Exhibit 4.1
REVOLVING CREDIT AGREEMENT
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PENNSYLVANIA REAL ESTATE INVESTMENT TRUST
Borrower
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CORESTATES BANK, N.A.
Agent
CORESTATES BANK, N.A.
MERIDIAN BANK
MIDLANTIC BANK, N.A.
PNC BANK, NATIONAL ASSOCIATION
Lenders
$78,000,000
Unsecured Revolving Credit
November 3, 1994
REVOLVING CREDIT AGREEMENT
AGREEMENT, made this 3rd day of November, 1994, by and among
PENNSYLVANIA REAL ESTATE INVESTMENT TRUST, an unincorporated association in
business trust form ("Borrower"), and CORESTATES BANK, N.A.*, a national banking
association ("Agent") in its individual capacity as a Lender and as Agent for
itself and MERIDIAN BANK, MIDLANTIC BANK, N.A., and PNC BANK, NATIONAL
ASSOCIATION (individually, including Agent, referred to as a "Lender" and
collectively referred to as "Lenders").
BACKGROUND
A. Borrower is a real estate investment trust engaged in
investment in "real estate assets," as defined in Section 856 of the Code (the
"Business"). Borrower desires to establish a committed maximum $78,000,000
unsecured revolving credit facility with Lenders for a term of 30 months,
subject to renewal as provided in this Agreement (i) to finance the acquisition,
expansion and renovation of real estate assets wholly-owned by Borrower, (ii)
for its working capital purposes (including without limitation for investments
in Ventures), and (iii) to fulfill Borrower's obligations to Ventures to obtain
Venture Loans. Lenders have agreed to extend such credit facilities to Borrower,
subject to the terms and conditions hereinafter more particularly set forth.
B. Subject to the terms and conditions hereinafter set
forth, Loans will be funded by all Lenders in accordance with
each Lender's respective Pro Rata Share.
C. Agent is both Agent and a Lender hereunder.
NOW, THEREFORE, in consideration of the foregoing and of the mutual
covenants set forth herein, the parties hereto, intending to be legally bound,
agree as follows:
ARTICLE 1
DEFINITIONS, CERTAIN RULES OF CONSTRUCTION
1.1 Defined Terms. Each of the terms listed below shall
have the meaning herein ascribed to it for the purposes hereof
and for each of the Loan Documents:
"Actual Debt Service" means all interest and principal
required to have been paid on Consolidated Liabilities for any period, excluding
any final payment of principal which exceeds the periodic payments of principal
on such debt.
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*CoreStates Bank, N.A. also conducts business as Philadelphia National Bank, as
CoreStates First Pennsylvania Bank and as CoreStates Xxxxxxxx Bank.
"Adjusted LIBOR" means the LIBOR finally adjusted and
determined in accordance with the following formula:
[LIBOR]*
Adj. LR = --------
[1.00 - RP]
Adj. LR = Adjusted LIBOR
LIBOR = London Interbank Offered Rate
RP = Reserve Percentage pertaining to
eurocurrency liabilities
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* the amount in brackets shall be rounded upwards if
necessary, to the next higher 1/16 of 1%
"Adjusted LIBOR Borrowings" and "Adjusted LIBOR Loans" mean
Advances bearing interest at a rate determined with reference to the Adjusted
LIBOR.
"Advance" means the cash which Lenders advance to Borrower or
a Venture under the Revolving Credit including draws under Letters of Credit,
all subject to and in accordance with the provisions of Article hereof.
"Affiliate" means and refers to, as applied to any Person, any
other Person directly or indirectly controlling, or through one or more Persons
is controlled by, controlling or in common control with that Person. "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/or policies of that Person, whether through the
ownership of voting securities, by contract, or otherwise.
"Agent" means CoreStates Bank, N.A., a national banking
association, with its main office at the Northeast corner of Broad and Xxxxxxxx
Xxxxxxx, Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000, or its successor designated pursuant
to Section hereof.
"Agreement" means this Revolving Credit Agreement, and all
schedules, exhibits, riders, extensions, supplements, amendments, or
modifications to this Revolving Credit Agreement.
"Authorized Signer" means any of the Persons listed on the
certificate to be delivered to Agent at Closing in accordance with Section 3.1.3
hereof or any replacement certificate with respect thereto subsequently
delivered to Agent.
"Bankruptcy Code" means Title 11 of the United States Code as
now or hereafter in effect, or any successor statute.
"Base Rate" shall mean, for any day, a rate per annum equal to
the greater of (a) the Prime Rate in effect on such day, or (b) the Federal
Funds Effective Rate in effect on such day plus 1/2%. If for any reason Agent
shall have determined (which determination shall be conclusive absent manifest
error) that it is unable to ascertain the Federal Funds Effective Rate for any
reason, including the inability or failure of Agent to obtain sufficient
quotations in accordance with the terms thereof, the Base Rate shall be
determined without regard to clause (b) of the preceding sentence, until the
circumstances giving rise to such inability no longer exist.
"Base Rate Borrowing" and "Base Rate Loans" mean Advances
bearing interest at a rate with reference to the Base Rate.
"Borrower" means Pennsylvania Real Estate Investment Trust, an
unincorporated association in business trust form.
"Business" shall have the meaning set forth in the
Background to this Agreement.
"Business Day" means any week day except those on which
commercial banks in Philadelphia are authorized by law to close.
"Calendar Quarter" means the three month period ending on the
last day of March, June, September and December of each year.
"Capital Lease" means any lease of any property (real,
personal or mixed) which, in conformity with GAAP, is or should be accounted for
as a capital lease on the balance sheet of the lessee.
"Cash" means money, currency or a credit balance in a
Deposit Account.
"Closing" and "Closing Date" mean the day on which all of the
conditions set forth in Article III hereof have been satisfied.
"Code" means the Internal Revenue Code of 1986, as amended,
from time to time, and any successor code or statute.
"Commitment Amount" means the aggregate amount of Lenders'
commitments to lend under the Revolving Credit, which amount is $78,000,000 on
the Closing Date, or such lesser amount as Borrower shall have determined
pursuant to Section 2.2.8.3 hereof.
"Company-Prepared Consolidated Financial Statements" means an
income and expense statement and balance sheet with respect to the operations
and financial condition of Borrower, which consolidate each of Borrower's
subsidiaries and Borrower's Percentage Interest in all Ventures during and as of
the last day of each Fiscal Quarter, prepared and certified as true, correct and
complete by Borrower's chief financial officer.
"Consolidated Liabilities" means, at any time, the sum of (i)
all liabilities of Borrower, determined in accordance with GAAP, plus (ii)
Borrower's applicable Percentage Interest in the total liabilities of each
Venture, plus (iii) the aggregate amount of indebtedness incurred in connection
with construction in progress by Borrower or any wholly-owned subsidiary and
Borrower's applicable Percentage Interest in all such indebtedness incurred by
each Venture, to the extent any such indebtedness referred to in this clause
(iii) is not included in clauses (i) and (ii).
"Consolidated NOI" means, at any time, Funds From Operations,
plus Interest Expense (from the most recent Company-Prepared Consolidated
Financial Statements), which sum shall be appropriately adjusted on a rolling
four Fiscal Quarter historical basis by the gross revenues and operating
expenses for each income-producing property that was placed in service or
disposed of by Borrower, by any wholly-owned subsidiary of Borrower, or by any
Venture, during such period of four Fiscal Quarters.
"Contingent Liabilities" means, at any time, the sum of (i)
all indebtedness of Borrower for borrowed monies (other than indebtedness for
which Borrower's liability is limited solely to specific assets of Borrower that
are financed by such indebtedness) plus (ii) all indebtedness of others for
borrowed monies, to the extent that payment of such monies is guarantied by
Borrower (excluding Borrower's Guaranty of its Percentage Interest in the
Venture known as Laurel Mall Associates).
"Debt" means for any Person at any date, without duplication,
(i) all obligations of such Person for borrowed money, (ii) all obligations of
such Person evidenced by bonds, debentures, notes or other similar instruments
with an original maturity in excess of one year, (iii) all obligations of such
Person to pay the deferred purchase price of property or services, except trade
accounts payable and accrued liabilities, in each case arising in the ordinary
course of business, (iv) all Debt of others secured by a lien on any asset of
such Person, whether or not such Debt is assumed by such Person, and (v) all
Debt of others guaranteed by such Person.
"Deposit Account" means a demand, time, savings, passbook or
like account with a federally insured bank or savings and loan association,
other than an account evidenced by a negotiable certificate of deposit.
"Designated Officer" means Xxxxx X. Xxxxxxxxx or any
other person designated in writing by Agent as its representative
for the purpose of receiving notice hereunder.
"Dollars" and the symbol "$" mean the lawful money of
the United States of America.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time.
"Event of Default" means each of the events set forth
in Section hereof.
"Federal Funds Effective Rate" means for any day 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 on the
succeeding Business Day by the Federal Reserve Bank of Philadelphia, or, if such
rate is not so published for any day which is a Business Day, the average of
quotations for the day of such transactions received by Agent from three Federal
funds brokers of recognized standing selected by it.
"Fiscal Quarter" means a fiscal quarter of Borrower, currently
ending on the last day of each November, February, May, and August.
"Fiscal Year" means the fiscal year of Borrower, which
currently ends on August 31 of each year.
"Funding Date" means the Business Day on which an
Advance is made.
"Funds From Operations" means, at any time, Borrower's NOI
less gains or losses from the sale, or the restructuring of any indebtedness
secured by, real properties, plus depreciation and amortization, and after
adjustments for unconsolidated entities in which Borrower holds an equity
interest, plus provisions for losses.
"GAAP" means generally accepted accounting principles as set
forth in the 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 as in effect on the
date hereof, which are applicable to the circumstances as of the date of
determination and which are applied on a consistent basis.
"Governmental Approvals" means all material authorizations,
consents, approvals, licenses and exemptions of, registrations and filings with,
and reports to all governmental bodies.
"Guaranties" means Borrower's Guaranties of the Venture
Loans in favor of each Lender.
"Indebtedness" means all amounts due from Borrower to Lenders
or Agent pursuant to Article and otherwise arising out of or in connection with
this Agreement or any other Loan Document.
"Interest Expense" means all payments by Borrower with respect
to interest on the Indebtedness or any other obligation of Borrower on which
interest is paid, including the interest portion of Capital Leases.
"Interest Period" means that period of time applicable
to an Adjusted LIBOR Borrowing as determined pursuant Section 2.2.5 hereof.
"Interest Rate Determination Date" means each date for
determining the interest rate for an Interest Period in respect of an Advance
based on the Adjusted LIBOR. The Interest Rate Determination Date shall be the
second London Business Day prior to the first day of the related Interest Period
for an Adjusted LIBOR Loan.
"Interest Rate Option" means the Base Rate or the Adjusted
LIBOR selected by Borrower for all or any part of the Loans as permitted by this
Agreement.
"Last Reported Fiscal Year" means, at any time, the most
recently concluded Fiscal Year of Borrower for which financial statements have
been delivered to Lenders.
"Lenders" means Agent and each Lender listed in the preamble
hereto. As used herein, the term Lenders, unless the context clearly requires to
the contrary, refers to all Lenders.
"Lenders' Costs" means all reasonable costs and expenses of
any kind paid or incurred by Agent in connection with the preparation,
execution, delivery, amendment, modification, administration or termination of
this Agreement or any other Loan Document, any amendments thereto, any
transaction contemplated herein or any existing or future related agreements and
the reasonable costs and expenses of Agent and each Lender in connection with
the preservation, enforcement, defense and protection of Lenders' rights,
remedies, obligations and liabilities in any manner concerning this Agreement or
any other Loan Document, any transaction contemplated herein or any existing or
future related agreements, including, but not limited to: (a) reasonable
attorneys' fees and other expenses paid or incurred by Agent in enforcing,
obtaining legal advice in preparing, reviewing, consummating, amending,
restructuring, extending, terminating, defending, or preserving or protecting
Agent's or Lenders' rights, remedies, obligations or liabilities in any manner
concerning, this Agreement, any Loan Document or any amendments thereto, any
transaction contemplated herein or any existing or future related agreements;
and (b) wire transfer charges in such amounts as Agent may from time to time
establish for such service.
"Letter of Credit" means a letter of credit issued
pursuant to Section hereof.
"LIBOR" means the rate per annum at which deposits of Dollars
are offered to Agent by prime banks in the London Eurodollar interbank market at
or about 11:00 A.M. local time in such interbank market, two London Business
Days prior to the first day of the applicable Interest Period for a period equal
to the period of such Interest Period in an amount substantially equal to the
principal amount requested to be lent as, maintained as or converted to an
Adjusted LIBOR Loan.
"Loan Documents" means this Agreement, any Letters of Credit,
the Notes, the Guaranties, the Venture Notes, and every other certificate or
agreement of Borrower in favor of Agent or Lenders delivered pursuant to this
Agreement.
"Loan(s)" means the aggregate of all Advances under the
Revolving Credit.
"London Business Day" means any Business Day on which
commercial banks are open for international business (including dealings in
Dollar deposits) in London and Philadelphia.
"Materially Adverse Effect" means, with respect to Borrower, a
materially adverse effect upon the business, assets, financial condition, or
results of operations of the Borrower and its subsidiaries taken as a whole, or
Borrower's ability to perform Borrower's obligations under the Loan Documents in
accordance with their respective terms.
"Maximum Available Credit" means the maximum amount of the
Loan which may be outstanding under this Agreement as determined in accordance
with Section 2.2.12 hereof.
"NOI" means Borrower's, plus Borrower's applicable Percentage
Interest of each Venture's, gross rental income minus operating and servicing
expenses derived from the operation by Borrower, or by any wholly-owned
subsidiary or Venture, of income-producing property wholly-owned by Borrower, a
subsidiary of Borrower or Venture during, and as shown on the financial
statements for, the Last Reported Fiscal Year, before Interest Expense,
depreciation and amortization.
"Notes" means the notes of Borrower in favor of Lenders to
evidence Borrower's repayment obligations under this Agreement with respect to
the Revolving Credit.
"Notice of Borrowing" means a notice substantially in the form
of Schedule 2.2.2 attached hereto and made a part hereof.
"Notice of Rate Election" means a notice substantially in the
form of Schedule 2.2.3 attached hereto and made a part hereof.
"PBGC" means the Pension Benefit Guaranty Corporation.
"Percentage Interest" means, with respect to each Venture, the
aggregate ownership interests of Borrower and any wholly-owned subsidiary of
Borrower in such Venture.
"Person" means an individual, corporation, partnership, joint
venture, trust or unincorporated organization, or a government or any agency or
political subdivision thereof.
"Prime Rate" means that rate of interest per annum announced
by Agent from time to time as its "prime rate" which may not represent the
lowest rate charged by Agent to other borrowers, or to any class of borrowers,
at any time, or from time to time.
"Pro Forma Debt Service" means, with respect to any period of
time, the aggregate amount of principal payments and interest during such period
on Consolidated Liabilities, calculated using the greater of (i) Actual Debt
Service or (ii) the amount of interest and principal payable, based on a 25 year
amortization schedule, on the principal amounts of such long term debt at a rate
of interest equal to the current yield to maturity of United States Treasury
obligations having a 10 year maturity plus two percent per annum.
