AMENDED AND RESTATED CREDIT AGREEMENT
Dated
July 7, 1998
among
ARCHSTONE COMMUNITIES TRUST
CHASE BANK OF TEXAS, NATIONAL ASSOCIATION,
as Administrative Agent
XXXXXX GUARANTY TRUST COMPANY OF NEW YORK
as Syndication Agent
and
XXXXX FARGO BANK, NATIONAL ASSOCIATION
as Documentation Agent
and
the Lenders
TABLE OF CONTENTS
1. Definitions..............................................................1
2. The Loans...............................................................16
2.1 Advances..........................................................16
2.2 Term Loan Conversion..............................................18
2.3 Payments..........................................................19
2.4 Pro Rata Treatment................................................21
2.5 Non-Receipt of Funds by the Agent.................................22
2.6 Sharing of Payments, Etc..........................................22
2.7 Fees..............................................................23
2.8 Money Market Borrowings...........................................24
3. Conditions..............................................................28
3.1 All Loans.........................................................28
3.2 First Loan........................................................28
3.3 Options Available.................................................29
3.4 Designation and Conversion........................................29
3.5 Special Provisions Applicable to Eurodollar Rate Borrowings
and Money Market Loans............................................30
3.6 Funding Offices; Adjustments Automatic............................33
3.7 Funding Sources, Payment Obligations..............................33
3.8 Mitigation, Non-Discrimination....................................33
4. Representations and Warranties..........................................34
4.1. Organization......................................................34
4.2 Financial Statements..............................................34
4.3 Enforceable Obligations; Authorization............................34
4.4 Other Debt........................................................35
4.5 Litigation........................................................35
4.6 Taxes.............................................................35
4.7 Regulation U......................................................35
4.8 Subsidiaries......................................................35
4.9 S.................................................................35
4.10 No Contractual or Corporate Restrictions..........................36
4.11 Investment Company Act Not Applicable.............................36
4.12 Public Utility Holding Company Act Not Applicable.................36
4.13 ERISA Not Applicable..............................................36
4.14 Year 2000.........................................................36
5. Affirmative Covenants...................................................36
5.1 Taxes, Insurance, Existence, Regulations, Property, etc...........36
(i)
5.2 Financial Statements and Information..............................37
5.3 Financial Tests...................................................37
5.4 Inspection........................................................37
5.5 Further Assurances................................................37
5.7 Insurance.........................................................38
5.8 Notice of Certain Matters.........................................38
5.9 Use of Proceeds...................................................38
5.10 Expenses of and Claims Against the Agent and the Lenders..........38
5.11 Legal Compliance; Indemnification.................................39
5.12 Borrower's Performance............................................39
5.13 Professional Services.............................................40
5.14 Capital Adequacy..................................................40
5.15 Property Pool.....................................................40
5.16 Year 2000.........................................................42
6. Negative Covenants......................................................42
6.1 Indebtedness......................................................42
6.2 Mergers, Consolidations and Acquisitions of Assets................43
6.3 Redemption........................................................43
6.4 Nature of Business................................................43
6.5 Transactions with Related Parties.................................44
6.6 Loans and Investments.............................................44
6.7 Limiting Agreements...............................................45
6.8 Nature of Assets..................................................46
7. Events of Default and Remedies..........................................46
7.1. Events of Default.................................................46
7.2 Remedies Cumulative...............................................48
8. The Agent...............................................................48
8.1 Appointment, Powers and Immunities................................48
8.2 Reliance..........................................................49
8.3 Defaults..........................................................50
8.4 Rights as a Lender................................................50
8.5 Indemnification...................................................50
8.6 Non-Reliance on Agent and Other Lenders...........................51
8.7 Failure to Act....................................................51
8.8 Resignation of Agent..............................................51
8.9 No Partnership....................................................52
9. Renewal and Extension...................................................52
9.1 Procedure for Consideration of Renewal and Extension Requests.....52
9.2 Conditions to Renewal and Extension...............................53
(ii)
9.3 No Obligation to Renew and Extend................................54
10. Miscellaneous...........................................................54
10.1 No Waiver, Amendments............................................54
10.2 Notices..........................................................54
10.3 Venue............................................................54
10.4 Choice of Law....................................................55
10.5 Survival; Parties Bound; Successors and Assigns..................55
10.6 Counterparts.....................................................57
10.7 Usury Not Intended; Refund of Any Excess Payments................58
10.8 Captions.........................................................58
10.9 Severability.....................................................58
10.10 Disclosures......................................................58
10.11 No Novation......................................................58
10.12 Limitation of Liability..........................................59
10.13 Entire Agreement.................................................59
EXHIBITS
--------
(iii)
A- Officer's Certificate B - Request for Loan C - Note C-1- Swing Loan Note D -
Legal Opinion
E- Money Market Quote Request
F- Invitation for Money Market Quotes
G- Money Market Quote
H- Designation Agreement
I- Guaranty
(iv)
AMENDED AND RESTATED CREDIT AGREEMENT
-------------------------------------
THIS AMENDED AND RESTATED CREDIT AGREEMENT (the "Agreement") is made and
entered into as of July 7, 1998, by and among ARCHSTONE COMMUNITIES TRUST, a
Maryland real estate investment trust formerly known as Security Capital Pacific
Trust (the "Borrower"), the financial institutions (including Chase, the
Syndication Agent and the Documentation Agent, the "Lenders") which are now or
may hereafter become signatories hereto, CHASE BANK OF TEXAS, NATIONAL
ASSOCIATION, a national banking association ("Chase"), as administrative agent
for Lenders (in such capacity, "Agent"), XXXXXX GUARANTY TRUST COMPANY OF NEW
YORK, as syndication agent for Lenders (in such capacity,
"Syndication Agent"), and XXXXX FARGO BANK, NATIONAL ASSOCIATION, as
documentation agent for the Lenders (in such capacity, "Documentation Agent").
W I T N E S S E T H:
-------------------
WHEREAS, the Borrower, the Agent, and certain of the Lenders entered into
an Amended and Restated Credit Agreement dated as of August 13, 1997 (the
"Original Credit Agreement"); and
WHEREAS, the Borrower, the Agent, the Syndication Agent, and the Lenders
desire to amend and restate the Original Credit Agreement upon the terms and
conditions hereinafter set forth;
NOW, THEREFORE in consideration of the mutual covenants, agreements and
undertakings herein contained, the parties hereto agree as follows:
1. Definitions.
-----------
Unless a particular word or phrase is otherwise defined or the context
otherwise requires, capitalized words and phrases used in Credit Documents have
the meanings provided below.
Absolute Rate Auction shall mean a solicitation of Money Market Quotes
setting forth Money Market Absolute Rates pursuant to Section 2.8.
Acceptable Credit Rating shall mean a Credit Rating from two of Standard &
Poor's Rating Services, Xxxxx'x Investors Service, Inc., DCR, or Fitch (one of
which must be an S&P Rating or a Xxxxx'x Rating) equal to a Credit Rating from
DCR or Fitch, or an S&P Rating of BBB- or better, or a Xxxxx'x Rating of Baa3 or
better.
Accounts, Equipment and Inventory shall have the respective meanings
assigned to them in the Texas Business and Commerce Code in force on the date
the document using such term was executed.
Affiliate shall mean any Person controlling, controlled by or under common
control with any other Person. For purposes of this definition, "control"
(including "controlled by" and "under common control with") means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of such Person, whether through the
ownership of voting securities or otherwise.
Annual Audited Financial Statements shall mean the annual financial
statements of a Person, including all notes thereto, which statements shall
include a balance sheet as of the end of such fiscal year and an income
statement and a statement of cash flows, all setting forth in comparative form
the corresponding figures from the previous fiscal year, all prepared in
conformity with Generally Accepted Accounting Principles and accompanied by a
report and opinion of independent certified public accountants satisfactory to
the Agent, which shall state that such financial statements, in the opinion of
such accountants, present fairly the financial position of such Person as of the
date thereof and the results of its operations for the period covered thereby in
conformity with Generally Accepted Accounting Principles. Such statements shall
be accompanied by a certificate of such accountants that in making the
appropriate audit and/or investigation in connection with such report and
opinion, such accountants did not become aware of any Default or, if in the
opinion of such accountant any such Default exists, a description of the nature
and status thereof. The Annual Audited Financial Statements shall be prepared
on a consolidated basis in accordance with Generally Accepted Accounting
Principles.
Applicable Margin shall mean (a) if a Credit Rating is obtained from more
than one agency, and one of the two highest Credit Ratings is an S&P Rating or a
Xxxxx'x Rating, the following percentage based on the corresponding Credit
Rating which is the second highest, or (b) if the one of the two highest Credit
Ratings in clause (a) above is not an S&P Rating or a Xxxxx'x Rating, the
following percentage based on the corresponding S&P Rating or Xxxxx'x Rating
which is the highest, or (c) if only one Credit Rating is obtained, which must
be an S&P Rating or a Xxxxx'x Rating, the following percentage based on the
corresponding S&P Rating or Xxxxx'x Rating:
APPLICABLE MARGIN
-----------------
APPLICABLE
----------
CREDIT RATING EURODOLLAR RATE MARGIN BASE
------------- --------------- -----------
BORROWING RATE
--------------- -----------
A/A2 or better 0.500% 0
A-/A3 0.600% 0
BBB+/Baa1 0.650% 0
BBB/Baa2 0.750% 0
BBB-/Baa3 0.900% 0
Worse than BBB-/Baa3 1.250% .25%
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Each Applicable Margin shall be in effect whenever and for so long as the
corresponding Credit Rating is in effect.
Base Rate shall mean for any day a rate per annum equal to the Applicable
Margin on that day plus the greater on a daily basis of (a) the Prime Rate for
that day, or (b) the Federal Funds Effective Rate for that day plus one-half of
one percent (1/2%).
Base Rate Borrowing shall mean that portion of the principal balance of the
Loans at any time bearing interest at the Base Rate.
Business Day shall mean a day other than (a) a day when the main office of
the Agent is not open for business, or (b) a day that is a federal banking
holiday in the United States of America.
Ceiling Rate shall mean, on any day, the maximum nonusurious rate of interest
permitted for that day by whichever of applicable federal or Texas laws permits
the higher interest rate, stated as a rate per annum. On each day, if any, that
Texas law establishes the Ceiling Rate, the Ceiling Rate shall be the "weekly
ceiling" (as defined in Chapter 303 of the Texas Finance Code (the "Texas
Finance Code") and Chapter 1D of Title 79, Tex. Rev. Civ. Stats. 1925 ("Chapter
1D"), as amended, respectively) for that day. The Agent may from time to time,
as to current and future balances, implement any other ceiling under the Texas
Finance Code or Chapter 1D by notice to the Borrower, if and to the extent
permitted by the Texas Finance Code or Chapter 1D. Without notice to the
Borrower or any other person or entity, the Ceiling Rate shall automatically
fluctuate upward and downward as and in the amount by which such maximum
nonusurious rate of interest permitted by applicable law fluctuates.
Code shall mean the Internal Revenue Code of 1986, as amended, as now or
hereafter in effect, together with all regulations, rulings and interpretations
thereof or thereunder by the Internal Revenue Service.
Commitment shall mean the commitment of the Lenders to lend funds under
Section 2.1 of this Agreement, other than Swing Loans.
Committed Loan shall mean Loans other than Money Market Loans.
Construction Interest shall mean Borrower's interest expense for the
construction of projects, which is capitalized in accordance with Generally
Accepted Accounting Principles.
Conversion Date has the meaning given to it in Section 2.2 hereof.
Coverage Ratio shall mean the ratio of (a) the Borrower's Funds From
Operations plus all of the Borrower's Interest Expense for the period used to
calculate Funds From Operations, to (b)
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dividends or other distributions of any kind or character paid or payable with
respect to any Disqualified Stock plus all of the Borrower's Interest Expense,
in each case for the period used to calculate the Funds From Operations.
Credit Documents shall mean this Agreement, the Notes, the guaranties
provided pursuant to Section 5.15.C, all instruments, certificates and
agreements now or hereafter executed or delivered to the Agent or the Lenders
pursuant to any of the foregoing, and all amendments, modifications, renewals,
extensions, increases and rearrangements of, and substitutions for, any of the
foregoing.
Credit Rating shall mean the S&P Rating, the Xxxxx'x Rating, the rating
assigned by DCR, or the rating assigned by Fitch to Borrower's senior unsecured
long term indebtedness.
DCR shall mean Duff & Xxxxxx Credit Rating Co.
Debt to Tangible Net Worth Ratio shall mean the ratio of Indebtedness to
Tangible Net Worth.
Debt to Total Asset Value Ratio shall mean the ratio (expressed as a
percentage) of Indebtedness to Total Asset Value.
Designated Lender shall mean a special purpose corporation that (a) shall
have become a party to this Agreement pursuant to Section 10.5(g), and (b) is
not otherwise a Lender.
Designated Lender Notes shall mean promissory notes of the Borrower,
substantially in the form of Exhibit C hereto, evidencing the obligation of the
Borrower to repay Money Market Loans made by Designated Lenders, and Designated
Lender Note means any one of such promissory notes issued under Section 10.5(g).
Designating Lender shall have the meaning set forth in Section 10.5(g).
Designation Agreement shall mean a designation agreement in substantially the
form of Exhibit H attached hereto, entered into by a Lender and a Designated
Lender and accepted by the Agent.
