TERM LOAN AGREEMENT

 

Exhibit 10.1

TERM LOAN AGREEMENT

among

FRANKLIN STREET PROPERTIES CORP.

FSP HOLDINGS LLC

FSP INVESTMENTS LLC

FSP PROPERTY MANAGEMENT LLC

FSP PROTECTIVE TRS CORP.

FSP HILLVIEW CENTER LIMITED PARTNERSHIP

FSP MONTAGUE BUSINESS CENTER CORP.

FSP GREENWOOD PLAZA CORP.

FSP 380 INTERLOCKEN CORP.

FSP 390 INTERLOCKEN LLC

FSP BLUE LAGOON DRIVE LLC

FSP ONE OVERTON PARK LLC

FSP NORTHWEST POINT LLC

FSP RIVER CROSSING LLC

FSP BOLLMAN PLACE LIMITED PARTNERSHIP

FSP SOUTHFIELD CENTRE LIMITED PARTNERSHIP

FSP FOREST PARK IV NC LIMITED PARTNERSHIP

FSP PARK SENECA LIMITED PARTNERSHIP

FSP ADDISON CIRCLE LIMITED PARTNERSHIP

FSP COLLINS CROSSING LIMITED PARTNERSHIP

FSP ELDRIDGE GREEN LIMITED PARTNERSHIP

FSP LIBERTY PLAZA LIMITED PARTNERSHIP

FSP PARK TEN LIMITED PARTNERSHIP

FSP WILLOW BEND OFFICE CENTER LIMITED PARTNERSHIP

FSP INNSBROOK CORP.

FSP EAST BALTIMORE STREET LLC

FSP PARK TEN PHASE II LIMITED PARTNERSHIP

and

OTHER BORROWERS WHICH MAY BECOME

PARTIES TO THIS AGREEMENT

and

RBS CITIZENS, NATIONAL ASSOCIATION (“Agent”)

BANK OF AMERICA, N.A. (“Co-Agent”)

WACHOVIA BANK, NATIONAL ASSOCIATION

and

Other Lenders, if any, which may become parties to this Agreement (with Citizens, BOA and Wachovia, the “Lenders”)

October 15, 2008

 

 

TABLE OF CONTENTS

 

 

 

 

 

 

 

 

 

 

EXHIBITS

Exhibit A – Joinder Agreement

Exhibit E – Assignment and Acceptance

Exhibit F – Lenders’ Commitment

Exhibit H - Unencumbered Pool Properties

 

 

SCHEDULES

Schedule 1 - Definitions

Schedule 2 – List of Borrowers

Schedule 3 – Loan Request Form

Schedule 4 - Subsidiaries

 

 

TERM LOAN AGREEMENT

This Term Loan Agreement (the “Loan Agreement”) is made as of the 15th day of October, 2008, by and among FRANKLIN STREET PROPERTIES CORP. (“FSP”) with a principal place of business at 401 Edgewater Place, Suite 200, Wakefield, Massachusetts 01880-6210 and the Wholly Owned Subsidiaries that are listed on Schedule 2 attached hereto (which Schedule 2 may be amended from time to time in accordance with the terms hereof) (collectively, the “Borrower”) organized under the laws of the states noted therein, and RBS CITIZENS, NATIONAL ASSOCIATION, with a place of business at 28 State Street, Boston, Massachusetts 02109, BANK OF AMERICA, N.A., WACHOVIA BANK, NATIONAL ASSOCIATION, and the other lending institutions which may become parties to this Agreement pursuant to Section 18.15 hereof (the “Lenders”) and RBS CITIZENS, NATIONAL ASSOCIATION as agent for itself and such other lending institutions (the “Agent”).

1.            BACKGROUND

1.1            Definitions .  This Agreement and other Loan Documents utilize various defined terms which shall have the meanings set forth in Schedule 1 attached to this Agreement or, if separately defined elsewhere herein or in any other Loan Documents, as set forth in such separate definitions.  Unless otherwise specified in the Loan Documents, the definitions contained in this Agreement shall supercede any inconsistent definitions contained in the Note or any other Loan Document and in the event of any inconsistencies between this Agreement, the Note or any other Loan Document, this Agreement shall control.

1.2            Borrower .  Each entity comprising the Borrower as of the date hereof is as described on Schedule 2 and organized under the laws of the states noted therein.   Schedule 2 shall be deemed updated (a) with respect to any Acquisitions of individual properties by a Wholly Owned Subsidiary, to include any such Wholly Owned Subsidiary at the time any such Wholly Owned Subsidiary executes and delivers Joinder Documents to the Agent pursuant to Section 5 hereof, and (b) with respect to any disposition of individual properties by any Wholly Owned Subsidiary, to exclude such Wholly Owned Subsidiary at the time Borrower delivers the notice and certification described in Section 9.15 hereof.

1.3            Use of Proceeds .  Borrower has applied to Lenders to establish a term facility in the maximum amount of $75,000,000.00, the proceeds of which are to be used to reduce the Borrower’s outstanding balance under the Revolver Loan and/or for property acquisitions.

1.4            Facility .  Subject to all of the terms, conditions and provisions of this Loan Agreement, and of the agreements and instruments referred to herein, each of the Lenders agree severally to establish the Loan up to a maximum aggregate principal amount equal to such Lender’s Commitment and Borrower agrees to accept and repay proceeds outstanding under the Loan.

