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EXHIBIT 10.60
November 6, 1996
Brandywine Realty Trust
00 Xxxxxx Xxxxxxxxx, Xxxxx 000
Xxxxxxx Xxxxxx, Xxxxxxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxxx
President and Chief Executive Officer
Brandywine Credit Facility of up to $80,000,000
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Gentlemen:
Xxxxx Xxxxxx Mortgage Capital Group, Inc., a Delaware
corporation ("SBMCG"), and NationsBank, N.A., a national banking association
("NB"), are pleased to inform Brandywine Realty Trust, a Maryland real estate
investment trust ("BRT"), that the respective credit and investment committees
of SBMCG and NB have approved BRT's request for a credit facility (the "Credit
Facility") in the principal sum of up to $80,000,000.
The obligation of SBMCG and NB to close and to fund the Credit
Facility shall be subject to (i) the General Conditions set forth in Exhibit A
attached hereto, and (ii) the following terms and conditions:
1. DEFINITIONS. All capitalized terms as used in this
Commitment shall, unless otherwise defined herein, have the meanings given to
such terms in Exhibit B attached hereto.
2. BORROWERS. The Credit Facility will be extended to BRT,
Brandywine Operating Partnership, L.P., a Delaware limited partnership ("BOP")
and the BRT/BOP Affiliates (BRT, BOP and the BRT/BOP Affiliates are herein
collectively referred to as "Borrowers"). The Initial Properties constituting
the original collateral pool for the Credit Facility shall be owned and
controlled by BRT and BOP either directly or indirectly through the BRT/BOP
Affiliates, and all Additional Properties from time to time constituting part
of the Credit Facility shall also be owned and controlled by BRT and BOP either
directly or indirectly through the BRT/BOP Affiliates.
3. REGISTRATION STATEMENT. BRT and BOP will be required at
the time of the closing of the Credit Facility to be the beneficial owners,
either directly or indirectly through one or more limited partnerships,
corporations, limited liability companies or other entities, of the assets more
fully described as the properties in the registration statement (the
"Registration Statement") filed by BRT with the Securities and Exchange
Commission on October 11, 1996. It is contemplated that the Registration
Statement will be amended prior to the closing of the Credit Facility to
include, among other things, provisions relating to the acquisition of up to 13
additional properties by BRT and BOP. The properties which will be described
in the Registration Statement, as amended, will include, but will not be
limited to, the Initial Properties constituting the original collateral pool
for the Credit Facility. Prior to the closing of the Credit Facility, and as a
condition precedent thereto, BRT shall have successfully offered and sold its
common stock in compliance with the provisions of the Registration Statement
(the "Offering"), and shall have realized at least $60 million in net proceeds
therefrom.
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4. INITIAL LENDERS AND AGENTS. The lead lender and
syndication agent for the Credit Facility shall be SBMCG or a subsidiary or
affiliate of SBMCG to be designated ("Lead Lender"). NB ("Co-Lead Lender")
shall act as a co-lead lender for the Credit Facility. Lead Lender and Co-Lead
Lender are herein collectively referred to as "Initial Lenders". NB shall act
as administrative and documentation agent for the Credit Facility (NB acting in
its capacity as administrative and documentation agent for the Credit Facility
is referred to herein as "Agent"). The obligation of Initial Lenders to close
and to fund the Credit Facility shall be contingent upon Initial Lenders
entering into a co-lenders agreement (the "Co-Lenders Agreement") in form and
substance satisfactory in all respects to Initial Lenders and their respective
counsel. Borrowers shall have no right to examine or receive a copy of, or to
approve, the Co-Lenders Agreement, it being agreed, however, that as a matter
of courtesy, the voting rights of the Lenders and required percentages thereof
for approval of various matters and actions pertaining to the Credit Facility,
as set forth in the Co-Lenders Agreement, will be disclosed to Borrowers. The
aforesaid voting rights and required percentages may at any time subsequent to
the closing of the Credit Facility (and without prior notice to or approval by
Borrowers) be modified by Lenders either (i) in accordance with the provisions
of the Co-Lenders Agreement, or (ii) otherwise in the sole and absolute
discretion of Lenders. Borrowers shall be promptly informed of any such change
in voting rights and required percentages provided no default has occurred and
is continuing under the Credit Facility.
5. CREDIT FACILITY. The Credit Facility shall be closed and
advanced in accordance with the terms and conditions set forth in this
Commitment and the Credit Facility Documents as negotiated and agreed to by
Initial Lenders and Borrowers. Lead Lender and Co-Lead Lender shall each be
obligated to respectively fund up to $40,000,000 of the Credit Facility. It is
Lead Xxxxxx's intention to syndicate the respective portions of the Credit
Facility held by Lead Lender and Co-Lead Lender in the manner contemplated by
paragraph 26 of this Commitment. The Credit Facility shall be evidenced by and
payable in accordance with the provisions of the Note and shall be secured
inter alia by the Mortgages, Assignments of Leases and Rents and Stock,
Partnership and Asset Pledges. The Credit Facility shall be funded and
advanced in accordance with the provisions of the Credit Facility Agreement.
Payment of the Credit Facility shall also be guaranteed in accordance with the
provisions of the Guaranty of Payment.
6. INTEREST. Interest on the outstanding principal balance
of the Credit Facility shall be calculated in the manner specified in Exhibit C
attached hereto and shall be payable monthly in arrears on Re-Set Dates.
7. MATURITY. The entire Credit Facility shall mature and
shall be payable in full two (2) years after the date of closing of the Credit
Facility.
8. USE OF PROCEEDS. The Credit Facility shall be available
(i) to refinance Additional Properties which are from time to time added to the
collateral pool for the Credit Facility in accordance with the provisions of
this paragraph and paragraph 9 below, (ii) to finance the acquisition by
Borrowers of Additional Properties, (iii) to finance in accordance with the
provisions of this Commitment the Development and the further Development of
unimproved land and improved properties owned and/or controlled either directly
or indirectly by Borrowers (irrespective of whether constituting part of the
collateral pool for the Credit Facility), provided that (x) Borrowers retain at
all times in the opinion of Lenders sufficient availability under the Credit
Facility to fund all costs remaining to be paid in connection with the
completion and stabilization of the improvements which are the subject of all
such Developments from time to time, which availability under the Credit
Facility will be reserved to cover the payment of such costs and will not be
advanced for any other purpose until such costs have been paid in full, (y)
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Borrower shall prior to the commencement of any such Development submit a
comprehensive description and budget therefor to Lenders, which budget and the
nature and scope of such Development shall be subject to approval by Lenders
prior to the commencement of such Development, (iv) to finance the Renovation
of, and capital improvements required with respect to, properties owned and/or
controlled either directly or indirectly by Borrower (irrespective of whether
constituting part of collateral pool for the Credit Facility), (v) for general
corporate purposes of Borrowers, and (vi) for the issuance of letters of credit
(the "Letters of Credit") required by Borrowers in the course of their general
operation and business, provided, however, that (A) the aggregate of the
Principal Balance outstanding under the Credit Facility pursuant to clauses
(iv) and (v) of this sentence, and the amount available for draw under
outstanding Letter of Credit shall at no time during the term of Credit
Facility exceed $10,000,000, and (B) the aggregate of the Principal Balance
outstanding under the Credit Facility, and the amount available for draw under
outstanding Letter of Credit shall at no time during the term of the Credit
Facility exceed the maximum amount available under the Credit Facility from
time to time in accordance with the provisions of this Commitment (the
aggregate of the Principal Balance outstanding from time to time under the
Credit Facility, and the amount available for draw under outstanding Letters of
Credit from time to time is herein referred to as the "Credit Facility
Outstanding"). Any draw made under an outstanding Letter of Credit shall
constitute an automatic and mandatory advance under the Credit Facility which
shall be evidenced by the Note and secured inter alia by the Mortgages and the
Assignments of Leases and Rents. The inclusion of Additional Properties in the
collateral pool for the Credit Facility shall be at the option of Borrowers,
and the acceptance of the same for inclusion in the Credit Facility shall be
subject to satisfaction of the conditions set forth in paragraph 9 below.
9. ADDITIONAL PROPERTIES. If Borrowers wish to submit an
Additional Property for inclusion in the collateral pool for the Credit
Facility, Borrowers shall notify Agent, and shall at Borrowers' expense cause
all of the terms and conditions of this Commitment which pertained to the
inclusion of the Initial Properties in the original collateral pool for the
Credit Facility to be satisfied with respect to such Additional Property, all
with the same force and effect as if such Additional Property had constituted
part of the original collateral pool for the Credit Facility (including,
without limitation, the provisions of paragraph 21 of this Commitment). An
Additional Property shall not be included in the collateral pool for the Credit
Facility unless (i) all of the aforesaid terms and conditions are met to the
satisfaction of Lenders, (ii) the Additional Property shall in the opinion of
Lenders be at least comparable in quality to the Initial Properties
constituting part of the original collateral pool for the Credit Facility,
(iii) all of the terms and conditions of the Credit Facility Documents will
continue to be complied with after inclusion of the Additional Property in the
collateral pool for the Credit Facility, and (iv) the inclusion of the
Additional Property is otherwise approved by Lenders.
10. LOAN TO VALUE REQUIREMENT. In no event will the
aggregate Credit Facility Outstanding at any given time exceed sixty percent
(60%) of the aggregate Approved Value of the Properties from time to time
constituting part of the collateral for the Credit Facility (the "Loan to Value
Requirement"). The "Approved Value" of a particular Property constituting part
of the collateral pool for the Credit Facility (A) shall during the first year
of the inclusion of such Property in the collateral pool for the Credit
Facility be equal to the appraised value of such Property, as determined by
appraisal in accordance with the provisions of this Commitment, and (B) shall
subsequent to the first anniversary of the date of the inclusion of such
Property in the collateral pool for the Credit Facility be equal to the
Capitalization Rate Value of such Property. The "Capitalization Rate Value" of
a Property constituting part of the collateral pool for the Credit Facility
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shall be equal to the aggregate Cash Flow of such Property for the four
calendar quarters preceding the date of each determination of the
Capitalization Rate Value of such Property divided by a capitalization rate of
10.5%. "Cash Flow" of a particular Property constituting part of the
collateral pool for the Credit Facility for any given period of time shall mean
the earning (i.e., gross revenues less expenses) of such Property (based upon
GAAP) before depreciation, amortization, interest expense and income taxes less
the portion of an annual capital and leasing reserve of fifty cents ($.50) per
square foot applicable to such period of time, it being understood that in
determining the expenses of such Property the management fees for such Property
shall be deemed to be the higher of actual management fees for such period of
time or three percent (3%) of the gross revenues of such Property for such
period of time. If at any time the Loan to Value Requirement shall cease to be
satisfied, Borrowers shall within ten (10) business days after demand by Agent
either (i) pay the outstanding Principal Balance of the Credit Facility down by
an amount sufficient to restore compliance with the Loan to Value Requirement,
or (ii) deliver to Agent additional collateral for the Credit Facility
consisting of unencumbered improved property which is satisfactory in all
respects to Lenders and sufficient in the opinion of Lenders to restore
compliance with the Loan to Value Requirement.
11. CONDITION TO ADVANCES. Lenders' obligation to make each
advance under the Credit Facility shall be subject to satisfaction of each of
the following conditions:
(i) No default shall have occurred and shall be
continuing under the Credit Facility Documents.
(ii) All affirmative and negative covenants and
representations and warranties contained in the Credit
Facility Documents shall continue to be complied with both
before and after the making of each advance under the Credit
Facility, it being understood that Borrower shall, at the time
of each advance under the Credit Facility, and as a condition
precedent thereto, certify to Lenders continuing compliance
with all such affirmative and negative covenants,
representations and warranties set forth in Credit Facility
Documents.
(iii) All of the terms and conditions set forth in
the Credit Facility Documents pertaining to advances of the
Credit Facility shall have been satisfied (including without
limitation, all title insurance requirements).
12. AFFIRMATIVE AND NEGATIVE COVENANTS; DEFAULTS. The Credit
Facility Documents will incorporate affirmative and negative covenants with
respect to Borrowers and the Properties which are acceptable to Initial Lenders
and are otherwise usual and customary for credit facilities comparable in size,
type and purpose to the Credit Facility, and including, without limitation, the
following:
(i) A restriction on the transfer or further
encumbrance of the Properties and other collateral from time
to time constituting part of the collateral for the Credit
Facility or of the direct or indirect beneficial ownership
interests therein or in the direct or indirect beneficial
ownership interests in and control of BOP and the BRT/BOP
Affiliates; provided, however, that nothing contained therein
shall prohibit the issuance of partnership interests or equity
shares in BOP (subject to the provisions of paragraph 6 of
Exhibit A to this Commitment) to an entity which conveys a
Property to BOP as partial consideration for the conveyance of
such Property. Nothing contained in this paragraph
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shall be deemed to restrict the consolidation of direct
ownership of Properties and collateral for the Credit Facility
up to BOP.