Determination Date shall mean the date that is two (2) years prior to the
then existing Revolving Credit Termination Date.
Disqualified Stock shall mean any of the Borrower's capital stock which by
its terms (or by the terms of any security into which it is convertible or for
which it is exchangeable or exercisable) (a) matures or is subject to mandatory
redemption, pursuant to a sinking fund obligation or otherwise, (b) is
convertible into or exchangeable or exercisable for Indebtedness or
Disqualified Stock, (c) is
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redeemable at the option of the holder of such stock, or (d) otherwise requires
any payments by Borrower, in each case on or before the Maturity Date.
Eligible Institution shall mean a commercial bank or a finance company,
insurance company or other financial institution which is regularly engaged in
making, purchasing or investing in loans and which has base capital of at least
$500,000,000.00, but shall not include any Person which is an Affiliate of the
Borrower.
Equity Percentage shall mean the following percentage for each Unconsolidated
Affiliate which will be in effect whenever and for so long as the Unconsolidated
Affiliate Ratio for that Unconsolidated Affiliate equals the corresponding
amount:
Unconsolidated Affiliate Ratio Equity Percentage
------------------------------ -----------------
1.5:1.0 or less 100%
Greater than 1.5:1.0 but less 50%
than or equal to 1.86:1.0
Greater than 1.86:1.0 0%
Eurodollar Business Day shall mean a Business Day on which transactions in
United States dollar deposits between banks may be carried on in the London
interbank dollar market.
Eurodollar Interbank Rate shall mean, for each Interest Period, the rate of
interest per annum, rounded, if necessary, to the next highest whole multiple of
one-sixteenth percent (1/16%), quoted by Agent at or before 11:00 a.m., London
time (or as soon thereafter as practicable), on the date two (2) Eurodollar
Business Days before the first day of such Interest Period, to be the arithmetic
average of the prevailing rates per annum at the time of determination and in
accordance with the then existing practice in the London interbank dollar
market, for the offering to Agent by one or more prime banks selected by Agent
in its sole discretion, in the London interbank dollar market, of deposits in
United States dollars for delivery on the first day of such Interest Period and
having a maturity equal to the length of such Interest Period and in an amount
equal (or as nearly equal as may be) to the Eurodollar Rate Borrowing to which
such Interest Period relates. Each determination by Agent of the Eurodollar
Interbank Rate shall be prima facie evidence thereof.
Eurodollar Rate shall mean for any day a rate per annum equal to the sum of
the Applicable Margin for that day plus the Eurodollar Interbank Rate in effect
on the first day of the Interest Period for the applicable Eurodollar Rate
Borrowing. Each Eurodollar Rate is subject to adjustments for reserves,
insurance assessments and other matters as provided for in Section 3.5 hereof.
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Eurodollar Rate Borrowing shall mean that portion of the principal balance of
the Loans at any time bearing interest at a Eurodollar Rate.
Eurodollar Reserve Requirement shall mean, on any day, the cost incurred by a
Lender as a reserve requirement (including, without limitation, basic,
supplemental, marginal and emergency reserves) applicable to "Eurocurrency
liabilities," as currently defined in Regulation D, all as specified by any
Governmental Authority, including but not limited to those imposed under
Regulation D, because of that Lender making a Eurodollar Rate Borrowing or a
Money Market LIBOR Loan available to the Borrower.
Event of Default shall mean any of the events specified as an event of
default in Section 7 of this Agreement, and Default shall mean any of such
events, whether or not any requirement for notice, grace or cure has been
satisfied.
Federal Funds Effective Rate shall to the extent necessary be determined by
the Agent separately for each day 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 the Agent from
three Federal funds brokers of recognized standing selected by the Agent.
Fitch shall mean Fitch IBCA Inc.
Fixed Charge Coverage Ratio shall mean the ratio of (a) the Borrower's Funds
From Operations plus all of the Borrower's Interest Expense for the period used
to calculate Funds From Operations, less Unit Capital Expenditures, to (b)
dividends of any kind or character or other proceeds paid or payable with
respect to any Disqualified Stock, plus all of the principal payable and
principal paid on the Borrower's Indebtedness other than (i) in the case of the
Borrower, any scheduled principal payments on the Term Loans, (ii) any
regularly scheduled principal payments on any Indebtedness which pays such
Indebtedness in full, to the extent the amount of such final scheduled principal
payment is greater than the scheduled principal payment immediately preceding
such final scheduled principal payment and (iii) scheduled principal payments on
the Borrower's Indebtedness incurred prior to July 7, 1998 (which date shall be
extended by one (1) year if the Revolving Credit Termination Date is extended by
one (1) year as provided in this Agreement) which has an Acceptable Credit
Rating at the time of issuance, plus all of the Borrower's Interest Expense, in
each case for the period used to calculate the Funds From Operations.
Funding Loss shall mean, with respect to (a) Borrower's payment or prepayment
of principal of a Eurodollar Rate Borrowing or a Money Market Loan on a day
other than the last day of the
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applicable Interest Period; (b) Borrower's failure to borrow a Eurodollar Rate
Borrowing or a Money Market Loan on the date specified by Borrower; (c)
Borrower's failure to make any prepayment of the Loans (other than Base Rate
Borrowings) on the date specified by Borrower, or (d) any cessation of a
Eurodollar Rate to apply to the Loans or any part thereof pursuant to Section
3.5, in each case whether voluntary or involuntary, any direct loss, expense,
penalty, premium or liability incurred by any Lender (including but not limited
to any loss or expense incurred by reason of the liquidation or reemployment of
deposits or other funds acquired by a Lender to fund or maintain a Loan).
Funds From Operations shall mean gross cash revenues (excluding unforfeited
security deposits) actually received by the Borrower, less all cash
disbursements characterized as expenses and all proper charges against income,
plus depreciation of Property and deferred taxes, reserves and other non-cash
charges, all determined in accordance with Generally Accepted Accounting
Principles; provided, that there shall not be included in such revenues (i) any
proceeds of any insurance policy other than rental or business interruption
insurance received by the Borrower, (ii) any gain which is classified as
"extraordinary" in accordance with Generally Accepted Accounting Principles,
(iii) gains or losses from depreciated real estate, or (iv) provisions for
possible losses. Funds From Operations will be calculated, on an annualized
basis, on the four (4) calendar quarters immediately preceding the date of the
calculation. Funds From Operations shall not be increased or decreased by gains
or losses from sales of Property other than undepreciated real estate. Funds
From Operations shall be calculated on a consolidated basis in accordance with
Generally Accepted Accounting Principles.
Generally Accepted Accounting Principles shall mean, as to a particular
Person, such accounting practice as, in the opinion of the independent
accountants of recognized national standing regularly retained by such Person
and acceptable to the Agent, conforms at the time to generally accepted
accounting principles, consistently applied. Generally Accepted Accounting
Principles means those principles and practices (a) which are recognized as such
by the Financial Accounting Standards Board, (b) which are applied for all
periods after the date hereof in a manner consistent with the manner in which
such principles and practices were applied to the most recent audited financial
statements of the relevant Person furnished to the Lenders or where a change
therein has been concurred in by such Person's independent auditors, and (c)
which are consistently applied for all periods after the date hereof so as to
reflect properly the financial condition, and results of operations and changes
in financial position, of such Person. If there is a change in such accounting
practice as to the Borrower that could affect the Borrower's ability to comply
with the terms of this Agreement, the parties hereto agree to review and discuss
such changes in accounting practice and the terms of this Agreement for a period
of no more than thirty (30) days with a view to amending this Agreement so that
the financial measures of the Borrower's operating performance and financial
condition are substantially the same after such change as they were immediately
before such change.
Governmental Authority shall mean any foreign governmental authority, the
United States of America, any State of the United States and any political
subdivision of any of the foregoing, and any agency, department, commission,
board, bureau, court or other tribunal having jurisdiction over the Agent, any
Lender or the Borrower or their respective Property.
-7-
Historical Value shall mean the purchase price of Property (including
improvements) and ordinary related purchase transaction costs, plus the cost of
subsequent capital improvements made by the Borrower, less any provision for
losses, all determined in accordance with Generally Accepted Accounting
Principles. If the Property is purchased as a part of a group of properties, the
Historical Value shall be calculated based upon a reasonable allocation of the
aggregate purchase price by the Borrower, and consistent with Generally Accepted
Accounting Principles.
Homestead Loans shall mean loans, advances and extensions of credit by the
Borrower to Homestead Village Incorporated evidenced by the Homestead Notes and
secured by Homestead Mortgages.
Homestead Mortgage Amount shall mean the amount funded under the Homestead
Loans (irrespective of the face amount of the Homestead Notes).
Homestead Mortgages shall mean mortgages issued to the Borrower on
Homestead Property securing the Homestead Loans.
Homestead Notes shall mean promissory notes payable to the Borrower and
convertible into common stock of Homestead Village Incorporated and secured by
Homestead Mortgages.
Homestead Property shall mean the real estate properties subject to the
Homestead Mortgages.
Indebtedness shall mean and include, without duplication (1) all
obligations for borrowed money, (2) all obligations evidenced by bonds,
debentures, notes or other similar agreements, (3) all obligations to pay the
deferred purchase price of Property or services, except trade accounts payable
arising in the ordinary course of business (unless included in (6) below), (4)
all guaranties and endorsements and other contingent obligations in respect of,
or any obligations to purchase or otherwise acquire, Indebtedness of others, (5)
all Indebtedness secured by any Lien existing on any interest of the Person with
respect to which Indebtedness is being determined in Property owned subject to
such Lien whether or not the Indebtedness secured thereby shall have been
assumed, (6) accounts payable, dividends of any kind or character or other
proceeds payable with respect to any stock and accrued expenses which in the
aggregate are in excess of five percent (5%) of the undepreciated value of the
assets of the Borrower, in each case including Non-recourse Debt, (7) payments
received in consideration for sale of Borrower's stock when the amount of the
stock so sold is determined, and the date of delivery is, more than one (1)
month after receipt of such payment and only to the extent that the obligation
to deliver stock is not payable solely in stock of the Borrower. Indebtedness
shall be calculated on a consolidated basis in accordance with Generally
Accepted Accounting Principles.
-8-
Interest Expense shall mean all of a Person's paid, accrued or capitalized
interest expense on such Person's Indebtedness (whether direct, indirect or
contingent, and including, without limitation, interest on all convertible
debt), but excluding Construction Interest.
Interest Options shall mean the Base Rate and the Eurodollar Rate, and
"Interest Option" means either of them.
Interest Payment Dates shall mean (a) the first (1st) day of each calendar
month and the Maturity Date, for Base Rate Borrowings and Eurodollar Rate
Borrowings; and (b) for Money Market Loans, the last day of each Interest Period
and the maturity date of the Money Market Loans Interest Period shall mean:
Interest Period shall mean:
(1) For each Eurodollar Rate Borrowing, a period commencing on the
date such Eurodollar Rate Borrowing was made and ending on the numerically
corresponding day which is, subject to availability, (a) one (1), two (2),
three (3) or six (6) months thereafter, or (b) seven (7), fourteen (14) or
twenty-one (21) days thereafter for no more than four (4) time periods
(provided that the first Eurodollar Rate Borrowing under this Agreement
with an Interest Period of seven (7) days shall not count against the four
time maximum) each calendar year in connection with payments of the Loans
because of debt and/or equity sales by the Borrower, changes in the Lender
Commitments or sales of major assets by the Borrower; provided that, (v)
any Interest Period which would otherwise end on a day which is not a
Eurodollar Business Day shall be extended to the next succeeding Eurodollar
Business Day, unless such Eurodollar Business Day falls in another calendar
month, in which case such Interest Period shall end on the next preceding
Eurodollar Business Day; (w) any Interest Period which begins on the last
Eurodollar Business Day of a calendar month (or on a day for which there is
no numerically corresponding day in the calendar month at the end of such
Interest Period) shall end on the last Eurodollar Business Day of the
appropriate calendar month; (x) no Interest Period shall ever extend beyond
the Maturity Date; and (y) Interest Periods shall be selected by Borrower
in such a manner that the Interest Period with respect to any portion of
the Loans which shall become due shall not extend beyond such due date.
(2) For each Money Market LIBOR Loan, the period commencing on the
date such Money Market LIBOR Loan was made and ending one (1), two (2),
three (3) or six (6) months thereafter, as the Borrower may elect in the
applicable Notice of Money Market Borrowing in accordance with Section 2.8;
provided that such Interest Period shall be limited as provided in clauses
(1)(v) through (y) above.
(3) With respect to each Money Market Absolute Rate Loan, the period
commencing on the date such Money Market Absolute Rate was made and ending
such
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number of days thereafter (but not less than 14 days) as the Borrower may
elect in accordance with Section 2.8; provided that such Interest Period
shall be limited as provided in clauses (1)(x) and (y) above.
Legal Requirement shall mean any law, statute, ordinance, decree,
requirement, order, judgment, rule, regulation (or interpretation of any of the
foregoing) of, and the terms of any license or permit issued by, any
Governmental Authority.
Lender Commitment means, for any Lender, the amount set forth opposite such
Lender's name on its signature page of this Agreement, or as may hereafter
become a signatory hereto, as adjusted to reflect assignments in accordance with
this Agreement.
LIBOR Auction shall mean a solicitation of Money Market Quotes setting
forth Money Market Margins based on the Eurodollar Interbank Rate pursuant to
Section 2.8.