1.5            Borrower Agent .  Each Borrower hereby appoints FSP as agent for the Borrower to execute, on behalf of the Borrower, documents, instruments and agreements in connection with the Loan, including, without limitation, documents, instruments and agreements required for the administration of the Loan, receiving Loan Advances and exercising interest rate selections and to receive all notices required to be given to the Borrower under the Loan Documents, and establishing, with RBS Citizens, National Association, on the Borrower’s behalf, the various deposit accounts required by this Agreement and the depositing therein and withdrawing therefrom by FSP of amounts from time to time in accordance with the terms and conditions of the Loan Documents.  Each Borrower shall be jointly and severally obligated under the Loan and shall be bound by all actions taken by FSP in connection with the Loan.  Any Loan received by FSP shall be deemed to have been received by each Borrower.

 

 

2.            AGREEMENT TO MAKE LOAN

2.1            Agreement to Make Term Loan .  Subject to the terms and conditions of this Agreement and relying upon the representations and warranties contained in this Agreement and the other Loan Documents, each of the Lenders agree to lend to the Borrower up to a maximum aggregate principal amount equal to such Lender’s Commitment and the Borrower may borrow on the Closing Date the Loan Amount in its entirety; however, any Advances of proceeds of the Loan shall be made by the Lenders pro rata, in accordance with each Lender’s Commitment Percentage.  Each request for an Advance of the Loan hereunder shall constitute a representation and warranty by the Borrower that the conditions set forth in §§7 and 8 have been satisfied on the date of such request unless, and only to the extent that, any such representation and warranty relates specifically and only to an earlier date in time.  Any amounts repaid by the Borrower may not be reborrowed, and there can be no repayments for the first year of the Loan.

2.2            Intentionally Omitted

2.3            Purpose of Loan .  The Loan shall be used by the Borrower for the following purposes:  pay down the Revolver Loan and/or for property acquisitions.

2.4            Requests for Advances .

 

 

2.5            Interest Rate and Payment Terms .  The Loan shall be payable as to interest and principal in accordance with the provisions of this Agreement and the Note.  This Agreement also provides for interest at a Default Rate, Late Charges and prepayment rights and fees.  All payments for the account of Lenders shall be applied to the respective accounts of the Lenders in accordance with each Lender’s Commitment Percentage of the Loan.  The Agent will disburse such payments to the Lenders on the date of receipt thereof if received prior to 10:00 a.m. on such date and, if not, on the next Business Day.  Any and all interest rate selection and conversion provisions in this Agreement are to be administered by the Agent and to be allocated on a pro rata basis to the Note held by each Lender based upon such Lender’s Commitment Percentage.

2.5.1                  Borrower’s Options .  Principal amounts outstanding under the Loan shall bear interest at the following rates, at Borrower’s selection, subject to the conditions and limitations provided for in this Agreement:  (i) Variable Rate or (ii) Adjusted Libor Rate.

2.5.2                  Selection To Be Made .  Borrower shall select and thereafter may change the selection of, the applicable interest rate, from the alternatives otherwise provided for in this Agreement, by giving Agent a Notice of Rate Selection: (i) prior to the Loan, (ii) prior to the end of each Interest Period applicable to a Libor Advance, or (iii) on any Business Day on which Borrower desires to convert an outstanding Variable Rate Advance to a Libor Advance.

 

 

2.5.3                  Notice .  A “Notice of Rate Selection” shall be a written notice, given by cable, tested telex, telecopier (with authorized signature), or by telephone if immediately confirmed by such a written notice, from an authorized representative of Borrower which: (i) is irrevocable; (ii) is received by Agent not later than 10:00 o’clock A.M. Eastern Time: (a) if an Adjusted Libor Rate is selected, at least three (3) Business Days but not more than five (5) Business Days prior to the requested Drawdown Date or the end of the current Interest Period to which such selection is to apply or (b) if a Variable Rate is selected, on the day on which such Loan is funded; (iii) as to each selected interest rate option, sets forth the aggregate principal amount(s) to which such interest rate option(s) shall apply and the Interest Period(s) applicable to each Libor Advance; provided, however, that no portion of the outstanding principal amount of any LIBOR Advances may be converted to, or continued as, LIBOR Advances when any Event of Default has occurred and is continuing, and no portion of the outstanding principal amount of any LIBOR Advances may be converted to LIBOR Advances of a different duration if such LIBOR Advances relate to any Hedging Obligations.  In the absence of delivery of a continuation/conversion notice with respect to any LIBOR Advances at least three Business Days before the last day of the then current Interest Period with respect thereto, such LIBOR Rate Loan shall, on such last day, automatically convert to a loan that accrues interest by reference to the LIBOR Rate Loans for a thirty (30) day period.

2.5.4                  Hedging Contracts .  The Borrower shall enter into a Hedging Contract for the initial three (3) year term of the Loan.  If the Extended Term is exercised by the Borrower, the Borrower may, at its discretion, enter into one or more Hedging Contracts for either or both Extension Periods.

2.5.5                  Telephonic Notice .  Without any way limiting Borrower’s obligation to confirm in writing any telephonic notice, Agent may act without liability upon the basis of telephonic notice believed by Agent in good faith to be from Borrower prior to receipt of written confirmation.  In each case Borrower hereby waives the right to dispute Agent’s record of the terms of such telephonic Notice of Rate Selection in the absence of manifest error.

2.5.6                  Limits On Options .  One Selection Per Month.  Each Libor Advance shall be in a minimum amount of $1,000,000.  At no time shall there be outstanding a total of more than five (5) Libor Advances combined at any time.  If Borrower shall make more than one (1) Libor Rate Loan interest rate selection in any thirty (30) day period, excluding conversions of outstanding advances made at the end of an applicable Interest Period of any previously outstanding Libor Advance, Agent may impose and Borrower shall pay a reasonable processing fee for each such additional selection.  This limitation on interest rate selection shall not limit the number of Advances which may be requested by the Borrower in any thirty (30) day period.

