unenforceable. No Loan Party nor any of its Subsidiaries is engaged
principally, or as one of its important activities, in the business of extending
credit for the purpose of purchasing or carrying any Margin Stock.
4.9 Employee Benefit Plans.
No Loan Party maintains any Employee Benefit Plan that is subject to
any provision of the Employee Retirement Income Security Act of 1974, as amended
from time to time.
4.10 Certain Fees.
No broker's or finder's fee or commission will be payable by any Loan
Party or any of its Subsidiaries with respect to this Agreement or any of the
transactions contemplated hereby (other than the fees payable pursuant to this
Agreement), and Borrower hereby indemnifies the Agent and the Lenders against,
and agrees that it will hold the Agent and the Lenders harmless from, any claim,
demand or liability for any such broker's or finder's fees or commissions
payable by Borrower alleged to have been incurred in connection herewith or
therewith and any expenses (including reasonable fees, expenses and
disbursements of counsel) arising in connection with any such claim, demand or
liability.
52
4.11 Solvency.
After giving effect to the consummation of the other transactions
contemplated by this Agreement and the other Loan Documents, as of the Closing
Date and as of each Funding Date, with respect to each Loan Party, (i) (a) the
then-current fair saleable value of the property of such Loan Party is (y)
greater than the total amount of liabilities (including contingent liabilities)
of such Loan Party and (z) not less than the amount that will be required to pay
the probable liabilities on such Loan Party's then-existing debts as they become
absolute and matured considering all financing alternatives and potential asset
sales reasonably available to such Loan Party; (b) such Loan Party's capital is
(or will be, as the case may be), not unreasonably small in relation to its
business or any contemplated or undertaken transaction; and (c) such Loan Party
does not intend to incur, or believe (nor should it reasonably believe) that it
will incur, debts beyond its ability to pay such debts as they become due; and
(ii) such Loan Party is (or will be, as the case may be) "solvent" within the
meaning given that term and similar terms under Applicable Laws relating to
fraudulent transfers and conveyances. For purposes of clause (i) of the
preceding sentence, the amount of any contingent liability at any time shall be
computed as the amount that, in light of all of the facts and circumstances
existing at such time, represents the amount that can reasonably be expected to
become an actual or matured liability.
4.12 Disclosure.
No representation or warranty of any Loan Party contained in this
Agreement and the other Loan Documents to which it is a party or in any other
document, certificate or written statement furnished to the Agent or any Lender
by or on behalf of any Loan Party for use in connection with the transactions
contemplated by the Loan Documents contains or will contain any untrue statement
of a material fact or omits or will omit to state a material fact (known to such
Loan Party, in the case of any document not furnished by it) necessary in order
to make the statements contained herein or therein not misleading in light of
the circumstances in which the same were made or will be made, as the case may
be. Any projections and pro forma financial information contained in such
materials are based or will be based upon good faith estimates and assumptions
believed to be reasonable at the time made, it being recognized by the Agent and
the Lenders that such projections as to future events are not to be viewed as
facts and that actual results during the period or periods covered by any such
projections may differ materially from the projected results. There is no fact
known to any Loan Party (other than matters of a general economic nature) that
has had, or could reasonably be expected to have, either individually or in the
aggregate, a Material Adverse Effect and that has not been disclosed in any of
the Loan Documents to which a Loan Party is a party as of the date hereof or in
such other documents,
53
certificates and statements furnished to the Agent and the Lenders for use in
connection with the transactions contemplated hereby.
4.13 Liens on the Collateral.
4.13.1 General. Except as expressly provided in the legal opinions
delivered pursuant to this Agreement, the provisions of this Agreement and the
Security Documents are effective to create and maintain, upon proper filing or
recording or taking of possession, as applicable, in favor of the Agent, on
behalf of the Lenders, valid and legally enforceable Liens on all of the
Mortgaged Properties and all of the remainder of the Collateral and, when all
necessary and appropriate recordings and filings have been effected in all
necessary and appropriate public offices, and payment is made of any applicable
mortgage recording, intangible and/or similar taxes, this Agreement and the
Security Documents will constitute perfected Liens on all of such Mortgaged
Properties and all of the remainder of the Collateral prior and superior to all
other Liens except Permitted Encumbrances.
4.13.2 Mortgages. Each Mortgage upon execution and delivery by Borrower
or, if applicable, a Mortgaged Property Subsidiary will be a valid and
enforceable first priority Lien on the Mortgaged Property that such Mortgage
purports to encumber, except for Permitted Encumbrances, and such Mortgage, when
such Mortgage is recorded in the real property records of the county in which
such Mortgaged Property is located and upon payment of any applicable mortgage
recording, intangible and/or similar taxes, will be a perfected, valid and
enforceable first priority Lien on such Mortgaged Property in favor of the
Agent, on behalf of the Lenders, which Mortgaged Property will then be free and
clear of all Liens having priority over the first Lien of such Mortgage, except
for Permitted Encumbrances.
4.13.3 Assignments of Rents and Leases. Except as expressly provided in
the legal opinions delivered pursuant to this Agreement, each Assignment of
Rents and Leases, upon execution and recordation of such Assignment of Rents and
Leases in the real property records of the county in which the Mortgaged
Property affected by such Assignment of Rents and Leases is located and upon
payment of any applicable recording or intangible taxes, will be, as to each
Mortgaged Property, a perfected, valid and enforceable first priority present
assignment of or Lien on the Leases affecting such Mortgaged Property and of the
Rents of and from such Mortgaged Property, which Mortgaged Properties will then
otherwise be free and clear of all Liens having priority over the Assignment of
Rents and Leases, except for Permitted Encumbrances. As of the Closing Date or
as of the Addition Date, as applicable, with respect to a Mortgaged Property,
Borrower represents that upon recordation of the applicable Assignment of Rents
and Leases the Agent has taken all actions necessary to obtain, and as of the
Closing Date or as
54
of the Addition Date, as applicable, with respect to a Mortgaged Property the
Agent has, a valid and perfected first priority assignment of or Lien on the
Rents from such Mortgaged Property and of all security for the Leases affecting
such Mortgaged Property, including cash or securities deposited as security
under such Leases subject to the prior right of the Tenants making such
deposits.
4.13.4 Mechanics' Liens. Except as otherwise permitted pursuant to the
provisions of this Agreement or the applicable Mortgage or as insured over by
Title Policies that are then in effect, no mechanic's liens have been filed and
remain in effect against any Mortgaged Property.
4.13.5 Filings and Recordings. All filings (including all financing
statements and all assignments of financing statements under the Uniform
Commercial Code) have been delivered to the Agent for filing in each public
office in which such filings and recordings are required or advisable to perfect
the Liens on each of the Mortgaged Properties and the other Collateral granted
by the Loan Parties pursuant to the Security Documents and, except for the
filing of continuation statements with respect to such financing statements as
may be required or advisable to be filed at periodic intervals, no periodic
refiling or periodic recording is presently required to protect and preserve
such Liens and security interests.
4.14 Zoning; Authorizations.
4.14.1 Zoning. The use and operation by Borrower or, if applicable, a
Mortgaged Property Subsidiary of its Mortgaged Property as multi- or single-
tenant suburban office building or buildings, with related uses, separate and
apart from any other properties, constitutes a legal use under applicable zoning
regulations and complies in all material respects with all Applicable Laws and
all applicable Insurance Requirements, and does not violate any Authorizations
or other material approvals, material restrictions of record or any material
agreement affecting any Mortgaged Property (or any portion thereof) to which
Borrower or, if applicable, a Mortgaged Property Subsidiary is a party or by
which Borrower or, if applicable, a Mortgaged Property Subsidiary or such
Mortgaged Property (or portion thereof) is bound, except for violations and
failures to comply which could not reasonably be expected to result, either
individually or in the aggregate, in a Material Adverse Effect. Neither the
zoning nor any right of access to or use of any Mortgaged Property is to any
material extent dependent upon or related to any real property other than such
Mortgaged Property.
4.14.2 Authorizations. There have been issued in respect of each
Mortgaged Property all Authorizations necessary to own, operate, use and occupy
such Mortgaged Property in the manner operated by Borrower or, if applicable, a
Mortgaged Property Subsidiary and their respective predecessors in interest, as
of
55
the Closing Date or the Addition Date, as applicable, and contemplated by
Borrower or, if applicable, a Mortgaged Property Subsidiary to be operated on
and after the Closing Date or the Additional Date, as applicable (including any
required permits relating to Hazardous Materials). None of the Loan Parties has
knowledge that any Authorization necessary or required to own, operate, use and
occupy any Mortgaged Property in the manner currently operated by the Tenants
under any Material Lease and contemplated to be operated by the Tenants on and
after the Closing Date or the Addition Date, as applicable (including any
required permits relating to Hazardous Materials) has not been issued and is not
in full force and effect, other than any such Authorizations which, if not
obtained, could not reasonably be expected to have, either individually or in
the aggregate, a Material Adverse Effect. Neither Borrower or any applicable
Mortgaged Property Subsidiary nor, to the knowledge of any of the Loan Parties,
any prior owner thereof, has received any notice of violation or revocation
thereof except for those which could not reasonably be expected to have, either
individually or in the aggregate, a Material Adverse Effect.
4.15 Physical Condition; Encroachment. Except as disclosed on the Engineering
Reports delivered pursuant to this Agreement, each Mortgaged Property is free of
material structural defects and is in good repair (normal wear and tear
excepted) and all building systems contained therein and all other material
items of Collateral are in good working order in all material respects subject
to ordinary wear and tear, except as disclosed in the Engineering Reports, and
is free and clear of any damage that would affect materially and adversely the
value of such Mortgaged Property or the use of such Mortgaged Property for its
intended purposes. To the knowledge of any of the Loan Parties, other than as
described in the Title Policy and in any Survey, no Improvement at any Mortgaged
Property encroaches upon any building line, setback line, side yard line or any
recorded or visible easement.
4.16 Insurance.
All insurance required to be maintained by the Loan Parties and their
respective Subsidiaries pursuant to this Agreement or any other Loan Document is
in full force and effect in accordance with the terms thereof. As to each
Mortgaged Property located in an area identified by the Federal Emergency
Management Agency as having special flood hazards, if flood insurance is
available, a flood insurance policy is in effect. All premiums have been paid
with respect to each insurance policy required to be maintained by the Loan
Parties and their Subsidiaries pursuant to this Agreement or any other Loan
Document.
4.17 Leases.
There is no default or event which with notice or lapse of time or both
would constitute a default under any of the
56
provisions of any Material Lease affecting any Mortgaged Property that has had,
or could reasonably be expected to have, either individually or in the
aggregate, a Material Adverse Effect. No litigation is currently pending or has
been threatened by any Tenant in connection with any Material Lease affecting
any Mortgaged Property that has had, or could reasonably be expected to have,
either individually or in the aggregate, a Material Adverse Effect. All Material
Leases and other Leases material to the operation of the Mortgaged Properties
are in full force and effect, except to the extent such failure could not
reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect.
4.18 Environmental Reports; Engineering Reports; Appraisals;
Market Studies.
Borrower has delivered to the Agent correct and complete copies of all
environmental audits, engineering reports, appraisals and market studies with
respect to each Mortgaged Property that any Loan Party or any of its
Subsidiaries has in its possession. To any Loan Party's knowledge, the
information contained in such audits, reports, appraisals and market studies
remains true, correct and complete.
4.19 No Condemnation or Casualty.
No condemnation or other like proceedings (including relocation of any
roadways abutting any Mortgaged Property or change in grade of such roadways or
denial of access to any Mortgaged Property) that has had, or could reasonably be
expected to result in, a Material Adverse Effect, are pending and served nor, to
the knowledge of any of the Loan Parties, threatened against any Mortgaged
Property in any manner whatsoever. No casualty has occurred to any Mortgaged
Property that has had or could reasonably be expected to have, either
individually or in the aggregate, a Material Adverse Effect.
4.20 Utilities and Access.
To the extent necessary for the full utilization of each Mortgaged
Property in accordance with its current use, telephone services, gas, steam,
electric power, storm sewers, sanitary sewers and water facilities and all other
utility services are available to each Mortgaged Property, are adequate to serve
each such Mortgaged Property, exist at the boundaries of the Land and are not
subject to any conditions, other than normal charges to the utility supplier,
which would limit the use of such utilities. All streets and easements necessary
for the occupancy and operation of each Mortgaged Property are available to the
boundaries of the Land. All necessary rights-of-way for all roads, which are
sufficient to permit each Mortgaged Property to be utilized fully for its
current use, have been completed and are serviceable, and, to the knowledge of
any of the Loan Parties, all public rights-of-way through or adjacent to the
57
Mortgaged Properties have been acquired and dedicated and accepted for
maintenance and public use by the applicable Governmental Authorities.
4.21 Wetlands.
Except as disclosed in any of the written environmental audits and
reports delivered pursuant to this Agreement, none of the Improvements on any
Mortgaged Property are constructed on land designated by any Governmental
Authority having land use jurisdiction as wetlands.
4.22 Labor Matters.
There are no strikes or other labor disputes against any Loan Party or
any of its Subsidiaries, pending or, to the knowledge of such Loan Party,
threatened that have had or could reasonably be expected to have, either
individually or in the aggregate, a Material Adverse Effect. Hours worked by and
payments made by such Loan Party or any of its Subsidiaries to their respective
employees are not in violation in any material respect of the Fair Labor
Standards Act or any other applicable law dealing with such matters.
4.23 Employment and Labor Agreements.
Each Loan Party and each of its Subsidiaries is in compliance in all
material respects with the terms and conditions of any employment agreements to
which it is party, except for failures to comply which could not be reasonably
expected to result, either individually or in the aggregate, in a Material
Adverse Effect.
ARTICLE 5
AFFIRMATIVE COVENANTS
Each Loan Party covenants and agrees that, from and after the Closing
Date and so long thereafter as the Commitments hereunder shall remain in effect
and until payment in full of the Loans and the other Obligations (other than
indemnification obligations with respect to claims that have not been asserted
at the time that the Loans and all other Obligations have been paid in full) and
the cancellation or expiration of all Letters of Credit, each Loan Party shall
perform and shall cause each of its Subsidiaries to perform all covenants made
by it in this Article .
5.1 Financial Statements and Other Reports.
COPT shall maintain and cause each of its Subsidiaries to maintain a
system of accounting established and administered in accordance with sound
business practices to permit preparation of
58
consolidated and consolidating financial statements in conformity
with GAAP. Borrower shall deliver to Lender:
5.1.1 [Intentionally Deleted];
5.1.2 Borrowing Base Certificates: as soon as available
and in any event (a) within 20 days after the end of each calendar
month, a Borrowing Base Certificate, in reasonable detail satisfactory
to the Agent and certified by the Chief Executive Officer or Chief
Financial Officer of the Loan Parties, calculated as of the last day of
such calendar month, and (b) at the times otherwise required by this
Agreement, or upon written request from the Agent or at the option of
Borrower, a Borrowing Base Certificate calculated as of the appropriate
date in reasonable detail satisfactory to the Agent;
5.1.3 Quarterly Property Operating Statements: as soon as
available and in any event within 60 days after the end of each
calendar quarter, commencing with respect to the calendar quarter
ending March 31, 1998, a current Rent Roll and a statement of Property
Gross Revenues and Property Operating Expenses and any other expenses
with respect to each Mortgaged Property and a consolidated operating
statement with respect to all Mortgaged Properties, in each case for
the 12 month period ending on the last day of such calendar quarter, in
reasonable detail satisfactory to the Agent and certified by the Chief
Executive Officer or Chief Financial Officer of the Loan Parties
stating that, subject to normal adjustments following the preparation
of the financial statements referred to in Sections 5.1.4 and 5.1.5
below, (x) such statements and consolidated operating statements fairly
present, in all material respects, the results of operations of the
Mortgaged Properties for the periods indicated and (y) all Property
Operating Expenses and any other expenses with respect to each
Mortgaged Property which have become due and payable as of the last day
of the calendar month next preceding the delivery of such statements
have been fully paid or recognized by Borrower;
5.1.4 Quarterly Financial Statements of COPT and Its
Subsidiaries: as soon as available and in any event within 60 days
after the end of each calendar quarter of each calendar year,
commencing with respect to the calendar quarter ending March 31, 1998,
(a) the consolidated balance sheet of COPT and its Subsidiaries as at
the end of such calendar quarter and the related consolidated
statements of income, reconciliation of surplus, stockholders' equity
and cash flows of COPT and its Subsidiaries for such calendar quarter
and for the period from the beginning of the then current calendar year
to the end of such calendar quarter, setting forth in each case in
comparative form the corresponding figures for the corresponding
periods of the
59
previous year and the corresponding figures from the plan and financial
forecast for the current year delivered pursuant to this Section, and
(b) the consolidating financial statements of COPT and its Subsidiaries
(including balance sheets and income statements segmenting any
Subsidiaries of COPT or groups of Subsidiaries of COPT, as requested by
the Agent in its reasonable discretion) together with any adjustments
and/or eliminations needed to reconcile such Subsidiary financial
statements to the consolidated financial statements of COPT, all in
reasonable detail (it being understood and agreed that, to the extent
COPT's quarterly report filed on Form 10-Q with the Securities and
Exchange Commission for such period contains the foregoing information,
such quarterly report shall be deemed to comply with the foregoing
requirements) and certified by the Chief Executive Officer or the Chief
Financial Officer of the Loan Parties stating that such consolidated
and consolidating financial statements fairly present, in all material
respects, the financial condition of COPT and its Subsidiaries as at
the dates indicated and the results of their operations and their cash
flows for the periods indicated, subject to changes resulting from
audit and normal year-end adjustments;
5.1.5 Year-End Financial Statements: as soon as available
and in any event within 90 days after the end of each calendar year,
commencing with respect to the calendar year ending December 31, 1998,
(a) the consolidated balance sheet of COPT and its Subsidiaries as at
the end of such calendar year and the related consolidated statements
of income, shareholders' equity and cash flows of COPT and its
Subsidiaries for such calendar year, setting forth in each case in
comparative form the corresponding figures for the previous calendar
year and the corresponding figures from the plan and financial forecast
delivered pursuant to this Section for the calendar year covered by
such consolidated financial statements, (b) the balance sheets and
related income statements of each Mortgaged Property, (c) the
consolidating financial statements of COPT and its Subsidiaries
(including balance sheets and income statements segmenting any
Subsidiaries of COPT or groups of Subsidiaries of COPT, as requested by
the Agent in its reasonable discretion) together with any adjustments
and/or eliminations needed to reconcile such Subsidiary financial
statements to the consolidated financial statements of COPT, all of the
foregoing in reasonable detail and certified by the Chief Executive
Officer or Chief Financial Officer of the Loan Parties stating that
they present fairly, in all material respects, the financial condition
of COPT and its Subsidiaries as at the dates indicated and the results
of their operations and their cash flows for the periods indicated, and
(d) in the case of the consolidated financial statements referred to in
clause (a), a report thereon of the Loan Parties' Accountants or other
independent
60
accountants of recognized national standing selected by COPT and
reasonably satisfactory to the Agent, which report shall be
unqualified, shall express no doubts about the ability of COPT and its
Subsidiaries to continue as a going concern and shall state that such
consolidated financial statements fairly present, in all material
respects, the financial position of COPT and its Subsidiaries as at the
dates indicated and the results of their operations and their cash
flows for the periods indicated in conformity with GAAP applied on a
basis consistent with prior years (except as otherwise disclosed in
such financial statements) and that the examination by such accountants
in connection with such consolidated financial statements has been made
in accordance with generally accepted auditing standards;
5.1.6 Annual Operating Plan: as soon as available and in
any event within 45 days after the end of each calendar year, an annual
operating plan and budget for each Mortgaged Property, showing all
anticipated operating revenues and expenses, capital expenditures,
leasing activity, repairs and improvements, and such other matters as
the Agent shall reasonably require;
5.1.7 Officers' Certificates: together with each delivery
of financial statements of COPT and its Subsidiaries pursuant to
Sections 5.1.3, 5.1.4 and 5.1.5 above, an Officers' Certificate of the
Loan Parties stating that (1) the signer has reviewed the terms of this
Agreement and has made, or caused to be made under his or her
supervision, a review in reasonable detail of the transactions and
condition of COPT and its Subsidiaries and the Collateral during the
accounting period covered by such financial statements, and (2) such
review has not disclosed the existence during or at the end of such
accounting period, and the signer does not have knowledge of the
existence as at the date of such Officers' Certificate, of any
condition or event that constitutes an Event of Default or Potential
Event of Default, or, if any such condition or event existed or exists,
specifying the nature and period of existence thereof and what action
the Loan Parties have taken, are taking and propose to take with
respect thereto;
5.1.8 Compliance Certificates: together with each delivery
of the financial statements of COPT and its Subsidiaries pursuant to
Sections 5.1.3, 5.1.4 and 5.1.5 above, a Compliance Certificate
demonstrating in reasonable detail compliance during and at the end of
the applicable accounting periods with the covenants set forth in
Section 6.6;
5.1.9 Accountants' Certification: together with each
delivery of financial statements of COPT pursuant to Section 5.1.5
above, a written statement by the Loan Parties' Accountants or other
independent accountants of
61
recognized national standing selected by COPT and reasonably
satisfactory to the Agent (a) stating in substance that their audit
examination has included a review of the terms of this Agreement and
the other Loan Documents as they relate to accounting matters, and (b)
stating whether, in connection with their audit examination, any
condition or event that constitutes an Event of Default or Potential
Event of Default has come to their attention and, if such a condition
or event has come to their attention, specifying the nature and period
of existence thereof; provided, however, that such accountants shall
not be liable by reason of any failure to obtain knowledge of any such
Event of Default or Potential Event of Default that would not be
disclosed in the course of their audit examination;
5.1.10 Accountants' Reports: promptly upon receipt thereof
(unless restricted by applicable professional standards), copies of all
reports submitted to COPT or any of its Subsidiaries by the Loan
Parties' Accountants or any other independent accountants in connection
with each annual, interim or special audit of the consolidated
financial statements of COPT and its Subsidiaries made by such
accountants, including any comment letter submitted by such accountants
to management in connection with their annual audit;
5.1.11 Reconciliation Statements: if, as a result of any
change in accounting principles and policies from those used in the
preparation of the audited financial statements referred to in Section
5.1.5, the consolidated financial statements of COPT and its
Subsidiaries delivered pursuant to this Section differ in any material
respect from the consolidated financial statements that would have been
delivered pursuant to such subdivisions had no such change in
accounting principles and policies been made, then (a) together with
the first delivery of such financial statements following such change,
consolidated financial statements of COPT and its Subsidiaries for (1)
the current calendar year to the effective date of such change and (2)
the two full calendar years immediately preceding the calendar year in
which such change is made, in each case prepared on a pro forma basis
as if such change had been in effect during such periods, and (b)
together with each delivery of such financial statements following such
change, a written statement of the Chief Financial Officer or Chief
Executive Officer of the Loan Parties setting forth the differences
which would have resulted in the calculation of the covenants set forth
in Article 6 if such financial statements, had been prepared without
giving effect to such change;
5.1.12 Evidence of Insurance: together with the
delivery of the foregoing statements, evidence reasonably
satisfactory to the Agent that the monthly premiums with
62
respect to the insurance required to be maintained pursuant to the Loan
Documents have been paid for the current month; provided that evidence
previously delivered pursuant to this Section with respect to the prior
payment of premiums for the current month need not be redelivered;
5.1.13 SEC Filings and Press Releases: promptly upon their
becoming available, copies of (a) all financial statements, reports,
notices and proxy statements sent or made available generally by COPT
to its security holders, (b) all regular and periodic reports and all
registration statements (other than on Form S-8 or a similar form) and
prospectuses, if any, filed by COPT or any of its Subsidiaries with any
securities exchange or with the Securities and Exchange Commission or
any Governmental Authority or private regulatory authority, and (c) all
press releases and other statements made available generally by COPT or
any of its Subsidiaries to the public or to the security holders of
COPT;
5.1.14 Events of Default, etc.: promptly upon any Loan
Party obtaining knowledge (a) of any condition or event that
constitutes an Event of Default or Potential Event of Default, or
becoming aware that the Agent has given any notice or taken any other
action with respect to a claimed Event of Default or Potential Event of
Default, (b) that any Person has given any notice to COPT or any of its
Subsidiaries or taken any other action with respect to a claimed
default or event or condition of the type referred to in Article of any
condition or event that constitutes or may (upon the giving or
receiving of notice or the lapse of time, later, or otherwise) a
default, a potential event of default, an event of default (in each
case, as defined in the agreement or instrument creating, evidencing or
governing any such Indebtedness) under or with respect to any
Indebtedness of COPT and its Subsidiaries (other than the Indebtedness
hereunder), or becoming aware that any agent, trustee, lender or
security holder with respect thereto has given any notice or taken any
other action with respect to such condition or event, or (d) of the
occurrence of any event or change that has had, or could reasonably be
expected to have, either individually or in the aggregate, a Material
Adverse Effect, an Officers' Certificate specifying the nature and
period of existence of such condition, event or change, or specifying
the notice given or action taken by any such Person and the nature of
such claimed Event of Default, Potential Event of Default, default,
event or condition, and what action the Loan Parties have taken, are
taking and propose to take with respect thereto;
5.1.15 Litigation or Other Proceedings:
(a) promptly upon COPT or Borrower obtaining knowledge of
(x) the institution of any action, suit, proceeding (whether
administrative, judicial or otherwise), governmental
63
investigation or arbitration against or affecting COPT or any of its
Subsidiaries (including Borrower), or any property of COPT or such
Subsidiary (collectively, "Proceedings") not previously disclosed in
writing by COPT or Borrower to Lender or (y) any material development
in any Proceeding that, in any case:
(i) if adversely determined, could
reasonably be expected to have, either individually or
in the aggregate, a Material Adverse Effect; or
(ii) seeks to enjoin or otherwise prevent the
consummation of, or to recover any damages or obtain relief as
a result of, the transactions contemplated hereby; or
(iii) threatens the validity or priority of
the Liens granted pursuant to the Loan Documents;
written notice thereof together with such other information as may be
reasonably available to any of the Loan Parties to enable the Agent and
its counsel to evaluate such matters; and (b) within 20 days after the
end of each calendar quarter of COPT, a schedule of all Proceedings
involving an alleged liability of, or claims against or affecting, COPT
and its Subsidiaries which, if adversely determined, could reasonably
be expected to result in a money judgment in excess of $1,000,000
individually or $5,000,000 in the aggregate (in either case not
adequately covered by insurance as to which a solvent and unaffiliated
insurance company has accepted coverage), and promptly after request by
the Agent, such other information as may be reasonably requested by the
Agent to enable the Agent and its counsel to evaluate any of such
Proceedings;
5.1.16 Financial Plans: as soon as practicable and in any
event no later than November 30 of each year, projected financial
statements for each Mortgaged Property for the three next succeeding
calendar years in detail reasonably satisfactory to the Agent, together
with an explanation of the assumptions on which such forecasts are
based, and such other information and projections as the Agent may
reasonably request for any Mortgaged Property or COPT or any of its
Subsidiaries;
5.1.17 Insurance: as soon as practicable and in any event
by the last day of each calendar year, a report in form and substance
reasonably satisfactory to the Agent outlining all material insurance
coverage maintained as of the date of such report by COPT and its
Subsidiaries or, in lieu thereof, copies of such policies, and a report
as to all material insurance coverage planned to be maintained by COPT
and its Subsidiaries in the next succeeding calendar
64
year to the extent varying from the description of that
delivered or described;
5.1.18 Environmental Audits and Reports: as soon as
practicable following receipt thereof, copies of all environmental
audits and reports, whether prepared by personnel of COPT or any of its
Subsidiaries or by independent consultants, with respect to material
environmental matters at any Mortgaged Property or which relate to an
Environmental Claim which could reasonably be expected to have, either
individually or in the aggregate, a Material Adverse Effect;
5.1.19 Board of Trustees: with reasonable promptness,
written notice of any change in the Board of Trustees of COPT;
5.1.20 Change in Name or Chief Place of Business: (a)
notification of any change in a Loan Party's name, identity or
corporate structure within 60 days of such change and (b) 60 days'
prior written notice of any change in a Loan Party's executive office
or chief place of business;
5.1.21 [Intentionally Deleted];
5.1.22 Notices with Respect to Mortgaged Properties: (i)
immediately upon any Loan Party's acquiring actual knowledge of the
same, a written notice with respect to the occurrence or effectiveness
of any event or condition that could reasonably be expected to have a
material adverse effect on one or more of the Mortgaged Properties; and
(ii) at least 20 days prior to the commencement of any
Restoration/Renovation of any Mortgaged Property, a written notice of
renovation or restoration with respect thereto and upon the completion
of such Renovation/Restoration, a written notice of such completion;
5.1.23 Supplements to Schedules: if at any time, the
information contained on any Schedule to this Agreement or any other
Loan Document is incomplete or incorrect, Borrower shall promptly and,
in any event prior to the next Funding Date, deliver to the Agent
written information that completes or corrects such Schedule; provided
that unless such information is reasonably approved in writing by the
Agent, such information shall not be deemed to supplement the
applicable Schedule for purpose of this Agreement and the other Loan
Documents unless such information solely reflects an action by Borrower
which it is expressly permitted pursuant to the terms of the Loan
Documents; and
5.1.24 Other Information: with reasonable promptness,
(a) information and other data revised to correct any erroneous
information and other data previously
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delivered by COPT or Borrower to Lender pursuant to this Agreement or
included in any statement, report or certificate previously delivered
by COPT or Borrower to the Agent pursuant to this Agreement, together
with such statement, report or certificate that shall have been revised
to reflect such revised information and data, and (b) such other
information and data with respect to the Loan Parties and their
respective Subsidiaries, the Mortgaged Properties (separately and for
all Mortgaged Properties), the Leases, the Management Agreements, the
other Collateral and the other assets and liabilities of the Loan
Parties and their respective Subsidiaries, all in form reasonably
satisfactory to the Agent, as from time to time may be reasonably
requested by the Agent.
5.2 Entity Existence; Financial Matters; Control.
5.2.1 Entity Existence. Each Loan Party shall, and shall cause each of
its Subsidiaries to, at all times preserve and keep in full force and effect its
trust, corporate, limited partnership, limited liability company or other entity
existence and all Authorizations, rights and franchises material to its
business.
5.2.2 Financial Matters. COPT and its Subsidiaries, taken as a whole,
shall (i) maintain financial statements, payroll records, accounting records and
other entity records and other documents separate from any other Person; (ii)
maintain bank accounts in their own name or names, separate from any other
Person; (iii) pay their own expenses and other liabilities from their own assets
and incur (or endeavor to incur) obligations to other Persons based solely upon
their own assets and creditworthiness and not upon the creditworthiness of any
other Person; and (iv) file their own tax returns or join in the consolidated
tax return of such group as a separate member thereof.
5.2.3 Change in Control. Without the Requisite Lender's (including the
Agent's) prior written consent, the Controlling Principals, in the aggregate,
shall not cease at any time or for any reason to maintain, free of any Lien,
beneficial ownership (as defined under Section 13(d) of the Exchange Act) of,
and a direct economic interest in, at least the number of shares of common
shares of COPT set forth on Schedule . For purposes of this Section, the
computation of such number of common shares owned shall include the maximum
number of such common shares into which the Controlling Principals are entitled
to convert Partnership Interest units in Borrower, without giving effect to
applicable time limits and other restrictions on such conversion, or to any
right given to COPT or Borrower to deliver cash in lieu of shares upon any such
conversion. The number of shares set forth on Schedule shall be appropriately
adjusted for stock splits or similar adjustments to the capitalization of COPT.