Lien shall mean any mortgage, pledge, charge, encumbrance, security
interest, collateral assignment or other lien or restriction of any kind,
whether based on common law, constitutional provision, statute or contract, and
shall include reservations, exceptions, encroachments, easements, rights of way,
covenants, conditions, restrictions, leases and other title exceptions.
Loans shall mean the Loans described in Sections 2.1, 2.2 and 2.8 hereof.
Loan shall mean any such Loan.
Majority Lenders shall mean the Lenders with an aggregate amount of at
least sixty-six and sixty-seven one hundredths percent (66.67%) of the amount of
the Commitment then outstanding, and after the Commitment has expired or
terminated, shall mean Lenders with an aggregate amount of at least sixty-six
and sixty-seven one hundredths percent (66.67%) of the unpaid principal balance
of all Loans.
Material Adverse Change shall mean a change which could reasonably be
expected to have a Material Adverse Effect.
Material Adverse Effect means a material adverse effect on (a) the
financial condition, or results of operations of Borrower and its Subsidiaries
taken as a whole, (b) the ability of Borrower to perform its material
obligations under the Credit Documents to which it is a party taken as a whole,
(c) the validity or enforceability of such Credit Documents taken as a whole, or
(d) the material rights and remedies of Lenders and Agent under the Credit
Documents taken as a whole.
Maturity Date shall mean (a) the Revolving Credit Termination Date prior to
any conversion of the Committed Loans to the Term Loans, and (b) the Termination
Date as to the Term Loans.
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Money Market Absolute Rate has the meaning set forth in Section 2.8.
Money Market Absolute Rate Loan shall mean a loan to be made by a Lender
pursuant to an Absolute Rate Auction.
Money Market LIBOR Loan shall mean a loan to be made by a Lender pursuant
to a LIBOR Auction.
Money Market Loan shall mean a Money Market LIBOR Loan or a Money Market
Absolute Rate Loan, as the context may require or allow.
Money Market Margin has the meaning set forth in Section 2.8.
Money Market Quote shall mean an offer by a Lender to make a Money Market
Loan in accordance with Section 2.8.
Xxxxx'x Rating shall mean the senior unsecured debt rating from time to
time received by the Borrower from Xxxxx'x Investors Service, Inc.
Net Operating Income shall mean, for any income producing operating
properties, the difference between (a) any cash rentals, proceeds and other
income received from such Property (but excluding security or other deposits,
late fees, early lease termination or other penalties, or other income of a non-
recurring nature) during the determination period, less (b) all cash costs and
expenses (excluding interest expense and any expenditures that are capitalized
in accordance with Generally Accepted Accounting Principles) incurred as a
result of, or in connection with, or properly allocated to, the operation or
leasing of such Property during the determination period. Net Operating Income
shall be calculated on a consolidated basis in accordance with Generally
Accepted Accounting Principles.
Non-recourse Debt shall mean any Indebtedness the payment of which the
Borrower or any of its Subsidiaries is not obligated to make other than to the
extent of any security therefor.
Notes shall mean the promissory notes of the Borrower described in Section
2.1 hereof, including the Swing Loan Note, any and all renewals, extensions,
modifications, rearrangements and replacements thereof and any and all
substitutions therefor, and Note shall mean any one of them.
Obligations shall mean, as at any date of determination thereof, the sum of
(a) the aggregate amount of Loans outstanding hereunder plus (b) all other
liabilities, obligations and Indebtedness of any Parties under any Credit
Document.
-11-
Occupancy Period shall mean the immediately preceding calendar quarter for
initial inclusion of a Homestead Property in the Operating Sub-Pool, and then
for the second quarter such Homestead Property is included the immediately
preceding two (2) calendar quarters, for the third quarter such Homestead
Property is included the immediately preceding three (3) calendar quarters, and
for the fourth quarter such Homestead Property is included and thereafter the
immediately preceding four (4) calendar quarters.
Officer's Certificate shall mean a certificate in the form attached hereto
as Exhibit A.
Operating Sub-Pool Value means the sum of:
(a) with respect to the Sub-Pool Real Estate (as defined in Section
5.15 hereof), for the period being measured, the lesser of (i) the aggregate
Historical Value of such properties; and (ii) the sum of (1) the aggregate Net
Operating Income of such properties that during such measurement period have
reached the beginning of the first full calendar quarter after the Stabilization
Date (the "Calculation Date") ((x) beginning with the Calculation Date until the
end of the third full calendar quarter after the Stabilization Date, based on
the annualized Net Operating Income from the Calculation Date until the time of
measurement, and (y) beginning with the fourth full calendar quarter after the
Stabilization Date, based on the immediately preceding four (4) calendar quarter
period) divided by nine percent (9.0%), plus (2) the Historical Value of such
properties that have not reached the Calculation Date during the measurement
period; plus
(b) with respect to the Homestead Loans, for the Occupancy Period the
lesser of (i) the aggregate Homestead Mortgage Amount; and (ii) the aggregate
Net Operating Income of the Homestead Property (which must meet the requirements
of Section 5.15 (e)) during the Occupancy Period on an annualized basis divided
by eleven percent (11.0%).
Organizational Documents shall mean, with respect to a corporation, the
certificate of incorporation, articles of incorporation and bylaws of such
corporation; with respect to a partnership, the partnership agreement
establishing such partnership; with respect to a joint venture, the joint
venture agreement establishing such joint venture, and with respect to a trust,
the instrument establishing such trust; in each case including any and all
modifications thereof as of the date of the Credit Document referring to such
Organizational Document and any and all future modifications thereof which are
consented to by the Lenders.
Opinion Letters shall mean the opinion letters of independent counsel for
the Borrower, each in Proper Form.
Parties shall mean all Persons other than the Agent, the Syndication Agent,
the Documentation Agent or any Lender executing any Credit Document.
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Past Due Rate shall mean, on any day, a rate per annum equal to the Ceiling
Rate for that day, or only if applicable law imposes no maximum nonusurious rate
of interest for that day, then the Past Due Rate for that day shall be a rate
per annum equal to the Base Rate plus an additional three percent (3%) per
annum, but in any event not to exceed the Ceiling Rate.
Percentage shall mean the amount, expressed as a percentage, of each Lender
Commitment as compared to the Commitment, set forth opposite the Lender's name
on its signature page of this Agreement, or as may hereafter become signatory
hereto.
Permitted Encumbrances shall mean (a) encumbrances consisting of zoning
restrictions, easements, or other restrictions on the use of real property,
provided that such items do not materially impair the use of such property for
the purposes intended and none of which is violated in any material respect by
existing or proposed structures or land use; (b) the following: (i) Liens for
taxes not yet due and payable, or being diligently contested in good faith, or
where no Material Adverse Effect could reasonably be expected to result from
such nonpayment or the imposition of such Lien; or (ii) materialmen's,
mechanic's, warehousemen's and other like Liens arising in the ordinary course
of business, securing payment of Indebtedness whose payment is not yet due, or
that are being contested in good faith by appropriate proceedings diligently
conducted, and for or against which the Borrower has established adequate
reserves in accordance with Generally Accepted Accounting Principles; (c) Liens
for taxes, assessments and governmental charges or assessments that are being
contested in good faith by appropriate proceedings diligently conducted, and for
or against which the Borrower has established adequate reserves in accordance
with Generally Accepted Accounting Principles; (d) Liens on real property which
are insured around or against by title insurance; (e) Liens securing assessments
or charges payable to a property owner association or similar entity which
assessments are not yet due and payable or are being diligently contested in
good faith; and (f) Liens securing this Agreement and Indebtedness hereunder.
Person shall mean any individual, corporation, trust, unincorporated
organization, Governmental Authority or any other form of entity.
Prime Rate shall mean, as of a particular date, the prime rate of interest
per annum most recently determined by the Agent as its prime rate, automatically
fluctuating upward or downward with and at the time specified in each such
determination without notice to Borrower or any other Person; each change in the
Prime Rate shall be effective on the date such change is determined; which Prime
Rate may not necessarily represent the Agent's lowest or best rate actually
charged to a customer.
Proper Form shall mean in form and substance reasonably satisfactory to the
Agent and the Majority Lenders.
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Property shall mean any interest in any kind of property or asset, whether
real, personal or mixed, tangible or intangible.
Quarterly Unaudited Financial Statements shall mean the quarterly financial
statements of a Person, including all notes thereto, which statements shall
include a balance sheet as of the end of such quarter and an income statement
for such fiscal quarter, and for the fiscal year to date, a statement of cash
flows for such quarter and for the fiscal year to date, subject to normal year-
end adjustments, and a detailed listing of the Borrower's Property and the
Historical Value thereof, all setting forth in comparative form the
corresponding figures for the corresponding fiscal period of the preceding year
(or, in the case of the balance sheet, the end of the preceding fiscal year),
prepared in accordance with Generally Accepted Accounting Principles except that
the Quarterly Unaudited Financial Statements may contain condensed footnotes as
permitted by regulations of the United States Securities and Exchange
Commission, and certified as true and correct by a managing director, senior
vice president, controller, co-controller or vice president of Borrower. The
Quarterly Unaudited Financial Statements shall be prepared on a consolidated
basis in accordance with Generally Accepted Accounting Principles.
Rate Designation Date shall mean 12:00 noon, Houston, Texas time, on the
date three (3) Eurodollar Business Days preceding the first day of any proposed
Interest Period.
Regulation D shall mean Regulation D of the Board of Governors of the
Federal Reserve System from time to time in effect and shall include any
successor or other regulation relating to reserve requirements applicable to
member lenders of the Federal Reserve System.
Request for Loan shall mean a written request for a Committed Loan
substantially in the form of Exhibit B.
Revolving Credit Termination Date shall mean July 7, 2001 as the same may
hereafter be accelerated pursuant to the provisions of any of the Credit
Documents.
S&P Rating shall mean the senior unsecured debt rating from time to time
received by the Borrower from Standard & Poor's Rating Services.
Stabilization Date shall mean, with respect to a property, the earlier of
(a) twelve (12) months from the date of acquisition of an income producing
property by the Borrower or twelve (12) months after substantial completion of
construction or development of a new construction or development property, and
(b) the date on which the occupancy level is at least ninety-three percent
(93%).
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Stated Rate shall, on any day, mean whichever of the Base Rate, the
Eurodollar Rate, or a rate applicable to Money Market Loans has been designated
and provided pursuant to this Agreement; provided that, if on any day such rate
shall exceed the Ceiling Rate for that day, the Stated Rate shall be fixed at
the Ceiling Rate on that day and on each day thereafter until the total amount
of interest accrued at the Stated Rate on the unpaid principal balance of the
Notes equals the total amount of interest which would have accrued if there had
been no Ceiling Rate. If the Notes mature (or are prepaid) before such equality
is achieved, then, in addition to the unpaid principal and accrued interest then
owing pursuant to the other provisions of the Credit Documents, Borrower
promises to pay on demand to the order of the holders of the Notes interest in
an amount equal to the excess (if any) of (a) the lesser of (i) the total
interest which would have accrued on the Notes if the Stated Rate had been
defined as equal to the Ceiling Rate from time to time in effect and (ii) the
total interest which would have accrued on the Notes if the Stated Rate were not
so prohibited from exceeding the Ceiling Rate, over (b) the total interest
actually accrued on the Notes to such maturity (or prepayment) date.
Subsidiary shall mean, as to a particular parent entity, any entity of
which more than fifty percent (50%) of the indicia of voting equity or ownership
rights (whether outstanding capital stock or otherwise) is at the time directly
or indirectly owned by, such parent entity, or by one or more of its other
Subsidiaries.
Swing Loan shall mean a Loan made pursuant to Section 2.1(c) hereof.
Swing Loan Note shall mean that certain promissory note dated of even date
herewith in the original principal amount of $75,000,000.00 executed by the
Borrower payable to the order of Chase.
Tangible Net Worth shall mean total assets (valued at cost without
deduction for depreciation, and including the book value of equity investments
in each Unconsolidated Affiliate multiplied by the Equity Percentage for that
Unconsolidated Affiliate), less (1) all intangibles (other than the unrealized
gain on the Homestead Loans) and (2) all liabilities (including contingent and
indirect liabilities), all determined in accordance with Generally Accepted
Accounting Principles. The term "intangibles" shall include, without limitation,
(i) deferred charges, (ii) the amount of any write-up in the book value of any
assets contained in any balance sheet resulting from revaluation thereof or any
write-up in excess of the cost of such assets acquired, and (iii) the aggregate
of all amounts appearing on the assets side of any such balance sheet for
franchises, licenses, permits, patents, patent applications, copyrights,
trademarks, trade names, goodwill, treasury stock, experimental or
organizational expenses and other like intangibles. The term "liabilities" shall
include, without limitation, (i) Indebtedness secured by Liens on Property of
the Person with respect to which Tangible Net Worth is being computed whether or
not such Person is liable for the payment thereof, (ii) deferred liabilities,
and (iii) obligations under leases which have been capitalized. Tangible Net
Worth shall be calculated on a consolidated basis in accordance with Generally
Accepted Accounting Principles.
-15-
Taxes shall mean any tax, levy, impost, duty, charge or fee.
Term Loan has the meaning given it in Section 2.2 hereof.
Termination Date shall mean the date two (2) years after the Conversion
Date, as the same may hereafter be accelerated pursuant to the provisions of any
of the Credit Documents.