"Project Specific Information" means an income and expense
statement and balance sheet with respect to individual income producing real
properties owned by Borrower or any subsidiary, and Borrower's Percentage
Interest in any Venture's income producing real property, disclosing gross
rental revenues, operating expenses, mortgage interest, depreciation and
amortization expenses and net operating income.
"Properties" means all real estate owned, leased or occupied
at any time by Borrower, any subsidiary of Borrower, or any Venture, and
"Property" means any single parcel of such real estate.
"Pro Rata Share" means, with respect to each Lender, the ratio
of the portion of the Loans funded by such Lender to all outstanding Loans, or
if no Loans are outstanding, the percentage of the Commitment Amount set forth
on Schedule 1.1A attached hereto and made a part hereof, as the same may be
amended, from time to time, by Lenders.
"Requisite Lenders" means Lenders whose Pro Rata Shares
aggregate at least 66 2/3%.
"Reserve Percentage" means for any day that maximum percentage
(expressed as a decimal), whether or not incurred, which is in effect on such
day, as prescribed by the Board of Governors of the Federal Reserve System, for
determining the reserve requirement for a member bank of the Federal Reserve
System in Philadelphia with respect to the Adjusted LIBOR "Eurocurrency
liabilities" (as such term is defined in Regulation D) (or in respect of any
other category of liabilities which includes deposits by reference to which the
interest rate on Adjusted LIBOR Loans is determined or any category of
extensions of credit or other assets which includes loans by a non-United States
office of any Lender to United States residents).
"Revolving Credit" means the facility under which Advances may
be borrowed, repaid and reborrowed, Venture Loans may be extended, and Letters
of Credit may be issued and paid, in the maximum amount of $78,000,000, all as
more fully described in Article 2 hereof.
"RICO" means the Racketeer Influenced and Corrupt Organization
Act, as amended by the Comprehensive Crime Control Act of 1984, 18 USC
ss.ss.1961-68.
"Rules" means any law, regulation, or rule of practice whether
or not having the force of law by which any Lender is bound or to which it
adheres.
"Senior Liabilities" means Borrower's obligations to
Lenders to repay the Indebtedness.
"Tangible Net Worth" means, at any time, the sum of (i)
Borrower's beneficiaries' equity (less the value of treasury stock and debt
convertible into Borrower's capital stock); (ii) Borrower's cumulative retained
earnings; and (iii) Borrower's, and Borrower's Percentage Interest in any
Venture's, accumulated depreciation and amortization; less all intangible assets
carried on the books of Borrower.
"Termination Date" means April 30, 1997 or such extension
thereof agreed to in writing by Lenders.
"Unencumbered Property Pool" means a group of no fewer than
five of Borrower's unencumbered, wholly-owned, income producing Properties with
a combined average occupancy rate of not less than 80% (as determined at the end
of each Fiscal Quarter).
"Unmatured Event of Default" means and refers to any event,
act or occurrence which with the passage of time or giving of notice or both
becomes an Event of Default.
"Unused Fee" means the fees provided for in Section
2.1.5 hereof.
"Venture" means each partnership, joint venture or other
entity in which Borrower or any wholly-owned subsidiary of Borrower has a 50% or
more beneficial, or other controlling, ownership interest, a list of which, as
of the date hereof, is attached hereto as Schedule 1.1B.
"Venture Loans" means the Loans or commitments for Loans made
by Lenders to Ventures, including, without limitation, the following:
Venture Maximum Credit
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Rancocas Limited Partnership $3,000,000
VLRC Associates 1,750,000
Big Oak Associates 4,275,000
Turren Associates 2,750,000
"Venture Note" means a promissory note executed by a Venture
to evidence any Venture Loan.
1.2 Construction of Definitions. All terms defined herein shall be
construed to include the plural or the singular, and references to persons in
the masculine or neuter gender shall refer to all persons or entities, as the
context requires.
1.3 Accounting Reports and Principles. Except for Company-prepared
Consolidated Financial Statements, the character or amount of any asset,
liability, account or reserve and of any item of income or expense to be
determined, and any consolidation or other accounting computation to be made,
and the construction of any definition containing a financial term, pursuant to
this Agreement or any other Loan Document, shall be construed, determined or
made, as the case may be, in accordance with GAAP, consistently applied, unless
such principles are inconsistent with any express provision of this Agreement.
1.4 Business Day. Whenever any payment or other obligation hereunder,
whether under the Notes or under another Loan Document, is due on a day other
than a Business Day, such shall be paid or performed on the Business Day next
following the prescribed due date, except as otherwise specifically provided for
herein to the contrary, and such extension of time shall be included in the
computation of interest and charges. Any reference made herein or in any other
Loan Document to an hour of day shall refer to the then prevailing Philadelphia,
Pennsylvania time, unless specifically provided herein to the contrary.
1.5 Charging Accounts. Whenever Borrower is obligated, pursuant to
Article , hereof, or pursuant to the Notes or any other Loan Document, to make
payments of any nature to Agent or Lenders, Agent shall be entitled, and
Borrower hereby authorizes Agent to draw against any Deposit Account owned by
Borrower at Agent on account of such fees and expenses or payments due. By 10:00
a.m. on the date on which any draw is made, Agent shall deliver to Borrower a
notice setting forth, in reasonable detail, the amount of the fees, expenses
and/or payments to be satisfied by such draw, and the name or number of the
account or accounts from which the draw was made. Any such charge shall be
subject to the provisions of Section 8.3 hereof relating to the sharing of
recoveries among Lenders.
1.6 Lenders' Costs. Borrower shall, upon the request of Agent, pay
Agent the amount of all unpaid Lenders' Costs within fifteen days after such
notice. Until paid, all past due and owing interest payments, fees and all past
due Lenders' Costs shall be deemed to be part of the principal balance of the
Loan, bear interest at the rate applicable to Base Rate Loans.
1.7 Other Terms. The words "herein", "hereof", "hereunder" and other
words of similar import refer to this Agreement as a whole, including the
exhibits hereto, as the same may from time to time be amended, modified or
supplemented, and not to any particular section, subsection or clause contained
in this Agreement. Any reference to an "Article", a "Section", an "Exhibit" or
"Schedule" shall refer to the relevant Article of, Section of, Exhibit to or
Schedule to this Agreement, unless otherwise specifically indicated.
ARTICLE 2
THE LOAN
2.1 Revolving Credit.
2.1.1 Extension of Revolving Credit. Provided that no Event of
Default or Unmatured Event of Default has occurred and is continuing and subject
to the terms and conditions set forth herein, commencing on the Closing Date and
expiring on the Termination Date, Lenders severally, in accordance with their
respective Pro Rata Shares, shall extend to Borrower the Revolving Credit
pursuant to which each Lender severally shall make Advances to Borrower in
accordance with its Pro Rata Share up to an aggregate for all Lenders of the
Commitment Amount, which Borrower may from time to time, borrow, repay and
reborrow.
2.1.2 Payment of Principal. The entire outstanding principal
balance of the Revolving Credit shall be paid in full on the Termination Date.
In the event the principal amount of all outstanding Advances and the face
amount of Letters of Credit issued and outstanding under Section hereof at any
time exceeds $78,000,000 in the aggregate, Borrower shall immediately pay such
excess to Agent for the benefit of Lenders, without demand or notice.
2.1.3 Payment of Interest. Interest on the Revolving Credit
shall be payable monthly, subject to Section 2.2.9 hereof in arrears to the last
Business Day of each month, with the first payment to be made on the first
Business Day of the month next following the Closing Date, and continuing
thereafter on the first Business Day of each month.
2.1.4 Revolving Credit Interest Rate Option and Notice of Rate
Election. Advances shall bear interest on the unpaid principal balance thereof
from the Funding Date to maturity (whether by acceleration or otherwise): with
respect to Base Rate Loans at the Base Rate per annum (calculated on the basis
of a 360-day year and charged for the actual number of days elapsed); and with
respect to Adjusted LIBOR Loans at the Adjusted LIBOR on the relevant Interest
Rate Determination Date plus one and eighty-five one-hundredths percent (1.85%)
per annum (calculated on the basis of a 360-day year and charged for the actual
number of days elapsed). The applicable basis for determining the Interest Rate
Option with respect to each Advance shall be selected by Borrower at the time a
Notice of Borrowing or Notice of Rate Election is given pursuant to Sections
2.2.2, and hereof.
2.1.5 Unused Fee. Borrower agrees to pay to Agent for the
benefit of Lenders a fee at an annual rate equal to one half of one percent
(0.5%) per annum of the aggregate daily average unused portion of the Revolving
Credit after Closing and until the Termination Date, payable in arrears, such
payments to be made first on the last day of the Calendar Quarter in which
Closing occurs and thereafter on the last day of each Calendar Quarter and on
the Termination Date. Provided however, that if the daily average borrowed
portion of the Revolving Credit equals or exceeds 50% of the Commitment Amount
for the Calendar Quarter then ended, the fee shall be one fourth of one percent
(0.25%) per annum for such Calendar Quarter. The Unused Fee shall be calculated
on the basis of the number of days actually elapsed in a 360 day year.
2.1.6 Notes. To evidence Borrower's obligations under the
Revolving Credit, Borrower shall execute and deliver the Notes to Lenders.
2.1.7 Letters of Credit. Upon receipt of a properly executed
Notice of Borrowing submitted by Borrower to Agent at least five Business Days
before the date of issuance, Agent shall issue a Letter or Letters of Credit to
a beneficiary designated by Borrower, for the purpose of collateralizing such of
Borrower's obligations as are required to be secured by a Letter of Credit. The
aggregate face amount of issued Letters of Credit under this subsection 2.1.7
shall not exceed $5,000,000 at any time. Letters of Credit may provide for
automatic renewal absent termination by Agent, provided however, no Letter of
Credit hereunder shall be issued with an expiration date exceeding one year and
no Letter of Credit shall be issued with an expiration date after the
Termination Date. Each Letter of Credit shall be subject to the terms and
conditions of Agent's standard unsecured application and agreement in effect at
the time of the issuance of the Letter of Credit, the current form of which is
attached hereto as Schedule 2.1.7.
2.1.7.1 Letter of Credit Fee. Borrower agrees
to pay to Agent for the benefit of Lenders a letter of credit fee at an annual
rate of 1.5% of the principal face amount of each issued Letter of Credit,
payable quarterly in arrears.
2.1.7.2 Reduction of Available Revolving Credit. Letters of
Credit shall reduce, dollar-for-dollar, the available borrowings under the
Revolving Credit and, upon the termination thereof, shall increase the available
borrowings, subject to the Commitment Amount.
2.1.7.3 Draws under Letter of Credit. All draws under Letters
of Credit shall be deemed to be Advances to be repaid in accordance with the
provisions of subsection 2.1.2 hereof.
2.1.7.4 Other Documents. Borrower agrees to execute and
deliver such documents and instruments as Agent may require in connection with
each Letter of Credit.
2.1.8 Venture Loans. Provided that no Event of Default or
Unmatured Event of Default has occurred and is continuing, and subject to the
terms and conditions set forth herein, commencing on the Closing Date and
expiring on the Termination Date, Borrower may request that Loans be made to any
Venture, and Lenders severally, in accordance with their respective Pro Rata
Shares, shall extend to such Venture such Venture Loan; provided, however, that
the aggregate face amount of all outstanding Venture Loans shall not exceed
$15,000,000 at any one time, except that the aforesaid $15,000,000 sublimit and
the available borrowings under the Revolving Credit shall be reduced, dollar for
dollar, by the amount that is outstanding from time to time under the Promissory
Note dated May 2, 1992, as amended, made by Turren Associates in favor of
CoreStates Bank, N.A. (the "Turren Note"), until the Turren Note is replaced
with Venture Notes executed by Turren Associates in favor of each Lender in the
principal amount equal to each Lender's Pro Rata Share of the Venture Loan to
Turren Associates. On the date hereof, by agreement of Lenders, CoreStates Bank,
N.A. has sold participation interests to each of the other Lenders each Lender's
Pro Rata Share of the Turren Note, which participation interests shall become
null and void as to any Lender upon delivery to such Lender of an executed
Venture Note for such Lender's Pro Rata Share of the Venture Loan to Turren
Associates. On the Funding Date of any Venture Loan, Borrower shall cause the
Venture which is to be the borrower of such Venture Loan to execute and deliver
to Agent a promissory note in the form attached hereto as Schedule 2.1.8A in the
principal amount equal to such Lender's Pro Rata Share of such Venture Loan and
Borrower shall execute and deliver to Agent a guaranty or guaranties of such
Venture Loan in the form attached hereto as Schedule 2.1.8B in favor of each
Lender. Each Venture Loan shall reduce, dollar for dollar, the available
borrowings under the Revolving Credit. With respect to each Venture Loan, the
applicable Venture shall select one Interest Rate option for the entire
principal amount thereof that is outstanding at any time, except that any
subsequent extension of credit made by Lenders to a Venture during an Interest
Period shall bear interest at the Base Rate until the expiration of the relevant
Interest Period.
2.2 General Provisions.
2.2.1 Advances. All Advances under this Agreement shall be
made by Lenders simultaneously and proportionately to their Pro Rata Shares, it
being understood that the obligations of Lenders for Advances are independent
and that no Lender shall be responsible for any default by any other Lender in
that other Lender's obligation to make Advances hereunder, nor shall the
commitment of any Lender be increased or decreased as a result of the default by
any other Lender in that other Lender's obligation to make Advances hereunder.
2.2.2 Notice of Borrowing. Subject to the provisions of this
Article 2, whenever Borrower desires to borrow under this Agreement, Borrower
shall deliver by telecopy to Agent a properly completed and executed Notice of
Borrowing with respect to (i) Adjusted LIBOR Loans no later than 11:00 A.M. at
least three London Business Days in advance of the proposed Funding Date, or
(ii) Base Rate Loans no later than 11:00 A.M. at least one Business Day in
advance of the proposed Funding Date. The Notice of Borrowing shall specify (i)
the proposed Funding Date (which shall be a Business Day), (ii) the amount of
the proposed Advance, (iii) whether such Advance is initially to consist of Base
Rate Loans, Adjusted LIBOR Loans or a combination thereof, and (iv) if such
Advance, or any portion thereof, is initially to be one or more Adjusted LIBOR
Loans, the amounts thereof and the initial Interest Periods therefor; provided
that the minimum amount of Advances shall be $100,000 for Base Rate Loans and
$1,000,000 for Adjusted LIBOR Loans, except for Venture Loans, which may be less
than the foregoing minimums. Advances may be continued as or converted into
Adjusted LIBOR Loans in the manner provided in Section 2.2.3 hereof upon the
submission to Agent of a properly completed and executed Notice of Rate
Election.
A Notice of Borrowing or a Notice of Rate Election for an Adjusted
LIBOR Loan shall be irrevocable on and after the related Interest Rate
Determination Date, and Borrower shall be bound to make, continue or convert an
Advance in accordance therewith.
