Exhibit 99.2
AMENDED AND RESTATED SENIOR SECURED CREDIT AGREEMENT
$100,000,000
DATED AS OF AUGUST 31, 1998
BETWEEN
CORPORATE OFFICE PROPERTIES TRUST,
CORPORATE OFFICE PROPERTIES, L.P.,
CORPORATE OFFICE PROPERTIES HOLDINGS, INC.,
BLUE XXXX INVESTMENT COMPANY, L.P.,
SOUTH BRUNSWICK INVESTORS, L.P.,
COMCOURT INVESTORS, L.P.,
AND
0000 XXXXX XXXXX, L.P.
AS LOAN PARTIES,
BANKERS TRUST COMPANY,
AND EACH OTHER LENDER THAT MAY HEREINAFTER BECOME
A PARTY TO THIS AGREEMENT PURSUANT TO SECTION 8.1.1,
COLLECTIVELY AS LENDERS
AND
BANKERS TRUST COMPANY,
AS AGENT
CREDIT AGREEMENT
TABLE OF CONTENTS
Page
ARTICLE 1....................................................................11
1.1 APPENDIX OF DEFINED TERMS..........................................11
1.2 ACCOUNTING TERMS; UTILIZATION OF GAAP FOR PURPOSES OF
CALCULATIONS UNDER AGREEMENT; PRO FORMA..........................11
1.3 CERTAIN REFERENCES, CAPTIONS, PERSONS, AND EXPRESSIONS.............11
1.4 DRAFTER............................................................11
1.5 KNOWLEDGE..........................................................11
ARTICLE 2....................................................................12
2.1 AGREEMENT TO LEND AND BORROW.......................................12
2.2 DISBURSEMENT OF FUNDS..............................................12
2.3 EVIDENCE OF INDEBTEDNESS AND MATURITY; THE REGISTER................12
2.4 EXTENSION OF MATURITY DATE.........................................13
2.5 FEES...............................................................14
2.6 INTEREST ON THE LOANS..............................................14
2.7 REPAYMENTS AND PREPAYMENTS; GENERAL PROVISIONS REGARDING PAYMENTS..15
2.7.1 SCHEDULED PAYMENTS OF THE LOANS............................15
2.7.2 PREPAYMENTS................................................15
2.7.3 APPLICATION OF PAYMENTS TO PRINCIPAL AND INTEREST..........15
2.7.4 GENERAL PROVISIONS REGARDING PAYMENTS......................15
2.8 RELEASES OF PROPERTIES.............................................17
2.8.1 CONDITIONS TO RELEASE......................................17
2.8.2 ...........................................................18
2.8.3 EFFECT OF RELEASE..........................................18
2.9 USE OF LOAN PROCEEDS...............................................18
2.9.1 LOANS......................................................18
2.9.2 MARGIN REGULATIONS.........................................18
2.10 SPECIAL PROVISIONS GOVERNING EURODOLLAR RATE......................18
2.10.1 SPECIAL EURODOLLAR INTEREST RATE PROVISIONS...............18
2.10.2 DETERMINATION OF APPLICABLE INTEREST RATE.................19
2.10.3 Inability to Determine Applicable Interest Rate...........19
2.10.4 ILLEGALITY OR IMPRACTICABILITY OF EURODOLLAR RATE.........19
2.10.5 Compensation For Breakage or Non-Commencement of
Interest Periods.................................................20
2.10.6 BOOKING OF EURODOLLAR RATE LOANS..........................20
2.10.7 ASSUMPTIONS CONCERNING FUNDING OF EURODOLLAR RATE LOANS...20
2.10.8 INCREASED COSTS; TAXES; CAPITAL ADEQUACY..................21
2.10.9 WITHHOLDING OF TAXES......................................21
2.10.10 CAPITAL ADEQUACY ADJUSTMENT..............................23
2.10.11 OBLIGATION OF THE LENDER TO MITIGATE.....................24
ARTICLE 3....................................................................24
3.1 CONDITIONS PRECEDENT TO LENDER'S OBLIGATIONS.......................24
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3.1.1 CORPORATE DOCUMENTS........................................24
3.1.2 PARTNERSHIP DOCUMENTS......................................25
3.1.3 OPERATING STATEMENTS.......................................26
3.1.4 OFFICER'S CERTIFICATES.....................................26
3.1.5 Maintenance of Tenanting Costs Account.....................26
3.1.6 PAYMENT OF FEES............................................26
3.1.7 NO MATERIAL ADVERSE EFFECT.................................26
3.1.8 SECURITY INTERESTS.........................................26
3.1.9 INSURANCE..................................................28
3.1.10 MANAGEMENT AGREEMENTS.....................................29
3.1.11 MATERIAL LEASES; TENANT ESTOPPEL CERTIFICATES.............29
3.1.12 ENVIRONMENTAL AUDITS......................................29
3.1.13 ENGINEERING REPORTS.......................................30
3.1.14 APPRAISALS................................................30
3.1.15 OPINIONS OF LOAN PARTIES' COUNSEL; AUDITOR'S LETTER.......30
3.1.16 OPINION OF AGENT'S COUNSEL................................30
3.1.17 NO ADVERSE LITIGATION.....................................30
3.1.18 EXISTING INDEBTEDNESS.....................................31
3.1.19 CONTINGENT OBLIGATIONS....................................31
3.1.20 PAYMENT OF FEES AND EXPENSES..............................31
3.1.21 COMPLETION OF PROCEEDINGS.................................31
3.1.22 OTHER DOCUMENTS...........................................31
3.2 INTENTIONALLY OMITTED..............................................32
ARTICLE 4....................................................................32
4.1 ORGANIZATION, POWERS, QUALIFICATION, GOOD STANDING, BUSINESS AND
SUBSIDIARIES.....................................................32
4.1.2 QUALIFICATION AND GOOD STANDING............................32
4.1.3 CONDUCT OF BUSINESS........................................32
4.2 AUTHORIZATION OF BORROWING, ETC....................................32
4.2.1 AUTHORIZATION OF BORROWING.................................32
4.2.2 NO CONFLICT................................................33
4.2.3 GOVERNMENTAL CONSENTS......................................33
4.2.4 BINDING OBLIGATION.........................................33
4.3 FINANCIAL CONDITION; CONTINGENT OBLIGATIONS........................33
4.3.1 FINANCIAL CONDITION........................................33
4.3.2 CONTINGENT OBLIGATIONS.....................................34
4.4 EXISTING GENERAL PARTNERS..........................................34
4.5 PROPERTIES; AGREEMENTS; LICENSES...................................34
4.5.1 TITLE TO PROPERTIES; LIENS.................................34
4.5.2 MATERIAL LEASES............................................34
4.6 LITIGATION; ADVERSE FACTS..........................................35
4.7 TAXES..............................................................35
4.7.1 PAYMENT OF TAXES...........................................35
4.7.2 REIT STATUS................................................35
4.7.3 FOREIGN PERSON.............................................36
4.7.4 CLASSIFICATION AS A PARTNERSHIP............................36
4.8 PERFORMANCE OF AGREEMENTS; MATERIALLY ADVERSE AGREEMENTS...........36
4.9 GOVERNMENTAL REGULATION; SECURITIES ACTIVITIES.....................36
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4.10 EMPLOYEE BENEFIT PLANS............................................36
4.11 CERTAIN FEES......................................................36
4.12 SOLVENCY..........................................................37
4.13 DISCLOSURE........................................................37
4.14 LIENS ON THE COLLATERAL...........................................37
4.14.1 GENERAL...................................................38
4.14.2 MORTGAGES.................................................38
4.14.3 ASSIGNMENTS OF RENTS AND LEASES...........................38
4.14.4 MECHANICS' LIENS..........................................38
4.14.5 FILINGS AND RECORDINGS....................................38
4.15 ZONING; AUTHORIZATIONS............................................39
4.15.1 ZONING....................................................39
4.15.2 AUTHORIZATIONS............................................39
4.16 PHYSICAL CONDITION; ENCROACHMENT; CAPITAL EXPENDITURES............39
4.16.1 PHYSICAL CONDITION; ENCROACHMENT..........................39
4.16.2 CAPITAL EXPENDITURES......................................40
4.17 INSURANCE.........................................................40
4.18 LEASES............................................................40
4.19 ENVIRONMENTAL REPORTS; ENGINEERING REPORTS; APPRAISALS; MARKET
STUDIES..........................................................40
4.20 NO CONDEMNATION OR CASUALTY.......................................40
4.21 UTILITIES AND ACCESS..............................................40
4.22 WETLANDS..........................................................41
4.23 LABOR MATTERS.....................................................41
4.24 EMPLOYMENT AND LABOR AGREEMENTS...................................41
ARTICLE 5....................................................................41
5.1 FINANCIAL STATEMENTS AND OTHER REPORTS.............................41
5.2 ENTITY EXISTENCE; FINANCIAL MATTERS; CONTROL.......................47
5.2.1 ENTITY EXISTENCE...........................................47
5.2.2 FINANCIAL MATTERS..........................................47
5.2.3 CHANGE IN CONTROL..........................................47
5.2.4 EMPLOYMENT OF CONTROLLING PRINCIPALS.......................48
5.3 QUALIFIED INCOME COVENANT; COMMON STOCK............................48
5.5 MAINTENANCE OF PROPERTIES; REPAIR; ALTERATION......................48
5.6 [INTENTIONALLY DELETED]............................................49
5.7 TENANTING COSTS RESERVE ACCOUNT....................................49
5.8 INSPECTION; THE AGENT; APPRAISALS..................................50
5.8.1 INSPECTION.................................................50
5.8.2 APPRAISALS.................................................50
5.9 COMPLIANCE WITH LAWS, AUTHORIZATIONS, ETC..........................50
5.10 PERFORMANCE OF LOAN DOCUMENTS AND RELATED DOCUMENTS...............51
5.11 PAYMENT OF LIENS..................................................51
5.11.1 REMOVAL BY LOAN PARTIES...................................51
5.11.2 REMOVAL BY LENDER.........................................51
5.11.3 TITLE SEARCHES............................................51
5.12 INSURANCE.........................................................51
5.12.1 RISKS TO BE INSURED.......................................52
5.12.2 POLICY PROVISIONS.........................................55
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5.12.3 INCREASES IN COVERAGE.....................................55
5.12.4 PAYMENT OF PROCEEDS.......................................56
5.12.5 DELIVERY OF COUNTERPART POLICIES; EVIDENCE................56
5.12.6 REPLACEMENT OR RENEWAL POLICIES...........................56
5.12.7 MATERIAL CHANGE IN POLICY.................................56
5.12.8 SEPARATE INSURANCE........................................56
5.13 CASUALTY AND CONDEMNATION; RESTORATION............................56
5.13.1 NOTICE OF CASUALTY........................................57
5.13.2 INSURANCE PROCEEDS........................................57
5.13.3 Notice of Condemnation; Negotiation and Settlement of
Claims..................................................58
5.13.4 CONDEMNATION PROCEEDS.....................................58
5.13.5 Repayment of Loans; Payment of Release Price; Conditions to
Restoration................................................59
5.13.6 RESTORATION...............................................60
5.13.7 ENGINEER'S INSPECTION.....................................62
5.14 XXXXXXXX CLAUSE...................................................63
5.15 FURTHER ASSURANCES................................................63
5.15.1 ASSURANCES................................................63
5.15.2 FILING AND RECORDING OBLIGATIONS..........................64
5.15.3 COSTS OF DEFENDING AND UPHOLDING THE LIEN.................64
5.15.4 COSTS OF ENFORCEMENT......................................65
5.16 RENOVATIONS.......................................................65
5.16.1 NOTICE OF RENOVATION; RENOVATION PLANS....................65
5.16.2 CONDUCT OF RENOVATION.....................................65
5.16.3 COMPLETION CERTIFICATE....................................65
5.16.4 ENGINEER'S INSPECTION.....................................65
ARTICLE 6....................................................................66
6.1 INDEBTEDNESS OF PARTNERSHIP BORROWER...............................66
6.2 INDEBTEDNESS OF COPLP AND COPT.....................................66
6.3 LIENS AND RELATED MATTERS..........................................66
6.3.1 PROHIBITION ON LIENS.......................................66
6.3.2 NO FURTHER NEGATIVE PLEDGES................................66
6.4 INVESTMENTS........................................................67
6.5 CONTINGENT OBLIGATIONS.............................................67
6.6 DISTRIBUTIONS......................................................68
6.7 FINANCIAL COVENANTS................................................68
6.7.1 CONSOLIDATED TANGIBLE NET WORTH............................68
6.7.2 MINIMUM PROPERTY INTEREST COVERAGE.........................68
6.7.3 MINIMUM PROPERTY HEDGED INTEREST COVERAGE..................68
6.7.4 MINIMUM CONSOLIDATED INTEREST COVERAGE.....................68
6.7.5 MAXIMUM CONSOLIDATED UNHEDGED FLOATING RATE DEBT...........69
6.7.6 MAXIMUM CONSOLIDATED TOTAL INDEBTEDNESS....................69
6.8 FUNDAMENTAL CHANGES................................................69
6.9 ZONING AND CONTRACT CHANGES AND COMPLIANCE.........................70
6.10 NO JOINT ASSESSMENT; SEPARATE LOTS................................70
6.11 TRANSACTIONS WITH AFFILIATED PERSONS..............................71
6.12 SALE OR DISCOUNT OF RECEIVABLES...................................71
6.13 OWNERSHIP OF SUBSIDIARIES.........................................71
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6.14 CONDUCT OF BUSINESS...............................................71
6.14.1 CONDUCT OF BUSINESS.......................................71
6.15 PROPERTIES........................................................72
6.15.1 TRANSFER OF PROPERTIES....................................72
6.16 MANAGEMENT AGREEMENTS; MATERIAL LEASES............................72
6.17 CHANGES IN CERTAIN OBLIGATIONS AND DOCUMENTS; ISSUANCE OF EQUITY
SECURITIES.......................................................72
6.17.1 CREDIT AGREEMENT..........................................72
6.17.2 EQUITY SECURITIES.........................................72
6.17.3 ORGANIZATION DOCUMENTS....................................73
6.18 FISCAL YEAR.......................................................73
ARTICLE 7....................................................................73
7.1 EVENTS OF DEFAULT..................................................73
7.1.1 FAILURE TO MAKE PAYMENTS WHEN DUE..........................73
7.1.2 OTHER DEFAULTS UNDER LOAN DOCUMENTS........................73
7.1.3 DEFAULT IN OTHER AGREEMENTS................................73
7.1.4 BREACH OF WARRANTY.........................................74
7.1.5 Invalidity of Loan Document; Failure of Security;
Repudiation of Obligations...............................74
7.1.6 PROHIBITED TRANSFERS.......................................74
7.1.7 INVOLUNTARY BANKRUPTCY; APPOINTMENT OF RECEIVER, ETC.......74
7.1.8 VOLUNTARY BANKRUPTCY; APPOINTMENT OF RECEIVER, ETC.........75
7.1.9 JUDGMENTS AND ATTACHMENTS..................................75
7.1.10 DISSOLUTION...............................................75
7.1.11 MATERIAL ADVERSE EFFECT...................................75
7.1.12 DEFAULT UNDER REVOLVING LOAN..............................76
7.2 CERTAIN REMEDIES...................................................76
7.3 LIMITATION ON RECOURSE AGAINST NON-RECOURSE PARTIES................78
ARTICLE 8....................................................................78
8.1 ASSIGNMENTS AND PARTICIPATIONS IN COMMITMENTS AND LOANS............78
8.1.1 GENERAL....................................................78
8.1.2 PARTICIPATIONS.............................................79
8.1.3 ASSIGNMENTS TO FEDERAL RESERVE BANKS.......................79
8.1.4 INFORMATION................................................79
8.1.5 PRO RATA ASSIGNMENTS AND PARTICIPATIONS....................79
8.2 EXPENSES...........................................................79
8.3 INDEMNITY..........................................................80
8.3.1 INDEMNITY..................................................81
8.3.2 PROCEDURE..................................................82
8.3.3 CONTRIBUTION...............................................82
8.3.4 NO LIMITATION..............................................83
8.3.5 INDEPENDENCE OF INDEMNITY; NO ENLARGEMENT..................83
8.4 NO JOINT VENTURE OR PARTNERSHIP....................................83
8.5 AMENDMENTS AND WAIVERS.............................................83
8.5.1 AMENDMENTS, ETC............................................83
8.5.2 DEEMED CONSENT.............................................84
8.6 INDEPENDENCE OF COVENANTS..........................................84
8.7 NOTICES............................................................84
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8.8 SURVIVAL OF REPRESENTATIONS, WARRANTIES AND AGREEMENTS.............85
8.9 OBLIGATIONS SEVERAL; INDEPENDENT NATURE OF THE LENDERS' RIGHTS.....85
8.10 REMEDIES OF LOAN PARTIES..........................................85
8.11 MAXIMUM AMOUNT....................................................85
8.12 MARSHALLING; PAYMENTS SET ASIDE...................................86
8.13 AGREEMENT TO CONTRIBUTE...........................................86
8.13.1 RIGHT TO CONTRIBUTION.....................................86
8.13.2 BENEFIT AMOUNT............................................87
8.13.3 TERM LOAN CONTRIBUTIONS...................................87
8.13.4 SUBORDINATION.............................................87
8.13.5 PRESERVATION OF RIGHTS....................................87
8.13.6 SUBSIDIARY PAYMENT........................................87
8.13.7 ASSET OF FUNDING LOAN PARTY...............................87
8.13.8 DATE OF DETERMINATION.....................................87
8.14 SURETYSHIP WAIVERS................................................87
8.15 SEVERABILITY......................................................89
8.16 HEADINGS..........................................................89
8.17 APPLICABLE LAW....................................................90
8.18 SUCCESSORS AND ASSIGNS............................................90
8.19 CONSENT TO JURISDICTION AND SERVICE OF PROCESS....................90
8.20 WAIVER OF JURY TRIAL..............................................91
8.21 COUNTERPARTS; EFFECTIVENESS.......................................92
8.22 MATERIAL INDUCEMENT...............................................92
8.23 ENTIRE AGREEMENT..................................................92
8.24 RATABLE SHARING...................................................93
8.25 AGENT'S DISCRETION................................................93
ARTICLE 9....................................................................93
9.1 APPOINTMENT........................................................93
9.2 POWERS; GENERAL IMMUNITY...........................................94
9.2.1 DUTIES SPECIFIED...........................................94
9.2.2 NO RESPONSIBILITY FOR CERTAIN MATTERS......................94
9.2.3 EXCULPATORY PROVISIONS.....................................94
9.2.4 AGENT ENTITLED TO ACT AS LENDER............................95
9.3 REPRESENTATIONS AND WARRANTIES; NO RESPONSIBILITY FOR APPRAISAL
OF CREDITWORTHINESS..............................................95
9.4 RIGHT TO INDEMNITY.................................................96
9.5 PAYEE OF NOTE TREATED AS OWNER.....................................96
9.6 SECURITY DOCUMENTS, ETC............................................96
9.6.1 SECURITY DOCUMENTS.........................................96
9.6.2 LENDER ACTION..............................................97
9.7 SUCCESSOR AGENT....................................................97
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EXHIBITS
Exhibit A The Properties
Exhibit B Form of Amended and Restated Promissory Note
Exhibit C Property Amounts
Exhibit D Compliance Certificate
Exhibit E Assignment Agreement
8
SCHEDULES
Schedule 2.2 - Disbursement of Funds
Schedule 4.1.1 - Loan Party Jurisdictions
Schedule 4.3.1 - Certain Contingent Obligations
Schedule 4.3.3 - Certain Contingent Obligations
Schedule 4.5.1 - Options, Rights of First Refusal, Etc.
Schedule 4.5.2 - Material Leases
Schedule 4.6 - Litigation
Schedule 4.8 - Materially Adverse Agreements
Schedule 5.1.14 - Form of Financial Plans
Schedule 5.2.3 - Initial Shareholdings of Controlling Principals
Schedule 5.6 - Rent Reserve Account
Schedule 5.7 - Tenant Costs Account
Schedule 6.4 - Investments
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AMENDED AND RESTATED SENIOR SECURED CREDIT AGREEMENT
This AMENDED AND RESTATED SENIOR SECURED CREDIT AGREEMENT (this
"AGREEMENT") is dated as of August 31, 1998 (the "EFFECTIVE DATE") and entered
into by and among CORPORATE OFFICE PROPERTIES TRUST, a Maryland real estate
investment trust ("COPT"), successor to Corporate Office Properties Trust, Inc.
and Royale Investment, Inc., CORPORATE OFFICE PROPERTIES, L.P., a Delaware
limited partnership ("COPLP"), successor to FCO, L.P., CORPORATE OFFICE
PROPERTIES HOLDINGS, INC. ("COPH"), a Delaware corporation, successor to FCO
Holdings, Inc., BLUE XXXX INVESTMENT COMPANY, L.P, a Delaware limited
partnership ("BLUE XXXX"), SOUTH BRUNSWICK INVESTORS, L.P., a Delaware limited
partnership ("SOUTH BRUNSWICK"), COMCOURT INVESTORS, L.P., a Delaware limited
partnership ("COMCOURT") and 0000 XXXXX XXXXX, L.P., a Pennsylvania limited
partnership ("FLANK Drive" and, together with all of the foregoing parties, the
"LOAN PARTIES") and BANKERS TRUST COMPANY, and each other Lender that may
hereinafter 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. Pursuant to that certain Senior Secured Credit Agreement dated as
of October 13, 1997 by and among the Loan Parties (or their predecessors) and
Lenders (the "ORIGINAL AGREEMENT"), Lenders made a loan to Blue Xxxx, South
Brunswick, Comcourt and Flank Drive in the original principal amount of
$100,000,000 (the "LOANS"). Pursuant to that certain Senior Secured Revolving
Credit Agreement dated as of May 28, 1998 (the "REVOLVING CREDIT AGREEMENT") by
and among COPT, COPLP, certain Mortgaged Property Subsidiaries (as defined
therein), Lenders and Agent, Lenders made a revolving loan to COPLP in the
aggregate principal amount of up to $100,000,000 (the "REVOLVING LOAN").