Total Asset Value shall mean the sum of (a) the aggregate Net Operating
Income of properties that have reached the Calculation Date (as defined in the
definition of Operating Sub-Pool Value) ((i) beginning with the Calculation Date
until the end of the third full calendar quarter after the Stabilization Date,
based on the annualized Net Operating Income from the Calculation Date until the
time of measurement, and (ii) beginning with the fourth full calendar quarter
after the Stabilization Date, based on the immediately preceding four (4)
calendar quarter period) divided by eight and three-fourths percent (8.75%),
plus (b) the total book value of properties that have not reached the
Calculation Date, plus (c) the amount of any cash and cash equivalents,
excluding tenant security and other restricted deposits, plus (d) the total book
value of all of the Borrower's other assets not described in (a), (b) or (c)
above, excluding all intangibles and all equity investments in Unconsolidated
Affiliates, plus (e) the total book value of the Borrower's equity investments
in each Unconsolidated Affiliate multiplied by the Equity Percentage for that
Unconsolidated Affiliate. Total Asset Value shall be calculated on a
consolidated basis in accordance with Generally Accepted Accounting Principles.
Unconsolidated Affiliate shall mean, in respect of any Person, any other
Person in whom such Person holds a voting equity or other ownership interest and
whose financial results would not be consolidated under Generally Accepted
Accounting Principles with the financial results of such other Person on the
consolidated financial statements of such first mentioned Person.
Unconsolidated Affiliate Ratio shall mean, for each Unconsolidated
Affiliate, the ratio of the Indebtedness of the Unconsolidated Affiliate to the
Tangible Net Worth of the Unconsolidated Affiliate.
Unit Capital Expenditure shall mean, on an annual basis, an amount equal to
the result of (a) the number of apartment units contained in each completed,
operating Property owned by Borrower and any Subsidiary as of the last day of
each of the immediately preceding five (5) calendar quarters, divided by five
(5); and multiplied by (b) $200.00.
20 The Loans.
-16-
2.1 Advances. (a) Subject to the terms and conditions of this Agreement,
each Lender severally agrees to make Committed Loans (other than Swing Loans)
prior to the Revolving Credit Termination Date to the Borrower not to exceed an
amount (in the aggregate, the "Commitment") at any one time outstanding equal to
the Lender's Lender Commitment. Each such request for a Committed Loan by
Borrower shall be deemed a request for a Committed Loan from each Lender equal
to such Lender's Percentage of the aggregate amount so requested, and such
aggregate amount shall be in an amount at least equal to $1,000,000.00 and equal
to a multiple of $100,000.00, or the difference between the Commitment and the
aggregate principal balance of the Notes, whichever is less. Each repayment of
the Committed Loans shall be deemed a repayment of each Lender's Committed Loan
equal to such Lender's Percentage of the amount so repaid. The obligations of
the Lenders hereunder are several and not joint, and the preceding two sentences
will give rise to certain inappropriate results if special provisions are not
made to accommodate the failure of a Lender to fund a Committed Loan as and when
required by this Agreement; therefore, notwithstanding anything herein to the
contrary, (A) no Lender shall be required to make Committed Loans at any one
time outstanding in excess of such Lender's Percentage of the Commitment and (B)
if a Lender fails to make a Committed Loan as and when required hereunder and
Borrower subsequently makes a repayment on the Committed Loans, such repayment
shall be split among the non-defaulting Lenders ratably in accordance with their
respective Percentages until each Lender has its Percentage of all of the
outstanding Committed Loans, and the balance of such repayment shall be divided
among all of the Lenders in accordance with their respective Percentages.
Notwithstanding the foregoing, borrowings and payments of Swing Loans shall be
for Chase's own account. The Loans (other than Swing Loans) shall be evidenced
by the Notes substantially in the form of Exhibit C attached hereto. The
Borrower, the Agent and the Lenders agree that Chapter 346 of the Texas Finance
Code shall not apply to this Agreement, the Notes or any Loan.
(b) The Borrower shall give the Agent notice of each borrowing of a
Committed Loan to be made hereunder as provided in Section 3.1 hereof, and the
Agent shall deliver same to each Lender promptly thereafter. Not later than
11:00 a.m., Houston, Texas time, on the date specified for each such borrowing
of a Committed Loan hereunder other than Swing Loans, each Lender shall make
available the amount of the Loan, if any, to be made by it on such date to the
Agent at the Agent's principal office in Houston, Texas, in immediately
available funds, for the account of the Borrower. Such amounts received by the
Agent will be held in Agent's general ledger account. The amounts so received by
the Agent shall, subject to the terms and conditions of this Agreement, be made
available to the Borrower by wiring or otherwise transferring, in immediately
available funds not later than 12:00 noon, Houston, Texas time, such amount to
an account designated by the Borrower and maintained with Chase in El Paso,
Texas or any other account or accounts which the Borrower may from time to time
designate to the Agent by a written notice as the account or accounts to which
borrowings hereunder are to be wired or otherwise transferred. Chase shall make
available the amount of each Swing Loan by depositing the same in immediately
available funds, in the foregoing account by 2:00 p.m., Houston, Texas time, on
the date of the borrowing.
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(c) Subject to the terms and conditions hereof, if necessary to meet the
Borrower's funding deadlines, Chase agrees to make Swing Loans to the Borrower
at any time on or prior to the Revolving Credit Termination Date, not to exceed
an amount at any one time outstanding equal to the lesser of (i) $75,000,000.00,
or (ii) the difference between the Commitment and the unpaid principal balance
of all Loans. Swing Loans shall constitute "Loans" for all purposes hereunder.
Notwithstanding the foregoing, the aggregate amount of all Loans (including,
without limitation, all Swing Loans) shall not at any time exceed the
Commitment. Each request for a Swing Loan shall be in an amount at least equal
to $1,000,000.00 and equal to a multiple of $100,000.00. If necessary to meet
the Borrower's funding deadlines, the Agent may treat any Request for Loan as a
request for a Swing Loan from Chase and Chase may fund it as a Swing Loan.
Within two (2) Business Days after each Swing Loan is funded, Chase shall
request that each Lender, and each Lender shall, on the first Business Day after
such request is made, purchase a portion of any one or more Swing Loans in an
amount equal to that Lender's Percentage of such Swing Loans by funding under
such Lender's Note, such purchase to be made in accordance with the terms of
Section 2.1(b) of this Agreement just as if the Lender were funding directly to
the Borrower under its Note (such that all Lenders other than Chase shall fund
only under their respective Note and not under the Swing Loan Note). Unless the
Agent knew or should have known when Chase funded a Swing Loan that the Borrower
had not satisfied the conditions in this Agreement to obtain a Loan, each
Lender's obligation to purchase an interest in the Swing Loans shall be absolute
and unconditional and shall not be affected by any circumstance, including,
without limitation, (i) any set-off, counterclaim, recoupment, defense or other
right which such Lender or any other Person may have against Chase or any other
Person for any reason whatsoever; (ii) the occurrence or continuance of a
Default or Event of Default or the termination of any Lender Commitment; (iii)
any adverse change in the condition (financial or otherwise) of the Borrower or
any of its Subsidiaries; (iv) any breach of this Agreement or any other Credit
Documents by the Borrower, any of its Subsidiaries, the Agent or any other
Lender; or (v) any other circumstance, happening or event whatsoever, whether or
not similar to any of the foregoing. Any portion of a Swing Loan not so
purchased and converted may be treated by Chase as a Committed Loan which was
not funded by the non-purchasing Lenders as contemplated in Section 2.1(a) of
this Agreement, and as a funding by Chase under the Commitment in excess of
Chase's Percentage. Each Swing Loan, once so sold, shall cease to be a Swing
Loan for the purposes of this Agreement, but shall be a Committed Loan made
under the Commitment and each Lender's Lender Commitment. The Swing Loans shall
be evidenced by the Swing Loan Note substantially in the form of Exhibit C-1
attached hereto.
2.2 Term Loan Conversion.
(a) Subject to the terms and conditions of this Agreement, if any
Extension Request (as defined in Section 9) shall be denied, the Borrower may
elect to convert the aggregate unpaid principal amount of the Committed Loans
(other than the Swing Loans) outstanding on the Revolving Credit Termination
Date (if the conversion election is chosen, the "Conversion Date") into a term
loan owing to each of the Lenders (each a "Term Loan"), so long as (i) the
Borrower has
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given the Agent at least fifteen (15) days prior written notice of the
Borrower's intention to so convert the Loans, (ii) no amounts remain unpaid
under the Swing Loan Note, and (iii) the conditions to make a Loan set forth in
Section 3 are satisfied as of the Conversion Date. After the Conversion Date,
the Borrower shall have no further right to receive, and no Lender shall have
the obligation to make, any advances of Loans.
(b) The Borrower shall repay the principal balance of each Term Loan
in quarterly installments due on September 30 first following the Conversion
Date, and continuing on the last day of each subsequent December, March, June
and September until the Termination Date. The amount of each quarterly principal
installment shall be equal to the following amount during the corresponding
period:
PERIOD PAYMENT AMOUNT
------ --------------
During the first year after Quarterly amount each equal to six and one-half
the Conversion Date percent (6-1/2%) of the unpaid principal
balance of the applicable Term Loan on the
Conversion Date
During the second year after Quarterly amount each equal to thirteen
the Conversion Date (13%) of the unpaid principal balance of the
applicable Term Loan on the Conversion Date
Accrued and unpaid interest on the unpaid principal balance of the Term Loans
shall continue to be due and payable on the Interest Payment Dates. The entire
unpaid principal balance, and all accrued and unpaid interest thereon, of the
Term Loans, together with all other amounts due under this Agreement, shall be
due and payable in full on the Termination Date.
2.3 Payments. (a) Except to the extent otherwise provided herein, all
payments of principal, interest and other amounts to be made by the Borrower
hereunder, under the Notes and under the other Credit Documents shall be made in
immediately available funds to the Agent at its principal office in Houston,
Texas (or in the case of a successor Agent, at the principal office of such
successor Agent in the United States), not later than 12:00 noon Houston, Texas
time on the date on which such payment shall become due (each such payment made
after such time on such due date to be deemed to have been made on the next
succeeding Business Day).
(b) The Borrower may, at the time of making each payment hereunder, under
any Note or under any other Credit Document, specify to the Agent the Loans or
other amounts payable by the Borrower hereunder or thereunder to which such
payment is to be applied (and in the event that it fails so to specify, such
payment shall be applied to the Loans (first to the Swing Loans) or, if no Loans
are outstanding, to other amounts then due and payable, provided that if no
Loans or other amounts are then due and payable or an Event of Default has
occurred and is continuing, the Agent may apply such payment to the Obligations
in such order as it may elect in its sole discretion, but
-19-
subject to the other terms and conditions of this Agreement, including without
limitation Section 2.4 hereof). Each payment received by the Agent hereunder,
under any Note or under any other Credit Document for the account of a Lender
shall be paid promptly to such Lender, in immediately available funds. If the
Agent receives a payment for the account of a Lender prior to 12:00 noon
Houston, Texas time, such payment must be delivered to the Lender on that same
day and if it is not so delivered due to the fault of the Agent, the Agent shall
pay to the Lender entitled to the payment the interest accrued on the amount of
the payment pursuant to said Lender's Note from the date the Agent receives the
payment to the date the Lender received the payment. The Agent may apply
payments received from the Borrower to pay any unpaid principal and interest on
the Swing Loans before making payment to each Lender of amounts due under the
Notes other than the Swing Loan Note. Committed Loans may be prepaid only if the
accompanying Funding Loss, if any, is also paid. Money Market Loans may not be
prepaid.
(c) If the due date of any payment hereunder or under any Note falls on a
day which is not a Business Day or a Eurodollar Business Day, as the case may
be, the due date for such payments shall be extended to the next succeeding
Business Day or Eurodollar Business Day, respectively, and interest shall be
payable for any principal so extended for the period of such extension;
provided, however, that with respect to Eurodollar Rate Borrowings and Money
Market LIBOR Loans if such extension would cause the Eurodollar Business Day of
payment to fall in another calendar month, the payment shall be due on the
Eurodollar Business Day next preceding the due date of the payment.
(d) The Borrower shall give the Agent at least one (1) Business Day's
prior written notice of the Borrower's intent to make any payment of principal
or interest under the Credit Documents not scheduled to be paid under the Credit
Documents. Any such notification of payment shall be irrevocable after it is
made by the Borrower. Upon receipt by the Agent of such notification of payment,
it shall deliver same to the other Lenders.