2.5.7                  Payment and Calculation of Interest .  All interest shall be:  (a) Payable in arrears commencing November 1, 2008 and on the last day of each Libor Interest Period thereafter until the principal together with all interest and other charges payable with respect to the Loan shall be fully paid; and (b) calculated on the basis of a 360 day year and the actual number of days elapsed.  Each change in the Prime Rate shall simultaneously change the Variable Rate payable under this Agreement.  Interest at the Adjusted Libor Rate shall be computed from and including the first day of the applicable Interest Period to, but excluding, the last day thereof.

 

 

2.5.8                  Principal .  Commencing on the date that is the end of the Libor Interest Period immediately following the second year anniversary of the date of this Agreement, and continuing on the same day of each calendar month thereafter, the Borrower shall make monthly payments of principal following  a loan amortization payment schedule over 30 years.  The entire principal balance shall be due and payable in full at the Maturity Date.

2.5.9                  Prepayment .  The Loan may not be prepaid during the first year of the Loan.  Thereafter, the Loan or any portion thereof may be prepaid in full or in part at any time upon three (3) Business Days, prior written notice to Agent without premium or penalty with respect to Variable Rate Advances and, with respect to Libor Advances subject to a Make-Whole Provision and upon payment of a LIBOR Rate Loan Prepayment Fee, if applicable.  Any partial prepayment of principal shall first be applied in accordance with the terms hereof.

2.5.10                  Maturity .  On the Maturity Date all accrued interest, principal and other charges due with respect to the Loan shall be due and payable in full and the principal balance and such other charges, but not unpaid interest, shall continue to bear interest at the Default Rate until so paid.

2.5.11                  Method of Payment; Date of Credit .  All payments of interest, principal and fees shall be made in lawful money of the United States in immediately available funds, without counterclaim or set off and free and clear, and without any deduction or withholding for, any taxes or other payments (a) by direct charge to an account of Borrower maintained with Agent (or the then holder of the Loan), or (b) by wire transfer to Agent or (c) to such other bank or address as the Agent may designate in a written notice to Borrower.  Payments shall be credited on the Business Day on which immediately available funds are received prior to 10:00 o’clock A.M. Eastern Time; payments received after ten o’clock A.M. Eastern Time shall be credited to the Loan on the next Business Day, payments which are by check, which Agent may at its option accept or reject, or which are not in the form of immediately available funds shall not be credited to the Loan until such funds become immediately available to Agent, and, with respect to payments by check, such credit shall be provisional until the item is finally paid by the payer bank.

2.5.12                  Billings .  Agent may submit monthly billings reflecting payments due; however, any changes in the interest rate which occur between the date of billing and the due date may be reflected in the billing for a subsequent month. Neither the failure of Agent to submit a billing nor any error in any such billing shall excuse Borrower from the obligation to make full payment of all Borrower’s payment obligations when due.

2.5.13                  Default Rate .  Agent shall have the option of imposing, and Borrower shall pay upon billing therefor, an interest rate which is four percent (4%) per annum above the Variable Rate (“Default Rate”):  (a) following any Event of Default, unless and until the Event of Default is cured or waived by Agent; and (b) after the Maturity Date.  Borrower’s right to select pricing options shall cease upon the occurrence and during the continuance of an Event of Default.

2.5.14                  Late Charges .  Borrower shall pay, upon billing therefor, a “Late Charge” equal to five percent (5%) of the amount of any payment of principal, other than principal due at Maturity, interest, or both, which is not paid within ten (10) days of the due date thereof.  Late charges are:  (a) payable in addition to, and not in limitation of, the Default Rate, (b) intended to compensate Agent and the Lenders for administrative and processing costs incident to late payments, (c) are not interest, and (d) shall not be subject to refund or rebate or credited against any other amount due.

 

 

2.5.15                  Voluntary Prepayment of LIBOR Rate Loans .  LIBOR Advances may be prepaid upon the terms and conditions set forth herein.  For LIBOR Advances in connection with which the Borrower has or may incur Hedging Obligations, additional obligations may be associated with prepayment, in accordance with the terms and conditions of the applicable Hedging Contracts.   The Borrower shall give the Agent, no later than 10:00 a.m., New York City time, at least three (3) Business Days notice of any proposed prepayment of any LIBOR Advances, specifying the proposed date of payment of such LIBOR Advances, and the principal amount to be paid.  Each partial prepayment of the principal amount of LIBOR Advances shall be in an integral multiple of $100,000.00 and accompanied by the payment of all charges outstanding on such LIBOR Advances and of all accrued interest on the principal repaid to the date of payment.  Borrower acknowledges that prepayment or acceleration of a LIBOR Advance during an Interest Period shall result in the Lender incurring additional costs, expenses and/or liabilities and that it is extremely difficult and impractical to ascertain the extent of such costs, expenses and/or liabilities.  Therefore, all full or partial prepayments of LIBOR Advances shall be accompanied by, and the Borrower hereby promises to pay, on each date a LIBOR Advance is prepaid or the date all sums payable hereunder become due and payable prior to their stated maturity, by acceleration or otherwise, in addition to all other sums then owing, an amount (“LIBOR Rate Loan Prepayment Fee”) determined by the Agent pursuant to the following formula:

The resulting amount shall be divided by:

and multiplied by:

 

 

The resulting amount of these calculations shall be the LIBOR Advance Prepayment Fee.