(ii) An obligation at all times to continue to
satisfy the Loan to Value Requirement.
(iii) A requirement that neither Borrowers nor any
of the respective affiliates of Borrowers who are directly
involved in Borrower's business and operations nor any of the
respective subsidiaries of Borrowers shall engage in any
business or activity which is not directly related to the
ownership, operation or management of the Properties
constituting part of the collateral pool for the Credit
Facility or other properties not constituting part of the
collateral pool for the Credit Facility which are otherwise
generally comparable in nature to the Properties constituting
part of the collateral for the Credit Facility.
(iv) An obligation on the part of Borrowers and the
respective affiliates of Borrowers who are directly involved
in Borrowers' business and operations and the respective
subsidiaries of Borrowers not to incur either directly or as a
guarantor any liability (whether recourse or non-recourse) for
the payment of any indebtedness other than the Debt and Other
Permitted Debt. In addition to outstandings under the Credit
Facility, (A) Borrowers shall be permitted to incur
non-recourse (other than currently existing secured debt of
Borrowers which may have recourse and other existing recourse
debt which may be assumed from existing guarantors of up to
$9,300,000, which existing recourse debt is held by Fidelity
Bank and encumbers Oakland 45 and 50, and 6575 Snowdrift Road)
secured debt (all such secured debt whether existing on the
date of the closing of the Credit Facility or incurred
thereafter is herein collectively referred to a "Other Secured
Debt") provided that (i) the net proceeds of any Other Secured
Debt which is incurred after the date of the closing of the
Credit Facility shall be used to reduce the outstanding
Principal Balance of the Credit Facility before being used for
any other purpose, (ii) the incurrence of such Other Secured
Debt shall not cause a default to occur under the Credit
Facility, (iii) the quality, geographic diversity and
character of the Properties constituting part of the
collateral pool for the Credit Facility shall in the
reasonable opinion of Lenders be no worse after the incurrence
of any Other Secured Debt than before such incurrence, and
(iv) each loan constituting Other Secured Debt shall bear
interest at a market interest rate, shall have an initial
maturity of not less than five (5) years after the date of its
closing and funding, shall have a loan to value ratio of not
less than fifty (50%), and shall otherwise be on terms and
conditions which are generally applicable to comparable
secured indebtedness, and (v) the conditions set forth in the
following sentence of this paragraph shall otherwise be
complied with, and (B) Borrowers shall be permitted to incur
up to, but not in excess of $5,000,000 of unsecured recourse
debt ("Other Unsecured Debt") provided that (i) the incurrence
of such Other Unsecured Debt, shall not cause a default to
occur under the Credit Facility Documents, and (ii) the
conditions set forth in the following sentence of this
paragraph shall otherwise be complied with. In addition to
the conditions set forth in the preceding sentence, (i) no
such Other Secured Debt or Other Unsecured Debt (collectively,
"Other Debt") shall be secured in whole or in part by the
Properties and other collateral from time to time securing
payment of the Credit Facility, (ii) the Supplemental Debt
Service Coverage Ratio, the Fixed Charge Coverage Ratio and
the Debt-to-
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Tangible Net Worth Requirement shall continue to be complied
with both before and after the incurring of any such Other
Debt, (iii) Borrowers shall inform Agent in advance of their
intention to incur any such Other Debt and shall provide to
Lenders with a term sheet setting forth the terms and
conditions which will pertain to any such Other Debt, and such
other information with respect thereto as shall be requested
by Lenders, (iv) all of the other affirmative and negative
covenants and representations and warranties contained in the
Credit Facility Documents shall continue to be complied with
both before and after the incurring of any such Other Debt by
Borrowers, and (v) Lenders shall be satisfied that such Other
Debt will not have a materially adverse effect on Borrowers,
or their ability to perform their obligations under the Credit
Facility Documents, or on collateral for the Credit Facility.
Any Other Debt incurred by Borrowers in compliance with the
provisions of the preceding provisions of this subparagraph is
herein referred to as "Other Permitted Debt". The incurrence
of any Other Debt in contravention of the provisions of this
subparagraph shall constitute an immediate event of default
under the Credit Facility. It is also agreed that the
earliest to occur of any one of the following events in
respect of Other Permitted Debt shall constitute an immediate
event of default under the Credit Facility Documents:
(a) if any default shall occur and be continuing in
respect of any Other Permitted Debt and the holder thereof has
declared an "event of default" in respect thereof, or has
accelerated the payment thereof or has otherwise exercised any
right or remedy which it may have as a result of the
occurrence of such "event of default";
(b) if any default shall occur in respect of any
Other Permitted Debt, and irrespective of whether such default
constitutes, or would, but for notice or the lapse of time, or
both, constitute, an "event of default" in respect thereof,
and either (x) Borrowers shall fail to inform Lenders of the
occurrence of such default within two (2) business days after
they have received notice of such default or otherwise become
aware that such default has occurred, or (y) Borrowers shall
fail in the case of any such default which can be cured by the
payment of a sum of money to effect a cure thereof within five
(5) days after the giving of such notice to Lenders, or (z)
Borrowers shall fail in the case of any such default which can
not be cured by the payment of a sum of money to effect a cure
thereof with twenty (20) days after giving such notice to
Lenders, provided, however, that if such default can not in
the exercise of due diligence reasonably be cured within such
twenty (20) day period, such default shall not constitute an
event of default under the Credit Facility Documents so long
as Borrowers commence to cure such default within such twenty
(20) day period and thereafter diligently take all steps to
effect a cure thereof, as promptly as possible, but in no
event later than sixty (60) days after the giving of such
notice to Lenders, failing which such default shall constitute
an immediate event of default under the Credit Facility
Document.
(v) An obligation at all times to maintain
Collateral Pool Earnings at a level sufficient to provide at
least 1.65x debt service coverage on the Credit Facility
Outstanding, which debt service coverage shall (except as
otherwise provided to the contrary in Exhibit B to this
Commitment) be determined on a rolling and preceding four (4)
calendar quarter basis, and shall
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be calculated on the basis of (A) the greater of (x) the
weighted average interest rate applicable to the Credit
Facility on the date of determination, and (y) a debt service
constant utilizing an interest rate equal to 180 basis points
over then prevailing rates on ten year U.S. Treasury
Obligations and an assumed 25-year full amortization schedule,
and (B) the letter of credit fees payable in respect of
outstanding Letters of Credit (the "Minimum Debt Service
Coverage Ratio"). If at any time the Minimum Debt Service
Coverage Ratio shall cease to be satisfied, Borrowers shall
within ten (10) business days after demand by Agent either (a)
reduce the outstanding Principal Balance of the Credit
Facility by an amount sufficient to restore compliance with
the Minimum Debt Service Coverage Ratio, or (b) deliver to
Agent additional collateral for the Credit Facility consisting
of unencumbered improved property which is satisfactory to
Lenders and sufficient in the opinion of Lenders to restore
compliance with the Minimum Debt Service Coverage Ratio.
(vi) An obligation at all times to maintain Total
Earnings at a level sufficient to provide at least 2.0x debt
service coverage on the Credit Facility Outstanding and on
Other Permitted Debt (the "Supplemental Debt Service Coverage
Ratio). For the purpose of determining compliance with the
Supplemental Debt Service Coverage Ratio, Total Earnings shall
(except as otherwise provided to the contrary in Exhibit B to
this Commitment) be determined on a rolling and preceding four
(4) calendar quarter basis, and annual debt service on the
Credit Facility Outstanding and on Other Permitted Debt (A)
shall insofar as the outstanding Principal Balance of Credit
Facility is concerned be deemed to be equal to the greater of
(x) the outstanding Principal Balance of the Credit Facility,
as of the date of determination, multiplied by the weighted
average interest rate applicable to the Credit Facility on the
date of determination, and (y) the annual debt service which
would be payable on a 25 year fully amortizing loan closing on
the date of determination in an amount equal the outstanding
Principal Balance of the Credit Facility on such date and
bearing interest at a per annum rate equal to 180 basis points
over prevailing rates on ten year U.S. Treasury Obligations on
such date, (B) shall insofar as outstanding Letters of Credit
are concerned be equal to the amount available for draw under
outstanding Letters of Credit on the date of determination
multiplied by the per annum letter of credit fee, and (C)
shall insofar as Other Permitted Debt is concerned be equal to
the actual per annum debt service payable on Other Permitted
Debt, as of the date of determination. If at any time the
Supplemental Debt Service Coverage Ratio shall cease to be
satisfied, Borrowers shall within ten (10) business days after
demand by Agent reduce the outstanding principal balance of
the Credit Facility by an amount sufficient to restore
compliance with the Supplemental Debt Service Coverage Ratio.
(vii) An obligation to maintain a fixed charge
coverage ratio of at least 1.75x (the "Fixed Charge Coverage
Ratio"). The Fixed Charge Coverage Ratio shall (except as
otherwise provided to the contrary in Exhibit B in this
Commitment) be determined on a rolling and preceding four (4)
calendar quarter basis, and shall be equal to the Total
Earnings for the period in question divided by the actual debt
service (inclusive of interest, amortization payments and
letter of credit fees) payable on the Credit Facility and all
Other Permitted Debt during the period in question plus actual
capital expenditures (with the exception of capital
expenditures that are related to newly acquired properties
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irrespective of whether constituting part of the collateral
pool for the Credit Facility and escrowed with another lender,
the seller of such property, a title company or other
independent third party escrow agent at the time of
acquisition or expended within 90-days after such
acquisition). If at any time the Fixed Charge Coverage Ratio
shall cease to be satisfied, Borrowers shall within ten (10)
business days after demand by Agent reduce the outstanding
Principal Balance of the Credit Facility by an amount
sufficient to restore compliance with the Fixed Charge
Coverage Ratio. If Borrowers so reduce the outstanding
Principal Balance of the Credit Facility, Lenders shall on the
date of such reduction confirm compliance with the Fixed
Change Coverage Ratio by retesting such compliance using a
methodology to be mutually agreed upon by Borrowers and
Initial Lenders prior to the closing of the Credit Facility.
(viii) An obligation to maintain a maximum
debt-to-tangible net worth of 1.0x (the "Debt-to-Tangible Net
Worth Requirement"). The Debt-to-Tangible Net Worth
Requirement shall be determined as of the end of each fiscal
quarter of Borrowers, and shall be determined by dividing any
and all of Borrowers' indebtedness (including, without
limitation, the Credit Facility Outstanding, the Other
Permitted Debt and contingent liabilities under any
outstanding guarantees to which any of the Borrowers is a
party) by Tangible Net Worth of Borrowers. The "Tangible Net
Worth" of Borrowers shall be determined in accordance with
GAAP and shall include the value of all assets (other than
intangible assets owned by Borrowers) minus the total
liability of Borrowers (excluding provisions for deferred
taxes). If at any time the Debt-to-Tangible Net Worth
Requirement shall cease to be satisfied, Borrowers shall
within ten (10) business days after demand by Agent reduce the
outstanding Principal Balance of the Credit Facility by an
amount sufficient to restore compliance with the
Debt-to-Tangible Net Worth Requirement. Notwithstanding
anything to the contrary contained in this Commitment, and for
the purpose of determining compliance with the
Debt-to-Tangible Net Worth Requirement and other financial
covenants set forth in this Commitment, in determining the
value of Borrowers' investment in any joint venture,
partnership, limited liability company or other comparable
entity which is not already consolidated into Borrowers'
financial statements, such value shall be determined taking
into account the total equity interest owned in such joint
venture, partnership, limited liability company or other
comparable entity and the portion of the debt (whether secured
or unsecured) encumbering the assets of such joint venture,
partnership, limited liability company or other comparable
entity or otherwise incurred by such joint venture,
partnership, limited liability company or other comparable
entity which is allocable to Borrowers' equity interest in
such joint venture, partnership, limited liability company or
other comparable entity or which otherwise constitutes the
recourse obligation of any one or more of the Borrowers.
(ix) A prohibition against the acquisition of
unimproved land unless (a) such unimproved land is adjacent to
an improved property being acquired by Borrowers (irrespective
of whether constituting part of the collateral for the Credit
Facility), and if after allocating 100% of the purchase price
to the improved property and 0% of the purchase price to the
adjacent land the acquisition of the improved property is at a
purchase price which is comparable to the purchase prices paid
for comparable improved properties which have been acquired by
Borrowers and/or third
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parties in the same market, (b) such land is intended to be
developed within six (6) months of acquisition thereof and all
permits and approvals for the contemplated Development thereof
have been issued or obtained from the applicable governmental
authorities, and provided that Borrowers will otherwise remain
in compliance with the requirements of subparagraph (x) below
as such land is developed, or (c) the acquisition of such land
is otherwise approved by Lenders, which approval shall not be
unreasonably withheld. Any unimproved land which is adjacent
to a Property constituting part of the collateral for the
Credit Facility will, at the election of Lenders, become part
of the collateral for the Credit Facility. The value of
unimproved land will not be taken into account for the purpose
of determining compliance with the Loan to Value Requirement
or the Debt- to-Tangible Net Worth Ratio Requirement.