(e) All payments by the Borrower hereunder or under any other Credit
Documents shall be made free and clear of and without deduction for or on
account of any Taxes, including withholding and other charges of any nature
whatsoever imposed by any taxing authority excluding in the case of each Lender
taxes imposed on or measured by its net income or franchise taxes imposed in
lieu of net income taxes by the jurisdiction in which it is organized or through
which it acts for purposes of this Agreement. If any withholding or deduction
from any payment to be made to, or for the account of, a Lender by the Borrower
hereunder or under any other Credit Document is required in respect of any Taxes
pursuant to any applicable law, rule, or regulation, then the Borrower will (i)
pay to the relevant authority the full amount required to be so withheld or
deducted; (ii) to the extent available, promptly forward to the Agent an
official receipt or other documentation satisfactory to the Agent evidencing
such payment to such authority; and (iii) pay to the Agent, for the account of
each affected Lender, such additional amount or amounts as are necessary to
ensure that the net amount actually received by such Lender will equal the full
amount such Lender would have received had no such withholding or deduction been
required. Each Lender shall determine
-20-
such additional amount or amounts payable to it (which determination shall, in
the absence of manifest error, be conclusive and binding on the Borrower). If a
Lender becomes aware that any such withholding or deduction from any payment to
be made by the Borrower hereunder or under any other Credit Document is
required, then such Lender shall promptly notify the Agent and the Borrower
thereof stating the reasons therefor and the additional amount required to be
paid under this Section. Each Lender shall execute and deliver to the Agent and
Borrower such forms as it may be required to execute and deliver pursuant to
subsection (f) below. To the extent that any such withholding or deduction
results from the failure of a Lender to provide a form required by subsection
(f) below (unless such failure is due to some prohibition under applicable Legal
Requirements), the Borrower shall have no obligation to pay the additional
amount required by clause (iii) above. Anything in this Section notwithstanding,
if any Lender elects to require payment by the Borrower of any material amount
under this Section, the Borrower may, within 60 days after the date of receiving
notice thereof and so long as no Default shall have occurred and be continuing,
elect to terminate such Lender as a party to this Agreement; provided that,
concurrently with such termination the Borrower shall (1) if the Agent and each
of the other Lenders shall consent, pay that Lender all principal, interest and
fees and other amounts owed to such Lender through such date of termination or
(2) have arranged for another Eligible Institution approved by the Agent (such
approval not to be unreasonably withheld) as of such date, to become a
substitute Lender for all purposes under this Agreement in the manner provided
in Section 10.5; provided further that, prior to substitution for any Lender,
the Borrower shall have given written notice to the Agent of such intention and
the Lenders shall have the option, but no obligation, for a period of 60 days
after receipt of such notice, to increase their Commitments pro rata based on
their Lender Commitments in order to replace the affected Lender in lieu of such
substitution.
(f) With respect to each Lender which is organized under the laws of a
jurisdiction outside the United States, on the day of the initial borrowing from
each such Lender hereunder and from time to time thereafter if requested by the
Borrower or the Agent, such Lender shall provide the Agent and the Borrower with
the forms prescribed by the Internal Revenue Service of the United States
certifying as to such Lender's status for purposes of determining exemption from
United States withholding taxes with respect to all payments to be made to such
Lender hereunder or other documents satisfactory to such Lender and the Agent
indicating that all payments to be made to such Lender hereunder are not subject
to United States withholding tax or are subject to such tax at a rate reduced by
an applicable tax treaty. Unless the Borrower and the Agent shall have received
such forms or such documents indicating that payments hereunder are not subject
to United States withholding tax or are subject to such tax at a rate reduced by
an applicable tax treaty, the Borrower or the Agent shall withhold taxes from
such payments at the applicable statutory rate in the case of payments to or for
any Lender organized under the laws of a jurisdiction outside the United States.
2.4 Pro Rata Treatment. Except to the extent otherwise provided herein:
(a) each borrowing from the Lenders under Section 2.1(a) hereof shall
be made ratably from the Lenders on the basis of their respective
Percentages, each payment of the Fee (hereinafter defined) shall be
made
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for the account of the Lenders, and shall be applied, pro rata, according to the
Lenders' respective Lender Commitment; and (b) each payment by the Borrower of
principal or interest on the Committed Loans other than the Swing Loans, of any
other sums advanced by the Lenders pursuant to the Credit Documents, and of any
other amount owed to the Lenders other than the Fee, payments of Swing Loans, or
any other sums designated by this Agreement as being owed to a particular
Lender, shall be made to the Agent for the account of the Lenders pro rata in
accordance with the respective unpaid principal amounts of the Committed Loans
(other than Swing Loans) held by the Lenders. Payments of Swing Loans shall be
for Chase's own account.
2.5 Non-Receipt of Funds by the Agent. Unless the Agent shall have been
notified by a Lender or the Borrower (the "Payor") prior to the date on which
such Lender is to make payment to the Agent of the proceeds of a Loan (or
purchase of a portion of a Swing Loan) to be made by it hereunder or the
Borrower is to make a payment to the Agent for the account of one or more of the
Lenders, as the case may be (such payment being herein called the "Required
Payment"), which notice shall be effective upon receipt, that the Payor does not
intend to make the Required Payment to the Agent, the Agent may assume that the
Required Payment has been made and may, in reliance upon such assumption (but
shall not be required to), make the amount thereof available to the intended
recipient on such date and, if the Payor has not in fact made the Required
Payment to the Agent, the recipient of such payment shall, on demand, pay to the
Agent the amount made available by the Agent together with interest thereon in
respect of the period commencing on the date such amount was so made available
by the Agent until the date the Agent recovers such amount at a rate per annum
equal to (a) the Past Due Rate for such period if the recipient returning a
Required Payment is the Borrower, or (b) the Federal Funds Effective Rate for
such period if the recipient returning a Required Payment is the Agent or a
Lender.
2.6 Sharing of Payments, Etc. The Borrower agrees that, in addition to
(and without limitation of) any right of set-off, bankers' lien or counterclaim
a Lender may otherwise have, each Lender shall be entitled, at its option, to
offset balances held by it for the account of the Borrower at any of its
offices, against any principal of or interest on any of such Lender's Loans to
the Borrower hereunder, or other Obligations of the Borrower hereunder, which is
not paid (regardless of whether such balances are then due to the Borrower), in
which case it shall promptly notify the Borrower and the Agent thereof, provided
that such Lender's failure to give such notice shall not affect the validity
thereof. If a Lender shall obtain payment of any principal of or interest on any
Committed Loan made by it under this Agreement (other than Swing Loans made by
Chase), or other Obligation then due to such Lender hereunder, through the
exercise of any right of set-off, banker's lien, counterclaim or similar right,
or otherwise, it shall promptly purchase from the other Lenders portions of the
Loans made or other Obligations held (other than Swing Loans made by Chase), by
the other Lenders in such amounts, and make such other adjustments from time to
time as shall be equitable to the end that all the Lenders shall share the
benefit of such payment (net of any expenses which may be incurred by such
Lender in obtaining or preserving such benefit) pro rata in accordance with the
unpaid principal and interest on the Obligations then due to each of them. To
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such end all the Lenders shall make appropriate adjustments among themselves (by
the resale of participations sold or otherwise) if such payment is rescinded or
must otherwise be restored. Nothing contained herein shall require any Lender to
exercise any such right or shall affect the right of any Lender to exercise, and
retain the benefits of exercising, any such right with respect to any other
indebtedness or obligation of the Borrower.
2.7 Fees. The Borrower shall pay to the Agent for the account of each
Lender fees (collectively, the "Fee") equal to the following:
(a) an amount payable as a facility fee by the Borrower to the Agent
for the account of each Lender equal to the following percentage per annum
multiplied by the Commitment, which will be in effect whenever and for so long
as the Borrower has received the corresponding Credit Rating (the method of
determining the Credit Rating based on multiple ratings to be the same as set
forth and used to determine the Credit Rating for the definition of Applicable
Margin):
CREDIT RATING FACILITY FEE
------------- ------------
A/A2 or better 0.125%
A-/A3 0.125%
BBB+/Baa1 0.150%
BBB/Baa2 0.150%
BBB-/Baa3 0.200%
If the Credit Rating is worse than BBB-/Baa3, then for that calendar quarter and
for so long thereafter as the Credit Rating is worse than BBB-/Baa3, the
facility fee will be equal to the daily unused amount of the Commitment (Swing
Loans shall be deemed to be a utilization of the Commitment solely for the
purposes of this Section 2.7(a)) multiplied by 0.250% per annum payable in
arrears on or before the tenth (10th) day of each April, July, October and
January.
(b) If the Revolving Credit Termination Date is extended pursuant to
Section 9 of this Agreement, an amount payable as an extension fee by the
Borrower to the Agent for the account of each Lender that extends its Committed
Loans equal to 0.075% of each Lender's Lender Commitment at that time payable on
the Determination Date.
(c) If the Loans are converted to the Term Loans pursuant to Section
2.2 of this Agreement, an amount payable as a conversion fee by the Borrower to
the Agent for the account of each Lender that converts its Loans equal to 0.200%
of the aggregate unpaid principal balance of each Loan on the Conversion Date
payable to each Lender on the Conversion Date.
The Fee shall not be refundable (except as required by Section 3.1(c) of
this Agreement). Any portion of the Fee which is not paid by the Borrower when
due shall bear interest at the Past
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Due Rate from the date due until the date paid by the Borrower. The Fee shall be
calculated on the actual number of days elapsed in a year deemed to consist of
360 days.
2.8 Money Market Borrowings.
-----------------------
(a) The Borrower may, as set forth in this Section, whenever at the
time of the request therefor the Borrower has received an Acceptable Credit
Rating request the Lenders prior to the Revolving Credit Termination Date to
make offers to make Money Market Loans to the Borrower, not to exceed, at such
time, the lesser of (i) the unused portion of the Commitment and (ii)
$375,000,000. The Lenders may, but shall have no obligation to, make such offers
and the Borrower may, but shall have no obligation to, accept any such offers in
the manner set forth in this Section. The Borrower shall pay the Agent a fee of
$2,500.00 for each Money Market Quote Request provided below, payable monthly
based on the requests for the previous month.
(b) When the Borrower wishes to request offers to make Money Market
Loans under this Section, it shall transmit to the Agent (in care of Xx. Xxxxx
Xxxxxxxx, Loan and Agency Services, Xxx Xxxxx Xxxxx, 0xx Xxxxx, Xxx Xxxx, Xxx
Xxxx 00000, Facsimile No. 000-000-0000, telephone number 000-000-0000) by
facsimile transmission a Money Market Quote Request ("Money Market Quote
Request") substantially in the form of Exhibit E hereto so as to be received no
later than 12:00 noon, New York, New York time on (i) the fourth Eurodollar
Business Day prior to the date of borrowing proposed therein, in the case of a
LIBOR Auction or (ii) the Business Day next preceding the date of borrowing
proposed therein, in the case of an Absolute Rate Auction (or, in either case,
such other time or date as the Borrower and the Agent shall have mutually agreed
and shall have notified to the Lenders not later than the date of the Money
Market Quote Request for the first LIBOR Auction or Absolute Rate Auction for
which such change is to be effective) specifying:
(x) the proposed date of borrowing, which shall be a Eurodollar
Business Day in the case of a LIBOR Auction or a Business Day in the
case of an Absolute Rate Auction, and
(y) the aggregate amount of such borrowing, which shall be
$20,000,000.00 or a larger multiple of $1,000,000.00.
The Borrower may request offers to make Money Market Loans for more than one
Interest Period in a single Money Market Quote Request. No Money Market Quote
Request shall be given within five (5) Eurodollar Business Days (or such other
number of days as the Borrower and the Agent may agree in writing ) of any other
Money Market Quote Request.
(c) Promptly upon receipt of a Money Market Quote Request, the Agent
shall send to the Lenders by telex or facsimile transmission an Invitation for
Money Market Quotes substantially in the form of Exhibit F hereto, which shall
constitute an invitation by the Borrower
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to each Lender to submit Money Market Quotes offering to make the Money Market
Loans to which such Money Market Quote Request relates in accordance with this
Section.
(d) (i) Each Lender may submit a Money Market Quote containing an
offer or offers to make Money Market Loans in response to any Invitation for
Money Market Quotes. Each Money Market Quote must comply with the requirements
of this subsection (d) and must be received by the Agent by telex or facsimile
transmission not later than (x) 9:30 a.m. New York, New York time on the third
Eurodollar Business Day prior to the proposed date of borrowing, in the case of
a LIBOR Auction or (y) 10:30 a.m. New York, New York time on the proposed date
of borrowing, in the case of an Absolute Rate Auction; provided that Money
Market Quotes submitted by the Agent (or any affiliate of the Agent or its
Designated Lender) in the capacity of a Lender may be submitted, and may only be
submitted, if the Agent or such affiliate notifies the Borrower of the terms of
the offer or offers contained therein not later than thirty (30) minutes prior
to the applicable deadline for the other Lenders. Any Money Market Quote so made
shall be irrevocable except with the written consent of the Agent given on the
instructions of the Borrower. If, and only if, the Borrower elected in the
applicable Money Market Quote Request to permit the Lenders to designate
Designated Lenders to fund such Money Market Loans, such Money Market Loans may
be funded by such Lender's Designated Lender (if any) as provided in Section
10.5(g), however such Lender shall not be required to specify in its Money
Market Quote whether such Money Market Loans will be funded by such Designated
Lender.
(ii) Each Money Market Quote shall be in substantially the form of
Exhibit G hereto and shall in any case specify:
(1) the principal amount of the Money Market Loan for which each
offer is being made, which principal amount (w) may be greater than or less
than the Lender Commitment of the quoting Lender, (x) must be $5,000,000.00
or a larger multiple of $500,000.00, (y) may not exceed the principal
amount of Money Market Loans for which offers were requested, and (z) may
be subject to an aggregate limitation as to the principal amount of Money
Market Loans for which offers being made by such quoting Lender may be
accepted,
(2) in the case of a LIBOR Auction, the margin (the "Money
Market Margin") above or below the applicable Eurodollar Interbank Rate)
offered for each such Money Market Loan, expressed as a percentage
(specified to the nearest 1/10,000th of 1%) to be added to or subtracted
from such applicable rate, and
(3) in the case of an Absolute Rate Auction, the rate of
interest per annum (specified to the nearest 1/10,000th of 1%) (the "Money
Market Absolute Rate") offered for each such Money Market Loan.