2.2.3 Notice of Rate Election; Failure to Give Notice.
Whenever Borrower desires to change or continue the Interest Rate Option on an
Advance, Borrower shall deliver to Agent a Notice of Rate Election with respect
to Adjusted LIBOR Loans no later than 11:00 A.M. at least three London Business
Days in advance of the proposed change or continuation. The Notice of Rate
Election shall specify: (i) the proposed date of change or continuation (which
shall be a Business Day); (ii) the type of Advance and amount thereof affected;
(iii) whether such interest rate change or continuation is to consist of Base
Rate Loans, Adjusted LIBOR Loans or a combination thereof; and (iv) the Interest
Periods therefor, if applicable. If at the termination of any Interest Period,
Borrower has failed to submit a Notice of Rate Election, as aforesaid, to
convert or to continue Adjusted LIBOR Loans, then such portions of the Revolving
Credit shall automatically be and become Base Rate Loans as of the termination
of the relevant Interest Period.
Upon the expiration of any Interest Period applicable to portions of
the Revolving Credit bearing interest based on the Adjusted LIBOR, such portions
of the Revolving Credit shall be deemed repaid and reborrowed upon the
submission to Agent of a properly completed and executed Notice of Rate Election
pertaining thereto within the requisite time periods for a change or
continuation of an Interest Rate Option, and the succeeding Interest Period(s)
of such continued portions of the Revolving Credit shall commence on the first
day of the Interest Period of the portions of the Revolving Credit deemed to be
reborrowed and continued.
Adjusted LIBOR Loans may be converted into Base Rate Loans only on the
expiration date of an Interest Period applicable thereto. In addition, no
outstanding portions of the Revolving Credit may be continued as, or be
converted into Base Rate Loans or Adjusted LIBOR Loans when any Event of Default
or Unmatured Event of Default has occurred and is continuing.
If on any day portions of the Revolving Credit are outstanding with
respect to which a Notice of Rate Election has not been delivered to Agent in
accordance with the terms of this Agreement specifying the basis for determining
the Interest Rate Option, then such portions of the Revolving Credit shall bear
interest at the Base Rate.
2.2.4 Funding. By 5:00 p.m. on the day Agent receives a Notice
of Borrowing pursuant to Section 2.2.2, Agent shall notify each Lender of the
proposed borrowing. Except as provided in the following paragraph, upon
satisfaction of the conditions precedent specified in Sections 3.1 (in the case
of the initial Advances) and 3.2 (in the case of all subsequent Advances), not
later than 11:00 A.M. on the Funding Date specified in the Notice of Borrowing,
each Lender shall wire transfer to such account of Agent as Agent shall
designate an amount in immediately available funds equal to the amount of each
Lender's Pro Rata Share of the Advance to be made to Borrower on such Funding
Date. Agent shall cause such Advances to be made available to Borrower on the
Funding Date pertaining thereto by depositing the amount thereof in the
designated account of Borrower with Agent.
Each Lender shall make the amount of its Pro Rata Share of the Advance
available to Agent, in same day funds at the office of Agent located at Broad
and Xxxxxxxx Xxxxxxx, Xxxxxxxxxxxx, Xxxxxxxxxxxx, 00000, not later than 11:00
A.M. on the Funding Date. Unless Agent shall have been notified by any Lender
prior to any Funding Date in respect of any Advances that such Lender does not
intend to make available to Agent such Lender's Pro Rata Share of the Advance on
such Funding Date, Agent may assume that such Lender has made such amount
available to Borrower on such Funding Date and Agent in its sole discretion may,
but shall not be obligated to, make available to Borrower a corresponding amount
on such Funding Date by depositing the proceeds thereof in the designated
Deposit Account of Borrower with Agent. If any Lender's Pro Rata Share is not in
fact made available (either by a wire transfer to Agent or otherwise) to Agent
by such Lender, Agent shall not be required to advance to Borrower on the
Funding Date any amount not made available to Agent by a Lender; provided, that
if Agent (or any other Lender(s)) advances to Borrower on the Funding Date any
amount not made available to Agent by a Lender, Agent (or such Lender) shall
notify Borrower that Agent (or such Lender) has advanced more than its Pro Rata
Share of such Advance and that such Advance is subject to reclamation in
accordance with the provisions of this Section. Any amount so advanced shall be
deemed to be an Advance which Borrower is obligated to repay as set forth under
this Agreement; and Agent shall be entitled to recover such corresponding amount
on demand from such Lender together with interest thereon, for each day from
such Funding Date until the date such amount is paid to the Agent at the daily
average Federal Funds Effective Rate for such period. If such Lender does not
pay such corresponding amount forthwith upon the Agent's demand therefor, the
Agent shall promptly notify the Borrower and the Borrower shall immediately pay
such corresponding amount to the Agent, together with interest at the Interest
Rate Option chosen by Borrower for such Advance. If such Advance was in the form
of an Adjusted LIBOR Loan, any prepayment penalty under Section 2.2.8.1 for
breakage of an Interest Period shall be paid by the Lender which failed to fund
its Pro Rata Share of such Advance.
In the event that any Lender fails to advance its Pro Rata Share of any
Advance, then such Lender's Pro Rata Share of the aggregate principal, interest,
fees and recoveries on all Advances will be reduced so as to be proportionate to
the amount such Lender did advance but will not cause a comparable reduction in
such Lender's Pro Rata Share of the expenses of collection of the Indebtedness
from Borrower or other costs or expenses relating to this Agreement. Such
reduction will not affect or limit such Lender's obligation to advance its full
Pro Rata Share of any and all future Advances or other obligations.
2.2.5 Interest Periods. In connection with each Adjusted LIBOR
Loan, Borrower shall elect an Interest Period to be applicable to such Loan,
which Interest Period shall be either a one, two, three, or six month period;
provided that:
2.2.5.1 the first Interest Period for any Advance
shall commence on the Funding Date of such Advance;
2.2.5.2 except as provided in subsection 2.2.5.3
hereof, if an Interest Period would otherwise expire on a day which is not a
Business Day, such Interest Period shall expire on the next succeeding Business
Day;
2.2.5.3 any Interest Period in respect of an Adjusted
LIBOR Loan which: (i) begins on the last Business Day of a calendar month (or 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 the
relevant calendar month, or (ii) would expire on a day which is not a Business
Day but is a day of the month after which no further Business Day occurs in that
month, such Interest Period shall expire on the last Business Day of the month;
2.2.5.4 no Interest Period shall extend beyond the
Termination Date; and
2.2.5.5 excluding Venture Loans, there shall be no
more than a maximum combination of six Adjusted LIBOR Loans and Base Rate Loans
outstanding at any time.
2.2.6 Post-Maturity Interest. Any principal payments on the
Loans not paid when due and, to the extent permitted by applicable law, any
interest payment on the Loans not paid when due, and any other amount due to
Agent or any Lender under this Agreement or any other Loan Document not paid
when due, in any case whether at stated maturity, by notice of prepayment, by
acceleration or otherwise, shall thereafter bear interest payable upon demand at
a rate which is 2% per annum in excess of the applicable Interest Rate until the
expiration of the then applicable Interest Period and after the expiration of
the then applicable Interest Period, at a rate which is 2% per annum in excess
of the Base Rate.
2.2.7 Adjusted LIBOR and Base Rate.
2.2.7.1 Agent shall give Lenders and Borrower prompt
notice of the Adjusted LIBOR determined for an Interest Period, and absent
manifest error, each determination of such rates by Agent shall be conclusive
and binding for all purposes hereof.
2.2.7.2 If Borrower requests that all or any portion
of the outstanding Revolving Credit bear interest at the Adjusted LIBOR and (i)
Agent determines that, by reason of circumstances affecting the interbank
Eurodollar market generally, deposits in U.S. Dollars (in the applicable
amounts) are not being offered to banks in the interbank Eurodollar market for
the selected Interest Period, or (ii) the Requisite Lenders shall certify that
the relevant rates of interest referred to in the definition of Adjusted LIBOR
do not accurately reflect the cost to Lenders of making or maintaining Adjusted
LIBOR Loans for the Interest Periods therefor, then Agent shall forthwith give
notice thereof to Borrower, whereupon until Agent notifies Borrower that the
circumstances giving rise to such suspension no longer exist, (a) the obligation
of Agent to permit applicable portions of the Revolving Credit to bear interest
at the Adjusted LIBOR shall be suspended so long as such circumstances exist,
and (b) Borrower shall convert the interest rates on the applicable portions of
the outstanding Revolving Credit to the Base Rate or the available Adjusted
LIBOR on the last day of the then current Interest Period.
2.2.7.3 If, after the date of this Agreement, the
adoption of or any change in Rules, or change in the interpretation or
administration thereof, by a governmental authority, central bank or comparable
agency charged with the interpretation or administration thereof, or compliance
by Lenders with any request or directive (whether or not having the force of
law) of any such authority, central bank or comparable agency shall make it
unlawful or impossible for any Lender to make or maintain or fund loans at the
Adjusted LIBOR, the affected Lender or Lenders shall promptly notify Borrower
and the interest rates on the applicable portions of the outstanding Revolving
Credit shall be deemed to have been converted to the Base Rate, or the Adjusted
LIBOR, whichever is available, on either (i) the last day of the then current
Interest Period if Lenders may lawfully continue to maintain loans at the
Adjusted LIBOR to such day, or (ii) immediately if Lenders may not lawfully
continue to maintain loans at the Adjusted LIBOR to such day. The affected
Lender will use its best efforts to designate a different lending office if such
office may lawfully continue to maintain loans at the Adjusted LIBOR through the
end of the then current Interest Period. After Borrower's receipt of notice of
the illegality or impossibility for any Lender to make, maintain or fund loans
at the Adjusted LIBOR, Borrower shall not request future Adjusted LIBOR Loans
until the affected Lender or Lenders shall have notified Borrower of the absence
or removal of such illegality or impossibility.
2.2.7.4 If, after the date of this Agreement, any
governmental authority, central bank or other comparable authority shall at any
time impose, modify or deem applicable any reserve (including, without
limitation, any imposed by the Board of Governors of the Federal Reserve
System), any tax (including without limitation, any United States interest
equalization tax or similar tax however named applicable to the acquisition or
holding of debt obligations and any interest or penalties with respect thereto),
duty, charge, fee, deduction, withholding, special deposit or similar
requirement against assets of, deposits with, or for the account of, or credit
extended by, any Lender, or shall impose on any Lender or the interbank
Eurodollar market any other condition affecting loans at the Adjusted LIBOR, and
the result of any of the foregoing is to increase the cost to any Lender of
making or maintaining the interest rate at the Adjusted LIBOR or to reduce the
amount of any sum received or receivable by any Lender under this Agreement, the
Notes or the Venture Notes by an amount deemed by such Lender to be material,
then within five days after demand by such Lender, Borrower shall pay to Agent
such additional amount or amounts as will compensate such Lender for such
increased cost or reduction. Agent will promptly notify Borrower of any event of
which it has knowledge occurring after the date hereof, which will entitle any
Lender to compensation pursuant to this subsection 2.2.7.4. A certificate of
Agent claiming compensation under this subsection 2.2.7.4 and setting forth the
additional amount or amounts to be paid to Lenders hereunder shall be conclusive
in the absence of manifest error.
2.2.7.5 The Adjusted LIBOR shall be adjusted
automatically on and as of the effective day of any change in the relevant
Reserve Percentage.
2.2.7.6 Promptly upon notice from Agent to Borrower,
Borrower will pay, prior to the date on which penalties attach thereto, all
present and future stamp, documentary and other similar taxes, levies, or costs
and charges whatsoever imposed, assessed, levied or collected on or in respect
of the Loans solely as a result of the interest rate being determined by
reference to the Adjusted LIBOR and/or the provisions of this Agreement relating
to the Adjusted LIBOR and/or the recording, registration, notarization or other
formalization of any thereof and/or payments of principal, interest or other
amounts made on or in respect of a Loan when the interest rate is determined by
reference to the Adjusted LIBOR (all such taxes, levies, costs and charges being
herein collectively called "Eurodollar Rate Tax"). Promptly after the date on
which payment of any such Eurodollar Rate Tax is due pursuant to applicable law,
Borrower will, at the request of Agent, furnish to Agent evidence, in form and
substance satisfactory to Agent, that Borrower has met its obligation under this
subsection 2.2.7.6. Borrower will indemnify each Lender against, and reimburse
each Lender on demand for, any Eurodollar Rate Tax, as determined by such Lender
in its good faith discretion. Such Lender shall provide Borrower with
appropriate receipts for any payments or reimbursements made by Borrower
pursuant to this subsection 2.2.7.6. A certificate of Agent (or a Lender) as to
any amount payable pursuant to this Section shall, absent manifest error, be
final, conclusive and binding on all parties hereto.
2.2.7.7 If Agent or any Lender shall determine that
(i) any current Rule, law, regulation, or guideline, the adoption or imposition
of any Rules, law, regulation, or guideline any change in any Rules, law,
regulation or guideline, or the adoption, imposition or change in the
interpretation or administration thereof by a governmental authority, central
bank or comparable agency charged with the interpretation and administration
thereof, or (ii) compliance by any Lender (or any lending office or any holding
company of a Lender) with any request, guideline or directive whether or not
having the force of law regarding special deposit, capital adequacy, risk based
capital, capital or reserve maintenance, capital ratio, or similar requirements
against loans or loan commitments or any commitments to extend credit or other
assets of or any deposits or other liabilities taken or entered into by Lenders
(including the capital adequacy guidelines promulgated by the Board of Governors
of the Federal Reserve System) and the result of any event referred to in
clauses (i) or (ii) above (x) shall be to increase the cost to any Lender of
making or maintaining, or to impose upon any Lender or increase any capital
requirement applicable as a result of the making or maintenance of, the Loan or
the obligation of Borrower hereunder or (y) has or would have the effect of
reducing the rate of return or amounts receivable hereunder on any Lender's (or
any holding company's) Pro Rata Share of any Loan as a consequence of its
obligations pursuant to this Agreement or Loans made by any Lender pursuant
hereto to a level below that which any Lender (or any Lender's holding company)
could have achieved but for such adoption, imposition, change or compliance
(taking into consideration such Lender's policies and the policies of such
Lender's holding company with respect to capital adequacy) by an amount deemed
by such holder to be material (which adoption, imposition, change, or increase
in capital requirements or reduction in amounts receivable may be determined by
Agent's reasonable allocation of the aggregate of such cost increase, capital
increase or imposition or reductions in amounts receivable resulting from such
events), then, from time to time, Borrower shall pay to such Lender, on demand
by Lender as set forth below, such additional amount or amounts as will be
necessary to restore the rate of return to such Lender from the date of such
change, together with interest on such amount from the date demanded until
payment thereof in full at the rate provided in this Agreement. Each Lender (or
Lender's holding company) shall be entitled to compensation pursuant to this
subsection 2.2.7.7. A certificate of each Lender claiming compensation under
this subsection 2.2.7.7 and setting forth the increased cost, reduction in
amounts receivable, additional amount or amounts necessary to compensate any
Lender (or any Lender's holding company) hereunder shall be delivered to
Borrower and shall be conclusive in the absence of manifest error. Borrower
shall pay each Lender the amount shown as due on any such certificate delivered
by such Lender within 10 days after Borrower's receipt of same. If any Lender
demands compensation under this Section, Borrower may, upon 10 Business Days'
prior notice to Agent, prepay in full, in accordance with subsection 2.2.8
hereof, the then outstanding: (1) Base Rate Loans together with accrued interest
thereon to the date of prepayment without penalty; and (ii) Adjusted LIBOR Loans
together with accrued interest thereon to the date of prepayment along with the
respective prepayment premium as provided in subsection 2.2.8.4 hereof, in each
case payable to such Lender. Concurrently with prepaying such Base Rate Loans or
Adjusted LIBOR Loans, Borrower may borrow from Lenders Advances at an Interest
Rate Option not so affected.