B. The Loan Parties and Lenders desire to amend and restate the
Original Agreement to, among other things, conform certain covenants, provisions
and terms of the Loan with the applicable covenants, provisions and terms of the
Revolving Loan.
C. In connection with the amendment and restatement of the Original
Agreement as set forth in this Agreement, the Loan Parties and Lenders also
desire that COPLP (but not COPT) shall become a Borrower under this Agreement
and that certain collateral pledged to Lenders as security for the Revolving
Loan shall also be pledged to Lenders as security for the Loans.
D. The making of the Loans and the amendment and restatement of the
Original Agreement as contemplated by this Agreement are of substantial benefit
to all of the Loan Parties, including the facilitation of the transactions
described in these Recitals.
NOW, THEREFORE, in consideration of the premises and the agreements,
provisions and covenants herein contained, the Loan Parties and Lenders and
Agent agree as follows:
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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 the Borrower to the Agent for distribution to the
Lenders pursuant to Section 5.1 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 5.1.
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 the 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.
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 Properties
owning or managing such Properties for its own account, the actual
11
knowledge or awareness, as of such date, of (i) Xxx X. Xxxxxxx, Xxxx X. Xxxxxx
III and Xxxxxx X. Xxxxxx, (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
TERMS OF THE LOAN
2.1 AGREEMENT TO LEND AND BORROW.
Subject to the terms and conditions of this Agreement and in
reliance upon the representations and warranties of the Loan Parties herein, the
Loan Parties and Lenders agree that the amount of the Loan Amount outstanding
under the Original Agreement on the date hereof shall be deemed the Loans made
to Borrower under this Agreement.
2.2 DISBURSEMENT OF FUNDS. Any portion of the Loans to be disbursed at the
Closing shall be disbursed as set forth on SCHEDULE 2.2 hereto.
2.3 EVIDENCE OF INDEBTEDNESS AND MATURITY; THE REGISTER.
2.3.1 The Loans shall be evidenced by the Amended and Restated
Promissory Notes in the principal amount of the Loan Amount substantially in the
form of Exhibit B to be executed as of the Closing Date and any other Notes
issued by Borrower pursuant to this Agreement. The 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.
2.3.2 As of the Effective Date, COPLP shall for all purposes become
a "borrower" under the Original Agreement (as amended and restated hereby), and
COPLP hereby unconditionally assumes and accepts all of the rights, interests
and obligations thereof.
2.3.3 The Agent shall maintain, at its address referred to in
Section 8.7 a register for the recordation of the names and addresses of the
Lenders and the Commitment and Loans for 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.
2.3.3.1 The Agent shall record in the Register the Commitment and
the Pro Rata Share of 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, including any Readvances. Any such recordation shall be
conclusive and binding on Borrower and each Lender, absent manifest error;
provided, however, that
12
failure to make any such recordation, or any error in such recordation
shall not affect Borrower's Obligations in respect of the applicable Loans.
2.3.3.2 Each Lender shall record on its internal records (including
any promissory note described in Section 2.3.1) the amount of the
Loans applicable to 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 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.
2.3.4 Any Lender may, by notice to the Agent and Borrower, request
that all or part of the principal amount of the Loans applicable to 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 requests for such Note, then a copy of this Agreement may be
presented in lieu of such a Note.
2.4 EXTENSION OF MATURITY DATE.
2.4.1 At any time prior to the date that is 90 days before the third
Anniversary, Borrower may deliver a written notice to Agent requesting that the
Maturity Date be extended from the third Anniversary to the fourth Anniversary
and, if such notice is delivered, the Maturity Date shall be so extended if the
following conditions are satisfied:
2.4.1.1 as of the third Anniversary, no Event of Default or
Potential Event of Default shall have occurred and be continuing
hereunder, no Event of Default or Potential Event of Default (as defined
in the Revolving Credit Agreement) shall have occurred under the Revolving
Credit Agreement and Borrower shall have delivered to Agent an Officers'
Certificate certifying thereto;
2.4.1.2 Borrower shall obtain Interest Rate Agreements in form and
substance reasonably acceptable to Agent (and with security reasonably
acceptable to Agent) sufficient to ensure compliance with Section 6.7.5;
and
2.4.1.3 on or prior to the third Anniversary, Borrower shall have
paid to Agent for distribution to Lenders in accordance with their Pro
Rata Shares in immediately available funds a fee equal to 0.25% of the
Outstanding Loan Amount on the third Anniversary.
2.4.2 If the Maturity Date has been extended pursuant to Section
2.4.1 above, at any time prior to the date that is 90 days before the fourth
Anniversary, Borrower may deliver a written notice to Agent requesting that the
Maturity Date be extended from the fourth
13
Anniversary to the fifth Anniversary and, if such notice is delivered, the
Maturity Date shall be so extended provided that the following conditions are
satisfied:
2.4.2.1 as of the fourth Anniversary, no Event of Default or
Potential Event of Default shall have occurred and be continuing
hereunder, no Event of Default or Potential Event of Default (as defined
in the Revolving Credit Agreement) shall have occurred under the Revolving
Credit Agreement and Borrower shall have delivered to Agent an Officers'
Certificate certifying thereto;
2.4.2.2 Borrower shall obtain Interest Rate Agreements in form and
substance reasonably acceptable to Agent (and with security reasonably
acceptable to Agent) sufficient to ensure compliance with Section 6.7.5;
and
2.4.2.3 on or prior to the fourth Anniversary, Borrower shall have
paid to Agent for distribution to Lenders in accordance with their Pro
Rata Shares in immediately available funds a fee equal to 0.25% of the
Outstanding Loan Amount on the third Anniversary.
2.5 FEES.
Borrower shall pay on the Closing Date the fees described in the Fee
Letter in accordance with the terms thereof.
2.6 INTEREST ON THE LOANS.
2.6.1 RATES OF INTEREST. Subject to the provisions of Section 2.6.3,
during the Initial Term the Outstanding Loan Amount shall bear interest from the
Closing Date to (but not including) the Maturity Date at the Fixed Rate.
Notwithstanding the foregoing, from and after the occurrence of any Event of
Default during the Initial Term, the Outstanding Loan Amount may, at Agent's
sole option, bear interest to (but not including) the Maturity Date at the
Eurodollar Rate for any period during which the provisions of Section 2.6.3 are
not applicable. Upon any exercise by Agent of such option, the Eurodollar Rate
shall, subject to the provisions of Section 2.6.3, remain in effect for the
balance of the Initial Term, notwithstanding, for example, the cure by Borrower
or waiver by Agent of the applicable Event of Default. Subject to the provisions
of Section 2.6.3, during any Extension Terms the Outstanding Loan Amount shall
bear interest from the third Anniversary to (but not including) the Maturity
Date at the Eurodollar Rate.
2.6.2 INTEREST PAYMENTS. Subject to the provisions of Section 2.6.3,
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.
2.6.3 DEFAULT RATE INTEREST. During the continuation of any Event of
Default, the Outstanding Loan Amount 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) 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 selected
by
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Lender at its sole option equal to (i) the sum of 2.0% and the interest rate
otherwise payable under this Agreement with respect to the Outstanding Loan
Amount (or, in the case of any such fees and other amounts, the sum of 2.0% and
the Eurodollar Rate), or (ii) the sum of 2.0% and the Eurodollar Rate, or (iii)
the sum of 2.0% and the Base Rate. Payment or acceptance of the increased rates
of interest provided for in this Section 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 Agent or any Lender.
2.6.4 COMPUTATION OF INTEREST. Interest on the Loans shall be
computed on the basis of a 360-day year and for the actual number of days
elapsed in the period during which it accrues. In computing interest, the date
of the making of the Loans or the first day of an Interest Period shall be
included, and the date of repayment of the Loans or the expiration date of an
Interest Period shall be excluded.
2.7 REPAYMENTS AND PREPAYMENTS; GENERAL PROVISIONS REGARDING PAYMENTS.
2.7.1 SCHEDULED PAYMENTS OF THE LOANS. On each Scheduled Principal
Payment Date, Borrower shall make a principal payment in an amount equal to
one-twelfth of the Principal Reduction Amount. Borrower shall repay the
Outstanding Loan Amount and pay all other Obligations in full no later than the
Maturity Date.
2.7.2 PREPAYMENTS. Borrower may, without prepayment charge or
penalty (but subject to Section 2.10.5), upon not less than three Business Days'
prior notice, prepay the Loans on any Payment Date, in whole or in part in a
minimum amount of $3,000,000 and integral multiples of $500,000 in excess of
that amount (or, if less, the total amount of all outstanding Loans). If a
prepayment is made during an Extension Term, such prepayment shall be
accompanied by the payment of any amounts payable under Section 2.10.5 if then
known, or if not then known, then promptly following Agent's demand therefor. If
such notice of prepayment is given, the principal amount of the Loans specified
in such notice shall become due and payable on the prepayment date specified
therein. Amounts prepaid may not be reborrowed.
2.7.3 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.
2.7.4 GENERAL PROVISIONS REGARDING PAYMENTS.
2.7.4.1 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 Agent not later than 12:00 Noon (New York
time) on the date due at its office located at One Bankers Trust Plaza,
000 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000; funds received by Agent
after that time shall be deemed to have been paid on the next succeeding
Business Day.
2.7.4.2 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,
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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.
2.7.4.3 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. Notwithstanding the foregoing provisions
of this Section 2.7.4.3, if, pursuant to Section 2.10.4, any Affected
Lender maintains Fixed Rate Loans in lieu of its Pro Rata Share of any
Eurodollar Rate Loans, the Agent shall give effect thereto in apportioning
payments received thereafter. Any payment to be apportioned and
distributed by Agent pursuant to this Section 2.7.4.3 that is received by
Agent prior to 12:00 Noon (New York time) on any Business Day shall be so
apportioned and distributed by Agent to the applicable Lenders on such
Business Day; any such payment received by Agent on or after 12:00 Noon
(New York time) on any Business Day shall be so apportioned and
distributed by Agent to the applicable Lenders on the next succeeding
Business Day. Any payment or portion thereof that is not apportioned and
distributed in accordance with the foregoing sentence shall accrue
interest at the Federal Funds Effective Rate from the Business Day on
which the payment is to be distributed to (but not including) the Business
Day on which the payment is apportioned and distributed to the applicable
Lenders, and Agent shall pay to each such Lender its proportionate share
of all such accrued interest at such time as the payment in question is
apportioned and distributed.
2.7.4.4 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.
2.7.5 Application of Proceeds of Collateral and Payments Under
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 by Agent upon all or any part of the Collateral under
any Security 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 Security Document in the order of
priority determined by Agent in its sole discretion.
(ii) APPLICATION OF PAYMENTS UNDER ANY MORTGAGED PROPERTY SUBSIDIARY
Guaranty. All payments received by the Agent under any Mortgaged
Property Subsidiary Guaranty shall be applied promptly from time to
time by the Agent in the order of priority determined by Agent in
its sole discretion.
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2.8 RELEASES OF PROPERTIES.
2.8.1 CONDITIONS TO RELEASE. At any time and from time to time after
the Closing Date, in connection with the refinancing, sale or other permanent
disposition of any Property, Borrower may obtain a Release of the Lien of the
Security Documents on such Property, subject to the following terms and
conditions:
2.8.1.1 Borrower shall have delivered written notice to Agent (a)
not less than 30 days prior to the proposed Release Date specifying the
proposed Release Date and such Property, and (b) not less than 5 days
prior to the actual Release Date specifying such actual Release Date and
such Property;
2.8.1.2 no Event of Default shall have occurred and be continuing as
of the date of the delivery of the release notices (other than an Event of
Default or Potential Event of Default that either (x) pertains solely to
the Property or portion thereof which is the subject of such Release, or
(y) which will be cured by such Release and the transactions consummated
in connection therewith) and no Event of Default shall be continuing as of
the Release Date after giving effect to such Release and the transactions
consummated in connection therewith;
2.8.1.3 Borrower shall concurrently prepay the Loans in an amount
equal to the Release Price for such Property, plus such other amounts, if
any, as may be due by virtue of a prepayment of the Loans under Section
2.7.2;
2.8.1.4 Borrower shall have delivered to Agent (a) an Officers'
Certificate dated and effective as of the Release Date, certifying as to
the matters referred to in Section 2.8.1.2, and (b) an Officer's
Certificate, certified by the Chief Executive Officer or Chief Financial
Officer of Borrower, in detail reasonably satisfactory to Agent and
accompanied by the financial statements and other information used by
Borrower to calculate the information contained therein, demonstrating
that such Release will not cause violation of the covenants set forth in
Section 6.7 of this Agreement.
2.8.1.5 Borrower, at its sole cost and expense, shall have (a)
delivered to Agent one or more endorsements to the Title Policy insuring
that, after giving effect to such Release, the insured Liens created by
the Mortgages on the Properties which are not being Released are in full
force and effect and unaffected by such Release, (b) prepared any and all
documents and instruments necessary to effect such Release, all of which
shall be reasonably satisfactory in form and substance to Agent, and (c)
paid all costs and expenses incurred by Agent and its counsel in
connection with the review, execution and delivery of the release
documents; and
2.8.1.6 all other proceedings taken or to be taken in connection
with such Release and all documents incidental thereto shall be reasonably
satisfactory in form and substance to Agent and Agent's counsel, Agent and
such counsel shall have received all such counterpart originals or
certified copies of such documents as Agent may reasonably request and
counsel for 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.
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Borrower may obtain a Release of the Lien of the Security Documents in respect
of a portion of any Property, if title to such portion has been permanently
Taken, by complying with the foregoing terms and conditions on the applicable
Release Date.
2.8.2 [Intentionally Deleted.]
2.8.3 EFFECT OF RELEASE. Upon any Release of any Property in
accordance with this Section 2.8, such property shall cease to be a 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 Property). From and after release of all
Properties owned by any Borrower, such Borrower shall cease to be a Borrower
hereunder and shall thereafter have no liability for obligations of the Loan
Parties arising from and after the date of such release. Notwithstanding the
foregoing, COPLP shall at all times remain a Borrower hereunder.
2.9 USE OF LOAN PROCEEDS.
2.9.1 LOANS. Subject to the other provisions of this Agreement, the
proceeds of the Loans shall be applied by Borrower (i) FIRST, to the repayment
(or, in the case of the Blue Xxxx Properties, provision reasonably acceptable to
Lender for the repayment) of existing Indebtedness, if any, secured by Liens on
the Properties, and (ii) THEN to such other uses as Borrower shall deem
appropriate.
2.9.2 MARGIN REGULATIONS. No portion of the proceeds of any
borrowing 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.
2.10 SPECIAL PROVISIONS GOVERNING EURODOLLAR RATE.
Notwithstanding any other provision of this Agreement to the
contrary, the following provisions shall govern with respect to the Eurodollar
Rate Loans as to the matters covered:
2.10.1 SPECIAL EURODOLLAR INTEREST RATE PROVISIONS.
2.10.1.1 APPLICABLE RATE. From time to time upon Borrower's request
during the Extension Term Lender shall advise Borrower of the interest
rate applicable to such Loans. Agent shall advise Borrower of the amount
of each interest payment in advance of each Payment Date in accordance
with the customary procedures of Agent with respect thereto, but the
failure of Agent to provide such advice accurately or timely shall not
vary the obligation of Borrower to pay the same in accordance with the
terms of this Agreement.
2.10.1.2 INTEREST PERIODS. At least five Business Days before the
Closing and expiration of each applicable Interest Period, Borrower shall
deliver to Lender a Notice of Interest Period Selection selecting an
interest period (each an "INTEREST PERIOD") to be applicable to the Loans,
which Interest Period shall be at
18
Borrower's option either a one, three or six month period; PROVIDED,
HOWEVER, that:
(a) the initial Interest Period shall commence on the third
Anniversary;
(b) each successive Interest Period shall commence on the day
on which the next preceding Interest Period expires;
(c) 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, unless the 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, in which
case such Interest Period shall expire on the next preceding
Business Day;
(d) 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 end on the last Business Day of a calendar month;
(e) no Interest Period with respect to any portion of the
Loans shall extend beyond the Maturity Date; and
(f) if Borrower fails to properly select an Interest Period,
Borrower shall be deemed to have selected an Interest Period of one
month.
2.10.2 DETERMINATION OF APPLICABLE INTEREST RATE. As soon as
practicable after 10:00 A.M. (New York time) on each Interest Rate Determination
Date, Agent shall determine the Eurodollar 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. Agent's determination shall
be final, conclusive and binding upon all parties, absent manifest error.
2.10.3 Inability to Determine Applicable Interest Rate; Existence of
Default. If on any Interest Rate Determination Date Agent determines in good
faith that by reason of circumstances affecting the interbank Eurodollar market,
adequate and fair means do not exist for ascertaining the Eurodollar Rate, Agent
shall on such date give notice to Borrower of such determination, whereupon any
Notice of Interest Period Selection given by Borrower with respect to the Loans
in respect of which such determination was made shall be deemed to contain a
request that the interest rate applicable to the Loans be the Base Rate. Agent's
determination shall be final and conclusive and binding upon all parties hereto,
absent manifest error.
2.10.4 ILLEGALITY OR IMPRACTICABILITY OF EURODOLLAR RATE. If at any
time any Lender determines in good faith that the application of its Eurodollar
Rate (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 not having the force 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
19
and adversely affect the interbank Eurodollar 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 convert the interest rate applicable to such Loans to the Eurodollar
Rate 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
Eurodollar Rate then being requested by Borrower to continue hereunder, the
Affected Lender shall convert such Loans to the Fixed Rate (c) the Affected
Lender's obligation to maintain its outstanding Eurodollar 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 Eurodollar Rate Loans
or when required by law and (d) the Affected Loans shall automatically convert
into Fixed Rate Loans on the date of such termination. Except as provided in the
immediately preceding sentence, nothing in this Section 2.10.4 shall affect the
obligation of any Lender other than an Affected Lender to maintain Loans as, or
to convert Loans to, Eurodollar 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 Eurodollar 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 and Borrower.
2.10.5 Compensation For Breakage or Non-Commencement of Interest
Periods. Borrower shall compensate Lenders, upon written request by Agent
setting forth the basis for requesting such amounts, for all reasonable costs,
expenses and liabilities (including any interest paid by any Lender to lenders
of funds borrowed by it to make or carry its Eurodollar Rate Loans and any
costs, expense or liability sustained by any Lender in connection with the
liquidation or re-employment of such funds) which that Lender may sustain: (i)
if for any reason a continuation of the Eurodollar Rate does not occur on a date
specified therefor in a Notice of Interest Period Selection, (ii) if any
prepayment occurs on a date that is not the last day of an Interest Period,
(iii) if any prepayment (including any prepayment pursuant to Section 2.7.2) 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.
2.10.6 BOOKING OF EURODOLLAR RATE LOANS. Each Lender may make, carry
or transfer the Loans at, to, or for the account of any of its branch offices or
the office of 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 Eurodollar Rate under Section 2.10.4, (y) payment
obligations under Section 2.10.8, or (z) withholding for Taxes under Section
2.10.9.
2.10.7 ASSUMPTIONS CONCERNING FUNDING OF EURODOLLAR RATE LOANS.
Calculation of all amounts payable to a Lender under this Agreement shall be
made as though such Lender had actually funded the Loans through the purchase of
a Eurodollar deposit bearing interest at the rate obtained pursuant to clause
(i) of the definition of Adjusted Eurodollar Rate in an amount equal to the
amount of the Loans and having a maturity comparable to the relevant Interest
Period and through the transfer of such Eurodollar deposit from an offshore
office of that Lender to a domestic office of that Lender located in the United
States of America.
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Nevertheless, each Lender may fund the 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.
2.10.8 INCREASED COSTS; TAXES; CAPITAL ADEQUACY.
2.10.8.1 COMPENSATION FOR INCREASED COSTS AND TAXES. Subject to
Section 2.10.9 (which shall be controlling with respect to the matters
covered thereby), if 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) 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 Lender (other than any such reserve or other requirements
with respect to the 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 Lender (or its applicable lending
office) or its obligations hereunder or the interbank Eurodollar
market;
and the result of any of the foregoing is to increase the cost to Lender of
agreeing to make, making or maintaining Loans hereunder then bearing the
Eurodollar 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 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 Lender for any such increased cost or reduction in amounts received
or receivable hereunder. Lender shall deliver to Borrower (with a copy to
Lender) a written statement setting forth in reasonable detail the basis for
calculating the additional amounts owed to Lender under this Section, which
statement shall be conclusive and binding upon all parties hereto absent
manifest error.
2.10.9 WITHHOLDING OF TAXES.
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2.10.9.1 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 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 or (d)
Taxes to which any Lender is generally subject by reason of its conduct of
business therein) 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 or any other jurisdiction from or to which a
payment is made by or on behalf of Borrower.
2.10.9.2 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 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 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 2.10.9.2(b) above to pay, Borrower shall deliver to the
Agent evidence satisfactory to the 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 any Lender listed on a signature page hereof) or
after the date such Lender became a Lender pursuant to Section 8.1 (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
22
Agreement (in the case of any Lender listed on a signature page hereof) or at
the date such Lender became a Lender pursuant to Section 8.1 (in the case of
each other Lender) in respect of payments to such Lender.
2.10.9.3 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 8.1, 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 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 be
reasonably requested by the Borrower.
2.10.9.4 REFUNDS, ETC. If any Lender receives a refund in respect of
any Taxes paid by Borrower pursuant to Section 2.10.9.2(b), it shall
promptly pay to Borrower such refund and any interest paid with respect
thereto.
2.10.10 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 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
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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 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 2.10.10 shall require Borrower to make any payments in respect of
Taxes; the Borrower's obligations to indemnify for Lender Taxes shall be limited
to its obligations under Section 2.10.9.
2.10.11 OBLIGATION OF THE LENDER TO MITIGATE.
Each Lender agrees that, as promptly as practicable after the
officer of Lender responsible for administering the Loans becomes aware of the
occurrence of an event or the existence of a condition that would entitle Lender
to (x) become an Affected Lender, (y) receive payments under Section 2.10.8, or
(z) require Borrower to make payments under Section 2.10.9, 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 Lender through another lending
office of 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 Lender; PROVIDED, HOWEVER, that 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 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 (setting forth in reasonable detail the basis for requesting
such amount) submitted by Lender to Borrower (with a copy to Agent) shall be
conclusive absent manifest error.