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A Money Market Quote may set forth up to five (5) separate offers by the quoting
Lender with respect to each Interest Period specified in the related Invitation
for Money Market Quotes.
(iii) Any Money Market Quote shall be disregarded if it:
(1) is not substantially in conformity with Exhibit G hereto
or does not specify all of the information required by subsection (d)(ii)
above;
(2) contains qualifying, conditional or similar language;
(3) proposes terms other than or in addition to those set
forth in the applicable Invitation for Money Market Quotes; or
(4) arrives after the time set forth in subsection (d)(i)
above.
(e) The Agent shall promptly notify the Borrower (i) of the terms
of each proper Money Market Quote and the identity of the Lender submitting such
Money Market Quote, and (ii) of any Money Market Quote that amends, modifies or
is otherwise inconsistent with a previous Money Market Quote submitted by such
Lender with respect to the same Money Market Quote Request. Any such subsequent
Money Market Quote shall be disregarded by the Agent unless such subsequent
Money Market Quote is submitted solely to correct a manifest error in such
former Money Market Quote. The Agent's notice to the Borrower shall specify (1)
the aggregate principal amount of Money Market Loans for which offers have been
received for each Interest Period specified in the related Money Market Quote
Request, (2) the respective principal amounts and Money Market Margins or Money
Market Absolute Rates, as the case may be, so offered, and (3) if applicable,
limitations on the aggregate principal amount of Money Market Loans for which
offers in any single Money Market Quote may be accepted.
(f) Not later than 10:30 a.m. New York, New York time on (i) the
third Eurodollar Business Day prior to the proposed date of borrowing, in the
case of a LIBOR Auction, or (ii) the proposed date of borrowing, in the case of
an Absolute Rate Auction, the Borrower shall notify the Agent of its acceptance
or non-acceptance of the offers so notified to it pursuant to subsection (e)
above. In the case of acceptance, such notice (a "Notice of Money Market
Borrowing") shall specify the aggregate principal amount of offers for each
Interest Period that are accepted. The Borrower may accept any Money Market
Quote in whole or in part; provided that:
(1) the aggregate principal amount of each borrowing may not
exceed the applicable amount set forth in the related Money Market
Quote Request;
(2) the principal amount of each borrowing must be
$5,000,000.00 or a larger multiple of $500,000.00;
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(3) acceptance of offers may only be made on the basis of
ascending Money Market Margins or Money Market Absolute Rates, as the
case may be; and
(4) the Borrower may not accept any offer that is described in
subsection (d)(iii) above or that otherwise fails to comply with the
requirements of this Agreement.
(g) If offers are made by two or more Lenders with the same Money
Market Margins or Money Market Absolute Rates, as the case may be, for a greater
aggregate principal amount than the amount in respect of which such offers are
accepted for the related Interest Period, the principal amount of Money Market
Loans in respect of which such offers are accepted shall be allocated by the
Agent among such Lenders as nearly as possible (in multiples of $500,000.00, as
the Agent may deem appropriate) in proportion to the aggregate principal amounts
of such offers. The Agent shall promptly (and in any event within one (1)
Business Day after such offers are accepted) notify the Borrower and each such
Lender in writing of any such allocation of Money Market Loans. Determinations
by the Agent of the allocation of Money Market Loans shall be conclusive in the
absence of manifest error.
(h) Upon receipt of the Borrower's Notice of Money Market Borrowing,
the Agent shall, on the date such Notice of Money Market Borrowing is received
by the Agent, promptly notify each Lender of the principal amount of the Money
Market Loans accepted by the Borrower and of such Lender's share (if any) of
such Money Market Loans and such Notice of Money Market Borrowing shall not
thereafter be revocable by the Borrower. Any Lender so notified shall fund such
Money Market Loans at the times provided in Section 2.1(b). A Lender that is
notified that it has been selected to make a Money Market Loan may designate its
Designated Lender (if any) to fund such Money Market Loan on its behalf, as
described in Section 10.5(g). Any Designated Lender which funds a Money Market
Loan shall on and after the time of such funding become the obligee under such
Money Market Loan and be entitled to receive payment thereof when due. No Lender
shall be relieved of its obligation to fund a Money Market Loan, and no Designed
Lender shall assume such obligation, prior to the time the applicable Money
Market Loan is funded.
(i) Notwithstanding anything to the contrary contained herein, each
Lender shall be required to fund its Percentage of each Committed Loan in
accordance with Section 2.1 despite the fact that any Lender's Lender Commitment
may have been or may be exceeded as a result of such Lender's making of Money
Market Loans.
(j) Each Money Market LIBOR Loan shall bear interest on the
outstanding principal amount thereof, for the Interest Period applicable
thereto, at a rate per annum equal to the sum of the Eurodollar Interbank Rate
for such Interest Period plus (or minus) the Money Market Margin quoted by the
Lender making such Loan in accordance with Section 2.8. Each Money Market
Absolute Rate Loan shall bear interest on the outstanding principal amount
thereof, for the
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Interest Period applicable thereto, at a rate per annum equal to the Money
Market Absolute Rate quoted by the Lender making such Loan in accordance with
Section 2.8. Such interest shall be payable on each Interest Payment Date.
3. Conditions. It is a condition precedent to the effectiveness of this
Agreement and all of the Credit Documents that the merger of Security Capital
Atlantic Incorporated into Security Capital Pacific Trust, and the change of
Security Capital Pacific Trust's name to Archstone Communities Trust, be fully
and finally consummated by July 7, 1998 in substantial accordance with the
filings made with the Governmental Authority in connection with the merger.
3.1 All Loans. The obligation of any Lender to make any Loan is subject
to the accuracy of all representations and warranties of the Borrower on the
date of such Loan, to the performance by the Borrower of its obligations under
the Credit Documents and to the satisfaction of the following further
conditions: (a) the Agent shall have received the following, all of which shall
be duly executed and in Proper Form: (1) for Committed Loans, a Request for Loan
(i) by 11:00 a.m., Houston, Texas time, one (1) Business Day before the date
(which shall also be a Business Day) of the proposed Loan which is to be a Base
Rate Borrowing (other than Swing Loans), (ii) by 11:00 a.m., Houston, Texas
time, on the same Business Day of any proposed Swing Loan, provided that by
11:00 a.m., Houston, Texas time on the date of the proposed Swing Loan, Borrower
shall also have notified Chase by telephone of its request for a Swing Loan, or
(iii) by the Rate Designation Date of the proposed Loan which is to be a
Eurodollar Rate Borrowing; (2) for Money Market Loans the information required
by Section 2.8; and (3) such other documents as the Agent may reasonably require
to satisfy itself or the request of any Lender; (b) no Default or Event of
Default shall have occurred and be continuing; (c) the making of the Loan shall
not be prohibited by any Legal Requirement (in which event the applicable
portion of the Fee will not be charged to the Borrower); (d) the Borrower shall
have paid all legal fees and expenses of the type described in Section 5.10
hereof through the date of such Loan; and (e) in the case of a Committed Loan
other than a Swing Loan, all Swing Loans then outstanding shall have been paid
or shall be paid with the proceeds of such Loan.
3.2 First Loan. In addition to the matters described in Section 3.1
hereof, the obligation of the Lenders to make the first Loan under this
Agreement is subject to the receipt by the Lenders of each of the following, in
Proper Form: (a) the Notes, executed by the Borrower; (b) a certificate executed
by the Secretary of the Borrower dated as of the date hereof; (c) a certificate
from the Secretary of State or other appropriate public official of Maryland as
to the continued existence and good standing of the Borrower; (d) a certificate
from the appropriate public official of Maryland as to the due qualification and
good standing of the Borrower; (e) a legal opinion from independent counsel for
the Borrower as to the matters set forth on Exhibit D acceptable to the Lenders;
(f) policies of insurance addressed to the Agent reflecting the insurance
required by Section 5.7 hereof; (g) an Officer's Certificate in the form of
Exhibit A; (h) a certificate from Borrower setting forth the pro forma
calculations of Debt to Tangible Net Worth Ratio, Coverage Ratio, Fixed Charge
Coverage Ratio, Tangible Net Worth (which include actual figures through April
30, 1998 and
-28-
projections through June 30, 1998), and the Pool pursuant to Section 5.15 (which
include actual figures as of March 31, 1998); and (i) any Guaranties required by
Section 5.15 together with such Guarantors' organizational documents and
certificates of existence and good standing from the state of its organization;
and to the further condition that, at the time of the initial Loan, all legal
matters incident to the transactions herein contemplated shall be satisfactory
to Liddell, Sapp, Zivley, Hill & XxXxxx, L.L.P., counsel for the Agent.
3.3 Options Available. The outstanding principal balance of the Notes
shall bear interest at the Base Rate; provided, that (1) all past due amounts,
both principal and accrued interest, shall bear interest at the Past Due Rate,
and (2) subject to the provisions hereof, Borrower shall have the option of
having all or any portion of the principal balance of the Notes, other than the
Swing Loan Note, from time to time outstanding bear interest at a Eurodollar
Rate. The records of the Lenders with respect to Interest Options, Interest
Periods and the amounts of Loans to which they are applicable shall be prima
facie evidence thereof. Interest on the Loans shall be calculated at the Base
Rate except where it is expressly provided pursuant to this Agreement that a
Eurodollar Rate is to apply.
3.4 Designation and Conversion. Borrower shall have the right to
designate or convert its Interest Options in accordance with the provisions
hereof. Provided no Event of Default has occurred and is continuing and subject
to the provisions of Section 3.5, Borrower may elect to have a Eurodollar Rate
apply or continue to apply to all or any portion of the principal balance of the
Notes, other than the Swing Loan Note. Each change in Interest Options shall be
a conversion of the rate of interest applicable to the specified portion of the
Loans, but such conversion shall not change the respective outstanding principal
balance of the Notes. The Interest Options shall be designated or converted in
the manner provided below:
(a) Borrower shall give Agent a Request for Loan. Each such written notice
shall specify the amount of Loan which is the subject of the designation, if
any; the amount of borrowings into which such borrowings are to be converted or
for which an Interest Option is designated; the proposed date for the
designation or conversion and the Interest Period, if any, selected by Borrower.
The Request for Loan shall be irrevocable and shall be given to Agent no later
than the applicable Rate Designation Date. The Agent shall promptly deliver the
Request for Loan to the Lenders.
(b) No more than twelve (12) Eurodollar Rate Borrowings with twelve (12)
Interest Periods shall be in effect at any time.
(c) Each designation or conversion of a Eurodollar Rate Borrowing shall
occur on a Eurodollar Business Day.
(d) Except as provided in Section 3.5 hereof, no Eurodollar Rate Borrowing
shall be converted on any day other than the last day of the applicable Interest
Period.
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(e) Unless a Request for Loan to the contrary is received as provided in
this Agreement, each Eurodollar Rate Borrowing will convert to a Base Rate
Borrowing after the expiration of the Interest Period.
3.5 Special Provisions Applicable to Eurodollar Rate Borrowings and Money
Market Loans .
(a) Options Unlawful. If the adoption of any applicable Legal Requirement
or any change in any applicable Legal Requirement or in the interpretation or
administration thereof by any Governmental Authority or compliance by the
Lenders with any request or directive (whether or not having the force of law)
of any central bank or other Governmental Authority shall at any time make it
unlawful or impossible for any Lender to permit the establishment of or to
maintain any Eurodollar Rate Borrowing or a Money Market Loan, the commitment of
the Lenders to establish or maintain such Eurodollar Rate Borrowing or a Money
Market Loan shall forthwith be suspended until such condition shall cease to
exist and Borrower shall forthwith, upon demand by Agent to Borrower, (1)
convert the Eurodollar Rate Borrowing with respect to which such demand was made
to a Base Rate Borrowing; (2) convert the Money Market LIBOR Loan with respect
to which such demand was made to a Loan bearing interest at the Base Rate; (3)
pay all accrued and unpaid interest to date on the amount so converted; and (4)
pay any amounts required to compensate the Lenders for any additional cost or
expense which the Lenders may incur as a result of such adoption of or change in
such Legal Requirement or in the interpretation or administration thereof and
any Funding Loss which the Lenders may incur as a result of such conversion. If,
when Agent so notifies Borrower, Borrower has given a Request for Loan
specifying a Eurodollar Rate Borrowing or a Notice of Money Market Borrowing but
the selected Interest Period has not yet begun, such Request for Loan or a
Notice of Money Market Borrowing shall be deemed to be of no force and effect,
as if never made, and the balance of the Loans specified in such Request for
Loan shall bear interest at the Base Rate until a different available Interest
Option shall be designated in accordance herewith.