2.5.16                  Make Whole Provision .  In addition to the LIBOR Rate Loan Prepayment Fee, the Borrower agrees to reimburse the Lenders (without duplication) for any increase in the cost to the Lenders, or reduction in the amount of any sum receivable by the Lenders, in respect, or as a result of:

The Agent shall promptly notify the Borrower in writing of the occurrence of any such event, such notice to state, in reasonable detail, the reasons therefore and the additional amount required fully to compensate the Agent for such increased cost or reduced amount.  Such additional amounts shall be payable by the Borrower to the Agent within five Business Days of its receipt of such notice, and such notice shall, in the absence of manifest error, be conclusive and binding on the Borrower.  The Borrower understands, agrees and acknowledges the following: (i) the Agent does not have any obligation to purchase, sell and/or match funds in connection with the use of LIBOR Rate as a basis for calculating the rate of interest on a LIBOR Advance, (ii) the LIBOR Rate may be used merely as a reference in determining such rate, and (iii) the Borrower has accepted the LIBOR Rate as a reasonable and fair basis for calculating such rate, the LIBOR Rate Prepayment Fee, and other funding losses incurred by the Lenders.  Borrower further agrees to pay the LIBOR Rate Prepayment Fee and other funding losses, if any, whether or not the Lenders elect to purchase, sell and/or match funds.

2.6            Additional Provisions Related to Interest Rate Selection.

2.6.1                  Increased Costs .   If on or after the date hereof the adoption of any applicable law, rule or regulation or guideline (whether or not having the force of law), or any change therein, or any change in the interpretation or administration thereof by any governmental authority, central bank or comparable agency charged with the interpretation or administration thereof, or compliance by the Lenders with any request or directive (whether or not having the force of law) of any such authority, central bank or comparable agency:

 

 

and the result of any of the foregoing is to increase the cost to the Lenders of making or maintaining any LIBOR Advances, or to reduce the amount of any sum received or receivable by the Lenders under this Agreement with respect thereto, by an amount reasonably deemed by the Lenders to be material, then, within 15 days after written demand by the Agent (which demand shall specify in detail the reasons for same), the Borrower shall pay to the Lenders such additional amount or amounts as will compensate the Lenders for such increased cost or reduction.

2.6.2                  Increased Capital Costs .  If any change in, or the introduction, adoption, effectiveness, interpretation, reinterpretation or phase-in of, any law or regulation, directive, guideline, decision or request (whether or not having the force of law) of any court, central bank, regulator or other governmental authority affects the amount of capital required or expected to be maintained by the Lender, and a Lender determines that the rate of return on capital as a consequence of its commitments or the loans made by the Lender is reduced to a level below that which the Lender could have achieved but for the occurrence of any such circumstance, then, in any such case upon written notice from time to time by the Lender to the Borrower, the Borrower shall promptly pay directly to the Lender additional amounts sufficient to compensate for such reduction in rate of return.  A statement of the Lenders as to any such additional amount or amounts (including calculations thereof in reasonable detail) shall, in the absence of manifest error, be conclusive and binding on the Borrower.  In determining such amount, the Lender may use any method of averaging and attribution that it shall deem applicable.

2.6.3                  Taxes .  All payments by the Borrower of principal of, and interest on, the LIBOR Advances and all other amounts payable hereunder shall be made free and clear of and without deduction for any present or future income, excise, stamp taxes and other taxes, fees, duties, withholdings or other charges of any nature whatsoever imposed by any taxing authority, but excluding franchise taxes and taxes imposed on or measured by the Lender’s net income or receipts (such non-excluded items being called “Taxes”).  In the event that any withholding or deduction from any payment to be made by the Borrower hereunder is required in respect of any Taxes pursuant to any applicable law, rule or regulation, then the Borrower will

 

 

2.6.4                  Libor Rate Lending Unlawful .   If the Agent shall determine (which determination shall, upon notice thereof to the Borrower be conclusive and binding on the Borrower) that the introduction of or any change in or in the interpretation of any law, rule, regulation or guideline, (whether or not having the force of law) makes it unlawful, or any central bank or other governmental authority asserts that it is unlawful, for the Lenders to make, continue or maintain any Libor Advance as, or to convert any loan into, a Libor Advance of a certain duration, the obligations of the Lenders to make, continue, maintain or convert into any such Libor Advances shall, upon such determination, forthwith be suspended until the Agent shall notify the Borrower that the circumstances causing such suspension no longer exist, and all Libor Advances of such type shall automatically convert into Variable Rate Loans at the end of the then current Interest Periods with respect thereto or sooner, if required by such law or assertion.

2.6.5                  Additional Libor Conditions .  The selection by Borrower of an Adjusted Libor Rate and the maintenance of the Loan at such rate shall be subject to the following additional terms and conditions:

 

2.6.6         Variable Rate Advances .  Each Variable Rate Advance shall continue as a Variable Rate Advance until the Maturity Date of the Loan, unless sooner converted, in whole or in part, to a Libor Advance, subject to the limitations and conditions set forth in this Agreement.

2.7            The Loan Account .

 

 

2.8            Extension Rights .  Agent and Lenders shall grant a request by Borrower to extend the Initial Maturity Date of the Note for two (2) successive one (1) year periods (each an “Extended Maturity”) until October 15, 2012 (the “First Extension Period”) and until October 15, 2013 (the “Second Extension Period”) each extension period (the “Extension Period”), upon and subject to the following terms and conditions:

2.9            Basic Conditions for Each Extension Period .  Unless otherwise agreed by Agent in writing:

3.            THE NOTES .  The obligation of the Borrower to pay the Loan Amount or, if less, the aggregate unpaid principal amount of all Advances made by the Lenders hereunder plus accrued interest thereon, shall be evidenced by Notes and payable in accordance therewith.  In the event any of the Notes are lost, destroyed or mutilated at any time prior to payment in full of the indebtedness evidenced thereby, the Borrower shall execute and deliver to the applicable Lender a new note substantially in the form of the Note and the applicable Lender shall execute and deliver to Borrower an affidavit and indemnification reasonably acceptable to Borrower with respect to such lost Note.