ARTICLE 3
CONDITIONS
3.1 CONDITIONS PRECEDENT TO LENDER'S OBLIGATIONS.
Lender's obligations under this Agreement are conditioned upon the
satisfaction prior to or concurrent with the Closing, at the expense of
Borrower, of the conditions specified in this Section 3.1, in each case as
reasonably determined by Agent:
3.1.1 CORPORATE DOCUMENTS. Each Loan Party that is a corporation,
trust, or limited liability company and each corporation, trust, or limited
liability company, or general partner of a Partnership Loan Party shall deliver
or cause to be delivered to Agent (with sufficient originally executed copies
for each Lender and Agent's counsel) the following, each dated the Closing Date
unless otherwise noted:
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3.1.1.1 executed originals of each Loan Document to which it is a
party;
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 a Property owned by such Loan Party is located), each dated
not more than 60 days prior to the Closing Date;
3.1.1.3 copies of its Bylaws, certified as of the Closing Date 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, 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 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 Partnership Loan Party shall
deliver to Agent (with sufficient originally executed copies for each Lender and
Agent's counsel) the following, each unless otherwise noted dated the Closing
Date:
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 as being
in full force and effect without modification or amendment;
3.1.2.3 with respect to each Partnership Loan Party that is a
limited partnership, 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,
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 a Property owned by such entity is located;
3.1.2.4 all documents of such Partnership 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 by the general partner of such
Partnership Loan Party; and
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3.1.2.5 a signature and incumbency certificate of the Person(s)
executing on behalf of such Partnership Loan Party any Loan Documents.
3.1.3 OPERATING STATEMENTS. Borrower shall have delivered to Agent
the following information, current as of a date not less than 45 days before the
Closing Date, and each in form and substance satisfactory to Agent:
3.1.3.1 current rent roll for each Property;
3.1.3.2 quarterly operating statements for each Property;
3.1.3.3 current operating plans and budgets for each 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 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 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 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 issuance of
equity Securities of COPT or any of its Subsidiaries since that date in a
manner acceptable to Agent;
3.1.4.3 since December 31, 1997, no Material Adverse Effect has
occurred; and
3.1.4.4 compliance of the Loan Parties with all of their obligations
hereunder as of such date, together with a calculation testing compliance
with financial and monetary covenants attached thereto in a form
reasonably satisfactory to Agent, each as of the Closing Date.
3.1.5 Maintenance of Tenanting Costs Account. Borrower shall be
properly maintaining the Tenanting Costs Reserve Account.
3.1.6 PAYMENT OF FEES. Payment of all fees payable as of the Closing
Date pursuant to the Fee Letter.
3.1.7 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.
3.1.8 SECURITY INTERESTS. Borrower shall have taken or caused to be
taken all such actions as may be necessary or reasonably requested by Agent to
give Agent, on behalf of Lenders, a valid, enforceable and perfected first
priority Lien on or first priority security interest
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in the Collateral owned by Borrower as of the Closing Date. Such actions shall
include the following:
3.1.8.1 the delivery to Lender of fully executed and acknowledged
counterparts of such amendments and/or modifications as Agent shall
require to the Mortgage, the Assignment of Rents and Leases, the Security
Agreement, and all other Security Documents with respect to the Properties
and the other Collateral owned by Borrower as of the Closing Date, and the
delivery of evidence satisfactory to Lender that counterparts of such
amendments and/or modifications to the Mortgage, the Assignment of Rents
and Leases and all other of such documents as 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 in the Properties in favor
of Agent, on behalf of the Lenders, as mortgagee, (b) valid and
enforceable first priority Liens on the Rents and Leases in favor of
Agent, on behalf of the Lenders, (c) valid and enforceable first priority
Liens in all fixtures at the Properties, in favor of 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 as of the Closing
Date in favor of Agent, on behalf of the Lenders;
3.1.8.2 (a) the delivery to Agent for filing pursuant to the
Security Documents of properly executed financing statements or such
amendments thereto as Agent shall require 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 Agent in each jurisdiction as may be necessary (in Agent's
reasonable judgment) effectively to perfect and maintain the security
interests in the Collateral created by the Security Documents executed by
Borrower 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 Lender, to create
and maintain valid and enforceable first priority Liens on such Collateral
in favor of Agent on behalf of the Lenders;
3.1.8.3 the delivery to 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 with respect to each Property
and PRO FORMA Title Policies, and/or such endorsements thereto as Agent
shall reasonably require, dated not more than 20 days prior to the Closing
Date with respect to each such Property, each reasonably satisfactory in
form and substance to Agent;
3.1.8.4 the delivery to Agent of the Title Policies or marked title
commitments insuring fee simple or leasehold title to each of the
Properties vested in Borrower and insuring the first priority of the Liens
created under the Mortgages in an aggregate amount not less than
$100,000,000, in each case subject only to Permitted Encumbrances, and
such other title exceptions as are satisfactory to Agent. Such Title
Policies shall be reinsured with title insurance companies acceptable to
Agent in amounts as required by Agent subject to facultative reinsurance
agreements in form satisfactory to Agent. Such Title Policies shall also
contain such endorsements and affirmative insurance provisions as Agent
may reasonably require and to the extent the same are available in the
applicable
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jurisdiction, including "comprehensive" endorsements, revolving credit
endorsements, affirmative insurance against mechanic's liens, survey
exceptions, 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
Agent to address issues raised by 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/or endorsements thereto and in connection with any Loans 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 the Loans;
3.1.8.5 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 and/or endorsements thereto;
3.1.8.6 the delivery to Agent of a Survey with respect to each of
the Properties, dated or re-dated to within 180 days prior to the Closing
Date, which Surveys shall be reasonably satisfactory in form and substance
to Agent;
3.1.8.7 unless a title insurance zoning endorsement is issued to
Agent by the Title Company, the delivery to Agent of a letter, to the
extent generally available, from the applicable Governmental Authority
with respect to each of the Properties and reasonably satisfactory to
Agent stating that all Improvements on each such 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 Property and all applicable fire and building
maintenance codes, and (b) all building permits issued in respect of each
such Property for work then being conducted and the certificate of
occupancy (if available) for each such Property;
3.1.8.8 the delivery to Agent of an opinion of counsel or opinions
in each state or other jurisdiction in which each Property is located,
dated the Closing Date, addressed to Agent and the Lenders and in form and
substance reasonably satisfactory to Agent;
3.1.8.9 the delivery to Agent of evidence reasonably satisfactory to
Agent that all other filings, recordings and other actions Agent deems
necessary or advisable to establish, perfect and preserve the Liens
granted to Agent in the Collateral owned by Borrower as of the Closing
Date shall have been made.
3.1.9 INSURANCE. Borrower shall have delivered to 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
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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 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 Agent or the Lenders arising from any
failure of Agent or the Lenders to comply with the National Flood Insurance Act
of 1968 (42 U.S.C. xx.xx. 4001, ET SEQ.), the Flood Disaster Protection Act of
1973 or the National Flood Insurance Reform Act of 1994, including any failure
of Agent or the Lenders to provide Borrower with written notification within ten
days prior to the Closing Date whether any 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 Property.
3.1.10 MANAGEMENT AGREEMENTS. Borrower shall have delivered to Agent
executed or conformed, certified copies of each of the Management Agreements and
all amendments thereto entered into on or before the Closing Date, which
Management Agreements shall be reasonably satisfactory in form and substance to
Lender. 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).
3.1.11 MATERIAL LEASES; TENANT ESTOPPEL CERTIFICATES. Borrower shall
have delivered to Agent (i) a Rent Roll for each Property, accompanied by an
Officers' Certificate with respect thereto, (ii) executed or conformed,
certified copies of each Material Lease with respect to each Property and all
amendments thereto entered into on or before the Closing Date, which Material
Leases shall be reasonably satisfactory in form and substance to Agent; the
Material Leases, as so amended, shall be in full force and effect 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; 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 Property (and including all
Material Leases) (or such lesser requirement with respect to any Property as is
mutually acceptable to the Requisite Lenders (including Agent)), reasonably
satisfactory in form and substance to Agent, duly executed and delivered by each
Tenant party to such Material Lease.
3.1.12 ENVIRONMENTAL AUDITS. Borrower shall have delivered to Agent
evidence satisfactory to 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 Properties; (ii) each such Property is in compliance
in all material respects with all applicable Environmental Laws with respect to
such Property; and (iii) no Hazardous Materials exist at, in, on, from, around
or under any such Property, except in compliance in all material respects with
applicable Environmental Laws and all other Hazardous Materials have been
removed from each Property to the extent required by Applicable Law. Such
evidence shall include a comprehensive environmental audit (which shall include
a Phase I environmental audit, or an update thereto, and, either if recommended
or suggested by an Approved Environmental Consultant or, if not so recommended
or suggested, if determined by Agent in its sole discretion to be necessary or
desirable after considering factors
29
reasonably related to such determination, a Phase II environmental audit),
satisfactory in form and substance to 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 or update thereto addressed to Agent, which reliance
letter shall be satisfactory in form and substance to Agent, (b) certification
that all required approvals from all Governmental Authorities having
jurisdiction with respect to the environmental condition of the Properties, if
any, have been obtained, and (c) such other environmental reports, inspections
and investigations as 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
Agent, in its sole discretion. On or before the Closing Date, Borrower shall
have delivered to Agent evidence satisfactory to Agent, in its sole discretion,
that Borrower has complied with the recommendations and suggestions of all
environmental consultant(s) referred to above.
3.1.13 ENGINEERING REPORTS. Borrower shall have delivered to Agent
(i) a written Engineering Report or update thereto with respect to each Property
prepared by an Engineer acceptable to 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 Lender;
and (ii) a reliance letter from such Engineer with respect to each such
Engineering Report or update thereto addressed to Agent, which letter shall be
in form and substance reasonably satisfactory to Agent.
3.1.14 APPRAISALS. Agent shall have received (i) an Appraisal of
each Property or update thereto prepared by an Appraiser designated by Agent,
which Appraisal shall be reasonably satisfactory in form and substance to 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
Properties in the possession or under the control of the Loan Parties or any of
their Subsidiaries or partners.
3.1.15 OPINIONS OF LOAN PARTIES' COUNSEL; AUDITOR'S LETTER. On the
Closing Date Borrower shall have delivered to Agent and its counsel executed
copies of each of the favorable written opinions, each dated as of the Closing
Date, of legal counsels for the Loan Parties, which shall be in the form and
substance reasonably approved by Lender and its counsel and the Requisite
Lenders.
3.1.16 OPINION OF AGENT'S COUNSEL. The Lenders shall have received
executed copies of the favorable written opinion of O'Melveny & Xxxxx LLP,
counsel to Agent, dated as of the Closing Date.
3.1.17 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 Subsidiaries, or any property of the Loan Parties or any of their
Subsidiaries that has not been disclosed by Borrower in writing pursuant to
Section 4.6 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 Agent, is likely to have a Material Adverse Effect; and
30
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 the Loans on the terms and conditions contained in this Agreement and
the other Loan Documents.
3.1.18 EXISTING INDEBTEDNESS. Borrower shall have caused the holders
of all Indebtedness secured by the Properties to deliver to 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 Loans to pay off such Indebtedness and obtain releases and reconveyances of
mortgages, fixture filings, financing statements and other liens within
seventy-five days after the Closing.
3.1.19 CONTINGENT OBLIGATIONS. Agent and 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.
3.1.20 PAYMENT OF FEES AND EXPENSES. Borrower shall have paid to
Agent, for distribution (as appropriate) to the Lenders and Agent, the expenses
payable pursuant to Section 8.2.
3.1.21 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 Agent and its counsel shall be reasonably satisfactory in form and
substance to Agent and such counsel, and Agent and such counsel shall have
received all such counterpart originals or certified copies of such documents as
Agent may reasonably request.
3.1.22 OTHER DOCUMENTS. Each Loan Party shall have delivered to
Lender such other information and documents as Lender may reasonably request.
3.1.23 CROSS-COLLATERALIZATION.
3.1.23.1 COPLP, COPT and the applicable Subsidiaries thereof shall
have delivered to Agent (with sufficient originally executed copies for
each Lender and Agent's counsel) such documents, agreements and amendments
or modifications to existing documents and agreements as are necessary in
Agent's sole discretion to provide that the Collateral (as defined in the
Revolving Credit Agreement) shall constitute Collateral hereunder;
3.1.23.2 Borrower shall have taken or caused to be taken all such
actions as may be reasonably necessary or reasonably requested by Agent to
give Agent, on behalf of Lenders, valid enforceable and perfected Lien
(subordinate only to Liens in favor of Lenders or otherwise approved by
Agent in its sole and absolute discretion) on or security interest
(subordinate only to Liens in favor of Lenders or otherwise approved by
Agent in its sole and absolute discretion) in the Collateral (as defined
in the Revolving Credit Agreement) that shall constitute Collateral
pursuant to the foregoing subsection 3.1.23.1.
31
3.1.23.3 In connection with the foregoing, Borrower shall deliver to
Agent such things and perform such acts, as are described in Sections
3.1.8.1 to 3.1.8.9 hereof in each case with respect to the Collateral
described in the foregoing subsection 3.1.23.1.
3.2 INTENTIONALLY OMITTED.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES
In order to induce Agent and the Lenders to enter into this
Agreement and to make the Loans and to induce other Lenders to purchase
participations therein, COPT, as to itself only, and each of the other Loan
Parties, as to all other Loan Parties (but not as to COPT), represents and
warrants to Agents and the Lenders that, as of the Closing Date, the following
statements in this Article 4 are true, correct and complete on the Closing Date.
4.1 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 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 4.1.1 annexed hereto). COPT and each such Subsidiary has the requisite
power and authority to own and operate its properties, to carry on its business
now as 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. Each entity comprising 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 4.1.1) and has all
requisite partnership power and authority to own and operate its properties
(including the 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 issued by it.
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 Subsidiaries owns
property or otherwise conducts business as of the Closing Date are set forth on
SCHEDULE 4.1.1 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 6.14.
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 trust, corporate, partnership or other action
on the part of each Loan Party, as the case may be.
32
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
Certificate of Incorporation or Bylaws, 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 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 stockholders 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 and disclosed in writing to Lender.
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 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 other 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; CONTINGENT OBLIGATIONS.
4.3.1 FINANCIAL CONDITION. Borrower has heretofore delivered to
Agent, at Agent's request, the following financial statements and information:
(i) the audited balance sheet of COPT at December 31, 1997 and the related
consolidated statements of income, shareholders' equity and cash flows of COPT
for the 12 months then ended; (ii) the unaudited statements of Property Gross
Revenue and Property Operating Expenses for each of the Properties for the
calendar years ended December 31, 1997, and the two immediately prior calendar
years if
33
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 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. On the Closing
Date, except as set forth in 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 CONTINGENT OBLIGATIONS. On 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 4.3.2
annexed hereto and except for any Contingent Obligations that are not in excess
of $1,000,000 individually or $5,000,000 in the aggregate.
4.4 EXISTING GENERAL PARTNERS. The general partners of Borrower who have
executed this Agreement as general partner of Borrower have no material assets
other than their respective interests in each Borrower.
4.5 PROPERTIES; AGREEMENTS; LICENSES.
4.5.1 TITLE TO PROPERTIES; LIENS. There are no outstanding options,
rights of first refusal, rights of first offer or similar rights to purchase or
otherwise acquire Borrower's interest in any Property, other than as set forth
on SCHEDULE 4.5.1 annexed hereto. Each Borrower has good and marketable fee
simple title to the 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 Documents. All
material fixtures, furnishings, attachments and equipment necessary for the
operation, use and occupancy of each such Property have been installed or
incorporated into such Property and each Borrower, as applicable, 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 6.3. Except as heretofore
disclosed in writing by Borrower to Agent, no tax liens have been filed against
any Borrower and/or any of the Properties, other than Liens for non-delinquent
real property taxes.
4.5.2 MATERIAL LEASES. Each Material Lease with respect to each
Property and all amendments thereto that have been or shall be entered into on
or before the Closing Date are listed on SCHEDULE 4.5.2 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
34
not then have had and could not reasonably be expected to have, either
individually or in the aggregate, a Material Adverse Effect.
4.6 LITIGATION; ADVERSE FACTS.
Except as set forth in SCHEDULE 4.6 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 Property or any other property of COPT or any of its
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 4.6 annexed hereto, 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 Property or any
Authorizations heretofore issued with respect to any Property or asserting that
such Authorizations or the zoning affecting any Property or any other property
of any Loan Party or any of its Subsidiaries do not permit the continued use of
such Property or property as contemplated by the Loan Documents. Except as set
forth on SCHEDULE 4.6, to the knowledge of Borrower, no Person has asserted any
claimed violation of Applicable Laws arising from the operation, use or
occupancy of the 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.
4.7 TAXES.
4.7.1 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 Properties required to be filed have been timely filed, and,
except as permitted under Section 5.4, all material Taxes, Impositions,
assessments, fees and other governmental charges upon any Loan Party or any of
its Subsidiaries or upon the Properties which are due and payable have been paid
prior to delinquency. Neither COPT nor Borrower knows of any proposed Tax
assessment against any Loan Party or any of its Subsidiaries or the Properties
that could reasonably be expected to have, either individually or in the
aggregate, a Material Adverse Effect. Neither any 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).
4.7.2 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.
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4.7.3 FOREIGN PERSON. None of the Loan Parties is a "foreign person"
within the meaning of Section 1445 or 7701 of the Internal Revenue Code.
4.7.4 CLASSIFICATION AS A PARTNERSHIP. Each of the Loan Parties that
is a Partnership Loan Party is properly classified as a partnership for federal
income tax purposes.
4.8 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 Material Adverse Effect.
Except as disclosed on SCHEDULE 4.8 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
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.
4.9 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.
4.10 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.
4.11 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 Agent and the Lenders against,
and agrees that it will hold Agent and the Lenders
36
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.
4.12 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 the date of each Readvance, 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.
4.13 DISCLOSURE.
No representation or warranty of any Loan Party contained in this
Agreement, the other Loan Documents and the Related Documents to which it is a
party or in any other document, certificate or written statement furnished to
Agent or any of the Lenders by or on behalf of any Loan Party for use in
connection with the transactions contemplated by the Loan Documents and the
Related 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 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 and the Related Documents to which any Loan Party is a party as of the
date hereof or in such other documents, certificates and statements furnished to
the Lenders for use in connection with the transactions contemplated hereby.
4.14 LIENS ON THE COLLATERAL.
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4.14.1 GENERAL. Except as expressly provided in the legal opinions
delivered pursuant to this Agreement, the provisions of this Agreement and the
Security Documents, and any amendments or modifications thereof executed as of
the Closing Date, are effective to create and maintain, upon proper filing or
recording or taking of possession, as applicable, in favor of Agent on behalf of
the Lenders valid and legally enforceable Liens on all of the 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 Properties and all of the remainder of
the Collateral prior and superior to all other Liens except Permitted
Encumbrances.
4.14.2 MORTGAGES. Each Mortgage, and any amendments or modifications
thereof executed as of the Closing Date, upon execution and delivery by the
applicable Loan Party will be a valid and enforceable first priority Lien on the
Property that such Mortgage purports to encumber, except for Permitted
Encumbrances, and such Mortgage, or amendment or modification, when recorded in
the real property records of the county in which such 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
Property in favor of Agent, on behalf of the Lenders, which Property will then
be free and clear of all Liens having priority over the first Lien of such
Mortgage, or amendment or modification, except for Permitted Encumbrances.
4.14.3 ASSIGNMENTS OF RENTS AND LEASES. Except as expressly provided
in the legal opinions delivered pursuant to this Agreement, each Assignment of
Rents and Leases, and any amendments or modifications thereof executed as of the
Closing Date, upon execution and recordation in the real property records of the
county in which the Property affected by such Assignment of Rents and Leases or
amendment or modification is located and upon payment of any applicable
recording or intangible taxes, will be, as to the Property so affected, a
perfected, valid and enforceable first priority present assignment of or Lien on
the Leases affecting such Property and of the Rents of and from such Property,
which Properties will then otherwise be free and clear of all Liens having
priority over the Assignment of Rents and Leases or such amendment or
modification, except for Permitted Encumbrances. As of the Closing Date,
Borrower represents that upon recordation of each Assignment of Rents and Leases
or required amendment or modification thereto Lender has taken all actions
necessary to obtain, and as of the Closing Date Lender has, a valid and
perfected first priority (or, to the extent described in the immediately
preceding sentence, junior priority) assignment of or Lien on the Rents from the
Properties and of all security for the Leases affecting such Properties,
including cash or securities deposited as security under such Leases subject to
the prior right of the Tenants making such deposits.
4.14.4 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 Property.
4.14.5 FILINGS AND RECORDINGS. All filings (including all financing
statements and all assignments of financing statements and amendments or
modifications under the Uniform Commercial Code) have been delivered to 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 Properties and
38
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.
4.15 ZONING; AUTHORIZATIONS.
4.15.1 ZONING. The use and operation by each Borrower of its
Property as a 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 Property (or any
portion thereof) to which such Borrower is a party or by which such Borrower or
such 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 Property is to any material extent dependent
upon or related to any real property other than such Property.
4.15.2 AUTHORIZATIONS. There have been issued in respect of each
Property all Authorizations necessary to own, operate, use and occupy such
Property in the manner operated by Borrower, and its respective predecessors in
interest, as of the Closing Date and contemplated by Borrower to be operated on
and after the Closing Date (including any required permits relating to Hazardous
Materials). No Loan Party has any knowledge that any Authorization necessary or
required to own, operate, use and occupy any 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 (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. No Loan Party, nor, to the knowledge 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.
4.16 PHYSICAL CONDITION; ENCROACHMENT; CAPITAL EXPENDITURES.
4.16.1 PHYSICAL CONDITION; ENCROACHMENT. Except as disclosed on the
Engineering Reports delivered pursuant to the Original Agreement or this
Agreement, each 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 Property or the use of such Property
for its intended purposes. To the knowledge of Borrower, other than as described
in the Title Policy and in any Survey, no Improvement at any Property encroaches
upon any building line, setback line, side yard line or any recorded or visible
easement.