(b) Increased Cost of Borrowings. If the adoption of any applicable Legal
Requirement or any change in any applicable Legal Requirement or in the
interpretation or administration thereof by any Governmental Authority or
compliance by any Lender with any request or directive of general applicability
(whether or not having the force of law) of any central bank or Governmental
Authority shall at any time as a result of any portion of the principal balance
of the Notes being maintained on the basis of a Eurodollar Rate or as a Money
Market Loan:
(1) subject any Lender (or make it apparent that any Lender is subject) to
any Taxes, or any deduction or withholding for any Taxes, on or from
any payment due under any Eurodollar Rate Borrowing, Money Market Loan
or other amount due hereunder, other than income and franchise taxes
of the United States and its political subdivisions; or
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(2) change the basis of taxation of payments due from Borrower to any
Lender under any Eurodollar Rate Borrowing or Money Market Loan
(otherwise than by a change in the rate of taxation of the overall net
income of a Lender); or
(3) impose, modify, increase or deem applicable any reserve requirement
(excluding that portion of any reserve requirement included in the
calculation of the applicable interest rate), special deposit
requirement or similar requirement (including, but not limited to,
state law requirements and Regulation D) imposed, modified, increased
or deemed applicable by any Governmental Authority against assets held
by any Lender, or against deposits or accounts in or for the account
of any Lender, or against loans made by any Lender, or against any
other funds, obligations or other property owned or held by any
Lender; or
(4) impose on any Lender any other condition regarding any Eurodollar Rate
Borrowing or Money Market Loan;
and the result of any of the foregoing is to increase the cost to any
Lender of agreeing to make or of making, renewing or maintaining such
Eurodollar Rate Borrowing or Money Market Loan, or reduce the amount of
principal or interest received by any Lender, then, upon demand by Agent,
Borrower shall pay to such Lender, from time to time as specified by such
Lender, additional amounts which shall compensate such Lender for such
increased cost or reduced amount. Agent will promptly notify Borrower in
writing of any event which will entitle any Lender to additional amounts
pursuant to this paragraph. A Lender's determination of the amount of any
such increased cost, increased reserve requirement or reduced amount shall
be prima facie evidence thereof. Borrower shall have the right, if it
receives from Agent any notice referred to in this paragraph, upon three
Business Days' notice to Agent, either (i) to repay in full (but not in
part) any borrowing with respect to which such notice was given, together
with any accrued interest thereon, or (ii) to convert the Eurodollar Rate
Borrowing which is the subject of the notice to a Base Rate Borrowing or to
convert the Money Market LIBOR Loan which is the subject of the notice to a
Loan bearing interest at the Base Rate; provided, that any such repayment
or conversion shall be accompanied by payment of (x) the amount required to
compensate a Lender for the increased cost or reduced amount referred to in
the preceding paragraph; (y) all accrued and unpaid interest to date on the
amount so repaid or converted, and (z) any Funding Loss which any Lender
may incur as a result of such repayment or conversion.
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(c) Inadequacy of Pricing and Rate Determination. If for any reason with
respect to any Interest Period Agent shall have determined (which
determination shall be prima facie evidence thereof) that:
(1) Agent is unable through its customary general practices to determine
any applicable Eurodollar Rate, or
(2) by reason of circumstances affecting the applicable market generally,
Agent is not being offered deposits in United States dollars in such
market, for the applicable Interest Period and in an amount equal to
the amount of any applicable Eurodollar Rate Borrowing requested by
Borrower, or
(3) any applicable Eurodollar Rate will not adequately and fairly reflect
the cost to the Lenders of making and maintaining such Eurodollar Rate
Borrowing hereunder for any proposed Interest Period,
then Agent shall give Borrower notice thereof and thereupon, (A) any
Request for Loan previously given by Borrower designating the applicable
Eurodollar Rate Borrowing which has not commenced as of the date of such
notice from Agent shall be deemed for all purposes hereof to be of no force
and effect, as if never given, and (B) until Agent shall notify Borrower
that the circumstances giving rise to such notice from Agent no longer
exist, each Request for Loan requesting the applicable Eurodollar Rate
shall be deemed a request for a Base Rate Borrowing, and any applicable
Eurodollar Rate Borrowing then outstanding shall be converted, without any
notice to or from Borrower, upon the termination of the Interest Period
then in effect with respect to it, to a Base Rate Borrowing.
(d) Funding Losses. Borrower shall indemnify the Agent and each Lender
against and hold the Agent and each Lender harmless from any Funding Loss. This
agreement shall survive the payment of the Notes. A certificate as to any
additional amounts payable pursuant to this subsection and setting forth the
reasons for the Funding Loss submitted by Agent to Borrower shall be prima facie
evidence thereof.
(e) Eurodollar Reserve Requirement. The Borrower shall pay to the Agent
or a Lender the Eurodollar Reserve Requirement incurred by that Lender within
thirty (30) days after written demand by Agent to the Borrower. The demand
setting forth the Eurodollar Reserve Requirement shall be prima facie evidence
thereof.
3.6 Funding Offices; Adjustments Automatic. Any Lender may, if it so
elects, fulfill its obligation as to any Eurodollar Rate Borrowing or Money
Market Loan by causing a branch or affiliate of such Lender to make such Loan
and may transfer and carry such Loan at, to, or for the
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account of, any branch office or affiliate of such Lender; provided, that in
such event for the purposes of this Agreement such Loan shall be deemed to have
been made by such Lender and the obligation of Borrower to repay such Loan shall
nevertheless be to such Lender and shall be deemed held by it for the account of
such branch or affiliate. Without notice to Borrower or any other person or
entity, each rate required to be calculated or determined under this Agreement
shall automatically fluctuate upward and downward in accordance with the
provisions of this Agreement.
3.7 Funding Sources, Payment Obligations. Notwithstanding any provision
of this Agreement to the contrary, each Lender shall be entitled to fund and
maintain its funding of all or any part of the Loans in any manner it sees fit,
it being understood, however, that for the purposes of this Agreement all
determinations hereunder shall be made as if each Lender had actually funded and
maintained each Eurodollar Rate Borrowing and Money Market LIBOR Loan during
each Interest Period through the purchase of deposits having a maturity
corresponding to such Interest Period and bearing an interest rate equal to the
interest rate for such Interest Period. Notwithstanding the foregoing, Funding
Losses, increased costs and other obligations relating to Eurodollar Rate
Borrowings and Money Market Loans described in Section 3.5 of this Agreement
will only be paid by the Borrower as and when actually incurred by the Lenders.
3.8 Mitigation, Non-Discrimination. (a) Each Lender will notify the
Borrower through the Agent of any event occurring after the date of this
Agreement which will require or enable such Lender to take the actions described
in Sections 3.5(a) or (b) of this Agreement as promptly as practicable after it
obtains knowledge thereof and determines to request such action, and (if so
requested by the Borrower through the Agent) will designate a different lending
office of such Lender for the applicable Eurodollar Rate Borrowing or Money
Market Loan or will take such other action as the Borrower reasonably requests
if such designation or action is consistent with the internal policy of such
Lender and legal and regulatory restrictions, can be undertaken at no additional
cost, will avoid the need for, or reduce the amount of, such action and will
not, in the sole opinion of such Lender, be disadvantageous to such Lender
(provided that such Lender will have no obligation to designate a different
lending office which is located in the United States of America).
(b) None of the Lenders shall be able to pass through to the Borrower
changes and costs under Section 3.5 of this Agreement on a discriminating basis,
such that such changes and costs are not also passed through by each Lender to
other customers of such Lender similarly situated where such customer is subject
to documents providing for such pass through.
(c) If any Lender elects under Section 3.5 of this Agreement to
suspend or terminate the availability of Eurodollar Rate Borrowings for any
material period of time, and the event giving rise to such election is not
generally applicable to all of the Lenders, the Borrower may within sixty (60)
days after notification of such Lender's election, and so long as no Event of
Default is then in existence, either (i) demand that such Lender, and upon such
demand, such Lender shall promptly, assign its Lender Commitment to another
financial institution subject to and in accordance
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with the provisions of Section 10.5 of this Agreement for a purchase price equal
to the unpaid balance of principal, accrued interest, the unpaid balance of the
Fee and expenses owing to such Lender pursuant to this Agreement, or (ii) pay
such Lender the unpaid balance of principal, accrued interest, the unpaid
balance of the Fee and expenses owing to such Lender pursuant to this Agreement,
whereupon, such Lender shall no longer be a party to this Agreement or have any
rights or obligations hereunder or under any other Credit Documents, and the
Commitment shall immediately and permanently be reduced by an amount equal to
the Lender Commitment of such Lender.
4. Representations and Warranties.
To induce the Lenders to enter into this Agreement and to make the Loans,
the Borrower represents and warrants to the Agent and the Lenders as follows:
4.1. Organization. The Borrower is duly organized, validly existing and in
good standing as a real estate investment trust under the laws of the state of
Maryland; has all power and authority to conduct its business as presently
conducted; and is duly qualified to do business and in good standing in every
state where the location of its Property requires it to be qualified to do
business, unless the failure to be so qualified would not reasonably be expected
to have a Material Adverse Effect.
4.2 Financial Statements. The financial statements delivered to the Agent
fairly present, in accordance with Generally Accepted Accounting Principles
(provided, however, that the Quarterly Unaudited Financial Statements are
subject to normal year-end adjustments and may contain condensed footnotes as
permitted by regulations of the United States Securities and Exchange
Commission), the financial condition and the results of operations of the
Borrower as at the dates and for the periods indicated. No Material Adverse
Change has occurred since the dates of such financial statements. The Borrower
is not subject to any instrument or agreement which would materially prevent it
from conducting its business as it is now conducted or as it is contemplated to
be conducted.
4.3 Enforceable Obligations; Authorization. The Credit Documents are
legal, valid and binding obligations of the Parties, enforceable in accordance
with their respective terms, except as may be limited by bankruptcy, insolvency
and other laws affecting creditors' rights generally and by general equitable
principles. The execution, delivery and performance of the Credit Documents have
all been duly authorized by all necessary action; are within the power and
authority of the Parties; do not and will not contravene or violate any Legal
Requirement or the Organizational Documents of the Parties; do not and will not
result in the breach of, or constitute a default under, any agreement or
instrument by which the Parties or any of their respective Property may be bound
or affected, except where such breach or default could not reasonably be
expected to have a Material Adverse Effect; and do not and will not result in
the creation of any Lien upon any Property of any of the
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Parties except as expressly contemplated therein. All necessary permits,
registrations and consents for such making and performance have been obtained
except where the lack thereof would not reasonably be expected to have a
Material Adverse Effect.
4.4 Other Debt. The Borrower is not in default in the payment of any other
Indebtedness or under any agreement, mortgage, deed of trust, security agreement
or lease to which it is a party which default would reasonably be expected to
have a Material Adverse Effect.
4.5 Litigation. There is no litigation or administrative proceeding
pending or, to the knowledge of the Borrower, threatened against, or any
outstanding judgment, order or decree affecting, the Borrower before or by any
Governmental Authority which is not adequately covered by insurance or which, if
determined adversely to the Borrower could reasonably be expected to have a
Material Adverse Effect. The Borrower is not in default with respect to any
judgment, order or decree of any Governmental Authority which default could
reasonably be expected to have a Material Adverse Effect.
4.6 Taxes. The Borrower has filed all tax returns required to have been
filed and paid all taxes shown thereon to be due, except those for which
extensions have been obtained, those which are being contested in good faith and
those for which the Borrower's failure to file a return or pay could not
reasonably be expected to have a Material Adverse Effect.
4.7 Regulation U. None of the proceeds of any Loan will be used for the
purpose of purchasing or carrying directly or indirectly any margin stock or for
any other purpose that would constitute this transaction a "purpose credit"
within the meaning of Regulation U of the Board of Governors of the Federal
Reserve System.
4.8 Subsidiaries. Each of the Borrower's Subsidiaries is a "qualified REIT
subsidiary" under Section 856 of the Code.
4.9 Securities Act of 1933. Other than the Agent's efforts in syndicating
the Loans (for which the Agent is responsible) neither the Borrower nor any
agent acting for it has offered the Notes or any similar obligation of the
Borrower for sale to or solicited any offers to buy the Notes or any similar
obligation of the Borrower from any Person other than the Agent or any Lender,
and neither the Borrower nor any agent acting for it will take any action which
would subject the sale of the Note to the provisions of Section 5 of the
Securities Act of 1933, as amended.
4.10 No Contractual or Corporate Restrictions. The Borrower is not a party
to, or bound by, any contract, agreement or charter or other corporate
restriction materially and adversely affecting its business, Property, assets,
operations or condition, financial or otherwise.
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4.11 Investment Company Act Not Applicable. The Borrower is not an
"investment company", or a company "controlled" by an "investment company",
within the meaning of the Investment Company Act of 1940, as amended.
4.12 Public Utility Holding Company Act Not Applicable. The Borrower is
not a "holding company", or a "subsidiary company" of a "holding company", or an
"affiliate" of a "holding company", or an affiliate of a "subsidiary company" of
a "holding company", as such terms are defined in the Public Utility Holding
Company Act of 1935, as amended.
4.13 ERISA Not Applicable. The Borrower is not subject to any requirements
of the Employee Retirement Income Security Act of 1974 as amended from time to
time, or any rules, regulations, rulings or interpretations adopted by the
Internal Revenue Service or the Department of Labor thereunder.
4.14 Year 2000. The Borrower has reviewed its business and operations and
has developed a plan (the "Year 2000 Plan") to address, and provide for any
reprogramming required, on a timely basis the risk that computer applications
used by it in performing date sensitive functions in and following the year 2000
(the "Year 2000 Problem") would reasonably be expected to result in a Default or
have a Material Adverse Effect.