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5.2.4 Employment of Controlling Principals. Prior to the first
Anniversary, COPT shall not fail to appoint, or remove from office, ▇▇▇▇ ▇.
▇▇▇▇▇▇ III as its chief executive officer or any other officer having
substantially similar authority with respect to the operations and direction of
COPT, except by reason of the death or disability of ▇▇▇▇ ▇. ▇▇▇▇▇▇ III or such
other officer.
5.3 Qualified Income Covenant; Common Stock.
5.3.1 COPT will conduct its affairs and the affairs of its Subsidiaries
in a manner so as to (i) continue to qualify as a REIT under Sections 856-860 of
the Internal Revenue Code and (ii) permit COPH to qualify as a "qualified REIT
subsidiary" under Section 856(i) of the Internal Revenue Code.
5.3.2 COPT shall at all times hereafter (i) cause its common shares to
be duly listed on the NYSE and (ii) shall timely file all reports required to be
filed by it in connection therewith.
5.4 Taxes and Claims.
Each Loan Party shall, and shall cause each of its Subsidiaries to, pay
or discharge or cause to be paid or discharged all Taxes and Impositions imposed
upon any Loan Party or any of its Subsidiaries, or payable by any Loan Party or
any of its Subsidiaries with respect to any Mortgaged Property or other assets
or in respect of any of the franchises, business, income or other property of
any Loan Party or any of its Subsidiaries before the same shall become
delinquent and before any penalty accrues thereon, and will pay, discharge or
otherwise satisfy or cause to be paid, discharged or otherwise satisfied at or
before maturity or before they become delinquent, all Indebtedness, obligations
and other claims (including claims for labor, supplies, materials and services
that, if unpaid, might become a Lien on the property of any Loan Party or any of
its Subsidiaries) of any Loan Party and its Subsidiaries; provided, however,
that no such charge or claim needs to be paid if (i) such charge or claim is
being diligently contested in good faith by appropriate proceedings, (ii)
reserves reasonably required by the Agent shall have been made therefor by such
Loan Party or such Subsidiary, (iii) none of the Mortgaged Properties or any
other material Collateral is in jeopardy of being sold, forfeited or lost during
or as a result of such contest, (iv) none of a Loan Party, or any of its
Subsidiaries, the Agent or any Lender is reasonably likely to become subject to
any civil fine or penalty not adequately reserved against (in the case of any
Loan Party or Subsidiary thereof) or criminal fine or penalty, in each case as a
result of non-payment of such charge or claim and (v) such contest has not had
and could not reasonably be expected to have, either individually or in the
aggregate, a Material Adverse Effect. Each Loan Party shall, and shall cause
each of its Subsidiaries to, deliver to the Agent all
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receipts evidencing the payment of all such Taxes and Impositions with respect
to any Property and, upon written request by the Agent, all other Taxes,
Impositions, assessments, levies, permits, fees, rents and other public charges
imposed upon or in respect of or assessed against any Loan Party, any of its
Subsidiaries or any of their respective properties or assets except for those
being paid or contested as described in the provisos above.
5.5 Maintenance of Properties; Repair; Alteration.
Borrower and each Mortgaged Property Subsidiary shall (i) maintain or
cause to be maintained each Mortgaged Property and all other items of Collateral
in a manner consistent for suburban office properties and related property, and
shall keep or cause to be kept every part thereof in good condition and repair,
reasonable wear and tear excepted, and make all reasonably necessary repairs,
renewals or replacements thereto as may be reasonably necessary to conduct the
business of Borrower or such Mortgaged Property Subsidiary, as applicable; (ii)
not remove, demolish or structurally alter, or permit or suffer the removal,
demolition or structural alteration of, any of the Improvements in respect of a
Mortgaged Property except as required of Borrower or such Mortgaged Property
Subsidiary, as applicable, or permitted for Tenants, or otherwise as permitted
with the prior written consent of the Agent, which consent shall not be
unreasonably withheld, conditioned or delayed; (iii) complete promptly and in a
good and workmanlike manner any Improvements which may be now or hereafter
constructed on any Mortgaged Property and promptly restore in like manner any
portion of the Improvements in respect of a Mortgaged Property which may be
damaged or destroyed thereon from any cause whatsoever, and pay when due all
claims for labor performed and materials furnished therefor (subject to the
right to contest the amount of validity thereof in good faith); (iv) comply in
all material respects with all Applicable Laws, applicable Insurance
Requirements and all covenants, conditions and restrictions now or hereafter
affecting any Mortgaged Property or other item of Collateral or any part thereof
or requiring any alterations or Improvements, other than any failure to comply
that does not and could not reasonably be expected to have, either individually
or in the aggregate, a Material Adverse Effect; (v) not commit or permit any
waste of the Collateral; (vi) not remove any item of the Collateral constituting
tangible personal property or fixtures without replacing it with a comparable
item of equal or greater quality, value and usefulness, except that Borrower or
such Mortgaged Property Subsidiary, as applicable, may sell or dispose of in the
ordinary course of business any property which is obsolete or no longer useful
in its business; and (vii) expend dollar amounts in material conformity with
those shown on Schedule 5.5 attached hereto for the capital improvements
described in the property condition reports prepared by Dames & ▇▇▇▇▇ for each
of the Mortgaged Properties in the Borrowing Base
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as of the Closing Date in material conformity with the time periods specified on
such Schedule 5.5.
5.6 Inspection; the Agent; Appraisals.
5.6.1 Inspection. As often as may be reasonably requested, each Loan
Party shall, and shall cause each of its Subsidiaries to, permit (i) any
authorized representatives designated by the Agent to visit and inspect any
Mortgaged Property, subject to the rights of Tenants, and (ii) any authorized
representatives designated by the Agent to inspect the financial and accounting
records, tenant leasing files and other management books and records of such
Loan Party or Subsidiary, and to make copies and take extracts therefrom, and to
discuss its and their affairs, operations, finances and accounts with its and
their officers, property managers and independent accountants; provided that
each such visit, inspection and discussion shall be made upon reasonable notice
and at such reasonable times during normal business hours, with as little
disruption of Borrower's, any Mortgaged Property Subsidiary's and Tenants'
business and operations as is reasonably practical.
5.6.2 Appraisals. The Agent may from time to time (and shall upon the
written request of Borrower, which request shall be made no more than once in
each calendar year) obtain Appraisals of any Mortgaged Property (which
Appraisals shall, if applicable with respect to any approved Renovation of such
Mortgaged Property, contain an estimate of the appraised value of such Mortgaged
Property upon completion of such Renovation) and Borrower shall cooperate fully
with the Appraiser selected by the Agent to conduct such Appraisals. In the
event that any Loan Party or any of its respective Subsidiaries obtains an
appraisal of one or more of the Mortgaged Properties other than pursuant to this
Section, Borrower shall deliver a copy of such appraisal to the Agent promptly
upon the completion thereof and the Agent may elect, in its sole discretion and
subject to Applicable Laws, to treat such appraisal as an "Appraisal." In the
event that the Agent obtains an Appraisal of one or more of the Mortgaged
Properties, the Agent shall deliver a copy of such Appraisal to Borrower upon
the completion thereof. Borrower shall take all such actions as are necessary to
ensure that the Appraised Value of any Mortgaged Property at no time exceeds the
amount secured by the Mortgage applicable to such Mortgaged Property. Without
limiting the generality of the foregoing, before an increase in Appraised Value
with respect to a Mortgaged Property may be taken into account in calculating
the Property Amount with respect to such Mortgaged Property, Borrower must amend
the applicable Mortgage to secure the full amount of the increased Appraised
Value.
5.7 Compliance with Laws, Authorizations, etc.
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Each Loan Party shall, and shall cause each of its Subsidiaries and all
Persons occupying any Mortgaged Properties to, comply in all material respects
with the requirements of all Applicable Laws. Each Loan Party shall, and shall
cause each of its Subsidiaries to, keep all material Authorizations which are
from time to time required for the use and operation of each Mortgaged Property
in full force and effect.
5.8 Performance of Loan Documents.
Each Loan Party shall, and shall cause each of its Subsidiaries to,
observe and perform, or cause to be observed and performed, all its covenants,
agreements, conditions and requirements contained in each of the Loan Documents
to which it is or will be a party in accordance with the terms thereof and will
maintain the validity and effectiveness of such Loan Documents.
5.9 Payment of Liens.
5.9.1 Removal by Loan Parties. If a Lien not permitted under this
Agreement may encumber any Mortgaged Property or other item of Collateral or any
portion thereof, the Loan Parties shall promptly discharge or cause to be
discharged by payment to the lienor or lien claimant or promptly secure removal
by bonding or deposit with the county clerk or otherwise or, at the Agent's
option, promptly obtain insurance against, any such Lien or mechanics' or
materialmen's claims of lien filed or otherwise asserted against any Mortgaged
Property or any other item of Collateral or any portion thereof within 60 days
after the date of notice thereof, but compliance with the provisions of this
Section 5.9.1 shall not be deemed to constitute a waiver of the provisions of
Section 6.2. The Loan Parties shall exhibit to the Agent upon request all
receipts or other satisfactory evidence of payment, bonding, deposit of taxes,
assessments, Liens or any other item which may cause any such Lien to be filed
against any Mortgaged Property or other item of Collateral of Borrower or, if
applicable, a Mortgaged Property Subsidiary. Borrower shall fully preserve the
Lien and the priority of each of the Mortgages and the other Security Documents
without cost or expense to the Agent or the Lenders.
5.9.2 Removal by the Agent. If the Loan Parties fail to promptly
discharge, remove or bond off any such Lien or mechanics' or materialmen's claim
of lien as described above within 60 days after the receipt of notice thereof,
then the Agent may, but shall not be required to, procure the release and
discharge of such Lien, mechanics' or materialmen's claim of lien and any
judgment or decree thereon, and in furtherance thereof may, in its sole
discretion, effect any settlement or compromise with the lienor or lien claimant
or post any bond or furnish any security or indemnity as the Agent, in its sole
discretion, may elect. In settling, compromising or arranging for the discharge
of any Liens under this Section 5.9.2, the Agent shall not be
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required to establish or confirm the validity or amount of the Lien. Borrower
agrees that all costs and expenses expended or otherwise incurred pursuant to
this Section 5.9.2 (including reasonable attorneys' fees and disbursements) by
the Agent shall be paid by Borrower in accordance with the terms hereof.
5.9.3 Title Searches. The Agent may, at any time and at the expense of
Borrower, obtain an updated title and/or lien search regarding any Mortgaged
Property or Collateral, or any portion thereof; provided that, unless the Agent
reasonably believes that a Lien not otherwise permitted under this Agreement may
encumber any Mortgaged Property or Collateral or any portion thereof or an Event
of Default shall have occurred and be continuing, the Agent may so obtain such
search with respect to such Mortgaged Property or Collateral or portion thereof
not more than once each calendar year.
5.10 Insurance.
5.10.1 Risks to be Insured. With respect to each Mortgaged Property,
Borrower shall procure and maintain, or shall cause a Mortgaged Property
Subsidiary to procure and maintain continuously in effect, insurance coverage
issued by an insurer (i) authorized to issue such insurance in all applicable
jurisdictions, (ii) rated "A" (or its equivalent) or better by ▇▇▇▇▇▇ ▇. Best
Company, Inc., (iii) with a financial size rating of VIII (or its equivalent) or
better, by ▇▇▇▇▇▇ ▇. Best Company, Inc., and (iv) otherwise satisfactory to the
Agent; provided, however, that (1) each insurer of COPT's or any of its
Subsidiaries' umbrella liability insurance policies as of the Closing Date (and
any renewal thereof by such insurers), may be rated "A-" (or its equivalent) by
▇▇▇▇▇▇ ▇. Best Company, Inc.; it being understood and agreed that such
carrier(s) shall comply with the requirement set forth in clause (ii) above, and
(2) as of the Closing Date, the insurers of COPT's or any of its Subsidiaries'
earthquake, flood and wind insurance policies (and any renewals thereof by such
insurers, respectively) may be rated "A-" (or its equivalent) by ▇▇▇▇▇▇ ▇. Best
Company, Inc. and have a financial size rating of "VIII" (or its equivalent) by
▇▇▇▇▇▇ ▇. Best Company, Inc.; it being understood and agreed that, in the event
COPT or any of its Subsidiaries procures any earthquake, flood or wind insurance
from a carrier other than the carrier providing such insurance on the Closing
Date, such carrier shall comply with the requirements set forth in clauses (ii)
and (iii) above unless otherwise approved by the Agent. Each Loan Party shall
pay, and shall cause each of its Subsidiaries to pay, in a timely manner all
premiums due in connection therewith. All insurance policies shall be issued by
insurers doing business as admitted licensed carriers in the state where such
Mortgaged Property is located, and shall be authorized and licensed to issue
insurance in such state unless otherwise approved by the Agent in its sole
discretion. The insurance to be procured and maintained by COPT and its
Subsidiaries is the following:
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5.10.1.1 Casualty. Borrower shall keep, or shall cause a
Mortgaged Property Subsidiary to keep, each Mortgaged Property insured
for the benefit of the Agent, on behalf of the Lenders, in each case,
as follows:
(a) All Risk of Physical Loss. Insurance
with respect to the Improvements now or hereafter located on
the Mortgaged Properties and any alterations or additions
thereto and the furniture, fixtures and equipment against any
peril included within the classification "All Risks of
Physical Loss" with extended coverage (including fire,
lightning, windstorm, sprinkler, hail, explosion, riot, riot
attending a strike, civil commotion, vandalism, malicious
mischief, terrorist acts, aircraft, vehicle, sinkholes and
smoke) in an amount equal to the full insurable value of such
Improvements and such furniture, fixtures and equipment. The
term "full insurable value" shall mean the actual replacement
cost of such Improvements and such furniture, fixtures and
equipment (without taking into account any depreciation, and
exclusive of excavations, footings and foundations,
landscaping and paving) determined every five years by an
insurer upon the request of the Agent, a recognized
independent insurance broker or an appraiser selected (and
approved by the Agent) and paid by the applicable Loan Party
or its Subsidiary; provided, however, that such amount shall
be sufficient to prevent such Loan Party or such Subsidiary
from becoming a co-insurer, and the policy shall contain a
stated value endorsement to that effect.
(b) Builder's Risk. During any period of
construction of Improvements and any repair, Restoration,
Renovation or replacement thereof, a standard builder's all
risk policy (completed value non-reporting form) or equivalent
coverage under the policy described in subclause (i)(a) above
for an amount at least equal to the full insurable value of
the work to be performed and equipment, supplies and materials
to be furnished, as shall be reasonably approved by the Agent
for such purpose, the coverage of which shall include the
hazards described in Section and building collapse; provided,
however, that such policy may be obtained by a contractor if
it names the Agent and Borrower as additional named insureds
and if it otherwise complies with this Agreement. Such policy
shall contain a stated value endorsement so that no
co-insurance provision shall be applicable to any loss
thereunder. Such policy shall contain the provision that
"permission is hereby granted to complete and/or occupy" upon
the earlier to occur of substantial completion of any discrete
increment of the work or a
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Tenant taking occupancy of any Mortgaged Property (or portion
thereof) as to which work was being performed.
(c) Flood. Insurance against damage or loss
by flood as to any Mortgaged Property that is located in an
area now or subsequently designated as an area having special
flood hazards and in which flood insurance has been made
available under the National Flood Insurance Act of 1968 or
the Flood Disaster Protection Act of 1973,or the National
Flood Insurance Reform Act of 1994, as such Acts may be
amended, modified, supplemented or replaced from time to time,
on such basis and not less than such amounts as shall be
reasonably approved by the Agent, but not less than the amount
required by law. If any Loan Party or any of its Subsidiaries
fails to obtain flood insurance as required, the Agent may
purchase such flood insurance, and Borrower shall pay all
premiums and other costs and expenses incurred by the Agent.
(d) Boilers. Broad form boiler and machinery
insurance (without exclusion for explosion) covering all
boilers, boiler tanks, heating and air conditioning equipment,
pressure vessels, auxiliary piping and similar apparatus,
machinery and equipment located in, on or about each Mortgaged
Property insuring against damage or loss from boilers, boiler
tanks, heating and air conditioning equipment, pressure
vessels, auxiliary piping and similar apparatus, machinery and
equipment and insurance against loss of occupancy or use
arising from any such breakdown in such amounts as are
generally available at reasonable premiums and are generally
required by institutional lenders for properties comparable to
the Mortgaged Properties.
(e) Business Interruption or Rental Income
Insurance. Business interruption and/or loss of rental value
or use and occupancy insurance insuring against business
interruption at and against loss of rental income from each
Mortgaged Property due to any of the hazards listed in Section
above in an amount sufficient to avoid any co-insurance
penalty and to provide proceeds for a period not less than one
year of loss.
(f) Earthquake Insurance. With respect to
any Mortgaged Property located in California or other area at
high risk for earthquakes, as determined by the Agent, and at
the discretion of the Agent, earthquake insurance on such
basis and in such amounts as shall be reasonably required by
the Agent.
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5.10.1.2 Workers' Compensation. Each Loan Party shall
maintain, and shall cause each of its Subsidiaries to maintain, for
itself and for each Mortgaged Property at which such Loan Party or such
Subsidiary maintains employees, statutory workers' compensation
insurance (to the extent the risks to be covered thereby are not
already covered by other policies of insurance maintained by such Loan
Party or such Subsidiary), in statutory amounts as required by law
(including employer's liability insurance), except in those states
where such Loan Party elects to not subscribe to the workers'
compensation statute. If the applicable Loan Party elects to not
subscribe to the workers' compensation statute, such Loan Party shall
have a benefit program and employees' legal liability coverage to
respond to claims that would otherwise be covered by a standard policy
of workers' compensation.
5.10.1.3 Liability. COPT and its Subsidiaries shall
procure and maintain:
(a) Comprehensive General Liability
Insurance. Comprehensive general liability insurance, on an
occurrence basis in the amount of $1,000,000 per occurrence
per Mortgaged Property and $3,000,000 in the aggregate per
Mortgaged Property covering each Loan Party, each of its
Subsidiaries, the Agent and each Lender against claims for
bodily injury, death and property damage (including claims and
legal liability to the extent insurable imposed upon Lender
and all court costs and attorneys' fees and expenses), arising
out of or connected with the possession, use, leasing,
operation, maintenance or condition of each Mortgaged Property
or occurring in, upon or about or resulting from each
Mortgaged Property, or any drive, sidewalk, curb or passageway
adjacent thereto (to the extent insurable), which insurance
shall include blanket contractual liability coverage which
insures contractual liability (to the extent insurable) under
the indemnification set forth in Section 8.3 of this Agreement
(but such coverage or the amount thereof shall in no way limit
such indemnification), garage liability (if applicable),
products liability (if applicable) and elevator liability (if
applicable) coverage and during any period of construction of
any Improvements, owner's and contractor's protective
liability coverage, including completed operations liability
coverage. If any of the coverages referred to in this Section
are obtained under a so called "blanket" policy with more than
one Property covered, the policy shall contain an "individual
aggregate per location/project" endorsement.
(b) General Liability and Property Damage.
Commercial general liability and property damage
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insurance on an occurrence basis in connection with any
construction being performed at any Mortgaged Property, to be
carried by any contractor or construction manager or by any
Person, including any Loan Party or any of its Subsidiaries,
performing a similar function, including "Builders Risk"
coverage in the amount of $1,000,000 per occurrence and
$3,000,000 in the aggregate.
(c) Liquor Liability and Dram Shop
Insurance. For any Mortgaged Property on which any Loan Party
or any of its Subsidiaries operates a liquor business in which
liquor is served, liquor liability and dram shop insurance on
such basis and in such amounts as shall be reasonably required
by Lender in a minimum amount of $1,000,000 per occurrence and
$3,000,000 in the aggregate for Mortgaged Properties.
(d) Umbrella or Excess Liability Insurance.
Umbrella or excess liability insurance, on an incurrence basis
in the amount of at least $50,000,000 per occurrence and in
the aggregate per year covering each Loan Party, each of its
Subsidiaries and Lender against claims for damages in excess
of all primary liability policies.
5.10.1.4 Additional Insurance. Each Loan Party shall procure
and maintain, and shall cause each of its Subsidiaries to procure and
maintain, such other insurance with respect to the Mortgaged Properties
against loss or damage of the kinds from time to time customarily
insured against and in such amounts as are generally available at
reasonable premiums and are generally required by institutional lenders
for properties comparable to the Mortgaged Properties.
5.10.2 Policy Provisions. Each policy of insurance maintained in
respect of Borrower and/or any Mortgaged Property pursuant to this Section shall
(a) in the case of each category of public liability insurance, name Borrower as
insured and name the Agent (for the benefit of the Lenders) as an additional
insured, and in the case of all other insurance required under this Agreement,
as an additional insured or as a loss payee, as the Agent shall require; (b)
except in the case of public liability insurance and workers' compensation
insurance, provide that all proceeds thereunder shall be payable to the Agent
pursuant to a standard first mortgagee endorsement, without contribution, that
all losses with respect to each Mortgaged Property shall be paid directly to the
Agent, without contribution by any similar insurance carried by the Agent and
that adjustment and settlement of any material loss shall be subject to the
reasonable approval of the Agent; (c) include effective waivers by the insurer
of all rights of subrogation against any loss payee, additional insured or named
insured;
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(d) permit the Agent to pay the premiums and continue any insurance upon failure
of such Loan Party or such Subsidiary, as the case may be, to pay premiums when
due, upon the insolvency of such Loan Party or such Subsidiary, as the case may
be, or through foreclosure; (e) to the extent such provisions are reasonably
obtainable, provide that such insurance shall not be impaired or invalidated by
virtue of (i) any act, failure to act, negligence of, or violation of
declarations, warranties or conditions contained in such policy by any of the
Loan Parties, the Agent, the Lenders, or any other named insured, additional
insured or loss payee, except for the willful misconduct of the Agent or the
Lenders knowingly in violation of the conditions of such policy, (ii) the
occupation or use of such Mortgaged Property for purposes more hazardous than
permitted by the terms of the policy, (iii) any foreclosure or other proceeding
or notice of sale relating to such Mortgaged Property or (iv) any change in the
possession of such Mortgaged Property without a change in the identity of the
holder of actual title to such Mortgaged Property; (f) be subject to a
deductible, if any, not greater than $100,000 (or, with respect to coverage for
wind damage, such greater amount as shall not exceed 5.0% of the affected
Mortgaged Property's agreed value); (g) contain an endorsement providing that
none of the Agent, the Lenders or the Loan Parties shall be, or shall be deemed
to be, a co-insurer with respect to any risk insured by such policy; and (h)
provide that if all or any part of such policy shall be canceled or terminated,
or shall expire, the insurer will forthwith give notice thereof to the Agent and
each additional insured and loss payee and that no cancellation, termination,
expiration, reduction in amount of, or material change (other than an increase)
in, coverage thereof shall be effective until at least 30 days after receipt by
the Agent and each additional insured and loss payee of written notice thereof.
5.10.3 Increases in Coverage. The policy limits of any policy of
insurance required hereunder shall be increased from time to time to reflect
what a reasonable prudent owner of land and improvements similar in type and
locality to each Mortgaged Property would carry.
5.10.4 Payment of Proceeds. If any such insurance proceeds required to
be paid to the Agent are instead made payable to Borrower, COPT or any
Subsidiary thereof, each of Borrower and COPT hereby appoints the Agent as its
attorney-in-fact, irrevocably and coupled with an interest, to endorse and/or
transfer any such payment to the Agent.
5.10.5 Delivery of Counterpart Policies; Evidence. Each Loan Party
shall deliver, and shall cause each of its Subsidiaries to deliver, to the Agent
on or before the Closing Date evidence acceptable to the Agent for the valid
policies of insurance required by this Agreement or any other Loan Document to
be carried evidencing (i) the issuance of such policies, (ii) the payment of all
premiums payable for the period ending
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not earlier than the first Anniversary and (iii) coverage which meets all of the
requirements set forth in this Agreement. At each time after the Closing Date
that any Loan Party or any of its Subsidiaries is required by this Agreement or
by any Security Document or any other Loan Document to deliver evidence of
insurance, such Loan Party shall deliver, or shall cause such Subsidiary to
deliver, such evidence of valid policies of insurance acceptable to the Agent
evidencing (a) the issuance of the policies of insurance required by this
Agreement or other Loan Document to be carried, (b) the payment of all premiums
then due to the applicable insurer, (c) coverage which meets all of the
requirements set forth in this Agreement or other Loan Document, and (d) that
the required policies are in full force and effect.
5.10.6 Replacement or Renewal Policies. Not less than 30 days prior to
the expiration, termination or cancellation of any insurance policy which any
Loan Party or any of its Subsidiaries is required to maintain hereunder, such
Loan Party shall obtain, or shall cause such Subsidiary to obtain, a replacement
or renewal policy or policies (or a binding commitment for such replacement or
renewal policy or policies), which shall be effective no later than the date of
the expiration, termination or cancellation of the previous policy, and shall
deliver to the Agent a valid binder in respect of such policy or policies in the
same form and containing the same information as the expiring policy or policies
required to be delivered by each Loan Party and its Subsidiaries pursuant to
this Section or a copy of the binding commitment for such policy complying with
all the requirements of this Section, followed by a certified true copy of the
policy or policies when issued.
5.10.7 Material Change in Policy. Each Loan Party shall deliver, and
shall cause each of its Subsidiaries to deliver, to the Agent concurrently with
each material change in any insurance policy covering any part of the Mortgaged
Properties required to be maintained by each Loan Party and its Subsidiaries
hereunder, a valid binder or policy endorsement with respect to such changed
insurance policy certified by the insurance company issuing such policy, in the
same form and containing the same information as the original evidence of
insurance required to be delivered by each Loan Party and its Subsidiaries
pursuant to this Section.
5.10.8 Separate Insurance. No Loan Party will take out, nor will it
permit any of its Subsidiaries to take out, separate insurance concurrent in
form or contributing in the event of loss with that required to be maintained
pursuant to this Section unless such insurance complies with all of the
requirements of this Section.
5.11 Casualty and Condemnation; Restoration.
5.11.1 Notice of Casualty. Upon the occurrence of any damage to or
loss or destruction of all or any portion of any
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Mortgaged Property, whether or not covered by insurance, which will cost (or may
reasonably be expected to cost) more than $1,000,000 to Restore, as reasonably
determined by Borrower and so certified in an Officers' Certificate delivered to
the Agent, (i) Borrower shall promptly deliver to the Agent written notice of
the same which shall, among other things, describe such casualty, and (ii) as
soon as practicable but in any event prior to the commencement of Restoration of
such Mortgaged Property, Borrower shall deliver to the Agent a notice of its
intended course of action with respect to such Restoration, in such detail as
the Agent shall reasonably require.
5.11.2 Insurance Proceeds. All Insurance Proceeds in respect of a
Mortgaged Property and the right thereto are hereby irrevocably assigned and
pledged by each Loan Party to the Agent for the benefit of the Lenders, and the
Agent is authorized, at its option, to collect and receive all of the same and
to give proper receipts and acquittances therefor; provided, however, that if no
Event of Default shall have occurred and be continuing such Loan Party shall
have the right to direct the Agent to apply Insurance Proceeds in accordance
with Sections 5.11.6. If no Event of Default shall have occurred and be
continuing, to the extent not inconsistent with the requirements of Sections
5.11.5 and 5.11.6, such Loan Party shall have the right to direct the Agent (1)
to pay to such Loan Party all Insurance Proceeds with respect to such casualty
affecting a Mortgaged Property which will cost (or may reasonably be expected to
cost) less than $1,000,000 to Restore and (2) to pay to such Loan Party all
proceeds of any related business interruption insurance. Each Loan Party agrees
to execute and to cause each of its Subsidiaries to execute such further
assignments and pledges of any Insurance Proceeds in respect of the Mortgaged
Properties as the Agent may reasonably require and shall otherwise cooperate
with the Agent in obtaining for the Agent and the Lenders the benefit of any
Insurance Proceeds lawfully or equitably payable in respect of any such
Mortgaged Property, subject to the provisos above. If, prior to the receipt by
the Agent of such Insurance Proceeds, any Mortgaged Property shall have been
transferred upon foreclosure of the applicable Mortgage (or by deed in lieu
thereof), the Agent shall have the right to receive such Insurance Proceeds to
the extent (x) such Insurance Proceeds are attributable to a casualty occurring
prior to foreclosure or delivery of any deed in lieu thereof and (y) of any
deficiency found to be due upon such sale, with legal interest thereon, and
reasonable counsel fees, costs and disbursements incurred by the Agent in
connection with the collection of such Insurance Proceeds. The Agent may, but
shall not be obligated to, make proof of loss if not made promptly by the
applicable Loan Party or Subsidiary thereof. During the continuance of an Event
of Default, the Agent is hereby authorized and empowered by each of the Loan
Parties to settle, adjust or compromise any claims for damage, destruction or
loss thereunder, with or without the consent of any Loan Party or any of its
Subsidiaries (and each of the Loan Parties hereby irrevocably appoints and
constitutes the
78
Agent as such Loan Party's lawful attorney-in-fact, coupled with an interest and
with full power of substitution, for such purpose). In no event shall any Loan
Party or any of its Subsidiaries settle, adjust or compromise any claim for
Insurance Proceeds in respect of any Mortgaged Property in excess of $1,000,000
without the prior written consent of the Agent, which shall not be unreasonably
withheld, conditioned or delayed. If any Loan Party or any of its Subsidiaries
receives any Insurance Proceeds resulting from such casualty in respect of any
Mortgaged Property, such Loan Party or Subsidiary shall promptly endorse and
transfer, or cause such Subsidiary to endorse and transfer, such excess
Insurance Proceeds to the Agent and each Loan Party covenants that until so paid
over to the Agent, such Loan Party or such Subsidiary, as applicable, shall hold
such Insurance Proceeds in trust for the benefit of the Agent and shall not
commingle such Insurance Proceeds with any other funds or assets of such Loan
Party or Subsidiary or any other Person.
5.11.3 Notice of Condemnation; Negotiation and Settlement of Claims.
The Loan Parties shall, and shall cause their respective Subsidiaries to,
promptly deliver written notice to the Agent upon obtaining knowledge of the
institution, or the proposed institution, of any bona fide action or proceeding
for the Taking of all or any portion of any Mortgaged Property. The Agent shall
have the right to participate in any negotiation, action or proceeding relating
to any such action or proceeding affecting any Mortgaged Property, and no
settlement or compromise of any claim in connection with any such action or
proceeding shall be made without the consent of the Agent, which consent shall
not be unreasonably withheld, conditioned or delayed. Upon the occurrence of any
Taking with respect to a Mortgaged Property which will cost (or may reasonably
be expected to cost) more than $1,000,000 to Restore, as reasonably determined
by Borrower and so certified in an Officers' Certificate delivered to the Agent,
as soon as practicable thereafter but in any event not less than 20 days prior
to the commencement of any Restoration of such Mortgaged Property, Borrower
shall deliver to the Agent a notice of its intentions with respect to such
renovation in such detail as the Agent shall require.