39
4.16.2 CAPITAL EXPENDITURES. Neither Borrower nor any Property is
subject to any agreement pursuant to which any Borrower shall have incurred or
may incur any obligation to make capital improvements to any Property, except as
set forth on SCHEDULE 5.7.
4.17 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 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.
4.18 LEASES.
There is no default or event which with notice or lapse of time or
both would constitute a default under any of the provisions of any Material
Lease affecting any 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 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 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.
4.19 ENVIRONMENTAL REPORTS; ENGINEERING REPORTS; APPRAISALS; MARKET STUDIES.
Borrower has delivered to Agent correct and complete copies of all
environmental audits, engineering reports, appraisals and market studies with
respect to each 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.
4.20 NO CONDEMNATION OR CASUALTY.
No condemnation or other like proceedings (including relocation of
any roadways abutting any Property or change in grade of such roadways or denial
of access to any 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 Loan Party, threatened against any Property in any manner
whatsoever. No casualty has occurred to any Property that has had or could
reasonably be expected to have, either individually or in the aggregate, a
Material Adverse Effect.
4.21 UTILITIES AND ACCESS.
To the extent necessary for the full utilization of each 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 Property, are adequate to serve each such
Property, exist at the boundaries of the Land and are not subject to any
conditions,
40
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 Property are available to the boundaries of the Land. All
necessary rights-of-way for all roads, which are sufficient to permit each
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 Properties have been acquired and
dedicated and accepted for maintenance and public use by the applicable
Governmental Authorities.
4.22 WETLANDS.
Except as disclosed in any of the written environmental audits and
reports delivered pursuant to this Agreement, none of the Improvements on any
Property are constructed on land designated by any Governmental Authority having
land use jurisdiction as wetlands.
4.23 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 any 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 any 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.
4.24 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 that 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 until payment in full of the Loans and the other Obligations
(other than indemnification obligations and obligations under Section 8.24 with
respect to claims that have not been asserted at the time that the Loan and all
other Obligations have been paid in full), each Loan Party shall perform and
shall cause each of their respective Subsidiaries to perform all covenants made
by it in this Article 5.
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 consolidated and consolidating
financial statements in conformity with GAAP. Borrower shall deliver to Lender:
5.1.1 QUARTERLY PROPERTY OPERATING STATEMENTS: as soon as available
and in any event within 60 days after the end of each calendar quarter,
commencing with
41
respect to the calendar quarter ending March 31, 1998, a current Rent Roll and a
statement of Property Gross Revenue and Property Operating Expenses and any
other expenses with respect to each Property separately, in each case for the 12
month period ending on the last day of such calendar quarter, in reasonable
detail satisfactory to Agent and certified by the Chief Executive Officer or
Chief Financial Officer of each of the Loan Parties stating that, subject to
normal adjustments following the preparation of the financial statements
referred to below in SECTIONS 5.1.2 and 5.1.3, respectively, (x) such statements
of Property Gross Revenue and Operating Expenses and other expenses fairly
present, in all material respects, the results of operations of the Properties
indicated for the periods indicated and (y) all Property Operating Expenses and
any other expenses with respect to each Property which have become due and
payable as of the last day of the calendar month next preceding the delivery of
such income statement have been fully paid or recognized by Borrower;
5.1.2 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, shareholders'
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 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 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 each 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;
5.1.3 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
42
each 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 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 each 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 Loan Parties's Accountants or other independent
accountants of recognized national standing selected by COPT and reasonably
satisfactory to Lender, 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;
5.1.4 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 Property, showing all anticipated operating revenues and
expenses, capital expenditures, leasing activity, repairs and improvements, and
such other matters as Agent shall reasonably require;
5.1.5 OFFICERS' CERTIFICATES: together with each delivery of
financial statements of COPT and its Subsidiaries pursuant to Sections 5.1.1,
5.1.2 and 5.1.3 above, an Officers' Certificate of the Loan Parties stating that
(1) the signers have 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 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;
5.1.6 COMPLIANCE CERTIFICATES: together with each delivery of the
financial statements of COPT and its Subsidiaries pursuant to Sections 5.1.1,
5.1.2, and 5.1.3 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 6.7;
43
5.1.7 ACCOUNTANTS' CERTIFICATION: together with each delivery of
financial statements of COPT pursuant to Section 5.1.3 above, a written
statement by the Loan Parties' Accountants or other independent accountants of
recognized national standing selected by COPT and reasonably satisfactory to
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;
5.1.8 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;
5.1.9 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 5.1.3, the consolidated
financial statements of the 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 Loan Parties setting forth the
differences which would have resulted in the calculation of Borrower's
compliance with the covenants set forth in Article 6 if such financial
statements had been prepared without giving effect to such change;
5.1.10 EVIDENCE OF INSURANCE: together with the delivery of the
foregoing statements, evidence reasonably satisfactory to Agent that the monthly
premiums with 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;
5.1.11 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
44
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;
5.1.12 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 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 7 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 COPT and Borrower have
taken, are taking and propose to take with respect thereto;
5.1.13 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
investigation or arbitration against or affecting COPT or any of its
Subsidiaries, or any property of COPT or such Subsidiary (collectively,
"PROCEEDINGS") not previously disclosed in writing by COPT or Borrower to the
Agent 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 Agent and its counsel to evaluate
such
45
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 Agent, such other
information as may be reasonably requested by Agent to enable Agent and its
counsel to evaluate any of such Proceedings;
5.1.14 FINANCIAL PLANS: as soon as practicable and in any event no
later than November 30 of each year, projected financial statements for each
Property for the three next succeeding calendar years in detail reasonably
satisfactory to Agent, together with an explanation of the assumptions on which
such forecasts are based, and such other information and projections as Agent
may reasonably request for any Property, all the Properties or COPT or any of
its Subsidiaries;
5.1.15 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 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 year
to the extent varying from the description of that delivered or described;
5.1.16 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 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;
5.1.17 BOARD OF TRUSTEES: with reasonable promptness, written notice
of any change in the Board of Trustees of COPT;
5.1.18 CHANGE IN NAME OR CHIEF PLACE OF BUSINESS: (a) notification
of any change in any 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
any Loan Party's executive office or chief place of business;
5.1.19 [Intentionally Deleted]
5.1.20 NOTICES WITH RESPECT TO 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
Properties; and (ii) at least 20 days prior to the commencement of any
Restoration/Renovation of any 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;
46
5.1.21 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 in any material respect, Borrower shall promptly 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
5.1.22 OTHER INFORMATION: with reasonable promptness, (a)
information and other data revised to correct any erroneous information and
other data previously delivered by COPT or Borrower to Agent pursuant to this
Agreement or included in any statement, report or certificate previously
delivered by COPT or Borrower to 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 Properties
(separately and for all 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 Agent, as
from time to time may be reasonably requested by 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, limited liability company, corporate, limited partnership 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 credit-worthiness and not upon the
credit-worthiness 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
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 5.2.3. 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 COPLP, without giving effect to
applicable time limits and other restrictions on such conversion, or to any
right given to COPT or COPLP to deliver cash in lieu of shares upon any such
conversion. The number of shares set forth on SCHEDULE 5.2.3 shall be
appropriately adjusted for stock splits or similar adjustments to the
capitalization of COPT.
47
5.2.4 EMPLOYMENT OF CONTROLLING PRINCIPALS. Prior to the first
Anniversary, COPT shall not fail to appoint and shall not remove from office,
Xxxx X. Xxxxxx 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 Xxxx X. Xxxxxx 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
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 Agent shall have
been made therefor by such Loan Party or such Subsidiary, (iii) none of the
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 any Loan
Party, or any of its Subsidiaries, 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 Agent all
receipts evidencing the payment of all such Taxes and Impositions with respect
to any Property and, upon written request by 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 shall (i) maintain or cause to be maintained each 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
48
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; (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 Property except as required of Borrower or permitted for Tenants,
or otherwise as permitted with the prior written consent of 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 Property and promptly restore in like manner any
portion of the Improvements in respect of a 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
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; and (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 may sell or
dispose of in the ordinary course of business any property which is obsolete or
no longer useful in its business.
5.6 [INTENTIONALLY DELETED].
5.7 TENANTING COSTS RESERVE ACCOUNT.
Borrower has directed Agent to fund and Agent has funded the
Tenanting Costs Reserve Account by disbursing a portion of the proceeds of the
Loans in the amount shown on SCHEDULE 5.7 as the "Initial Deposit" and
depositing such proceeds into the Tenanting Costs Reserve Account. Agent shall
have sole control over such account, and no Loan Party shall have any right to
withdraw funds therefrom except as set forth in this Section. Agent shall
release funds to Borrower from the Tenanting Costs Reserve Account following
delivery to Agent of invoices and such supporting documentation as Agent shall
reasonably require for Tenanting Costs which have been actually incurred by
Borrower. Amounts on deposit in the Tenanting Costs Reserve Account shall be
disbursed upon the request of Borrower only for the payment of expenses for
capital improvements (including tenant improvements) in space within the
Property and leasing commissions with respect to which funds have been budgeted
for under the then-current approved capital expenditures budget, made in
accordance with the terms hereof (collectively, the "WORK") upon satisfaction of
the following conditions:
(i) Prior to the commencement of any such Work, the plans and
specifications for such Work, and the budgeted costs, shall be
submitted to Agent for Agent's approval, which shall not be
unreasonably withheld, conditioned or delayed.
(ii) Disbursements of such funds shall be made to Borrower within
thirty days after Borrower delivers to Agent a properly completed
request certificate in a form reasonably approved by Agent (the
"REQUEST CERTIFICATE"), signed on behalf of Borrower by a duly
authorized representative of the general partner of Borrower, which
shall, among other things, certify (i) that Borrower has paid the
49
amounts being required or shall pay such amounts out of the
disbursement to the applicable general contractor, subcontractor of
materialman, accompanied by any conditional lien waivers or other
conditional releases it may reasonably request and (ii) that the
amounts being requested, together with the amounts disbursed to date
from the Tenanting Costs Reserve Account, do not exceed the budgeted
cost thereof as set forth in the then-current approved capital
expenditures budget.
(iii) Upon completion of such Work, final lien waivers shall have
been obtained from the applicable general contractor and Borrower
shall have furnished evidence reasonably satisfactory to Agent that
the subcontractors and materialmen and subcontractors and
submaterialmen have been paid in full.
5.8 INSPECTION; THE AGENT; APPRAISALS.
5.8.1 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 Agent to visit and inspect any
Property, subject to the rights of Tenants, and (ii) any authorized
representatives designated by 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 and Tenants' business and operations as is reasonably
practical.
5.8.2 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 Property (which Appraisals
shall, if applicable with respect to any approved Renovation of such Property,
contain an estimate of the appraised value of such 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
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 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 Property at no time
exceeds the amount secured by the Mortgage applicable to such Property. Without
limiting the generality of the foregoing, before an increase in Appraised Value
with respect to a Property may be taken into account in calculating the Property
Amount with respect to such Property, Borrower must amend the applicable
Mortgage to secure the full amount of the increased Appraised Value.
5.9 COMPLIANCE WITH LAWS, AUTHORIZATIONS, ETC.
Each Loan Party shall, and shall cause each of its Subsidiaries and
all Persons occupying any 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
50
material Authorizations which are from time to time required for the use and
operation of each Property in full force and effect.
5.10 PERFORMANCE OF LOAN DOCUMENTS AND RELATED 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.
5.11 PAYMENT OF LIENS.
5.11.1 REMOVAL BY LOAN PARTIES. If a Lien not permitted under this
Agreement may encumber any 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 Agent's option, promptly
obtain insurance against, any such Lien or mechanics' or materialmen's claims of
lien filed or otherwise asserted against any 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 shall not be deemed
to constitute a waiver of the provisions of Section 6.3. The Loan Parties shall
exhibit to 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 Property or other item of
Collateral of any Borrower. Each Borrower shall fully preserve the Lien and the
priority of each of the Mortgages and the other Security Documents without cost
or expense to Agent or the Lenders.
5.11.2 REMOVAL BY LENDER. If 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 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 Agent, in its sole discretion, may
elect. In settling, compromising or arranging for the discharge of any Liens
under this Section, Agent shall not be 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 (including reasonable
attorneys' fees and disbursements) by Agent shall be paid by Borrower in
accordance with the terms hereof.
5.11.3 TITLE SEARCHES. Agent may, at any time and at the expense of
Borrower, obtain an updated title and/or lien search regarding any Property or
Collateral, or any portion thereof; PROVIDED that, unless Agent reasonably
believes that a Lien not otherwise permitted under this Agreement may encumber
any Property or Collateral or any portion thereof or an Event of Default shall
have occurred and be continuing, Agent may so obtain such search with respect to
such Property or Collateral or portion thereof not more than once each calendar
year.
5.12 INSURANCE.
51
5.12.1 RISKS TO BE INSURED. With respect to each Property, each
Borrower shall 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 Xxxxxx X. Best
Company, Inc., (iii) with a financial size rating of VIII (or its equivalent) or
better, by Xxxxxx X. Best Company, Inc., and (iv) otherwise satisfactory to
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
Xxxxxx X. 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 Xxxxxx X. Best
Company, Inc. and have a financial size rating of "VIII" (or its equivalent) by
Xxxxxx X. 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 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 Property is
located, and shall be authorized and licensed to issue insurance in such state
unless otherwise approved by Agent in its sole discretion. The insurance to be
procured and maintained by COPT and its Subsidiaries is the following:
5.12.1.1 CASUALTY. Borrower shall keep each Property insured for the
benefit of 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 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 Agent, a recognized independent
insurance broker or an appraiser selected (and approved by 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
52
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 Agent for such purpose, the coverage
of which shall include the hazards described in Section 5.12.1.1(a)
and building collapse; PROVIDED, HOWEVER, that such policy may be
obtained by a contractor if it names 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 Tenant taking occupancy of any Property (or portion
thereof) as to which work was being performed.
(c) FLOOD. Insurance against damage or loss by flood as to any
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
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, Agent may purchase such flood insurance, and Borrower
shall pay all premiums and other costs and expenses incurred by
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 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 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 Property due to any of the hazards listed
in Section 5.12.1.1(a) 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.
5.12.1.2 WORKERS' COMPENSATION. Each Loan Party shall maintain, and
shall cause each of its Subsidiaries to maintain, for itself and for each
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
53
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.
5.12.1.3 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 Property and $3,000,000 in the
aggregate per 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 Property or occurring in, upon or about or
resulting from each 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 insurance on an occurrence basis in
connection with any construction being performed at any 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 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 Agent in a minimum amount of $1,000,000 per occurrence
and $3,000,000 in the aggregate for Properties.
(d) UMBRELLA OR EXCESS LIABILITY INSURANCE. Umbrella or excess
liability insurance, on an incurrence basis in the amount of at
least
54
$50,000,000 per occurrence and in the aggregate per year covering
each Loan Party, each of its Subsidiaries and Agent against claims
for damages in excess of all primary liability policies.
5.12.1.4 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 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 Properties.
5.12.2 POLICY PROVISIONS. Each policy of insurance maintained in
respect of Borrower and/or any Property pursuant to this Section shall (a) in
the case of each category of public liability insurance, name Borrower as
insured and name 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 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 Agent pursuant to a
standard first mortgagee endorsement, without contribution, that all losses with
respect to each Property shall be paid directly to Agent, without contribution
by any similar insurance carried by Agent and that adjustment and settlement of
any material loss shall be subject to the reasonable approval of Agent; (c)
include effective waivers by the insurer of all rights of subrogation against
any loss payee, additional insured or named insured; (d) permit 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 gross
negligence or willful misconduct of Agent or the Lenders knowingly in violation
of the conditions of such policy, (ii) the occupation or use of such 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 Property or
(iv) any change in the possession of such Property without a change in the
identity of the holder of actual title to such 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
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 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
Agent and each additional insured and loss payee of written notice thereof.
5.12.3 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 Property would carry.
55
5.12.4 PAYMENT OF PROCEEDS. If any such insurance proceeds required
to be paid to Agent are instead made payable to Borrower, COPT or any Subsidiary
thereof, each of Borrower and COPT hereby appoints Agent as its
attorney-in-fact, irrevocably and coupled with an interest, to endorse and/or
transfer any such payment to Agent.
5.12.5 DELIVERY OF COUNTERPART POLICIES; EVIDENCE. Each Loan Party
shall deliver, and shall cause each of its Subsidiaries to deliver, to Agent on
or before the Closing Date evidence acceptable to 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 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 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.
5.12.6 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 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.
5.12.7 MATERIAL CHANGE IN POLICY. Each Loan Party shall deliver, and
shall cause each of its Subsidiaries to deliver, to Agent concurrently with each
material change in any insurance policy covering any part of the 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.
5.12.8 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.
5.13 CASUALTY AND CONDEMNATION; RESTORATION.
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5.13.1 NOTICE OF CASUALTY. Upon the occurrence of any damage to or
loss or destruction of all or any portion of any 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 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 Property, Borrower shall
deliver to Agent a notice of its intended course of action with respect to such
Restoration, in such detail as Agent shall reasonably require.
5.13.2 INSURANCE PROCEEDS. All Insurance Proceeds in respect of a
Property and the right thereto are hereby irrevocably assigned and pledged by
each Loan Party to Agent for the benefit of the Lenders, and Agent on behalf of
the Lenders 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 Agent to apply Insurance Proceeds in accordance
with Sections 5.13.6. If no Event of Default shall have occurred and be
continuing, to the extent not inconsistent with the requirements of Sections
5.13.5 and 5.13.6, such Loan Party shall have the right to direct Agent (1) to
pay to such Loan Party all Insurance Proceeds with respect to such casualty
affecting a 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 Properties
as Agent may reasonably require and shall otherwise cooperate with Agent in
obtaining for Agent and the Lenders the benefit of any Insurance Proceeds
lawfully or equitably payable in respect of any such Property, subject to the
provisos above. If, prior to the receipt by Agent of such Insurance Proceeds,
any Property shall have been transferred upon foreclosure of the applicable
Mortgage (or by deed in lieu thereof), 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 Lender in connection with the collection of such
Insurance Proceeds. 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, 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 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
Property in excess of $1,000,000 without the prior written consent of 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 Property, such Loan Party or Subsidiary shall
promptly endorse and transfer, or cause such Subsidiary to endorse and transfer,
such excess Insurance Proceeds to Agent and each Loan Party covenants that until
so paid over to Agent, such Loan Party or such Subsidiary, as applicable, shall
hold such Insurance Proceeds in trust for the benefit of Agent and the Lenders
57
and shall not commingle such Insurance Proceeds with any other funds or assets
of such Loan Party or Subsidiary or any other Person.
5.13.3 Notice of Condemnation; Negotiation and Settlement of Claims.
The Loan Parties shall, and shall cause their respective Subsidiaries to,
promptly deliver written notice to 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 Property. Agent shall have the right
to participate in any negotiation, action or proceeding relating to any such
action or proceeding affecting any Property, and no settlement or compromise of
any claim in connection with any such action or proceeding shall be made without
the consent of Agent, which consent shall not be unreasonably withheld,
conditioned or delayed. Upon the occurrence of any Taking with respect to a
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 Agent, as soon as practicable thereafter
but in any event not less than 20 days prior to the commencement of any
Restoration of such Property, Borrower shall deliver to Agent a notice of its
intentions with respect to such renovation in such detail as Lender shall
require.
5.13.4 CONDEMNATION PROCEEDS. All Condemnation Proceeds in respect
of each of the Properties and the right thereto are hereby irrevocably assigned
and pledged by each Loan Party to Agent for the benefit of the Lenders, and
Agent on behalf of the Lenders 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 Agent
to apply Condemnation Proceeds in accordance with Section 2.7.2 (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 Agent to pay such Loan Party all Condemnation Proceeds
with respect to a Taking affecting a 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 Property as Agent may
reasonably require and shall otherwise cooperate with Agent in obtaining for
Agent and the Lenders the benefit of any Condemnation Proceeds lawfully or
equitably payable in respect of such Property, subject to the provisos above.
If, prior to the receipt by Agent of such Condemnation Proceeds, the portion of
the Property, subject to such action or proceeding shall have been sold on
foreclosure of the applicable Mortgage (or by deed in lieu thereof), 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 Agent in connection with the
collection of such Condemnation Proceeds. 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), 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 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
58
for Condemnation Proceeds in respect of any Property without the prior written
consent of 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 Properties
payable by it directly to Agent. If any Loan Party or any of its Subsidiaries
receives any Condemnation Proceeds resulting from such condemnation in respect
of any Property, such Loan Party or such Subsidiary shall promptly endorse and
transfer such excess Condemnation Proceeds to Agent and each Loan Party
covenants that until so paid over to Agent, such Loan Party or Subsidiary, as
the case may be, shall hold such Condemnation Proceeds in trust for the benefit
of Agent and the Lenders and shall not commingle such Condemnation Proceeds with
any other funds or assets of such Loan Party or Subsidiary or any other Person.