4.            FEES .   The Borrower agrees to pay to the Agent on behalf of the Lenders such fees as agreed to by and between the Agent and the Borrower in the Fee Letter.

5.            JOINDER DOCUMENTS .  At the time of an Acquisition by a Wholly Owned Subsidiary, such Wholly Owned Subsidiary which has become an owner of a Property in connection with such Acquisition shall execute the Joinder Documents so as to become a Borrower under this Agreement and shall be added as a maker under the Note.  Upon the execution of such Joinder Documents, such entities shall be considered a “Borrower” and subject to all of the terms and conditions hereof, and shall continue to be a “Borrower” hereunder except as provided in clause (b) of Section 1.2 hereof.

 

 

6.            CONDITIONS TO CLOSING .  The obligation of the Lenders to make the initial Loan shall be subject to the satisfaction of the following conditions precedent on or before the Closing Date.

6.1            Loan Documents .  Each of the Loan Documents and the Intercreditor Agreement shall have been duly executed and delivered by the respective parties thereto.  Each of the Loan Documents and the Intercreditor Agreement shall be in full force and effect and shall be in form and substance satisfactory to the Lenders.

6.2            Certified Copies of Organization Documents .  The Agent shall have received from the Borrower a certified copy of its Organization Documents as in effect on such date of certification, such Organizational Documents to be in form and substance reasonably satisfactory to the Lenders.

6.3            Resolutions .  All action necessary for the valid execution, delivery and performance by the Borrower of this Agreement and the other Loan Documents to which it is or is to become a party shall have been duly and effectively taken, and evidence thereof satisfactory to the Lenders shall have been provided to the Lenders.  The Agent shall have received from each such Person true copies of the resolutions authorizing the transactions described herein, each certified as of a recent date to be true and complete.

6.4            Incumbency Certificate; Authorized Signers .  The Agent shall have received from the Borrower an incumbency certificate, dated as of the Closing Date, giving the name and bearing a specimen signature of each individual who shall be authorized:  (a) to sign, in the name and on behalf of such Person each of the Loan Documents to which such Person is or is to become a party; and (b) to give notices and to take other action on its behalf under the Loan Documents.

6.5            Legal Opinions .  The Lenders shall have received a favorable opinion or opinions in form and substance satisfactory to the Agent and the Agent’s counsel, addressed to the Agent and the Lenders and dated as of the Closing Date, from counsel to the Borrower acceptable to the Agent, as to such matters as the Lender shall reasonably request, including, without limitation, the due execution and authorization of all Loan Documents and the enforceability of this Agreement and the Notes.

6.6            Intentionally Deleted .

6.7            Performance; No Default .  The Borrower shall have performed and complied with all terms and conditions herein required to be performed or complied with by it or there shall exist no Default or Event of Default.

6.8            Representations and Warranties .  Without limiting the provisions set forth in Section 8.20, the representations of warranties made by the Borrower in the Loan Documents or otherwise made by or on behalf of the Borrower in connection therewith shall be true and correct in all respects on the Closing Date unless such representations and warranties relate specifically and only to an earlier date in time.

 

 

6.9            Proceedings and Documents .  All proceedings in connection with the transactions contemplated by this Agreement and the other Loan Documents shall be satisfactory to the Agent and the Agent’s counsel in form and substance, and the Agent shall have received all information and such counterpart originals or certified copies of such documents and such other certificates, opinions or documents as the Agent and the Agent’s counsel may reasonably require.

6.10            Waiver .   Any waiver by the Agent of any of the conditions precedent contained herein for the closing of the Loan shall not be deemed to be a waiver by the Agent of any other obligation of the Borrower hereunder.

7.            CONDITIONS TO ALL BORROWINGS .  The obligations of the Lenders to make the Loan or any Advance, whether on or after the Closing Date, shall also be subject to the satisfaction of the following conditions precedent:

7.1            Representations True; No Event of Default .  Subject to Section 8.20, each of the representations and warranties of the Borrower contained in this Agreement, the other Loan Documents or in any document or instrument delivered pursuant to or in connection with this Agreement shall be true as of the date as of which they were made and shall also be true at and as of the time of the making of such Loan, with the same effect as if made at and as of that time (except to the extent of changes resulting from transactions contemplated or permitted by this Agreement and the other Loan Documents and changes occurring in the ordinary course of business that singly or in the aggregate are not materially adverse, and except to the extent that such representations and warranties relate expressly to an earlier date) and no Default or Event of Default shall have occurred and be continuing.  The Agent on behalf of the Lenders shall have received a certificate of the Borrower signed by an authorized officer of the Borrower to such effect.

7.2            No Legal Impediment .  No change shall have occurred in any law or regulations thereunder or interpretations thereof that in the reasonable opinion of the Agent would make it illegal for the Lenders to make such Loan.

7.3            Governmental Regulation .  With respect to any Libor Advance, the Lenders shall have received such statements in substance and form reasonably satisfactory to the Lenders as the Lenders shall require for the purpose of compliance with any applicable regulations of the Comptroller of the Currency or the Board of Governors of the Federal Reserve System.