(x) A requirement that Borrowers shall not at any
time during the term of the Credit Facility have under
Development or further Development unimproved land or improved
properties (irrespective of whether constituting part of the
collateral pool to the Credit Facility) for their account
unless (i) the total cost which will be incurred upon
completion of all such Development which is under way at any
given time is not more than $25,000,000, (ii) the improvements
constituting part of each such Development are at least 50%
pre-leased on generally accepted market terms prior to the
commencement of such Development, and (iii) the improvements
under Development are otherwise similar in type, quality and
location to the existing portfolio of improved properties
owned by Borrowers, it being understood that the purchase of
unimproved land as permitted under subparagraph (ix) above
shall constitute the commencement of Development of such
unimproved land for the purposes of this subparagraph, and
accordingly shall require compliance with the provisions of
this subparagraph.
(xi) A requirement that (i) BRT will at all times
maintain its REIT status under the Internal Revenue Code, and
(ii) its status as a public company whose stock is listed on a
nationally-recognized exchange or is a NASDAQ security.
(xii) A requirement that the dividend payout ratio
(dividends paid divided by funds from operations, as defined
by NAREIT), and as determined on a rolling and preceding
twelve month basis, shall at all times be less than 90%.
Notwithstanding the foregoing, the actual dividend payout may
exceed the foregoing dividend payout ratio restriction if
required in order to maintain BRT's status as a REIT under the
Internal Revenue Code.
(xiii) A requirement that the minimum net worth of
BRT (as determined in accordance with GAAP) shall at all times
equal the aggregate of $100,000,000 plus 90% of the net
proceeds (i.e. after the expenses incurred in connection with
such offerings) of all equity offerings by BRT after the date
hereof.
(xiv) A requirement that the aggregate Approved
Value of all Properties from time to time constituting part of
the collateral pool for the Credit Facility shall at all times
be equal to or in excess of $80,000,000.
(xv) A requirement that no individual Property
constituting part of the collateral pool for the Credit
Facility shall have an Approved Value in excess of 15% of the
aggregate Approved Value of
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all Properties constituting part of the collateral pool for
the Credit Facility.
(xvi) A requirement that Borrowers will not without
the prior consent of Lenders assume, guaranty, endorse or
otherwise become directly or contingently liable for the debts
or obligations of any other person, party or entity, except by
reason of endorsement of negotiable instruments for deposit or
collection in the ordinary course of business.
(xvii) A requirement that that at all times during
the term of the Credit Facility the average occupancy of all
of the Properties constituting part of the collateral pool for
the Credit Facility shall equal at least 85%. Occupancy shall
mean space in the Properties constituting part of the
collateral pool for the Credit Facility which is occupied by
tenants who in each case are not in default in the payment of
rent under their respective leases. For the purpose of
determining compliance with this covenant not more than 15,000
square feet in the aggregate of headquarters space in the
Properties which is occupied by Borrowers or by affiliates of
Borrowers who are directly involved in the business and
operations of Borrowers or by subsidiaries of Borrowers shall
be considered to constitute occupied space in the Properties.
The Credit Facility Documents will also incorporate default provisions
(inclusive of notice and cure periods as appropriate and customary) which are
acceptable to Borrowers and Initial Lenders and are otherwise usual and
customary for credit facilities comparable in size, type and purpose to the
Credit Facility. Continuing compliance with the covenants set forth in clauses
(ii), (iv), (v), (vi), (vii), (viii), (xii), (xiii), (xiv), (xv) and (xvii) of
this paragraph shall be subject to confirmation by Xxxxxxx at the end of each
calendar quarter, it being understood that Borrowers shall provide to Lenders
at the end of each calendar quarter such information and evidence as Lenders
shall reasonably require in connection with the confirmation of such continuing
compliance.
13. REPRESENTATIONS, WARRANTIES AND INDEMNITIES. The Credit
Facility Documents will incorporate representations and warranties with respect
to Borrowers and the Properties which are acceptable to Initial Lenders and are
otherwise usual and customary for credit facilities comparable in size, type
and purpose to the Credit Facility, and including, without limitation,
confirmation of corporate, REIT and partnership status and authority;
execution, delivery and performance of Credit Facility Documents do not violate
law or existing agreements; accuracy of financial information; no material
adverse change in financial conditions, operations or business prospects since
the date of the last audited balance sheet furnished to Initial Lenders prior
to closing; use of Credit Facility proceeds; the receipt of all necessary
consents; the making of all necessary filings and giving of all required
notices; compliance with ERISA; compliance with ADA; compliance with all
applicable laws, rules and regulations (including, without limitation, all
applicable zoning, building code, fire safety and environmental laws, rules and
regulations; continue tax qualification of BRT as a REIT; no material
litigation, casualty or condemnation; payment of taxes; full disclosure, good
title and no material liens; utilization of proceeds of Credit Facility only
for permitted uses; no governmental or regulatory approvals required; accuracy
of representations and warranties; absence of defaults or events of default;
legality, validity, binding effect and enforceability of the Credit Facility
Documents; perfection and priority of liens created by Credit Facility
Documents. The Credit Facility Documents will also incorporate
indemnifications from Borrowers which are acceptable to
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Initial Lenders and Borrowers and are otherwise usual and customary for Credit
Facilities comparable in size, type and purpose to the Credit Facility.
14. SALE OF PROPERTY. A Property constituting part of the
collateral for the Credit Facility and other property owned by Borrowers and
not constituting part of the collateral pool for the Credit Facility may be
sold with the prior approval of Initial Lenders, which approval will not be
unreasonably withheld or delayed, provided that (i) such sale is an arms length
bona fide sale, (ii) no default has occurred and is continuing under the Credit
Facility Documents, (iii) the Loan to Value Requirement, the Minimum Debt
Service Coverage Ratio, the Supplemental Debt Service Coverage Ratio, the Fixed
Charge Coverage Ratio and the Debt-to-Tangible Net Worth Requirement shall
continue to be maintained and satisfied after any such release, (iv) if the
property being sold is a Property constituting part of the collateral pool for
the Credit Facility, the outstanding Principal Balance of the Credit Facility
shall be reduced by an amount equal to greater of 100% of the net proceeds
realized on the sale of such Property, and 60% of the Approved Value of such
Property as of the date upon which a binding contract for the sale of such
Property has been entered into (so long as such sale occurs within 180 days
after such contract is entered into, it being agreed that if such sale occurs
more than 180 days after such contract is entered into the Approved Value of
such Property as of the date of sale shall be utilized), (v) if property being
sold does not constitute part of the collateral pool for the Credit Facility,
100% of the net proceeds realized on the sale of such property shall be applied
first to the payment of the Other Secured Debt, if any, encumbering such
property and which is payable to unrelated third parties, and next to the
reduction of the outstanding Principal Balance of the Credit Facility before
being used for any other purpose, (vi) Lenders shall be of the reasonable
opinion that the sale of any such Property constituting part of the collateral
pool for the Credit Facility will not have a material adverse effect on the
value, quality, composition or character of the remaining Properties in
collateral pool for the Credit Facility, and (vii) all of the terms, covenants,
conditions, representations and warranties contained in the Credit Facility
Documents shall continue to be complied with after any such sale. If a
Property constituting part of the collateral pool for the Credit Facility is
sold in compliance with the provisions of this paragraph, such Property will
contemporaneously with such sale be released from the lien of the Mortgage and
other Credit Facility Documents encumbering the same.
15. NEW DEBT OR EQUITY OFFERING. The net proceeds of any
new debt or equity offering by Borrowers or their respective subsidiaries or
affiliates shall (unless otherwise agreed to by Lenders in the exercise of
their sole and absolute discretion) be applied first to the reduction of the
outstanding principal balance of the Credit Facility before being used for any
other purpose.
16. READVANCES. The Credit Facility is intended to be a
revolving credit facility. In this regard, it is understood Borrowers shall
have the right upon compliance with the conditions of this Commitment and the
Credit Facility Documents which pertain to the making of advances under the
Credit Facility (including, without limitation, the requirement that all
advances be evidenced and secured by the Credit Facility Documents and insured
under acceptable title insurance policies) to obtain readvances of amounts from
time to time applied to the reduction of the principal balance outstanding
under the Credit Facility pursuant to the provisions of paragraph 14 or 15 of
this Commitment, or otherwise required or permitted to be made in accordance
with the provisions of this Commitment (including, without limitation, any
portion of the outstanding principal balance of the Credit Facility which is
prepaid in accordance with the provisions of paragraph 15 above or paragraph 8
of Exhibit C attached hereto). All sums which are applied from time to time in
reduction of the outstanding Principal Balance of
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the Credit Facility in accordance with the provisions of this Commitment shall
(unless otherwise agreed to the contrary by Xxxxxxxx) be deemed to have been
applied in reduction of advances of the Credit Facility made pursuant to clause
(iv) and (v) of paragraph 8 of this Commitment.
17. INTEREST RATE PROTECTION AGREEMENTS. Borrowers shall be
permitted to enter into interest rate swap and cap agreements with respect to
the Credit Facility and with respect to Other Permitted Debt provided that (i)
Borrowers notify Agent of its intention to do so prior to entering into any
such agreement, (ii) any such agreement which has the effect of fixing the
interest rate, or setting a minimum and/or maximum interest rate, with respect
to the Credit Facility or with respect to Other Permitted Debt shall be taken
into account in determining compliance with the Minimum Debt Service Coverage
Ratio, the Supplemental Debt Service Coverage Ratio and the Fixed Charge
Coverage Requirement, (iii) no such agreement shall be secured by the
Properties or other collateral for the Credit Facility, and (iv) each such
agreement which pertains to the Credit Facility shall be assigned by Borrowers
to Agent, acting in its capacity as collateral agent for the Credit Facility,
as additional collateral for the Credit Facility.
18. REPORTING REQUIREMENTS. Borrowers shall be required to
submit to each Lender the following financial information:
(i) Annual individual and consolidated operating and
capital expenditure budgets for BRT and with respect to each
of the Properties from time to time constituting part of the
collateral for the Credit Facility. The 1997 budgets shall be
submitted prior to January 31, 1997 and budgets for subsequent
calendar years shall be due not later than 30 days prior to
the beginning of each calendar year during the term of the
Credit Facility.
(ii) Quarterly unaudited individual and consolidated
operating statements covering each of the Properties from time
to time constituting part of the collateral for the Credit
Facility, reconciled on a quarterly basis, to the then current
annual individual and consolidated operating budgets for the
Properties, in each case not later than 45 days after the end
of each calendar quarter during the term of the Credit
Facility, it being understood that the first three quarterly
operating statements for calendar year 1996 to date shall be
submitted prior to the closing of the Credit Facility.
(iii) Annual individual and consolidated operating
statements covering each of the Properties from time to time
constitutes part of the collateral for the Credit Facility not
later than 90 days after the end of each calendar year during
the term of the Credit Facility, it being understood that the
1995 annual operating statements shall be delivered prior to
the closing of the Credit Facility.
(iv) Annual audited consolidated and annual
unaudited consolidating financial statements of Borrowers not
later than 90 days after the end of each calendar year during
the term of the Credit Facility, it being understood that such
consolidated and consolidating annual financial statements for
calendar year 1995 shall be delivered prior to the closing of
the Credit Facility.
(v) Copies of all other quarterly and annual filings
of Borrowers with the SEC and other publicly-released
information concurrent with such filing or public release.
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(vi) Such other information with respect to
Borrowers, the properties and assets owned by Borrowers
(irrespective of whether constituting part of the collateral
pool for the Credit Facility) and the respective subsidiaries
and affiliates of Borrowers as may be reasonably requested by
Agent.
All statements are to be prepared in accordance with GAAP and shall be in form
and substance acceptable to Lenders. All unaudited financial statements will
be certified to be true and correct in all material respects by the chief
financial officer or the chief executive officer of BRT.
19. RECOURSE OBLIGATION. Borrowers' obligation in respect of
the Credit Facility shall constitute the full personal and joint and several
recourse obligations of Borrowers.
20. APPRAISAL. Initial Lenders shall receive not later than
December 15, 1996, a comprehensive updated written "as is" appraisal report
with respect to each of the Initial Properties constituting part of the
original collateral pool for the Credit Facility from MAI appraisers designated
or approved by Initial Lenders and complying with FIRREA standards. The basis
of the appraisal calculation shown in the appraisal reports and all other
aspects of the appraisal reports shall be satisfactory in all respect to
Initial Lenders. Agent shall have the right in its discretion to commission
updated appraisals or interim valuation with respect to the Properties from
time to time constituting part of the collateral for the Credit Facility (i)
with respect to a particular Property, if Agent, in the exercise of its sole
and absolute discretion, believes that there has been a reduction in the value
of such Property, and (ii) upon the occurrence of an event of default under the
Credit Facility Documents. All costs incurred in connection with any appraisal
or interim valuation required under this paragraph shall be borne by Borrowers.