5.13.5 Repayment of Loans; Payment of Release Price; Conditions to
Restoration. In the event of any casualty or Taking with respect to a 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 Agent, Borrower shall elect by written notice delivered
to Agent as soon as practicable thereafter, but in any event before the earlier
of (x) 30 days after the occurrence of such casualty or Taking and (y) the
commencement of the Restoration of such Property, either:
5.13.5.1 to Release such Property pursuant to Section 2.8, prepay
the loan to the extent required under Section 2.8.1.3 (with Agent to
release to Borrower any excess Net Insurance/Condemnation Proceeds held by
Agent after such required prepayment); or
5.13.5.2 if all the following conditions shall be satisfied, to
Restore such Property in accordance with Section 5.13.6:
(a) the Maturity Date shall then not have occurred;
(b) no Potential Event of Default or Event of Default shall
have occurred and be continuing;
(c) Agent shall have determined that Borrower is in compliance
in all respects with the provisions or Section 5.13.6;
(d) Agent shall have determined, in its reasonable discretion
and after considering such written opinions of architects and
engineers and other written information as Borrower shall timely
deliver to Agent, that Restoration of such Property is, under the
circumstances then existing, physically and economically feasible
and can be completed in accordance with Section 5.13.6 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);
(e) Borrower shall have business interruption or rental income
insurance complying with this Agreement in an amount at least equal
to the reduction in Property Adjusted Net Income with respect to
such Property, if any, which Borrower reasonably expects to suffer
during the period of Restoration;
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(f) either (1) the Net Insurance/Condemnation Proceeds shall
be sufficient to complete the costs of such Restoration, as
determined by Agent in its reasonable discretion, or (2) Borrower
shall have provided, at Borrower's option, a cash deposit or a
letter of credit satisfactory to Agent, in its reasonable discretion
(or other collateral reasonably satisfactory to 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
(g) unless Agent agrees that no such Appraisal shall be
required, Agent shall have received an Appraisal satisfactory to
Agent demonstrating that the aggregate Appraised Values of such
Property following such Restoration shall not be less than the most
recent Appraised Value of such 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 Property, or shall fail
to diligently and continuously prosecute the Work to completion (other than as a
result of Excusable Delay), as determined by Agent, in its reasonable
discretion, then Borrower shall prepay the Loans in an amount equal to the
Release Price with respect to such Property and Agent shall apply any or all
remaining Net Insurance/Condemnation Proceeds, as applicable, towards such
prepayment and the Property shall be Released pursuant to Section 2.8. 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 Agent to Borrower.
5.13.6 RESTORATION WITH NET INSURANCE/CONDEMNATION PROCEEDS. In the
event of any casualty or Taking with respect to a 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 Agent, if Borrower elects to Restore a Property, pursuant to this
Section and the conditions set forth in Section 5.13.5.2 are satisfied, all Net
Insurance/Condemnation Proceeds shall be held by Agent in an interest-bearing
account at Agent, with all interest to be held therein until completion and
final inspection of the Work, and shall be applied by Agent to the payment of
the cost of Restoring such Property so damaged or destroyed or of the portion or
portions of such 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 Agent in accordance with construction lending practices
and otherwise in accordance with any conditions reasonably imposed by Lender but
subject to each of the following conditions:
5.13.6.1 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) commence, or cause the commencement of, Restoration of such
Property.
5.13.6.2 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 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
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lesser amount), and before Borrower commences any Work, other than
temporary work to protect property or prevent interference with business,
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 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 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.
5.13.6.3 Each request for payment shall be made on seven days' prior
notice to 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 clause (ii) 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 clause (ii) 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 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 Agent, or (y) the amount of such
funds, PLUS funds in the hands of the applicable Loan Party or Subsidiary
thereof from other sources irrevocably committed to the completion of the
Work in a manner reasonably satisfactory to Lender (including delivery of
such funds to 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 Agent may require an estimate of the
cost of such completion). Agent may require that any such statements be
independently verified by an inspector approved by Agent.
5.13.6.4 Each request shall be accompanied by waivers of lien
satisfactory to Agent covering that part of the Work for which payment or
reimbursement has been made (or other evidence as shall be satisfactory to
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 Agent establishing that there has not been
filed with respect to such 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
61
reasonable satisfaction of Agent and evidencing the continued priority of
the Mortgage and Assignment of Rents and Leases on such Property.
5.13.6.5 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 Lender as collateral, in
each case reasonably acceptable to Agent as to amount, obligor and
maturity) are, in the reasonable judgment of Agent, sufficient to pay in
full the costs of the Restoration.
5.13.6.6 There shall be no Event of Default or Potential Event of
Default.
5.13.6.7 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.
5.13.6.8 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 in accordance with the approved plans
and specifications, if any.
5.13.6.9 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 Agent.
5.13.6.10 Borrower shall have obtained and maintained, or shall have
caused the applicable Loan Party or Subsidiary thereof to obtain and
maintain, 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 Agent a Completion Certificate with respect thereto,
together with all final lien waivers in form and substance reasonably
satisfactory to Agent, and Agent shall return to Borrower the amount of any
unspent Insurance Proceeds or Condemnation Proceeds then or thereafter in the
hands of 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 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.
5.13.7 ENGINEER'S INSPECTION. At any time after Agent 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 Agent) Agent may hire an independent engineer to
inspect the applicable Property and Agent may deem any
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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.
5.14 XXXXXXXX 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 Property for the
purpose of taxation 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
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 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 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 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 Agent 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 Lender 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 or recording this Agreement
or any other Loan Documents. Without limiting the foregoing, each Borrower shall
deliver to Agent, promptly upon receipt thereof, all instruments
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received by Borrower after the Closing Date and take all actions and execute all
documents necessary or reasonably requested by Agent to perfect Agent's security
interest in any such instrument or any other Investment acquired by Borrower.
Promptly upon request or, in an emergency, upon demand, each Loan Party shall
execute and deliver, and hereby authorizes Agent to execute and file in the name
of such Loan Party, to the extent 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 Loans hereunder is
located or Taxes to which it is generally subject by reason of its conduct of
its business therein. If any Loan Party fails to make any of the payments
described in the preceding sentence within 10 days after notice thereof from
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 Agent, in its sole discretion) accompanied by documentation
verifying the nature and amount of such payments, 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 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 Property.
5.15.3 COSTS OF DEFENDING AND UPHOLDING THE LIEN. 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 Agent in its sole
discretion determines is reasonably likely to materially adversely affect any
Property, any other material Collateral, any Mortgage, the Lien thereof or any
other Loan Document and (ii) institute any action or proceeding which Agent
reasonably determines should be instituted to protect the interest or rights of
Agent in any 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 Agent shall be paid by Borrower or reimbursed to
Agent, as the case may be, promptly after demand.
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5.15.4 COSTS OF ENFORCEMENT. Borrower agrees to bear and shall pay
or reimburse Agent and the Lenders in accordance with the terms of this
Agreement for all reasonable sums, costs and expenses incurred by any 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
Property or all or any portion of the other Collateral.
5.16 RENOVATIONS.
5.16.1 NOTICE OF RENOVATION; RENOVATION PLANS. If any Loan Party
intends to Renovate any 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) a project budget (as revised and
supplemented from time to time in accordance with this Section 5.16.1 (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 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 5.16.1 (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.
5.16.2 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 5.16, shall be for the account of Borrower.
5.16.3 COMPLETION CERTIFICATE. Upon completion of the Renovation,
Borrower shall promptly deliver to the Agent a written notice of completion with
respect thereto.
5.16.4 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 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.
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ARTICLE 6
NEGATIVE COVENANTS
Each Loan Party covenants and agrees that, 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), 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 PARTNERSHIP BORROWER.
Any Partnership Borrower 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; and
6.1.2 Interest Rate Agreements otherwise required or permitted under
this Agreement; and
6.1.3 unsecured intercompany Indebtedness owed to Loan Parties, if
all such Indebtedness is evidenced by one or more promissory notes that are
pledged to Lender pursuant to the Security Documents to secure the Obligations.
6.2 INDEBTEDNESS OF COPLP AND COPT.
COPLP 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 as permitted
pursuant to the Revolving Credit Agreement.
6.3 LIENS AND RELATED MATTERS.
6.3.1 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 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 Indebtedness permitted under Section 6.1 or 6.2 hereof, as applicable, (ii)
pursuant to the Security Documents, and (iii) Permitted Encumbrances.
6.3.2 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
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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.
6.4 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 6.1, 6.2 and 8.13, (ii) any
Renovations, Restorations or improvements permitted under Section 5.5, 5.13,
5.16 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 6.4. For the purpose of this Section 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.
6.5 CONTINGENT OBLIGATIONS.
Any Loan Party shall not, directly or indirectly, create or become
liable with respect to any Contingent Obligation, except that:
6.5.1 Such Loan Party may become liable with respect to Contingent
Obligations in respect of the Obligations;
6.5.2 Such Loan Party may become liable with respect to Contingent
Obligations in respect of the "Obligations" under and as defined in the
Revolving Credit Agreement;
6.5.3 Such Loan Party may as required hereunder or under the
Revolving Credit Agreement or in the ordinary course of such Loan Party's
business enter into interest rate hedging agreements with respect to
Indebtedness otherwise permitted under this Agreement or the Revolving Credit
Agreement;
6.5.4 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 6.5.4, (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
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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);
6.5.5 Such Loan Party may become liable to make Investments
permitted by, and in accordance with the terms of, this Article 6; and
6.5.6 Such Loan Party may become liable with respect to Contingent
Obligations permitted under Section 6.1 or 6.2, as applicable.
6.6 DISTRIBUTIONS.
Notwithstanding the terms of any agreement, articles or bylaws to
the contrary, neither COPLP nor COPH shall, 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.
6.7 FINANCIAL COVENANTS.
6.7.1 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.
6.7.2 MINIMUM PROPERTY INTEREST COVERAGE. As of the last day of any
calendar quarter, the Loan Parties shall not permit the ratio of Total Property
Adjusted Net Income to Total 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, or, before the first Anniversary, with reference to the
period from the Closing Date to such last day).
6.7.3 MINIMUM PROPERTY HEDGED INTEREST COVERAGE. As of the last day
of any calendar quarter, the Loan Parties shall not permit the ratio of (i)
Property Adjusted Net Income for all Properties subject to Interest Rate
Agreements, to (ii) Property Hedged Interest Expense to be less than 1.15:1.0
(such amounts to be determined with reference to the preceding 12-month period
ending on such last day, or, before the first Anniversary, with reference to the
period from the Closing Date to such last day).
6.7.4 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, or, before the first Anniversary, with
reference to the period from the Closing Date to such last day).
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6.7.5 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 5.1.6.
6.7.6 MAXIMUM CONSOLIDATED TOTAL INDEBTEDNESS. The Loan Parties
shall not at any time permit Consolidated Total Indebtedness to exceed 65% of
Consolidated Total Assets.
6.8 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 Property, except that, from time to
time after the Closing Date:
6.8.1 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;
6.8.2 the Loan Parties may incorporate or otherwise organize, and,
subject to Section 6.4, capitalize, one or more Subsidiaries, provided that
COPLP 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;
6.8.3 the Loan Parties may Transfer Properties to the extent
expressly permitted in this Agreement;
6.8.4 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;
6.8.5 the Loan Parties may acquire by purchase or otherwise
(excluding any transaction covered by Section 6.8.6 or 6.8.7 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;
6.8.6 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
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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, 6.2 and 6.7. Borrower shall
deliver to the Agent, at least fifteen Business Days prior to the closing of any
transaction described in this Section 6.8.6, a Compliance Certificate prepared
on a pro forma basis after giving effect to such transaction;
6.8.7 the Loan Parties may acquire by purchase or otherwise,
directly or indirectly, all or substantially all 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,
6.2 and 6.7. 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 6.8.7, a Compliance
Certificate prepared on a pro forma basis after giving effect to such
transaction; and
6.8.8 the Loan Parties may dispose of obsolete, worn out or surplus
property in the ordinary course of business.
6.9 ZONING AND CONTRACT CHANGES AND COMPLIANCE.
Without the prior written approval of Agent, which approval shall
not be unreasonably withheld, conditioned or delayed, no Loan Party shall
initiate or consent to any zoning reclassification of any Property or seek any
material variance under any existing zoning ordinance or use or permit the use
of any 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 Property without the prior written consent of Agent.
6.10 NO JOINT ASSESSMENT; SEPARATE LOTS.
Without the prior written approval of 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 Property (i) with
any other real property constituting a separate tax lot (other than another
Property) and (ii) with any portion of any Property which may be deemed to
constitute personal property, or any other procedure whereby the lien of any
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Taxes which may be levied against any such personal property shall be assessed
or levied or charged to any Property as a single lien. The Loan Parties
represent and warrant that each Property is comprised of one or more parcels,
each of which, to the knowledge of the Loan Parties, constitutes a separate tax
lot (except with respect to any lot constituting another Property) and none of
which constitutes a portion of any other tax lot.
6.11 TRANSACTIONS WITH AFFILIATED PERSONS.
Without the prior written approval of the Requisite Lenders
(including Agent), which approval may be granted, withheld, conditioned or
delayed in their 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.
6.12 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.
6.13 OWNERSHIP OF SUBSIDIARIES.
The Loan Parties shall not permit each Partnership Borrower to cease
to be a Wholly Owned Subsidiary of COPT. Borrower shall not cease to be
Subsidiaries of COPT and the financial statements of Borrower shall not cease to
be consolidated with the financial statements of COPT in accordance with GAAP.
6.14 CONDUCT OF BUSINESS.
6.14.1 CONDUCT OF BUSINESS. The Loan Parties shall not, and shall
not permit any of their respective Subsidiaries to, directly or indirectly, do
the following:
6.14.1.1 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, 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
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6.14.1.2 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
Property, including any such Material Lease, agreement or other action,
that would convert or reposition any Property into any office building of
a quality less than as of the Closing Date.
6.15 PROPERTIES.
6.15.1 TRANSFER OF PROPERTIES. The Loan Parties shall not, and shall
not permit any of their respective Subsidiaries to, Transfer any Property,
except to the extent expressly permitted under the Loan Documents, and Borrower
complies with the provisions set forth in Section 2.8 with respect to such
Property, including the payment of any Release Price required thereby.
6.16 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 Property after the
Closing Date, except (i) Management Agreements that Agent has approved in
writing, or (ii) that may be terminated by Agent 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 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.
6.17 CHANGES IN CERTAIN OBLIGATIONS AND DOCUMENTS; ISSUANCE OF EQUITY
SECURITIES.
6.17.1 CREDIT AGREEMENT. Without the prior written approval of
Requisite Lenders, which approval may be granted, withheld, conditioned or
delayed in its sole discretion, the Loans 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.
6.17.2 EQUITY SECURITIES. Without the prior written approval of
Agent, which approval may be granted, withheld, conditioned or delayed in its
sole discretion, except as set forth on SCHEDULE 6.17.2 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
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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.
6.17.3 ORGANIZATION DOCUMENTS. Without the prior written approval of
Requisite Lenders (including 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, 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.
6.18 FISCAL YEAR.
Without the prior written approval of Requisite Lenders (including
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.
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 Loans or any Release Price 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
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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
7.1) 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 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 the Lenders, under any Loan
Document to which it is a party; or
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
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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 acknowledged coverage) shall be entered or filed against Borrower 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
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7.1.12 DEFAULT UNDER REVOLVING LOAN. Any "Event of Default" under,
and as defined in, the Revolving Credit Agreement shall occur.
THEN (i) upon the occurrence of any Event of Default described in Sections 7.1.7
or 7.1.8, the unpaid principal amount of and accrued interest on the Loans and
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 shall thereupon terminate, and (ii) during the
continuance of any other Event of Default, Agent may, in its sole discretion, by
written notice to Borrower, declare all or any portion of the amounts described
in clauses (i) above to be, and the same shall forthwith become, immediately due
and payable and the obligations of Lender hereunder shall thereupon terminate.
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.
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 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 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 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 Agent shall be cumulative and concurrent and may be pursued independently,
singly, successively, together or otherwise, at such time and in such order as
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
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 Agent to
enforce its remedies in connection with one or more of the Properties or any
other Collateral or all or any portion of the Properties, 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 Property, 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 Agent on behalf of the Lenders pursuant to the Mortgages; PROVIDED,
HOWEVER, that, if 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
Property (or, in the event that Agent on behalf of the Lenders is the purchaser
of such 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 Agent subsequently
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disposes of such 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 for the purpose of securing
the entire Obligations secured thereby and each Loan Party acknowledges and
agrees that each Property is mortgaged and transferred to 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 Agent on behalf of the Lenders a Lien upon and the title to any
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 Properties or Mortgaged Property or any part thereof
to Agent on behalf of the Lenders; but nothing contained herein or in the
Mortgages shall be construed as requiring Agent on behalf of the Lenders to
resort to any Property for the satisfaction of the Obligations secured thereby
in preference or priority to any other Mortgaged Property thereby conveyed, but
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, 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 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 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) Agent shall have made any demand hereunder or (ii) the principal of or the
interest on the Loan or any other amounts due hereunder shall have become due
and payable pursuant to Section 7.1 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, 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 Properties, to
give notice to the obligors thereunder of 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 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, 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
77
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 Agent and the Lenders under
this Agreement shall be cumulative and not exclusive of any other right, power
or remedy which 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 Agent and the Lender may be pursued singly, concurrently or
otherwise, at such time and in such order as Lender, 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.
7.3 LIMITATION ON RECOURSE AGAINST NON-RECOURSE PARTIES.
The Non-Recourse Parties shall not be personally liable for the
payment of any sums now or hereafter owing any Lender under the terms of the
Loan Documents, nor subject to mandatory or injunctive relief for enforcement of
their Obligations hereunder. If any Event of Default should occur under the Loan
Documents, Agent and each Lender agrees that its rights, as to the Non-Recourse
Parties only, shall be limited to proceeding against any Collateral pledged by
the Non-Recourse Parties as security for the Obligations pursuant to the
Security Documents, and that it shall have no right to proceed directly against
the Non-Recourse Parties for the satisfaction of any monetary obligation of or
enforcement of any monetary claim hereunder, or for other equitable relief.
Nothing contained in this Section shall in any manner constitute or be deemed a
release of the Obligations or otherwise affect or impair the enforceability
against the other Loan Parties or the Collateral of the Loan Documents. Nothing
in this Section shall impair, in any manner, any right, remedy or recourse
Lender may have against the Non-Recourse Parties for fraud or any other claim
that is not to enforce a provision of the Loan Documents against the
Non-Recourse Parties.
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 the Loans and the Loan
Documents 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
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hereto and, to the extent that rights and obligations hereunder have been
assigned to it, shall have the rights and obligations of a Lender 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 8.5.1. The Loan Parties and each Lender hereby acknowledge and agree
that, solely for purposes of Sections 2.10 and 8.24, (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, 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 and Agent 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 Loans 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 8.1.4 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.
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 Revolving Credit
Agreement) under the Revolving Credit Agreement.
8.2 EXPENSES.
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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 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 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 as debtor, and copies of all such other financing
statements); (iii) all reasonable out-of-pocket costs and expenses incurred by
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
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 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 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 Property or other
Collateral 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 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 Agent to pay same, accompanied by documentation in
reasonable detail sufficient to verify the nature and amount.
8.3 INDEMNITY.
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8.3.1 INDEMNITY. In addition to the payment of expenses as required
by Section 8.2, whether or not the transactions contemplated hereby shall be
consummated, Borrower agrees to defend, indemnify and hold harmless 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 of
the Commitments, 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 Affiliate 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
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
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
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of 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 Agent, the Lenders and each other Indemnified Person hereunder from all
liability arising out of 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 Agent.
8.3.3 CONTRIBUTION. In order to provide for just and equitable
contribution with respect to matters subject to this Section, 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 Agent and the 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 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
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their respective Affiliates, on the one hand, and 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 Lender under the Loan Documents. Notwithstanding
the foregoing, 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
Agent and the Lenders, respectively, in respect of the Loan Documents. Borrower,
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.
8.3.4 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 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 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) 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 Lenders and Borrower as that of
creditor/debtor hereunder and 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
Agent or any Lender nor to grant Agent or any Lender any interest in the
Mortgaged Property other than that of mortgagee or lender.
8.5 AMENDMENTS AND WAIVERS.
8.5.1 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; 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
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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 2.6.3) 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; or (I) changes in any manner the provisions contained in
this subsection 8.5.1; (ii) no such amendment, modification, termination, waiver
or consent shall be effective without the written concurrence of Lenders having
or holding more than 66.67% of the sum of the aggregate Commitments of all
Lenders if such amendment, modification, termination, waiver or consent changes
in any manner the provisions contained in Section 6.7; (iii) 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 (iv) no amendment, modification, termination or waiver of any
provision of Article 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 8.5.1 shall be binding upon each Lender
at the time outstanding, each future Lender and, if signed by Borrower, on
Borrower.
8.5.2 DEEMED CONSENT. If the Agent delivers a written request for
the Lenders' approval of 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.
8.6 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.
8.7 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
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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
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 Agent.
8.8 SURVIVAL OF REPRESENTATIONS, WARRANTIES AND AGREEMENTS.
8.8.1 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 shall terminate upon indefeasible
payment in full of the Obligations, notwithstanding anything in this Agreement
or implied by law to the contrary.
8.8.2 Notwithstanding anything in this Agreement or implied by law
to the contrary, the agreements of Borrower set forth in Sections 4.11, 8.3 and
8.24 shall survive the payment in full of the other Obligations and the
termination of this Agreement.
8.9 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.
8.10 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 Notes, the
Mortgages or the other Loan Documents, Agent, such Lender or such agent, as the
case may be, has an obligation to act reasonably or promptly, Loan Parties agree
that none of Agent, Lender or such agents, shall be liable for any monetary
damages, and Borrower'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 Agent or any Lender has acted
reasonably shall be determined by an action seeking declaratory judgment.
8.11 MAXIMUM AMOUNT.
8.11.1 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
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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 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.
8.11.2 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.
8.12 MARSHALLING; PAYMENTS SET ASIDE.
Neither 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 Agent or any
Lender (or to Agent for the benefit of the Lenders), or Agent or the Lenders
enforce any security interests or 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.
8.13 AGREEMENT TO CONTRIBUTE.
8.13.1 RIGHT TO CONTRIBUTION. Except as otherwise expressly provided
herein, the Loan Parties are jointly and severally liable for the Obligations.
However, the benefits of this Agreement and the Loans will not necessarily
benefit each Loan Party to the same degree. In order to provide for just and
equitable contribution among the Loan Parties, if any payment is made by a Loan
Party (the "FUNDING LOAN PARTY") in discharging more than its Proportionate
Share (hereinafter defined) of the Obligations, the Funding Loan Party shall be
entitled to a
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contribution from each other Loan Party (each a "CONTRIBUTING LOAN PARTY") for
all payments, damages and expenses incurred by the Funding Loan Party in
discharging the Obligations, as set forth in this Section 8.13.