2.2.7.8 Failure on the part of any Lender to demand
compensation for any increased costs or reduction in amounts received or
receivable or reduction in return on capital with respect to any period shall
not constitute a waiver of such Lender's right to demand compensation with
respect to such period or any other period. The protection of this Section shall
be available to each Lender regardless of any possible contention of the
invalidity or inapplicability of the law, rule, regulation, guideline or other
change or condition which shall have occurred or been imposed.
2.2.7.9 The Base Rate shall be determined and
adjusted daily.
2.2.7.10 If any Lender shall demand compensation as a
result of the events or conditions described in subsections 2.2.7.4, 2.2.7.6, or
2.2.7.7 hereof, and such events or conditions have not affected the other
Lenders or the other Lenders have not demanded compensation therefor, Borrower
shall have the option to prepay the portion of the Loans, together with accrued
and unpaid interest and any applicable prepayment premium, funded by the
affected Lender. Upon prepayment in full to the affected Lender, such Lender
shall be discharged from all of its duties and obligations as a Lender under
this Agreement. Agent shall thereupon appoint a successor Lender acceptable to
Borrower, whose assent shall not be unreasonably withheld, which successor
Lender shall become vested with all the rights, powers, privileges and duties of
the removed Lender upon execution of a counterpart signature page hereof. In the
event no successor Lender is obtained, the Commitment Amount shall be reduced by
the amount of the departing Lender's Pro Rata Share of the former Commitment
Amount during any period for which there is no successor Lender. Upon any such
change in Commitment Amount, the Pro Rata Share of the remaining Lenders shall
change to reflect the absence of the departing Lender's Pro Rata Share.
2.2.8 Prepayment; Repayments; Prepayment Premium.
2.2.8.1 Voluntary Prepayments. All voluntary
prepayments shall be applied among the Lenders in accordance with the Pro Rata
Share of each. In connection with each voluntary prepayment:
(a) Borrower shall provide Agent with at
least one (1) Business Day prior notice of its intention to prepay, specifying
the amount and date of such payment.
(b) Borrower shall concurrently with any
prepayment in full of the Revolving Credit pay the full amount of all interest
accrued on the Revolving Credit and accrued fees (including without limitation
the Unused Fee attributable to the expired portion of the period with respect to
which such fees have not yet been paid), and payments received shall be applied
first to fees, then to accrued interest and thereafter in reduction of
principal.
(c) Each prepayment of principal shall be in
an amount equal to at least One Million Dollars ($1,000,000.00) (exclusive of
the Interest and fees payable in connection therewith and of the other amounts
payable pursuant to this Agreement upon a prepayment).
In the event Borrower makes a prepayment (whether voluntary or mandatory) of any
portion of the Loans bearing interest at a rate based on the Adjusted LIBOR
during a specified Interest Period on a day other than the last day of such
Interest Period, Borrower will pay to the Agent upon demand, for the account of
the affected Lenders, any cost or expense incurred as a result of such
prepayment. Each affected Lender shall certify the amount of such cost or
expense to Borrower and provide Borrower with a written statement setting forth
the cost or expense claimed and the calculations used in determining such loss
and expense, which certification and statement shall be conclusive in the
absence of manifest error.
Prepayments shall be applied first to interest (to the extent then payable),
then to principal with respect to the portions of the Loans accruing interest at
a rate based upon the Base Rate, and then to principal with respect to those
portions of the Loans accruing interest at a rate based upon the Adjusted LIBOR
and among such portions of the Loans accruing interest at rates based upon the
Adjusted LIBOR to such portions with the earliest expiring Interest Periods.
2.2.8.2 Funding Losses. If the Borrower fails to
borrow any Adjusted LIBOR Loans after a Notice of Borrowing or Notice of Rate
Election has been given to Agent as provided in this Article , Borrower shall
reimburse each Lender on demand for any resulting loss or expense incurred by it
(or by any existing or prospective participant in the related Loan), including
(without limitation) any loss incurred in obtaining, liquidating or employing
deposits from third parties, provided that such Lender shall have delivered to
the Borrower a certificate as to the amount of such loss or expense and
specifying the calculation thereof, which certificate shall be conclusive in the
absence of manifest error.
2.2.8.3 Termination or Reduction in Commitments.
Borrower shall have the right without premium or penalty except as provided in
subsection 2.2.8.1 hereof, upon not less than three Business Days' prior written
notice to Agent, at any time after the Closing Date to reduce or terminate any
or all of the commitments of the Lenders regarding the Revolving Credit. Any
voluntary termination or reduction in the Commitment Amount shall permanently
reduce the Commitment Amount. No such reduction in Commitment Amount shall be in
an amount less than $3,000,000. All voluntary reductions of Commitment Amount
shall effect a pro rata reduction of each Lender's commitment. If Borrower
desires to terminate or reduce the Commitment Amount as aforesaid, Borrower
shall execute and deliver to Agent such documents and instruments as Agent shall
require.
2.2.9 Manner and Time of Payment. All payments of principal,
interest and fees hereunder and under the Notes shall be made by Borrower
without notice, set off or counterclaim and in immediately available same day
funds and delivered to Agent not later than 12:00 noon on the date due at its
office located at Broad and Xxxxxxxx Xxxxxxx, Xxxxxxxxxxxx, Xxxxxxxxxxxx, 00000
for the account of Lenders; funds received by Agent after that time shall be
deemed to have been paid by Borrower on the next succeeding Business Day.
2.2.10 Apportionment of Payments. Aggregate principal and
interest payments in respect of Loans shall be apportioned among all outstanding
Loans to which such payments relate, proportionately to each Lender's respective
Pro Rata Share except to the extent a Lender fails to fund its portion of such
Loan (in which case such Lender shall be entitled to a portion of principal and
interest payments determined with respect to the ratio of Loans made by it to
all outstanding Loans). Agent shall within one Business Day distribute to each
Lender its share of all payments received by Agent for the benefit of Lenders.
2.2.11 Use of Proceeds. The Revolving Credit shall be used
solely by Borrower (i) to finance the acquisition, expansion and renovation of
real estate assets wholly-owned by Borrower, (ii) for its working capital
purposes (including without limitation for investments in Ventures), and (iii)
to fulfill Borrower's obligations to Ventures to obtain Venture Loans.
2.2.12 Maximum Available Credit. Notwithstanding anything
herein to the contrary, the maximum amount of the Loans to Borrower that may be
outstanding at any one time shall not exceed the Commitment Amount, less (i) the
aggregate maximum amount of all Venture Loans then outstanding (including all
unfunded portions thereof), and (ii) the face amount of all outstanding Letters
of Credit.
2.2.13 Conditional Payment. Borrower agrees that checks and
other instruments received by Agent on behalf of Lenders or by any Lender in
payment or on account of the Indebtedness constitute only conditional payment
until such items are actually paid to Agent or such Lender.
2.2.14 Postponement of Termination Date. If Borrower desires
to extend the Termination Date of this Agreement, Borrower shall deliver to
Agent a written request therefor not later than January 1 of the calendar year
that immediately precedes the calendar year of the then-current Termination
Date. If such request is made on or before January 1, 1996, the request shall be
to extend the Termination Date to August 31, 1998. Any subsequent request shall
be to extend the Termination Date by 12 months. Agent shall advise Borrower in
writing, not later than March 1 of the calendar year that immediately precedes
the calendar year of the then-current Termination Date, whether Lenders have
approved such request, which approval shall be in Lenders' sole discretion. If
Lenders approve such request, the Termination Date shall be postponed to August
31, 1998 or for 12 months, as applicable, and Borrower, Agent, and Lenders shall
promptly execute and deliver such documentation as Agent may require to evidence
such postponement. If Agent does not give Borrower written notice of Lenders'
approval of the requested postponement, the then-current Termination Date shall
remain unchanged.
ARTICLE 3
CONDITIONS PRECEDENT
The performance by Lenders of any of their obligations hereunder are
subject to the following conditions precedent:
3.1 Initial Funding of the Loan. Borrower shall deliver or cause to be
delivered to Agent on the Closing Date (except as otherwise indicated herein),
in form and substance satisfactory to Agent and its counsel, in addition to this
Agreement, the following documents and instruments and the following
transactions shall have been consummated:
3.1.1 The Notes;
3.1.2 A certified copy of Borrower's Trust Agreement and
resolutions adopted by the Board of Trustees authorizing the execution, delivery
and performance of this Agreement, the Notes, all other Loan Documents, and all
other documents and instruments required by Agent for the implementation of this
Agreement to which Borrower is a party, all certified by a trustee or officer of
Borrower to be true and correct copies of the originals and to be in full force
and effect as of the Closing Date;
3.1.3 An incumbency and signature certificate with respect to
each of the trustees of Borrower authorized to execute and deliver this
Agreement, the Notes, the other Loan Documents, and all other documents and
instruments required by Agent for the implementation of this Agreement and to be
the Authorized Signers;
3.1.4 A copy of the Partnership Actions executed by the
general partner(s) of each Venture authorizing the execution, delivery and
performance of the respective Venture Notes by each Venture, together with
copies of each Venture's partnership agreement;
3.1.5 The opinion of Borrower's and Borrower's subsidiarys'
counsel, in form and substance acceptable to Lenders in their reasonable
judgment;
3.1.6 A Notice of Borrowing with respect to any Advances and
Venture Loans requested as of the Closing Date;
3.1.7 Venture Notes evidencing, and Borrower's Guaranties of,
any Venture Loans then requested by Borrower.
3.1.8 Such additional documents or instruments as may be
required by this Agreement or as Agent may reasonably require.
3.2 All Loan Fundings. On the Funding Date of any Advance, Venture Loan
or issuance date of any Letter of Credit: (a) Agent shall have received a Notice
of Borrowing as required by Section 2.2.2; (b) the representations and
warranties set forth in Articles 4 and 4A hereof shall be true and correct on
and as of such date, with the same effect as though made on and as of such date,
except to the extent such representations and warranties relate to an earlier
date or changes have been disclosed to all Lenders and not objected to by
Requisite Lenders; (c) no Event of Default or Unmatured Event of Default shall
have occurred and be continuing; (d) Borrower shall be in compliance with all of
the terms and conditions hereof, of the Notes, and of all other Loan Documents,
in each case on and as of the date of the performance of such obligations by
Lenders; and (e) with respect to each Venture Loan, Borrower shall cause to be
delivered to Agent the organizational documents and all amendments thereto of
the Venture receiving the Venture Loan, a copy of the action or resolutions of
such Venture authorizing the execution, delivery and performance of the Venture
Notes to be executed by such Venture, and a signature and incumbency certificate
with respect to the officers or partners of the entities signing on behalf of
such Venture, each certified as true, complete and correct as of the Funding
Date of such Venture Loan.
Each Advance, Venture Loan and issuance of a Letter of Credit shall be
deemed to constitute a representation and warranty by Borrower on the respective
Funding Date or issuance date as to the matters specified in paragraphs (b), (c)
and (d) of this Section. Continuations and conversions of outstanding portions
of the Revolving Credit shall not be deemed to be new borrowings for purposes of
this Section.
ARTICLE 4
BORROWER'S REPRESENTATIONS AND WARRANTIES.
4.1 Borrower represents and warrants to each Lender as
follows:
4.1.1 Good Standing. Borrower is a "real estate investment
trust" as defined in Section 856 of the Code; has the power and authority to own
and operate Borrower's Properties and to carry on Borrower's Business where and
as contemplated; is an unincorporated association in business trust form duly
organized and validly existing under the laws of the Commonwealth of
Pennsylvania, is duly qualified to do business in, and is in good standing in,
every jurisdiction where the nature of Borrower's Business requires such
qualification.
4.1.2 Power and Authority. The making, execution, issuance and
performance by Borrower of this Agreement, the Notes, and the other Loan
Documents to which Borrower is a party, have been duly authorized by all
necessary action and will not violate any provision of law or regulation or of
the trust agreement of Borrower; will not violate any agreement, trust or other
indenture or instrument to which Borrower is a party or by which Borrower or any
of its property is bound. This Agreement, the Notes and the other Loan Documents
have been duly executed and delivered by Borrower and constitute legal, valid
and binding obligations of Borrower, enforceable in accordance with their
respective terms.
4.1.3 Financial Condition. The audited balance sheet of
Borrower together with income and surplus statements as at and for the year
ended August 31, 1993 and the unaudited balance sheet of Borrower together with
income and surplus statements as at and for the nine months ended May 31, 1994
heretofore furnished to Agent, are complete and correct in all respects, have
been prepared in accordance with GAAP, consistently applied, and fairly present
the financial condition of Borrower as of said dates and the results of
Borrower's operations for the periods then ended. Except as set forth on such
financial statements, Borrower does not have any fixed, accrued or contingent
obligation or liability for taxes or otherwise that is not disclosed or reserved
against on its balance sheets. Borrower has filed all federal, state and local
tax returns required to be filed by it with any taxing authority. Since May 31,
1994, there has been no material adverse change in the condition of Borrower's
financial position or otherwise from that set forth in the balance sheet as of
said date. Borrower does not believe, in the exercise of reasonable business
judgment, that there has been or will likely be a change relating to the
Business of Borrower that would cause a Materially Adverse Effect on Borrower.
Borrower is not aware of any additional tax assessment or tax to be assessed
that would have a Material Adverse Effect on the financial condition of
Borrower.
4.1.4 No Litigation. Except as set forth on Schedule 4.1.4
hereto, there are no suits or proceedings pending, or, to the knowledge of
Borrower, threatened against or affecting Borrower, and Borrower is not in
default in the performance of any agreement to which Borrower may be a party or
by which Borrower is bound, or with respect to any order, writ, injunction, or
any decree of any court, or any federal, state, municipal or other government
agency or instrumentality, domestic or foreign, which is likely to have a
Materially Adverse Effect on Borrower.
4.1.5 Compliance. Borrower has all Governmental Approvals
necessary for the conduct of Borrower's Business, and the conduct of Borrower's
Business is not and has not been in violation of any such Governmental Approvals
or any applicable law, rule, regulation, judgment, decree or order, the failure
to obtain or with which to comply would, in any such case, have a Materially
Adverse Effect on Borrower. Borrower does not require any Governmental Approvals
to enter into, or perform under, this Agreement, the Notes or any other Loan
Document.
4.1.6 Compliance with Regulations T, U and X. Borrower is not
engaged principally, or as one of Borrower's important activities, in the
business of extending credit for the purpose of purchasing or carrying margin
stock (within the meanings of Regulations T, U and X of the Board of Governors
of the Federal Reserve System).