7.4            Proceedings and Documents .  All proceedings in connection with the transactions contemplated by this Agreement, the other Loan Documents and all other documents incident thereto shall be reasonably satisfactory in substance and in form to the Agent and its counsel, and the Agent and such counsel shall have received all information and such counterpart originals or certified or other copies of such documents as the Agent may reasonably request.

 

 

8.            REPRESENTATIONS, WARRANTIES AND COVENANTS .  The Borrower represents, warrants, and covenants to the Lenders as follows:

8.1            Organization; Authority, Etc .

8.2            Title to Asset .  The Borrower owns all of the assets reflected in the financial statements of the Borrower as at the Balance Sheet Date or acquired since that date free from all encumbrances except for Permitted Liens (except with respect to any 1031 Property and property and assets sold or otherwise disposed of in the ordinary course of business since that date).

 

 

8.3            Financial Statements . There has been furnished to the Lender the Form 10-K Annual Report filed with the SEC in February 2008, which included audited financial statements for the year ended December 31, 2007 for the Borrower.  There has also been furnished to the Lender the Form 10-Q Quarterly Report filed with the SEC for the Borrower, which included unaudited financial statements for the three months ending June 30, 2008 for the Borrower.  Such filings have been prepared in accordance with generally accepted accounting principles and fairly present the financial condition of the Borrower as at the close of business on the date(s) thereof and the results of operations for the fiscal year or period then ended.  As of the date of this Agreement, there are no liabilities or contingent liabilities of the Borrower known to the officers, partners, or trustees of the Borrower which are not disclosed in said financial statements and the related notes thereto other than the Obligations, except for contingent liabilities associated with the disposition of properties in such amounts as would not reasonably be expected to have a material adverse effect on Borrower’s financial condition.

8.4            No Material Changes, Etc .  Since the Balance Sheet Date, there has occurred no materially adverse change in the financial condition or business of the Borrower other than (i) changes described in the Form 10-Q for the fiscal quarter ended June 30, 2008, and (ii) changes in the ordinary course of business that have not had any material adverse effect either individually or in the aggregate on the business or financial condition of such Borrower.

8.5            Franchises, Patents, Copyrights, Etc .  The Borrower possesses, and will at all times possess, all franchises, patents, copyrights, trademarks, trade names, licenses and permits, and rights in respect of the foregoing, adequate for the conduct of its business substantially as now conducted or as it is intended to be conducted with respect to the Unencumbered Pool Properties, without known conflict with any rights of others, except where the failure to do so would not reasonably be expected to have a material adverse effect on the Borrower taken as a whole.

8.6            Litigation .  There are no actions, suits, proceedings or investigations of any kind pending or, to Borrower’s knowledge, threatened against the Borrower before any court, tribunal or administrative agency or board or any mediator or arbitrator that, either in any case or in the aggregate, would reasonably be expected to materially and adversely affect the business, assets or financial condition of the Borrower taken as a whole, or result in any material liability not adequately covered by insurance, and for which adequate reserves are not maintained on the balance sheet of such Person, or which question the validity of this Agreement or any of the other Loan Documents, any action taken or to be taken pursuant hereto or thereto, or which will materially and adversely affect the ability of the Borrower to use and occupy any of the properties comprising the Unencumbered Pool Properties or to pay and perform the Obligations in the manner contemplated by this Agreement and the other Loan Documents.

8.7            No Materially Adverse Contracts, Etc .  The Borrower is not subject to any charter, corporate or other legal restriction, or any judgment, decree, order, rule or regulation that has or is reasonably expected in the future to have a materially adverse effect on the business, assets or financial condition of such Person.  Each Borrower is not, and will not be, a party to any contract or agreement that has or is expected to have any materially adverse effect on the business of such Person.

 

 

8.8            Compliance With Other Instruments, Laws, Etc .  The Borrower is not, and will not at any time be, in violation of any provision of its Organizational Documents or any agreement or instrument to which it may be subject or by which it or any of its properties may be bound or any decree, order, judgment, statute, license, rule or regulation, in any of the foregoing cases in a manner that would be likely to materially and adversely affect the financial condition, properties or business of such Person.

8.9            Tax Status .  Each of the entities comprising the Borrower (a) has made or filed, and will make or file in a timely fashion, all federal and state income and all other material tax returns, reports and declarations required by any jurisdiction to which it is subject, (b) has paid, and will pay when due, all taxes and other governmental assessments and charges shown or determined to be due on such returns, reports and declarations, except those being contested in good faith and by appropriate proceedings, (c) if a partnership, limited partnership, limited liability partnership, or limited liability company, has, and will maintain, partnership tax classification under the Code, and (d) has set aside, and will at all times set aside, on its books provisions reasonably adequate for the payment of all taxes for periods subsequent to the period to which such returns, reports or declarations apply, when and to the extent required by generally accepted accounting principles.  There are no unpaid taxes in any material amount claimed to be due by the taxing authority of any jurisdiction, and the officers, partners or trustees of the Borrower know of no basis for any such claim. The Borrower has filed, and will continue to file, all of such tax returns, reports, and declarations either (i) separately from any parent or affiliate or (ii) if part of a consolidated filing, as a separate member of any such consolidated group.

8.10            No Event of Default .  No Default or Event of Default has occurred and is continuing.

8.11            Setoff, Etc .  The Lenders’ rights with respect to the repayment of the Obligations are not subject to any setoff, claims, withholdings or other defenses.