8.13.2 BENEFIT AMOUNT. For purposes of this Agreement, the "BENEFIT
AMOUNT" of a Loan Party as of any date of determination shall be the net value
of the benefits to such Loan Party from the Loans. The "PROPORTIONATE SHARE" of
a Partnership Borrower shall be the ratio of (x) the Benefit Amount of such
partnership Borrower to (y) the total amount of all Benefit Amounts of all
Borrowers. The "PROPORTIONATE SHARE" of COPLP and COPH shall be the ratio of (x)
the Benefit Amount of COPLP or COPH, as the case may be, to (y) the total amount
of all Benefit Amounts of COPLP and COPH.
8.13.3 TERM LOAN CONTRIBUTIONS. Each Contributing Loan Party shall
be liable to a Funding Loan Party in an aggregate amount equal to its
Proportionate Share multiplied by the amount of Obligations paid by such Funding
Loan Party. The liability of the Non-Recourse Parties to a Funding Party under
this Section shall be limited as set forth in Section 7.3.
8.13.4 SUBORDINATION. The rights and claims of any Funding Loan
Party against any Contributing Loan Party under this Agreement shall be subject
and subordinate to the prior payment in cash in full of the Obligations, and no
Loan Party shall make or receive any contribution payment from any other Loan
party until such payment in cash in full of the Obligations.
8.13.5 PRESERVATION OF RIGHTS. This Agreement shall not limit any
right which any Borrower may have against any other Person which is not a party
hereto.
8.13.6 SUBSIDIARY PAYMENT. The amount of contribution payable under
this Agreement by any Loan Party shall be reduced by the amount of any
contribution paid hereunder by a Subsidiary of such Loan Party.
8.13.7 ASSET OF FUNDING LOAN PARTY. The parties hereto acknowledge
that the right to contribution hereunder shall constitute an asset of the party
to which such contribution is owing.
8.13.8 DATE OF DETERMINATION. Any amount payable as contribution
under this Contribution Agreement shall be determined as of the date on which
the related payment is made by a Funding Loan Party.
8.14 SURETYSHIP WAIVERS.
8.14.1 Each Loan Party agrees that its obligations hereunder are
irrevocable, absolute, independent and unconditional and shall not be affected
by any circumstance which constitutes a legal or equitable discharge of a
guarantor or surety other than payment and performance in full of the
Obligations. In furtherance of the foregoing and without limiting the generality
thereof, each Loan Party agrees as follows: (i) Agent may from time to time,
without notice or demand and without affecting the validity or enforceability of
this Agreement or giving rise to any limitation, impairment or discharge of such
Loan Party's liability hereunder, (A) renew, extend, accelerate or otherwise
change the time, place, manner or terms of payment of the Obligations, (B)
settle, compromise, release or discharge, or accept or refuse any offer of
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performance with respect to, or substitutions for, the Obligations or any
agreement relating thereto and/or subordinate the payment of the same to the
payment of any other obligations, (C) request and accept guaranties of the
Obligations and take and hold other security for the payment of the Obligations,
(D) release, exchange, compromise, subordinate or modify, with or without
consideration, any other security for payment of the Obligations, any guaranties
of the Obligations, or any other obligation of any Person with respect to the
Obligations, (E) enforce and apply any other security now or hereafter held by
or for the benefit of Lenders in respect of the Obligations and direct the order
or manner of sale thereof, or exercise any other right or remedy that Agent may
have against any such security, as Lenders in their discretion may determine
consistent with this Agreement and any other Loan Document including foreclosure
on any such security pursuant to one or more judicial or nonjudicial sales,
whether or not every aspect of any such sale is commercially reasonable, and (F)
exercise any other rights available to Agent under the Loan Documents, at law or
in equity; and (ii) this Agreement and the obligations of each Loan Party
hereunder shall be valid and enforceable and shall not be subject to any
limitation, impairment or discharge for any reason (other than payment in full
of the Obligations), including without limitation the occurrence of any of the
following, whether or not any Loan Party shall have had notice or knowledge of
any of them: (A) any failure to assert or enforce or agreement not to assert or
enforce, or the stay or enjoining, by order of court, by operation of law or
otherwise, of the exercise or enforcement of, any claim or demand or any right,
power or remedy with respect to the Obligations or any agreement relating
thereto, or with respect to any guaranty of or other security for the payment of
the Obligations, (B) any waiver, amendment or modification of, or any consent to
departure from, any of the terms or provisions (including without limitation
provisions relating to events of default) of this Agreement, any of the other
Loan Documents or any agreement or instrument executed pursuant thereto, or of
any guaranty or other security for the Obligations, (C) the Obligations, or any
agreement relating thereto, at any time being found to be illegal, invalid or
unenforceable in any respect, (D) the application of payments received from any
source to the payment of indebtedness other than the Obligations, even though
Agent might have elected to apply such payment to any part or all of the
Obligations, (E) any failure to perfect or continue perfection of a security
interest in any other collateral which secures any of the Obligations, (F) any
defenses, set-offs or counterclaims which any other Loan Party may allege or
assert against any Lender in respect of the Obligations, including but not
limited to failure of consideration, breach of warranty, payment, statute of
frauds, statute of limitations, accord and satisfaction and usury, and (G) any
other act or thing or omission, or delay to do any other act or thing, which may
or might in any manner or to any extent vary the risk of any Loan Party as an
obligor in respect of the Obligations.
8.14.2 Each Loan Party waives, for the benefit of Lenders: (i) any
right to require Agent or any Lender, as a condition of payment or performance
by such Loan Party, to (A) proceed against any other Loan Party, any guarantor
of the Obligations or any other Person, (B) proceed against or exhaust any other
security held from any other Loan Party, any guarantor of the Obligations or any
other Person, (C) proceed against or have resort to any balance of any deposit
account or credit on the books of any Lender in favor of any Loan Party or any
other Person, or (D) pursue any other remedy in the power of any Lender
whatsoever; (ii) any defense arising by reason of the incapacity, lack of
authority or any disability or other defense of any Loan Party including,
without limitation, any defense based on or arising out of the lack of validity
or the unenforceability of the Obligations or any agreement or instrument
relating thereto or by reason of the cessation of the liability of any Loan
Party from any cause other than payment in full of the Obligations; (iii) any
defense based upon any statute or rule of law which
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provides that the obligation of a surety must be neither larger in amount nor in
other respects more burdensome than that of the principal; (iv) any defense
based upon Agent's or any Lender's errors or omissions in the administration of
the Obligations, except behavior which amounts to bad faith; (v) (A) any
principles or provisions of law, statutory or otherwise, which are or might be
in conflict with the terms of this Agreement and any legal or equitable
discharge of such Loan Party's obligations hereunder, (B) the benefit of any
statute of limitations affecting such Loan Party's liability hereunder or the
enforcement hereof, (C) any rights to set-offs, recoupments and counterclaims,
and (D) promptness, diligence and any requirement that Agent or any Lender
protect, secure, perfect or insure any other security interest or lien or any
property subject thereto; (vi) notices, demands, presentments, protests, notices
of protest, notices of dishonor and notices of any action or inaction, notices
of default under this Agreement or any agreement or instrument related thereto,
notices of any renewal, extension or modification of the Obligations or any
agreement related thereto, notices of any extension of credit to Loan Parties
and notices of any of the matters referred to in the preceding paragraph and any
right to consent to any thereof; and (vii) to the fullest extent permitted by
law, any defenses or benefits that may be derived from or afforded by law which
limit the liability of or exonerate guarantors or sureties, or which may
conflict with the terms of this Agreement.
8.14.3 Until the Obligations shall have been paid in full, each Loan
Party shall withhold exercise of (i) any claim, right or remedy, direct or
indirect, that such Loan Party now has or may hereafter have against any other
Loan Party or any of its assets in connection with this Agreement or the
performance by any other Loan Party of its obligations hereunder, in each case
whether such claim, right or remedy arises in equity, under contract, by
statute, under common law or otherwise and including without limitation (A) any
right of subrogation, reimbursement or indemnification that any Loan Party now
has or may hereafter have against any other Loan Party, (B) any right to
enforce, or to participate in, any claim, right or remedy that any Lender now
has or may hereafter have against any Loan Party, and (C) any benefit of, and
any right to participate in, any other collateral or security now or hereafter
held by Agent or any Lender, and (ii) any right of contribution any Loan Party
may have against any guarantor of the Obligations. Each Loan Party further
agrees that, to the extent the waiver of its rights of subrogation,
reimbursement, indemnification and contribution as set forth herein is found by
a court of competent jurisdiction to be void or voidable for any reason, any
rights of subrogation, reimbursement or indemnification such Loan Party may have
against any other Loan Party or against any other collateral or security, and
any rights of contribution such Loan Party may have against any such guarantor,
shall be junior and subordinate to any rights Agent or any Lender may have
against any Loan Party, to all right, title and interest Agent or any Lender may
have in any such other collateral or security, and to any right Agent or any
Lender may have against any such guarantor.
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 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.
89
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 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 XXX 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 and inure to the benefit of the
parties hereto and their respective successors and assigns. Neither the Loan
Parties' rights or 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
90
OTHER LOAN DOCUMENT, OR ANY OBLIGATIONS THEREUNDER, MAY BE BROUGHT IN ANY STATE
OR FEDERAL COURT OF COMPETENT JURISDICTION IN XXX XXXXX, XXXXXX XXX XXXX XX XXX
XXXX. 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
8.7;
(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 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
91
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 LOANS
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, including its covenants and agreements to pay Release Prices, 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. The Loan Parties understand that the Release Prices are
designed to afford to the Lenders a predictable return on their investment in
the Loans, that the Release Prices will be required to be paid by Borrower in
connection with voluntary and involuntary prepayments of the principal amount of
the Loans to the extent provided in this Agreement and that the payment of the
Release Prices in connection with involuntary prepayments beyond Borrower's
control (such as upon the occurrence of a casualty or a Taking) may be required.
Borrower agrees that its representations, warranties, covenants and agreements
contained in this Agreement and the other Loan Documents, including its
covenants and agreements to pay Release Prices, are reasonable in purpose and
scope. 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 Documents and all
certificates and other documents
92
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 RATABLE SHARING.
The Lenders hereby agree among themselves that if any of them shall,
whether by voluntary payment (other than a voluntary prepayment of the 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.
8.25 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 decision by the Lenders or a percentage of the Lenders.
ARTICLE 9
AGENT
9.1 APPOINTMENT.
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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.
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
94
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 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 this Agreement and the Revolving Credit Agreement.
9.2.5 CERTAIN DUTIES OF AGENT. Notwithstanding anything herein to
the contrary, upon and during the continuation of any Event of Default, Agent
shall be required to take such action or refrain from taking such action on
behalf of Lenders as directed in writing by Lenders having or holding more than
66.67% of the sum of the aggregate Commitments of all Lenders; provided,
however, that Agent shall not be required to so act or not act if to do so would
be contrary to any Loan Document or Applicable Law.
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 appraisal on behalf of Lenders. The Agent
shall not have any responsibility with
95
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.
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
96
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.
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.
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98
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 TRUST,
a Maryland real estate investment trust
By: /s/ Xxxxxx X. Xxxxxx
--------------------------------------------
Its: Vice President Finance
---------------------------------------
By: ______________________________________________
Its: _______________________________________
Notice Address:
Corporate Office Properties Trust
Xxx Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000
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: /s/ Xxxxxx X. Xxxxxx
--------------------------------------------
Its: Vice President Finance
---------------------------------------
By: ______________________________________________
Its: _______________________________________
Notice Address:
Corporate Office Properties Trust
Xxx Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000
CORPORATE OFFICE PROPERTIES HOLDINGS,
INC., A DELAWARE CORPORATION
By: /s/ Xxxxxx X. Xxxxxx
--------------------------------------------
99
Name: _______________________________________
Its: Vice President Finance
---------------------------------------
Notice Address: c/o Corporate Office Properties Trust
Xxx Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000
BLUE XXXX INVESTMENT COMPANY, L.P., A
DELAWARE LIMITED PARTNERSHIP
By: Corporate Office Properties Holdings, Inc., a
Delaware corporation, its general partner
By: /s/ Xxxxxx X. Xxxxxx
--------------------------------------------
Name: _______________________________________
Its: Vice President Finance
---------------------------------------
Notice Address: c/o Corporate Office Properties Trust
Xxx Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000
SOUTH BRUNSWICK INVESTORS, L.P., A DELAWARE LIMITED
PARTNERSHIP
By: Corporate Office Properties Holdings, Inc., a
Delaware corporation, its general partner
By: /s/ Xxxxxx X. Xxxxxx
--------------------------------------------
Name: _______________________________________
Its: Vice President Finance
---------------------------------------
Notice Address: c/o Corporate Office Properties Trust
Xxx Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000
COMCOURT INVESTORS, L.P., A DELAWARE LIMITED PARTNERSHIP
By: Corporate Office Properties Holdings, Inc., a
Delaware corporation, its general partner
100
By: /s/ Xxxxxx X. Xxxxxx
--------------------------------------------
Name: _______________________________________
Its: Vice President Finance
---------------------------------------
Notice Address: c/o Corporate Office Properties Trust
Xxx Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000
0000 XXXXX XXXXX, X.X., X XXXXXXXXXXXX LIMITED
PARTNERSHIP
By: Corporate Office Properties Holdings, Inc., a
Delaware corporation, its general partner
By: /s/ Xxxxxx X. Xxxxxx
--------------------------------------------
Name: _______________________________________
Its: Vice President Finance
---------------------------------------
Notice Address: c/o Corporate Office Properties Trust
Xxx Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000
LENDER:
BANKERS TRUST COMPANY,
as Lender and the Agent
By: /s/ Xxxxx X. Xxxxxxx
--------------------------------------------
Name: _____________________________________
Its: Principal
---------------------------------------
Title: _____________________________________
Notice Address:
Bankers Trust Company
000 Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx X. Xxxxx
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APPENDIX I
DEFINED TERMS
"ADJUSTED CONSOLIDATED NET WORTH" means, as at any date of
determination, the Consolidated Total Assets plus accumulated depreciation, less
Consolidated Total Liabilities and intangible assets, on a consolidated basis
determined in conformity with GAAP.
"ADJUSTED EURODOLLAR RATE" means, for any Interest Rate
Determination Date the rate per annum obtained by DIVIDING (i) the U.S. Dollar
London Interbank Offered Rate published on Telerate screen 3750 (or a similar
service in the event Telerate is no longer available), rounded upwards, if
necessary, to the nearest whole multiple of one-sixteenth of one percent (1/16%)
for deposits with maturities comparable to the Interest Period for which such
Adjusted Eurodollar Rate will apply as of approximately 10:00 A.M. (New York
time) on such Interest Rate Determination Date as reasonably determined by
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.
"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 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 Original 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,
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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 Property, a written appraisal
of such Property prepared by an Appraiser in form, content and methodology
reasonably satisfactory to 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. xx.xx.
3331, ET SEQ., as amended (or any successor statute thereto), and the
regulations promulgated thereunder).
"APPRAISED VALUE" means, as of any date of determination and with
respect to any Property, the lesser of (i) the appraised value of such Property,
in each case as most recently determined by an Appraisal approved by Lender on
or before such date of determination and (ii) the principal amount secured by
the Mortgage encumbering such Property, as expressly set forth in such Mortgage.
"APPRAISER" means any independent appraiser selected by Agent and
reasonably acceptable to Borrower who meets all regulatory requirements
applicable to 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
Xxxxx'x.
"APPROVED ENVIRONMENTAL CONSULTANT" means any of the environmental
consultants who prepared the environmental audits delivered to Agent pursuant to
Section 3.1.12 or any other qualified, independent environmental consultant
reasonably acceptable to Agent.
"ASSIGNMENT AGREEMENT" shall mean an agreement substantially in the
form of EXHIBIT E annexed hereto.
"ASSIGNMENT OF RENTS AND LEASES" means each Assignment of Rents and
Leases executed and acknowledged by the Loan Party thereto in favor of Lender
for the benefit of Lender substantially in the form delivered on or before the
Original Closing Date pursuant to the Original Agreement, 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
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or renovation of any Improvements located on any Property or for the use,
occupancy or operation of any 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 or COPH, as applicable.
"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%.
"BLUE XXXX" has the meaning set forth for it in the first paragraph
of this Agreement.
"BLUE XXXX PROPERTIES" means the Properties owned by Blue Xxxx as of
the Closing Date.
"BORROWER" means, collectively, COPLP, Blue Xxxx, South Brunswick,
Comcourt and Flank Drive, or, with respect to any Property, the Loan Party
owning such Property.
"BUSINESS DAY" means 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.
"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 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 Xxxxx'x; (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 Xxxxx'x; (iv) Eurodollar 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
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higher by Xxxxx'x; (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 Xxxxx'x.
"CASH PROCEEDS" means, with respect to any sale or other disposition
or refinancing of any Property, Cash payments received from such sale or
disposition or refinancing.
"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 an
interest, to the extent of such Loan Party's interest therein, now or hereafter
granted, assigned, transferred, mortgaged or pledged to Agent and/or the Lenders
or in which a Lien is granted to 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 Properties, the Leases and Rents
and any and all proceeds of the foregoing, the Partnership Interests pledged
pursuant to the Pledges and the "Collateral" under, and as defined in, the
Revolving Credit Agreement.
"COMCOURT" has the meaning set forth for it in the first paragraph
of this Agreement.
"COMMITMENT" means, collectively, the commitments of the Lenders to
make the Loans to Borrower pursuant to this Agreement, in the aggregate
principal amount of One Hundred Million Dollars ($100,000,000).
"COMPLIANCE CERTIFICATE" means a certificate delivered to Lender by
Borrower pursuant to Section 5.1.5 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 Properties and other
properties, debt restructurings or other nonrecurring expenses, and (vii) income
expense attributable to minority interest; LESS (a) a recurring capital expense
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reserve equal to $0.15 per net rentable square foot for all Properties other
than the Blue Xxxx 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.
"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, during the Initial Term, 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 the Loans, during any Extension Term, using a constant based on
the then-current 10-year Treasury Rate as of the commencement of such
Extension Term, plus 1.75%, instead of the interest rates actually
applicable thereto;
(c) for all other fixed rate Indebtedness, at the interest rates actually
applicable thereto; and
(d) for all other variable rate Indebtedness, using a constant based on
the then-current 10-year Treasury Rate as of the commencement of the
then-current Extension Term, 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
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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 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. For purposes of this definition, the carrying 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 of COPT or any of its Subsidiaries.
"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
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ERISA or under any qualified plan or related trust; but 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 (without duplication of Consolidated Total Liabilities); 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 Agent in its sole discretion. No Letter of Credit (as
defined in the Revolving Credit Agreement) issued under that Revolving Credit
Agreement shall be considered a Contingent Obligation of any Loan Party.
"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 Xxx Xxxxxxx and/or Xxxx X. Xxxxxx 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.
"COPLP" has the meaning set forth in the introductory paragraph of
this Agreement.
"COPT" has the meaning set forth in the introductory paragraph of
this Agreement.
"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.
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"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 Agent; and (ii) any Lender and any Affiliate
acceptable to Agent of any 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 Loans to
such entity Borrower is reasonably expected to become liable for additional
costs or withholdings by virtue of such assignment under Sections 2.10.8 and
2.10.9 or any other provision hereof.
"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.
"ENGINEER" means each reputable engineer approved by Agent licensed
as such in the state in which the applicable Property in question is located.
"ENGINEERING REPORT" means, with respect to any Property, a written
report prepared by an Engineer, describing and analyzing the physical condition
of the Improvements of such Property, describing any necessary or recommended
repairs, estimating the cost of such repairs and otherwise in form and substance
reasonably satisfactory to 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 Property.
"ENVIRONMENTAL INDEMNITY" means the Environmental Indemnity executed
and delivered by Borrower on or before the Original Closing Date, in favor of
Agent, substantially in the form delivered on or before the Original Closing
Date pursuant to this Agreement, as such
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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 any Loan Party or
any of its Subsidiaries or any of their properties, including the Comprehensive
Environmental Response, Compensation, and Liability Act (42 X.X.X.xx.xx. 9601,
et seq.), the Hazardous Materials Transportation Act (49 X.X.X.xx.xx. 1801, et
seq.), the Resource Conservation and Recovery Act (42 X.X.X.xx.xx. 6901, et
seq.), the Federal Water Pollution Control Act (33 X.X.X.xx.xx. 1251, et seq.),
the Clean Air Act (42 X.X.X.xx.xx. 7401, et seq.), the Toxic Substances Control
Act (15 X.X.X.xx.xx. 2601, et seq.), the Solid Waste Disposal Act (42
U.S.C.ss.ss.6901, et seq.), as amended by the Resource Conservation and Recovery
Act (42 X.X.X.xx.xx. 6901, et seq.), the Federal Insecticide, Fungicide and
Rodenticide Act (7 X.X.X.xx.xx. 136, et seq.), the Occupational Safety and
Health Act (29 X.X.X.xx.xx. 651, et seq.) and the Emergency Planning and
Community Right-to-Know Act (42 X.X.X.xx.xx. 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.
"EURODOLLAR RATE" means the sum of the Adjusted Eurodollar Rate PLUS
the Eurodollar Rate Margin.
"EURODOLLAR RATE MARGIN" means, as of any date of determination, a
per annum rate equal to 1.75%.
"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.
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"EXTENSION TERM" means the term of the Loans during the period from
the third Anniversary to (i) the fourth Anniversary if the extension option
contained in Section 2.4.1 is exercised, or (ii) the fifth Anniversary if the
extension option contained in Section 2.4.2 is exercised.
"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 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.
"FIXED RATE" means a fixed interest rate of seven and one-half
percent per annum.
"FLANK DRIVE" has the meaning set forth for it in the first
paragraph of this Agreement.
"FUNDING DATE" means the date of the funding of the Loans.
"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,
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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 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 Agent in its reasonable 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 are 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 non-hazardous form such as asphalt
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contained in road-surfacing materials or hazardous materials customarily used in
the 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 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.
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"INDEMNIFIED PERSON" has the meaning assigned to that term in
Section 8.3.1.
"INITIAL TERM" means the term of the Loans commencing on the
Original Closing Date and ending on the third Anniversary.
"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 Property.