5.11.4 Condemnation Proceeds. All Condemnation Proceeds in respect of
each of the Mortgaged Properties and the right thereto are hereby irrevocably
assigned and pledged by each Loan Party to the Agent for the benefit of the
Lenders, and the Agent is authorized, at its option, to collect and receive all
such Condemnation Proceeds and to give proper receipts and acquittances
therefor; provided, however, (x) if no Event of Default shall have occurred and
be continuing, such Loan Party shall have the right to direct the Agent to apply
Condemnation Proceeds in accordance with Section 5.11.6 (without application of
the minimum amount requirements contained therein) and (z) if no Event of
Default shall have occurred and be continuing, such Loan Party shall have the
right to direct the Agent to pay such Loan Party all Condemnation Proceeds with
respect to a Taking
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affecting a Mortgaged Property which will cost (or may reasonably be expected to
cost) less than $1,000,000 to Restore. Each Loan Party agrees to execute, and to
cause each of its Subsidiaries to execute, such further assignments of any
Condemnation Proceeds in respect of any Mortgaged Property as the Agent may
reasonably require and shall otherwise cooperate with the Agent in obtaining for
the Agent and the Lenders the benefit of any Condemnation Proceeds lawfully or
equitably payable in respect of such Mortgaged Property, subject to the provisos
above. If, prior to the receipt by the Agent of such Condemnation Proceeds, the
portion of the Mortgaged Property, subject to such action or proceeding shall
have been sold on foreclosure of the applicable Mortgage (or by deed in lieu
thereof), the Agent shall have the right to receive such Condemnation Proceeds
to the extent (x) such Condemnation Proceeds are attributable to a Taking
occurring prior to foreclosure or delivery of any deed in lieu thereof and (y)
of any deficiency found to be due upon such sale, with legal interest thereon,
and reasonable counsel fees, costs and disbursements incurred by the Agent in
connection with the collection of such Condemnation Proceeds. The Agent may, but
shall not be obligated to, make proof of loss if not made promptly by the
applicable Loan Party or Subsidiary thereof. Upon the occurrence and during the
continuance of an Event of Default (but not otherwise), the Agent is hereby
authorized and empowered by each Loan Party to settle, adjust or compromise any
claims for Condemnation Proceeds with or without the consent of such Loan Party
or any of its Subsidiaries (and each of the Loan Parties hereby irrevocably
appoints and constitutes the Agent as its lawful attorney-in-fact, coupled with
an interest and with full power of substitution, for such purpose). In no event
shall any Loan Party or any of its Subsidiaries settle, adjust or compromise any
claim for Condemnation Proceeds in respect of any Mortgaged Property without the
prior written consent of the Agent, which shall not be unreasonably withheld,
conditioned or delayed. Each condemnor concerned is hereby authorized and
directed to make payment of all Condemnation Proceeds in respect of each of the
Mortgaged Properties payable by it directly to the Agent. If any Loan Party or
any of its Subsidiaries receives any Condemnation Proceeds resulting from such
condemnation in respect of any Mortgaged Property, such Loan Party or such
Subsidiary shall promptly endorse and transfer such excess Condemnation Proceeds
to the Agent and each Loan Party covenants that until so paid over to the Agent,
such Loan Party or Subsidiary, as the case may be, shall hold such Condemnation
Proceeds in trust for the benefit of the Agent and shall not commingle such
Condemnation Proceeds with any other funds or assets of such Loan Party or
Subsidiary or any other Person.
5.11.5 Election to Release/Restore.
In the event of any casualty or Taking with respect to a Mortgaged
Property, which will cost (or may reasonably be expected to cost) more than
$1,000,000 to Restore, as determined by Borrower and so certified in an
Officer's Certificate
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delivered to the Agent, Borrower shall elect by written notice delivered to the
Agent as soon as practicable thereafter, but in any event before the earlier of
(i) twenty-one (21) days after the occurrence of such casualty or Taking and
(ii) the commencement of the Restoration of such Mortgaged Property, either:
(a) to Release such Mortgaged Property pursuant to Section
2.14, prepay the Loans to the extent required by Section 2.9.4 (and
release to Borrower any excess Net Insurance/Condemnation Proceeds held
by the Agent after such required prepayment) and recompute the
Borrowing Base as provided in Section 2.9.3, or
(b) if all the following conditions shall be satisfied, to
Restore such Mortgaged Property pursuant to Section 5.11.6:
(1) the Maturity Date shall then not have
occurred;
(2) no Potential Event of Default or Event of Default
shall have occurred and be continuing;
(3) the Agent shall have determined that Borrower
is in compliance in all respects with the provisions of
Section 5.11.6;
(4) the Agent shall have determined, in its
reasonable discretion and after considering written opinions
of architects and engineers and other information as Borrower
shall timely deliver to the Agent, that Restoration of such
Mortgaged Property is, under the circumstances then existing,
physically and economically feasible and can be completed in
accordance with Section 5.11.6 on or before a date not less
than six months prior to the Maturity Date (or such later date
as is reasonably and mutually acceptable to Borrower and
Requisite Lenders);
(5) Borrower or, if applicable, a Mortgaged Property
Subsidiary shall have business interruption insurance
complying with Section 5.10 in an amount at least equal to the
reduction in Property Adjusted Net Income with respect to such
Mortgaged Property, if any, which Borrower reasonably expects
to suffer during the period of Restoration;
(6) either (A) the Net Insurance/Condemnation
Proceeds shall be sufficient to complete the costs of such
Restoration, as determined by the Agent in its reasonable
discretion, or (B) Borrower shall have provided, at Borrower's
option, a letter of credit satisfactory to the Agent, in its
reasonable discretion
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(or other collateral reasonably satisfactory to the Agent),
for the amount of any shortfall in the amount of Net
Insurance/Condemnation Proceeds necessary to cover the costs
to complete such Restoration; and
(7) unless Agent agrees that no such Appraisal shall
be required, the Agent shall have received an Appraisal
satisfactory to the Agent demonstrating that the Appraised
Value of such Mortgaged Property following such Restoration
shall not be less than the most recent Appraised Value of such
Mortgaged Property prior to such casualty or Taking.
If the Loan Parties and their respective Subsidiaries shall fail to satisfy the
conditions set forth herein with respect to the related Mortgaged Property, or
shall fail to diligently and continuously prosecute the Work to completion
(other than as a result of Excusable Delay), as determined by the Agent, in its
reasonable discretion, then the Borrowing Base shall be recomputed as provided
in Section 2.9.3, Borrower shall prepay the Loans and the Agent shall apply any
or all remaining Net Insurance/Condemnation Proceeds towards such prepayment and
the Mortgaged Property shall be Released pursuant to Section 2.14. Provided that
no Event of Default or Potential Event of Default then exists, any excess Net
Insurance/Condemnation Proceeds remaining after such prepayment shall be
released by the Agent to Borrower.
5.11.6 Restoration with Net Insurance/Condemnation Proceeds. In the
event of any casualty or Taking with respect to a Mortgaged Property, which will
cost (or may reasonably be expected to cost) more than $1,000,000 to Restore, as
reasonably determined by Borrower and so certified in an Officers' Certificate
delivered to the Agent, if Borrower elects to Restore a Mortgaged Property
pursuant to this Section 5.11.6 and the conditions set forth in Section 5.11.5
are satisfied, all Net Insurance/Condemnation Proceeds shall be held by the
Agent in an interest-bearing account at the Agent, with all interest to be held
therein until completion and final inspection of the Work, and shall be applied
by the Agent to the payment of the cost of Restoring such Mortgaged Property so
damaged or destroyed or of the portion or portions of such Mortgaged Property
not so Taken (the "Work") and shall be paid out from time to time to Borrower as
the Work progresses, subject to retainage as reasonably determined by the Agent
in accordance with construction lending practices and otherwise in accordance
with any conditions reasonably imposed by the Agent but subject to each of the
following conditions:
5.11.6.1 Subject to Excusable Delays, Borrower shall promptly
(and in any event within 120 days after the applicable casualty or
Taking (or such other period as may be agreeable to the Agent and the
Requisite Lenders))
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commence, or cause the commencement of, Restoration of such
Mortgaged Property.
5.11.6.2 If the Work is structural or if the cost of the
Work, as estimated by Borrower, shall exceed 15% of the Property Amount
with respect to such Mortgaged Property the Work shall be in the charge
of an architect or Engineer (who may be an employee or Affiliate of
Borrower only if the cost of the Work does not exceed such lesser
amount), and before Borrower commences any Work, other than temporary
work to protect property or prevent interference with business, the
Agent shall have approved the plans and specifications and the general
contract for the Work to be submitted by Borrower, which approval shall
not be unreasonably withheld, conditioned or delayed. Such plans and
specifications shall provide for such Work that, upon completion
thereof, the Improvements shall (x) be in compliance in all material
respects with all legal requirements such that all representations or
warranties of the Loan Parties relating to the compliance of such
Mortgaged Property with Applicable Laws in this Agreement or any of the
other Loan Documents would then be true and correct, and (y) be at
least equal in value and general utility to the Improvements which were
on such Mortgaged Property prior to the damage, destruction or Taking.
Such plans and specifications shall be accompanied by (1) a signed
estimate of Borrower, or, if an architect or Engineer is required to
supervise the Work, such architect or Engineer, stating the estimated
cost of completing the Work, which estimate shall bear the architect's
or Engineer's seal if not made by Borrower and (2) to the extent
necessary at such stage of the Work, certified copies of all
Authorizations required in connection with the commencement and
performance of the Work.
5.11.6.3 Each request for payment shall be made on seven
days' prior notice to the Agent and shall be accompanied by paid
invoices and by (a) a certificate to be made by such architect or
Engineer, if one be required under Section 5.11.6.2 above, otherwise by
an Officers' Certificate of Borrower, stating that (1) all of the Work
completed has been done in substantial compliance with the approved
plans and specifications, if any be required under said Section
5.11.6.2 above, and (2) the sum requested is justly required to
reimburse Borrower for payments made by Borrower to, or is justly due
to, the contractor, subcontractors, materialmen, laborers, engineers,
architects or other Persons rendering services or materials for the
Work (giving a brief description of such services and materials), and
that when added to all sums previously paid out by the Agent does not
exceed the cost of the Work done to the date of such certificate, and
(b) an Officers' Certificate of Borrower stating either that (x) the
amount of such proceeds remaining in the hands of the Agent, or (y) the
amount of such funds, plus funds in the hands of the
83
applicable Loan Party or Subsidiary thereof from other sources
irrevocably committed to the completion of the Work in a manner
reasonably satisfactory to the Agent (including delivery of such funds
to the Agent for application to pay the costs of the Restoration), will
be sufficient on completion of the Work to pay for the same in full
(giving in such reasonable detail as the Agent may require an estimate
of the cost of such completion). The Agent may require that any such
statements be independently verified by an inspector approved by the
Agent.
5.11.6.4 Each request shall be accompanied by waivers of lien
satisfactory to the Agent covering that part of the Work for which
payment or reimbursement has been made (or other evidence as shall be
satisfactory to the Agent in its sole discretion confirming that no
rights of mechanics, contractors, subcontractors, materialmen or
suppliers are outstanding in respect of such Work) and by a search
prepared by the Title Company reasonably satisfactory to the Agent
establishing that there has not been filed with respect to such
Mortgaged Property any mechanics' or other lien or instrument for the
retention of title in respect of any part of the Work not discharged of
record or bonded to the reasonable satisfaction of Lender and
evidencing the continued priority of the Mortgage and Assignment of
Rents and Leases on such Mortgaged Property.
5.11.6.5 The available Insurance Proceeds or Condemnation
Proceeds which are paid or will be payable by the insurance company
(together with any cash, irrevocable letter of credit, payment or
performance bond or United States government obligation assigned to the
Agent as collateral, in each case reasonably acceptable to the Agent as
to amount, obligor and maturity) are, in the reasonable judgment of the
Agent, sufficient to pay in full the costs of the Restoration.
5.11.6.6 There shall be no Event of Default or
Potential Event of Default.
5.11.6.7 The request for any payment after the Work has been
completed shall be accompanied by (a) a copy of any certificate or
certificates required by law to render occupancy of the improvements
being rebuilt, repaired or restored legal; and (b) final lien waivers
for all labor, materials and supplies from all contractors,
subcontractors and materialmen, except with respect to claims or rights
being contested or bonded in accordance with the provisions hereof.
5.11.6.8 After commencing the Work, Borrower shall, subject
to Excusable Delays, perform the Work diligently and in good faith in a
good and workmanlike manner to completion
84
in accordance with the approved plans and specifications, if
any.
5.11.6.9 The Agent shall have received "agreements to
complete" of the general contractor and any independent architects or
Engineers, which agreements to complete shall be in form and substance
reasonably satisfactory to the Agent.
5.11.6.10 Borrower shall have obtained and maintained
completed value builders' risk (all risk) insurance in accordance with
this Agreement.
All costs and expenses of any Restoration, including, without
limitation, any Work, Engineer's fees, architect's fees or contractors fees and
the cost and expenses of complying with this Section, shall be for the account
of Borrower. Upon completion of the Work and payment in full therefor, Borrower
shall promptly deliver to the Agent a Completion Certificate with respect
thereto, together with all final lien waivers in form and substance reasonably
satisfactory to the Agent, and the Agent shall return to Borrower the amount of
any unspent Insurance Proceeds or Condemnation Proceeds then or thereafter in
the hands of the Agent on account of the casualty or Taking that necessitated
such Work, together with all undisbursed accrued interest thereon. Nothing in
this Section shall prevent the Agent from applying at any time all or any part
of the Insurance Proceeds or Condemnation Proceeds to the curing of any Event of
Default under this Agreement or any other Loan Document.
5.11.7 Engineer's Inspection. At any time after Lender becomes aware of
a casualty or Taking involving an aggregate amount in excess of $1,000,000 (as
reasonably determined by Borrower and so certified in an Officers' Certificate
delivered to the Agent) the Agent may hire an independent engineer to inspect
the applicable Mortgaged Property and the Agent may deem any related Restoration
not complete unless the engineer reasonably determines that the Restoration was
completed in accordance with this Agreement. The cost of such inspection shall
be for the account of Borrower.
5.12 Renovations.
5.12.1 Notice of Renovation; Renovation Plans. If any Loan Party
intends to Renovate any Mortgaged Property and such Renovation is estimated
to cost in excess of $1,000,000 (as reasonably determined by Borrower and so
certified in an Officers' Certificate delivered to the Agent), Borrower
shall, prior to the commencement of any such Renovation, deliver to the Agent
the following: (i) a written notice of renovation or restoration with
respect thereto, which shall, among other things, describe such Loan Party's
plans with respect to such Renovation and the nature and extent of any
interruption in leasing, use and other operations caused by the Renovation;
(ii)
85
a project budget (as revised and supplemented from time to time in accordance
with this Section 5.12.1 (the "Renovation Budget") satisfactory in form to the
Agent and setting forth, among other things, the aggregate costs for such
Renovation, and the aggregate cost for each line item in such budget; (iii) an
estimated time schedule for such Renovation, satisfactory in form to the Agent
and setting forth, among other things, the projected completion date, the square
footage of the Mortgaged Property that will be unavailable for leasing as a
result of such Renovation and the duration of such unavailability; (iv) a
description of such Renovation in reasonable detail as may be requested by the
Agent (as revised and supplemented from time to time in accordance with this
Section 5.12.1 (the "Renovation Plans"), which shall be reasonably satisfactory
in form and substance to the Agent; and (v) all such other information or
materials with respect to the Renovation that the Agent may reasonably request.
In the event such changes the scope of the intended Renovation, revises the
Renovation Budget (including the estimated amounts contained therein), or
revises or modifies the Renovation Plans, Borrower shall promptly deliver to the
Agent a supplement to the Renovation Budget or Renovation Plans or a revised
Renovation Budget or revised Renovation Plans, as applicable, which shall be
satisfactory in form and substance to the Agent.
5.12.2 Conduct of Renovation; Costs. The applicable Loan Party shall
complete the Renovation promptly, in a good and workmanlike manner and in
accordance with the Renovation Plans. All costs and expenses of any Renovation,
including, without limitation, the cost and expenses of complying with this
Section 5.12, shall be for the account of Borrower.
5.12.3 Completion Certificate. Upon completion of the Renovation,
Borrower shall promptly deliver to the Agent a written notice of completion
with respect thereto.
5.12.4 Engineer's Inspection. At any time after the Agent becomes aware
of a Renovation involving an aggregate amount in excess of $1,000,000 (as
reasonably determined by Borrower and so certified in an Officer's Certificate
delivered to the Agent), the Agent may, hire an independent engineer to inspect
the applicable Mortgaged Property and the related Renovation and Lender may deem
such Renovation not complete unless the engineer approves such Renovation. The
cost of such inspection shall be for the account of Borrower.
5.13 Intentionally Omitted.
5.14 ▇▇▇▇▇▇▇▇ Clause.
In the event of the enactment of or change in (including a change in
interpretation of) any Applicable Law (i) deducting or allowing any Loan Party
or any of its Subsidiaries to deduct from the value of any Mortgaged Property
for the purpose of taxation
86
any Lien thereon, (ii) subjecting any Lender to any tax in respect of, or
changing the basis of taxation in respect of, the Mortgages, or the manner of
collection of such taxes (other than Taxes on net income, franchise taxes and
doing business taxes), or (iii) for the taxation of mortgages or debts secured
by mortgages or in the means of collection of any such tax, in each such case,
so as to affect any Lender or the Notes or the Mortgages or any other Loan
Document, and the result is to increase the taxes imposed upon or the cost to
any Lender of maintaining the Loans, or to reduce the amount of any payments
receivable under the Notes, the Mortgages or any other Loan Document, or to
invalidate the Lien created by any Security Document, then, in any such event,
Borrower shall, within twenty Business Days of receipt of a request therefor,
accompanied by documentation verifying the nature, amount and due date, pay to
such Lender additional amounts to compensate for such increased costs or reduced
amounts; provided, however, that if any Lender makes such a request, or if the
Lien created by any Security Document may be invalidated, then Borrower shall
have the right, and, in the case of such invalidation, shall have the
obligation, to prepay the Loans in accordance with the provisions of this
Agreement and the Notes; provided further, however, that if any such payment or
reimbursement shall be unlawful or would constitute usury or render the Loans
wholly or partially usurious under Applicable Law, then the Agent may, in its
sole discretion, declare the Loans so affected immediately due and payable
(without premium or penalty) and/or require Borrower to pay or reimburse the
Lenders for payment of the lawful and non-usurious portion thereof not less than
180 days after notice of such declaration.
5.15 Further Assurances.
5.15.1 Assurances. Without expense or cost to the Agent or the Lenders,
each Loan Party shall, and shall cause each of its Subsidiaries to, from time to
time hereafter execute, acknowledge, file, record, do and deliver all and any
further acts, deeds, conveyances, mortgages, deeds of trust, deeds to secure
debt, security agreements, hypothecations, pledges, charges, assignments,
financing statements and continuations thereof, notices of assignment,
transfers, certificates, assurances and other instruments as the Agent may from
time to time reasonably require in order to carry out more effectively the
purposes of this Agreement or the other Loan Documents, including to subject any
Mortgaged Property or other items of Collateral, intended to now or hereafter be
covered, to the Liens created by the Security Documents, to perfect and maintain
such Liens, and to assure, convey, assign, transfer and confirm unto Lender the
property and rights hereby conveyed and assigned or intended to now or hereafter
be conveyed or assigned or which any Loan Party or any such Subsidiary may be or
may hereafter become bound to convey or to assign to the Agent or for carrying
out the intention of or facilitating the performance of the terms of this
Agreement, or any other Loan Documents or for filing, registering
87
or recording this Agreement or any other Loan Documents. Without limiting the
foregoing, Borrower shall deliver, or cause to be delivered, to the Agent,
promptly upon receipt thereof, all instruments received by Borrower or, as
applicable, any Mortgaged Property Subsidiary after the Closing Date and take
all actions and execute all documents necessary or reasonably requested by the
Agent to perfect the Agent's security interest in any such instrument or any
other Investment acquired by Borrower or, as applicable, any Mortgaged Property
Subsidiary. Promptly upon request or, in an emergency, upon demand, each Loan
Party shall execute and deliver, and hereby authorizes the Agent to execute and
file in the name of such Loan Party, to the extent the Agent may lawfully do so,
one or more financing statements, chattel mortgages or comparable security
instruments to evidence more effectively the Lien hereof upon the Collateral.
5.15.2 Filing and Recording Obligations. Each Loan Party shall pay
all filing, registration and recording fees and all expenses incident to the
execution and acknowledgement of any Mortgage or other Loan Document,
including any instrument of further assurance described in Section 5.15.1 and
shall pay all mortgage recording taxes, transfer taxes, general intangibles
taxes and governmental stamp and other taxes, duties, imposts, assessments
and charges arising out of or in connection with the execution, delivery,
filing, recording or registration of any Mortgage or other Loan Document,
including any instrument of further assurance described in Section 5.15.1 or
by reason of its interest in, or measured by amounts payable under, the
Notes, the Mortgages or any other Loan Document, including any instrument of
further assurance described in Section 5.15.1, and shall pay all stamp taxes
and other taxes required to be paid on the Notes or any other Loan Document,
but excluding in the case of any Lender, Taxes imposed on its income by a
jurisdiction under the laws of which it is organized or in which its
principal executive office is located or in which its applicable lender
office for funding or booking its Loan hereunder is located. If any Loan
Party fails to make any of the payments described in the preceding sentence
within 10 days after notice thereof from the Agent (or such shorter period as
is necessary to protect the loss of or diminution in value of any Collateral
by reason of tax foreclosure or otherwise, as determined by Lender, in its
sole discretion) accompanied by documentation verifying the nature and amount
of such payments, the Agent may (but shall not be obligated to) pay the
amount due and the Loan Parties shall reimburse all amounts in accordance
with the terms hereof upon demand. If Applicable Law prohibits any Loan Party
from paying such taxes, charges, filing, registration and recording fees,
excises, levies, stamp taxes or other taxes, then the Agent may declare the
Loans immediately due and payable in accordance with the terms of this
Agreement, without premium or penalty not less than 30 days after such
declaration in a principal amount equal to the Property Amount with respect
to the applicable Mortgaged Property, and such Mortgaged Property shall
thereafter be
88
excluded from the calculation of the Borrowing Base until all such payments have
been made.
5.15.3 Costs of Defending and Upholding the Lien. The Agent may,
upon at least five days' prior notice to Borrower, (i) appear in and defend
any action or proceeding, in the name and on behalf of the Agent, the Lenders
or any Loan Party in which the Agent or any Lender is named or which the
Agent in its sole discretion determines is reasonably likely to materially
adversely affect any Mortgaged Property, any other material Collateral, any
Mortgage, the Lien thereof or any other Loan Document and (ii) institute any
action or proceeding which the Agent reasonably determines should be
instituted to protect the interest or rights of the Agent in any Mortgaged
Property or other Collateral or under this Agreement or any other Loan
Document. Borrower agrees that all reasonable costs and expenses expended or
otherwise incurred pursuant to this Section (including reasonable attorneys'
fees and disbursements) by the Agent shall be paid by Borrower or reimbursed
to the Agent, as the case may be, promptly after demand.
5.15.4 Costs of Enforcement. Borrower agrees to bear and shall pay or
reimburse the Agent and the Lenders in accordance with the terms of this
Agreement for all reasonable sums, costs and expenses incurred by Lender
(including reasonable attorneys' fees and the expenses and fees of any receiver
or similar official) of or incidental to the collection of any of the
Obligations, any foreclosure (or Transfer in lieu of foreclosure) of any
Mortgage or any other Loan Document or any sale of all or any portion of any
Mortgaged Property or all or any portion of the other Collateral.
ARTICLE 6
NEGATIVE COVENANTS
Each Loan Party covenants and agrees that, so long as the Commitments
hereunder shall remain in effect and until payment in full of the Loans and the
other Obligations (other than indemnification obligations with respect to claims
that have not been asserted at the time that the Loans and all other Obligations
have been paid in full) and the cancellation or expiration of all Letters of
Credit, the Loan Parties shall perform and shall cause each of their respective
Subsidiaries to perform all of their covenants in this Article 6.
6.1 Indebtedness of Loan Parties.
Any Loan Party shall not, directly or indirectly, create, incur,
assume, Guarantee, refinance, exchange, refund or otherwise become or remain
directly or indirectly liable with respect to, any Indebtedness, except:
6.1.1 the Obligations;
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6.1.2 Indebtedness under the Term Loan, with respect to which
the recourse liability of any Loan Party thereunder shall rank pari
passu with the liability of such Loan Party hereunder;
6.1.3 recourse Indebtedness to which the Requisite Lenders
(including the Agent) have given their prior written consent, which
they may give or withhold in their sole discretion;
6.1.4 non-recourse Indebtedness (with ordinary and customary
carve-outs to such non-recourse liability) secured by property other
than the Collateral with respect to which Borrower has delivered to
Agent (at least 5 Business Days prior to such Loan Party becoming
obligated for such Indebtedness) a Compliance Certificate demonstrating
compliance, on a pro forma basis taking into account the applicable
Indebtedness, with the covenants set forth in Section 6.6;
6.1.5 non-recourse Guarantees of the Indebtedness of
Subsidiaries of the Loan Parties (other than any Mortgaged Property
Subsidiary) secured by pledges of any Loan Party's interest in such
Subsidiaries;
6.1.6 Interest Rate Agreements otherwise required or permitted
under this Agreement or the Term Loan Agreement;
6.1.7 unsecured intercompany Indebtedness owed to any of such
Loan Party's Subsidiaries (other than to another Loan Party), provided
that such Indebtedness shall be subordinated in right of payment to the
payment in full of the Obligations pursuant to an intercompany
subordination agreement and shall be incurred in the ordinary course of
business with respect to the cash management of COPT and its
Subsidiaries for the purpose of paying operating expenses and Capital
Expenditures in connection with the ownership, management, operation,
cleaning, maintenance, repair, restoration or leasing of any Property,
and provided, further, that no such Indebtedness shall be incurred by
any Loan Party during the existence of an Event of Default or Potential
Event of Default;
6.1.8 Indebtedness set forth on Schedule 6.1.8.
6.2 Liens and Related Matters.
6.2.1 Prohibition on Liens. Any Loan Party shall not, directly or
indirectly, create, incur, assume or permit to exist any Lien on or with respect
to any property or asset of any kind (including any document or instrument in
respect of goods, furniture, fixtures, equipment or accounts receivable) of such
Loan Party, whether now owned or hereafter acquired, or any
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income or profits therefrom, or file or permit the filing of, or permit to
remain in effect, any financing statement or other similar notice of any Lien
with respect to any such property, asset, income or profits under the Uniform
Commercial Code of any State or under any similar recording or notice statute,
except (i) in connection with any Indebtedness permitted under Section 6.1
hereof, (ii) pursuant to the Security Documents and (iii) Permitted
Encumbrances.
6.2.2 No Further Negative Pledges. Except with respect to agreements
entered into in the ordinary course of business which by their terms restrict
the assignment of rights thereunder (but not any other rights or interests and
otherwise consistent with industry practices), any Loan Party shall not,
directly or indirectly, enter into any agreement prohibiting the creation or
assumption of any Lien upon any of its properties or assets, whether now owned
or hereafter acquired, except to the extent that Liens to secure the Obligations
are excluded therefrom.
6.3 Investments.
Any Loan Party shall not, directly or indirectly, make any
Investment in any Person, including any Affiliate or Joint Venture, except
(i) any transaction permitted under Sections or 6.7, (ii) any Renovations,
Restorations or improvements permitted under Section 5.5, 5.11, 5.12 or
elsewhere in this Agreement, (iii) Investments in Subsidiaries of such Loan
Party, (iv) Investments in Cash or Cash Equivalents, or (v) Investments set
forth on Schedule 6.3. For the purpose of this Section 6.3 and without
limiting any other method of making an Investment, a Loan Party and its
Subsidiaries shall be deemed to make an Investment in each Investment owned
by a Person at the time such Person becomes a Subsidiary of such Loan Party
or any of its Subsidiaries.
6.4 Contingent Obligations.
Any Loan Party shall not, directly or indirectly, create or become
liable with respect to any Contingent Obligation, except that:
6.4.1 Such Loan Party may become liable with respect to
Contingent Obligations in respect of the Obligations;
6.4.2 Such Loan Party may become liable with respect to
Contingent Obligations in respect of the "Obligations" under and as
defined in the Term Loan Agreement;
6.4.3 Such Loan Party may as required hereunder or under the
Term Loan Agreement or in the ordinary course of such Loan Party's
business enter into interest rate hedging
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agreements with respect to Indebtedness otherwise permitted
under this Agreement or the Term Loan Agreement;
6.4.4 Such Loan Party may become liable with respect to
indemnification agreements and Guaranties (whether now or existing or
hereafter entered into) with respect to performance, surety and similar
bonds or guaranties of completion provided in the ordinary course of
business consistent with past practices, in an aggregate maximum
amount, when combined with all such Loan Parties, not to exceed
$3,000,000 (for purposes of determining the amount of any such guaranty
of completion with respect to this Section 6.4.4, (i) in the event such
completion guaranty guarantees construction obligations that are the
subject of a guaranteed maximum general contract and for which the
general contractor thereunder has posted a valid performance bond, the
amount of such guaranty of completion shall be deemed to be ten percent
(10%) of the sum of: (a) the total construction budget for the then
remaining construction obligations guaranteed by the guaranty of
completion, minus (b) any remaining unallocated contingency included in
such construction budget, all as reasonably determined by such Loan
Party and accepted by the Agent, and (ii) in all other events, the
amount of such guaranty of completion shall be deemed to be the lesser
of: (a) the sum of: (i) one hundred percent (100%) of the construction
budget for the then remaining construction obligations guaranteed by
such guaranty of completion, minus (ii) any remaining unallocated
contingency included in such construction budget, all as reasonably
determined by such Loan Party and accepted by the Agent; or (b) the
outstanding principal and interest balance of the Indebtedness to which
such guaranty of completion relates);
6.4.5 Such Loan Party may become liable to make Investments
permitted by, and in accordance with the terms of, this Article 6;
and
6.4.6 Such Loan Party may become liable with respect to
Contingent Obligations permitted under Section 6.1.
6.5 Distributions.
Notwithstanding the terms of any agreement, articles or bylaws to the
contrary, Borrower shall not, directly or indirectly, declare, order, pay, make,
give or publish notice or fix a date in respect of or set apart any sum for any
Distribution, except, if no Event of Default has occurred and is then
continuing, (i) to the extent the aggregate amount of such Distributions over
the preceding twelve months is less than 90% of Funds From Operations, or (ii)
as may otherwise be required in order to comply with Section 5.3.1.
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6.6 Financial Covenants.
6.6.1 Consolidated Tangible Net Worth. The Loan Parties shall not
permit at any time the Consolidated Tangible Net Worth of COPT and its
Subsidiaries to be less than (i) the Consolidated Tangible Net Worth of COPT and
its Subsidiaries as of March 31, 1998 as adjusted for additional offerings of
equity Securities of COPT or any of its Subsidiaries since that date in a manner
acceptable to Agent, plus (ii) 80% of any Equity Proceeds received by COPT and
its Subsidiaries (other than from COPT and its Subsidiaries) after the Closing
Date.
6.6.2 Minimum Mortgaged Property Interest Coverage. As of the last day
of any calendar quarter, the Loan Parties shall not permit the ratio of Total
Mortgaged Property Adjusted Net Income to Total Mortgaged Property Interest
Expense to be less than 1.4:1.0 (such amounts to be determined with reference to
the preceding 12-month period ending on such last day).