4.1.7 ERISA. With respect to each employee pension benefit
plan (within the meaning of Section 3(2) of ERISA other than any "multi-employer
plan" within the meaning of Section 3(37) of ERISA) (hereinafter, a "Plan"),
maintained for employees of Borrower or of any trade or business (whether or not
incorporated) which is under common control with Borrower (within the meaning of
Section 4001(b)(1) of ERISA), (i) there is no accumulated funding deficiency
(within the meaning of Section 302 of ERISA or Section 412 of the Code), as of
the last day of the most recent plan year of such Plan heretofore ended, taking
into account contributions made or to be made within the time prescribed by
Section 412(c)(10) of the Code; (ii) each such Plan has been maintained in
accordance with its terms and ERISA; and (iii) there has been no "reportable
event" within the meaning of Section 4043 of ERISA and the regulations
thereunder for which the 30-day notice requirement has not been waived. Borrower
has not incurred any liability to the PBGC other than required insurance
premiums, all of which, that have become due as of the date hereof, have been
paid. Borrower is not a party to any multi-employer plan.
4.1.8 Environmental.
Except as set forth in Schedule 4.1.8 or where failure to comply would
not have or result in a Materially Adverse Effect on Borrower or the conduct of
Borrower's Business;
4.1.8.1 Borrower and each Venture has, to the best of
Borrower's knowledge, in the conduct of Borrower's Business, and the ownership
and use of the Properties, complied, in all respects, with all federal, state
and local, laws, rules, regulations, judicial decisions and decrees pertaining
to the use, storage or disposal of hazardous waste or toxic materials.
4.1.8.2 To the best of Borrower's knowledge: (i) no
Hazardous Substance, is present on any of the Properties in any quantity in
excess of those allowed by applicable law; (ii) neither Borrower nor any Venture
has been identified in any litigation, administrative proceedings or
investigation as a responsible party for any liability under any Environmental
Law; (iii) all materials that are located on any of the Properties in lawful
amounts are properly stored and maintained in containers appropriate for such
purposes. For purposes of this Agreement, the term "Environmental Law" means any
and all applicable Federal, State and local environmental statutes, laws,
ordinances, rules and regulations, whether now existing or hereafter enacted,
together with all amendments, modifications, and supplements thereto, including,
without limitation, the Comprehensive Environmental Response, Compensation and
Liability Act (CERCLA), 42 U.S.C. ss.9601, as amended by the Superfund
Amendments and Re-authorization Act of 1986 (Pub. L. Xx. 00-000, 000 Xxxx. 0000
(1986) (XXXX) or 40 CFR Part 261, whichever is applicable) and the term
"Hazardous Substance" means all contaminants, hazardous substances, pollutants,
hazardous waste, residual waste, solid waste, or similar substances or wastes
which may be the subject of any Environmental Law.
4.1.9 Other Contractual Obligations. The execution and
delivery of this Agreement does not, and the performance by Borrower of its
obligations and covenants under this Agreement will not, violate any other
contractual obligation of Borrower.
4.1.10 Investment Company Act. Borrower is not an
Investment Company within the meaning of the Investment Company
Act of 1940.
4.1.11 Public Utility Holding Company Act. Borrower
is not a Public Utility Holding Company within the meaning of the
Public Utility Holding Company Act.
4.1.12 RICO. To the best of Borrower's knowledge, Borrower has
not engaged in any conduct or taken or omitted to take any action which violates
RICO.
4.2 Accuracy of Representations; No Default. The information regarding
the Borrower or any Venture set forth herein and on each of the Schedules
hereto, in the Notes, the other Loan Documents and each document delivered by
the Borrower or any Venture to Agent in connection herewith is complete and
accurate and contains full and true disclosure of pertinent financial and other
information in connection with the Loans. None of the foregoing contains any
untrue statement of a material fact or omits to state a material fact necessary
to make the information contained herein or therein not misleading or
incomplete. No Event of Default or Unmatured Event of Default hereunder, under
the Notes or the other Loan Documents, has occurred.
ARTICLE 4A
BORROWER'S REPRESENTATIONS AND WARRANTIES
REGARDING THE VENTURES.
4A.1 Borrower, as the holder of a 50% or more beneficial, or other
controlling, ownership in each of the Ventures, represents and warrants to each
Lender as follows with respect to each Venture which has executed a Venture
Note:
4A.1.1 Good Standing. Except as set forth on Schedule 4A.1.1,
each Venture is a partnership, corporation, joint venture or other entity, as
applicable, and is duly organized and validly existing under the laws of its
state of formation; has the power and authority to own and operate its
respective Properties and to carry on its respective business where and as
contemplated; is duly qualified to do business in, and is in good standing in,
every jurisdiction where the nature of its business requires such qualification.
4A.1.2 Power and Authority. The making, execution, issuance
and performance by each Venture of its respective Venture Notes have been duly
authorized by all necessary action and will not violate any provision of law or
regulation or of the organizational documents of such Venture; will not violate
any agreement, trust or other indenture or instrument to which such Venture is a
party or by which such Venture or any of its property is bound. Each Venture
Note has been duly executed and delivered by the respective Venture and
constitutes the legal, valid and binding obligation of such Venture, enforceable
in accordance with its respective terms.
4A.1.3 No Litigation. To the best of Borrower's knowledge, and
except as set forth on Schedule 4.1.4 hereto, there are no suits or proceedings
pending, or, to the knowledge of Borrower, threatened against or affecting any
Venture, and none of the Ventures is in default in the performance of any
agreement to which such Venture may be a party or by which such Venture is
bound, or with respect to any order, writ, injunction, or any decree of any
court, or any federal, state, municipal or other government agency or
instrumentality, domestic or foreign, which is likely to have a Materially
Adverse Effect on such Venture.
4A.1.4 Compliance. To the best of Borrower's knowledge, each
of the Ventures has all Governmental Approvals necessary for the conduct of
their respective businesses, and the conduct of their respective businesses is
not and has not been in violation of any such Governmental Approvals or any
applicable law, rule, regulation, judgment, decree or order, the failure to
obtain or with which to comply with would, in any such case, have a Materially
Adverse Effect on any Venture. No Venture requires any Governmental Approvals to
enter into, or perform under its respective Venture Notes.
4A.1.5 Compliance with Regulations T, U and X. No Venture is
engaged principally, or as one of its important activities, in the business of
extending credit for the purpose of purchasing or carrying margin stock (within
the meanings of Regulations T, U and X of the Board of Governors of the Federal
Reserve System).
4A.1.6 ERISA. With respect to each employee pension benefit
plan (within the meaning of Section 3(2) of ERISA other than any "multi-employer
plan" within the meaning of Section 3(37) of ERISA) (hereinafter, a "Plan"),
maintained for employees of any Venture or of any trade or business (whether or
not incorporated) which is under common control with such Venture (within the
meaning of Section 4001(b)(1) of ERISA), (i) there is no accumulated funding
deficiency (within the meaning of Section 302 of ERISA or Section 412 of the
Code), as of the last day of the most recent plan year of such Plan heretofore
ended, taking into account contributions made or to be made within the time
prescribed by Section 412(c)(10) of the Code; (ii) each such Plan has been
maintained in accordance with its terms and ERISA; and (iii) there has been no
"reportable event" within the meaning of Section 4043 of ERISA and the
regulations thereunder for which the 30-day notice requirement has not been
waived. No Venture has incurred any liability to the PBGC other than required
insurance premiums, all of which, that have become due as of the date hereof,
have been paid. No Venture is a party to any multi-employer plan.
4A.1.7 Other Contractual Obligations. To the best of
Borrower's knowledge, the execution by each Venture and delivery of such
Venture's Venture Notes does not, and the performance by such Venture of its
obligations and covenants thereunder will not, violate any other contractual
obligation of such Venture.
4A.1.8 Investment Company Act. No Venture is an
Investment Company within the meaning of the Investment Company
Act of 1940.
4A.1.9 Public Utility Holding Company Act. No
Venture is a Public Utility Holding Company within the meaning of
the Public Utility Holding Company Act.
4A.1.10 RICO. To the best of Borrower's knowledge, no Venture
has engaged in any conduct or taken or omitted to take any action which violates
RICO.
4A.2 Accuracy of Representations; No Default. The information regarding
any Venture set forth herein and on each of the Schedules hereto, in the Venture
Notes and each document delivered by any Venture to Agent in connection herewith
is complete and accurate and contains full and true disclosure of pertinent
financial and other information in connection with the Venture Loans. None of
the foregoing contains any untrue statement of a material fact or omits to state
a material fact necessary to make the information contained herein or therein
not misleading or incomplete. No Event of Default or Unmatured Event of Default
hereunder or under the Venture Notes has occurred.
ARTICLE 5
AFFIRMATIVE COVENANTS
5.1 Borrower's Covenants. As long as any portion of the Indebtedness or
any Venture Loan remains outstanding and unpaid, Lenders have any obligation to
extend Advances, or any Letter of Credit remains outstanding hereunder, Borrower
covenants and agrees that, in the absence of prior written consent of Agent,
Borrower shall:
5.1.1 Maintain the ratio of (a) Consolidated Liabilities, as
reported in Borrower's most recent Company-Prepared Consolidated Financial
Statements, plus Contingent Liabilities to (b) Consolidated NOI at no more than
6.0 to 1; provided however, that (i) upon Borrower's successful completion of a
public offering of equity securities of Borrower, such ratio shall be maintained
at no more that 5.0 to 1 and (ii) on and after August 31, 1996, if Borrower has
not completed a public offering of its equity securities, Borrower shall
maintain the ratio at no more than 5.5 to 1;
5.1.2 Maintain Consolidated NOI at no less than $25,000,000
tested quarterly at the end of each Fiscal Quarter on a rolling four Fiscal
Quarter historical basis, and provide comparative Consolidated NOI calculations
for the same Fiscal Quarter of the prior Fiscal Year on a rolling four Fiscal
Quarter historical basis, and cause Consolidated NOI during any period of four
consecutive Fiscal Quarters which ends with any Fiscal Quarter to be at least
90% of Consolidated NOI during the four Fiscal Quarters determined at the end of
the immediately prior Fiscal Quarter;
5.1.3 Maintain NOI generated by the Unencumbered Property Pool
("Unencumbered NOI") at not less than $10,500,000 to be tested quarterly on a
rolling four Fiscal Quarter historical basis, and cause the ratio of Senior
Liabilities to Unencumbered NOI to be no more than 7.5 to 1 to be tested
annually on and as of the last day of each Fiscal Year upon Borrower's
submission of Project Specific Information;
5.1.4 Maintain Tangible Net Worth at not less than
$115,000,000, or such larger amount determined by adding thereto amounts equal
to 75% of the gross proceeds from Borrower's sale of equity securities from time
to time;
5.1.5 Maintain the ratio of Consolidated NOI to Actual Debt
Service at not less than 1.5 to 1, tested at the end of each Fiscal Quarter on a
rolling four Fiscal Quarter historical basis;
5.1.6 Maintain, as of the last day of each Fiscal Quarter, the
ratio of Consolidated NOI to Pro Forma Debt Service with respect to the next
four (4) Fiscal Quarters at no less than 1.35 to 1;
5.1.7 Deliver to Lenders, within 60 days after the end of each
of the first three (3) Fiscal Quarters, an income and expense statement, balance
sheet, and schedule of sources and uses of funds, with respect to the operations
and financial condition of Borrower, and each of its subsidiaries during and as
of the last day of such fiscal quarter, prepared and certified by Borrower's
chief financial officer;
5.1.8 Deliver to Lenders, within 60 days after the
end of each Fiscal Quarter, Company-Prepared Consolidated
Financial Statements;
5.1.9 Deliver to Lenders, within 120 days after the end of
each Fiscal Year, audited consolidated financial statements of Borrower,
including an income and expense statement, balance sheet and schedule of sources
and uses of funds, which financial statements shall include the unqualified
opinion of Xxxxxx Xxxxxxxx & Co. or another national firm of certified public
accountants reasonably acceptable to Agent; provided that if such financial
statements are prepared by another national firm of certified public accountants
that is reasonably acceptable to Agent, such statements may include a
qualification with respect to the results of prior fiscal years for which such
other accountants were not engaged by Borrower;
5.1.10 Deliver to Lenders, within 120 days after the end of
each Fiscal Year of Borrower, Project Specific Information for such Fiscal Year
prepared and certified by the chief financial officer of Borrower;
5.1.11 Deliver to Lenders, at the time each financial
statement is required to be delivered pursuant to Sections 5.1.7 and 5.1.9
hereof, a covenant compliance certificate, together with a certification, signed
by a senior executive officer of Borrower, both in the form of Schedule 5.1.11
attached hereto, certifying to Lender that there exists no breach of any of the
covenants contained in this Article 5 or in Article 6 hereof;
5.1.12 With reasonable promptness furnish to Lenders all
financial and business information provided to beneficiaries of Borrower, the
Securities and Exchange Commission, and the American Stock Exchange, and such
additional information and data concerning the business and financial condition
of Borrower as may be reasonably requested by Lenders; afford Lenders or their
agents reasonable access to the financial books and records, computer records
and properties of Borrower at all reasonable times after reasonable notice and
permit Lenders or their agents to make copies and abstracts of same and to
remove such copies; and abstracts from Borrower's premises and permit Lenders or
their agents the right to converse directly with the independent accounting firm
then engaged by Borrower to prepare its audited financial statements;
5.1.13 Cause the prompt payment and discharge of all material
taxes, governmental charges and assessments levied and assessed or imposed upon
Borrower's or any Venture's assets and pay all other material claims which, if
unpaid, might become liens or charges upon Borrower's or any Venture's assets,
provided, however, that nothing in this Section shall require Borrower or any
Venture to pay any such taxes, claims or assessments which are not overdue or
which are being contested in good faith and by appropriate proceedings, with
reserves therefor in an amount acceptable to Agent being available or having
been set aside;
5.1.14 Maintain the existence of Borrower as a "real estate
investment trust" under Section 856 of the Code and all necessary foreign
qualifications in good standing; continue to comply with all applicable
statutes, rules and regulations with respect to the conduct of Borrower's
Business to the extent the same are material to the financial condition of
Borrower or the conduct of Borrower's Business; maintain such necessary licenses
and permits required for the conduct of Borrower's Business, in each case if the
failure to maintain or comply would have a Materially Adverse Effect on
Borrower;
5.1.15 Promptly defend all actions, proceedings or claims
which would have a Materially Adverse Effect on Borrower or Borrower's Business
and promptly notify Agent of the institution of, or any change in, any such
action, proceeding or claim if the same is in excess of $250,000 for any single
action, proceeding or claim and $500,000 (other than claims covered by insurance
in the ordinary course of business and booked on Borrower's balance sheet) in
the aggregate, or would have a Materially Adverse Effect on the financial
condition of Borrower or its property if adversely determined;
5.1.16 Comply in all material respects with the requirements
of ERISA applicable to any employee pension benefit plan (within the meaning of
Section 3(2) of ERISA), sponsored by Borrower. With respect to any such plan,
other than any "multi-employer plan" (within the meaning of Section 3(37) of
ERISA), in the case of a "reportable event" within the meaning of Section 4043
of ERISA and the regulations thereunder for which the 30-day notice requirement
has not been waived, or in the case of any other event or condition which
presents a material risk of the termination of any such plan by action of the
PBGC or Borrower, Borrower shall furnish to Agent a certificate of the chief
financial officer of Borrower identifying such reportable event or such other
event or condition and setting forth the action, if any, that Borrower intends
to take or has taken with respect thereto, together with a copy of any notice of
such reportable event or such other event or condition filed with the PBGC or
any notice received by Borrower from the PBGC evidencing the intent of the PBGC
to institute proceedings to terminate any such plan. Such certificate of the
chief financial officer or such other notice to be furnished to Agent in
accordance with the preceding sentence shall be given in the manner provided for
in Section hereof: (i) within 30 days after the Borrower knows of such
reportable event or such other event or condition; (ii) as soon as possible upon
receipt of any such notice from the PBGC; or (iii) concurrently with the filing
of any such notice with the PBGC, as the case may be. For purposes of this
Section, Borrower shall be deemed to have all knowledge attributable to the
administrator of any such plan;
5.1.17 Maintain each Property in good condition and repair,
reasonable wear and tear excepted, making as and when necessary, all material
repairs of every nature;
5.1.18 Except where failure to do so would not have a