21. ENVIRONMENTAL REPORT. Not later than ten (10) business
days prior to the closing of Credit Facility, Initial Lenders shall receive a
phase one level environmental audit report with respect to each of the Initial
Properties constituting part of the original collateral for the Credit Facility
(and such additional reports as may be required by Initial Lenders with respect
to particular Properties which may have environmental problems as disclosed by
the phase one level reports) prepared by qualified environmental consultant(s)
or firm(s) designated by or otherwise acceptable to Initial Lenders, which
reports shall indicate that each such Property is free and clear of toxic
wastes, hazardous substances and all other environmental contaminations, and
complies in all respects with all Federal, state and local environmental,
petroleum products and hazardous waste laws, orders, ordinances, rules and
regulations, including those relating to asbestos, and shall otherwise be in
form and substance satisfactory in all respects to Initial Lenders.
22. ENVIRONMENTAL INDEMNIFICATION. Borrowers and Guarantors
shall execute and deliver to Lenders a joint and several indemnification
agreement in form and substance satisfactory in all respects to Initial Lenders
pursuant to the provisions of which they shall absolutely and unconditionally
and jointly and severally agree to indemnify and to hold Lenders harmless from
and against any and all loss, liability, cost or expense of any nature
whatsoever, contingent or otherwise, foreseen or unforeseen, incurred by
Lenders (including, without limitation, reasonable attorneys fees) as a result
of any failure for any reason of Borrowers to comply in all respects with all
existing and future Federal, state and local environmental, petroleum products
and hazardous waste laws, orders, ordinances, rules and regulations, including
those relating to asbestos. The environmental indemnification and the personal
recourse obligations and liabilities of Borrowers and Guarantors, thereunder
shall survive and continue in full force
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and effect and shall not be terminated, discharged or released, in whole or in
part, irrespective of whether the Credit Facility has been paid in full and
irrespective of any foreclosure of the Mortgages or sale of the Properties
pursuant to the Mortgages or acceptance by Xxxxxxx, their nominee(s) or wholly
owned subsidiar(ies) of deeds or assignments in lieu of foreclosure and
irrespective of any other fact or circumstance of any nature whatsoever. The
aforementioned indemnity shall not apply to acts of Lenders or others after
foreclosure or deed-in- lieu thereof.
23. LETTER OF CREDIT FEE. Borrowers shall pay a letter of
credit fee in respect of outstanding Letters of Credit, which letter of credit
shall be calculated separately with respect to each calendar month or portion
thereof during the term of the Credit Facility, shall be payable monthly in
arrears, and shall be equal to (1.875%) multiplied by a fraction the numerator
of which shall be equal to the actual number of days elapsed in such calendar
month or portion thereof, and the denominator of which shall be 360.
24. FEE ON UNUSED PORTION OF CREDIT FACILITY. Borrowers
shall pay a fee on the unused portion of the Credit Facility (i.e., $80,000,000
minus the aggregate amount of the outstanding Principal Balance of the Credit
Facility and the amount available for draw under outstanding Letters of
Credit), which fee shall be payable quarterly in arrears, shall be calculated
separately for each calendar quarter or portion thereof during the term of the
Credit Facility on the basis of the actual number of days elapsed over a 360
day year and on the basis of the daily weighted average of the unused portion
of the Credit Facility, and shall equal 1/8% per annum from the date of closing
of the Credit Facility to and including March 31, 1997, and shall effective
April 1, 1997, and thereafter equal 1/4% per annum.
25. ADMINISTRATIVE FEES. Borrowers shall pay to Agent an
annual administration fee for the Credit Facility equal to $35,000 per annum,
which annual administration fee shall be payable in advance on the date of the
closing of the Credit Facility and on the first anniversary date of such
closing and shall be deemed earned in full upon payment.
26. SYNDICATION. Borrowers acknowledge that Lead Lender
intends after the date of this Commitment to sell and assign and/or transfer
direct interests in the Credit Facility held by Lead Lender and Co-Lead Lender
to one or more domestic or foreign banks, insurance companies, pension funds,
trusts or other institutional lenders as may be selected by Lead Lender in its
sole and absolute discretion and on terms and conditions satisfactory to
Initial Lenders sole and absolute discretion (any such banks, insurance
companies, pension funds, trusts or other institutional lenders to whom a
direct interest in the Credit Facility is sold and assigned and/or transferred
in accordance with the provisions of this paragraph is herein collectively
referred to together with Initial Lenders as "Lenders" and individually as a
"Lender"). Lenders will also reserve the right to sell and assign conventional
participation interests in the Credit Facility to such domestic or foreign
banks, insurance companies, pension funds, trusts or other institutional
lenders or other persons, parties or investors (including, but not limited to,
grantor trusts, owner trusts, special purpose corporations or other similar or
comparable investment vehicles, but specifically excluding REMICS, FASITs and
real estate investment trusts) as may be selected by Lenders in their sole and
absolute discretion and on terms and conditions satisfactory to Lenders in
their sole and absolute discretion (any such bank, insurance company, pension
fund, trust or other institutional lender or other person, party or investor to
whom a conventional participation interest in the Credit Facility is so sold
and assigned being herein referred to as a "Participant"). Borrowers
understand and acknowledge that (a) each Lender holding a direct interest in
the Credit Facility shall directly assume the obligation to fund the portion of
the Credit Facility held by it, and shall have sole responsibility for funding
the portion of the Credit Facility held by it, (b) Borrowers shall not
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have the right to look to any other party, including, without limitation, any
other Lender for the funding of any such portion of the Credit Facility held by
such Lender, and (c) voting rights among Lenders in respect of the Credit
Facility shall be satisfactory in all respects to Initial Lenders and will be
incorporated as part of the Co-Lenders Agreement. If a Lender shall sell a
conventional participation interest in the portion of the Credit Facility held
by it, Borrowers shall have no obligation to look to any person or party other
than such Lender for the funding of any portion of the Credit Facility in which
such Xxxxxx has sold and assigned to a Participant a conventional participation
interest, it being agreed that the provisions of the preceding sentence of this
paragraph shall not be applicable to any conventional participation interest in
the Loan which is sold and assigned by a Lender to a Participant. Borrowers
shall cooperate, and shall cause each guarantor, indemnitor and other person or
party associated or connected with the Credit Facility or the collateral
therefor to cooperate, in all respects with Lenders in connection with the sale
of direct interests and conventional participation interests in the Credit
Facility in the manner contemplated by this paragraph, and shall, in connection
therewith, execute and deliver such estoppels, certificates, instruments and
documents as may be reasonably requested by Xxxxxxx, including, without
limitation, such documents and instruments as are required to effect the
assumption by each Lender of the direct obligation to fund the portion of the
Credit Facility held by it. Borrowers grant to Lenders, and shall cause each
guarantor, indemnitor and other person or party associated or connected with
the Credit Facility or the collateral therefor to grant to Lenders, the right
to distribute on a confidential basis financial and other information
concerning Borrowers, each such guarantor, indemnitor and other person or party
and the property encumbered by the Mortgages and other pertinent information
with respect to the Credit Facility to any party who has purchased a direct
interest or conventional participation interest in the Credit Facility or who
has expressed a serious interest in purchasing a direct interest or
conventional participation interest in the Credit Facility. Borrowers shall
reimburse Lead Lender upon demand for all costs incurred by Lead Lender in
connection with the syndication of the Credit Facility (including, reasonable
attorneys' fees), it being understood that (i) Lead Lender shall, unless
otherwise agreed to by Lead Lender, have the exclusive right to effect a
syndication of direct interests in the Credit Facility, and (ii) 100% of any
such syndication by Lead Lender shall be transferred on a pari passu basis from
Initial Lenders respective commitments in the Credit Facility unless otherwise
mutually agreed by Initial Lenders to the contrary. Lead Lender shall have the
right at any time in its sole and absolute discretion and without obtaining the
prior approval or consent of Borrowers to permit other Lenders to sell and
assign and/or transfer direct interests in the Credit Facility on such terms
and conditions as shall be acceptable to Lead Lender, and otherwise on the
terms and conditions hereinabove set forth in this paragraph which are
applicable in connection with any such sale and assignment and/or transfer of a
direct interest in the Credit Facility by Lead Lender. If Borrowers shall
default in the performance of its obligation as set forth in this paragraph,
and if such default shall not be remedied by Borrowers within ten (10) days
after notice by Lead Lender, Lead Lender shall have the absolute and
unconditional right to declare the Credit Facility immediately due and payable.
Notwithstanding anything to the contrary in this paragraph, each Initial Lender
shall at all times during the term of the Credit Facility (and provided that no
default has occurred and is continuing) retain not less than a $15,000,000
direct interest in the maximum committed amount of the Credit Facility, it
being understood that nothing contained in this sentence shall be deemed to
restrict the ability of Initial Lenders to assign conventional participation
interests in their respective retained direct interests in Credit Facility.
Agent shall use its best efforts to inform Borrowers of each sale of a direct
interest in the Credit Facility promptly after the same occurs, but shall in no
event have any liability for failing to do so.
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27. MANAGEMENT. The Properties from time to time
constituting part of the collateral pool for the Credit Facility shall at all
times during the term of the Credit Facility be managed by Brandywine Realty
Services Corp. or other manager satisfactory to Lenders, under management
agreements in form and substance satisfactory to Lenders.
28. DEFAULT RATE. The default rate of interest on the Credit
Facility shall be equal to four percent (4%) over the non- default interest
rates (i.e. the LIBOR Rates and the Floating Rate) applicable to the Credit
Facility from time to time.
29. LATE PAYMENT CHARGE. If Borrowers shall fail to pay any
installment of interest on the Credit Facility on the due date thereof (TIME
BEING OF THE ESSENCE UNDER ANY AND ALL CIRCUMSTANCES), Borrowers shall pay to
Lenders as a late payment charge an amount equal to four percent(4%) of any
such past due installment.
30. SURVIVAL OF COMMITMENT. This Commitment and the Credit
Facility Documents, if and when executed and delivered, constitute and will
continue to constitute the entire agreement among Lenders and Borrowers with
respect to the Credit Facility, it being expressly understood that the terms,
covenants, conditions and provisions set forth in this Commitment shall survive
the closing of the Credit Facility, provided, however, that in the event of any
conflict or ambiguity between the terms, covenants, conditions and provisions
set forth in this Commitment and those set forth in the Credit Facility
Documents, the terms, covenants, conditions and provisions of the Credit
Facility Documents shall prevail.
31. NO JOINT VENTURE. In no event shall the transactions
contemplated by this Commitment or the Credit Facility Documents constitute, or
be deemed or construed under any fact or circumstance to constitute, a
partnership or joint venture among Lenders and Borrowers, it being agreed that
the sole relationship between Lenders and Borrowers has been, and will at all
times continue to be, that of lenders and borrowers.
32. COMMITMENT FEE. In consideration of the extension of
this Commitment, Borrowers shall pay to Initial Lenders a commitment fee equal
to $600,000 (the "Commitment Fee"), which Commitment Fee shall be paid by
Borrowers to Initial Lenders in the manner hereinafter set forth and which
Commitment Fee shall under any and all circumstances be deemed to be earned in
full upon Borrower's acceptance of this Commitment, and shall not (other than
as expressly provided to the contrary in the last sentence of this paragraph)
under any fact or circumstance be refundable in whole or in part. The entire
Commitment Fee shall be payable by Borrowers on the earlier to occur of (x) the
date of closing of the Credit Facility, and as a condition precedent thereto,
and (y) the expiration date of this Commitment (irrespective of whether such
expiration date occurs as a result of the Borrower's inability to timely
satisfy the terms and conditions of this Commitment, TIME BEING OF THE ESSENCE
UNDER ANY AND ALL CIRCUMSTANCES). The Commitment Fee shall be payable to
Initial Lenders on a pro-rata basis. Notwithstanding anything to the contrary
contained in this paragraph, the Commitment Fee shall not be payable by
Borrowers if the Offering is not successfully concluded by the Expiration Date.
33. EXPIRATION DATE OF COMMITMENT AND LOAN CLOSING. Unless
otherwise agreed by Initial Lenders in the exercise of their sole and absolute
discretion, the closing and the initial funding of the Credit Facility shall
occur not later than December 23, 1996 (the "Expiration Date"), IT BEING AGREED
THAT TIME SHALL BE OF THE ESSENCE UNDER ANY AND ALL CIRCUMSTANCES. Initial
Lenders shall have the absolute and unconditional right in the exercise of
their sole and absolute discretion, but in no event the obligation, to
unilaterally extended the Expiration Date for such period or
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periods of time (but not beyond January 31, 1997) as Initial Lenders shall deem
to be appropriate in the exercise of their sole and absolute discretion.