6.6.3 Minimum Consolidated Interest Coverage. As of the last day of any
calendar quarter, the Loan Parties shall not permit the ratio of Consolidated
Adjusted Net Income to Consolidated Interest Expense to be less than 1.75:1.0
(such amounts to be determined with reference to the preceding 12-month period
ending on such last day).
6.6.4 Maximum Consolidated Unhedged Floating Rate Debt. The Loan
Parties shall not at any time permit Consolidated Total Indebtedness subject to
a variable interest rate that is not subject to Interest Rate Agreements to
exceed 15% of Consolidated Total Assets. Borrower shall submit evidence of
compliance with the requirements governing Interest Rate Agreements with the
Compliance Certificates delivered to Agent pursuant to Section 5.1.8.
6.6.5 Maximum Consolidated Total Indebtedness. The Loan Parties shall
not at any time permit Consolidated Total Indebtedness to exceed 65% of
Consolidated Total Assets.
6.7 Fundamental Changes.
Without the prior written approval of the Requisite Lenders (including
the Agent), which approval may be granted, withheld, conditioned or delayed in
its sole discretion, the Loan Parties shall not alter the legal structure of any
Loan Party, or enter into any transaction of merger or consolidation, or
liquidate, wind-up or dissolve itself (or suffer any liquidation or
dissolution), or make or permit any Transfer, or acquire by purchase or
otherwise, directly or indirectly, all or substantially all of the business,
property or fixed assets of, or stock or other evidence of beneficial ownership
of, any Person, or Transfer any Mortgaged Property, except that, from time to
time after the Closing Date:
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6.7.1 the Loan Parties may lease space in Improvements and
remove, sell or otherwise dispose of items of Collateral and other
property as expressly permitted under the Loan Documents;
6.7.2 the Loan Parties may incorporate or otherwise organize,
and, subject to Section 6.3, capitalize, one or more Subsidiaries,
provided that Borrower shall within thirty days after such organization
deliver to the Agent a notice informing the Agent of such organization,
the name and state of organization of such Subsidiary, and such other
information as the Agent shall reasonably require;
6.7.3 the Loan Parties may Transfer Mortgaged
Properties to the extent expressly permitted in this
Agreement;
6.7.4 the Loan Parties may Transfer any Property or any other
assets of any Loan Party so long as after giving effect to such
Transfer the Loan Parties are in compliance with all of the covenants
in this Agreement;
6.7.5 the Loan Parties may acquire by purchase or otherwise
(excluding any transaction covered by Section 6.7.6 or 6.7.7 below),
directly or indirectly, all or a portion of the business, property or
fixed assets of any Person so long as after giving effect to such
acquisition the Loan Parties are in compliance with the covenants of
this Agreement;
6.7.6 the Loan Parties may enter into a transaction of merger
or consolidation with another Entity provided that: (i) COPT or such
Subsidiary is the surviving Entity; (ii) the Entity that is merged into
COPT or such Subsidiary is predominantly in the commercial real estate
business; (iii) in the case of any such transaction in which the then
fair market value of the assets of the Entity that is combined with
COPT or its Subsidiary is (A) ten percent (10%) or more of COPT's and
its Subsidiaries' Consolidated Total Assets, the Agent consents thereto
in writing or (B) thirty-five percent (35%) or more of COPT's and its
Subsidiaries Consolidated Total Assets, the Requisite Lenders and the
Agent consent thereto in writing; and (iv) after giving effect to such
transaction, the Loan Parties shall, on a pro forma basis, be in
compliance with all of the covenants in this Agreement, including
Sections 6.1 and 6.6. Borrower shall deliver to the Agent, at least
fifteen Business Days prior to the closing of any transaction described
in this Section 6.7.4, a Compliance Certificate prepared on a pro forma
basis after giving effect to such transaction;
6.7.7 the Loan Parties may acquire by purchase or
otherwise, directly or indirectly, all or substantially all
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of the stock or other evidence of beneficial ownership of any Person
provided that (i) in the case of any such transaction in which the then
fair market value of the assets in question is (A) ten percent (10%) or
more of COPT's and its Subsidiaries' Consolidated Total Assets, the
Agent consents thereto in writing or (B) thirty-five percent (35%) or
more of COPT's and its Subsidiaries' Consolidated Total Assets, the
Requisite Lenders and the Agent consent thereto in writing; and (ii)
after giving effect to such transaction, the Loan Parties shall, on a
pro forma basis, be in compliance with all of the covenants in this
Agreement, including Sections 6.1 and 6.6. Borrower shall deliver to
the Agent, at least fifteen Business Days (or such shorter time period
as reasonably acceptable to the Agent) prior to the closing of any such
transaction described in this Section 6.7.5, a Compliance Certificate
prepared on a pro forma basis after giving effect to such transaction;
and
6.7.8 the Loan Parties may dispose of obsolete, worn out or
surplus property in the ordinary course of business.
6.8 Zoning and Contract Changes and Compliance.
Without the prior written approval of the Agent, which approval shall
not be unreasonably withheld, conditioned or delayed, no Loan Party shall
initiate or consent to any zoning reclassification of any Mortgaged Property or
seek any material variance under any existing zoning ordinance or use or permit
the use of any Mortgaged Property in any manner that could result in such use
becoming a non-conforming use under any zoning ordinance or any other applicable
land use law, rule or regulation. No Loan Party shall initiate or consent to any
change in any laws, requirements of Governmental Authorities or obligations
created by private contracts and Material Leases which now or hereafter could
reasonably be likely to materially and adversely affect the ownership,
occupancy, use or operation of any Mortgaged Property without the prior written
consent of the Agent.
6.9 No Joint Assessment; Separate Lots.
Without the prior written approval of the Agent, which approval may be
granted, withheld, conditioned or delayed in its sole discretion, no Loan Party
shall suffer, permit or initiate the joint assessment of any Mortgaged Property
(i) with any other real property constituting a separate tax lot (other than
another Mortgaged Property) and (ii) with any portion of any Mortgaged Property
which may be deemed to constitute personal property, or any other procedure
whereby the lien of any Taxes which may be levied against any such personal
property shall be assessed or levied or charged to any Mortgaged Property as a
single lien. The Loan Parties represent and warrant that each Mortgaged Property
is comprised of one or more parcels, each of which, to
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the knowledge of the Loan Parties, constitutes a separate tax lot (except with
respect to any lot constituting another Mortgaged Property) and none of which
constitutes a portion of any other tax lot.
6.10 Transactions with Affiliated Persons.
Without the prior written approval of the Requisite Lenders (including
the Agent), which approval may be granted, withheld, conditioned or delayed in
its sole discretion, the Loan Parties shall not, and shall not permit any of
their respective Subsidiaries to, directly or indirectly, enter into or permit
to exist any transaction (including, without limitation, the purchase, sale,
lease or exchange of any property, the rendering of any service or the making of
any Investment or Guaranty, or the amendment, restatement, supplement or other
change of, or waiver or failure to enforce any obligations under, any agreement)
with any holder of 5% or more of any class of equity Securities of Borrower or
COPT or any Affiliate or Subsidiary of COPT unless the terms thereof are not
less favorable to such Loan Party or Subsidiary, as the case may be, than those
that might be obtained in a comparable transaction at the time on an arms-length
basis from Persons who are not such a holder or Affiliate.
6.11 Sale or Discount of Receivables.
The Loan Parties shall not, and shall not permit any of their
respective Subsidiaries to, directly or indirectly, sell with recourse or,
except in the ordinary course of business and consistent with past practices,
discount or otherwise sell for less than the face value thereof, any of its
notes or accounts receivable.
6.12 Ownership of Mortgaged Property Subsidiaries.
The Loan Parties shall not permit any of the Mortgaged Property
Subsidiaries to cease to be a Wholly Owned Subsidiary of COPT. Borrower shall
not cease to be a Subsidiary of COPT and the financial statements of Borrower
shall not cease to be consolidated with the financial statements of COPT in
accordance with GAAP.
6.13 Conduct of Business.
6.13.1 Conduct of Business. The Loan Parties shall not, and shall not
permit any of their respective Subsidiaries to, directly or indirectly, do the
following:
6.13.1.1 engage in any business other than (a) the
acquisition, development, construction, ownership, renovation,
Restoration, management, operation and disposition of real properties
and related assets that are office, industrial, "flex" and retail
properties located in the United States of America, (b) the
acquisition,
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ownership, servicing and disposition of loans secured by real property,
and (c) any business that is ancillary, in purpose and extent, to any
business referred to in the preceding clauses; provided that,
notwithstanding the foregoing, the primary focus of the business of the
Loan Parties and their respective Subsidiaries, taken as a whole, shall
at all times be to conduct the activities described in the foregoing
clause (a) with respect to suburban office properties; or
6.13.1.2 terminate, modify, amend, waive any material
provision of, or enter into any Material Lease without Agent's prior
written consent, which shall not be unreasonably withheld, conditioned
or delayed, or enter into any other agreement, or take any other
action, if such other agreement or action would materially change the
business conducted at any Mortgaged Property, including any such
Material Lease, agreement or other action, that would convert or
reposition any Mortgaged Property into any office building of a quality
less than as of the Closing Date or the applicable Addition Date, as
the case may be.
6.14 Properties.
6.14.1 Transfer of Mortgaged Properties. The Loan Parties shall not
Transfer any Mortgaged Property, except to the extent expressly permitted under
the Loan Documents, and Borrower complies with the provisions set forth in
Section 2.12 with respect to such Mortgaged Property.
6.14.2 Suburban Office Properties. The Loan Parties shall not, and
shall not permit any of their respective Subsidiaries to, hold, on a
consolidated basis, at any time less than 95% of the total of Consolidated Total
Assets in suburban office buildings located in the United States, excluding for
purposes of such calculation the real property assets set forth on Schedule
6.14.2.
6.15 Management Agreements; Material Leases.
No Loan Party shall enter into, or otherwise be or become obligated
with respect to, any Management Agreement with respect to any Mortgaged Property
after the Closing Date, except (i) Management Agreements that Lender has
approved in writing, or (ii) that may be terminated by Lender without
compensation upon thirty days' notice. No Loan Party shall enter into, or
otherwise be or become obligated with respect to, or terminate, or amend or
modify in any material respect, any Material Lease without the prior written
approval of the Agent, which approval shall not be unreasonably withheld,
conditioned or delayed. In connection with any such approval, if the Agent does
not respond within five (5) Business Days after receipt of such Material Lease,
or such amendment, modification or termination agreement relating to a Material
Lease, then the Agent shall be deemed to
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have approved such item. In lieu of delivering the actual Material Lease, or the
actual amendment, modification or termination agreement relating to a Material
Lease, such Loan Party may deliver to the Agent a term sheet setting forth the
material terms of such transaction for approval and any such approval or deemed
approval by the Agent of such term sheet shall be effective so long as the
actual Material Lease, or such amendment, modification or termination agreement
relating to a Material Lease, does not deviate in any material respect from the
terms set forth in such term sheet.
6.16 Changes in Certain Obligations and Documents; Issuance of
Equity Securities.
6.16.1 Credit Agreement. Without the prior written approval of the
Requisite Lenders (including the Agent), which approval may be granted,
withheld, conditioned or delayed in its sole discretion, the Loan Parties shall
not, and shall not permit any of their respective Subsidiaries to, enter into
any agreement (other than this Agreement) prohibiting or restricting the ability
of any of the Loan Parties and any of their respective Subsidiaries to amend or
otherwise modify this Agreement or any other Loan Document.
6.16.2 Equity Securities. Without the prior written approval of the
Agent, which approval may be granted, withheld, conditioned or delayed in its
sole discretion, except as set forth on Schedule 6.16.2 annexed hereto, the Loan
Parties shall not, and shall not permit any of their respective Subsidiaries to,
issue any Capital Stock or other Security which, by its terms (or by the terms
of any Security into which it is convertible or for which it is exchangeable),
or upon the happening of any event, matures or is mandatorily redeemable,
pursuant to a sinking fund or otherwise, or redeemable in Cash at the option of
the holder thereof, in whole or in part, before the date that is 91 days after
the Maturity Date.
6.16.3 Organization Documents. Without the prior written approval of
the Requisite Lenders (including the Agent), which approval may be granted,
withheld, conditioned or delayed in its sole discretion, the Loan Parties shall
not, and shall not permit any of the Mortgaged Property Subsidiaries to, amend
or otherwise modify their respective charters or partnership agreements in any
material respect, except in connection with a transaction expressly permitted
under this Agreement or as otherwise expressly permitted under the Loan
Documents.
6.17 Fiscal Year.
Without the prior written approval of the Requisite Lenders (including
the Agent), which approval may be granted, withheld, conditioned or delayed in
its sole discretion, neither COPT nor any of its Subsidiaries shall change its
fiscal year-end from December 31.
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ARTICLE 7
EVENTS OF DEFAULT; REMEDIES
7.1 Events of Default.
If any of the following conditions or events ("Events of Default")
shall occur:
7.1.1 Failure to Make Payments When Due. Failure to pay any installment
of principal of any Loan when due, whether at stated maturity, by acceleration
in accordance with the provisions of the applicable Loan Document, by notice of
voluntary prepayment, by mandatory prepayment or otherwise; or failure to pay
interest or any other amount due under this Agreement within (i) two Business
Days after the date of receipt of notice that such payment has not been received
as of the date due, until three such notices have been delivered under this
Agreement, or (ii) thereafter, five days after the date due; or
7.1.2 Other Defaults Under Loan Documents. Any Loan Party or any of its
Subsidiaries shall default in the performance of or compliance with any term
contained in this Agreement or any other Loan Document other than any such term
in this Agreement or other Loan Document that is referred to in any other clause
of this Section and such default shall not have been remedied or waived within
30 days after the earlier of (i) such Loan Party's or such Subsidiary's
obtaining knowledge of such default or (ii) receipt by such Loan Party or such
Subsidiary of notice from Lender of such default; provided, however, that if
such default cannot be cured solely by the payment of money and the cure of such
default requires a period in excess of 30 days, and such default may reasonably
be expected to be cured on or before the 90th day after such Loan Party or such
Subsidiary obtains knowledge or notice thereof, and if and so long as such Loan
Party or such Subsidiary is diligently and continuously prosecuting such cure,
then such default shall not be an Event of Default unless such Loan Party or
such Subsidiary fails to cure such default before the 90th day after any Loan
Party or any of its Subsidiaries obtains knowledge or notice thereof, as the
case may be; or
7.1.3 Default in Other Agreements. (i) Failure of any Loan Party or any
of its Subsidiaries to pay when due any principal of or interest on any
Indebtedness the aggregate principal amount of which is equal to or greater than
$1,000,000, in each case beyond the end of any grace period provided therefor
(without extension); or (ii) occurrence of any other event or condition (other
than an event or condition expressly described in another paragraph or provision
of this Section ) which, with the giving of notice or the lapse of time or both,
with respect to (a) any Indebtedness the aggregate principal amount of which is
equal to or greater than $1,000,000 or any Contingent Obligation(s) the
aggregate amount of which is equal to or
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greater than $1,000,000 or (b) any loan agreement, mortgage, indenture or other
agreement relating to such Indebtedness or Contingent Obligation(s), would
cause, or would permit the holder or holders of that Indebtedness or Contingent
Obligation(s) (or a trustee on behalf of such holder or holders) to cause, that
Indebtedness or Contingent Obligation(s) to become or be declared due and
payable (upon the giving or receiving of notice, lapse of time, both, or
otherwise) prior to its stated maturity or the stated maturity of any underlying
obligation, as the case may be, in each case beyond the end of any cure period
therefor (without any extension thereof); or
7.1.4 Breach of Warranty. Any representation, warranty, certification
or other statement of any Loan Party or any of its Subsidiaries made in this
Agreement or in any other Loan Document or in any statement or certificate at
any time given in writing pursuant hereto or thereto or in connection herewith
or therewith shall be false in any material respect on the date as of which made
and such default shall not have been remedied or waived within 30 days after the
earlier of (i) such Loan Party's or such Subsidiary's obtaining knowledge of
such default and (ii) receipt by such Loan Party or such Subsidiary of notice
from Lender of such default; provided, however, that if such default cannot be
cured solely by the payment of money and the cure of such default requires a
period in excess of 30 days, and if such Loan Party or such Subsidiary, as
applicable, is diligently and continuously prosecuting such cure, then such
default shall not be an Event of Default unless such Loan Party or such
Subsidiary fails to cure such default within 90 days, after such Loan Party or
such Subsidiary obtain knowledge or notice thereof, as the case may be; or
7.1.5 Invalidity of Loan Document; Failure of Security; Repudiation of
Obligations. At any time after the execution and delivery thereof, (i) any Loan
Document (other than a Security Document) or any material provision thereof
shall cease to be in full force and effect (other than in accordance with its
terms) or shall be declared null and void; (ii) any Security Document or any
material provision thereof shall cease to be in full force and effect (other
than by reason of a release of Collateral thereunder in accordance with the
terms hereof or thereof or any other termination of such Security Document in
accordance with the terms hereof or thereof) or shall be declared null and void,
or Lender shall not have or shall cease to have a valid and perfected first
priority Lien or security interest, subject only to the Permitted Encumbrances,
in any material Collateral purported to be covered, in each case for any reason
other than the failure of Lender to take any action within its control; or (iii)
any Loan Party shall contest in writing the validity or enforceability of any
Loan Document in writing or deny in writing that it has any further liability,
including with respect to future advances by Lender, under any Loan Document to
which it is a party; or
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7.1.6 Prohibited Transfers. Any Loan Party attempts to assign its
rights under this Agreement or any other Loan Document or any interest herein
or therein; or
7.1.7 Involuntary Bankruptcy; Appointment of Receiver, etc. (i) A court
having jurisdiction shall enter a decree or order for relief in respect of any
Loan Party or any of its Subsidiaries in an involuntary case under the
Bankruptcy Code or under any other applicable bankruptcy, insolvency or similar
law now or hereafter in effect, which decree or order is not stayed; or any
other similar relief shall be granted under any applicable federal or state law;
or (ii) an involuntary case shall be commenced against any Loan Party or any of
its Subsidiaries under the Bankruptcy Code or under any other applicable
bankruptcy, insolvency or similar law now or hereafter in effect; or a decree or
order of a court having jurisdiction in the premises for the appointment of a
receiver, liquidator, sequestrator, trustee, custodian or other officer having
similar powers over any Loan Party or any of its Subsidiaries, or over all or a
substantial part of its property, shall have been entered; or there shall have
occurred the involuntary appointment of an interim receiver, trustee or other
custodian of any Loan Party or any of its Subsidiaries for all or a substantial
part of its property; or a warrant of attachment, execution or similar process
shall have been issued against any substantial part of the property of any Loan
Party or any of its Subsidiaries, and any such event described in this clause
(ii) shall continue for 60 days unless dismissed, bonded or discharged; or
7.1.8 Voluntary Bankruptcy; Appointment of Receiver, etc. (i) Any Loan
Party or any of its Subsidiaries shall have an order for relief entered with
respect to it or commence a voluntary case under the Bankruptcy Code or under
any other applicable bankruptcy, insolvency or similar law now or hereafter in
effect, or shall consent to the entry of an order for relief in an involuntary
case, or to the conversion of an involuntary case to a voluntary case, under any
such law, or shall consent to the appointment of or taking possession by a
receiver, trustee or other custodian for all or a substantial part of its
property; or any Loan Party or any of its Subsidiaries shall make any assignment
for the benefit of creditors; or (ii) any Loan Party or any of its Subsidiaries
shall be unable, or shall fail generally, or shall admit in writing its
inability, to pay its debts as such debts become due; or the Board of Directors
of any Loan Party or any of its Subsidiaries (or any committee thereof) shall
adopt any resolution or otherwise authorize any action to approve any of the
actions referred to in clause (i) above or this clause (ii); or
7.1.9 Judgments and Attachments. Any money judgment, writ or warrant of
attachment or similar process involving individually or in the aggregate at any
time an amount in excess of $1,000,000 (in either case not adequately covered by
insurance as to which a solvent and unaffiliated insurance company has
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acknowledged coverage) shall be entered or filed against any Loan Party or any
of its Subsidiaries or any of their respective assets and shall remain
undischarged, unvacated, unbonded or unstayed for a period of 60 days (or in any
event later than five days prior to the date of any proposed sale thereunder);
or
7.1.10 Dissolution. Any order, judgment or decree shall be entered
against any Loan Party or any of its Subsidiaries decreeing the dissolution or
split up of such Loan Party or that Subsidiary and such order shall remain
undischarged or unstayed for a period in excess of 30 days; or
7.1.11 Material Adverse Effect. Any event or change (including, without
limitation, any event or condition expressly described in another paragraph or
provision of this Section) shall occur that has caused or evidences, either in
any case or in the aggregate, a Material Adverse Effect; or
7.1.12 Default under Term Loan. Any "Event of Default" under, and as
defined in, the Term Loan Agreement shall occur.
THEN (i) upon the occurrence of any Event of Default described in Sections 7.7.1
or 7.1.8, each of (a) the unpaid principal amount of and accrued interest on the
Loans, (b) an amount equal to the maximum amount that may at any time be drawn
under all Letters of Credit then outstanding (whether or not any beneficiary
under any such Letter of Credit shall have presented, or shall be entitled at
such time to present, the drafts or other documents or certificates required to
draw under such Letter of Credit) and (c) all other Obligations shall
automatically become immediately due and payable, without notice, presentment,
demand, protest or other requirements of any kind, all of which are hereby
expressly waived by the Loan Parties and the obligations of each Lender
hereunder (including, without limitation, the obligations of such Lender to make
any Loan or to issue any Letter of Credit hereunder) shall thereupon terminate,
and (ii) during the continuance of any other Event of Default, the Agent may, in
its sole discretion, by written notice to Borrower, declare all or any portion
of the amounts described in clauses (a) through (c), inclusive, above to be, and
the same shall forthwith become, immediately due and payable and the obligations
of each Lender hereunder (including, without limitation, the obligations of such
Lender to make any Loan or to issue any Letter of Credit hereunder) shall
thereupon terminate; provided that the foregoing shall not affect in any way the
obligations of Lenders under Section 2.18.3.1.
The occurrence of any condition or event may constitute an
Event of Default (or a Potential Event of Default) under more than one provision
of this Section 7.1.
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7.2 Certain Remedies.
7.2.1 During the continuance of an Event of Default, all or any one or
more of the rights, powers, privileges and other remedies available to the Agent
or the Lenders against any Loan Party under this Agreement, the Notes, the
Mortgages, the Security Documents or any of the other Loan Documents, or at law
or in equity, may be exercised by the Agent, acting in its own sole discretion
at any time and from time to time, whether or not all or any portion of the
Obligations shall be declared due and payable, and whether or not the Agent
shall have commenced any foreclosure proceeding or other action for the
enforcement of its rights and remedies under any of the Loan Documents with
respect to any Property or all or any portion of the Mortgaged Property. Any
such actions taken by the Agent shall be cumulative and concurrent and may be
pursued independently, singly, successively, together or otherwise, at such time
and in such order as the Agent in its sole discretion may determine, to the
fullest extent permitted by law, without impairing or otherwise affecting the
other rights and remedies of the Agent or the Lenders permitted by law, equity
or contract or as set forth herein or in the other Loan Documents.
7.2.2 In the event of the foreclosure or other action by the Agent to
enforce its remedies in connection with one or more of the Mortgaged Properties
or any other Collateral, whether such foreclosure (or other remedy) yields net
proceeds in an amount less than, equal to or more than the Property Amount with
respect to such Mortgaged Property, the Agent shall apply all net proceeds
received to repay the Obligations, the Obligations shall be reduced to the
extent of such net proceeds and the remaining portion of the Obligations shall
remain outstanding and secured by the Mortgages and the other Loan Documents, it
being understood and agreed by the Loan Parties that Borrower is liable for the
repayment of the Obligations and that any "excess" foreclosure proceeds are part
of the cross-collateralized and cross-defaulted security granted to the Agent on
behalf of the Lenders pursuant to the Mortgages; provided, however, that, if the
Agent so elects, at its sole discretion, the Loans and the Notes shall be deemed
to have been accelerated only to the extent of the net proceeds actually
received by the Lenders with respect to any individual Mortgaged Property (or,
in the event that the Agent on behalf of the Lenders is the purchaser of such
Mortgaged Property by Credit Bid at a foreclosure sale, the Loans and the Notes
shall be deemed to have been accelerated only at such time as the Agent
subsequently disposes of such Mortgaged Property and then only to the extent of
the amount of such Credit Bid) and applied in reduction of the Obligations in
accordance with the provisions of this Agreement and the Notes, after payment by
Borrower of all transaction costs and expenses and costs of enforcement.
7.2.3 It is intended that the Liens of the Mortgages shall each be
construed and treated as a separate, distinct Lien
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for the purpose of securing the entire Obligations secured thereby and each Loan
Party acknowledges and agrees that each Mortgaged Property is mortgaged and
transferred to the Agent on behalf of the Lenders by a separate and distinct
mortgage and security agreement, so that if it should at any time appear or be
held that any Mortgage fails to mortgage, and transfer to the Agent on behalf of
the Lenders a Lien upon and the title to any Mortgaged Property, or any part
thereof, as against creditors of any Loan Party other than the Lenders or
otherwise, such failure shall not operate to affect in any way the transfer of
the other Mortgaged Properties or any part thereof to the Agent on behalf of the
Lenders; but nothing contained herein or in the Mortgages shall be construed as
requiring the Agent on behalf of the Lenders to resort to any Mortgaged Property
for the satisfaction of the Obligations secured thereby in preference or
priority to any other Mortgaged Property thereby conveyed, but the Agent, acting
in its sole discretion may seek satisfaction out of all of the Mortgaged
Property or any part thereof.
7.2.4 In addition to any rights now or hereafter granted under
applicable law and not by way of limitation of any such rights, upon the
occurrence and during the continuance of any Event of Default, the Agent is
hereby authorized by the Loan Parties at any time or from time to time, without
notice to any Loan Party or to any other Person, any such notice being hereby
expressly waived, to set off and to appropriate and to apply any and all
deposits (general or special, including Indebtedness evidenced by certificates
of deposit, whether matured or unmatured, but not including trust accounts) and
any other Indebtedness at any time held or owing by the Agent to or for the
credit or the account of any Loan Party against and on account of the
obligations and liabilities of any Loan Party to the Agent under this Agreement
and the Notes, including all claims of any nature or description arising out of
or connected with this Agreement or any other Loan Document, irrespective of
whether or not (i) the Agent shall have made any demand hereunder or (ii) the
principal of or the interest on the Loans or any other amounts due hereunder
shall have become due and payable pursuant to Section and although said
obligations and liabilities, or any of them, may be contingent or unmatured.
7.2.5 During the continuance of an Event of Default, the Agent, in its
sole discretion, shall have the right, to the extent permitted by law, to
impound and take possession of books, records, notes, and other documents
evidencing Borrower's deposit accounts, accounts receivable and other claims for
payment of money (including Rents) arising in connection with the Mortgaged
Properties, to give notice to the obligors thereunder of the Agent's interest
therein, and to make direct collections on such deposit accounts, accounts
receivable and claims.
7.2.6 During the occurrence of an Event of Default and upon the
occurrence and during the continuance of a default in the payment of any
principal or interest of any Indebtedness owed
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or alleged to be owed by the Loan Parties or any of their respective
Subsidiaries, and following the initiation of any proceeding or the taking of
any other action to collect the payment thereof by the Person entitled to such
payment, the Agent may, in its sole discretion, advance either to such Person or
to Borrower, for payment to such Person, all or any portion of the amount of
such payment, whether or not the existence of such obligation or amount thereof
shall be disputed by Borrower or such Subsidiary. Each such advance, to the
extent not paid out of from funds of COPT, Borrower or any of their respective
Subsidiaries, shall be deemed a Loan hereunder and shall be subject to the
provisions of this Agreement.
7.2.7 The rights, powers and remedies of the Agent and the Lenders
under this Agreement shall be cumulative and not exclusive of any other right,
power or remedy which the Agent or the Lenders may have against any Loan Party
pursuant to this Agreement or the other Loan Documents executed by or with
respect to such Loan Party, or existing at law or in equity or otherwise. The
rights, powers and remedies of the Agent and the Lenders may be pursued singly,
concurrently or otherwise, at such time and in such order as the Agent, acting
in its own sole discretion, may determine. No delay or omission to exercise any
remedy, right or power accruing upon an Event of Default shall impair any such
remedy, right or power or shall be construed as a waiver thereof, but any such
remedy, right or power may be exercised from time to time and as often as may be
deemed expedient. A waiver of any Event of Default or Potential Event of Default
with respect to any Loan Party shall not be construed to be a waiver of any
subsequent Event of Default or Potential Event of Default by such Loan Party or
to impair any remedy, right or power consequent thereon.
ARTICLE 8
MISCELLANEOUS
8.1 Assignments and Participations in Commitments and Loans.
8.1.1 General. Each Lender shall have the right at any time, with the
prior written consent of the Agent and, so long as no Event of Default or
Potential Event of Default then exists, Borrower (which, in either case, such
consent shall not be unreasonably withheld, conditioned or delayed) to (i) sell,
assign, transfer or negotiate to any Eligible Assignee, or (ii) sell to any
Eligible Assignee participations in, all or any part of its Commitment or any
Loan or Loans made by it or its Letters of Credit or participations therein or
any other interest herein or in any other Obligations owed to it. In the case of
any such assignment, (i) the assigning Lender shall notify the Loan Parties of
the effective date of such assignment, (ii) as of such effective date, the
assignee shall be a party hereto and, to the extent that rights and obligations
hereunder have been assigned to it, shall have the rights and obligations of a
Lender
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hereunder, (iii) the assigning Lender shall, to the extent that its rights and
obligations hereunder have been assigned by it, relinquish its rights and be
released from its obligations under this Agreement, (iv) the assignment shall be
in an amount not less than $5,000,000, and (v) the assignment shall be effected
pursuant to an Assignment Agreement. In the event of an assignment hereunder,
the Commitments shall be modified to reflect the Commitments of such assignee.
8.1.2 Participations. In the case of any such participation, each
Lender shall retain the sole right to vote its Pro Rata Share of the Commitment,
without the consent of any such participant, for the approval or disapproval of
any amendment, modification or waiver of any provisions of the Loan Documents,
provided that such Lender may grant such participant the right to approve any
amendment, modification or waiver relating to the matters described in clauses
(i)(A) (other than any increase of any of the Commitments), (D), (E) or (F) of
Section 8.6.1. The Loan Parties and each Lender hereby acknowledge and agree
that, solely for purposes of Sections 2.11, 2.12 and 8.5, (i) any participation
will give rise to a direct obligation of the Loan Parties to the participant and
(ii) the participant shall be considered to be a "Lender".
8.1.3 Assignments to Federal Reserve Banks. In addition to the
assignments and participations permitted under the foregoing provisions of
this Section 8.1, any Lender may assign and pledge all or any portion of its
Loans and the other Obligations owed to such Lender to any Federal Reserve
Bank as collateral security pursuant to Regulation A of the Board of
Governors of the Federal Reserve System and any operating circular issued by
such Federal Reserve Bank. No Lender shall, as between Borrower and such
Lender, be relieved of any of its obligations hereunder as a result of any
such assignment and pledge.