Materially Adverse Effect on Borrower: perform, as and when due, all of
Borrower's obligations (both monetary and non-monetary) under all leases,
easements, agreements, mortgages and deeds of trust that encumber any part of
the real estate assets of Borrower, within such applicable notice or cure period
allowed Borrower pursuant to the relevant lease, easement, agreement, mortgage
or deed of trust, pay and discharge, at or before maturity, all Borrower's
material obligations and liabilities, except where the same may be contested in
good faith by appropriate proceedings, and will maintain, in accordance with
GAAP, appropriate reserves for the accrual of any of the same;
5.1.19 Immediately notify Agent of: (i) the occurrence or
imminent occurrence of any event which causes or would imminently cause (A) any
material adverse change in the Business, property, prospects or financial
condition of Borrower (B) any representation or warranty made by Borrower
hereunder to be untrue, incomplete or misleading, or (C) the occurrence of any
other Event of Default or Unmatured Event of Default hereunder; and (ii) the
institution of, or the issuance of any order, judgment, decree or other process
in, any litigation, investigation, prosecution, proceeding or other action by
any governmental authority or other Person against Borrower and that does, or
could, materially affect Borrower;
5.1.20 Cause at least 66% of Consolidated NOI to be generated
from assets located in states of the United States east of the Mississippi
River;
5.1.21 Cause each Venture to pay and perform, when due, all of
such Venture's obligations under any Venture Note executed by such Venture;
5.1.22 Maintain or cause to be maintained insurance on the
Properties in such amounts, against such hazards and liabilities, and with such
companies as is consistent with sound business practices, including without
limitation:
(i) Insurance against loss to the Properties on an
"all risk" policy form, covering insurance risks no less broad than those
covered under a Standard Multi Peril (SMP) policy form, which contains a
Commercial ISO "Causes of Loss-Special Form," in the then current form, and such
other risks as Lenders may reasonably require, in amounts equal to the full
replacement cost of the Properties including fixtures and equipment, Borrower's
interest in leasehold improvements, and the cost of debris removal, with an
agreed amount endorsement, and with deductibles of not more than $50,000;
(ii) Rent and rental value/extra expense insurance
(if the Property is tenant occupied) in amounts sufficient to pay during any
period in which a Property may be damaged or destroyed, for a period of twelve
(12) months: (x) at least 80% all rents and (y) all amounts (including, but not
limited to, all taxes, assessments, utility charges and insurance premiums)
required to be paid by tenants of the Property;
(iii) Broad form boiler and machinery insurance
including business interruption/extra expense and rent and rental value
insurance, on all equipment and objects customarily covered by such insurance
and/or involved in the heating, cooling, electrical and mechanical systems of
the Properties (if any are located at the Properties), but excluding individual
HVAC equipment that serves only one residential apartment unit, providing for
full repair and replacement cost coverage, and other insurance of the types and
in amounts as Lenders may reasonably require, but in no event less than that
customarily carried by persons owning or operating like properties;
(iv) During the making of any alterations or
improvements to a Property, (x) insurance covering claims based on the owner's
or employer's contingent liability not covered by the insurance provided in
subsection (vi) below, (y) workers' compensation insurance covering all persons
engaged in such alterations or improvements, and (z) builder's completed value
risk insurance against "all risks of physical loss" for construction projects of
$1,000,000 or more;
(v) Insurance against loss or damage by flood or mud
slide in compliance with the Flood Disaster Protection Act of 1973, as amended
from time to time, if the Properties are now, or at any time while the
Indebtedness or any portion thereof remains unpaid shall be, situated in any
area which an appropriate governmental authority designates as a special flood
hazard area, in amounts equal to the full replacement value of all above grade
structures on the Properties;
(vi) Commercial general public liability insurance,
with the location of the Properties designated thereon, against death, bodily
injury and property damage arising on, about or in connection with the
Properties, with Borrower or the applicable subsidiary or Venture listed as the
named insured, with such limits as Borrower or the applicable subsidiary or
Venture may reasonably require (but in no event less than $1,000,000 and written
on a then current Standard "ISO" occurrence basis form or equivalent form),
excess umbrella liability coverage with such limits as Borrower or the
applicable subsidiary or Venture may reasonably require but in no event less
than $5,000,000; and
(vii) Such other insurance relating to the Properties
and the uses and operation thereof as Lenders may, from time to time, require in
the exercise of good faith;
5.1.23 Maintain the Unencumbered Property Pool free from any
mortgage, lien, pledge, charge, security interest or other encumbrance, whether
voluntary or involuntary; and
5.1.24 Comply in all material respects with all laws, rules,
regulations, judgments, decrees, and orders, the failure with which to comply
would have a Materially Adverse Effect on Borrower or any Venture.
5.2 Indemnification. Borrower hereby indemnifies and agrees to
protect, defend, and hold harmless Lenders and Lenders' directors, officers,
employees, agents, attorneys and shareholders from and against any and all
losses, damages, expenses or liabilities of any kind or nature and from any
suits, claims, or demands, including all reasonable counsel fees incurred in
investigating, evaluating or defending such claim, suffered by any of them and
caused by, relating to, arising out of, resulting from, or in any way connected
with this Agreement, the Notes, the Loans, the Venture Notes, the other Loan
Documents and any transaction contemplated herein or therein including, but not
limited to, claims based upon any act or failure to act by Lenders in connection
with this Agreement, the Notes, the Loans, the Venture Notes, the other Loan
Documents and any transaction contemplated herein or therein; provided that
Borrower shall not be liable for any portion of such losses, damages, expenses
or liabilities resulting from any Lender's gross negligence or willful
misconduct or that of Lenders' directors, officers, employees, agents, attorneys
and shareholders. If Borrower shall have knowledge of any claim or liability
hereby indemnified against, it shall promptly give written notice thereof to
Agent. THIS COVENANT SHALL SURVIVE PAYMENT OF THE INDEBTEDNESS.
5.2.1 Agent shall promptly give Borrower written notice of all
suits or actions instituted against Lenders with respect to which Borrower has
indemnified Lenders, and Borrower shall timely proceed to defend any such suit
or action. Lenders shall also have the right, at the expense of Borrower, to
participate in or, at Lenders' election, assume the defense or prosecution of
such suit, action, or proceeding, and in the latter event Borrower may employ
counsel and participate therein. Agent shall have the right to adjust, settle,
or compromise any claim, suit, or judgment after notice to Borrower, unless
Borrower desires to litigate such claim, defend such suit, or appeal such
judgment and simultaneously therewith deposits with Agent collateral security
sufficient to pay any judgment rendered, with interest, costs, legal fees and
expenses; and the right of Lenders to indemnification under this Agreement shall
extend to any money paid by Lenders in settlement or compromise of any such
claims, suits, and judgments in good faith, after notice to Borrower.
5.2.2 If any suit, action, or other proceeding is brought by
Lenders against Borrower for breach of Borrower's covenant of indemnity herein
contained, separate suits may be brought as causes of action accrue, without
prejudice or bar to the bringing of subsequent suits on any other cause or
causes of action, whether theretofore or thereafter accruing.
ARTICLE 6
NEGATIVE COVENANTS
6.1 Borrower's Negative Covenants. As long as any portion of the
Indebtedness or of any Venture Loan shall remain outstanding and unpaid, Lenders
have any obligation to extend Advances, or any Letter of Credit remains
outstanding hereunder, Borrower covenants and agrees that, in the absence of
prior written consent of Agent, Borrower shall not:
6.1.1 Except for (i) Lenders' proposed $32,000,000 term loan
to be secured by mortgages on certain of Borrower's Properties in Pennsylvania
and Ohio, (ii) the Guaranties (iii) secured liabilities for which the obligee's
recourse is limited solely to the specific asset or assets that are encumbered,
and (iv) indebtedness incurred by Xxxxxx Park Mall Venture in favor of Midlantic
Bank, N.A. and guarantied by Borrower, create, assume, incur or otherwise become
liable under Consolidated Liabilities or Contingent Liabilities in amounts in
excess of $5,000,000 in the aggregate after the date hereof;
6.1.2 Pay dividends or other distributions to beneficiaries in
any Fiscal Year in excess of Funds From Operations for such Fiscal Year plus
$5,000,000 (excluding special capital gains distributions which shall not exceed
$10,000,000 in the aggregate after the date of this Agreement);
6.1.3 Change the general character of Borrower's Business from
that in which it is currently engaged; enter into proceedings in total or
partial dissolution; merge or consolidate with or into any entity, or acquire
all or substantially all of the assets or securities of any other Person, unless
Borrower remains the surviving entity and such other Person is engaged primarily
in the business of owning and operating shopping centers or multi-family
residential income-producing properties; or otherwise take any action or omit to
take any action which would have a Materially Adverse Effect on Borrower or
Borrower's Business;
6.1.4 Use any part of the proceeds of the Loans to purchase or
carry, or to reduce, retire or refinance any credit incurred to purchase or
carry, any margin stock (within the meaning of Regulations T, U and X of the
Board of Governors of the Federal Reserve System) or to extend credit to others
for the purpose of purchasing or carrying any margin stock. If requested by
Agent, Borrower will furnish Agent statements in conformity with the
requirements of Federal Reserve Form U-1 referred to in said Regulation;
6.1.5 Except as described in Schedule 4.1.8, use, generate,
treat, store, dispose of, or otherwise introduce any Hazardous Substances,
pollutants, contaminants, hazardous waste, residual waste or solid waste (as
defined above) into or on any of the Properties and will not cause, suffer,
allow, or permit anyone else to do so in material violation of any Environmental
Law, and will not knowingly acquire, or permit any subsidiary of Borrower or any
Venture to knowingly acquire, any Property on which any Hazardous Substance,
pollutant, contaminant, hazardous waste, residual waste or solid waste has been
used, generated, treated, stored, disposed of or otherwise introduced in
violation of any Environmental Law; provided that such a Property may be
acquired if Borrower has received (i) a final remediation plan, prepared by a
qualified environmental engineer, for the remediation of the violative
environmental situation, Borrower's direct or indirect liability for the cost of
which remediation is reasonably estimated to be less than $250,000 or (ii) the
written consent of the Requisite Lenders;
6.1.6 Engage in any conduct or take or fail to take any action
which will, or would, if the facts and circumstances relative thereto were
discovered, violate RICO.
6.1.7 Agree with any other Person not to encumber, whether by
mortgage, lien, pledge, charge, security interest, or other encumbrance, any
parcel of the Unencumbered Property Pool.
ARTICLE 7
DEFAULT
7.1 Events of Default. The occurrence of any one or more of the
following events, conditions or states of affairs, shall constitute an "Event of
Default" hereunder, under the Notes (together with accrued interest thereon) and
under each of the other Loan Documents, provided however, that nothing contained
in this Article 7 shall be deemed to enlarge or extend any grace period provided
for in the Notes, or any other Loan Document:
7.1.1 Failure by Borrower to pay the Indebtedness or any
portion thereof as the same becomes due;
7.1.2 Failure by Borrower to observe or perform any agreement,
condition, undertaking or covenant in this Agreement, the Notes, or the other
Loan Documents, which failure, if it does not consist of the failure to pay
money to such Lender and is susceptible to being cured, is not cured within
twenty (20) days after written notice from such Lender (but if such failure
cannot reasonably be cured within such twenty (20) day period, such shall not be
an Event of Default if Borrower has commenced such cure within such twenty (20)
day period and thereafter diligently pursues such cure to its completion, but in
no event shall the period to cure exceed one hundred twenty (120) days);
provided that the notice and grace period provided in this Section 7.1.2 shall
not apply to the breach by Borrower of any covenants contained in Sections
5.1.1, 5.1.2, 5.1.3, 5.1.4, 5.1.5, 5.1.6, 5.1.14, 5.1.19, 5.1.20, 5.1.21, 6.1.1,
6.1.2, or 6.1.3 hereof or a voluntary or consensual breach of the covenant
contained in Section 6.1.7 hereof, and provided further that the grace period
with respect to a breach of the covenants contained in Section 5.1 hereof that
pertain to the delivery to Lenders of financial information shall be limited to
thirty(30) days after delivery of any Lender's written notice of such breach;
7.1.3 Any representation or warranty of the Borrower made, or
deemed made, in this Agreement, the Notes, the Venture Notes, the other Loan
Documents or any statement or information in any report, certificate, Financial
Statement or other instrument furnished by Borrower in connection with making of
this Agreement, the making of the Loans hereunder or in compliance with the
provisions hereof or any other Loan Document shall have been false or misleading
in any material respect when so made, deemed made or furnished;
7.1.4 Borrower shall become insolvent or unable to pay its
debts as they mature, or file a voluntary petition or proceeding seeking
liquidation, reorganization or other relief with respect to itself under any
provision of the Bankruptcy Code or any state bankruptcy or insolvency statute,
or make an assignment or any other transfer of assets for the benefit of its
creditors, or apply for or consent to the appointment of a receiver for its
assets, or suffer the filing against its property of any attachment or
garnishment or take any action to authorize any of the foregoing; or an
involuntary case or other proceeding shall be commenced against Borrower seeking
liquidation, reorganization or other relief with respect to its debts under the
Bankruptcy Code or any other bankruptcy, insolvency or similar law now or
hereafter in effect or seeking the appointment of a trustee, receiver,
liquidator, custodian or other similar official of it or any substantial part of
its property, and such involuntary case or other proceeding shall remain
undismissed and unstayed for a period of sixty (60) days (it being understood
that no delay period applies with respect to any default arising under this
Section by reason of the filing of a voluntary petition by Borrower under the
Bankruptcy Code or any state bankruptcy or insolvency statute or the making of
an assignment or other transfer of assets for the benefit of Borrower's
creditors or by reason of Borrower applying for or consenting to the appointment
of a receiver for Borrower's assets); or an order for relief shall be entered
against the Borrower under any provision of the Bankruptcy Code or any state
bankruptcy or insolvency statute as now or hereafter in effect;
7.1.5 Entry of a final judgment or judgments against Borrower
by a court of law in an amount exceeding an aggregate of $500,000 outstanding at
any one time: (i) which is not fully or unconditionally covered by insurance; or
(ii) for which Borrower has not established a cash or cash equivalent reserve in
the amount of such judgment or judgments that were entered by a court of record
against Borrower; or (iii) enforcement of such judgment or judgments has not
been stayed or such judgment or judgments shall continue in effect for a period
of thirty (30) consecutive days without being vacated, discharged, satisfied or
bonded pending appeal;
7.1.6 Regardless of the intent or knowledge of Borrower, if
the validity, binding nature or enforceability of any material term, provision,
condition, covenant or agreement contained in this Agreement, any other Loan
Document or in any other existing or future agreement between Borrower and
Lenders shall be wrongfully disputed by, on behalf of, or in the right or name
of Borrower or if any such material term, provision, condition, covenant or
agreement shall be found or declared to be invalid, non-binding, unenforceable
or avoidable by any governmental authority or court and the parties cannot agree
upon substitutions therefor within thirty (30) days; or
7.1.7 Borrower shall be accused of conduct in violation of
RICO which is not explained to Lenders within ten (10) days thereafter in a
manner in which Lenders, in their sole discretion, determine that such
accusation is not likely to result in a RICO indictment;
7.1.8 The occurrence of any "Event of Default"
under any Venture Note; or
7.1.9 Borrower shall have defaulted in the payment when due of
any Debt in an amount in excess of $500,000 and such default shall have
continued beyond any period of grace permitted with respect thereto, unless
waived;
then, and in every such event, upon the vote of Requisite Lenders, the Agent
shall (i) by notice to Borrower, terminate the commitments to lend pursuant to
this Agreement and they shall thereupon terminate, and (ii) without notice to
Borrower, declare the Notes (together with accrued interest thereupon) to be,
and the Notes shall thereupon become, immediately due and payable without
presentment, demand, protest or other notice of any kind, all of which are
hereby waived by Borrower. Notwithstanding the foregoing, upon any Event of
Default arising from any of the events or circumstances described in Section
7.1.4 hereof, the Notes shall, without any further action, become immediately
due and payable without presentment, demand, protest or other notice of any
kind, all of which are hereby waived by Borrower.