34. EXCULPATION. No recourse shall be had for any obligation
of BRT hereunder, or for any claim based thereon or otherwise in respect
thereof, against any past, present or future trustee, shareholder, officer or
employee of BRT, whether by virtue of any statute or rule of law, or by the
enforcement of any assessment or penalty or otherwise, all such liability being
expressly waived and released by each other party hereto.
35. ACCEPTANCE OF COMMITMENT. If the foregoing is
satisfactory, kindly indicate your acceptance of this Commitment and your
agreement to take the Credit Facility pursuant to the provisions of this
Commitment by signing and returning the enclosed copies of this Commitment to
Lead Lender and Co-Lead Lender and contemporaneously therewith wiring to Lead
Lender the sums of $100,000 (the "Good Faith Deposit") on or before the close
of business on November 8, 1996, otherwise this Commitment will be of no
further force or effect, IT BEING AGREED THAT TIME SHALL BE OF THE ESSENCE
UNDER ANY AND ALL CIRCUMSTANCES. The Good Faith Deposit shall be applied by
Initial Lenders on account of the costs and expenses which are referred to in
paragraph 1 of Exhibit A to this Commitment and which will be incurred by
Initial Lenders, which costs and expenses Borrowers acknowledge will be in
excess of $100,000, and shall not be refundable in whole or in part.
XXXXX XXXXXX MORTGAGE
CAPITAL GROUP, INC.
By: ______________________
Name: ____________________
Title: ___________________
NATIONSBANK, N.A.
By: ______________________
Name: ____________________
Title: ___________________
Accepted and Agreed this
6th day of November, 1996
BRANDYWINE REALTY TRUST
By: _________________________
Name: Xxxxxx X. Xxxxxxx
Title: President and Chief
Executive Officer
BRANDYWINE OPERATING PARTNERSHIP, L.P.
By: Brandywine Realty Trust, its
general partner
By: __________________________
Name: Xxxxxx X. Xxxxxxx
Title: President and Chief
Executive Officer
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EXHIBIT A
(GENERAL CONDITIONS)
1. Borrowers' acceptance of this Commitment shall constitute
Borrowers' unconditional agreement to pay all fees, costs, charges, taxes and
other expenses incurred by Initial Lenders in connection with this Commitment
and the funding of the Credit Facility, whether or not the Credit Facility
closes, including but not limited to reasonable fees of Initial Lenders'
respective counsel, appraisal fees, fees and expenses incurred in accounting
review; fees and charges for surveys, examination of title to the Properties
and mortgage title insurance thereon, hazard insurance, mortgage taxes,
transfer taxes and all recording fees and charges. Initial Lenders shall
cooperate with Borrowers in an attempt to minimize the aforementioned costs and
expenses, provided, however, that nothing contained herein shall require
Initial Lenders to compromise their respective underwriting standards and
requirements.
2. Lenders shall not be required to pay any brokerage fees or
commissions or other remuneration of any nature whatsoever arising from the
issuance of this Commitment or the funding of the Credit Facility, and
Borrowers agree, to defend, indemnify, and hold Lenders harmless from and
against any and all such claims in connection therewith and brought by any
party claiming a fee, commission or other compensation from, by, through or
under Borrowers or otherwise as a result of dealing or alleged dealings with
Borrowers.
3. Not less than 10 business days prior to the closing of the
Credit Facility, Initial Lenders shall have received, approved and accepted the
following:
(a) An up-to-date survey (i.e., sufficiently current
to cause the standard survey exception to be deleted from the
mortgage title insurance policies described below) of each of
the Properties constituting part of the initial collateral
pool for the Credit Facility satisfactory to Initial Lenders
and their respective counsel, which surveys shall be prepared
by surveyor(s) acceptable to Initial Lender and the Title
Company and shall be certified to the Title Company and to
Lenders. Each survey shall show dimensions and location of
all improvements, easements, rights of way, adjoining sites,
encroachments and the extent thereof, established building
lines and street lines, the distance to, and names of the
nearest intersecting streets and such other details as Initial
Lender or their respective counsel may request or require.
The surveyor(s) shall provide surveyor's certifications in
form and substance satisfactory in all respects to Initial
Lender, their respective counsel and the Title Company.
(b) Policies of mortgage title insurance insuring
the respective liens of the Mortgages at all times as first
liens on the Properties for the full amount outstanding from
time to time under the Credit Facility, subject only to those
exceptions to title as are approved by Initial Lenders and
their respective counsel, and with affirmative insurance on
such matters as Initial Lenders or their respective counsel
may require. The title policies shall be issued by a company
or companies designated by Initial Lenders (the "Title
Company"), shall be in an amount specified by Initial Lenders,
and shall be sufficient to satisfy all co-insurance
requirements, shall contain such terms and coverage as Initial
Lenders and their respective counsel shall
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deem acceptable, and shall name Lenders as the insured
parties. If required by Initial Lenders, Borrowers shall
cause to be delivered to Agent facultative reinsurance
agreements with direct access in amounts and issued by
companies satisfactory to Initial Lenders and otherwise in
form and substance satisfactory in all respects to Initial
Lenders and their respective counsel. The title policies
shall be assignable by Initial Lender in connection with any
sale, assignment or syndication of the Credit Facility, and
Borrowers shall be obligated to pay any additional insurance
premiums which may become due as the result of the assignment
of the title policies in connection with any such sale,
assignment or syndication of the Credit Facility (including,
without limitation, any premium which may become due as a
result of any endorsement to the title policy naming the
holder(s) of any interest therein subsequent to any such sale,
assignment or syndication as named insured(s) in the title
policies).
(c) Executed copies of all agreements of any nature
whatsoever affecting or relating to the use, operation or
development of the Properties, which agreements shall be
satisfactory in all respects to Initial Lenders and their
respective counsel.
(d) Evidence of compliance with all zoning,
environmental and other laws, ordinances, rules, regulations
and restrictions affecting Properties, the operation and use
of the Properties and consummation of the Credit Facility
transaction. Initial Lenders acknowledge that, in some
jurisdictions, public officials will not issue comfort letters
with respect to zoning laws and, with respect to such
jurisdictions, Initial Lenders will accept a certification of
a qualified engineer or other evidence of compliance in form
and substance satisfactory to Initial Lenders.
(e) A detailed structural and physical inspection
report prepared with respect to each Property by an inspecting
engineer acceptable to Initial Lenders, which reports shall be
dated or down dated to a date no earlier than nine (9) months
prior to the closing of the Credit Facility, shall give a
detailed description of the physical condition of each
Property and shall otherwise be in form and substance
acceptable to Initial Lenders, and shall indicate that each
Property is generally in good condition and repair.
(f) In the case of unimproved land, evidence from
the utility companies and municipalities servicing the local
in which such unimproved land is located that water, sewer,
electric, telephone and gas services are and will continue to
be available to the improvements to be constructed as part of
the Development thereof. The requirement set forth in this
subparagraph shall be satisfied as a condition precedent to
acquisition of any unimproved land (irrespective of whether
constituting part of the collateral pool for the Credit
Facility).
(g) Hazard Insurance Policies, liability insurance
policies and other insurance policies and coverage (including,
without limitation, earthquake coverage) as may be required by
Initial Lenders and in form and substance and issued by
companies satisfactory in all respects to Initial Lenders. If
a Property, or any portion thereof, is located in a Federally
designated "special flood hazard area", a flood insurance
policy shall be delivered to Agent. If no portion of a
Property is located in a Federally designated "special flood
hazard area" such fact shall
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be substantiated by a certificate in form satisfactory to
Initial Lenders from a licensed surveyor, appraiser or
professional engineer or other qualified person, party or
entity.
(h) Such security agreements, assignment or chattel
mortgages as respective counsel for Initial Lenders shall
prepare and counsel for Borrowers shall approve in order to
create, as additional security for the Credit Facility, a
first lien on all of the items of personal property owned by
Borrowers from time to time located on or in or used in
connection with the Properties, and, if the Credit Facility
transaction or any aspect thereof or any portion of the
collateral therefor comes within the scope of the Uniform
Commercial Code, such financing statements and other documents
as are required to comply with and to create and perfect a
security interest under the Uniform Commercial Code.
(i) Evidence satisfactory to Initial Lenders that
the Credit Facility and all interest, commitment fees, charges
and other sums collected and to be collected in connection
therewith will not be usurious under applicable law.
(j) Such other documents, instruments, certificates,
opinions, assurances, consents, or approvals as Initial
Lenders or their respective counsel may reasonably request or
require.
4. Initial Lenders may terminate this Commitment if, except
as may be otherwise provided herein, (i) the Credit Facility, or any other
feature of the Credit Facility transaction has been or is misrepresented by
Borrowers, in the Credit Facility application, or otherwise, (ii) any material
adverse change shall occur with respect to Borrowers, the Properties or any
other person, party or entity connected with the Credit Facility or any
collateral for the Credit Facility or other source of repayment of the Credit
Facility at any time prior to the closing of the Credit Facility, (iii)
Borrowers, or any other person, party or entity connected with the Credit
Facility or any collateral for the Credit Facility or other source of repayment
of the Credit Facility shall be insolvent or involved in any arrangement,
bankruptcy, reorganization or insolvency proceeding, or shall be the subject of
an ongoing criminal investigation or under criminal indictment, or Initial
Lenders are of the opinion that Borrowers or any such other person, party or
entity will not otherwise be able to meet their respective obligations in
respect of the Credit Facility or (iv) BRT shall cease to maintain its status
as a REIT under the Internal Revenue Code.
5. All instruments and documents required hereby or affecting
the Properties, securing the Credit Facility or relating to the organization
and formation of Borrowers and other required persons, parties and entities and
to the capacity and authority of Borrowers to take the Credit Facility and the
capacity and authority of Borrowers, and other required persons, parties and
entities to execute and deliver the Credit Facility Documents and such other
documents, instruments, certificates, opinions, assurances, consents and
approvals as Initial Lenders or their respective counsel may request and all
procedures connected therewith shall be subject to the approval, as to form and
substance, of Lead Lender, and its counsel.
6. Except as otherwise expressly provided to the contrary in
this Commitment or the Credit Facility Documents, no part of the Properties nor
any interest of any nature whatsoever therein or in the BRT/BOP affiliates
(whether legal or beneficial or whether held directly or indirectly, other than
stock of BRT and limited partnership interests in BOP issued to transferring
entities as partial consideration for the conveyance of Properties to BOP)
shall in any manner be further encumbered, sold, transferred, assigned or
conveyed, or permitted to be further encumbered,
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21
sold, transferred, assigned or conveyed without the prior consent of Xxxxxxx,
which consent in any and all circumstances may be withheld in the sole and
absolute discretion of Lender. The provisions of the foregoing sentence of
this paragraph shall apply to each and every such further encumbrance, sale,
transfer, assignment or conveyance, regardless of whether or not Lenders have
consented to, or waived by their action or inaction their rights hereunder with
respect to, any such previous further encumbrance, sale, transfer, assignment
or conveyance, and irrespective of whether such further encumbrance, sale,
transfer, assignment or conveyance is voluntary, by reason of operation of law
or is otherwise made. Not less than 75% interest in BOP shall at all times be
owned and controlled by BRT, and which interest shall at all times remain
unencumbered other than by the Credit Facility Document. The sole general
partner of BOP shall at all times be BRT and BRT shall not be permitted to
encumber, sell, transfer, assign or convey its general partner interest in the
BOP. Not less than the present interest held either directly or indirectly by
BRT and/or BOP in each BRT/BOP Affiliate which owns an Initial Property shall
at all times continue to be owned and controlled by BRT and/or BOP, which
interest in each such BRT/BOP Affiliate shall at all times remain unencumbered
except by the Credit Facility Documents. The management and day to day
operations of BRT, BOP and each BRT/BOP Affiliate shall at all times be under
the active control of Brandywine Realty Services Corp., or another management
company of comparable experience and credentials and which is otherwise
reasonably acceptable to Lenders. Nothing contained in this paragraph shall be
deemed or construed to restrict in any manner whatsoever BRT's ability to issue
any common stock or beneficial shares of beneficial interests in BRT.
7. Unless Initial Lenders shall otherwise elect, any leases
affecting the Properties shall be subject and subordinate to the lien of the
Mortgages, and shall be assigned to Lenders as additional security for the
Credit Facility. Any such leases and assignments shall be in form and
substance satisfactory, in all respects, to Initial Lenders and their
respective counsel. All leases entered into after the date of this Commitment
shall satisfy leasing parameters acceptable to Initial Lenders. Agent will
enter into subordination, non-disturbance and attornment agreements in form and
substance satisfactory to Initial Lenders with respect to any lease covering
more than 10,000 square feet of the rental space located at any Property and
which has been approved by Initial Lenders, or is otherwise entered into in
conformity with the provisions of the Credit Facility Documents.