8.1.4 Information. Each Lender agrees to exercise commercially
reasonable efforts to keep any non-public information delivered or made
available to it pursuant to the Loan Documents, which any Loan Party or its
authorized representative has identified as confidential information,
confidential from any Person other than Persons employed by or retained by such
Lender who are or are expected to become engaged in evaluating, approving,
structuring or administering the Loan and other extensions of credit or
Obligations hereunder; provided that nothing herein shall prevent such Lender
from disclosing such information to any Eligible Assignee or participant that
has agreed to be bound by the provisions of this Section in connection with the
contemplated assignment or transfer of any interest or participation in the
Loans or other Obligations hereunder or as required or requested by any
Governmental Authority or representative thereof or pursuant to legal process or
in connection with the exercise of any remedy under the Loan Documents.
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8.1.5 Pro Rata Assignments and Participations. Any assignment or
participation made by any Lender or Eligible Assignee pursuant to Section 8.1
may not be made unless such Lender or Eligible Assignee contemporaneously
assigns or participates, as applicable, to such assignee or participant a pro
rata share of its respective "Commitment" (as defined in the Term Loan
Agreement) under the Term Loan Agreement.
8.2 Expenses.
Whether or not the transactions contemplated hereby shall be
consummated, Borrower agrees to pay promptly (i) all the costs of furnishing all
opinions of counsel for Borrower and the other Loan Parties (including any
opinions reasonably requested by the Agent) as to any legal matters arising
hereunder and of each Loan Party's performance of and compliance with all
agreements and conditions on its part to be performed or complied with under
this Agreement and the other Loan Documents including with respect to confirming
compliance with environmental, insurance and solvency requirements and with
respect to the Security Documents and the Liens created pursuant thereto; (ii)
all the actual costs and expenses of creating, perfecting and maintaining Liens
in favor of the Agent for the benefit of the Lenders pursuant to any Loan
Document, including filing and recording fees and expenses, mortgage recording
taxes, intangible taxes and transfer and stamp taxes, title searches, title
insurance premiums, UCC search and filing charges and expenses (including
charges and expenses for UCC searches evidencing the proper filing, recording
and indexing of UCC financing statements and listing all other effective
financing statements that name Borrower or any applicable Mortgaged Property
Subsidiary as debtor, and copies of all such other financing statements); (iii)
all reasonable out-of-pocket costs and expenses incurred by the Agent and the
Lenders (including the reasonable fees, expenses and disbursements of any
auditors, accountants, architects, engineers or appraisers and any environmental
or other consultants, advisors and agents employed or retained by the Agent or
its counsel) in connection with performing due diligence, including obtaining
and reviewing any Appraisals, any environmental audits or reports, market
surveys, title reports, surveys and similar information; (iv) all reasonable
out-of-pocket fees, expenses and disbursements of counsel for the Agent and its
Affiliates (including allocated costs of internal counsel) in connection with
the negotiation, preparation, execution, participation, marketing and
syndication of the Loan Documents and any consents, amendments, waivers or other
modifications thereto and any other documents or matters requested by any Loan
Party; (v) all reasonable out-of-pocket costs and expenses incurred by the Agent
in connection with (a) the negotiation, preparation and execution of the Loan
Documents, the syndication of the Loans and due diligence, (b) any consents,
amendments or waivers of or other modifications to any of the Loan Documents,
(c) any addition, substitution, Transfer or release of any Mortgaged Property or
other Collateral
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or any proposal with respect to any of the foregoing, (d) the custody or
preservation of any of the Collateral and (e) the preparation, delivery or
review of other documents or matters requested by any Loan Party, including,
without limitation, all instruments, documents, boundary surveys, footing or
foundation surveys, certificates, plans and specifications, Appraisals, title
and other insurance reports and agreements, and each and every other document,
certificate, agreement and instrument required to be furnished pursuant to the
terms of the Loan Documents; and (vi) after the occurrence of an Event of
Default, all costs and expenses, including reasonable attorneys' fees (including
allocated costs of internal counsel) and costs of settlement, incurred by the
Agent and the Lenders in enforcing any Obligations of or in collecting any
payments due from any Loan Party hereunder or under the other Loan Documents by
reason of such Event of Default or in connection with any refinancing or
restructuring of the credit arrangements provided under this Agreement in the
nature of a "work-out" or pursuant to any insolvency or bankruptcy proceedings.
Except as expressly provided to the contrary in this Agreement or any other Loan
Document, costs or expenses that are payable by Borrower after the Closing Date
shall be payable by Borrower within ten (10) Business Days after Borrower's
receipt of written demand from the Agent to pay same, accompanied by
documentation in reasonable detail sufficient to verify the nature and amount.
8.3 Indemnity.
8.3.1 Indemnity. In addition to the payment of expenses as required by
Section , whether or not the transactions contemplated hereby shall be
consummated, Borrower agrees to defend, indemnify and hold harmless the Agent,
the Lenders and their respective Affiliates and Persons deemed to be
"controlling persons" thereof within the meaning of the Securities Act or the
Exchange Act and the respective directors, officers, employees, agents,
attorneys and representatives of the foregoing (collectively, "Indemnified
Persons" and individually, an "Indemnified Person"), to the full extent lawful,
from and against any and all losses, claims, damages, liabilities, costs and
expenses or other obligations of any kind or nature whatsoever incurred by each
such Indemnified Person (including fees, charges and disbursements of counsel
and the allocated costs and expenses of internal counsel for such Indemnified
Person) which are related to, arise out of or result from (a) any untrue
statements or alleged untrue statements or omissions or alleged omissions to
state therein a material fact necessary to make the statements therein, in light
of the circumstances in which they were made, not misleading, in each case made
or, to the extent contemplated by the Loan Documents, to be made, by or on
behalf of any Loan Party or any of its Affiliates, (x) in the representations
and warranties of the Loan Parties contained in the Loan Documents, (b)
information provided by or on behalf of any Loan Party or any of their
Affiliates for use in connection with any syndication, assignment or
participation of any portion
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of the Commitments, the Loans, the Notes, the other Loan Documents or the
Obligations, or in connection with any Loan Document or any transactions
contemplated hereby or thereby, (c) the transactions contemplated by the Loan
Documents (including Lenders' agreements to make the Loans or the use or
intended use of the proceeds thereof) or any enforcement of any of the Loan
Documents (including any sale of, collection from, or other realization upon any
of the Collateral or the enforcement of the COPT Guaranty or any Mortgaged
Property Subsidiary Guaranty), (d) any actions taken or omitted to be taken by
an Indemnified Person with the consent of any Loan Party or in conformity with
the instructions of any Loan Party, or (e) any other transactions contemplated
by the Loan Documents, and Borrower will reimburse each Indemnified Person for
all reasonable costs and expenses, including fees and disbursements of both
outside and internal counsel for such Indemnified Person, as they are incurred,
in connection with investigating, preparing for, or defending any formal or
informal claim, action, suit, investigation, inquiry or other proceeding,
whether or not in connection with pending or threatening litigation, caused by
or arising out of or in connection with the foregoing, whether or not such
Indemnified Person is named as a party thereto and whether or not any liability
results therefrom. Borrower shall not, however, be responsible for any losses,
claims, damages, liabilities, costs or expenses pursuant to clauses (c), (d) or
(e) of the preceding sentence which have resulted from the bad faith or
recklessness of such Indemnified Person as determined by a final judgment of a
court of competent jurisdiction. Neither the Agent nor any other Indemnified
Person shall have any liability (whether direct or indirect, in contract or tort
or otherwise) to any of the Loan Parties and their respective Affiliates or any
director, officer, employee, agent or representative of any of the foregoing, or
any other person, for or in connection with the foregoing, or otherwise arising
out of or in any way relating to the matters contemplated by the Loan Documents
or any commitment to lend except for such liability for losses, claims, damages,
liabilities, costs or expenses of any Indemnified Person pursuant to clauses
(c), (d) or (e) of the preceding sentence to the extent they are determined to
have resulted from the bad faith, recklessness or negligence of such Indemnified
Person as determined by a final judgment of a court of competent jurisdiction
and in no event shall the Agent or any other Indemnified Person be responsible
for or liable to any of the Loan Parties or any of their respective Affiliates
or any other Person for consequential, punitive or exemplary damages. Borrower
further agrees that the Loan Parties shall not, nor shall they permit their
respective Subsidiaries to, without the prior written consent of the Agent,
settle or compromise or consent to the entry of any judgment in any pending or
threatened claim, action, suit, investigation, inquiry or other proceeding in
respect of which indemnification is actually sought hereunder unless such
settlement, compromise or consent includes an unconditional release of the
Agent, the Lenders and each other Indemnified Person hereunder from all
liability arising out of
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such claim, action, suit, investigation, inquiry or other
proceeding.
8.3.2 Procedure. If any action, suit, investigation, inquiry or other
proceeding is commenced, as to which an Indemnified Person proposes to demand
indemnification hereunder, such Indemnified Person shall notify Borrower with
reasonable promptness; provided, however, that any failure by such Indemnified
Person to notify Borrower shall not relieve Borrower or any of its Affiliates
from its obligations hereunder (except to the extent that Borrower or such
Affiliate is prejudiced by such failure to so promptly notify). Borrower shall
be entitled to assume the defense of any such action, suit, investigation,
inquiry or other proceeding, including the employment of counsel reasonably
satisfactory to the Indemnified Person and the payment of all reasonable fees
and expenses incurred in connection therewith. The Indemnified Person shall have
the right to employ separate counsel in any such action, suit, investigation,
inquiry or other proceeding, or to participate in the defense thereof, but the
fees and expenses of such counsel shall be at the expense of the Indemnified
Person unless (i) Borrower has agreed to pay such fees and expenses, (ii)
Borrower shall have failed promptly upon written demand therefor to assume the
defense of such action, suit, investigation, inquiry or other proceeding, and
employ counsel reasonably satisfactory to the Indemnified Person in connection
therewith or (iii) such Indemnified Person shall have been advised by counsel
that there exists actual or potential conflicting interests between any Loan
Party and such Indemnified Person, including situations in which one or more
legal defenses may be available to such Indemnified Person that are different
from or additional to those available to any Loan Party, in which case, if such
Indemnified Person notifies Borrower in writing that it elects to employ
separate counsel at the expense of Borrower, Borrower shall not have the right
to assume the defense of such action or proceeding on behalf of such Indemnified
Person; provided, however, that Borrower shall not, in connection with any one
such action, suit, investigation, inquiry or other proceeding or separate but
substantially similar or related actions, suits, investigations, inquiries or
other proceedings in the same jurisdiction arising out of the same general
allegations or circumstances, be liable for the fees and expenses of more than
one separate firm of attorneys at any time for all such Indemnified Persons (in
addition to local counsel), which firm shall be designated in writing by the
Agent.
8.3.3 Contribution. In order to provide for just and equitable
contribution with respect to matters subject to this Section 8.3, if a claim for
indemnification is made pursuant to these provisions but is found in a final
judgment by a court of competent jurisdiction (not subject to further appeal)
that such indemnification is not available for any reason, even though the
express provisions hereof provide for indemnification in such case, or is
insufficient to hold an Indemnified Party harmless, then the Loan Parties, on
the one hand, and the Agent and the
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Lenders, on the other hand, shall contribute to such loss, claim, damage,
liability, cost or expense for which such indemnification or reimbursement is
held unavailable or is insufficient in such proportion as is appropriate to
reflect the relative benefits to the Loan Parties and their respective
Affiliates, on the one hand, and the Agent and the Lenders, on the other hand,
in connection with the transactions described in the Loan Documents, as well as
any other equitable considerations. The parties agree that for the purpose of
this Section, the relative benefits to the Loan Parties and their respective
Affiliates, on the one hand, and the Agent and the Lenders, on the other hand,
shall be deemed to be in the same proportion as the proceeds received or to be
received by the Loan Parties from the Loan Documents bears to the fees paid or
to be paid to the Agent and the Lenders under the Loan Documents.
Notwithstanding the foregoing, the Agent and the Lenders shall not be required
to contribute under this Section any amount in excess of the amount of fees
actually received by the Agent and the Lenders, respectively, in respect of the
Loan Documents. Borrower, the Agent and the Lenders agree that it would not be
just and equitable if contribution pursuant to this Section were determined by
pro rata allocation or by any other method which does not take into account the
equitable considerations referred to in this Section 8.3.3.
8.3.4 No Limitation. The foregoing rights to indemnity and contribution
shall be in addition to any rights that any Indemnified Person and Loan Parties
may have at common law or otherwise and shall remain in full force and effect
following the completion or any termination of the transactions contemplated by
the Loan Documents. In no event shall the Agent or the Lenders be responsible or
liable to any person for consequential damages which may be alleged as a result
of the Loan Documents or any transaction contemplated thereby.
8.3.5 Independence of Indemnity; No Enlargement. The Loan Parties
acknowledge and agree that the provisions of this Section 8.3 are separate from
and in addition to the provisions contained in the Environmental Indemnity.
8.4 No Joint Venture or Partnership.
The Lenders and the Loan Parties acknowledge and agree that the
relationship created hereunder or under the other Loan Documents is that of
creditor/debtor. Each of the Loan Parties acknowledges and agrees that (a) they
are knowledgeable and sophisticated business practitioners with particular
expertise and broad experience in the area of real estate acquisition,
ownership, operation, finance and management; (b) the Agent and the Lenders,
individually and collectively, do not owe, and expressly disclaim, any fiduciary
or special obligation to the Loan Parties or any of their partners, agents, or
representatives; and (c) nothing contained in this Agreement or any other Loan
Document shall affect the relationship between the Lenders and Borrower as that
of creditor/debtor hereunder and
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under the other Loan Documents. Nothing herein or therein is intended to create
a joint venture, partnership, tenancy-in-common, or joint tenancy relationship
between any Loan Party or Subsidiary thereof and the Agent or any Lender nor to
grant the Agent or the Lenders any interest in the Mortgaged Property other than
that of mortgagee or lender.
8.5 Ratable Sharing.
The Lenders hereby agree among themselves that if any of them shall,
whether by voluntary payment (other than a voluntary prepayment of Loans made
and applied in accordance with this Agreement), by realization upon security,
through the exercise of any right of set-off or banker's lien, by counterclaim
or cross action or by the enforcement of any right under the Loan Documents or
otherwise, or as adequate protection of a deposit treated as cash collateral
under the Bankruptcy Code, receive payment or reduction of a proportion of the
aggregate amount of principal, interest, fees and other amounts then due and
owing to that Lender hereunder or under the other Loan Documents (collectively,
the "Aggregate Amounts Due" to such Lender) which is greater than the proportion
received by any other Lender in respect of the Aggregate Amounts Due to such
other Lender, then the Lender receiving such proportionately greater payment
shall (i) notify the Agent and each other Lender of the receipt of such payment
and (ii) apply a portion of such payment to purchase participations (which it
shall be deemed to have purchased from each seller of a participation
simultaneously upon the receipt by such seller of its portion of such payment)
in the Aggregate Amounts Due to the other Lenders so that all such recoveries of
Aggregate Amounts Due shall be shared by all Lenders in proportion to the
Aggregate Amounts Due to them; provided, however, that if all or part of such
proportionately greater payment received by such purchasing Lender is thereafter
recovered from such Lender upon the bankruptcy or reorganization of Borrower or
otherwise, those purchases shall be rescinded and the purchase prices paid for
such participations shall be returned to such purchasing Lender ratably to the
extent of such recovery, but without interest. The Loan Parties expressly
consent to the foregoing arrangement and agree that any holder of a
participation so purchased may exercise any and all rights of banker's lien,
set-off or counterclaim with respect to any and all monies owing by such Loan
Party to that holder with respect thereto as fully as if that holder were owed
the amount of the participation held by that holder.
8.6 Amendments and Waivers.
8.6.1 Amendments, etc. Except as expressly provided to the contrary
herein, no amendment, modification, termination or waiver of any provision of
this Agreement or any other Loan Document or consent to any departure by any
Loan Party therefrom, shall in any event be effective without the written
concurrence of the Requisite Lenders (including, without limitation, any
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amendment, modification or waiver of the obligation of Borrower under Section
2.9.1.4); provided that (i) no such amendment, modification, termination, waiver
or consent shall be effective without the written concurrence of all Lenders if
such amendment, modification, termination, waiver or consent (A) increases the
amount of any of the Commitments or reduces the principal amount of any of the
Loans; (B) changes in any manner the definition of "Pro Rata Share" or the
definition of "Requisite Lenders"; (C) changes in any manner any provision of
this Agreement which, by its terms, expressly requires the approval or
concurrence of a specified percentage of, or all, Lenders; (D) postpones the
scheduled final maturity date of any of the Loans; (E) postpones the date on
which any interest or any fees are payable; (F) decreases the interest rate
borne by any of the Loans (other than any waiver of any increase in the interest
rate applicable to any of the Loans pursuant to Section 2.7.5) or the amount of
any fees payable hereunder; (G) increases the maximum duration of Interest
Periods permitted hereunder; (H) releases any Lien granted in favor of Agent
with respect to all or substantially all of the Collateral; (I) releases COPT
from its obligations under the COPT Guaranty; or (J) changes in any manner the
provisions contained in this subsection 8.6.1, (ii) no amendment, modification,
termination or waiver of any provision of any Note shall be effective without
the written concurrence of the Lender which is the holder of that Note; and
(iii) no amendment, modification, termination or waiver of any provision of
Section 9 or of any other provision of this Agreement which, by its terms,
expressly requires the approval or concurrence of the Agent shall be effective
without the written concurrence of the Agent. The Agent may, but shall have no
obligation to, with the concurrence of any Lender, execute amendments,
modifications, waivers or consents on behalf of that Lender. Any waiver or
consent shall be effective only in the specific instance and for the specific
purpose for which it was given. No notice to or demand on Borrower in any case
shall entitle Borrower to any other or further notice or demand in similar or
other circumstances. Any amendment, modification, termination, waiver or consent
effected in accordance with this Section 8.6.1 shall be binding upon each Lender
at the time outstanding, each future Lender and, if signed by Borrower, on
Borrower.
8.6.2 Deemed Consent. If the Agent delivers a written request for the
Lenders' approval or a proposed amendment or modification to, or waiver of, this
Agreement, each Lender shall, within ten (10) Business Days of receiving such
request for approval or proposed amendment, modification or waiver, give Agent
written notice that either (i) it grants its consent or approves such amendment,
modification or waiver or (ii) it does not grant its consent or does not approve
such amendment, modification or waiver; provided that if any Lender does not
respond within such ten (10) Business Days, such Lender shall be deemed to have
granted its consent or approved such amendment, modification or waiver.
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8.7 Independence of Covenants.
All covenants hereunder shall be given independent effect so that if a
particular action or condition is not permitted by any of such covenants, the
fact that it would be permitted by an exception to, or would otherwise be within
the limitations of, another covenant shall not avoid the occurrence of an Event
of Default or Potential Event of Default if such action is taken or condition
exists.
8.8 Notices.
Unless otherwise specifically provided herein, any notice or other
communication herein required or permitted to be given shall be in writing and
may be personally served or sent by telefacsimile or courier service and shall
be deemed to have been given when delivered in person or by courier service or
upon receipt of the telefacsimile, as the case may be. For the purposes hereof,
the address of each party hereto shall be as set forth under such party's name
on the signature pages hereof or (i) as to any Loan Party and the Agent, such
other address as shall be designated by such Person in a written notice
delivered to the other parties hereto and (ii) as to each other party, such
other address as shall be designated by such party in a written notice delivered
to the Agent.
8.9 Survival of Representations, Warranties and Agreements.
8.9.1 Except as provided below, all representations, warranties and
agreements made herein shall survive the execution and delivery of this
Agreement and the making of the Loans and the issuance of the Letters of Credit
and shall terminate upon indefeasible payment in full of the Obligations,
notwithstanding anything in this Agreement or implied by law to the contrary.
8.9.2 Notwithstanding anything in this Agreement or implied by law
to the contrary, the agreements of Borrower set forth in Sections 4.10, 8.3,
and 8.5 shall survive the payment in full of the other Obligations and the
termination of this Agreement.
8.10 Agent's Discretion.
Whenever pursuant to this Agreement or any other Loan Document the
Agent exercises any right given to it to approve or disapprove, or any
arrangement or term is to be satisfactory to the Agent, the decision of the
Agent to approve or disapprove or to decide whether arrangements or terms are
satisfactory or not satisfactory shall (except as is otherwise specifically
herein provided) be in the sole discretion of the Agent. Borrower acknowledges
and agrees that, notwithstanding anything in this Agreement to the contrary,
certain decisions to be made by the Agent under this Agreement may be subject to
or determined by the further decision by the Lenders or a percentage of the
Lenders.
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8.11 Obligations Several; Independent Nature of the Lenders'
Rights.
The obligations of the Lenders hereunder are several and no Lender
shall be responsible for the obligations of any other Lender hereunder. Nothing
contained herein or in any other Loan Document, and no action taken by the
Lenders pursuant hereto or thereto, shall be deemed to constitute the Lenders as
a partnership, an association, a joint venture or any other kind of entity. The
amounts payable at any time hereunder to each Lender shall be a separate and
independent debt, and each Lender shall be entitled to protect and enforce its
rights arising out of this Agreement and it shall not be necessary for any other
Lender to be joined as an additional party in any proceeding for such purpose.
8.12 Remedies of Loan Parties.
In the event that a claim or adjudication is made that Agent or any
Lender or their respective agents has acted unreasonably or unreasonably delayed
acting in any case where by law or under this Agreement, the Note, the Mortgages
or the other Loan Documents, the Agent, such Lender or such agent, as the case
may be, has an obligation to act reasonably or promptly, the Loan Parties agree
that none of the Agent, any Lender or such agents, shall be liable for any
monetary damages, and each Loan Party's sole remedies shall be limited to
commencing an action seeking injunctive relief or declaratory judgement. The
parties hereto agree that any action or proceeding to determine whether the
Agent or any Lender has acted reasonably shall be determined by an action
seeking declaratory judgment.
8.13 Maximum Amount.
8.13.1 It is the intention of Borrower and the Lenders to conform
strictly to the usury and similar laws relating to interest from time to time in
force, and all agreements between the Loan Parties and their respective
Subsidiaries and the Lenders, whether now existing or hereafter arising and
whether oral or written, are hereby expressly limited so that in no contingency
or event whatsoever, whether by acceleration of maturity hereof or otherwise,
shall the amount paid or agreed to be paid in the aggregate to the Lenders as
interest (whether or not designated as interest, and including any amount
otherwise designated but deemed to constitute interest by a court of competent
jurisdiction) hereunder or under the other Loan Documents or in any other
agreement given to secure the indebtedness of Borrower to the Lenders, or in any
other document evidencing, securing or pertaining to the indebtedness evidenced
hereby, exceed the maximum amount permissible under applicable usury or such
other laws (the "Maximum Amount"). If under any circumstances whatsoever
fulfillment of any provision hereof, or any of the other Loan Documents, at the
time performance of such provision shall be due, shall involve exceeding the
Maximum
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Amount, then, ipso facto, the obligation to be fulfilled shall be reduced to the
Maximum Amount. For the purposes of calculating the actual amount of interest
paid and/or payable hereunder in respect of laws pertaining to usury or such
other laws, all sums paid or agreed to be paid to the holder hereof for the use,
forbearance or detention of the indebtedness of Borrower evidenced hereby,
outstanding from time to time shall, to the extent permitted by Applicable Law,
be amortized, pro-rated, allocated and spread from the date of disbursement of
the proceeds of the Notes until payment in full of all of such indebtedness, so
that the actual rate of interest on account of such indebtedness is uniform
through the term hereof. The terms and provisions of this Section shall control
and supersede every other provision of all agreements between Borrower or any
endorser of the Notes and the Lenders.
8.13.2 If under any circumstances any Lender shall ever receive an
amount which would exceed the Maximum Amount, such amount shall be deemed a
payment in reduction of the principal amount of the Loans and shall be treated
as a voluntary prepayment and shall be so applied in accordance with this
Agreement hereof or if such excessive interest exceeds the unpaid balance of the
Loans and any other indebtedness of Borrower in favor of such Lender, the excess
shall be deemed to have been a payment made by mistake and shall be refunded to
Borrower.
8.14 Marshalling; Payments Set Aside.
Neither the Agent nor any Lender shall be under any obligation to
marshal any assets in favor of Borrower, any other Loan Party or any other party
or against or in payment of any or all of the Obligations. To the extent that
Borrower or any other Loan Party makes a payment or payments to the Lenders or
the Agent (or to the Agent for the benefit of the Lenders), or the Agent or the
Lenders enforce any security interests or the Agent or any Lender exercises its
rights of setoff, and such payment or payments or the proceeds of such
enforcement or setoff or any part thereof are subsequently invalidated, declared
to be fraudulent or preferential, set aside and/or required to be repaid to a
trustee, receiver or any other party under any bankruptcy law, any other state
or federal law, common law or any equitable cause of action, then, to the extent
of such recovery, the obligation or part thereof originally intended to be
satisfied, and all Liens, rights and remedies therefor or related thereto, shall
be revived and continued in full force and effect as if such payment or payments
had not been made or such enforcement or setoff had not occurred.
8.15 Severability.
In case any provision in or obligation under this Agreement or any Note
or any other Loan Document shall be invalid, illegal or unenforceable in any
jurisdiction or under any set of circumstances, the validity, legality and
enforceability of the
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remaining provisions or obligations, or of such provision or obligation in any
other jurisdiction or under any other set of circumstances, shall not in any way
be affected or impaired thereby.
8.16 Headings.
Section and Section headings in this Agreement are included herein for
convenience of reference only and shall not constitute a part of this Agreement
for any other purpose or be given any substantive effect.
8.17 Applicable Law.
THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
HEREUNDER AND UNDER THE OTHER LOAN DOCUMENTS SHALL BE GOVERNED BY, AND SHALL BE
CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW
YORK (INCLUDING WITHOUT LIMITATION SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW
OF THE STATE OF NEW YORK), WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES,
EXCEPT AS SET FORTH BELOW. THE PARTIES ACKNOWLEDGE THAT NEW YORK HAS A
SUBSTANTIAL RELATIONSHIP TO THE UNDERLYING TRANSACTIONS RELATED TO THIS
AGREEMENT AND TO THE PARTIES INVOLVED.
NOTWITHSTANDING THE FOREGOING, THE PARTIES AGREE THAT:
(A) THE LAW OF THE STATE IN WHICH EACH MORTGAGED PROPERTY IS SITUATED (THE
"SITUS STATE") GOVERNS PROCEDURES FOR ENFORCING, IN THE SITUS STATE,
PROVISIONAL REMEDIES DIRECTLY RELATED TO SUCH REAL PROPERTY, INCLUDING,
WITHOUT LIMITATION, APPOINTMENT OF A RECEIVER.
(B) THE LAW OF THE SITUS STATE ALSO APPLIES TO THE EXTENT, BUT
ONLY TO THE EXTENT, NECESSARY TO CREATE, TO PERFECT, AND TO
FORECLOSE THE SECURITY INTERESTS AND LIENS CREATED BY THE
LOAN DOCUMENTS, BUT DOES NOT APPLY TO ANY OBLIGATION SECURED
THEREBY. THOSE OBLIGATIONS ARE GOVERNED BY NEW YORK LAW.
IN FURTHERANCE OF THE FOREGOING, THE PARTIES STIPULATE AND
AGREE THAT LENDER MAY ENFORCE IN ACCORDANCE WITH NEW YORK
LAW ANY OR ALL OF ITS RIGHTS TO ▇▇▇ ANY LOAN PARTY OTHER
THAN THE NON-RECOURSE PARTIES TO COLLECT ANY INDEBTEDNESS,
AND TO OBTAIN A DEFICIENCY JUDGMENT AGAINST BORROWER IN THE
SITUS STATE, NEW YORK, OR ELSEWHERE, BEFORE OR AFTER
FORECLOSURE, AND IF LENDER OBTAINS A DEFICIENCY JUDGMENT
OUTSIDE THE SITUS STATE, IT MAY ENFORCE THAT JUDGMENT IN THE
SITUS STATE, AS WELL AS IN OTHER STATES.
8.18 Successors and Assigns.
This Agreement shall be binding upon the parties hereto and their
respective successors and assigns and shall inure to the benefit of the parties
hereto and the successors and assigns of the Agent and the Lenders. Neither the
Loan Parties' rights or
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obligations hereunder nor any interest therein may be assigned or
delegated by the Loan Parties.
8.19 Consent to Jurisdiction and Service of Process.
ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST THE LOAN PARTIES
ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR ANY
OBLIGATIONS THEREUNDER, MAY BE BROUGHT IN ANY STATE OR FEDERAL COURT OF
COMPETENT JURISDICTION IN ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇. BY EXECUTING
AND DELIVERING THIS AGREEMENT, EACH LOAN PARTY, FOR ITSELF AND IN CONNECTION
WITH ITS PROPERTIES, IRREVOCABLY
(I) ACCEPTS GENERALLY AND UNCONDITIONALLY THE
NONEXCLUSIVE JURISDICTION AND VENUE OF SUCH COURTS;
(II) WAIVES ANY DEFENSE OF FORUM NON CONVENIENS;
(III) AGREES THAT SERVICE OF ALL PROCESS IN ANY SUCH
PROCEEDING IN ANY SUCH COURT MAY BE MADE BY REGISTERED OR CERTIFIED
MAIL, RETURN RECEIPT REQUESTED, TO BORROWER AT ITS ADDRESS PROVIDED IN
ACCORDANCE WITH SECTION 8.8;
(IV) AGREES THAT SERVICE AS PROVIDED IN CLAUSE (III)
ABOVE IS SUFFICIENT TO CONFER PERSONAL JURISDICTION OVER COMPANY IN ANY
SUCH PROCEEDING IN ANY SUCH COURT, AND OTHERWISE CONSTITUTES EFFECTIVE
AND BINDING SERVICE IN EVERY RESPECT;
(V) AGREES THAT LENDER RETAINS THE RIGHT TO SERVE
PROCESS AND PURSUE ITS REMEDIES IN ANY OTHER MANNER PERMITTED BY LAW
AND TO BRING PROCEEDINGS AGAINST THE LOAN PARTIES IN THE COURTS OF ANY
OTHER JURISDICTION; AND
(VI) AGREES THAT THE PROVISIONS OF THIS SECTION RELATING
TO JURISDICTION AND VENUE SHALL BE BINDING AND ENFORCEABLE TO THE
FULLEST EXTENT PERMISSIBLE UNDER NEW YORK GENERAL OBLIGATIONS LAW
SECTION 5-1402 OR OTHERWISE.