7.2 Remedies on Default. Upon the occurrence and continuation of any
Event of Default, Agent may, subject to Article 8 hereof, forthwith declare all
Indebtedness to be immediately due and payable, without protest, demand or other
notice (which are hereby expressly waived by Borrower) and, in addition to the
rights specifically granted hereunder or now or hereafter existing in equity, at
law, by virtue of statute or otherwise (each of which rights may be exercised at
any time and from time to time), Agent may exercise the rights and remedies
available to Lenders at law or in equity or under this Agreement, the Notes and
any of the other Loan Documents or any other agreement by, between or among
Borrower and Lenders in accordance with the respective provisions thereof.
7.3 Set-Off Rights Upon Default. Upon and during the continuance of any
Event of Default, Lenders, in addition to any remedies set forth above, shall
have the right at any time and from time to time without notice to Borrower (to
the extent permitted by law) (any such notice being expressly waived by Borrower
and to the fullest extent permitted by applicable Rules, to set off, to exercise
any banker's lien or any right of attachment or garnishment and apply any and
all balances, credits, deposits (general or special, time or demand, provisional
or final), accounts or monies at any time held by any Lender and other
indebtedness at any time owing by any Lender to or for the account of Borrower
against any and all Indebtedness or other obligations of Borrower now or
hereafter existing under this Agreement, the Notes, or any other Loan Document,
whether or not any Lender shall have made any demand hereunder or thereunder.
All net funds recovered under the rights provided in this Section 7.3 shall be
recovered by Lenders as agent for the other Lenders and shall be distributed
among Lenders according to their Pro Rata Share. Each Lender shall be an agent
of all other Lenders for purposes of rights of set-off.
7.4 Purchase of Venture Notes Upon Default. Upon the occurrence and
during the continuance of any Event of Default, Agent may, at the instruction of
Requisite Lenders, give written notice to Borrower that an Event of Default has
occurred and is continuing and that Lenders require Borrower to purchase from
Lenders all of the Venture Notes. Borrower shall purchase from Lenders each of
the Venture Notes for a price equal to the outstanding principal balance of, and
all accrued and unpaid interest on, each Venture Note, the aggregate amount of
which for all Venture Notes (the "Purchase Price") shall be paid in immediately
available funds to Agent on behalf of Lenders on or before five (5) Business
Days after receipt of Agent's notice requiring the repurchase of all Venture
Notes. The sale of the Venture Notes shall be on an "as is" basis and, except
(i) for Lenders' ownership thereof, and (ii) that the Venture Notes shall be
free and clear of encumbrances and other assignments, shall be without
representation or warranty of any kind, which Lenders individually and severally
disclaim, including without limitation, the execution, legality, validity,
genuineness, sufficiency, value, transferability, enforceability or
collectibility of the Venture Notes, the existence or value of any collateral
therefor, and the priority of any interests in such collateral. Upon Lenders'
receipt of collected funds in the amount of the Purchase Price, Lenders shall
deliver the original Venture Notes to Borrower, each endorsed by the appropriate
Lender, without recourse, together with any collateral documentation therefor
appropriately assigned to Borrower.
7.5 Singular or Multiple Exercise; Non-Waiver. The remedies provided
herein, in the Notes and in the other Loan Documents or otherwise available to
Lenders at law or in equity and any warrants of attorney therein contained,
shall be cumulative and concurrent, and may be pursued singly, successively or
together at the sole discretion of Agent, and may be exercised as often as
occasion therefor shall occur; and the failure to exercise any such right or
remedy shall in no event be construed as a waiver or release of the same.
ARTICLE 8
AGENT
8.1 Appointment. Each Lender hereby appoints CoreStates Bank, N.A. as
agent hereunder, and each Lender hereby authorizes Agent to act hereunder and
under the other instruments and agreements referred to herein (including,
without limitation, the Notes and the other Loan Documents) as its agent
hereunder and thereunder. Agent agrees to act as such upon the express
conditions contained in this Article 8 and in the Loan Documents. The provisions
of this Article 8 are solely for the benefit of Lenders; Borrower shall not have
any rights as a third party beneficiary of any of the provisions hereof except
with respect to the provisions requiring Borrower's consent or that certain
matters be satisfactory to Borrower. In performing its functions and duties
under this Agreement, Agent shall act solely as 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.
8.2 Powers; General Immunity.
8.2.1 Duties Specified. Each Lender irrevocably authorizes
Agent to take such action on such Lender's behalf and to exercise such powers
hereunder and under the other instruments and agreements referred to herein
(including, without limitation, the Loan Documents) as are specifically
delegated to Agent by the terms hereof and thereof, together with such powers as
are reasonably incidental thereto. Agent shall have only those duties and
responsibilities which are expressly specified in this Agreement and the other
Loan Documents and Agent may perform such duties by or through its agents or
employees. The duties of Agent shall be mechanical and administrative in nature;
Agent shall not have by reason of this Agreement a fiduciary relationship in
respect of any Lender; and nothing in this Agreement, expressed or implied, is
intended to or shall be so construed as to impose upon Agent any obligations in
respect of this Agreement or the other instruments and agreements referred to
herein except as expressly set forth herein or therein. Agent agrees promptly to
transmit to Lenders any documents which have been transmitted by Borrower to
Agent for transmittal to Lenders. Agent shall take such action as has been
determined to be taken by a vote of the applicable Lenders hereunder. In
performing its duties and functions under this Agreement and the Loan Documents,
Agent will exercise the same care which it normally exercises in making and
handling loans and handling collateral in which it alone is interested, but
Agent assumes no further responsibility.
8.2.2 Powers of Agent.
8.2.2.1 In General. Unless otherwise specifically
limited by this Section 8.2.2, Agent may take all actions hereunder on behalf of
all of the Lenders without seeking the advise or consent of any of the Lenders.
8.2.2.2 Actions Requiring Certain Votes of Lenders.
Notwithstanding anything to the contrary herein contained, Agent agrees that it
will not, without the unanimous consent of the Lenders, take any of the
following actions whether voluntary or involuntary pursuant to this Agreement:
(i) decrease any of the rates of interest with respect to any of the Loans
hereunder; (ii) decrease any fees with respect to the Loans hereunder; (iii)
except for Borrower's request to reduce the Commitment Amount pursuant to
Section 2.2.8.3 hereof, increase or decrease the Commitment Amount or the
commitment of any Lender or subject any Lender to any additional obligation to
lend; (iv) reduce the principal of any Loan; (v) postpone the date fixed for any
payment of principal of or interest on any Loan; (vi) change the definitions of
Pro Rata Shares or Requisite Lenders; or (vii) amend this Section 8.2.2.2. It is
the intention of Borrower and Lenders that, upon the occurrence and during the
continuance of an Event of Default, Borrower shall repurchase the Venture Notes
as provided in Section 7.4 hereof. Proceeds received in respect of the Venture
Notes, whether by repurchase or otherwise, shall be shared among the Lenders
according to their Pro Rata Shares in like manner as provided in Sections 8.3
and 8.5 hereof.
8.2.2.3 Actions Requiring Votes of Requisite Lenders.
Notwithstanding anything to the contrary herein contained, Agent agrees that it
will not without the vote of the Requisite Lenders: (i) declare any Event of
Default; (ii) exercise any remedies upon and after the occurrence of an Event of
Default; or (iii) subject to Section 8.2.2.2 hereof, amend or waive any
provision of this Agreement.
8.2.2.4 Agent's Action when Lender Fails to Respond.
If Agent requests authority to act in a specified manner, Agent may at Agent's
option, act as if a Lender had approved such request if such Lender fails or
refuses to respond to Agent's request within seven (7) Business Days after
receipt of Agent's written request.
8.2.3 No Responsibility for Certain Matters. Agent
shall not be responsible to any Lender for the execution, effectiveness,
genuineness, validity, enforceability, collectibility or sufficiency of this
Agreement, the other Loan Documents, the Notes or the Venture Notes issued
hereunder, or for any representations, warranties, recitals or statements made
herein or therein or made in any written or oral statement or in any financial
or other statements, instruments, reports, certificates or any other documents
in connection herewith or therewith furnished or made by Agent to Lenders or by
or on behalf of Borrower to Agent or any Lender except to the extent Agent has
actual knowledge to the contrary that such representation, warranty, recital or
statement is false or incorrect, or be required to ascertain or inquire as to
the performance or observance of any of the terms, conditions, provisions,
covenants or agreements contained herein or therein or as to the use of the
proceeds of the Loans or of the existence or possible existence of any Event of
Default or Unmatured Event of Default or potential Event of Default or Unmatured
Event of Default.
8.2.4 Exculpatory Provisions. Agent and its officers,
directors, employees and agents shall not be liable to any Lenders for any
action taken or omitted hereunder or in connection herewith (including, without
limitation, any act or omission under the Notes or the other Loan Documents)
unless caused by its or their gross negligence or willful misconduct. If Agent
shall request instructions from Lenders with respect to any act or action
(including the determination not to take an action) in connection with this
Agreement or the Notes, or the other Loan Documents, Agent shall be entitled to
refrain from such act or taking such action unless and until Agent shall have
received instructions from the Requisite Lenders or the applicable percentage of
Lenders, as the case may be. Without prejudice to the generality of the
foregoing, (i) 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 Borrower),
accountants, experts and other professional advisors selected by it; and (ii) no
Lender shall have any right of action whatsoever against Agent as a result of
Agent's acting or (where so instructed) refraining from acting under this
Agreement, the Notes, or other Loan Documents in accordance with the
instructions of the Requisite Lenders or the applicable percentage of Lenders,
as the case may be. Agent shall be entitled to refrain from exercising any
power, discretion or authority vested in it under this Agreement, the Notes, or
other Loan Documents unless and until it has obtained the instructions of the
Requisite Lenders.
8.2.5 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, Agent in its individual capacity as a
Lender hereunder. With respect to its granting of Loans, 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 terms "Lender" or "Lenders" or any similar term shall, unless
the context clearly otherwise indicates, include Agent in its individual
capacity as a Lender. Notwithstanding the foregoing, Agent shall not be
influenced to act hereunder in a manner inconsistent with the best interests of
Lenders by reason of Agent's involvement in unrelated transactions with
Borrower. 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 Borrower or any affiliate of Borrower as if it were not performing
the duties specified herein, and may accept fees and other consideration from
Borrower for services in connection with this Agreement and otherwise without
having to account for the same to Lenders. Lenders acknowledge that Agent has,
and may from time to time hereafter, enter into lending arrangements with
Borrower, its subsidiaries or Ventures and that Borrower may grant mortgages,
security interests or otherwise encumber its assets in favor of Agent
individually and not as agent for the Lenders as collateral for such lending
arrangements, which shall be independent of the Revolving Credit hereunder.
8.2.6 No Responsibility for Creditworthiness. Each Lender
represents and warrants that it has made its own independent investigation of
the financial condition and affairs of Borrower in connection with the making of
the Loans hereunder and has made and shall continue to make its own appraisal of
the creditworthiness of Borrower. 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 or, except as expressly
provided in this Agreement, to provide any Lender with any credit or other
information with respect thereto whether coming into its possession before the
making of the Loan or any time or times thereafter, and Agent shall further have
no responsibility with respect to the accuracy of or the completeness of the
information provided to Lenders.
8.2.7 Right to Indemnity. Each Lender severally agrees to
indemnify Agent, its officers, directors, employees and agents, proportionately
to its Pro Rata Share, to the extent Agent shall not have been reimbursed by
Borrower, 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 Agent
in performing its duties hereunder or in any way relating to or arising out of
this Agreement, except in its capacity as a Lender; 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 Agent's gross negligence or willful misconduct; and provided
further that Agent shall not be entitled to be indemnified hereunder for amounts
paid by Agent in settlement of litigation prior to final judgment unless such
settlement shall be consented to by Requisite Lenders. If any indemnity
furnished to Agent for any purpose shall, in the opinion of Agent, be
insufficient or become impaired, Agent may call for additional indemnity and
cease, or not commence, to do the acts indemnified against (other than acts
constituting Agent's obligations to Lenders hereunder) until such additional
indemnity is furnished.
8.2.8 Resignation; Removal; Successor Agent.
8.2.8.1 Agent may resign from the performance of all
its functions and duties hereunder at any time by giving 45 Business Days' prior
written notice to Borrower and Lenders. Agent may be removed at any time with or
without cause by a notice or concurrent notices in writing delivered to Borrower
and Agent and signed by all Lenders other than Agent. Such resignation or
removal shall take effect upon the acceptance by a successor Agent pursuant to
subsections 8.2.8.2 and 8.2.8.3.
8.2.8.2 Upon any such notice of resignation or
removal, Lenders upon the vote of the holders of 66.67% of the Commitment Amount
shall have the right to appoint a successor Agent which shall be a Lender or
such other Person as is satisfactory to Borrower. Such successor agent shall
thereupon succeed to and become vested with all the rights, powers, privileges
and duties of the retiring or removed Agent, and the retiring or removed Agent
shall be discharged from all its duties and obligations as Agent under this
Agreement (except as otherwise provided herein).