8. If Borrowers' interest in any Property is a leasehold, all
of the terms and conditions of the ground lease creating such leasehold estate
must be approved by Initial Lenders and their respective counsel. There shall
be no encumbrance on the fee estate in any such Property which is superior to
the ground lease.
9. No statements, agreements or representations, oral or
written, which may have been made either by any Initial Lenders or by any
employee, agent or broker acting on any Initial Lenders' behalf, with respect
to this Commitment or the Credit Facility, shall be of any force or effect,
except to the extent stated in this Commitment, and all prior agreements and
representations in respect of this Commitment and the Credit Facility are
merged herein so that this Commitment shall contain the entire agreement among
Initial Lenders and Borrowers with respect to the Credit Facility. This
Commitment may not be (i) changed except by written agreement signed by
Xxxxxxxxx and Initial Lenders, or (ii) assigned by Borrowers by agreement,
operation of law, or otherwise, unless Initial Lenders shall consent in writing
to such assignment, which consent may be withheld by Agents in the exercise of
their sole and absolute discretion.
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10. INITIAL LENDERS AND BORROWERS HEREBY IRREVOCABLY AND
UNCONDITIONALLY WAIVE, AND THE GUARANTORS, THE INDEMNITORS AND ALL OTHER
PARTIES TO THE CREDIT FACILITY DOCUMENTS SHALL IRREVOCABLY AND UNCONDITIONALLY
WAIVE, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, SUIT OR COUNTERCLAIM
ARISING IN CONNECTION WITH, OUT OF OR OTHERWISE RELATING TO THIS COMMITMENT,
THE CREDIT FACILITY, THE CREDIT FACILITY DOCUMENTS OR THE TRANSACTIONS
CONTEMPLATED BY THIS COMMITMENT OR THE CREDIT FACILITY DOCUMENTS.
11. The governing law for the Credit Facility shall be the
law of the State of New York.
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23
EXHIBIT B
(DEFINITION OF CERTAIN TERMS)
ADDITIONAL PROPERTY: Any property acquired by Borrowers subsequent to the date
of the closing of the Credit Facility.
AGENT: Defined in paragraph 4 of the main body of this Commitment.
ALTERNATE BASE RATE: Defined in paragraph 1(ii) of Exhibit C to this
Commitment.
APPROVED VALUE: Defined in paragraph 10 of the main body of this Commitment.
ASSIGNMENTS OF LEASES AND RENTS: Assignments of Leases and Rents to be
executed and delivered by Borrowers to Agent, in its capacity as collateral
agent, as security for the payment of the Debt and covering on a first lien
basis all of Borrower's right, title and interest now owned or hereafter
acquired in and to all leases, rents, revenues, issues, profits and accounts
pertaining to or derived from the Properties.
BASE LIBOR RATE: Defined in paragraph 1(iv) of Exhibit C to this Commitment.
BORROWERS: Defined in paragraph 2 of the main body of this Commitment.
BOP: Defined in paragraph 2 of the main body of this Commitment.
BRT: Defined in the first paragraph of the main body of this Commitment.
BRT/BOP AFFILIATE: Any corporation, partnership, limited liability company or
other entity which is controlled by BRT and/or BOP and which owns a Property
from time to time constituting part of the collateral pool for the Credit
Facility, including, without limitation, any Initial Property.
BUSINESS DAY: Defined in paragraph 1(ii) of Exhibit C to this Commitment.
BUSINESS DAY: Defined in paragraph 1(i) of Exhibit C to this Commitment.
CAPITALIZATION RATE VALUE: Defined in paragraph 10 of the main body of this
Commitment.
CASH FLOW: Defined in paragraph 10 of the main body of the Commitment.
COLLATERAL POOL EARNINGS: Consolidated earnings of the Properties before
minority interests, interest, taxes, depreciation and amortization, as
determined on a consolidated basis and according to GAAP, for the period in
question and which earnings shall be reduced by an amount equal to the higher
of actual management fees incurred with respect to the Properties during the
period in question and an amount equal to three percent (3%) of the gross
revenues of the Properties during the period in question. Collateral Pool
Earnings will be calculated on the basis of the four complete calendar quarters
preceding the date of determination, with the exception that during 1997, the
calculation shall be based on complete calendar quarters commencing with the
calendar quarter beginning on October 1, 1996.
CO-LEAD LENDER: Defined in paragraph 4 of the main body of this Commitment.
CO-LENDERS AGREEMENT: Defined in paragraph 4 of the main body of this
Commitment.
24
COMMITMENT FEE: Defined in paragraph 32 of the main body of this Commitment.
CREDIT FACILITY: Defined in the first paragraph of the main body of this
Commitment.
CREDIT FACILITY AGREEMENT: Credit Facility Agreement to be entered into among
Borrowers and the Initial Lenders and pursuant to the provisions of which the
Credit Facility will be advanced.
CREDIT FACILITY DOCUMENTS: Collectively, the Note, the Credit Facility
Agreement, the Mortgages, the Assignments of Leases and Rents, the Stock,
Partnership and Asset Pledges, the Guaranty of Payment and all other documents
and instruments evidencing, securing or otherwise executed and delivered in
connection the Credit Facility.
CREDIT FACILITY OUTSTANDING: Defined in paragraph 8 of the main body of this
Commitment.
DEBT: All principal, interest and other sums of any nature whatsoever which
may or shall become due and payable in connection with the Credit Facility in
accordance with the provisions of the Credit Facility Documents.
DEBT-TO-TANGIBLE NET WORTH REQUIREMENT: Defined in paragraph 12(viii) of the
main body of this Commitment.
DEVELOPMENT: Any improvements which are to be constructed on any unimproved
land owned and/or controlled either directly or indirectly by Borrowers or to
be acquired by Borrowers, and any additions which are to be added to any
improved property owned and/or controlled either directly or indirectly by
Borrowers (irrespective of whether constituting part of the collateral pool for
the Credit Facility) and which additions will increase the square footage of
the improvements (rentable or otherwise) located on any such improved property.
EXPIRATION DATE: Defined in paragraph 33 of the main body of this Commitment.
FEDERAL FUNDS EFFECTIVE RATE: Defined in paragraph 1(ii) of Exhibit C to this
Commitment.
FLOATING RATE: Defined in paragraph 1(ii) of Exhibit C to this Commitment.
FIXED CHARGE COVERAGE RATIO: Defined in paragraph 12(vii) of the main body of
this Commitment.
GAAP: Generally accepting accounting principles.
GOOD FAITH DEPOSIT: Defined in paragraph 35 of the main body of this
Commitment.
GUARANTORS: Collectively, Xxxxxx Operating Partnership, L.P., Brandywine
Realty Partners and Brandywine Realty Services Corp.
GUARANTY OF PAYMENT: Guaranty of Payment to be executed and delivered by
Guarantors to Initial Lenders pursuant to which Guarantors shall jointly and
severally guaranty the payment of the Debt.
INITIAL LENDERS: Defined in paragraph 4 of the main body of this Commitment.
INITIAL PROPERTIES: The properties which are more particularly described in
Exhibit B-1 attached hereto, and which will constitute the original collateral
pool for the Credit Facility at the time of the closing thereof.
B-2
25
INTEREST PERIOD: Defined in paragraph 1(iii) of Exhibit C to this Commitment.
LEAD LENDER: Defined in paragraph 4 of the main body of this Commitment.
LENDERS: Defined in paragraph 26 of the main body of this Commitment.
LETTERS OF CREDIT: Defined in paragraph 8 of the main body of this Commitment.
LIBOR RATE: Defined in paragraph 1(iv) of Exhibit C to this Commitment.
LOAN TO VALUE REQUIREMENT: Defined in paragraph 10 of the main body of this
Commitment.
MINIMUM DEBT SERVICE COVERAGE RATIO: Defined in paragraph 12(v) of the main
body of this Commitment.
MORTGAGES: Fully cross defaulted and cross collateralized blanket mortgages
and deeds of trust constituting a first lien on the fee and leasehold estates
of Borrowers in all Properties constituting part of the collateral pool for the
Credit Facility from time to time to be executed and delivered by Borrowers to
or for the benefit of Agent, acting in its capacity as collateral agent for the
Credit Facility, and securing payment in full of the Debt.
NB: Defined in the first paragraph of the main body of this Commitment.
NOTE: Promissory Note(s) in the aggregate principal amount of the Credit
Facility to be executed and delivery by Borrowers to Initial Lenders and
evidencing the portions of the Credit Facility respectively held by the Initial
Lenders.
OFFERING: Defined in paragraph 3 of the main body of this Commitment.
OTHER DEBT: Defined in paragraph 12(iv) of the main body of this Commitment.
OTHER PERMITTED DEBT: Defined in paragraph 12(iv) of the main body of this
Commitment.
OTHER SECURED DEBT: Defined in paragraph 12(iv) of the main body of this
Commitment.
OTHER UNSECURED DEBT: Defined in paragraph 12(iv) of the main body of this
Commitment.
PARTICIPANT: Defined in paragraph 26 of the main body of this Commitment.
PRIME RATE: Defined in paragraph 1(ii) of Exhibit C to this Commitment.
PRINCIPAL BALANCE: Defined in paragraph 1(v) of Exhibit C to this Commitment.
PROPERTIES: The properties from time to time constituting part of the
collateral pool for the Credit Facility.
REGISTRATION STATEMENT: Defined in paragraph 3 of the main body of this
Commitment.
RENOVATION: Any renovation to an improved property owned and/or controlled
either directly or indirectly by Borrowers (irrespective of whether
constituting part of the collateral pool for the Credit Facility) which does
not constitute an additional Development of such property.
RE-SET DATE: Defined in paragraph 1(vi) of Exhibit C to this Commitment.
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26
ROLL OVER DATE: Defined in paragraph 1(vii) of Exhibit C to this Commitment.
SBMCG: Defined in the first paragraph of the main body of this Commitment.
STOCK, PARTNERSHIP AND ASSET PLEDGES: Comprehensive first priority pledges of
all of the stock, partnership interests, membership interests and other
interests owned and/or controlled either directly or indirectly by Borrowers in
any corporation, partnership, limited liability company or other entity, and in
all other assets (whether tangible or intangible) owned and/or controlled by
either directly or indirectly by Borrowers. Notwithstanding anything to
contrary contained in this definition, it is agreed that the Stock, Partnership
and Asset Pledges insofar as they may pertain to a property which does not
constitute part of the collateral pool for the Credit Facility and which is
encumbered by Other Secured Debt incurred in compliance with the provisions of
this Commitment, shall be subject and subordinate to the liens securing such
Other Secured Debt.
SUPPLEMENTAL DEBT SERVICE COVERAGE RATIO: Defined in paragraph 12(vi) of the
main body of this Commitment.
TANGIBLE NET WORTH: Defined in paragraph 12(viii) of the main body of this
Commitment.
TELERATE PAGE 3750: Defined in paragraph 1(iv) of Exhibit C to this
Commitment.
TITLE COMPANY: Defined in paragraph 3(b) of Exhibit A to this Commitment.
TOTAL EARNINGS: Consolidated earnings of Borrowers before minority interests,
interest, taxes, depreciation and amortization, as determined on a consolidated
basis and according to GAAP, for the period in question. Total Earnings will
be calculated on the basis of the four complete calendar quarters preceding the
date of determination, with the exception that during 1997, the calculation
shall be based on complete calendar quarters commencing with the calendar
quarter beginning on October 1, 1996.
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27
EXHIBIT B-2
(DESCRIPTION OF INITIAL PROPERTIES)
28
EXHIBIT C
(INTEREST RATE PROVISIONS)
1. The following terms as used in this Exhibit shall have the
following meanings:
(i) The term "Business Day" shall mean any day on
which Agent is open for business in Charlotte, North Carolina
and on which commercial banks in the City of London, England
are open for dealings in U.S. dollar deposits in the London
Interbank Market, provided, however, that during any period of
time during which the entire Principal Balance is bearing
interest at the Floating Rate in accordance with the
provisions of this Exhibit hereinafter set forth, the term
"Business Day" shall mean any day on which Agent is open for
business in Charlotte, North Carolina.
(ii) The term "Floating Rate" shall mean a rate per
annum equal to 25 basis points plus the greater on a daily
basis of the Prime Rate, or the Alternate Base Rate. The term
"Prime Rate" shall mean such rate of interest as is publicly
announced by NB or other comparable bank designated by Agent
at its principal office from time to time as its prime rate.