8.20 Waiver of Jury Trial.
EACH OF THE PARTIES TO THIS AGREEMENT HEREBY AGREES TO WAIVE ITS
RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR
ARISING OUT OF THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR ANY DEALINGS BETWEEN
THEM RELATING TO THE SUBJECT MATTER OF THIS LOAN TRANSACTION OR THE
LENDER/BORROWER RELATIONSHIP THAT IS BEING ESTABLISHED HEREBY AND THEREBY. The
scope of this waiver is intended to be all-encompassing of any and all disputes
that may be filed in any court and that relate to the subject matter of this
transaction, including contract claims, tort claims, breach of duty claims and
all other common law and statutory claims. Each party hereto acknowledges that
this waiver is a material inducement to enter into a business relationship, that
each has already relied on this waiver in
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entering into this Agreement and the other Loan Documents, and that each will
continue to rely on this waiver in their related future dealings. Each party
hereto further warrants and represents that it has reviewed this waiver with its
legal counsel and that it knowingly and voluntarily waives its jury trial rights
following consultation with legal counsel. THIS WAIVER IS IRREVOCABLE, MEANING
THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING (OTHER THAN BY A MUTUAL
WRITTEN WAIVER SPECIFICALLY REFERRING TO THIS SECTION AND EXECUTED BY EACH OF
THE PARTIES HERETO), AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS,
RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT OR ANY OF THE OTHER
LOAN DOCUMENTS OR TO ANY OTHER DOCUMENTS OR AGREEMENTS RELATING TO THE LOAN MADE
HEREUNDER. In the event of litigation, this Agreement may be filed as a written
consent to a trial by the court.
8.21 Counterparts; Effectiveness.
This Agreement and any amendments, waivers, consents or supplements
hereto or in connection herewith may be executed in any number of counterparts
and by different parties hereto in separate counterparts, each of which when so
executed and delivered shall be deemed an original, but all such counterparts
together shall constitute but one and the same instrument; signature pages may
be detached from multiple separate counterparts and attached to a single
counterpart so that all signature pages are physically attached to the same
document. This Agreement shall become effective upon the execution of a
counterpart hereof by each of the parties hereto and receipt by Borrower and
Lender of written or telephonic notification of such execution and authorization
of delivery thereof.
8.22 Material Inducement.
Each Loan Party acknowledges that its representations, warranties,
covenants and agreements contained in this Agreement and the other Loan
Documents are material inducements to the Lenders to enter into this Agreement
and to make the Loans, that the Lenders have already relied on such
representations, warranties, covenants and agreements in entering into this
Agreement and agreeing to make the Loans (notwithstanding any investigation
heretofore or hereafter made by or on behalf of the Lenders), and that the
Lenders will continue to rely on such representations, warranties, covenants and
agreements in their future dealings with the Loan Parties. Borrower represents
and warrants that it has reviewed this Agreement and the other Loan Documents
with its legal counsel and that it knowingly and voluntarily is entering into
this Agreement and the other Loan Documents following consultation with legal
counsel.
8.23 Entire Agreement.
This Agreement is evidence of the indebtedness incurred pursuant hereto
and, taken together with all of the other Loan
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Documents and all certificates and other documents delivered to Lender hereunder
and thereunder, embodies the entire agreement and supersedes all prior
agreements, written and oral, relating to the subject matter hereof. This
Agreement and the other Loan Documents constitute the final expression of the
agreement between the parties hereto and this Agreement and such other Loan
Document may not be contradicted by evidence of any alleged oral agreement.
8.24 Additional Mortgaged Property Subsidiaries.
The initial Mortgaged Property Subsidiaries hereunder shall be such of
the Mortgaged Property Subsidiaries as are signatories to the Joinder attached
hereto on the date hereof. From time to time subsequent to the date hereof, and
pursuant to the terms of Section 2.13 of this Agreement, additional Mortgaged
Property Subsidiaries may become parties hereto, as additional Loan Parties
(each an "Additional Loan Party"), by executing a counterpart of this Agreement
in the form attached as Schedule 8.24 hereto. Upon delivery of any such
counterpart to the Agent, notice of which is hereby waived by the Loan Parties,
each such Additional Loan Party shall be a Loan Party as fully a party hereto as
if such Additional Loan Party were an original signatory hereof. Each Loan Party
expressly agrees that its obligations arising hereunder shall not be affected or
diminished by the addition or release of any other Loan Party hereunder, nor by
any election of the Agent not to cause any Mortgaged Property Subsidiary to
become an Additional Loan Party hereunder.
ARTICLE 9
AGENT
9.1 Appointment.
Bankers Trust Company is hereby appointed the Agent hereunder and under
the other Loan Documents and each Lender hereby authorizes the Agent to act as
its agent in accordance with the terms of this Agreement and the other Loan
Documents. The Agent agrees to act upon the express conditions contained in this
Agreement and the other Loan Documents, as applicable. The provisions of this
Article 9 are solely for the benefit of the Agent and Lenders and no Loan Party
or any other Person shall have any rights as a third party beneficiary of any of
the provisions hereof. In performing its functions and duties under this
Agreement and the other Loan Documents, the Agent shall act solely as an agent
of Lenders and does not assume and shall not be deemed to have assumed any
obligation towards or relationship of agency or trust with or for Borrower, any
other Loan Party or any of their respective Subsidiaries.
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9.2 Powers; General Immunity.
9.2.1 Duties Specified. Each Lender irrevocably authorizes the Agent to
take such action on such Lender's behalf and to exercise such powers hereunder
and under the other Loan Documents as are specifically delegated to the Agent by
the terms hereof and thereof, together with such powers as are reasonably
incidental thereto. The Agent shall have only those duties and responsibilities
that are expressly specified in this Agreement and the other Loan Documents and
it may perform such duties by or through its agents or employees. The Agent
shall not have, by reason of this Agreement or any of the other Loan Documents,
a fiduciary relationship in respect of any Lender; and nothing in this Agreement
or any of the other Loan Documents, expressed or implied, is intended to or
shall be so construed as to impose upon the Agent any obligations in respect of
this Agreement or any of the other Loan Documents except as expressly set forth
herein or therein. The Agent shall be deemed to have exercised reasonable care
in servicing the Loans if it accords the Loans treatment substantially equal to
that which the Agent accords loans for its own account.
9.2.2 No Responsibility for Certain Matters. The Agent shall not be
responsible to any Lender for the execution, effectiveness, genuineness,
validity, enforceability, collectibility or sufficiency of this Agreement or
any Loan Document or for any representations, warranties, recitals or
statements made herein or therein or made in any written or oral statements
or in any financial or other statements (other than representations made by
the Agent in this Agreement), instruments, reports or certificates or any
other documents furnished or made by the Agent to Lenders or by or on behalf
of any Loan Party to the Agent or any Lender in connection with the other
Loan Documents and the transactions contemplated thereby or for the financial
condition or business affairs of Borrower or any other Person liable for the
payment of any Obligations, nor (except as expressly set forth in the Loan
Documents) shall the Agent be required to ascertain or inquire as to the
performance of any of the provisions of the Loan Documents or the existence
or possible existence of any Event of Default or Potential Event of Default.
Anything contained in this Agreement or in the other Loan Documents to the
contrary notwithstanding, the Agent shall not have any liability arising from
confirmations of the amount of outstanding Loans or the component amounts
thereof, absent gross negligence or willful misconduct.
9.2.3 Exculpatory Provisions. Neither the Agent nor any of its
officers, directors, employees or agents shall be liable to Lenders for any
action taken or omitted by the Agent under or in connection with any of the Loan
Documents except to the extent caused by the Agent's gross negligence or willful
misconduct. If the Agent shall request instructions from Lenders with respect to
any act or action (including the failure to take an action) in connection with
this Agreement or any of the other Loan
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Documents, the Agent shall be entitled to refrain from such act or taking such
action unless and until the Agent shall have received instructions from
Requisite Lenders (or, if expressly required by the terms of this Agreement, all
Lenders). Without prejudice to the generality of the foregoing, (i) the Agent
shall be entitled to rely, and shall be fully protected in relying, upon any
communication, instrument or document believed by it to be genuine and correct
and to have been signed or sent by the proper Person or Persons, and shall be
entitled to rely and shall be protected in relying on opinions and judgments of
attorneys (who may be attorneys for one or more of the Loan Parties and their
respective Subsidiaries), accountants, experts and other professional advisors
selected by it; and (ii) no Lender shall have any right of action whatsoever
against the Agent as a result of the Agent acting or (where so instructed)
refraining from acting under this Agreement or any of the other Loan Documents
in accordance with the instructions of Majority Lenders (or, if expressly
required by this Agreement, all Lenders).
9.2.4 Agent Entitled to Act as Lender. The agency hereby created shall
in no way impair or affect any of the rights and powers of, or impose any duties
or obligations upon, the Agent in its individual capacity as a Lender hereunder.
With respect to its participation in the Loans, the Agent shall have the same
rights and powers hereunder as any other Lender and may exercise the same as
though it were not performing the duties and functions delegated to it
hereunder, and the term "Lender" or "Lenders" or any similar term shall, unless
the context clearly otherwise indicates, include the Agent in its individual
capacity as a Lender. The Agent and its Affiliates may accept deposits from,
lend money to and generally engage in any kind of banking, trust, financial
advisory or other business with any Loan Party or any of their respective
Affiliates as if it were not performing the duties specified herein, and may
accept fees and other consideration from Borrower or any other Loan Party for
services in connection with this Agreement and otherwise without having to
account for the same to Lenders. Without limiting the generality of the
foregoing, each Lender hereby acknowledges that, as of the date of this
Agreement, Bankers Trust Company is the lender under, and holds the Indebtedness
of the borrowers under, the Term Loan Agreement.
9.3 Representations and Warranties; No Responsibility For
Appraisal of Creditworthiness.
Each Lender represents and warrants that it has made its own
independent investigation of the financial condition and affairs of Borrower,
the other Loan Parties and their respective Subsidiaries in connection with the
making of the Loans under the Credit Agreement and that it has made and shall
continue to make its own appraisal of the creditworthiness of Borrower, the
other Loan Parties and their respective Subsidiaries. The Agent shall not have
any duty or responsibility, either initially or on a continuing basis, to make
any such investigation or any such ap-
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praisal on behalf of Lenders. The Agent shall not have any responsibility with
respect to the accuracy of or the completeness of any information provided by
the Agent to Lenders.
9.4 Right to Indemnity.
Each Lender, in proportion to its Pro Rata Share, severally agrees to
indemnify the Agent, to the extent that the Agent shall not have been reimbursed
by Borrower or any other Loan Party within 30 days of delivery by the Agent to
Borrower of a written request for reimbursement, for and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses (including, without limitation, counsel fees and disbursements)
or disbursements of any kind or nature whatsoever which may be imposed on,
incurred by or asserted against the Agent in performing its duties hereunder or
under the other Loan Documents or otherwise in its capacity as the Agent in any
way relating to or arising out of this Agreement or the other Loan Documents;
provided that no Lender shall be liable for any portion of such liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements resulting from the Agent's gross negligence or willful
misconduct; provided further that upon the consummation of an assignment of all
or any portion of a Lender's interest under the Loan Documents in accordance
with this Agreement (including without limitation the requirements that (i) the
assignee assume all obligations (or the applicable percentage thereof) of the
assigning Lender and (ii) the Agent consent in writing to such assignment), the
assigning Lender shall be released from its obligations pursuant to this Section
9.4 (or the applicable percentage thereof). If any indemnity furnished to the
Agent for any purpose shall, in the opinion of the Agent, be insufficient or
become impaired, the Agent may call for additional indemnity and cease, or not
commence, to do the acts indemnified against until such additional indemnity is
furnished. The Agent shall remit to each applicable Lender its allocable share
of any recovery from Borrower or another Loan Party of amounts previously paid
by such Lender.
9.5 Payee of Note Treated as Owner.
The Agent may deem and treat the holder of any Note as the owner
thereof for all purposes hereof unless and until a written notice of the
assignment or transfer thereof shall have been filed with the Agent by the
registered holder of the applicable Note. Any request, authority or consent of
any Person who, at the time of making such request or giving such authority or
consent, is the holder of any Note shall be conclusive and binding on any
subsequent holder, transferee or assignee of that Note or of any Note or Notes
issued in exchange therefor.
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9.6 Security Documents, Etc.
9.6.1 Security Documents. Each Lender hereby further authorizes the
Agent to enter into the Security Documents as secured party on behalf of and for
the benefit of Lenders in connection with the Obligations and agrees to be bound
by the terms of the Security Documents; provided that anything in this Agreement
or the other Loan Documents to the contrary notwithstanding:
9.6.1.1 The Agent is authorized on behalf of all Lenders,
without the necessity of any notice to or further consent from the
Lenders, from time to time to take any action with respect to any
Collateral or the Security Documents which may be necessary or
reasonably desirable to perfect and maintain perfected the security
interest in and Liens upon the Collateral granted pursuant to the
Security Documents.
9.6.1.2 The Lenders irrevocably authorize the Agent, at its
option and in its discretion, to release any Lien granted to or held by
the Agent upon any Collateral (a) upon termination of the Commitments
and payment in full of the Loans and all other Obligations payable
under this Agreement and under any other Loan Document; (b)
constituting property sold or to be sold or disposed of as part of or
in connection with any disposition permitted under this Agreement
(including the application of Insurance Proceeds and Condemnation
Proceeds in accordance with the terms of this Agreement); (c)
constituting property leased to any Loan Party under a lease which has
expired or been terminated in a transaction permitted under this
Agreement or is about to expire and which has not been, and is not
intended by such Loan Party to be, renewed or extended; or (d)
consisting of an instrument evidencing Indebtedness if the Indebtedness
evidenced thereby has been paid in full. Upon request by the Agent at
any time, Lenders will confirm in writing the Agent's authority to
release or otherwise deal with particular types or items of Collateral
pursuant to this Section 9.6.1.
9.6.2 Lender Action. Anything contained in any of the Loan Documents to
the contrary notwithstanding, each Lender agrees that, without prior written
consent of the Agent, no Lender shall have any right individually to realize
upon any of the Collateral under the Security Documents (including without
limitation through the exercise of a right of set-off against call deposits of
such Lender in which any funds on deposit in the Security Documents may from
time to time be invested), it being understood and agreed that all rights and
remedies under the Security Documents may be exercised solely by the Agent for
the benefit of Lenders in accordance with the terms thereof.
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9.7 Successor Agent.
The Agent may resign at any time by giving thirty (30) days' prior
written notice thereof to Lenders and Borrower, and the Agent may be removed at
any time solely for cause by an instrument or concurrent instruments in writing
delivered to Borrower and the Agent and signed by all Lenders (excluding Agent).
Upon any such notice of resignation or any such removal, the Lenders (excluding
Agent) shall have the right, upon five Business Days' notice to Borrower, to
appoint a successor Agent (which successor shall, in the absence of any
Potential Event of Default or Event of Default, be reasonably acceptable to
Borrower); provided, that if such Lenders cannot agree on a successor Agent by
the thirtieth (30th) day after the Agent's delivery of such notice or upon such
removal, the Agent shall have the right to appoint a successor Agent. Upon the
acceptance of any appointment as the Agent hereunder by a successor Agent, that
successor Agent shall thereupon succeed to and become vested with all the
rights, powers, privileges and duties of the retiring or removed Agent and the
retiring or removed Agent shall be discharged from its duties and obligations
under this Agreement. After any retiring or removed Agent's resignation or
removal hereunder as the Agent, such retiring or removed Agent shall continue to
have the benefit of the provisions of this Agreement with respect to any actions
taken or omitted to be taken by it while it was the Agent under this Agreement
and the other Loan Documents.
[Remainder of page intentionally left blank.]
125
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered by their respective officers thereunto duly
authorized as of the date first written above.
LOAN PARTIES: CORPORATE OFFICE PROPERTIES, L.P.,
a Delaware limited partnership
By: Corporate Office Properties Trust, a
Maryland real estate investment
trust, its sole general partner
By: ▇▇▇▇▇▇ ▇▇▇▇▇▇
--------------------------
Its: VP Finance
--------------------------
By:
--------------------------
Its:
--------------------------
Notice Address:
Corporate Office Properties Trust
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
CORPORATE OFFICE PROPERTIES TRUST,
a Maryland real estate investment trust
By: ▇▇▇▇▇▇ ▇▇▇▇▇▇
-----------------------------
Its: VP Finance
-----------------------------
By:
-----------------------------
Its:
-----------------------------
Notice Address:
Corporate Office Properties Trust
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
S-1
LENDER: BANKERS TRUST COMPANY,
as a Lender and the Agent
By: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------
Title: Vice President
---------------------------
Notice Address:
Bankers Trust Company
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇
S-2
APPENDIX I
DEFINED TERMS
"Acquisition Agreements" means, collectively, the agreements entered
into after the Closing Date by COPT or any of its Subsidiaries in connection
with the acquisition of any fee interest in any Mortgaged Property.
"Acquisition Date" means, with respect to any Mortgaged Property, the
date such Mortgaged Property was acquired by Borrower or, if applicable, a
Mortgaged Property Subsidiary.
"Addition Certificate" means a certificate delivered to the Agent by
Borrower pursuant to Section 2.13 substantially in the form attached as Exhibit
F hereto.
"Addition Date" means the following:
(i) with respect to any Mortgaged Property listed on
Schedule 1.1A as of the Closing Date, the Closing Date;
(ii) with respect to any Additional Mortgaged Property
designated after the Closing Date in accordance with Section 2.13, the
effective date on which such Additional Mortgaged Property is added to
the Borrowing Base in accordance with the provisions of Section 2.13.
"Additional Mortgaged Property" has the meaning assigned to
that term in Section 2.13.
"Adjusted LIBOR Rate" means, for any Interest Rate Determination Date
with respect to a LIBOR Rate Loan, the rate per annum obtained by dividing (i)
the LIBOR offered rate for deposits with maturities comparable to the Interest
Period for which such Adjusted LIBOR Rate will apply as of approximately 10:00
A.M. (New York time) on such Interest Rate Determination Date as reasonably
determined by the Agent, by (ii) a percentage equal to 100% minus the stated
maximum rate of all reserve requirements (including any marginal, emergency,
supplemental, special or other reserves) applicable on such Interest Rate
Determination Date to any member bank of the Federal Reserve System in respect
of "Eurocurrency liabilities" as defined in Regulation D (or any successor
category of liabilities under Regulation D).
"Affected Lender" has the meaning assigned to that term in
Section 2.11.3.
"Affected Loans" has the meaning assigned to that term in
Section 2.11.3.
1
"Affiliate" means with respect to any Person, any other Person directly
or indirectly controlling, controlled by, or under common control with, that
Person. For the purposes of this definition, "control" (including, with
correlative meanings, the terms "controlling", "controlled by" and "under common
control with"), as applied to any Person, means the possession, directly or
indirectly, of the power to direct or cause the direction of the management and
policies of that Person, whether through the ownership of voting securities or
by contract or otherwise.
"Agent" has the meaning assigned to that term in the introduction to
this Agreement and also means and includes any successor Agent hereunder.
"Agreement" means this Senior Secured Revolving Credit Agreement dated
as of the date first written above, as it may be amended, restated, supplemented
or otherwise modified from time to time.
"ALTA" means the American Land Title Association or any
successor thereto.
"Anniversary" means each anniversary of the Closing Date.
"Applicable Laws" means, collectively, all statutes, laws, rules,
regulations, ordinances, orders, decisions, writs, judgments, decrees and
injunctions of Governmental Authorities (including Environmental Laws) affecting
Borrower, any Loan Party or the Collateral or any part thereof (including the
acquisition, development, construction, Renovation, occupancy, use, improvement,
alteration, management, operation, maintenance, repair or restoration thereof),
whether now or hereafter enacted and in force, and all Authorizations relating
thereto, and all covenants, conditions and restrictions contained in any
instruments, either of record or known to Borrower or any other Loan Party, at
any time in force affecting any Property or any part thereof, including any such
covenants, conditions and restrictions which may (i) require improvements,
repairs or alterations in or to such Property or any part thereof or (ii) in any
way limit the use and enjoyment thereof; for purposes of usury, Applicable Laws
means the law of the State of New York applicable to maximum rates of interest.
"Appraisal" means, with respect to any Mortgaged Property or any
Additional Mortgaged Property, a written appraisal of such Mortgaged Property
prepared by an Appraiser and requested by the Agent pursuant to Section 5.6.2 or
delivered to the Agent pursuant to Section 3.1.12, in each case in form, content
and methodology satisfactory to the Agent and in compliance with all applicable
legal and regulatory requirements (including the requirements of Title XI of the
Financial Institutions Reform, Recovery and Enforcement Act of 1989, 12 U.S.C.
▇▇.▇▇. 3331, et seq., as amended (or any successor statute thereto), and the
regulations promulgated thereunder).
2
"Appraised Value" means, as of any date of determination and with
respect to any Mortgaged Property, the appraised value of such Mortgaged
Property, in each case as most recently determined by an Appraisal approved by
the Agent on or before such date of determination and subject to the
requirements set forth in Section 5.6.2.
"Appraiser" means any independent appraiser selected by the Agent and
reasonably acceptable to Borrower who meets all regulatory requirements
applicable to the Agent and the Lenders, who is a member of the Appraisal
Institute with a national practice and who has at least 10 years experience with
real estate of the same type as the Property to be appraised.
"Approved Bank" means banks which have (i)(a) a minimum net worth of
$500,000,000 and/or (b) total assets of $10,000,000,000, and (ii) a minimum long
term debt rating of (a) BBB+ or higher by S&P, and (b) Baal or higher by
▇▇▇▇▇'▇.
"Approved Environmental Consultant" means any of the environmental
consultants who prepared the environmental audits delivered to the Agent
pursuant to Section 3.1.11 or any other qualified, independent environmental
consultant reasonably acceptable to the Agent.
"Assignment Agreement" shall mean an agreement substantially in the
form of Exhibit G annexed hereto.
"Assignment of Rents and Leases" means each Assignment of Rents and
Leases executed and acknowledged by Borrower or, if applicable, a Mortgaged
Property Subsidiary in favor of the Agent for the benefit of the Lenders in form
and substance satisfactory to the Agent, as any such Assignment of Rents and
Leases may be amended, restated, supplemented, consolidated, extended or
otherwise modified from time to time in accordance with the terms thereof and
hereof.
"Authorization" means any authorization, approval, franchise, license,
variance, land use entitlement, sewer and waste water discharge permit, storm
water discharge permit, air pollution authorization to operate, certificate of
occupancy, municipal water and sewer connection permit, and any like or similar
permit now or hereafter required for the construction or renovation of any
Improvements located on any Mortgaged Property or for the use, occupancy or
operation of any Mortgaged Property and all amendments, modifications,
supplements and addenda thereto.
"Authorized Officer" means the President; Chief Executive
Officer; Vice President; Chief Investment Officer; and Vice
President, Finance and Treasurer of COPT, the sole general
partner of Borrower.
3
"Available Amount" means, as of the date of determination, the least of
(i) the Borrowing Base then in effect; (ii) the aggregate amount of Commitments
then in effect; and (iii) the aggregate amount of title insurance pursuant to
Title Policies delivered pursuant to Section 3.1.6.4 with respect to Mortgaged
Properties.
"Bankruptcy Code" means Title 11 of the United States Code entitled
"Bankruptcy", as now and hereafter in effect, or any successor statute.
"Base Rate" means, at any time, the rate per annum that is the higher
of (i) the Prime Rate or (ii) the sum of (a) the Federal Funds Effective Rate
plus (b) 1/2 of 1%.
"Base Rate Loans" means Loans bearing interest at rates determined by
reference to the Base Rate as provided in Section 2.7.
"Borrower" has the meaning assigned to that term in the
introduction to this Agreement.
"Borrowing Base" means, as of any date of determination from and after
the Closing Date through and including the Maturity Date, the amount determined
by the Agent as of the last day of the preceding month or, if subsequent
thereto, the most recent Addition Date or Release Date, that is equal to the sum
of the Property Amounts in respect of all Mortgaged Properties as of such date
of determination. The Borrowing Base is subject to recomputation and adjustment
from time to time as provided in this Agreement.
"Borrowing Base Certificate" means a certificate substantially in the
form annexed hereto as Exhibit E delivered by Borrower pursuant to Section
3.1.4.4 or 5.1.2.
"Business Day" means (i) for all purposes other than as covered by (ii)
below, any day excluding Saturday, Sunday and any day which is a legal holiday
under the laws of the State of New York or is a day on which banking
institutions located in such state are authorized or required by law or other
governmental action to close and (ii) with respect to notices, determinations,
fundings and payments in connection with the Adjusted LIBOR Rate or any LIBOR
Rate Loans, any day that is a Business Day described in clause (i) above and
that is also a day for trading by and between banks in Dollar deposits in the
London interbank market.
"Capital Expenditures" means, with respect to any Property, for any
period and as of any date of determination, all expenditures for capital
improvements, determined in accordance with GAAP.
"Capital Stock" means, with respect to any Person, any
capital stock, partnership, limited liability company or joint
4
venture interests of such Person and shares, interests, participations or other
ownership interests (however designated) of any Person and any rights (other
than debt securities convertible into any of the foregoing), warrants or options
to purchase any of the foregoing.
"Cash" means money, currency or a credit balance in a
Deposit Account.
"Cash Equivalents" means, as of any date of determination, (i)
marketable securities (a) issued or directly and unconditionally guaranteed as
to interest and principal by the United States of America or (b) issued by any
agency of the United States of America the obligations of which are backed by
the full faith and credit of the United States of America, in each case maturing
within one year after such date; (ii) marketable direct obligations issued by
any state of the United States of America or any political subdivision of any
such state or any public instrumentality thereof, in each case maturing within
one year after such date and having, at the time of the acquisition thereof, the
highest rating obtainable from either S&P or ▇▇▇▇▇'▇; (iii) commercial paper
maturing no more than one year from the date of creation thereof and having, at
the time of the acquisition thereof, a rating of at least A-1 from S&P or at
least P-1 from ▇▇▇▇▇'▇; (iv) LIBOR deposits due within one year of any
commercial banks whose outstanding senior long-term debt securities are rated
either A- or higher by S&P or A-3 or higher by ▇▇▇▇▇'▇; (v) repurchase
obligations with a term of not more than 7 days for underlying securities of the
types described in clause (i) of this paragraph with any bank meeting the
qualifications specified in clause (vi) of this paragraph; (vi) certificates of
deposit or bankers' acceptances maturing within one year after such date and
issued or accepted by Lender or by any commercial bank organized under the laws
of the United States of America or any state thereof or the District of Columbia
that (a) is at least "adequately capitalized" (as defined in the regulations of
its primary Federal banking regulator) and (b) has Tier 1 capital (as defined in
such regulations) of not less than $100,000,000; and (vii) shares of any money
market mutual fund that (a) has at least 95% of its assets invested continuously
in the types of investments referred to in clauses (i) and (ii) above, (b) has
net assets of not less than $500,000,000, and (c) has the highest rating
obtainable from either S&P or ▇▇▇▇▇'▇.
"Closing Date" means the first date on which all of the conditions set
forth in Article 3 are satisfied.
"Collateral" means, collectively, all property (including, without
limitation, Capital Stock, Partnership Interests and promissory notes and other
evidences of Indebtedness), whether real, personal or mixed, tangible or
intangible, owned or to be owned or leased or to be leased or otherwise held or
to be held by any Loan Party or in which any Loan Party has or shall acquire
5
an interest, to the extent of such Loan Party's interest therein, now or
hereafter granted, assigned, transferred, mortgaged or pledged to the Agent
and/or the Lenders or in which a Lien is granted to the Agent and/or the Lenders
to secure all or any part of the Obligations, whether pursuant to the Security
Documents or otherwise, including, without limitation, the Mortgaged Properties,
the Leases and Rents and any and all proceeds of the foregoing, and the
Partnership Interests pledged pursuant to the COPT Pledge Agreement.
"Commitment" means, collectively, the commitments of the Lenders to
make Loans to Borrower pursuant to Section 2.1.1, the aggregate outstanding
principal amount of such Loans not to exceed One Hundred Million Dollars
($100,000,000) at any time.
"Compliance Certificate" means a certificate delivered to Lender by
Borrower pursuant to Section 5.1.8 substantially in the form attached as Exhibit
D hereto.
"Condemnation Proceeds" means all compensation, awards, damages, rights
of action and proceeds awarded to any Loan Party by reason of any Taking.
"Consolidated Adjusted Net Income" means, for any period and without
duplication, for COPT and its Subsidiaries, the sum of the amounts for such
period of (i) Consolidated Net Income, (ii) Consolidated Interest Expense, (iii)
provisions for taxes based on income, (iv) total depreciation expense, (v) total
amortization expense, (vi) gains or losses on the sales of Mortgaged Properties
and other Properties, debt restructurings or other nonrecurring expenses, and
(vii) income expense attributable to minority interest; less a recurring capital
expense reserve equal to $0.15 per net rentable square foot for all Properties,
and as adjusted in a manner acceptable to Agent for (x) unconsolidated
partnerships, joint ventures and similar entities, and (y) straight line rents,
all of the foregoing as determined on a consolidated basis for COPT and its
Subsidiaries in conformity with GAAP.
"Consolidated Funds from Operations" means net income (loss) (computed
in accordance with GAAP), excluding gains (or losses) from debt restructuring
and sales of property, plus depreciation and amortization (specifically
including the amortization of deferred financial costs), and after adjustments
for unconsolidated partnerships and joint ventures. Adjustments for
unconsolidated partnerships and joint ventures will be calculated to reflect
funds from operations on the same basis. Consolidated Funds from Operations does
not represent cash generated from operating activities in accordance with GAAP
and, therefore, should not be considered as a substitute for net income as a
measure of results of operations or cash flow from operations calculated in
accordance with GAAP as a measure of liquidity.
6
"Consolidated Interest Expense" means, for any period, total interest
expense (including that portion attributable to capital leases in accordance
with GAAP and capitalized interest) of COPT and its Subsidiaries on a
consolidated basis with respect to all outstanding Indebtedness of COPT and its
Subsidiaries, such interest to be calculated for purposes of this Agreement
against the outstanding principal amounts such Indebtedness as follows:
(a) for the Loans, using a constant based on the then-current 10-year
Treasury Rate as of the date of determination, plus 1.75%, instead of
the interest rates actually applicable thereto;
(b) for all other fixed rate Indebtedness, at the interest
rates actually applicable thereto; and
(c) for all other variable rate Indebtedness, using a constant based on
the then-current 10-year Treasury Rate as of the date of determination,
plus 1.75%, instead of the interest rates actually applicable thereto.
"Consolidated Net Income" means, for any period, the net income (or
loss) of COPT and its Subsidiaries on a consolidated basis for such period taken
as a single accounting period determined in conformity with GAAP; provided that
there shall be excluded (i) the income (or loss) of any Person (other than a
Subsidiary of COPT) in which any other Person (other than COPT or any of its
Subsidiaries) has a joint interest, except to the extent of the amount of
dividends or other distributions actually paid to COPT or any of its
Subsidiaries by such Person during such period, (ii) the income (or loss) of any
Person accrued prior to the date it becomes a Subsidiary of COPT or is merged
into or consolidated with COPT or any of its Subsidiaries or that Person's
assets are acquired by COPT or any of its Subsidiaries, (iii) the income of any
Subsidiary of COPT to the extent that the declaration or payment of dividends or
similar distributions by that Subsidiary of that income is not at the time
permitted by operation of the terms of its charter or any agreement, instrument,
judgment, decree, order, statute, rule or governmental regulation applicable to
that Subsidiary, (iv) any after-tax gains or losses attributable to any
disposition of any assets of COPT or its Subsidiaries or returned surplus assets
of any Pension Plan, and (v) (to the extent not included in clauses (i) through
(iv) above) any net extraordinary gains or net non-cash extraordinary losses.
"Consolidated Tangible Net Worth" means, as at any date of
determination, the shareholders' equity of COPT and its Subsidiaries (determined
on a book basis), plus accumulated depreciation, less Intangible Assets, on a
consolidated basis determined in conformity with GAAP.