8.2.8.3 If a successor Agent shall not have been so
appointed within said 45 Business Day period, a resigning (but not a removed)
Agent with the consent of Borrower, shall then appoint a successor Agent, which
shall be a commercial bank with capital and surplus of not less than
$5,000,000,000 who shall serve as Agent until such time, if any, as the
Requisite Lenders, with the consent of Borrower, appoint a successor Agent as
provided above.
8.3 Sharing of Recoveries. Lenders hereby agree that all sums recovered
(and the proceeds of all property recovered) from Borrower by any Lender
hereunder, whether on foreclosure of any banker's or other lien or any setoff or
other claim on or against any deposit or other balance of Borrower held by any
Lender shall be on behalf of Lenders and shall be shared by Lenders according to
their respective Pro Rata Shares. If a Lender shall make any recovery, it will
promptly remit to the other Lenders their Pro Rata Share thereof. No Lender's
Pro Rata Share shall have priority over any other Lender's Pro Rata Share.
8.4 Intentionally Deleted.
8.5 Ratable Sharing. Each Lender and each subsequent holder by
acceptance of a Note agree among themselves that with respect to all amounts
received by them which are applicable to the payment of or reduction of a
proportion of the aggregate amount of principal and interest due with respect to
the Notes held by the Lender or holder, which is greater than the proportion
received by any other holder of a Note in respect to the aggregate amount of
principal and interest due with respect to the Notes held by it, or any other
amount payable hereunder, that Lender or that holder of a Note receiving such
proportionately greater payments shall notify each other Lender and the Agent of
such receipt and remit to them such amounts as are necessary so that all such
recoveries of principal and interest with respect to the Notes shall be
proportionate to the Lenders' respective Pro Rata Shares. If any Lender or
holder of a Note receiving such proportionately greater payments is required to
return such proportionately greater payment to any trustee, receiver or other
representative of or for Borrower upon or by reason of the bankruptcy,
insolvency, reorganization or dissolution of any entity comprising Borrower,
then such other Lender(s) which received its or their Pro Rata Share of such
proportionately greater payment must also return such amounts to Borrower as if
such payment or payments from the Lender receiving such proportionately greater
payments had not been made.
ARTICLE 9
MISCELLANEOUS
9.1 Integration. This Agreement, the Notes, and the other Loan
Documents shall be construed as one agreement, and in the event of any
inconsistency, the provisions of the Notes shall control over the provision of
this Agreement or any other Loan Document, and the provisions of this Agreement
shall control over the provisions of any other Loan Document. This Agreement,
the Notes and the other Loan Documents contain all the agreements of the parties
hereto with respect to the subject matter of each thereof and supersede all
prior or contemporaneous discussions and agreements with respect to such subject
matter.
9.2 Modification. Except as provided in Section 8.2.2.2 hereof,
modifications or amendments of or to the provisions of this Agreement, the
Notes, or any other Loan Document shall be effective only if set forth in a
written instrument signed by Requisite Lenders and Borrower. No Lender shall
amend any Note or Venture Note payable to such Lender without the written
consent of Requisite Lenders.
9.3 Waivers. Except as provided in Section 8.2.2.2 hereof, any
provision of this Agreement, the Notes or any other Loan Document may be waived
if, but only if, such waiver is in writing and is signed by the Borrower and
Requisite Lenders.
9.4 Notices. Except as hereinelsewhere specifically allowed with
respect to a Notice of Borrowing or a Notice of Rate Election, any notice or
other communication by one party hereto to the other shall be in writing and
shall be deemed to have been validly given upon receipt if by hand delivery, or
by overnight delivery service or by telecopier, or two days after mailing if
mailed, first class mail, postage prepaid, return receipt requested, addressed
as follows:
If to Borrower:
Pennsylvania Real Estate Investment Trust
000 Xxxxxxxxxxxx Xxxxxx, Xxxxx 000
Xxxx Xxxxxxxxxx, XX 00000
Attn: Xxxxx X. Xxxxxxxxx
Telecopier: (000) 000-0000
With a copy to:
Xxxxx Xxxxxxxxx Xxxxxx, Esq.
Cohen, Shapiro, Polisher, Shiekman & Xxxxx
00 Xxxxx 00xx Xxxxxx, 00xx Xxxxx
Xxxxxxxxxxxx, XX 00000
Telecopier: (000) 000-0000
If to the Agent:
CoreStates Bank, N.A.
FC 0-0-00-00
Xxxxxxx Xxxxxxxx 00xx Xxxxx
0000 Xxxxxxxx Xxxxxx
X.X. Xxx 0000
Xxxxxxxxxxxx, XX 00000
Attn: Xxxxx X. Xxxxxxxxx, Vice President
Telecopier (000) 000-0000
With a copy to:
CoreStates Investment Banking
0000 Xxxxxxxx Xxxxxx
XX 0-0-00-0
Xxxxxxxxxxxx, XX 00000-0000
Attn: Xxxxx Xxxxxx, Commercial Officer
Telecopier (000) 000-0000
With a copy to:
Xxxxxxx X. Xxxxxxxxx, Esquire
Mesirov Xxxxxx Xxxxx Xxxxxx & Xxxxxxxx
0000 Xxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxxxxxxx, XX 00000-0000
Telecopier (000) 000-0000
With a copy to:
Meridian Bank
X.X. Xxxxxxx, Vice President
Real Estate Department
0000 Xxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxxxxx, XX 00000
Telecopier (000) 000-0000
With a copy to:
Midlantic Bank, N.A.
Xxxxxx X. Xxxxxxxxx, Vice President
Real Estate Department
0000 Xxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxxxxxxx, XX 00000
Telecopier (000) 000-0000
With a copy to:
PNC Bank, National Association
Xxxxxxx X. Xxxxxxxx, Banking Officer
Real Estate Finance Division
Land Title Building, 3rd Floor
Broad and Xxxxxxxx Xxxxxxx
Xxxxxxxxxxxx, XX 00000
Telecopier (000) 000-0000
9.5 Survival. The terms of this Agreement and all agreements,
representations, warranties and covenants made by Borrower in any other Loan
Document shall survive the issuance and payment of the Notes and shall continue
as long as any portion of the Indebtedness shall remain outstanding and unpaid;
provided, however, that the covenants set forth in Sections 2.2.7, 5.2, 9.8, and
9.9 hereof shall survive the payment of the Indebtedness. Borrower hereby
acknowledges that Lenders have relied upon the foregoing in making the Loans.
9.6 Closing. Closing hereunder shall occur on November __, 1994 at the
offices of Mesirov Xxxxxx Xxxxx Xxxxxx & Xxxxxxxx, 1735 Market Street, 38th
Floor, Philadelphia, Pennsylvania 19103- 7598 or at such other time and place as
the parties hereto may determine. In the event Closing is not held on or before
such date unless extended by all of the parties hereto, the rights and
obligations of the parties hereto contained herein shall be terminated and be of
no further force or effect except for the provisions of Sections 5.2, 9.8, and
9.9.
9.7 Successors and Assigns; Governing Law. This Agreement shall be
binding upon and inure to the benefit of the respective successors and assigns
of the parties hereto; provided, however (i) that Borrower shall not assign this
Agreement, or any rights or duties arising hereunder, without the express prior
written consent of Lenders and (ii) that subject to the right to enter into
participation arrangements under Section 9.10 hereof, no Lender may assign its
rights or duties arising hereunder, except as provided in 9.11 hereof, without
the express prior written consent of Borrower and of the other Lenders. This
Agreement shall be construed and enforced in accordance with the internal laws
of the Commonwealth of Pennsylvania for contracts made and to be performed in
Pennsylvania.
9.8 Jurisdiction. IN ANY LEGAL PROCEEDING INVOLVING, DIRECTLY OR
INDIRECTLY, ANY MATTER ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE
RELATIONSHIP EVIDENCED HEREBY, BORROWER HEREBY IRREVOCABLY SUBMITS TO THE
NONEXCLUSIVE JURISDICTION OF ANY STATE OR FEDERAL COURT LOCATED IN ANY COUNTY IN
THE COMMONWEALTH OF PENNSYLVANIA WHERE AGENT MAINTAINS AN OFFICE AND AGREES NOT
TO RAISE ANY OBJECTION TO SUCH JURISDICTION OR TO THE LAYING OR MAINTAINING OF
THE VENUE OF ANY SUCH PROCEEDING IN SUCH COUNTY. BORROWER AGREES THAT SERVICE OF
PROCESS IN ANY SUCH PROCEEDING MAY BE DULY EFFECTED UPON IT BY MAILING A COPY
THEREOF, BY REGISTERED MAIL, POSTAGE PREPAID, TO BORROWER.
9.9 Waiver of Jury Trial. BORROWER HEREBY WAIVES, AND LENDERS BY THEIR
ACCEPTANCE HEREOF THEREBY WAIVE, TRIAL BY JURY IN ANY LEGAL PROCEEDING
INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER (WHETHER SOUNDING IN TORT,
CONTRACT OR OTHERWISE) IN ANY WAY ARISING OUT OF OR RELATED TO THIS AGREEMENT OR
THE RELATIONSHIP EVIDENCED HEREBY. THIS PROVISION IS A MATERIAL INDUCEMENT FOR
LENDERS TO ENTER INTO, ACCEPT OR RELY UPON THIS AGREEMENT.
9.10 Participation. Each Lender may in its sole discretion enter into a
participation arrangement(s) with respect to its Pro Rata Share of the Loans
made or committed to be made under this Agreement and may provide all
information in its possession relating to Borrower to any current or prospective
participating lender; provided, however, that no such participant shall have any
voting rights or right to consent to or approve matters hereunder except for (i)
any decrease in the rates of interest payable by Borrower with respect to the
Loans, (ii) the final maturity of the Loans, and (iii) any change in the
Commitment Amount.
9.11 Assignments by Lenders.
9.11.1 Right to Assign. Each Lender may in its sole discretion
assign portions of its respective Pro Rata Share of the Loans in increments not
less than $5,000,000 to any other commercial bank with assets of at least
$5,000,000,000 subject to the approval of Borrower and Agent, which approval
shall not be unreasonably withheld, delayed or conditioned; provided however,
that each Lender shall retain at least $10,000,000 of the Commitment Amount and
that such assignment shall be in the form of Schedule 9.11 hereto. Any Lender
assigning a portion of its Pro Rata Share of the Loans shall give Agent written
notice thereof and pay to Agent a $3,000 fee upon the consummation thereof.
9.11.2 Substitution of Notes. Upon each assignment by a Lender
of a portion of its Pro Rata Share of the Loans, Borrower shall, and shall use
its best efforts to cause each Venture that is then the beneficiary of a Venture
Loan to, execute replacement Notes, or Venture Notes, in favor of the assigning
Lender and its assignee, which replacement Notes, and replacement Venture Notes,
shall be in the amounts that are equal to the assigning Lender's and its
assignee's respective Pro Rata Shares of the Commitment Amount, and of the
appropriate Venture Loan. Such replacement Notes and Venture Notes shall be
delivered to the assigning Lender and its assignee upon delivery to Borrower and
to each Venture of the original Note and Venture Notes that have been so
replaced, with each such replaced Note and Venture Note marked "Replaced."
9.12 Excess Payments. If Borrower shall pay any interest under the terms
of the Notes at a rate higher than the maximum rate allowed by applicable law,
then such excess payment shall be credited against outstanding Advances unless
Borrower notifies Agent in writing to return the excess payment to Borrower.
Notwithstanding anything to the contrary contained in this Agreement, crediting
the excess payments hereunder as a payment of principal shall not trigger the
application of any prepayment penalties that might otherwise apply to a
prepayment of principal hereunder.
9.13 Partial Invalidity. If any provision of this Agreement shall for any
reason be held to be invalid or unenforceable, such invalidity or
unenforceability shall not affect any other provision hereof, but this Agreement
shall be construed as if such invalid or unenforceable provision had never been
contained herein.
9.14 Compliance with Rules. Lenders shall not be required by operation or
effect of any provision of this Agreement to violate any statute or regulation
under state or federal law, including all Rules.
9.15 Headings. The heading of any Article or Section contained in this
Agreement is for convenience of reference only and shall not be deemed to
amplify, limit, modify or give full notice of the provisions thereof.
9.16 Counterparts. This Agreement may be signed in counterparts each of
which shall be deemed to be an original and all of which together shall
constitute one and the same agreement.
9.17 Retention of Documents. Unless otherwise provided herein, any
documents, schedules, invoices or other papers delivered to Agent on behalf of
Lenders or to any Lender may be destroyed or otherwise disposed of by Agent or
such Lender six months after they are delivered to or received by Agent or such
Lender, unless Borrower requests the return of such documents, schedules,
invoices or other papers and makes arrangements, at Borrower's expense, for
their return.
9.18 Name of Borrower. The name and designation Pennsylvania Real
Estate Investment Trust is the designation of the Trustees from time to time
under the Trust Agreement amended and restated as of December 16, 1987 and
recorded in the Office for the Recording of Deeds in Norristown, Xxxxxxxxxx
County, Pennsylvania, in Deed Book 4864, page 1463, and all persons dealing with
the Pennsylvania Real Estate Investment Trust must look solely to the Trust
property for the enforcement of any claims against the Pennsylvania Real Estate
Investment Trust, as neither the Trustees, officers, agents or shareholders of
the Pennsylvania Real Estate Investment Trust assume any personal liability for
obligations entered into by the Pennsylvania Real Estate Investment Trust by
reason of their status as said Trustee, officer, agent or shareholder.
IN WITNESS WHEREOF, Borrower, Agent and Lenders have executed this
Agreement under seal, intending to be legally bound hereby, as of the day and
year first above written.
BORROWER:
PENNSYLVANIA REAL ESTATE INVESTMENT
TRUST
By:/s/Xxxxxxxx X. Xxxxxx
----------------------------------
Xxxxxxxx X. Xxxxxx, Trustee
By:/s/Xxxxxx X. Xxxxxx
----------------------------------
Xxxxxx X. Xxxxxx, Trustee
LENDERS:
CORESTATES BANK, N.A.
By:/s/Xxxxx X. Xxxxxxxxx
----------------------------------
Xxxxx X. Xxxxxxxxx, Vice President
[Signatures Continue On Next Page]
MERIDIAN BANK
By:/s/X.X. Xxxxxxx
----------------------------------
X.X. Xxxxxxx, Vice President
MIDLANTIC BANK, N.A.
By:/s/Xxxxxx X. Xxxxxxxxx
----------------------------------
Xxxxxx X. Xxxxxxxxx,
Vice President
PNC BANK, NATIONAL ASSOCIATION
By:/s/Xxxxx X. St. Clair
----------------------------------
Xxxxx X. St. Clair,
Vice President
AGENT:
CORESTATES BANK, N.A.
By:/s/Xxxxx X. Xxxxxxxxx
----------------------------------
Xxxxx X. Xxxxxxxxx,
Vice President