Any change in the Prime Rate shall be effective on the date
such change is announced by NB or other comparable bank
designated by Agent. The term "Alternate Base Rate" shall
mean a rate per annum equal to 50 basis points plus the
Federal Funds Effective Rate from time to time. The "Federal
Funds Effective Rate" shall to the extent necessary be
determined by Agent separately for each day during the term of
the Credit Facility and shall for each such day be a rate per
annum equal to the weighted average of the rates on overnight
Federal funds transactions with members of the Federal Reserve
System arranged by Federal funds brokers, as published for
each such day (or if any such day is not a business day, for
the next immediately preceding business day) by the Federal
Reserve Bank of New York, or if the weighted average of such
rates is not so published for any such day which is a business
day, the average of the quotations for any such day on such
transactions received by Agent from three Federal funds
brokers of recognized standing selected by Agent. The term
"business day" as used in the preceding sentence of this
subparagraph shall mean any day on which Agent is open for
business in Charlotte, North Carolina. Any change in the
Floating Rate as a result of a change in the Prime Rate or the
Federal Funds Effective Rate shall be effective on the
effective date of any such change in the Prime Rate or the
Federal Funds Effective Rate, as the case may be. If for any
reason Agent shall have determined (which determination shall
be conclusive and binding on Borrowers absent manifest error)
that Agent is unable to ascertain the Federal Funds Effective
Rate for any reason, including, without limitation, the
inability or failure of to obtain sufficient bids for the
purposes of determining the Federal Funds Effective Rate in
accordance with the provisions of this subparagraph, the
Floating Rate shall be determined on the basis of the Prime
Rate until the circumstances giving rise to such inability no
longer exist. The Floating Rate shall be calculated for the
actual number of days elapsed on the basis of a 360 day year.
Each determination of the Floating Rate shall be made by Agent
and shall be conclusive and binding upon Borrowers absent
manifest error.
(iii) The term "Interest Period" shall mean the
period of time during which a particular LIBOR Rate will be
applicable to
29
all or any particular portion of the Principal Balance in
accordance with the provisions of this Exhibit, it being
agreed that each Interest Period shall commence and shall
terminate on a Re-Set Date, each Interest Period shall be of a
duration of either one month, two months or three months, as
selected by Borrowers, or otherwise determined, in accordance
with the provisions hereof, no Interest Period shall extend
beyond the maturity date of the Credit Facility, and the
portion of the Principal Balance with respect to which a
particular Interest Period is applicable will bear interest at
the LIBOR Rate pertaining to such Interest Period from and
including the first day of such Interest Period to, but not
including, the last day of such Interest Period.
(iv) The "LIBOR Rate" applicable to a particular
Interest Period shall mean a rate per annum equal to 175 basis
points plus the Base LIBOR Rate applicable to such Interest
Period. The "Base LIBOR Rate" applicable to a particular
Interest Period shall mean a rate per annum equal to the rate
for U.S. dollar deposits with maturities comparable to such
Interest Period which appears on Telerate Page 3750 as of
11:00 a.m., London time, two (2) Business Days prior to the
commencement of such Interest Period, provided, however, that
if such rate does not appear on Telerate Page 3750, the "Base
LIBOR Rate" applicable to such Interest Period shall mean a
rate per annum equal to the rate at which U.S. dollar deposits
in an amount approximately equal to the Principal Balance (or
the portion thereof which will bear interest at a LIBOR Rate
during the Interest Period to which such Base LIBOR Rate is
applicable in accordance with the provisions of this Exhibit),
and with maturities comparable to the last day of the Interest
Period with respect to which such Base LIBOR Rate is
applicable, are offered in immediately available funds in the
London Interbank Market to the London office of NB or other
comparable bank designated by Agent by leading banks in the
Eurodollar market at 11:00 a.m., London time, two (2) Business
Days prior to the commencement of the Interest Period to which
such Base LIBOR Rate is applicable. The term "Telerate Page
3750" means the display designated as "Page 3750" on the
Associated Press-Dow Xxxxx Telerate Service (or such other
page as may replace Page 3750 on the Associated Press-Dow
Xxxxx Telerate Service or such other service as may be
nominated by the British Bankers' Association as the
information vendor for the purpose of displaying British
Bankers' Association interest settlement rates for U.S. dollar
deposits). Any Base LIBOR Rate determined on the basis of the
rate displayed on Telerate Page 3750 in accordance with the
foregoing provisions of this subparagraph shall be subject to
corrections, if any, made in such rate and displayed by the
Associated Press-Dow Xxxxx Telerate Service within one hour of
the time when such rate is first displayed by such Service.
Each determination of the LIBOR Rate and the Base LIBOR Rate
applicable to a particular Interest Period shall be made by
Agent and shall be conclusive and binding upon Borrowers
absent manifest error. Interest at the applicable LIBOR Rate
from time to time shall be calculated for the actual number of
days elapsed on the basis of a 360-day year.
(v) The term "Principal Balance" shall mean the
outstanding principal balance of the Credit Facility from time
to time.
(vi) The term "Re-Set Date" shall mean consecutive
numerically corresponding dates during the term of the Credit
Facility, the first of which Re-Set Dates shall occur on a
Business Day to be designated by Agent which Business Day
shall
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30
not be earlier than five (5) Business Days following the date
of the initial funding of the Credit Facility or later than
the first Business Day of the calendar month following the
date of the initial funding of the Credit Facility and which
is five (5) Business Days or more after the date of such
funding. Each subsequent Re-Set Date during the term of the
Credit Facility shall be the date in each subsequent calendar
month during the term of the Credit Facility which numerically
corresponds to the first Re-Set Date during the term of the
Credit Facility, provided, however, that if the numerically
corresponding date in any such subsequent calendar month
during the term of the Credit Facility shall not be a Business
Day, the Re-Set Date for such calendar month shall be the next
succeeding Business Day, unless the next such succeeding
Business Day would fall in the next calendar month, in which
event the Re-Set Date for such calendar month shall be the
next preceding Business Day. For the purposes of this Exhibit
the period of time between any two consecutive Re-Set Dates
during the term of the Credit Facility shall be deemed to be a
period of one month. At the present time it is anticipated
that the Re-Set Date will be timed to correspond to the first
day of each calendar month during the term of the Credit
Facility.
(vii) The "Roll Over Date" applicable to a
particular Interest Period shall mean the last day of such
Interest Period.
2. From and including the date of the initial advance of the
Credit Facility pursuant to the provisions of this Commitment to, but not
including, the first Re-Set Date during the term of the Credit Facility, the
entire Principal Balance shall bear interest at the Floating Rate. From and
including the first Re-Set Date during the term of the Credit Facility to, but
not including, the last Re-Set Date during the term of the Credit Facility, the
entire Principal Balance shall, except as specifically provided to the contrary
in this paragraph and in paragraph 4 of this Exhibit, bear interest at one or
more of the available LIBOR Rates. The available LIBOR Rates shall consist of
a one-month LIBOR Rate, a two-month LIBOR Rate and a three-month LIBOR Rate
determined in accordance with the provisions of paragraph 1(iv) and paragraph 4
of this Exhibit, it being agreed that (i) Borrowers shall have the right to
select the LIBOR Rate or Rates from time to time applicable to the Principal
Balance, (ii) Borrowers shall not have the right to select a two month or a
three-month LIBOR Rate prior to the expiration of 120 days after the date of
closing of the Credit Facility unless Lead Lenders shall otherwise agree to the
contrary in their sole and absolute discretion, and (iii) each LIBOR Rate from
time to time so selected by Borrowers shall take effect and shall end on a
Re-Set Date. Except as hereinafter specifically provided to the contrary in
this paragraph, Borrowers shall not have the right to select more than one
LIBOR Rate to take effect on any given Re-Set Date. If Borrowers shall not
select a LIBOR Rate by written notice given to Agent at least five (5) Business
Days prior to a particular Re-Set Date, the LIBOR Rate for such Re-Set Date
shall be a one-month LIBOR Rate. The LIBOR Rate selected by Borrowers or
otherwise designated for a particular Re-Set Date in accordance with the
foregoing provisions of this paragraph, shall be in effect from and including
the first day of the Interest Period to which such LIBOR Rate pertains to, but
not including, the Roll Over Date applicable to such Interest Period, and shall
(subject to the following provisions of this paragraph) be applicable to the
entire portion of the Principal Balance with respect to which a LIBOR Rate or
Rates are due to be re-set on such Re-Set Date, as well as to any portion of
the Principal Balance bearing interest at a Floating Rate and any advance of
the Credit Facility scheduled to be made on such Re-Set Date. Notwithstanding
the foregoing provisions of this paragraph, any advance or advances of the
Credit Facility which are drawn down and which in the aggregate are less than
$2,000,000, or which are drawn down other than
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31
on a Re-Set Date in accordance with the provisions of paragraph 3 of this
Exhibit, will bear interest at the Floating Rate from and including the date
upon which the same are drawn down to, but not including, the earlier to occur
of the first Re-Set Date on which a LIBOR Rate applicable to the outstanding
Principal Balance is due to be re-set, or the first Re-Set Date on which the
aggregate portion of the Principal Balance bearing interest at the Floating
Rate is equal to or is in excess of $2,000,000, whereupon the interest rate
applicable to such advance or advances or such portion of the Principal Balance
bearing interest at the Floating Rate will be converted to a LIBOR Rate in
accordance with the provisions of this paragraph. From and after the date upon
which and for so long as the Principal Balance is equal to or in excess of
$4,000,000, Borrowers shall, subject to the foregoing provisions of this
paragraph, have the right to select up to, but not in excess of, two LIBOR
Rates to take effect on any given Re-Set Date by written notice given to Agent
at least five (5) Business Days prior to the applicable Re-Set Date in which
Borrowers shall specify the two LIBOR Rates so selected by Borrowers and the
respective portions of the Principal Balance (inclusive of any advance of the
Credit Facility scheduled to be made on such Re-Set Date) to which such LIBOR
Rates are to respectively pertain, it being agreed that the minimum portion of
the Principal Balance to which any such LIBOR Rate may pertain shall be equal
to at least $2,000,000, and each such LIBOR Rate so selected by Borrowers shall
be applicable to the portion of the Principal Balance to which it pertains from
and including the first day of the applicable Interest Period to, but not
including, the Roll Over Date applicable to such Interest Period. If the
maturity date of the Credit Facility is not a Re-Set Date, the entire Principal
Balance shall at the election of Lenders either bear interest at the Floating
Rate or at a one month LIBOR Rate determined in accordance with the provisions
of paragraph 1(iv) and paragraph 4 of this Exhibit from and including the last
Re-Set Date prior to the maturity date of the Credit Facility to, but not
including, the maturity date of the Credit Facility, it being agreed that any
such one-month LIBOR Rate shall be determined on the basis of an assumed
Interest Period of one month.
3. Borrowers shall not have the right (other than as provided
in the next sentence) to obtain more than one advance per month under the
Credit Facility. Each advance under the Credit Facility shall be equal to or
in excess of $1,000,000 and shall be made upon not less than five (5) Business
Days prior written request therefor from Borrowers to Agent. Notwithstanding
the foregoing, Borrowers shall have the right to obtain more than one advance
under the Credit Facility per month if such additional advance or advances are
being made pursuant to this Commitment in connection with the acquisition of
Additional Property. Any such advance which is not made on a Re-Set Date shall
bear interest at the Floating Rate until the next occurring Re-Set Date, unless
such next occurring Re-Set Date is less than five (5) Business Days from the
date of such advance in which event such advance shall bear interest at the
Floating Rate until the second Re-Set Date following the date of such advance,
at which time the interest rate applicable to such advance shall, except as
otherwise provided to the contrary in this Exhibit, be converted to a LIBOR
Rate.
4. Agent shall, as soon as practicable after 9:00 a.m., New
York City time, two (2) Business Days prior to the commencement of a particular
Interest Period, determine the LIBOR Rate which will be in effect during such
Interest Period and inform Borrowers of the LIBOR Rate so determined (which
determination shall be conclusive and binding upon Borrowers absent manifest
error). In the event, and on each occasion, that on the day two (2) Business
Days prior to the commencement of a particular Interest Period, Agent shall
have determined in good faith (which determination shall be conclusive and
binding upon Borrowers) that U.S. dollar deposits in an amount approximately
equal to the portion of the Principal Balance which is to bear interest at a
particular LIBOR Rate during such particular Interest Period in accordance with
the provisions of this Exhibit are not generally available at such time
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in the London Interbank Market, or reasonable means do not exist for
ascertaining a LIBOR Rate for such particular Interest Period, Agent shall so
notify Borrowers and the interest rate applicable to the portion of the
Principal Balance with respect to which such LIBOR Rate was to pertain shall
automatically be converted to the Floating Rate as of the next occurring Re-Set
Date, it being agreed that the Floating Rate shall remain in effect thereafter
with respect to such portion of the Principal Balance unless and until Agent
shall have determined in good faith (which determination shall be conclusive
and binding upon Borrowers) that the aforesaid circumstances no longer exist,
whereupon the interest rate applicable to such portion of the Principal Balance
shall be converted back to a LIBOR Rate determined in the manner hereinabove
set forth in this Exhibit effective as of the first Re-Set Date which occurs
ten (10) Business Days or more after such good faith determination by Agent.