8.12            Certain Transactions .  None of (a) the officers, trustees, directors, general partners, managers, members, stockholders (except any stockholders of FSP), beneficiaries, or employees of any Borrower or Subsidiary thereof or (b) to the knowledge of the Borrower, any corporation, partnership, trust or other entity (except a Syndicated REIT) in which any such officer, trustee, director, general partner, manager, member, stockholder (except any stockholder of FSP), beneficiary, or employee has a substantial interest or is an officer, director, trustee, manager or general partner, is presently a party to any transaction with the Borrower (other than for services as employees, officers, trustees, managers and directors, other than otherwise permitted under this Agreement and other than on the same terms as would be generally available to the Borrower in an arm’s length contract or arrangement with a third party).

8.13            Subsidiaries .  As of the date hereof, the Borrower’s Subsidiaries are as set forth on Schedule 4 .

8.14            Intentionally Deleted .

8.15            ERISA Plan .  The Borrower does not, and will not, maintain or contribute to an ERISA Plan under Section 412 of ERISA.

 

 

8.16            Solvency .  Borrower, on a consolidated basis, (a) is not insolvent nor will be rendered insolvent by the Indebtedness incurred in connection with the Loan, (b) does not have unreasonably small capital with which to engage in its business, or (c) has not incurred Indebtedness beyond its ability to pay such Indebtedness as it matures. The Borrower, on a consolidated basis, has assets having a value in excess of amounts required to pay any Indebtedness.

8.17            The Unencumbered Pool Properties .  The Borrower makes the following representations and warranties, to the best of its knowledge, with respect to each individual property included in the Unencumbered Pool Properties, as of the date hereof and except as disclosed in the Borrower’s filings with the Securities and Exchange Commission:

 

 

 

 

 

 

8.18            No Broker or Finder .  Neither Borrower, nor anyone on behalf thereof, has dealt with any broker, finder or other person or entity who or which may be entitled to a broker’s or finder’s fee, or other compensation, payable by Agent or the Lenders in connection with establishing of the Loan.

 

 

8.19            General .  Each Borrower has disclosed any material fact or condition which is necessary to make the representations and warranties set forth herein or in any other Loan Document not materially misleading; provided that the Borrower shall have no obligation to update any representation and warranty made as of a specific date.

8.20            Representations, Warranties, Covenants and Agreements with Respect to the Unencumbered Pool Properties .  The representations, warranties, covenants and agreements contained herein with respect to the Unencumbered Pool Properties, or any of the properties comprising the Unencumbered Pool Properties, shall be made as of the date hereof and no representations, warranties, covenants and agreements are made with respect to the Unencumbered Pool Properties subsequent to the date hereof.

9.            AFFIRMATIVE COVENANTS OF THE BORROWER .  The Borrower covenants and agrees that, so long as the Loan is outstanding:

9.1            Punctual Payment .  The Borrower will duly and punctually pay or cause to be paid the principal and interest on the Loan and all other amounts provided for in the Note, this Agreement and the other Loan Documents to which the Borrower is a party, all in accordance with the terms of the Notes, this Agreement and such other Loan Documents.

9.2            Financial Statements, Certificates and Information .  The Borrower will deliver, or cause to be delivered, to the Lenders:

 

 

9.3            Insurance .

9.4            Liens and Other Charges .  The Borrower will duly pay and discharge, or cause to be paid and discharged, before the same shall become overdue all claims for labor, materials, or supplies that if unpaid would reasonably be expected by law to become a lien or charge upon any of its Other Properties, except for Permitted Liens, or any of the Unencumbered Pool Properties, except as to the Permitted Liens otherwise permitted in the definition of Unencumbered Pool Properties.

 

 

9.5            Inspection of Unencumbered Pool Properties and Books .  Subject to the cost limitation set forth in Section 13 below,

9.6            Compliance with Laws, Contracts, Licenses, and Permits .  The Borrower will comply in all material respects with (a) the applicable laws and regulations wherever its business is conducted, including all Environmental Laws and, in the case of the Borrower, all Requirements, (b) the provisions of its Organizational Documents and all Loan Documents to which Borrower or Subsidiary are signatories, (c) all agreements and instruments by which it or any of its properties may be bound, including, all restrictions, covenants and easements affecting the Unencumbered Pool Properties, (d) all applicable decrees, orders and judgments, and (e) all licenses and permits required by applicable laws and regulations for the conduct of its business or the ownership, use or operation of its properties.

9.7            Use of Proceeds .  The Borrower will use the proceeds of the Loan solely for the purposes described herein.  No portion of the Loan shall be used directly or indirectly, and whether immediately, incidentally or ultimately (i) to purchase or carry any margin stock, or to extend credit to others for the purpose thereof, or to repay or refund indebtedness previously incurred for such purpose, within the meaning of the regulations of the Board of Governors of the Federal Reserve System including, without limitation, Regulations G, U and X and the interpretations thereof, or (ii) for any purpose which would violate or is inconsistent with the provisions of regulations of the Board of Governors of the Federal Reserve System including, without limitation, Regulations G, U and X thereof.

 

 

9.8            Publicity .  The Borrower will permit the Lenders to obtain publicity in connection with the financing through press releases.  The Borrower shall be provided with an opportunity to review and approve such publicity prior to publication.

9.9            Further Assurances . The Borrower will cooperate with, and will do such further acts and execute such further instruments and documents as the Agent and the Lenders shall reasonably request to carry out to its satisfaction the transactions contemplated by this Agreement and the other Loan Documents.

9.10            Notices .  The Borrower will promptly notify the Agent in writing of (i) the occurrence of any Event of Default; (ii) the occurrence of any other event which is likely to have a materially adverse effect on any of the properties comprising the Unencumbered Pool Properties or the business or financial condition of the Borrower; or (iii) the receipt by the Borrower of any notice of default or notice of termination with respect to any contract or agreement relating to the ownership, operation, or use of any of the properties comprising the Unencumbered Pool Properties which is likely to have a materially adverse effect on the Borrower.