"INSURANCE REQUIREMENTS" means all terms of any insurance policy
required hereunder covering or applicable to any 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
Property or any part thereof or any use of any 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
2.10.1.2.
"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 (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 Eurodollar 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.
"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:
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(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) a Person with respect to which
such investing Person or Subsidiary is a Wholly Owned Subsidiary or
(b) any other Wholly Owned Subsidiary of the Person referred to in
the preceding clause (a); PROVIDED that, in the case of COPT and its
Subsidiaries, such other Wholly Owned Subsidiary is a Loan Party and
has Guaranteed the Obligations), 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 payment to any other Person for the purpose of or otherwise
in connection with securing, extending, renewing or modifying any
Management Agreement;
(v) any commitment or obligation to make any investment described in
clauses (i) through (iv) above; and
(vi) 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, 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 (2) 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
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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.
"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 Property, the land described on
EXHIBIT A to the Mortgage encumbering such 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 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
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.
"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
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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 Lenders to Borrower
pursuant to this Agreement.
"LOAN AMOUNT" means One Hundred Million Dollars ($100,000,000).
"LOAN DOCUMENTS" means, collectively, this Agreement, the Notes, the
Security Documents, the Environmental Indemnity and the Fee Letter.
"LOAN PARTIES" has the meaning set forth for it in the first
paragraph of this Agreement.
"LOAN PARTIES' ACCOUNTANTS" means Pricewaterhouse Coopers or another
"big five" accounting firm.
"MANAGEMENT AGREEMENTS" means, collectively, all management
agreements with respect to the 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
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.
"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
Property or (ii) 30,000 or more square feet.
"MATURITY DATE" means the earlier of (i) the third Anniversary of
the Original Closing Date, as such date may be extended pursuant to Section 2.4
to a date not later than the fifth Anniversary of the Original 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 8.11.
"MOODY'S" means Xxxxx'x Investors Service, Inc. or any successor to
the business thereof.
"MORTGAGE" means each Mortgage, Assignment of Rents, Security
Agreement and Fixture Filing executed and acknowledged by the Loan Party thereto
in favor of Agent for
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the benefit of the Lenders, substantially in the form delivered on or before the
Closing Date pursuant to this Agreement, as each such instrument may be amended,
restated, supplemented, consolidated, extended or otherwise modified from time
to time in accordance with the terms thereof and hereof.
"MORTGAGED PROPERTY" has the meaning assigned to that term in the
Mortgages.
"MORTGAGED PROPERTY SUBSIDIARY GUARANTY" shall have the meaning
ascribed to it in the Revolving Credit Agreement.
"NET INCOME" means, with respect to any Person, the net income
(loss) of such Person, determined in accordance with GAAP and before any
reduction in respect of Preferred Stock dividends, excluding, however, any gain
(but not loss), together with any related provision for Taxes on such gain (but
not loss), realized in connection with any asset sale, and excluding any
extraordinary gain (but not loss), together with any related provision for taxes
on such extraordinary gain (but not loss).
"NET INSURANCE/CONDEMNATION PROCEEDS" means all Insurance Proceeds
on account of damage or destruction to any Property or all Condemnation Proceeds
in respect of any 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.
"NET SALES PRICE" means, with respect to any sale or other permanent
disposition by a Loan Party or any of its Subsidiaries of a Property, or other
asset, the gross purchase price therefor less the sum of (i) the amounts applied
to the payment of Indebtedness or other obligations secured by a Lien on such
Property or other asset (other than the Obligations), (ii) the reasonable
out-of-pocket costs and expenses incurred by such Loan Party or Subsidiary
directly in connection with such sale or other permanent disposition, including
income taxes paid or estimated to be actually payable as a result thereof, after
taking into account any available tax credits or deductions and any tax sharing
arrangements (PROVIDED that the amount of income taxes so estimated to be
actually payable shall be approved by Agent, which approval shall not be
unreasonably withheld, conditioned or delayed), and (iii) closing adjustments
contemplated and reserved.
"NON-RECOURSE PARTIES" means COPT and COPH.
"NOTES" means, collectively, (i) the promissory notes of COPH and
Borrower issued on the Closing Date, in the Loan Amount, and (ii) any promissory
notes issued by COPH and Borrower in connection with an assignment of all or any
portion of the Commitments and Loans of any Lender, in each case, substantially
in the form of EXHIBIT B 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 INTEREST PERIOD SELECTION" means a notice pursuant to
which Borrower shall elect an Interest Period, which shall be in a form
reasonably acceptable to Lender.
"NYSE" means the New York Stock Exchange.
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"OBLIGATIONS" means, collectively, all obligations of every nature
of the Loan Parties from time to time owed to 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 as lessee that, in
conformity with GAAP, is not accounted for as a capital lease on the balance
sheet of that Person.
"ORIGINAL CLOSING DATE" means October 13, 1997.
"OUTSTANDING LOAN AMOUNT" means at any time the portion of the Loan
Amount which is then outstanding.
"PARTNERSHIP BORROWER" means each of Blue Xxxx, South Brunswick,
Comcourt and Flank Drive.
"PARTNERSHIP INTERESTS" means the general and/or limited partnership
interests (including all partnership units, all rights under partnership
agreements and all rights to distributions) in a Partnership Loan Party.
"PARTNERSHIP LOAN PARTY" means any Loan Party that is a general or
limited partnership.
"PAYMENT DATE" means the last day of each calendar month, beginning
November 30, 1997, or, if such day is not a Business Day, the next succeeding
Business Day.
"PBGC" means the Pension Benefit Guaranty Corporation (or any
successor thereto).
"PERMITTED ENCUMBRANCES" means the Liens shown in the Title Policy
for each Property and, with respect to any 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;
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(ii) the Leases in existence on the Original 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 that do not make such 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 Property for office building purposes or with
the ordinary conduct of the business of Borrower;
(iv) Liens securing the Obligations; and
(v) Liens that are bonded and thereby released of record in a manner
reasonably satisfactory to 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.
"PLEDGES" means, collectively, the pledge by COPT of all of its
interest in COPLP and COPH, the pledge by COPLP of all of its interest in each
Partnership Borrower, and the pledge by COPH of all of its interest in each
Partnership Borrower.
"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 Agent 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. Agent and each Lender may make commercial
loans or other loans at rates of interest at, above or below the Prime Rate.
"PRINCIPAL REDUCTION AMOUNT" means the difference between (i) the
Outstanding Loan Amount on the third Anniversary, and (ii) sixty percent of the
then-current Appraised Value of all of the Properties then securing the Loans.
"PROPERTY" OR "PROPERTIES" means each of the properties described on
EXHIBIT A hereto.
"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 the amount set forth for a Property on
EXHIBIT C hereto.
"PROPERTY GROSS REVENUE" means, for any period and with respect to a
Property, all Receipts resulting from the operation of such Property, including,
without limitation, Rents or
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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 HEDGED INTEREST EXPENSE" means, for any period, total
interest expense (including that portion attributable to capital leases in
accordance with GAAP and capitalized interest) of Borrower on a consolidated
basis with respect to all outstanding Indebtedness of Borrower and its
Subsidiaries that is subject to Interest Rate Agreements, such interest to be
calculated for purposes of this Agreement against the outstanding principal
amounts of such Indebtedness using the highest possible interest rate (including
credit spread) payable by Borrower pursuant to such Interest Rate Agreements.
"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 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
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 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,
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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 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;
(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 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 must pay to Tenants and other
occupants of such Property;
(xvii) reserves for such expenses and in such amounts as
Borrower 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
annual financial statements as operating expenses of such Property.
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Notwithstanding the foregoing, Property Operating Expenses shall not include
depreciation and amortization or interest or 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
Agent, but excluding amounts applied to the repayment of indebtedness or other
obligations secured by a Lien on the assets subject to such 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 Agent 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 (other than amounts received by COPT or any of its
Subsidiaries in respect of the Managed Properties on behalf of, or as agent for,
the parties to the Management Agreements other than COPT and its Subsidiaries);
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.
"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 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 2.8.
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"RELEASE PRICE" means the amount that is the greatest of the
following, calculated as of the Release Date:
(a) 125% of the Property Amount with respect to such Property;
(b) in the event of a sale or other permanent disposition of
such Property, 85% of the Net Sales Price for such Property;
(c) the amount necessary to ensure that the sale or other
disposition does not cause a violation of the covenants set forth in
Section 6.7 of this Agreement; and
(d) in the event of a casualty or Taking with respect to such
Property, the Insurance Proceeds or Condemnation Proceeds, as the
case may be, resulting therefrom.
"RENOVATION" means the expansion, rebuilding, repair, restoration,
refurbishment, fixturing and equipping of the Improvements at a 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 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 Property, a rent roll in the form
approved by Agent indicating (i) the names of all Tenants of such Property and
the space occupied by such Tenants, (ii) the term of each Lease affecting such
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 Property and Borrower's estimate of the fair rental value of each
such space, (vi) the occupancy rate of such Property, (vii) the security deposit
and escrows, if any, held by Borrower 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 Property (or the
Improvements thereof) following the
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destruction, damage, loss or Taking thereof. The term "Restore" used as a verb
has the corresponding meaning.
"REVOLVING CREDIT AGREEMENT" shall have the meaning given to it in
Recital A.
"REVOLVING LOAN" shall have the meaning given to it in Recital A.
"SCHEDULED PRINCIPAL PAYMENT DATE" means, if the Maturity Date is
extended beyond the third Anniversary pursuant to Section 2.4, the third
Anniversary and the next succeeding eleven Payment Dates.
"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 each Loan Party and Agent on or before the Original
Closing Date pursuant to the Original Agreement as amended by the Amendment to
Security Agreement of even date herewith, substantially in the form delivered on
or before the Closing Date pursuant to this Agreement, pursuant to which such
Loan Party will pledge and grant a security interest in the Collateral described
therein to Agent for the benefit of 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, the Pledges, 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 the
Original Agreement or any amendments or modifications thereto or restatements
thereof 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 or reaffirm to Agent for the
benefit of Lenders 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.
"SOUTH BRUNSWICK" has the meaning set forth for it in the first
paragraph of this Agreement.
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"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. Without limiting the generality of such term, all
of the Loan Parties other than COPT shall be deemed Subsidiaries of COPT for
purposes of this Agreement.
"SURVEY" means, with respect to any Property, a current survey map
prepared by a surveyor licensed in the state in which such Property is located,
reasonably acceptable to Agent, which shall (i) contain the legal description of
such Property, (ii) conform, and be certified by such surveyor to 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 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 Agent in its sole
discretion. Any such survey shall contain a certification by such surveyor to
Agent stating whether the 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 XxXxxx-Xxxx
Companies, Inc., or any successor to the business thereof.
"SWAP" shall have the meaning given to it in Section 2.7.7.3.
"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
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
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(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)
or a tax to which it is generally subject by reason of its conduct of its
business therein.
"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 any other Loan Party and Agent, and reasonably satisfactory in form
and substance to 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.
"TENANTING COSTS" means costs incurred by Borrower in connection
with the leasing of a Property, including brokerage commissions, free rent,
tenant improvements and related costs and expenses.
"TENANTING COSTS RESERVE ACCOUNT" means, collectively, one or more
interest-bearing accounts to be established and maintained by Borrower at the
offices of Agent located at 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx, each in the
name of "Bankers Trust Company -- FCOLP Tenanting Costs Reserve Account," with
such additional identifying references in such name as Borrower and Agent shall
agree.
"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 Agent in its reasonable discretion.
"TITLE POLICIES" means, with respect to the 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
Lender) and issued by the Title Company.
"TOTAL 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 Properties.
"TOTAL PROPERTY INTEREST EXPENSE" means, for any period, total
interest expense related to outstanding Indebtedness secured by the Properties,
such interest to be calculated for purposes of this Agreement against the
aggregate amount 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
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(A) held by COPT in COPLP, (B) held by COPH in any Borrower, or (C) held by
COPLP in any Borrower.
"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 5.13.6.
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EXHIBIT A
THE PROPERTIES
129
EXHIBIT B
AMENDED AND RESTATED
PROMISSORY NOTE
$100,000,000 New York, New York
August 31, 1998
THIS PROMISSORY NOTE (as amended, restated, supplemented or
otherwise modified from time to time, this "NOTE") is made by CORPORATE OFFICE
PROPERTIES, L.P., a Delaware limited partnership ("COPLP"), BLUE XXXX INVESTMENT
COMPANY, L.P., a Delaware limited partnership ("Blue Xxxx"), SOUTH BRUNSWICK
INVESTORS, L.P., a Delaware limited partnership ("South Brunswick"), COMCOURT
INVESTORS, L.P., a Delaware limited partnership ("Comcourt"), and 0000 XXXXX
XXXXX, L.P., a Pennsylvania limited partnership ("Flank Drive", or collectively
with the foregoing parties, "MAKER"), each having an address Xxx Xxxxx Xxxxxx,
Xxxxx 0000, Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000, in favor of BANKERS TRUST COMPANY
and its successors and assigns (the "PAYEE").
FOR VALUE RECEIVED, Maker promises to pay to the order of Payee on
the Maturity Date ONE HUNDRED MILLION DOLLARS ($100,000,000).
Maker also promises to pay interest on the unpaid principal amount
hereof, from the Closing Date until paid in full, at the rates and times
determined in accordance with the provisions of that certain Amended and
Restated Senior Secured Credit Agreement dated as of August 31, 1998 by and
among, inter alia, Maker, Corporate Office Properties Trust and Payee (said
Amended and Restated Credit Agreement, as it may be amended, restated
supplemented or otherwise modified from time to time, being the "CREDIT
AGREEMENT", and the terms defined therein and not otherwise defined herein being
used herein as therein defined).
This Note is issued pursuant to and entitled to the benefits of the
Credit Agreement, to which reference is hereby made for a more complete
statement of the terms and conditions under which the Loans evidenced hereby
were made and are to be repaid.
All payments of principal and interest in respect of this Note shall
be made in lawful money of the United States of America in same day funds at the
office of Lender located at One Bankers Trust Plaza, New York, New York or at
such other place as shall be designated in writing for such purpose in
accordance with the terms of the Credit Agreement. Unless and until notified in
writing of the assignment or transfer of this Note in accordance with the terms
of the Credit Agreement, Maker shall be entitled to deem and treat Payee as the
owner and holder of this Note and the Loans evidenced hereby.
Whenever any payment on this Note shall be stated to be due on a day
which 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 on this Note.
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This Note is subject to mandatory and optional prepayment as
provided in the Credit Agreement.
This Note is secured by certain assets pursuant to the Mortgages and
the other Security Documents.
During the continuance of any Event of Default, the unpaid balance
of the principal amount of this Note, together with all accrued and unpaid
interest thereon, may become, or may be declared to be, due and payable in the
manner, upon the conditions and with the effect provided in the Credit
Agreement.
The terms of this Note are subject to amendment only in the manner
provided in the Credit Agreement.
This Note is subject to restrictions on transfer or assignment as
provided in Sections 8.1 of the Credit Agreement.
No reference herein to the Credit Agreement and no provision of this
Note or the Credit Agreement shall alter or impair the obligations of Maker,
which are absolute and unconditional, to pay the principal of and interest on
this Note at the place, at the respective times, and in the currency herein
prescribed.
Maker promises to pay all costs and expenses, including reasonable
attorneys' fees, all as provided in Section 8.2 of the Credit Agreement,
incurred in the collection and enforcement of this Note. Maker and any endorsers
of this Note hereby consent to renewals and extensions of time at or after the
maturity hereof, without notice, and hereby waive diligence, presentment,
protest, demand and, except as expressly provided in the Credit Agreement,
notice of every kind and, to the full extent permitted by law, the right to
plead any statute of limitations as a defense to any demand hereunder.
Makers' liability under this note is joint and several. The
provisions of Section 8.13 of the Credit Agreement, relating to contribution
rights of Maker, are incorporated herein by this reference. Each Maker further
agrees that its obligations hereunder are irrevocable, absolute, independent and
unconditional and shall not be affected by any circumstance which constitutes a
legal or equitable discharge of a guarantor or surety other than payment and
performance in full of the Obligations. In furtherance of the foregoing and
without limiting the generality thereof, each Maker agrees as follows: (i) Payee
may from time to time, without notice or demand and without affecting the
validity or enforceability of this Agreement or giving rise to any limitation,
impairment or discharge of such Maker's liability hereunder, (A) renew, extend,
accelerate or otherwise change the time, place, manner or terms of payment of
the Obligations, (B) settle, compromise, release or discharge, or accept or
refuse any offer of performance with respect to, or substitutions for, the
Obligations or any agreement relating thereto and/or subordinate the payment of
the same to the payment of any other obligations, (C) request and accept
guaranties of the Obligations and take and hold other security for the payment
of the Obligations, (D) release, exchange, compromise, subordinate or modify,
with or without consideration, any other security for payment of the
Obligations, any guaranties of the Obligations, or any other obligation of any
Person with respect to the Obligations, (E) enforce and apply any other security
now or hereafter held by or for the benefit of Payee in respect of the
Obligations and direct the order or manner of sale thereof, or exercise any
other right or remedy that Payee may have
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against any such security, as Payees in their discretion may determine
consistent with this Agreement and any other Loan Document including foreclosure
on any such security pursuant to one or more judicial or nonjudicial sales,
whether or not every aspect of any such sale is commercially reasonable, and (F)
exercise any other rights available to Payee under the Loan Documents, at law or
in equity; and (ii) this Agreement and the obligations of each Maker hereunder
shall be valid and enforceable and shall not be subject to any limitation,
impairment or discharge for any reason (other than payment in full of the
Obligations), including without limitation the occurrence of any of the
following, whether or not any Maker shall have had notice or knowledge of any of
them: (A) any failure to assert or enforce or agreement not to assert or
enforce, or the stay or enjoining, by order of court, by operation of law or
otherwise, of the exercise or enforcement of, any claim or demand or any right,
power or remedy with respect to the Obligations or any agreement relating
thereto, or with respect to any guaranty of or other security for the payment of
the Obligations, (B) any waiver, amendment or modification of, or any consent to
departure from, any of the terms or provisions (including without limitation
provisions relating to events of default) of the Credit Agreement, any of the
other Loan Documents or any agreement or instrument executed pursuant thereto,
or of any guaranty or other security for the Obligations, (C) the Obligations,
or any agreement relating thereto, at any time being found to be illegal,
invalid or unenforceable in any respect, (D) the application of payments
received from any source to the payment of indebtedness other than the
Obligations, even though Payee might have elected to apply such payment to any
part or all of the Obligations, (E) any failure to perfect or continue
perfection of a security interest in any other collateral which secures any of
the Obligations, (F) any defenses, set-offs or counterclaims which any other
Maker may allege or assert against any Payee in respect of the Obligations,
including but not limited to failure of consideration, breach of warranty,
payment, statute of frauds, statute of limitations, accord and satisfaction and
usury, and (G) any other act or thing or omission, or delay to do any other act
or thing, which may or might in any manner or to any extent vary the risk of any
Maker as an obligor in respect of the Obligations.
Each Maker waives, for the benefit of Payee: (i) any right to
require Payee, as a condition of payment or performance by such Maker, to (A)
proceed against any other Maker, any guarantor of the Obligations or any other
Person, (B) proceed against or exhaust any other security held from any other
Maker, any guarantor of the Obligations or any other Person, (C) proceed against
or have resort to any balance of any deposit account or credit on the books of
Payee in favor of any Maker or any other Person, or (D) pursue any other remedy
in the power of Payee whatsoever; (ii) any defense arising by reason of the
incapacity, lack of authority or any disability or other defense of any Maker
including, without limitation, any defense based on or arising out of the lack
of validity or the unenforceability of the Obligations or any agreement or
instrument relating thereto or by reason of the cessation of the liability of
any Maker from any cause other than payment in full of the Obligations; (iii)
any defense based upon any statute or rule of law which provides that the
obligation of a surety must be neither larger in amount nor in other respects
more burdensome than that of the principal; (iv) any defense based upon Payee's
errors or omissions in the administration of the Obligations, except behavior
which amounts to bad faith; (v) (A) any principles or provisions of law,
statutory or otherwise, which are or might be in conflict with the terms of this
Agreement and any legal or equitable discharge of such Maker's obligations
hereunder, (B) the benefit of any statute of limitations affecting such Maker's
liability hereunder or the enforcement hereof, (C) any rights to set-offs,
recoupments and counterclaims, and (D) promptness, diligence and any requirement
that Payee protect, secure, perfect or insure any other security interest or
lien or any property subject thereto;
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(vi) notices, demands, presentments, protests, notices of protest, notices of
dishonor and notices of any action or inaction, notices of default under the
Credit Agreement or any agreement or instrument related thereto, notices of any
renewal, extension or modification of the Obligations or any agreement related
thereto, notices of any extension of credit to Loan Parties and notices of any
of the matters referred to in the preceding paragraph and any right to consent
to any thereof; and (vii) to the fullest extent permitted by law, any defenses
or benefits that may be derived from or afforded by law which limit the
liability of or exonerate guarantors or sureties, or which may conflict with the
terms of this Agreement.
Until the Obligations shall have been paid in full, each Maker shall
withhold exercise of (i) any claim, right or remedy, direct or indirect, that
such Maker now has or may hereafter have against any other Maker or any of its
assets in connection with this Agreement or the performance by any other Maker
of its obligations hereunder, in each case whether such claim, right or remedy
arises in equity, under contract, by statute, under common law or otherwise and
including without limitation (A) any right of subrogation, reimbursement or
indemnification that any Maker now has or may hereafter have against any other
Maker, (B) any right to enforce, or to participate in, any claim, right or
remedy that Payee now has or may hereafter have against any Maker, and (C) any
benefit of, and any right to participate in, any other collateral or security
now or hereafter held by Payee, and (ii) any right of contribution any Maker may
have against any guarantor of the Obligations. Each Maker further agrees that,
to the extent the waiver of its rights of subrogation, reimbursement,
indemnification and contribution as set forth herein is found by a court of
competent jurisdiction to be void or voidable for any reason, any rights of
subrogation, reimbursement or indemnification such Maker may have against any
other Maker or against any other collateral or security, and any rights of
contribution such Maker may have against any such guarantor, shall be junior and
subordinate to any rights Payee may have against any Maker, to all right, title
and interest Payee may have in any such other collateral or security, and to any
right Payee may have against any such guarantor.