If any change in any law or regulation or in the interpretation thereof by any
governmental authority charged with the administration or interpretation
thereof shall make it unlawful for Lenders to make or maintain LIBOR Rates with
respect to the Principal Balance or any portion thereof or to fund the
Principal Balance or any portion thereof at LIBOR Rates in the London Interbank
Market or to give effect to their obligations as contemplated by this
Commitment, then, upon notice by Agent to Borrowers, the interest rate
applicable to the entire Principal Balance shall be automatically converted to
the Floating Rate, it being agreed that any notice given by Agent to Borrowers
pursuant to this sentence shall, if lawful, be effective insofar as it pertains
to any particular portion of the Principal Balance bearing interest at a
particular LIBOR Rate on the last day of the then existing Interest Period
pertaining to such particular portion of the Principal Balance, or if not
lawful, shall be effective immediately upon being given by Agent to Borrowers,
and that the Floating Rate shall remain in effect thereafter with respect to
such particular portion of the Principal Balance unless and until Agent shall
have determined in good faith (which determination shall be conclusive and
binding upon Borrower) that the aforesaid circumstances no longer exist,
whereupon the interest rate applicable to such portion of the Principal Balance
shall be converted to a LIBOR Rate determined in the manner hereinabove set
forth in this Exhibit effective as of the first Re-Set Date which occurs ten
(10) Business Days or more after such good faith determination by Agent. If
the interest rate applicable to any particular portion of the Principal Balance
is converted from a LIBOR Rate to the Floating Rate on a date other than a Roll
Over Date in accordance with the provisions of the preceding sentence,
Borrowers shall pay to Agent on demand an amount equal to the prepayment
premium, if any, which would have been due pursuant to the provisions of this
Exhibit hereinafter set forth if the portion of the Principal Balance bearing
interest at such LIBOR Rate was prepaid in full on the date of such conversion.
5. Borrowers recognizes that the cost to Lenders of making or
maintaining LIBOR Rates with respect to the Principal Balance or any portion
thereof may fluctuate and Borrowers agrees to pay Agent within ten (10) days
after demand by Agent an additional amount or amounts as Agent shall reasonably
determine will compensate Lenders for actual costs incurred by Lenders in
maintaining LIBOR Rates on the Principal Balance or any portion thereof as a
result of:
(i) the imposition after the date of this Commitment
of, or changes after the date of this Commitment in, or the
actual maintenance after the date of this Commitment by any
Lender of, reserves in accordance with the reserve
requirements now or hereafter promulgated by the Board of
Governors of the Federal Reserve System of the United States,
including, but not limited to, any reserve on Eurocurrency
Liabilities as defined in Regulation D of the Board of
Governors of the Federal Reserve System of the United States
at the ratios provided in such Regulation from time to time,
it being agreed that the portion of
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the Principal Balance bearing interest at LIBOR Rates from
time to time in accordance with the provisions of this Exhibit
shall be deemed to be funded with obligations that constitute
Eurocurrency Liabilities, as defined by such Regulation; or
(ii) any change, after the date of this Commitment,
in applicable law, rule or regulation or in the interpretation
or administration thereof by any domestic or foreign
governmental authority charged with the interpretation or
administration thereof (whether or not having the force of
law) or by any domestic or foreign court changing the basis of
taxation of payments to any Lender of the Principal Balance or
interest on the Principal Balance or any portion thereof at a
LIBOR Rate or any other fees or amounts payable in respect of
the Credit Facility (other than taxes imposed on all or any
portion of the overall net income of any such Lender by the
Federal government or by the state or country of incorporation
or domicile of any such Lender or by any political subdivision
or taxing authority of the Federal government or any such
state or country), or imposing, modifying or applying any
reserve, special deposit or similar requirement against assets
of, deposits with or for the account of, credit extended by,
or any other acquisition of funds for loans by any such Lender
or imposing on any such Lender or on the London Interbank
Market any other condition affecting the Credit Facility or
the portion of the Principal Balance bearing interest at LIBOR
Rates so as to increase the cost to any such Lender of making
or maintaining LIBOR Rates with respect to the Principal
Balance or any portion thereof or to reduce the amount of any
sum received or receivable by any such Lender with respect to
the Credit Facility (whether of principal, interest or
otherwise), by an amount deemed by Agent in good faith to be
material, but without duplication for payments required under
subparagraph (i) above.
Any amount or amounts payable by Borrowers to Agent pursuant to subparagraph
(i) or (ii) above shall be paid by Borrowers to Agent within ten (10) days of
receipt by Borrowers from Agent of a statement setting forth the amount or
amounts due and the basis for the determination from time to time of such
amount or amounts, which statement shall be conclusive and binding upon
Borrowers absent manifest error. Failure on the part of Agent to demand
compensation for any increased costs in any Interest Period shall not
constitute a waiver of Agent's right to demand compensation for any increased
costs incurred during any such Interest Period or in any other subsequent or
prior Interest Period, provided, however, that if Agent shall fail to notify
Borrower of the occurrence of any event described in subparagraph (i) or (ii)
above within one hundred eighty (180) days after the occurrence of such event,
Borrowers' liability for any increased costs incurred by any such Lender, as
the result of the occurrence of such event shall be limited to increased costs
attributable to the period occurring subsequent to the date upon which Agent
shall actually notify Borrowers of the occurrence of such event.
6. Borrowers shall indemnify each Lender against any loss or
expense that any such Lender may sustain or incur as a consequence of any
failure by Borrowers to take down all or any portion of any advance of the
Credit Facility (including, without limitation, the initial advance of the
Credit Facility) on the date Borrowers requested that such advance be made in
accordance with the provisions of this Commitment or as a consequence of any
default by Borrowers in the payment of any portion of the Principal Balance
bearing interest at a LIBOR Rate, or any part thereof or interest accrued
thereon at a LIBOR Rate, as and when due and payable, or the occurrence of any
event of default specified in the Credit Facility Document, including, but not
limited to, any loss or expense actually sustained or incurred by any such
Lender in liquidating or reemploying deposits from third parties acquired to
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34
effect or maintain a LIBOR Rate with respect to all or any portion of the
Principal Balance or any advance of the Credit Facility requested or scheduled
to be made pursuant to the provisions of this Commitment. Agent shall provide
to Borrowers a statement explaining the amount of any such loss or expense,
which statement shall be conclusive and binding upon Borrowers absent manifest
error.
7. If after the date of this Commitment, Agent shall have
determined that the adoption after the date of this Commitment of any law,
rule, regulation or guideline regarding capital adequacy, or any change
therein, or any change in any of the foregoing or in the interpretation or
administration of any of the foregoing by any domestic or foreign governmental
authority, central bank or comparable agency charged with the interpretation or
administration thereof, or compliance by any Lender (or any lending office of
any Lender), or by any Lender's holding company, as the case may be, with any
request or directive regarding capital adequacy (whether or not having the
force of law) of any such authority, central bank or comparable agency, has or
would have the effect of reducing the rate of return on any Lender's capital or
on the capital of any Lender's holding company, as the case may be, as a
consequence of any Lender's obligations with respect to the Credit Facility to
a level below that which any such Lender or any such Lender's holding company,
as the case may be, could have achieved but for such adoption, change or
compliance (taking into consideration any such Lender's or any such Xxxxxx's
holding company's policies, as the case may be, with respect to capital
adequacy) by an amount deemed by Agent to be material, then from time to time,
Borrowers shall pay to Agent such additional amount or amounts as will
compensate any such Lender or any such Xxxxxx's holding company, as the case
may be, for such reduction. Any amount or amounts payable by Borrowers to
Agent in accordance with the provisions of this paragraph shall be paid by
Borrowers to Agent within ten (10) days of receipt by Borrowers from Agent of a
statement setting forth the amount or amounts due and the basis for the
determination from time to time of such amount or amounts, which statement
shall be conclusive and binding upon Borrowers absent manifest error.
8. Subject to the following provisions of this paragraph,
Borrowers shall have the right to prepay the Principal Balance in whole, or in
part, upon not less than five (5) Business Days' prior written irrevocable
notice to Agent specifying the intended date of prepayment, which date of
prepayment shall not be more than fifteen (15) days after the date of such
notice, and the amount to be prepaid and upon payment of all interest and other
sums then due and payable pursuant to the provisions of the Credit Facility
Document. The portion of the Principal Balance specified in any such
irrevocable notice of prepayment shall, be absolutely and unconditionally due
and payable on the date specified in such notice. No prepayment premium shall
be payable if the portion of the Principal Balance being prepaid is bearing
interest on the date of prepayment at the Floating Rate in accordance with the
provisions of this Exhibit, or if such prepayment occurs on the Roll Over Date
pertaining to the portion of the Principal Balance being prepaid. If any
particular portion of the Principal Balance being prepaid is bearing interest
at a particular LIBOR Rate and such prepayment does not occur on the Roll Over
Date pertaining to the portion of the Principal Balance being prepaid,
Borrowers shall pay to Agent contemporaneously with such prepayment a
prepayment premium equal to the portion of the Principal Balance being prepaid,
multiplied by a per annum interest rate equal to the difference between the
Base LIBOR Rate applicable to the portion of the Principal Balance being
prepaid and the 360-day equivalent interest yield, as adjusted to reflect
interest payments on a monthly basis (hereinafter called the Reinvestment
Rate), on any U.S. Government Treasury Obligations selected by Agent, in its
sole and absolute discretion, in an aggregate amount comparable to the portion
of the Principal Balance being prepaid, and with maturities comparable to the
Roll Over Date applicable to the portion of the Principal Balance being
prepaid, calculated over a period of time from and including the
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35
date of prepayment to, but not including, the Roll Over Date applicable to the
portion of the Principal Balance being prepaid. If the Base LIBOR Rate
applicable to the portion of the Principal Balance being prepaid is equal to or
less than the Reinvestment Rate no prepayment premium shall be due. No
prepayment premium payable under this paragraph shall in any event or under any
circumstance be deemed or construed to be a penalty. If a portion of the
Principal Balance is bearing interest at a LIBOR Rate or Rates and a portion of
the Principal Balance is bearing interest at the Floating Rate in accordance
with the provisions of this Exhibit on the date of a partial prepayment of the
Principal Balance in accordance with the provisions of this paragraph, such
partial prepayment shall be applied to the respective portions of the Principal
Balance bearing interest at such LIBOR Rate or Rates and the Floating Rate in
such order and manner so as to minimize the prepayment premium due with respect
thereto as calculated pursuant to the provisions of this paragraph. Any
payment of the Principal Balance after the Credit Facility has been declared to
be immediately due and payable in accordance with the provisions of the Credit
Facility Documents, or after a foreclosure of the Mortgages has been commenced
as a result of a default under the Credit Facility Documents, shall be deemed
to be a voluntary prepayment for all purposes of this paragraph and a
prepayment premium calculated pursuant to the provisions of this paragraph
shall be payable with respect thereto based upon the Base LIBOR Rate or Rates
applicable to the Principal Balance immediately prior to such default,
declaration or commencement. Agent shall deliver to Borrowers a statement
setting forth the amount and basis of determination of the prepayment premium,
if any, due in connection with a prepayment of the Principal Balance in
accordance with the provisions of this paragraph, it being agreed that (a) the
calculation of such prepayment premium may be based on any U.S. Government
Treasury Obligations selected by Agent, in its sole and absolute discretion,
(b) no Lender shall be obligated or required to have actually reinvested the
prepaid portion of the Principal Balance in any such U.S. Government Treasury
Obligations as a condition precedent to Borrowers being obligated to pay a
prepayment premium calculated in accordance with the provisions of this
paragraph, and (c) Borrowers shall not have the right to question the
correctness of any such statement or the method of calculation set forth
therein in the absence of manifest error. Borrowers shall, upon receipt of
such statement and contemporaneously with any such prepayment of the Principal
Balance, remit to Agent the prepayment premium, if any, due in connection
therewith, as calculated pursuant to the provisions of this paragraph. Agent
shall not be obligated to accept any prepayment of the Principal Balance unless
it is accompanied by the prepayment premium, if any, due in connection
therewith as calculated pursuant to the provisions of this paragraph. Any
partial prepayment of the Principal Balance in accordance with the provisions
of this paragraph shall be in a minimum amount of at least $1,000,000 and shall
be in an even multiple of $100,000. The provisions of this paragraph shall be
applicable to any prepayment of the Principal Balance in whole or in part, it
being agreed that any payment of the Principal Balance, in whole or in part, in
connection with the sale or refinancing of and release of any Property in
accordance with the provisions of this Commitment or otherwise to maintain
compliance with the Loan to Value Requirement, the Minimum Debt Service
Coverage Ratio, the Supplemental Debt Service Coverage Ratio, the Fixed Charge
Coverage Requirement or the Debt-to-Tangible Net Worth Requirement, any other
provision of this Commitment or otherwise in accordance with the provisions of
this Commitment or the Credit Facility Documents, shall be deemed to be a
voluntary prepayment for the purposes of this paragraph and a prepayment
premium calculated pursuant to the provisions of this paragraph shall be
payable with respect thereto.
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