"Consolidated Total Assets" means, at any date of
determination, total assets of COPT and its Subsidiaries on a
7
consolidated basis which may properly be classified as assets in conformity with
GAAP plus, in the event that any guarantees of indebtedness of non-consolidated
joint ventures are included in the calculation of Consolidated Total Liabilities
for such period pursuant to clause (iii) of the definition of Consolidated Total
Liabilities, the pro rata share of COPT or such Subsidiary in the assets of such
non-consolidated joint venture. The value of any real property asset included in
Consolidated Total Assets shall be determined by capitalizing the Consolidated
Adjusted Net Income using a 9.5% capitalization rate; provided, however, in the
case of: (a) any real property asset owned less than one year, the value of such
asset shall be determined by using the aggregate purchase price for such asset;
and (b) any real property asset which is under development, the value of such
asset shall be determined by using the direct costs incurred in connection with
such development until the earlier of: (i) 30 months following the commencement
of construction of such asset and (ii) 12 months following receipt of a
certificate of occupancy, or the equivalent, with respect to such asset.
"Consolidated Total Indebtedness" means, as of any date of
determination, the sum of the following, without duplication: (i) all
Indebtedness of COPT and its Subsidiaries, determined on a consolidated basis;
plus (ii) all Contingent Obligations of COPT and its Subsidiaries; plus (iii)
all Guaranties of COPT or any of its Subsidiaries; plus (iv) all letter of
credit reimbursement agreement obligations.
"Consolidated Total Liabilities" means, as at any date of
determination, the sum of each of the following, without duplication, for COPT
and its Subsidiaries, on a consolidated basis, (i) all indebtedness for borrowed
money, (ii) any obligation owed for all or any part of the deferred purchase
price of assets or services which would be shown to be a liability (or on the
liability side of the balance sheet) in accordance with GAAP, (iii) all
guaranteed obligations including any guaranteed indebtedness of consolidated or
non-consolidated joint ventures, (iv) the maximum amount of all letters of
credit issued or acceptance facilities established for the account of COPT or
any of its Subsidiaries, and, without duplication, all drafts drawn thereunder
(other than letters of credit offset by a like amount of Cash or government
securities held in escrow to secure such letter of credit and draws thereunder),
(v) all capitalized lease obligations, (vi) all indebtedness (A) of another
Person secured by any Lien on any property or asset owned or held by COPT or any
of its Subsidiaries regardless of whether the indebtedness secured thereby shall
have been assumed by COPT or such Subsidiary or is nonrecourse to the credit of
COPT or such Subsidiary, and (B) of any consolidated Affiliate of COPT whether
or not such indebtedness has been assumed by COPT, and (vii) indebtedness
created or arising under any conditional sale or title retention agreement, and
(viii) withdrawal liability or insufficiency under ERISA or under any qualified
plan or related
8
trust; including within the foregoing, trade payables and accrued expenses
arising or incurred in the ordinary course of business.
"Contingent Obligation" means, with respect to any Person, as of any
date of determination and without duplication, any direct or indirect liability,
contingent or otherwise, of that Person which has not been (or to the extent
that it has not been) paid or otherwise discharged with respect to the
following: (i) any Guaranty; (ii) any letter of credit issued for the account of
that Person or as to which that Person is otherwise liable for reimbursement of
drawings; or (iii) performance, surety and similar bonds in respect of any
Restoration, Renovation or other design, construction, restoration, renovation,
expansion or repair of any Improvements, in each case with respect to any
Property. The amount of any Contingent Obligation, as of any date of
determination, shall be equal to the least of (x) the amount of the obligation
so Guaranteed or that otherwise may be required to be paid, (y) the amount to
which such Contingent Obligation is expressly limited and (z) except with
respect to a Guaranty of Indebtedness, the maximum exposure under such
Contingent Obligation as reasonably calculated by Borrower and approved by the
Agent in its sole discretion.
"Contractual Obligation" means, with respect to any Person, any
provision of any Security issued by that Person or of any material indenture,
mortgage, deed of trust, deed to secure debt, contract, lease, purchase order,
undertaking, agreement or other instrument to which that Person is a party or by
which it or any of its properties is bound or to which it or any of its
properties is subject.
"Controlling Principal" means ▇▇▇ ▇▇▇▇▇▇▇ and/or ▇▇▇▇ ▇. ▇▇▇▇▇▇ III, or
any trusts established by such Persons for the benefit of their immediate family
members if such Person is a trustee of such trusts and able to effectively
control the property and business of the trusts.
"COPH" means Corporate Office Properties Holdings, Inc.
(formerly known as FCO Holdings, Inc.), a Delaware corporation.
"COPT" has the meaning assigned to that term in the
introduction to this Agreement.
"COPT Guaranty" means the Guaranty executed and delivered by COPT on or
before the Closing Date in favor of the Agent, for the benefit of the Lenders,
substantially in the form delivered on or before the Closing Date pursuant to
this Agreement, as such guaranty may be amended, restated, supplemented or
otherwise modified from time to time in accordance with the terms thereof and
hereof.
9
"Credit Bid" means a bid in a foreclosure sale pursuant to a Mortgage
made by Lender consisting of all or a portion of the outstanding amount of the
Obligations.
"Deposit Account" means a demand, time, savings, passbook or like
account with a bank, savings and loan association, credit union or like
organization, other than an account evidenced, by a negotiable certificate of
deposit.
"Distribution" means any payment, distribution, dividend or other
transfer of money or other assets to a Loan Party's constituent partners,
shareholders or beneficiaries, other than (i) a payment on account of bona fide
intercompany indebtedness permitted under this Agreement, (ii) an Investment, or
(iii) any other payment expressly permitted under this Agreement.
"Dollars" and the sign "$" mean the lawful money of the
United States of America.
"Eligible Assignee" means (i) (a) a commercial bank organized under the
laws of the United States of America or any state thereof; (b) a savings and
loan association or savings bank organized under the laws of the United States
of America or any state thereof; (c) a commercial bank organized under the laws
of any other country or a political subdivision thereof; provided, however, that
(x) such bank is acting through a branch or agency located in the United States
of America or (y) such bank is organized under the laws of a country that is a
member of the Organization for Economic Cooperation and Development or a
political subdivision of such country; and (d) any other entity which is an
"accredited investor" (as defined in Regulation D under the Securities Act)
which extends credit or buys loans as one of its principal businesses including,
but not limited to, insurance companies, investment banks, mutual funds and
lease financing companies, in each case (under clauses (a) through (d) above)
that is reasonably acceptable to Lender; and (ii) Lender and any Affiliate of
Lender; and provided further, however, that (A) each Eligible Assignee under
clauses (i)(a) through (i)(c) above shall have Tier 1 capital (as defined in the
regulations of its primary Federal banking regulator) of not less than
$100,000,000, and (B) an entity shall not be an Eligible Assignee if on the date
of assignment of an interest in the Loan to such entity Borrower is reasonably
expected to become liable for additional costs or withholdings by virtue of such
assignment under Section 2.12.2.
"Employee Benefit Plan" means any "employee benefit plan" as defined in
Section 3(3) of ERISA which (i) is currently maintained or contributed to by
COPT or any of its Subsidiaries, or (ii) was at any time within the preceding
five years maintained or contributed to by COPT or any of its Subsidiaries, to
the extent any of them could reasonably be expected to incur liability with
respect to such employee benefit plan.
10
"Engineer" means each reputable engineer approved by the Agent licensed
as such in the state in which the applicable Mortgaged Property in question is
located.
"Engineering Report" means, with respect to any Mortgaged Property, a
written report prepared by an Engineer, describing and analyzing the physical
condition of the Improvements of such Mortgaged Property, describing any
necessary or recommended repairs, estimating the cost of such repairs and
otherwise in form and substance reasonably satisfactory to the Agent.
"Environmental Claim" means any accusation, allegation, notice of
violation, claim, demand, abatement order or other order or direction
(conditional or otherwise) by any Governmental Authority or any other Person for
any damage, including personal injury (including sickness, disease or death),
tangible or intangible property damage, contribution, indemnity, indirect or
consequential damages, damage to the environment, damage to natural resources,
nuisance, pollution, contamination or other adverse effects on the environment,
or for fines, penalties or restrictions, in each case relating to, resulting
from or in connection with Hazardous Materials and relating to COPT, any of its
Subsidiaries (including any Person who was a Subsidiary prior to the Closing
Date) or any Mortgaged Property.
"Environmental Indemnity" means the Environmental Indemnity executed
and delivered by the Loan Parties on or before the Closing Date, in favor of the
Agent and the Lenders, substantially in the form delivered on or before the
Closing Date pursuant to this Agreement, as such agreement may be amended,
restated, supplemented or otherwise modified from time to time in accordance
with the terms thereof and hereof.
"Environmental Laws" means all statutes, laws, ordinances, orders,
rules, regulations, written guidelines, writs, judgments, decrees or injunctions
and the like relating to (i) environmental matters, including those relating to
fines, injunctions, penalties, damages, contribution, cost recovery
compensation, losses or injuries resulting from the Hazardous Release or
threatened Hazardous Release of Hazardous Materials, (ii) the generation, use,
storage, transportation or disposal of Hazardous Materials, or (iii)
occupational safety and health, industrial hygiene, or the protection of human,
plant or animal health or welfare, in any manner applicable to either Loan Party
or any of their respective Subsidiaries or any of their properties, including
the Comprehensive Environmental Response, Compensation, and Liability Act (42
U.S.C. Section 9601, et seq.), the Hazardous Materials Transportation Act (49
U.S.C. Section 1801, et seq.), the Resource Conservation and Recovery Act (42
U.S.C. Section 6901, et seq.), the Federal Water Pollution Control Act (33
U.S.C. Section 1251, et seq.), the Clean Air Act (42 U.S.C. Section 7401, et
seq.), the Toxic Substances Control Act (15 U.S.C. Section 2601, et seq.),
the Solid Waste Disposal Act (42 U.S.C. Section 6901, et seq.), as amended
by the Resource Conservation and Recovery Act
11
(42 U.S.C. Section 6901, et seq.), the Federal Insecticide, Fungicide
and Rodenticide Act (7 U.S.C. Section 136, et seq.), the Occupational
Safety and Health Act (29 U.S.C. Section 651, et seq.) and the
Emergency Planning and Community Right-to-Know Act (42 U.S.C.
Section 11001, et seq.), each as amended or supplemented, and rules
and regulations, policies and guidelines promulgated pursuant
thereto and any analogous future or present local, state and
federal statutes and rules and regulations, policies and
guidelines promulgated pursuant thereto, each as in effect as of
the date of determination.
"Equity Proceeds" means the cash proceeds (net of underwriting
discounts and commissions and other reasonable costs associated therewith) from
the issuance of any equity Securities of COPT or any of its Subsidiaries,
including additional issuances of common shares, preferred shares or Partnership
Interests.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and any successor thereto.
"Event of Default" means each of the events set forth in
Article 7.
"Exchange Act" means the Securities Exchange Act of 1934, as amended
from time to time, and any successor statute.
"Excusable Delay" means a delay due to acts of God, governmental
restrictions, enemy actions, war, civil commotion, fire, casualty, strikes,
shortages of supplies or labor, work stoppages or other causes beyond the
reasonable control of COPT or any of its Affiliates, but lack of funds shall not
be deemed a cause beyond the reasonable control of COPT or any of its
Affiliates.
"Extraordinary Receipts" means the proceeds to COPT or any of its
Subsidiaries from such items as (i) sales, exchanges or other dispositions of
the assets of COPT or any of its Subsidiaries other than in the ordinary course
of business thereof, (ii) damage recoveries and casualty insurance proceeds
(including Condemnation Proceeds or Insurance Proceeds but other than the
proceeds of business interruption insurance or rental loss insurance), (iii)
income derived from Securities and other property acquired for investment except
to the extent such Securities represent Cash Equivalents, (iv) condemnation
awards or sales in lieu of and under the threat of condemnation (other than
awards or other payments for any Taking for temporary use), (v) debt or equity
financing or refinancing, and (vi) all other amounts of any nature paid to COPT
or any of its Subsidiaries not arising out of the ordinary course of business
thereof.
"Federal Funds Effective Rate" means, for any period, a fluctuating
interest rate equal for each day during such period to the weighted average of
the rates on overnight Federal funds
12
transactions with members of the Federal Reserve System arranged by Federal
funds brokers, as published for such day (or, if such day is not a Business Day,
for the next preceding Business Day) by the Federal Reserve Bank of New York,
or, if such rate is not so published for any day which is a Business Day, the
average of the quotations for such day on such transactions received by Lender
from three Federal funds brokers of recognized standing selected by Lender.
"Fee Letter" means, collectively, all letter agreements between all or
some of the Loan Parties and Lender or Lender's Affiliates regarding fees
payable in connection with the Loans.
"Funding Date" means the date of the funding of a Loan.
"Funds from Operations" means net income (computed in accordance with
GAAP), excluding gains (or losses) from debt restructuring and sales of
property, plus depreciation and amortization, and after adjustments for
unconsolidated partnerships and joint ventures. Adjustments for unconsolidated
partnerships and joint ventures will be calculated to reflect funds from
operations on the same basis.
"GAAP" means, subject to the limitations on the application thereof set
forth in Section 1.2, generally accepted accounting principles set forth in
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board, in each case as the same are
applicable to the circumstances as of the date of determination.
"Governmental Authority" means any nation or government, any state,
county, municipality or other political subdivision or branch thereof, and any
entity exercising executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government, including any agency, board, central
bank, commission, court, department or officer thereof.
"Guaranty" means, with respect to any Person, any obligation,
contingent or otherwise, of that Person which has not been (or to the extent
that it has not been) paid or otherwise discharged with respect to any
Indebtedness, lease, dividend or other obligation of any other Person if the
primary purpose or intent thereof by the Person incurring the Guaranty is to
provide assurance to the obligee of such obligation that such obligation of
another will be paid or discharged, or that any agreements relating thereto will
be complied with, or that the holders of such obligation will be protected (in
whole or in part) against loss in respect thereof. Guaranties shall include,
without limitation, (i) the direct or indirect guaranty, endorsement (otherwise
than for collection or deposit in the ordinary course of business), co-making,
discounting with recourse or sale with recourse by such Person of the obligation
of another, (ii) the
CREDIT AGREEMENT
13
obligation to make take-or-pay or similar payments if required regardless of
non-performance by any other party or parties to an agreement, and (iii) any
liability of such Person for the obligation of another Person through any
agreement (contingent or otherwise) (a) to purchase, repurchase or otherwise
acquire such obligation or any security therefor, or to provide funds for the
payment or discharge of such obligation (whether in the form of loans, advances,
stock purchases, capital contributions or otherwise) or (b) to maintain the
solvency or any balance sheet item, level of income or financial condition of
another Person if, in the case of any agreement described under subclauses (a)
or (b) of this sentence, the primary purpose or intent thereof is as described
in the preceding sentence. The amount of any Guaranty shall be equal to the
least of (x) the amount of the obligation so guaranteed or otherwise supported,
(y) the amount to which such Guaranty is specifically limited and (z) except
with respect to a Guaranty of Indebtedness, the maximum exposure under such
Guaranty as reasonably calculated by Borrower and approved by Lender in its sole
discretion. Guaranties shall not include (i) any of the foregoing obligations to
the extent that the same constitutes Indebtedness under the definition thereof
or is a Guaranty with respect thereto and (2) Guaranties of any liability or
obligation of Borrower in respect of which Borrower is permitted to become
liable pursuant to this Agreement. The term "Guarantee" used as a verb has a
corresponding meaning.
"Hazardous Materials" means (i) any chemical, material or substance at
any time defined as or included in the definition of "hazardous substances",
"hazardous wastes", "hazardous materials", "extremely hazardous waste",
"restricted hazardous waste", "infectious waste", "toxic substances",
"pollutant", "contaminant" or any other formulations intended to define, list or
classify substances by reason of deleterious properties such as ignitability,
corrosivity, reactivity, carcinogenicity, toxicity, reproductive toxicity, "TCLP
toxicity" or "EP toxicity" or words of similar import under any applicable
Environmental Laws, (ii) any oil, petroleum, petroleum fraction or petroleum
derived substance, (iii) any drilling fluids, produced waters and other wastes
associated with the exploration, development or production of crude oil, natural
gas or geothermal resources, (iv) any flammable substances or explosives, (v)
any radioactive materials, (vi) asbestos in any form, (vii) radon, (viii) urea
formaldehyde foam insulation, (ix) electrical equipment which contains any oil
or dielectric fluid containing levels of polychlorinated biphenyls in excess of
fifty parts per million, (x) pesticides, and (xi) any other chemical, material
or substance, exposure to which is prohibited, limited or regulated by any
Governmental Authority or which may or could pose a hazard to the health and
safety of the owners, occupants or any Persons in the vicinity of the
Properties; provided, however, that Hazardous Materials shall not include any
materials in a nonhazardous form such as asphalt contained in road-surfacing
materials or hazardous materials customarily used in the
CREDIT AGREEMENT
14
operation of office properties and properly stored and maintained.
"Hazardous Release" means any release, spill, emission, leaking,
pumping, pouring, injection, escaping, deposit, disposal, discharge, dispersal,
dumping, leaching or migration of Hazardous Materials into the indoor or outdoor
environment (including the abandonment or disposal of any barrels, containers or
other receptacles containing any Hazardous Materials), or into or out of any
Property, including the movement of any Hazardous Material through the air,
soil, surface water, groundwater or property.
"Impositions" means all real property taxes and assessments, of any
kind or nature whatsoever, including, without limitation, vault, water and sewer
rents, rates, charges and assessments, levies, permits, inspection and license
fees and other governmental, quasi-governmental or nongovernmental levies or
assessments such as maintenance charges, owner association dues or charges or
fees resulting from covenants, conditions and restrictions affecting the
Properties, assessments resulting from inclusion of any Property in any taxing
district or municipal or other special district, any of which are assessed or
imposed upon the Property, or become due and payable, and which create or may
create a Lien upon the Property, or any part thereof. In the event that any
penalty, interest or cost for nonpayment of any Imposition becomes due and
payable, such penalty, interest or cost shall be included within the term
"Impositions".
"Improvements" means all buildings, structures, fixtures, tenant
improvements and other improvements of every kind and description now or
hereafter located in or on or attached to any Land, including all building
materials, water, sanitary and storm sewers, drainage, electricity, steam, gas,
telephone and other utility facilities, parking areas, roads, driveways, walks
and other site improvements; and all additions and betterments thereto and all
renewals, substitutions and replacements thereof.
"Indebtedness" means, with respect to any Person and without
duplication, to the extent required to be shown on a balance sheet prepared in
conformity with GAAP, (i) all indebtedness for money borrowed by that Person,
(ii) that portion of obligations with respect to capital leases that is
classified as a liability on a balance sheet in conformity with GAAP, (iii)
notes payable and drafts accepted representing extensions of credit whether or
not representing obligations for borrowed money, (iv) all obligations owed for
all or any part of the deferred purchase price of assets or services purchased
by that Person (a) due more than six months from the date of incurrence of the
obligation in respect thereof, (b) evidenced by a note or similar written
instrument or (c) owed in respect of real property purchased by such Person or
any of its Subsidiaries, (v) all indebtedness secured by any Lien on any
property or asset owned or held by that Person regardless of whether the
indebtedness secured
CREDIT AGREEMENT
15
thereby shall have been assumed by that Person or is nonrecourse to the credit
of that Person, (vi) obligations under Interest Rate Agreements, (vii) that
portion of any other obligation of that Person (other than reservation and
similar deposits from customers and working capital deposits from owners
received and held in the ordinary course of business) that is classified as a
liability on a balance sheet in conformity with GAAP, which obligation is (a)
due more than six months from the date of incurrence thereof or (b) evidenced by
a note or similar written instrument, (viii) trade payables of such Person and
its Subsidiaries that by their terms are more than 90 days delinquent (unless
being contested diligently and in good faith) and (ix) all Guaranties by that
Person.
"Indemnified Person" has the meaning assigned to that term
in Section 8.3.1.
"Insurance Proceeds" means all insurance proceeds, damages, claims and
rights of action and the right thereto under any insurance policies relating to
any portion of any Mortgaged Property.
"Insurance Requirements" means all terms of any insurance policy
required hereunder covering or applicable to any Mortgaged Property or any part
thereof, all requirements of the issuer of any such policy, and all orders,
rules, regulations and other requirements of the National Board of Fire
Underwriters (or any other body exercising similar functions) applicable to or
affecting any Mortgaged Property or any part thereof or any use of any Mortgaged
Property or any portion thereof.
"Intangible Assets" means assets that are considered intangible assets
under GAAP including goodwill, patents, trademarks, service marks, trade names,
anticipated future benefit of tax loss carry forwards, copyrights, organization
or developmental expenses and other intangible assets.
"Interest Period" has the meaning assigned to that term in
Section 2.7.2.
"Interest Rate Agreement" means any interest rate swap agreement,
interest rate cap agreement, interest rate collar agreement or other similar
agreement or arrangement designed to protect COPT or any of its Subsidiaries
against fluctuations in interest rates, which agreement or approval shall be
approved by the Agent as to form and substance; provided, however, that such
approval by the Agent shall not be required if such agreement (i) shall have a
minimum term of two (2) years, or, in the case of loans pursuant to which
interest shall accrue at a rate other than a fixed rate, a term equal to the
term of such floating rate loan (to the extent the term of floating rate loan is
less than two (2) years), (ii) shall have the effect of capping the interest
rates covered thereby at a rate equal to or lower than the Interest Rate Cap at
the time of purchase or execution, and
CREDIT AGREEMENT
16
(iii) shall be with an Approved Bank, provided that it is acknowledged and
agreed that the Borrower shall have no obligation to replace any Interest Rate
Agreement even if the counterparty thereto shall cease to be an Approved Bank.
"Interest Rate Cap" means the Treasury Rate plus 3.0%.
"Interest Rate Determination Date" means each date for calculating the
Adjusted LIBOR Rate for purposes of determining the interest rate in respect of
an Interest Period. The Interest Rate Determination Date shall be the second
Business Day prior to the first day of the related Interest Period for any Loan.
"Internal Revenue Code" means the Internal Revenue Code of 1986, as
amended to the date hereof and from time to time hereafter.
"Investment" means, with respect to any Person or any of its
Subsidiaries, as of any date of determination and without duplication:
(i) any direct or indirect purchase or other acquisition
(whether or not for consideration) by such investing Person or
Subsidiary of, or of a beneficial interest in, any Securities of any
other Person;
(ii) any direct or indirect redemption, retirement, purchase or
other acquisition for value by such investing Person or Subsidiary from
any other Person (other than a Person with respect to which such
investing Person or Subsidiary is a Wholly Owned Subsidiary) of any
equity Securities of such investing Person or Subsidiary;
(iii) any direct or indirect loan, advance (other than (a)
advances to officers, employees, consultants, accountants, attorneys
and other advisors and members of the Board of Directors of any Person
for moving, entertainment and travel expenses, drawing accounts and
similar expenditures in each case incurred in the ordinary course of
business and (b) advances to officers of any Person for other purposes
in an amount not greater than $100,000 individually or $330,000 in the
aggregate, in each case at any time outstanding) or capital
contribution to any other Person, including all indebtedness and
accounts receivable from that other Person that are not current assets
or did not arise from sales to that other Person in the ordinary course
of business;
(iv) any commitment or obligation to make any investment
described in clauses (i) through (iii) above; and
(v) any liability that is recourse to such investing Person or
Subsidiary or secured by any asset of such investing Person or
Subsidiary and that arises, by law,
CREDIT AGREEMENT
17
contract, ownership of Securities or otherwise, directly or indirectly,
as the result of or otherwise in connection with the origination,
continuation or termination of any investment described in clauses (i)
through (iv) above.
The amount of any Investment, as of any date of determination, shall be equal to
(y) with respect to an Investment referred to in clause (i) or (ii) of the
preceding sentence, the remainder of (1) the sum of original cost of such
Investment plus the cost of all additions thereto as of such date of
determination, minus (2) the aggregate amount paid to such Person or Subsidiary
as a return of such Investment; provided, that (A) the calculation of the amount
referred to in this clause (2) shall exclude all fees and other amounts (or the
portion thereof) that shall constitute interest, dividends or other amounts in
respect of the return on such Investment, as determined in accordance with GAAP,
and (B) the calculation of the amount referred to in this clause (i) shall
exclude, all adjustments for increases or decreases in value, and write-ups,
write-downs or write-offs with respect to such Investment, and (z) with respect
to an Investment referred to in clause (iv) or (v) of the preceding sentence,
the maximum aggregate liability for which such investing Person or Subsidiary
may become liable, by law, contract, ownership of Securities or otherwise, with
respect to such Investment as of such date of determination.
"Issuing Lender" means, with respect to any Letter of Credit, the
Lender which agrees or is otherwise obligated to issue such Letter of Credit as
provided in Section 2.16.2.2.
"Joint Venture" means a joint venture, partnership or other similar
arrangement, whether in corporate, partnership, limited liability company or
other legal form, which joint venture, partnership or other similar arrangement
may be a Subsidiary of any Person, including of COPT.
"Land" means, with respect to each Mortgaged Property, the land
described on Exhibit A to the Mortgage encumbering such Mortgaged Property,
together with all strips and gores within or adjoining such property, all
estate, right, title, interest, claim or demand whatsoever of any Loan Party or
any of its Subsidiaries in the streets, roads, sidewalks, alleys, and ways
adjacent thereto (whether or not vacated and whether public or private and
whether open or proposed), all vaults or chutes adjoining such land, all of the
tenements, hereditaments, easements, reciprocal easement agreements, rights
pursuant to any trackage agreement, rights to the use of common drive entries,
rights-of-way and other rights, privileges and appurtenances thereunto belonging
or in any way pertaining thereto, all reversions, remainders, dower and right of
dower, curtesy and right of curtesy, all of the air space and right to use said
air space above such property, all transferable development rights arising
therefrom or transferred thereto, all water and water rights (whether riparian,
appropriative or otherwise, and whether
CREDIT AGREEMENT
18
or not appurtenant) and shares of stock evidencing the same, all mineral,
mining, gravel, geothermal, oil, gas, hydrocarbon substances and other rights to
produce or share in the production of anything related to such property, all
drainage, crop, timber, agricultural, and horticultural rights with respect to
such property, and all other appurtenances appurtenant to such property,
including without limitation, any now or hereafter belonging or in any way
appertaining thereto, and all claims or demands of Borrower either at law or in
equity, in possession or expectancy, now or hereafter acquired, of, in or to the
same.
"Lease" means each of the leases, licenses, concession agreements,
franchise agreements and other occupancy agreements and other agreements
demising, leasing or granting rights of possession or use or, to the extent of
the interest therein of any Loan Party or any of its Subsidiaries, any sublease,
subsublease, underletting or sublicense, which now or hereafter may affect any
Mortgaged Property or any part thereof or interest therein, including any
agreement relating to a loan or other advance of funds made in connection with
any such lease, license, concession agreement, franchise or other occupancy
agreement and such sublease, subsublease, underletting or sublicense, and every
amendment, restatement, supplement, consolidation or other modification of or
other agreement relating to or entered into in connection with such lease,
license, concession agreement, franchise or other occupancy agreement and such
sublease, subsublease, underletting or sublicense, and every security deposit,
letter of credit, trust agreement, guaranty or similar security for the
performance and observance of the covenants, conditions and agreements to be
performed and observed by the other party thereto, and any guaranties of leasing
commissions.
"Lender" and "Lenders" have the meanings set forth in the first
paragraph of this Agreement, together with their respective successors and
permitted assigns.
"Letter of Credit" means any standby letter of credit or similar
instrument issued for the purpose of supporting (i) Indebtedness of the Loan
Parties or any of their Subsidiaries in respect of industrial revenue or
development bonds or financings, (ii) workers' compensation liabilities of the
Loan Parties or any of their Subsidiaries, (iii) the obligations of third party
insurers of the Loan Parties or any of their Subsidiaries arising by virtue of
the laws of any jurisdiction requiring third party insurers, (iv) obligations
with respect to capital leases or operating leases of the Loan Parties or any of
their Subsidiaries, and (v) performance, payment, deposit or surety obligations
of the Loan Parties or any of their Subsidiaries, in any case if required by law
or governmental rule or regulation or in accordance with custom and practice in
the industry; provided that Letters of Credit may not be issued for the purpose
of supporting (a) trade payables or (b) any Indebtedness constituting
"antecedent debt" (as that term is used in Section 547 of the Bankruptcy Code).
CREDIT AGREEMENT
19
"Letter of Credit Usage" means, as at any date of determination, the
sum of (i) the maximum aggregate amount which is or at any time thereafter may
become available for drawing under all Letters of Credit then outstanding plus
(ii) the aggregate amount of all drawings under Letters of Credit honored by
Issuing Lenders and not theretofore reimbursed by Borrower (including any such
reimbursement out of the proceeds of Loans pursuant to Section 2.18.2).
"LIBOR Rate Loans" means Loans bearing interest at rates determined by
reference to the Adjusted LIBOR Rate as provided in Section 2.7.
"Lien" means any lien (including any lien or security title granted
pursuant to any mortgage, deed of trust or deed to secure debt), pledge,
hypothecation, assignment, security interest, charge, levy, attachment,
restraint or encumbrance of any kind (including any conditional sale or other
title retention agreement, any lease in the nature thereof, and any agreement to
give any security interest) and any option, trust or other preferential
arrangement having the practical effect of any of the foregoing.
"Loans" means, collectively, the loans made by the Lenders to Borrower
pursuant to Section 2.1.1.
"Loan Documents" means, collectively, this Agreement, the Note, the
Security Documents, the Environmental Indemnity, the COPT Guaranty and any
Mortgaged Property Subsidiary Guaranty.
"Loan Parties" means, collectively, Borrower, COPT and any
Mortgaged Property Subsidiary.
"Loan Parties' Accountants" means Coopers & ▇▇▇▇▇▇▇, LLP, or another
"big six" accounting firm.
"Management Agreements" means, collectively, all management agreements
with respect to the Mortgaged Properties.
"Management Fees" means, collectively, all management fees and all
other fees or charges payable to a manager for the management and operation of a
Mortgaged Property, the related land and the improvements thereof.
"Margin Stock" has the meaning assigned to that term in Regulation U of
the Board of Governors of the Federal Reserve System as in effect from time to
time.
"Material Adverse Effect" means a material adverse effect upon the
business, operations or condition (financial or otherwise) of the Loan Parties,
taken as a whole, which causes or is reasonably likely to cause the material
impairment of the ability of the Loan Parties to perform, or of Lender to
enforce, any Obligations of the Loan Parties.
CREDIT AGREEMENT
20
"Material Lease" means each Lease demising the greater of: (i) 25% or
more of the net rentable area of the Improvements with respect to any Mortgaged
Property or (ii) 30,000 or more square feet.
"Maturity Date" means the earlier of (i) the second Anniversary of the
Closing Date, as such date may be extended pursuant to Section 2.6 to a date not
later than the third Anniversary of the Closing Date, and (ii) the date as of
which the Obligations shall have become immediately due and payable pursuant to
Section 7.1.
"Maximum Amount" has the meaning set forth in Section 8.13.
"Moody's" means ▇▇▇▇▇'▇ Investors Service, Inc. or any successor to
the business thereof.