Payee's recourse to the general partners of the parties constituting
Maker hereunder is limited by the provisions of Section 7.3 of the Credit
Agreement, which is incorporated herein by reference.
THIS NOTE AND THE RIGHTS AND OBLIGATIONS OF MAKER AND PAYEE
HEREUNDER 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.
[Signatures on the next page]
133
IN WITNESS WHEREOF, Maker has caused this Note to be duly executed and
delivered by its officer thereunto duly authorized as of the date and at the
place first written above.
MAKER
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: ______________________________________________
Name: _______________________________________
Title: _______________________________________
BLUE XXXX INVESTMENT COMPANY, L.P.,
A DELAWARE LIMITED PARTNERSHIP
By: Corporate Office Properties Holdings, Inc., a
Delaware corporation, its sole general partner
By: ______________________________________________
Name: _______________________________________
Title: _______________________________________
SOUTH BRUNSWICK INVESTORS, L.P.,
A DELAWARE LIMITED PARTNERSHIP
By: Corporate Office Properties Holdings, Inc., a
Delaware corporation, its sole general partner
By: ______________________________________________
Name: _______________________________________
Title: _______________________________________
COMCOURT INVESTORS, L.P.,
A DELAWARE LIMITED PARTNERSHIP
134
By: Corporate Office Properties Holdings, Inc., a
Delaware corporation, its sole general
By: ______________________________________________
Name: _______________________________________
Title: _______________________________________
0000 XXXXX XXXXX, L.P.,
A PENNSYLVANIA LIMITED PARTNERSHIP
By: Corporate Office Properties Holdings, Inc., a
Delaware corporation, its sole general partner
By: ______________________________________________
Name: _______________________________________
Title: _______________________________________
135
EXHIBIT C
PROPERTY AMOUNTS
136
EXHIBIT D
FORM OF COMPLIANCE CERTIFICATES
COMPLIANCE CERTIFICATE
DATE: AUGUST 31, 1998
THE UNDERSIGNED HEREBY CERTIFIES THAT:
(1) I am a duly appointed Authorized Officer of Corporate Office
Properties Trust, a Maryland real estate investment trust (the
"COMPANY");
(2) I have reviewed the terms of that certain Senior Secured Credit
Agreement dated as even date herewith, as amended, restated,
supplemented or otherwise modified to the date hereof (said Credit
Agreement, as so amended, restated, supplemented or otherwise
modified, being the "CREDIT AGREEMENT," the terms defined therein
and not otherwise defined in this Certificate being used in this
Certificate as therein defined), by and among the Company and
certain other parties, as Loan Parties, and Bankers Trust Company,
as Lender and as Agent for the Lenders, and the terms of the other
Loan Documents, and I have made, or have caused to be made under my
supervision, a review in reasonable detail of the transactions and
condition of the Company during the accounting period immediately
preceding the Closing;
(3) The financial and operating statements delivered to Agent by the
Company as of the Closing Date are accurate;
(4) The Consolidated Tangible Net Worth of the Loan Parties as of
the Closing Date is $___________;
(5) Since December 31, 1997, no Material Adverse Effect has occurred
with respect to the Company; and
(6) The examination described in paragraph (2) above did not
disclose, and I have no knowledge of, the failure of the Company to
comply with any of the financial covenants set forth in Section 6.7
of the Credit Agreement during or at the end of the accounting
period immediately preceding the Closing or as of the date of this
Certificate.
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137
The foregoing certifications (which are made in my corporate and not
individual capacity on behalf of the Company) are made and delivered on the date
first written above pursuant to Sections 3.1.4 and 3.2.1 of the Credit
Agreement.
CORPORATE OFFICE PROPERTIES TRUST,
A MARYLAND REAL ESTATE INVESTMENT TRUST
By: ______________________________________________
Name: _______________________________________
Title: _______________________________________
138
COMPLIANCE CERTIFICATE
DATE: AUGUST 31, 1998
THE UNDERSIGNED HEREBY CERTIFIES THAT:
(1) I am a duly appointed Authorized Officer of Corporate Office
Properties Holdings, Inc., a Delaware corporation (the "COMPANY");
(2) I have reviewed the terms of that certain Amended and Restated
Senior Secured Credit Agreement dated as of even date herewith, as
amended, restated, supplemented or otherwise modified to the date
hereof (said Credit Agreement, as so amended, restated, supplemented
or otherwise modified, being the "CREDIT AGREEMENT," the terms
defined therein and not otherwise defined in this Certificate being
used in this Certificate as therein defined), by and among the
Company and certain other parties, as Loan Parties, and Bankers
Trust Company, as Lender and as Agent for the Lenders, and the terms
of the other Loan Documents, and I have made, or have caused to be
made under my supervision, a review in reasonable detail of the
transactions and condition of the Company during the accounting
period immediately preceding the Closing;
(3) The financial and operating statements delivered to Agent by the
Company as of the Closing Date are accurate;
(4) The Consolidated Tangible Net Worth of the Loan Parties as of
the Closing Date is $___________;
(5) Since December 31, 1997, no Material Adverse Effect has occurred
with respect to the Company; and
(6) The examination described in paragraph (2) above did not
disclose, and I have no knowledge of, the failure of the Company to
comply with any of the financial covenants set forth in Section 6.7
of the Credit Agreement during or at the end of the accounting
period immediately preceding the Closing or as of the date of this
Certificate.
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139
The foregoing certifications (which are made in my corporate and not
individual capacity on behalf of the Company) are made and delivered on the date
first written above pursuant to Section 3.1.4 of the Credit Agreement.
CORPORATE OFFICE PROPERTIES HOLDINGS, INC.,
A DELAWARE CORPORATION
By: ______________________________________________
Name: _______________________________________
Title: _______________________________________
140
COMPLIANCE CERTIFICATE
DATE: AUGUST 31, 1998
THE UNDERSIGNED HEREBY CERTIFIES THAT:
(1) I am a duly appointed Authorized Officer of Corporate Office
Properties Trust, acting in its capacity as sole general partner of
Corporate Office Properties, L.P., a Delaware limited partnership
(the "COMPANY");
(2) I have reviewed the terms of that certain Amended and Restated
Senior Secured Credit Agreement dated as of even date herewith, as
amended, restated, supplemented or otherwise modified to the date
hereof (said Credit Agreement, as so amended, restated, supplemented
or otherwise modified, being the "CREDIT AGREEMENT," the terms
defined therein and not otherwise defined in this Certificate being
used in this Certificate as therein defined), by and among the
Company and certain other parties, as Loan Parties, and Bankers
Trust Company, as Lender and as Agent for the Lenders, and the terms
of the other Loan Documents, and I have made, or have caused to be
made under my supervision, a review in reasonable detail of the
transactions and condition of the Company during the accounting
period immediately preceding the Closing;
(3) The financial and operating statements delivered to Agent by the
Company as of the Closing Date are accurate;
(4) The Consolidated Tangible Net Worth of the Loan Parties as of
the Closing Date is $___________;
(5) Since December 31, 1997, no Material Adverse Effect has occurred
with respect to the Company; and
(6) The examination described in paragraph (2) above did not
disclose, and I have no knowledge of, the failure of the Company to
comply with any of the financial covenants set forth in Section 6.7
of the Credit Agreement during or at the end of the accounting
period immediately preceding the Closing or as of the date of this
Certificate.
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141
The foregoing certifications (which are made in my corporate and not
individual capacity on behalf of the Company) are made and delivered on the date
first written above pursuant to Section 3.1.4 of the Credit Agreement.
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: ______________________________________________
Name: _______________________________________
Title: _______________________________________
142
COMPLIANCE CERTIFICATE
DATE: AUGUST 31, 1998
THE UNDERSIGNED HEREBY CERTIFIES THAT:
(1) I am a duly appointed Authorized Officer of Corporate Office
Properties Holdings, Inc., acting in its capacity as general partner
of each of Blue Xxxx Investment Company, L.P., South Brunswick
Investors, L.P., ComCourt Investors, L.P., a Pennsylvania limited
partnership, and 0000 Xxxxx Xxxxx, L.P., each a Delaware limited
partnership (each a "COMPANY" and collectively, the "COMPANIES");
(2) I have reviewed the terms of that certain Amended and Restated
Senior Secured Credit Agreement dated as of even date herewith, as
amended, restated, supplemented or otherwise modified to the date
hereof (said Credit Agreement, as so amended, restated, supplemented
or otherwise modified, being the "CREDIT AGREEMENT," the terms
defined therein and not otherwise defined in this Certificate being
used in this Certificate as therein defined), by and among the
Companies and certain other parties, as Loan Parties, and Bankers
Trust Company, as Lender and as Agent for the Lenders, and the terms
of the other Loan Documents, and I have made, or have caused to be
made under my supervision, a review in reasonable detail of the
transactions and condition of the Companies during the accounting
period immediately preceding the Closing;
(3) The financial and operating statements delivered to Agent by the
Companies as of the Closing Date are accurate;
(4) The Consolidated Tangible Net Worth of the Loan Parties as of
the Closing Date is $___________;
(5) Since December 31, 1997, no Material Adverse Effect has occurred
with respect to any Company; and
(6) The examination described in paragraph (2) above did not
disclose, and I have no knowledge of, the failure of the Company to
comply with any of the financial covenants set forth in Section 6.7
of the Credit Agreement during or at the end of the accounting
period immediately preceding the Closing or as of the date of this
Certificate.
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143
The foregoing certifications (which are made in my corporate and not
individual capacity on behalf of the Company) are made and delivered on the date
first written above pursuant to Section 3.1.4 of the Credit Agreement.
BLUE XXXX INVESTMENT COMPANY, L.P.,
A DELAWARE LIMITED PARTNERSHIP
By: Corporate Office Properties Holdings, Inc.,
a Delaware corporation, its sole general partner
By: ______________________________________________
Xxxx X. Xxxxxx, III,
President
SOUTH BRUNSWICK INVESTORS, L.P.,
A DELAWARE LIMITED PARTNERSHIP
By: Corporate Office Properties Holdings, Inc.,
a Delaware corporation, its sole general partner
By: ______________________________________________
Xxxx X. Xxxxxx, III,
Manager
COMCOURT INVESTORS, L.P.,
A DELAWARE LIMITED PARTNERSHIP
By: Corporate Office Properties Holdings, Inc.,
a Delaware corporation, its sole general partner
By: ______________________________________________
Xxxx X. Xxxxxx, III,
President
0000 XXXXX XXXXX, L.P.,
A PENNSYLVANIA LIMITED PARTNERSHIP
By: Corporate Office Properties Holdings, Inc.,
a Delaware corporation, its sole general partner
144
By: ______________________________________________
Xxxx X. Xxxxxx, III,
President
145
EXHIBIT E
[FORM OF ASSIGNMENT AGREEMENT]
ASSIGNMENT AGREEMENT
This ASSIGNMENT AGREEMENT (this "AGREEMENT") is entered into by and
between the parties designated as Assignor ("ASSIGNOR") and Assignee
("ASSIGNEE") above the signatures of such parties on the Schedule of Terms
attached hereto and hereby made an integral part hereof (the "SCHEDULE OF
TERMS") and relates to that certain Credit Agreement described in the Schedule
of Terms (said Credit Agreement, as amended, supplemented or otherwise modified
to the date hereof and as it may hereafter be amended, supplemented or otherwise
modified from time to time, being the "CREDIT AGREEMENT", the terms defined
therein and not otherwise defined herein being used herein as therein defined).
IN CONSIDERATION of the agreements, provisions and covenants herein
contained, the parties hereto hereby agree as follows:
SECTION 1. ASSIGNMENT AND ASSUMPTION.
(a) Effective upon the Settlement Date specified in Item 4 of the
Schedule of Terms (the "SETTLEMENT DATE"), Assignor hereby sells and assigns to
Assignee, without recourse, representation or warranty (except as expressly set
forth herein), and Assignee hereby purchases and assumes from Assignor, that
percentage interest in all of Assignor's rights and obligations as a Lender
arising under the Credit Agreement and the other Loan Documents with respect to
Assignor's Commitments and outstanding Loans, if any, which represents, as of
the Settlement Date, the percentage interest specified in Item 3 of the Schedule
of Terms of all rights and obligations of Lenders arising under the Credit
Agreement and the other Loan Documents with respect to the Commitments and any
outstanding Loans (the "ASSIGNED SHARE").
(b) In consideration of the assignment described above, Assignee
hereby agrees to pay to Assignor, on the Settlement Date, the principal amount
of any outstanding Loans included within the Assigned Share, such payment to be
made by wire transfer of immediately available funds in accordance with the
applicable payment instructions set forth in Item 5 of the Schedule of Terms.
(c) Assignor hereby represents and warrants that Item 3 of the
Schedule of Terms correctly sets forth the amount of the Commitment and the Pro
Rata Share corresponding to the Assigned Share.
(d) Assignor and Assignee hereby agree that, upon giving effect to
the assignment and assumption described above, (i) Assignee shall be a party to
the Credit Agreement and shall have all of the rights and obligations under the
Loan Documents, and shall be deemed to have made all of the covenants and
agreements contained in the Loan Documents, arising out of or otherwise related
to the Assigned Share, and (ii) Assignor shall be absolutely released from any
of such obligations, covenants and agreements assumed or made by Assignee in
respect of the Assigned Share. Assignee hereby acknowledges and agrees that the
agreement
146
set forth in this Section 1(d) is expressly made for the benefit of Borrower,
Agent, Assignor and the other Lenders and their respective successors and
permitted assigns.
(e) Assignor and Assignee hereby acknowledge and confirm their
understanding and intent that (i) this Agreement shall effect the assignment by
Assignor and the assumption by Assignee of Assignor's rights and obligations
with respect to the Assigned Share, (ii) any other assignments by Assignor of a
portion of its rights and obligations with respect to the Commitment and any
outstanding Loans shall have no effect on the Commitment and the Pro Rata Share
corresponding to the Assigned Share as set forth in Item 3 of the Schedule of
Terms or on the interest of Assignee in any outstanding Loans corresponding
thereto, and (iii) from and after the Settlement Date, Agent shall make all
payments under the Credit Agreement in respect of the Assigned Share (including
without limitation all payments of principal and accrued but unpaid interest and
commitment fees with respect thereto) (A) in the case of any such interest and
fees that shall have accrued prior to the Settlement Date, to Assignor, and (B)
in all other cases, to Assignee; provided that Assignor and Assignee shall make
payments directly to each other to the extent necessary to effect any
appropriate adjustments in any amounts distributed to Assignor and/or Assignee
by Agent under the Loan Documents in respect of the Assigned Share in the event
that, for any reason whatsoever, the payment of consideration contemplated by
Section 1(b) occurs on a date other than the Settlement Date.
SECTION 2. CERTAIN REPRESENTATIONS, WARRANTIES AND AGREEMENTS.
(a) Assignor represents and warrants that it is the legal and
beneficial owner of the Assigned Share, free and clear of any adverse claim.
(b) Assignor shall not be responsible to Assignee for the execution,
effectiveness, genuineness, validity, enforceability, collectibility or
sufficiency of any of the Loan Documents or for any representations, warranties,
recitals or statements made therein or made in any written or oral statements or
in any financial or other statements, instruments, reports or certificates or
any other documents furnished or made by Assignor to Assignee or by or on behalf
of any Loan Party or any of its Subsidiaries to Assignor or Assignee in
connection with the Loan Documents and the transactions contemplated thereby or
for the financial condition or business affairs of any Loan Party or any other
Person liable for the payment of any Obligations, nor shall Assignor be required
to ascertain or inquire as to the performance or observance of any of the terms,
conditions, provisions, covenants or agreements contained in any of the Loan
Documents or as to the use of the proceeds of the Loans or as to the existence
or possible existence of any Event of Default or Potential Event of Default.
(c) Assignee represents and warrants that it is an Eligible
Assignee; that it has experience and expertise in the making of loans such as
the Loans; that it has acquired the Assigned Share for its own account in the
ordinary course of its business and without a view to distribution of the Loans
within the meaning of the Securities Act or the Exchange Act or other federal
securities laws (it being understood that, subject to the provisions of
subsection 8.1 of the Credit Agreement, the disposition of the Assigned Share or
any interests therein shall at all times remain within its exclusive control);
and that it has received, reviewed and approved a copy of the Credit Agreement
(including all Exhibits and Schedules thereto).
147
(d) Assignee represents and warrants that it has received from
Assignor such financial information regarding each Loan Party and its
Subsidiaries as is available to Assignor and as Assignee has requested, that it
has made its own independent investigation of the financial condition and
affairs of each Loan Party and its Subsidiaries in connection with the
assignment evidenced by this Agreement, and that it has made and shall continue
to make its own appraisal of the creditworthiness of each Loan Party and its
Subsidiaries. Assignor shall have no duty or responsibility, either initially or
on a continuing basis, to make any such investigation or any such appraisal on
behalf of Assignee or to provide Assignee with any other credit or other
information with respect thereto, whether coming into its possession before the
making of the initial Loans or at any time or times thereafter, and Assignor
shall not have any responsibility with respect to the accuracy of or the
completeness of any information provided to Assignee.
(e) Each party to this Agreement represents and warrants to the
other party hereto that it has full power and authority to enter into this
Agreement and to perform its obligations hereunder in accordance with the
provisions hereof, that this Agreement has been duly authorized, executed and
delivered by such party and that this Agreement constitutes a legal, valid and
binding obligation of such party, enforceable against such party in accordance
with its terms, except as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting creditors' rights generally and by general principles of equity.
SECTION 3. MISCELLANEOUS.
(a) Each of Assignor and Assignee hereby agrees from time to time,
upon request of the other such party hereto, to take such additional actions and
to execute and deliver such additional documents and instruments as such other
party may reasonably request to effect the transactions contemplated by, and to
carry out the intent of, this Agreement.
(b) Neither this Agreement nor any term hereof may be changed,
waived, discharged or terminated, except by an instrument in writing signed by
the party (including, if applicable, any party required to evidence its consent
to or acceptance of this Agreement) against whom enforcement of such change,
waiver, discharge or termination is sought.
(c) 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, telexed or sent by telefacsimile or United States
mail or courier service and shall be deemed to have been given when delivered in
person or by courier service, upon receipt of telefacsimile or telex, or three
Business Days after depositing it in the United States mail with postage prepaid
and properly addressed. For the purposes hereof, the notice address of each of
Assignor and Assignee shall be as set forth on the Schedule of Terms or, as to
either such party, such other address as shall be designated by such party in a
written notice delivered to the other such party. In addition, the notice
address of Assignee set forth on the Schedule of Terms shall serve as the
initial notice address of Assignee for purposes of Section 8.8 of the Credit
Agreement.
(d) In case any provision in or obligation under this Agreement
shall be invalid, illegal or unenforceable in any jurisdiction, the validity,
legality and enforceability of the
148
remaining provisions or obligations, or of such provision or obligation in any
other jurisdiction, shall not in any way be affected or impaired thereby.
(e) THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
HEREUNDER 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.
(f) This Agreement shall be binding upon, and shall inure to the
benefit of, the parties hereto and their respective successors and assigns.
(g) This Agreement may be executed in one or more 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.
(h) This Agreement shall become effective upon the date (the
"EFFECTIVE Date") upon which all of the following conditions are satisfied: (i)
the execution of a counterpart hereof by each of Assignor and Assignee, (ii) the
receipt by Agent of any processing or recordation fees required under the Credit
Agreement, (iii) in the event Assignee is organized under the laws of any
jurisdiction other than the United States of America or any state or other
political subdivision thereof, the delivery by such Assignee to Agent of such
forms, certificates or other evidence with respect to United States federal
income tax withholding matters as Assignee may reasonably require; (iv) the
execution of a counterpart hereof by Agent as evidence of its acceptance hereof
in accordance with subsection 8.1 of the Credit Agreement, (v) the receipt by
Agent of originals or telefacsimiles of the counterparts described above and
authorization of delivery thereof, and (vi) the recordation by Agent in the
Register of the pertinent information regarding the assignment effected hereby
in accordance with subsection 8.1 of the Credit Agreement.
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149
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed and delivered by their respective officers thereunto duly
authorized, such execution being made as of the Effective Date in the applicable
spaces provided on the Schedule of Terms.
150
SCHEDULE OF TERMS
1. BORROWER: Blue Xxxx Investment Company, L.P., South Brunswick Investors,
L.P., Comcourt Investors, L.P. and 0000 Xxxxx Xxxxx, L.P., collectively.
2. NAME AND DATE OF CREDIT AGREEMENT: Amended and Restated Senior Secured
Credit Agreement dated as of August 31, 1998 by and among Borrower,
Corporate Office Properties Trust and Corporate Office Properties, L.P.,
collectively as Loan Parties, the financial institutions listed therein as
Lenders, and Bankers Trust Company, as Agent.
3. AMOUNTS:
Re: Term Re: Revolving
Loan Loan
-------- -------------
(a) Aggregate Commitments of all Lenders: $_______ $_______
(b) Assigned Share/Pro Rata Share: ______% ______%
(c) Amount of Assigned Share of Commitment: $_______ $_______
4. SETTLEMENT DATE: ____________, 199_
5. PAYMENT INSTRUCTIONS:
ASSIGNOR: ASSIGNEE:
|____________________________ _____________________________
|____________________________ _____________________________
|____________________________ _____________________________
Attention: |_________________ Attention: __________________
Reference: |_________________ Reference: __________________
6. NOTICE ADDRESSES:
ASSIGNOR: ASSIGNEE:
|____________________________ _____________________________
|____________________________ _____________________________
|____________________________ _____________________________
|____________________________ _____________________________
7. SIGNATURES:
[NAME OF ASSIGNOR], [NAME OF ASSIGNEE],
as Assignor as Assignee
By: |______________________________ By: ___________________________________
Title: |___________________________ Title: ________________________________
Accepted in accordance with subsection
8.1.1 of the Credit Agreement
[NAME OF AGENT], as Agent
By: ___________________________________
Title: ________________________________
151