9.11            Other Affirmative Covenants .  The Borrower will:

9.12            Control of Borrower .  Borrower agrees that at least two of George J. Carter, Barbara J. Fournier, Janet P. Notopoulos, John G. Demeritt, John N. Burke or Georgia Murray or a replacement officer (or director) which is approved by Lenders in its reasonable discretion, shall, at all times maintain control of the day to day operations of the Borrower; provided that it shall not be a Default or an Event of Default during the period of ninety (90) days during which replacement director(s) or officer(s), as the case may be, are being sought and approved.  The parties acknowledge that Georgia Murray and John Burke are currently members of the board of directors of FSP, and as such, do not maintain control the day to day operations of the Borrower as of the date hereof.

9.13            Wholly Owned Subsidiary .  The Borrower shall provide Agent with written notice of the establishment of a Wholly Owned Subsidiary.  At the time of an Acquisition by a Wholly Owned Subsidiary, such Wholly Owned Subsidiary which has become an owner of a Property in connection with such Acquisition shall execute the Joinder Documents so as to become a Borrower under this Agreement.

 

 

9.14            Maintenance of Borrower’s Properties .  Borrower will protect and maintain, or cause to be maintained, in a manner consistent with Borrower’s current maintenance standards at all times, the buildings and structures now standing or hereafter erected on the Borrower’s properties, and any additions and improvements thereto, and all personal property now or hereafter situated therein, and the utility services, the parking areas and access roads, and all building fixtures and equipment and articles of personal property now or hereafter acquired and used in connection with the operation of the Borrower’s properties.

9.15            Acquisitions, Dispositions and Syndication of Borrower’s Assets .  Borrower shall provide Agent with written notice of all dispositions or Acquisitions of individual properties by FSP or a Wholly Owned Subsidiary within seven (7) days prior to the disposition or Acquisition.  With respect to any Acquisitions, the notice shall include the location of the property, the purchase price and the projected closing date.  With respect to any disposition (other than an Affiliate Disposition) of individual properties by a Wholly Owned Subsidiary, the notice shall include a certification from the chief financial officer of FSP stating that such disposition shall not cause a violation of any covenant contained herein, including, without limitation, any breach of §10.8, both before and after such disposition, and that no Default or Event of Default exists hereunder.  With respect to Syndication REITS, Borrower will provide Agent with a copy of the applicable confidential offering memorandum on or before the first Syndication Event for such offering.  .   All real property acquired in an Acquisition by FSP or a Wholly Owned Subsidiary (including a 1031 Property) shall become part of the Property and shall be subject to the terms hereof, and the definition of Property shall include all such real property (including 1031 Property) and to exclude any real property disposed of by the Borrower pursuant to the terms hereof.

9.16            Business Activities .  The Borrower shall limit its business activities to the ownership, construction, operation and maintenance of income producing properties and investment banking activities related thereto and all matters incidental or accessory thereto.

10.            NEGATIVE COVENANTS OF THE BORROWER .  The Borrower covenants and agrees that, so long as the Loan is outstanding or the Lenders have any obligation to make any Advances:

10.1            No Amendments, Terminations or Waivers .  The Borrower will not, directly or indirectly, amend, or allow the amendment of, any of the Organizational Documents of the Borrower following the date of this Agreement in any material respect.

10.2            Restrictions on Indebtedness .  The Borrower will not create, incur, assume, guaranty or be or remain liable, contingently or otherwise, with respect to any Indebtedness other than:

 

 

10.3            Restrictions on Liens, Etc .  With the exception of Permitted Liens, the Borrower will not  (a) create or incur or suffer to be created or incurred or to exist any lien, encumbrance, mortgage, pledge, charge or other security interest of any kind upon any of the Borrower’s Properties, or upon the income or profits therefrom; (b) transfer any of the Borrower’s Properties or the income or profits therefrom for the purpose of subjecting the same to the payment of Indebtedness or performance of any other obligation in priority to payment of its general creditors, except as provided in Section 10.2(e); (c) acquire, or agree or have an option to acquire, any property or assets upon conditional sale or other title retention or purchase money security agreement, device or arrangement; (d) suffer to exist for a period of more than thirty (30) days after the same shall have been incurred any Indebtedness or claim or demand against it that if unpaid would likely by law or upon bankruptcy or insolvency, or otherwise, be given any priority whatsoever over its general creditors; or (e) sell, assign, pledge or otherwise transfer any accounts, contract rights, general intangibles, chattel paper or instruments, with or without recourse; provided that the Borrower may create or incur or suffer to be created or incurred or to exist liens in favor of the Lenders under the Loan Documents and in favor of the agent and lenders under the Revolver Loan.  Notwithstanding the foregoing, the Borrower may sell any of its Property, whether now owned or hereafter acquired, provided that prior to and after any such sale (i) the Borrower is in compliance with all of its covenants herein, including, without limitation, the financial covenants contained in §10.8, and (ii) No Default or Event of Default has occurred and is continuing hereunder.

10.4            Restrictions on Loans and Investments .  The Borrower will not make or permit to exist or to remain outstanding any loan by the Borrower to any Person or any Investment except Investments in:

 

 

10.5            Merger, Consolidation, Conversion, Business Operations, and Ownership and Disposition of Assets .

 

 

10.6            Sale and Leaseback .  The Borrower will not enter into any arrangement, directly or indirectly, whereby the Borrower shall sell or transfer any property owned by it in order then or thereafter to lease such property or lease other property that the Borrower intends to use for substantially the same purpose as the property being sold or transferred.

10.7            Distributions .  Except for Distributions nec