"Mortgage" means each Mortgage, Assignment of Rents, Security Agreement
and Fixture Filing and each Deed of Trust, Assignment of Rents, Security
Agreement and Fixture Filing executed and acknowledged by Borrower or, if
applicable, a Mortgaged Property Subsidiary in favor of the Agent for the
benefit of the Lenders (or, in the case of a deed of trust, to a trustee for the
benefit of the Agent and the Lenders), in form and substance satisfactory to the
Agent, as each such agreement may be amended, restated, supplemented,
consolidated, extended or otherwise modified from time to time in accordance
with the terms thereof and hereof.
"Mortgaged Properties" means, collectively, the suburban office
properties, the Land on which they are located, and all Improvements thereon and
all fixtures attached thereto and all personal property used in connection
therewith, in each case as listed on Schedule 1.1A annexed hereto, as such
Schedule may be revised or supplemented from time to time pursuant to Section
2.13, 2.14 or 2.15.
"Mortgaged Property Subsidiary" means any Wholly Owned Subsidiary of
COPT that owns any Mortgaged Property.
"Mortgaged Property Subsidiary Guaranty" means the Subsidiary Guaranty
executed by each Mortgaged Property Subsidiary, in form and substance
satisfactory to the Agent, as such Mortgaged Property Subsidiary Guaranty may be
amended, restated, supplemented or otherwise modified from time to time in
accordance with the terms thereof and hereof.
"Net Insurance/Condemnation Proceeds" means all Insurance Proceeds on
account of damage or destruction to any Mortgaged Property or all Condemnation
Proceeds in respect of any Mortgaged Property, minus the reasonable cost, if
any, of such recovery and of paying out such proceeds, including reasonable
attorneys' fees and costs allocable to inspecting the Work and the plans and
specifications therefor.
CREDIT AGREEMENT
21
"Notes" means, collectively, (i) the promissory note of Borrower issued
on the Closing Date and (ii) any promissory notes issued by Borrower in
connection with an assignment of all or any portion of the Commitments and Loans
and Letters of Credit of any Lender, in each case substantially in the form of
Exhibit A annexed hereto, as they may be amended, restated, supplemented or
otherwise modified from time to time in accordance with the terms thereof and
hereof.
"Notice of Borrowing" means a notice substantially in the form of
Exhibit B annexed hereto delivered by Borrower to the Agent pursuant to Section
2.1.2 with respect to a proposed borrowing hereunder.
"Notice of Conversion/Continuation" means a notice substantially in the
form of Exhibit C annexed hereto delivered by Borrower to the Agent pursuant to
Section 2.7.4 with respect to a proposed conversion/continuation of the
applicable basis for determining the interest rate with respect to the Loans
specified therein.
"Notice of Issuance of Letter of Credit" means a notice substantially
in the form of Exhibit H annexed hereto delivered by Borrower to the Agent
pursuant to Section 2.16.2.1 with respect to the proposed issuance of a Letter
of Credit.
"NYSE" means the New York Stock Exchange.
"Obligations" means, collectively, all obligations of every nature of
the Loan Parties from time to time owed to the Agent or the Lenders, or any of
them, under or in respect of the Loans and the Loan Documents, whether for
principal, interest, fees, commissions, expenses, indemnification or otherwise.
"Officers' Certificate" means, as applied to any corporation, a
certificate executed on behalf of such corporation by a person specified in this
Agreement for such purpose or, in the absence of such specification, by its
chairman of the board (if an officer) or its president or one of its vice
presidents and by its chief financial officer or its treasurer; provided,
however, that every Officers' Certificate with respect to the compliance with a
condition precedent to the making of the Loans hereunder shall include (i) a
statement that each officer making or giving such Officers' Certificate has read
such condition and any definitions or other provisions contained in this
Agreement relating thereto, (ii) a statement that, in the opinion of each
signer, he has made or has caused to be made such examination or investigation
as is reasonably necessary to enable him to express an informed opinion as to
whether or not such condition has been complied with, and (iii) a statement as
to whether, in the opinion of each signer, such condition has been complied
with.
"Operating Lease" means, with respect to any Person, a lease of any
property (whether real, personal or mixed) by that Person
CREDIT AGREEMENT
22
as lessee that, in conformity with GAAP, is not accounted for as a capital lease
on the balance sheet of that Person.
"Partnership Interests" means the general and/or limited partnership
interests (including all partnership units, all rights under partnership
agreements and all rights to distributions) of such Person that is a
partnership.
"Payment Date" means the first day of each calendar month, beginning
June 1, 1998, or, if such day is not a Business Day, the next succeeding
Business Day, with such payment including the accrual of interest through the
last day of the preceding calendar month.
"PBGC" means the Pension Benefit Guaranty Corporation (or
any successor thereto).
"Permitted Encumbrances" means the Liens shown in the Title Policy for
each Mortgaged Property and, with respect to any Mortgaged Property, the
following types of Liens:
(i) Liens for real property Taxes, assessments, vault charges,
water and sewer rents, and other Impositions the payment of which is
not, at the time, required pursuant to this Agreement;
(ii) the Leases in existence on the Closing Date and any Leases
entered into thereafter in accordance with the requirements of the Loan
Documents;
(iii) covenants, easements, rights-of-way, restrictions, minor
encroachments or other similar encumbrances incurred in the ordinary
course of business of Borrower or, if applicable, the applicable
Mortgaged Property Subsidiary that do not make such Mortgaged Property
unmarketable or interfere in any material respect, and which could not
reasonably be expected to interfere in any material respect, with the
use of the Mortgaged Property for office building purposes or with the
ordinary conduct of the business of Borrower or, if applicable, the
applicable Mortgaged Property Subsidiary;
(iv) Liens securing the Obligations; and
(v) Liens that are bonded and thereby released of record in a
manner reasonably satisfactory to the Agent.
"Person" means, collectively, natural persons, corporations, limited
liability companies, limited partnerships, general partnerships, joint stock
companies, Joint Ventures, associations, companies, trusts, banks, trust
companies, land trusts, business trusts or other organizations, whether or not
legal entities, and Governmental Authorities.
CREDIT AGREEMENT
23
"Potential Event of Default" means a condition or event that, after
notice or lapse of time or both, would constitute an Event of Default if that
condition or event were not cured or removed within the applicable grace period.
"Prime Rate" means the rate that Lender announces from time to time as
its prime lending rate, as in effect from time to time. The Prime Rate is a
reference rate and does not necessarily represent the lowest or best rate
actually charged to any customer. Lender may make commercial loans or other
loans at rates of interest at, above or below the Prime Rate.
"Property" or "Properties" means, collectively, the Mortgaged
Properties as listed on Schedule 1.1.A annexed hereto and all other commercial
office properties owned by COPT or any of its Subsidiaries (including Borrower)
as listed on Schedule 1.1B annexed hereto, the land on which such other
commercial office properties are located and all Improvements thereon and all
fixtures attached thereto and all personal property used in connection
therewith, in each case as such Schedules may be revised or supplemented from
time to time pursuant to Section 2.13, 2.14 or 2.15.
"Property Adjusted Net Income" means, for any period, for each
Property, the sum of the amounts for such period of (i) Property Gross Revenue;
less (ii) Property Operating Expenses, all determined in conformity with GAAP.
"Property Amount" means, with respect to any Mortgaged Property and as
of any date of determination, an amount equal to 65% of the Appraised Value of
such Mortgaged Property.
"Property Gross Revenues" means, for any period, all Receipts resulting
from the operation of such Property, including, without limitation, Rents or
other payments from Tenants, licensees and concessionaires and business
interruption and rental loss insurance payments; provided that Property Gross
Revenue shall exclude (i) excise, sales, use, occupancy and similar taxes and
charges collected from Tenants and remitted to Governmental Authorities, (ii)
gratuities collected for employees of such Property, (iii) security deposits and
other advance deposits, until and unless same are forfeited to Borrower or
applied for the purpose for which collected, (iv) federal, state or municipal
excise, sales, use or similar taxes collected directly from Tenants or included
as part of the sales price of any goods or services, and (v) Extraordinary
Receipts.
"Property Information" means, with respect to any Additional Mortgaged
Property pursuant to Section 2.13:
(i) financial statements in respect of such Additional
Mortgaged Property for the most recently completed three calendar
years, to the extent such financial statements exist and are in the
possession of COPT or any of its
CREDIT AGREEMENT
24
Subsidiaries or can be obtained by COPT or any of its Subsidiaries at
no cost;
(ii) copies of all other consolidated balance sheets and related
statements of operations and statements of cash flows of such
Additional Mortgaged Property that are to be or were delivered to COPT
or any of its Subsidiaries in connection with the acquisition of such
Additional Mortgaged Property, if applicable;
(iii) to the extent Renovation is then proposed for such
Additional Mortgaged Property, a preliminary project plan and a project
budget for such Additional Mortgaged Property satisfactory in form and
substance to the Agent in its sole discretion;
(iv) (a) a comprehensive environmental audit (which shall
include a Phase I environmental audit and, if necessary or desirable in
the Agent's opinion, a Phase II environmental audit), satisfactory in
form and substance to the Agent, conducted and certified by an Approved
Environmental Consultant (Borrower shall certify as of the closing date
of the Addition Date that, as to any environmental audit delivered by
Borrower prior to such date, to Borrower's knowledge, the information
contained in such audit remains true, correct and complete), (b) a
reliance letter from such Approved Environmental Consultant with
respect to each such environmental audit addressed to the Agent and the
Lenders, which reliance letter shall be satisfactory in form and
substance to the Agent, (c) if requested by the Agent, evidence that
all required approvals from all Governmental Authorities having
jurisdiction with respect to the environmental condition of such
Additional Mortgaged Property, if any, have been obtained, and (d) such
other environmental reports, inspections and investigations as the
Agent shall, in its sole discretion, require, prepared, in each
instance, by an Approved Environmental Consultant, which audits,
approvals, reports, inspections and investigations shall be
satisfactory in form and substance to the Agent, in its sole
discretion;
(v) with respect to an Additional Mortgaged Property, (a) a
written Engineering Report with respect to such Additional Mortgaged
Property dated not more than 90 days (or such longer period not to
exceed 180 days as Lender may approve) prior to the closing date and
prepared by an Engineer which Engineering Report shall be satisfactory
in form and substance to the Agent and (b) a reliance letter from such
Engineer with respect to each such Engineering Report addressed to the
Agent and the Lenders, which letter shall be in form and substance
reasonably satisfactory to the Agent;
CREDIT AGREEMENT
25
(vi) copies (if available) or drafts of the Acquisition
Agreements with respect to such Additional Mortgaged Property, all
other purchase agreements, letters of intent or other related
agreements entered into by COPT or any of its Subsidiaries in
connection with the acquisition thereof (it being understood and agreed
that, to the extent such agreements or letters of intent have not been
entered into at such time, copies of such agreements and letters of
intent shall be delivered reasonably promptly after the execution
thereof);
(vii) a market study with respect to such Additional Mortgaged
Property as of a date not earlier than 90 days (or such longer period
not to exceed 180 days as the Agent may approve) before the acquisition
of such Additional Mortgaged Property and copies of all other
appraisals and market studies with respect to such Additional Mortgaged
Property to the extent such appraisals and market studies exist and can
be readily obtained by COPT or any of its Subsidiaries;
(viii) an Appraisal with respect to such Additional Mortgaged
Property as of a date not earlier than 90 days (or such longer period
not to exceed 180 days as the Agent may approve) before the acquisition
of such Additional Mortgaged Property; and
(ix) any other information relating to such Additional Mortgaged
Property reasonably requested by the Agent.
"Property Operating Expenses" means, for any period and for any item
classified as an expense on the accrual basis of accounting (other than the item
described in clause (xiii) below), all expenses incurred by Borrower or, as
applicable, a Mortgaged Property Subsidiary during such period in connection
with the ownership, management, operation, cleaning, maintenance, repair,
restoration or leasing of any Property, including without duplication:
(i) costs and expenses in connection with the
cleaning, ordinary repair, maintenance, decoration and
painting of such Property;
(ii) wages, benefits, payroll taxes, uniforms,
insurance costs and all other related expenses for employees
of Borrower or, as applicable, a Mortgaged Property Subsidiary
engaged in the management, operation, cleaning, maintenance,
repair, restoration and leasing of such Property and service
to Tenants of such Property;
(iii) a management fee equal to 3% of Property Gross
Revenue with respect to such Property and during such period
(which amount shall be treated as a
CREDIT AGREEMENT
26
Property Operating Expense whether or not any such
management fee was in fact paid);
(iv) the cost of all services and utilities with
respect to such Property, including all electricity, oil, gas,
water, steam, heating, ventilation, air conditioning,
elevator, escalator, landscaping, model furniture, answering
services, telephone maintenance, credit check, snow removal,
trash removal and pest extermination costs and expenses and
any other energy, utility or similar item and overtime
services with respect to such Property;
(v) the cost of building and cleaning supplies with
respect to such Property;
(vi) insurance premiums required in order to maintain
the insurance policies required under this Agreement or any
other Loan Documents with respect to such Property (which, in
the case of any policies covering multiple Properties, shall
be allocated among the Properties pro rata in proportion to
the insured value of the Properties covered by such policies);
(vii) legal, accounting, engineering, brokerage and other
fees, commissions, costs and expenses incurred by or on behalf
of Borrower or, as applicable, a Mortgaged Property Subsidiary
in connection with the ownership, management, operation,
maintenance, repair, restoration, and leasing of such
Property, including collection costs and expenses;
(viii) costs and expenses of security and security systems
provided to and/or installed and maintained with respect to
such Property;
(ix) real property taxes and assessments with respect
to such Property and the costs incurred in seeking to reduce
such taxes or the assessed value of such Property;
(x) advertising, marketing and promotional costs
and expenses with respect to such Property;
(xi) costs and expenses incurred in connection with
lock changes, storage, moving, appraisals, surveys,
valuations, title insurance, inspections, market surveys,
permits (and the application or registration therefor), and
licenses (and the application or registration therefor) with
respect to such Property;
(xii) maintenance and cleaning costs related to tenant
amenities with respect to such Property;
CREDIT AGREEMENT
27
(xiii) Capital Expenditures with respect to such Property
accrued during such period or, if higher, a reserve for
Capital Expenditures equal to $0.15 per square foot of floor
area contained in the Improvements located at such Property
during such period;
(xiv) contributions by Borrower or, as applicable, a
Mortgaged Property Subsidiary to any merchants' association,
whether as dues or advertising costs or otherwise with respect
to such Property;
(xv) costs incurred pursuant to any reciprocal easement
agreement affecting such Property;
(xvi) refunds Borrower or, as applicable, a Mortgaged
Property Subsidiary must pay to Tenants and other occupants of
such Property;
(xvii) reserves for such expenses and in such amounts as
Borrower or, as applicable, a Mortgaged Property Subsidiary
and the Agent may reasonably agree upon; and
(xviii) all other ongoing expenses which in accordance with
the accrual basis of accounting should be included in
Borrower's or, as applicable, the Mortgaged Property
Subsidiary's annual financial statements as operating expenses
of such Property.
Notwithstanding the foregoing, Property Operating Expenses shall not include
depreciation and amortization or interest, principal, if any, due under the
Loans or the Notes or otherwise in connection with the Obligations.
"Pro Rata Share" means, with respect to each Lender, the percentage
obtained by dividing (i) that Lender's Commitment by (ii) the sum of the
aggregate Commitments of all Lenders.
"Receipts" means, collectively, all cash, Cash Equivalents, checks,
notes, drafts and any items of payment or collection received, by or on behalf
of COPT or any of its Subsidiaries, or by any officers, employees or agents of
COPT or any of its Subsidiaries or other Persons acting for or in concert with
COPT or such Subsidiary to make collections on COPT's or such Subsidiary's
behalf in connection with or in any way relating to COPT or such Subsidiary or
the operation of COPT's or such Subsidiary's business, including, without
limitation, any proceeds received from or pursuant to (i) any sales of, or loans
against, accounts of COPT or any of its Subsidiaries (other than the Loans
pursuant to this Agreement), (ii) any disposition of assets (including, without
limitation, any disposition of assets permitted hereunder or consented to by the
Agent, but excluding amounts applied to the repayment of indebtedness or other
obligations secured by a Lien on the assets subject to such
CREDIT AGREEMENT
28
disposition) or issuance or sale of equity Securities by COPT or any of its
Subsidiaries, (iii) the incurrence of Indebtedness by COPT or any of its
Subsidiaries and the issuance and sale by COPT or any of its Subsidiaries of
equity or debt Securities, in each case other than the Obligations and other
Indebtedness permitted by this Agreement, (iv) insurance policies (other than
liability insurance payable directly or indirectly to a third party) maintained
by COPT or any of its Subsidiaries, whether or not Lender is an additional
insured or named as loss payee thereunder, (v) the successful prosecution
(including any settlement) of any claims, actions or other litigation or
proceeding by or on behalf of or against COPT or any of its Subsidiaries, (vi)
Investments in, or equity and debt Securities issued by, Joint Ventures or other
Persons and (vii) the Management Agreements; it being understood and agreed that
nothing contained in this definition shall in any respect be deemed to permit
any transactions by COPT or any of its Subsidiaries otherwise restricted or
prohibited by this Agreement.
"Regulation D" means Regulation D of the Board of Governors of the
Federal Reserve System, as in effect from time to time.
"Reimbursement Date" has the meaning assigned to that term
in Section 2.18.2.
"REIT" means a "real estate investment trust," as such term is defined
in Section 856 of the Internal Revenue Code.
"Release" means any satisfaction, release, assignment instrument, deed
of reconveyance or similar instrument or instruments (each in recordable form
but without any representation or warranty of the Agent or any Lender) necessary
and sufficient to release any Collateral from the Lien of all applicable
Security Documents.
"Release Date" means the date of a release of the Lien of the Security
Documents from any Property pursuant to Section 2.14.
"Renovation" means the expansion, rebuilding, repair, restoration,
refurbishment, fixturing and equipping of the Improvements at a Mortgaged
Property. The term "Renovate" used as a verb has a corresponding meaning.
"Rents" means all rents, issues, profits, royalties, receipts,
revenues, accounts receivable, security deposits and other deposits (subject to
the prior right of Tenants making such deposits) and income, including fixed,
additional and percentage rents, occupancy charges, operating expense
reimbursements, reimbursements for increases in taxes, sums paid by Tenants to
Borrower to reimburse Borrower for amounts originally paid or to be paid by
Borrower or Borrower's agents or affiliates for which such Tenants were liable,
as, for example, tenant improvements
CREDIT AGREEMENT
29
costs in excess of any work letter, lease takeover costs, moving expenses and
tax and operating expense pass-throughs for which a Tenant is solely liable,
parking, maintenance, common area, tax, insurance, utility and service charges
and contributions, proceeds of sale of electricity, gas, heating,
air-conditioning and other utilities and services, deficiency rents and
liquidated damages, and other benefits.
"Rent Roll" means, for any Mortgaged Property, a rent roll in the form
approved by the Agent indicating (i) the names of all Tenants of such Mortgaged
Property and the space occupied by such Tenants, (ii) the term of each Lease
affecting such Mortgaged Property, (iii) the monthly Rent, additional Rent, if
any, and other fees and charges paid by each such Tenant and whether such Tenant
is in default, (iv) for any Rent Roll delivered after the Closing Date, any
extension, renewal, expansion, or purchase options contained in any such Lease,
(v) each vacant space in such Mortgaged Property and Borrower's or, as
applicable, a Mortgaged Property Subsidiary's estimate of the fair rental value
of each such space, (vi) the occupancy rate of such Mortgaged Property, (vii)
the security deposit and escrows, if any, held by Borrower or, as applicable, a
Mortgaged Property Subsidiary under any such Lease and (viii) the arrearages for
any such Tenant.
Requisite Lenders" means Lenders having or holding more than a 50% of
the sum of the aggregate Commitments of all Lenders.
"Restoration" means the repair, restoration (including demolition),
replacement and rebuilding of all or any portion of a Mortgaged Property (or the
Improvements thereof) following the destruction, damage, loss or Taking thereof.
The term "Restore" used as a verb has the corresponding meaning.
"Securities" means any stock, shares, partnership interests, interests
in limited liability companies, voting trust certificates, certificates of
interest or participation in any profit-sharing agreement or arrangement,
options, warrants, bonds, debentures, notes or other evidences of indebtedness,
secured or unsecured, convertible, subordinated or otherwise, or in general any
instruments commonly known as "securities" or any certificates of interest,
shares or participations in temporary or interim certificates for the purchase
or acquisition of, or any right to subscribe to, purchase or acquire, any of the
foregoing.
"Securities Act" means the Securities Act of 1933, as amended from time
to time, and any successor statute.
"Security Agreement" means the Security and Pledge Agreement executed
and delivered by Borrower (if Borrower owns any Mortgaged Property in the
Borrowing Base at the time of the closing) and, if applicable, any Mortgaged
Property Subsidiary and the Agent on or before the Closing Date pursuant to this
Agreement, substantially in the form delivered on or before the
CREDIT AGREEMENT
30
Closing Date pursuant to this Agreement, pursuant to which Borrower (if
applicable) and, if applicable, any Mortgaged Property Subsidiary will pledge
and grant a security interest in the Collateral described therein to the Agent
for the benefit of the Lenders, as such Security Agreement may be amended,
restated, supplemented or otherwise modified from time to time in accordance
with the terms thereof and hereof.
"Security Documents" means, collectively, the Mortgages, the
Assignments of Rents and Leases, the Security Agreement, the Tenant
Subordination Agreements, all mortgages, security agreements, pledge agreements,
assignments and all other instruments or documents (including UCC-1 financing
statements, fixture filings, amendments of financing statements or similar
documents required or advisable in order to perfect or maintain the Liens
created by the Security Documents) delivered by any Person pursuant to this
Agreement or any of the other Loan Documents, whether such delivery is prior to,
contemporaneous with or after delivery of this Agreement, in order to grant to
Lender Liens in real, personal or mixed property of that Person, and to maintain
such Liens as each of the foregoing may be amended, restated, consolidated,
supplemented or otherwise modified from time to time in accordance with the
terms thereof and hereof. Security Documents do not include this Agreement or
the Notes.
"Subsidiary" means, with respect to any Person, any corporation,
partnership, limited liability company, association, trust, joint venture or
other business entity of which either (i) the Person is a general partner or
member of a limited liability company or other entity having the right to direct
or manage the business and affairs of such entity or (ii) more than 50% of the
total voting power of shares of stock or other ownership interests entitled
(without regard to the occurrence of any contingency) to vote in the election of
the Person or Persons (whether directors, managers, trustees or other Persons
performing similar functions) having the power to direct or cause the direction
of the management and policies thereof is at the time owned or controlled,
directly or indirectly, by that Person or one or more of the other Subsidiaries
of that Person or a combination thereof. The term "Subsidiary" shall include
Subsidiaries of a Subsidiary.
"Survey" means, with respect to any Mortgaged Property, a current
survey map prepared by a surveyor licensed in the state in which such Mortgaged
Property is located, reasonably acceptable to the Agent, which shall (i) contain
the legal description of such Mortgaged Property, (ii) conform, and be certified
by such surveyor to the Agent and the Lenders and the Title Company as
conforming, to the Minimum Standard Detail Requirements for ALTA/ACSM Land Title
Surveys for urban survey class as adopted by ALTA and American Congress on
Surveying & Mapping (1992 version), and (iii) show, to the extent practicable,
all matters described in "Table A/Optional Survey
CREDIT AGREEMENT
31
Responsibilities and Specifications" in such Minimum Standard Detail
Requirements; provided, however, that the survey need not satisfy the
requirements of the preceding clauses (ii) and (iii) if the Title Company has
eliminated the survey exception from the Title Policies and all other exceptions
to the Title Policies based upon such survey are acceptable to the Agent in its
sole discretion. Any such survey shall contain a certification by such surveyor
to Lender stating whether the Mortgaged Property is located in an area having
special flood hazards as identified by the Federal Emergency Management Agency.
"S&P" means Standard & Poor's, a division of The ▇▇▇▇▇▇-▇▇▇▇ Companies,
Inc., or any successor to the business thereof.
"Taking" means the taking or appropriation (including by deed in lieu
of condemnation or by voluntary sale or transfer under threat of condemnation or
while legal proceedings for condemnation are pending) of any Mortgaged Property,
or any part thereof or interest therein, for public or quasi-public use under
the power of eminent domain, by reason of any public improvement or condemnation
proceeding, or in any other manner or any damage or injury or diminution in
value through condemnation, inverse condemnation or other exercise of the power
of eminent domain. The term "Taken" used as a verb has a correlative meaning.
"Tax" or "Taxes" means any present or future tax, levy, impost, duty,
charge, fee, deduction or withholding of any nature and whatever called, on
whomsoever and wherever imposed, levied, collected, withheld or assessed by a
Governmental Authority; provided, however, that "Tax on the overall net income"
of a Person shall be construed as a reference to a tax imposed by the
jurisdiction in which that Person's principal office (and/or, in the case of any
Lender, its lending office) is located or in which that Person is deemed to be
doing business on (or measured with reference to) all or part of the net income,
profits or gains of that Person (whether worldwide, or only insofar as such
income, profits or gains are considered to arise in or to relate to a particular
jurisdiction, or otherwise).
"Tenant" means any Person liable by contract or otherwise to pay rent
or a percentage of income, revenue or profits pursuant to a Lease, and includes
a tenant, subtenant, lessee and sublessee.
"Tenant Subordination Agreement" means any Subordination,
Non-Disturbance and Attornment Agreement executed and acknowledged by a Tenant,
Borrower or, if applicable, a Mortgaged Property Subsidiary and the Agent, on
behalf of the Lenders, and reasonably satisfactory in form and substance to the
Agent, as each such agreement may be amended, restated, supplemented or
otherwise modified from time to time in accordance with the terms thereof and
hereof.
CREDIT AGREEMENT
32
"Term Loan" means the Indebtedness incurred by Borrower and other
parties under the Term Loan Agreement.
"Term Loan Agreement" means that certain Senior Secured Credit
Agreement dated as of October 13, 1997, by and among COPT (formerly known as
Royale Investments, Inc., a Minnesota corporation), Borrower (formerly known as
FCO, L.P.), Commercial Office Properties Holdings, Inc. (formerly known as FCO
Holdings, Inc.), a Delaware corporation, Blue ▇▇▇▇ Investment Company, L.P., a
Delaware limited partnership, South Brunswick Investors, L.P., a Delaware
limited partnership, Comcourt Investors, L.P., a Delaware limited partnership,
and ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇, L.P., a Pennsylvania limited partnership, collectively, as
"Loan Parties" and Bankers Trust Company as "Lender", as it may be amended,
restated, supplemented or otherwise modified from time to time.
"Title Company" means (i) as of any date on or prior to the Closing
Date, Commonwealth Land Title Insurance Company and (ii) as of any date after
the Closing Date, such other title company as may be selected by Borrower and
approved by the Agent in its reasonable discretion.
"Title Policies" means, with respect to the Mortgaged Properties, the
paid mortgagee policies of title insurance in the form of a 1970 ALTA loan
policy (or other form of loan policy available in the applicable state and
acceptable to the Agent) and issued by the Title Company.
"Total Mortgaged Property Adjusted Net Income" means, for any period
and as of any date of determination, the aggregate Property Adjusted Net Income
for such period with respect to all Mortgaged Properties.
"Total Mortgaged Property Interest Expense" means, for any period,
total interest expense related to outstanding Indebtedness secured by the
Mortgaged Properties, such interest to be calculated for purposes of this
Agreement against the aggregate amount of the Commitments regardless of the
actual outstanding principal amount of the Loans using a constant based on the
10-year Treasury Rate as of the date of determination, plus 1.75%, instead of
the interest rates actually applicable thereto.
"Transfer" means any conveyance, assignment, sale, sale and leaseback,
mortgaging, encumbrance, pledging, hypothecation, granting of a security
interest in, granting of options with respect to or other disposition of
(directly or indirectly, voluntarily or involuntarily, by operation of law or
otherwise, and whether or not for consideration or of record) all or any portion
of any legal or beneficial interest (i) in all or any portion of any Property or
(ii) in any other assets of any Loan Party or any of its Subsidiaries, or (iii)
of any Partnership Interest held by COPT in Borrower.
CREDIT AGREEMENT
33
"Treasury Rate" means, as of any date or determination, a rate equal to
the annual yield to maturity on the U.S. Treasury Constant Maturity Series with
a ten year maturity, as such yield is reported in Federal Reserve Statistical
Release H.15 -Selected Interest Rate, published most recently prior to the date
the applicable Treasury Rate is being determined. Such yield shall be determined
by straight line linear interpolation between the yields reported in Release
H.15, if necessary. In the event Release H.15 is no longer published, Agent
shall select, in its reasonable discretion, an alternate basis for the
determination of Treasury yield for U.S. Treasury Constant Maturity Series with
ten year maturities.
"United States of America" means the 50 states of the United States of
America and Washington, D.C., but excluding any territories or possessions
thereof other than the Commonwealth of Puerto Rico.
"Wholly Owned" means, with respect to any Subsidiary of any Person, a
Subsidiary all of the outstanding equity Securities of which are owned directly
or indirectly by such Person.
"Work" has the meaning assigned to that term in
Section 5.11.6.
CREDIT AGREEMENT
34
SENIOR SECURED REVOLVING CREDIT AGREEMENT
SCHEDULE 1.1 A
Interests of Loan Parties for Mortgaged Properties
-----------------------------------------------------------------------------------------------
Entity Property Ownership
-----------------------------------------------------------------------------------------------
Airport Square II, LLC Airport Square II 50% - COPT Airport Square One, LLC
50% - COPT Airport Square Two, LLC
-----------------------------------------------------------------------------------------------
Airport Square IV, LLC Airport Square IV 50% - COPT Airport Square One, LLC
50% - COPT Airport Square Two, LLC
-----------------------------------------------------------------------------------------------
Airport Square V, LLC Airport Square V 50% - COPT Airport Square One, LLC
50% - COPT Airport Square Two, LLC
-----------------------------------------------------------------------------------------------
Airport Square X, LLC ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇ ▇▇% - ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ One, LLC
50% - COPT Airport Square Two, LLC
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Airport Square XI, LLC Airport Square XI 50% - COPT Airport Square One, LLC
50% - COPT Airport Square Two, LLC
-----------------------------------------------------------------------------------------------
Airport Square XIII, LLC Airport Square XII 50% - COPT Airport Square One, LLC
50% - COPT Airport Square Two, LLC
-----------------------------------------------------------------------------------------------
Airport Square XIV, LLC Airport Square XIV 50% - COPT Airport Square One, LLC
50% - COPT Airport Square Two, LLC
-----------------------------------------------------------------------------------------------
Airport Square XIX, LLC Airport Square XIX 50% - COPT Airport Square One, LLC
50% - COPT Airport Square Two, LLC
-----------------------------------------------------------------------------------------------
Airport Square XX, LLC Airport Square XX 50% - COPT Airport Square One, LLC
50% - COPT Airport Square Two, LLC
-----------------------------------------------------------------------------------------------
Tech Park I, LLC Tech Park I 50% - COPT Airport Square One, LLC
50% - COPT Airport Square Two, LLC
-----------------------------------------------------------------------------------------------
Tech Park II, LLC Tech Park II 50% - COPT Airport Square One, LLC
50% - COPT Airport Square Two, LLC
-----------------------------------------------------------------------------------------------
Tech Park IV, LLC Tech Park IV 50% - COPT Airport Square One, LLC
50% - COPT Airport Square Two, LLC
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