5. Affirmative Covenants.
The Borrower covenants and agrees with the Agent and the Lenders that prior
to the termination of this Agreement it will do, and if necessary cause to be
done, each and all of the following:
5.1 Taxes, Insurance, Existence, Regulations, Property, etc. At all times
(a) pay when due all taxes and governmental charges of every kind upon it or
against its income, profits or Property, unless and only to the extent that the
same shall be contested in good faith and reserves which are adequate under
Generally Accepted Accounting Principles have been established therefor, or
unless such failure to pay could not reasonably be expected to have a Material
Adverse Effect; (b) do all things necessary to preserve its existence,
qualifications, rights and franchises in all States where such qualification is
necessary or desirable, except where failure to obtain the same could not
reasonably be expected to have a Material Adverse Effect; (c) comply with all
applicable Legal Requirements in respect of the conduct of its business and the
ownership of its Property except where failure to so comply could not reasonably
be expected to have a Material Adverse Effect; and (d) cause its Property to be
protected, maintained and kept in good repair (reasonable wear and tear
excepted) and make all replacements and additions to its Property as may be
reasonably necessary to conduct its business.
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5.2 Financial Statements and Information. Furnish to the Agent each of
the following: (a) as soon as available and in any event within 90 days after
the end of each fiscal year of the Borrower, Annual Audited Financial Statements
of the Borrower (which shall include an unaudited statement of Funds From
Operations); (b) as soon as available and in any event within 50 days after the
end of each quarter (except the last quarter) of each fiscal year of the
Borrower, Quarterly Unaudited Financial Statements of the Borrower (which shall
include a statement of Funds From Operations); (c) concurrently with the
financial statements provided for in Subsections 5.2(a) and (b) hereof, an
Officer's Certificate, together with such schedules, computations and other
information (including, without limitation, if provided to Borrower information
as to Unconsolidated Affiliates of the Borrower), in reasonable detail, as may
be required by the Agent to demonstrate compliance with the covenants set forth
herein or reflecting any non-compliance therewith as of the applicable date, all
certified as true, correct and complete by a managing director, vice president,
senior vice president, controller, a co-controller of Borrower; (d) promptly
after the filing thereof, all reports to or filings made by the Borrower or any
of its Subsidiaries with the Securities and Exchange Commission, including,
without limitation, registration statements and reports on Forms 10-K, 10-Q and
8-K (or their equivalents); (e) within two (2) Business Days after the receipt
thereof, a copy of the notification to the Borrower of the Borrower's Credit
Rating, or change therein, and (f) such other information relating to the
financial condition and affairs of the Borrower as from time to time may be
reasonably requested by any Lender. The Agent will send to each Lender the
information received by the Agent pursuant to this Section 5.2 promptly after
the receipt thereof by Agent.
5.3 Financial Tests. Have and maintain, on a consolidated basis in
accordance with Generally Accepted Accounting Principles: (a) a Debt to Tangible
Net Worth Ratio no greater than 1.0:1.0 at all times; (b) a Coverage Ratio of
not less than 2.0:1.0 at all times; (c) a Fixed Charge Coverage Ratio of not
less than 1.75:1.00 at all times; (d) a Tangible Net Worth of at least Two
Billion Two Hundred Million Dollars ($2,200,000,000.00) at all times; and (e) a
Debt to Total Asset Value Ratio no greater than (i) if any Extension Request
shall be denied, fifty-five percent (55%) during the year before the Revolving
Credit Termination Date, and (ii) fifty percent (50%) thereafter.
5.4 Inspection. In order to permit the Agent to ascertain compliance with
the Credit Documents, during normal business hours permit the Agent to inspect
its Property, to examine its files, books and records and make and take away
copies thereof, and to discuss its affairs with its officers and accountants,
all at such times and intervals and to such extent as a Lender may reasonably
desire.
5.5 Further Assurances. Promptly execute and deliver any and all other and
further instruments which may be requested by the Agent to cure any defect in
the execution and delivery of any Credit Document or more fully to describe
particular aspects of the Borrower's agreements set forth in the Credit
Documents or so intended to be.
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5.6 Books and Records. Maintain books of record and account in accordance
with Generally Accepted Accounting Principles.
5.7 Insurance. Maintain insurance with such insurers, on such of its
properties, in such amounts and against such risks as is consistent with
insurance maintained by businesses of comparable type and size in the industry,
and furnish the Agent satisfactory evidence thereof promptly upon request.
5.8 Notice of Certain Matters. Notify the Agent promptly upon acquiring
knowledge of the occurrence of any of the following: the institution or
threatened institution of any lawsuit or administrative proceeding affecting the
Borrower in which the claim exceeds $10,000,000.00 and if determined adversely
could have a Material Adverse Effect; when the Borrower believes that there has
been a Material Adverse Change; or the occurrence of any Event of Default or any
Default. The Borrower will notify the Agent in writing at least thirty (30)
Business Days prior to the date that the Borrower changes its name or the
location of its chief executive office or principal place of business or the
place where it keeps its books and records.
5.9 Use of Proceeds. The proceeds of the Loans will be used for
general business purposes, including (without limitation) for acquisition of
multi-family real estate properties, for the development and enhancement of
multi-family real estate properties, or for the costs of construction of multi-
family real estate projects owned or to be acquired by the Borrower.
Notwithstanding the foregoing, none of the proceeds of the Loans will be used to
finance, fund or complete any hostile acquisition of any Person.
5.10 Expenses of and Claims Against the Agent and the Lenders. To the
extent not prohibited by applicable law, the Borrower will pay all reasonable
costs and expenses incurred to third parties and reimburse the Agent and each
Lender, as the case may be, for any and all reasonable expenditures of every
character incurred or expended from time to time, in connection with (a)
regardless of whether a Default or Event of Default shall have occurred, the
Agent's preparation, negotiation and completion of the Credit Documents, and (b)
during the continuance of an Event of Default, all costs and expenses relating
to the Agent's and such Lender's exercising any of its rights and remedies under
this or any other Credit Document, including, without limitation, attorneys'
fees, legal expenses, and court costs; provided, that no rights or option
granted by the Borrower to the Agent or any Lender or otherwise arising pursuant
to any provision of this or any other instrument shall be deemed to impose or
admit a duty on the Agent or any Lender to supervise, monitor or control any
aspect of the character or condition of any property or any operations conducted
in connection with it for the benefit of the Borrower or any other person or
entity other than the Agent or such Lender. Notwithstanding the foregoing, the
Borrower shall not be charged with any cost or expense incurred by the Agent or
any Lender relating to disputes or claims among or between the Agent, the
Lenders, or any of them unless during the continuance of an Event of Default and
related to details of enforcement of the Lenders' rights under the Credit
Documents.
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5.11 Legal Compliance; Indemnification. The Borrower shall operate its
Property and businesses in full compliance with all Legal Requirements. It
shall not constitute an Event of Default if there is a failure to comply with
any Legal Requirement which failure could not reasonably be expected to have a
Material Adverse Effect. The Borrower shall indemnify the Agent and each
Lender, their directors, officers, employees and shareholders (the "Indemnified
Parties") for and defend and hold the Indemnified Parties harmless against any
and all claims, demands, liabilities, causes of action, penalties, obligations,
damages, judgments, deficiencies, losses, costs or expenses (including, without
limitation, interest, penalties, attorneys' fees, and amounts paid in
settlement) threatened or incurred by reason of, arising out of or in any way
related to (i) any failure of the Borrower to so comply with the provisions of
any Legal Requirement, this Agreement or the other Credit Documents, or (ii) the
Agent or any Lender's making of the Loans or any other acts or omissions taken
or made in connection with the Loans, and any and all matters arising out of any
act, omission, event or circumstance, regardless of whether the act, omission,
event or circumstance constituted a violation of any such Legal Requirement,
this Agreement or the other Credit Documents at the time of its existence or
occurrence. THE BORROWER SHALL INDEMNIFY THE AGENT AND EACH LENDER PURSUANT TO
THIS SECTION REGARDLESS OF WHETHER THE ACT, OMISSION, FACTS, CIRCUMSTANCES OR
CONDITIONS GIVING RISE TO SUCH INDEMNIFICATION WERE CAUSED IN WHOLE OR IN PART
BY THE AGENT'S OR SUCH LENDER'S NEGLIGENCE (SIMPLE, BUT NOT GROSS NEGLIGENCE).
The Borrower will comply with all Legal Requirements to maintain, and will at
all times elect, qualify as and maintain, its status as a real estate investment
trust under Section 856(c)(1) of the Code.
5.12 Borrower's Performance. If the Borrower should fail to comply with
any of the agreements, covenants or obligations of the Borrower under this
Agreement or any other Credit Document, then the Agent (in the Borrower's name
or in Agent's name) may perform them or cause them to be performed for the
account of the Borrower and at the Borrower's sole expense, but shall not be
obligated to do so. Any and all expenses thus incurred or paid by the Agent and
by any Lender shall be the Borrower's demand obligations to the Agent or such
Lender and shall bear interest from the date of demand therefor until the date
that the Borrower repays it to the Agent or the applicable Lender at the Past
Due Rate. Upon making any such payment or incurring any such expense, the Agent
or the applicable Lender shall be fully subrogated to all of the rights of the
Person receiving such payment. Any amounts owing by the Borrower to the Agent
or any Lender pursuant to this provision or any other provision of this
Agreement shall automatically and without notice be secured by any collateral
provided by the Credit Documents. The amount and nature of any such expense and
the time when paid shall, absent manifest error, be fully established by the
affidavit of the Agent or the applicable Lender or any of the Agent's or the
applicable Lender's officers or agents.
5.13 Professional Services. Promptly upon the Agent's request to satisfy
itself or the request of any Lender, the Borrower, at the Borrower's sole cost
and expense, provided, however, that so long as no Event of Default has occurred
and is continuing, such items will not be at the
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Borrower's expense, shall: (a) allow an inspection and/or appraisal of the
Borrower's Property to be made by a Person approved by the Agent in its sole
discretion; and (b) if the Agent believes that an Event of Default has occurred
or is about to occur, cause to be conducted or prepared any other written
report, summary, opinion, inspection, review, survey, audit or other
professional service relating to the Borrower's Property or any operations in
connection with it (all as designated in the Agent's request), including,
without limitation, any accounting, auctioneering, architectural, consulting,
engineering, design, legal, management, pest control, surveying, title
abstracting or other technical, managerial or professional service relating to
such property or its operations.
5.14 Capital Adequacy. (a) If after the date of this Agreement, the
Agent or any Lender shall have determined that the adoption or effectiveness of
any applicable law, rule or regulation regarding capital adequacy of general
applicability, 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 Agent or any Lender with any request or directive regarding capital
adequacy of general applicability (whether or not having the force of law) of
any such Governmental Authority, central bank or comparable agency, has or would
have the effect of reducing the rate of return on the Agent's or any Lender's
capital as a consequence of its obligations hereunder to a level below that
which the Agent or such Lender could have achieved but for such adoption, change
or compliance (taking into consideration the Agent's or such Lender's policies
with respect to capital adequacy) by an amount deemed by the Agent or such
Lender to be material, then from time to time, the Borrower shall pay to the
Agent or such Lender such additional amount or amounts as will compensate the
Agent or such Lender for such reduction.
(b) A certificate of the Agent or such Lender setting forth such
amount or amounts as shall be necessary to compensate the Agent or such Lender
as specified in Section 5.14(a) hereof and making reference to the applicable
law, rule or regulation shall be delivered as soon as practicable to the
Borrower and shall be prima facie evidence thereof. The Borrower shall pay the
Agent or such Lender the amount shown as due on any such certificate within
fourteen (14) Business Days after the Agent or such Lender delivers such
certificate. In preparing such certificate, the Agent or such Lender may employ
such assumptions and allocations of costs and expenses as it shall in good xxxxx
xxxx reasonable and may use any reasonable averaging and attribution method.
5.15 Property Pool. A. The Borrower (or a Subsidiary of the Borrower
if the conditions in clause (C) below are satisfied) will at all times own fee
simple title to a pool (the "Pool") of assets that are not mortgaged, pledged,
hypothecated, or encumbered in any manner other than Permitted Encumbrances,
consisting of Homestead Loans and Homestead Mortgages, and real estate
properties (the "Pool Real Estate") with an aggregate value equal to the
aggregate Homestead Mortgage Amount plus the aggregate Historical Value of the
Pool Real Estate (plus all cash balances held by the Borrower if and whenever
the unpaid balance of the Loans is zero), of at least one hundred seventy-five
percent (175%) of the Borrower's unsecured Indebtedness outstanding from time to
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time, with the following characteristics: (a) the Pool must include income
producing operating properties (the "Sub-Pool Real Estate") and Homestead Loans
(the "Operating Sub-Pool") with an aggregate Operating Sub-Pool Value of at
least one hundred fifty percent (150%) of the Borrower's unsecured Indebtedness
outstanding from time to time, (b) each individual Sub-Pool Real Estate property
in the Operating Sub-Pool must have an occupancy level of at least eighty
percent (80%), where such occupancy level is the average of the actual occupancy
level for each of the immediately preceding three (3) months, (c) any Sub-Pool
Real Estate properties added to the Operating Sub-Pool after the date of this
Agreement must be multifamily properties, (d) the Borrower must have received
from third party independent environmental consultants, written assessments for
each Sub-Pool Real Estate property in, or to be added to, the Operating Sub-Pool
that do not disclose any material environmental conditions or risks related to
such properties, and (e) each individual Homestead Property used to calculate
Operating Sub-Pool Value must be completed, in full operation, and have an
occupancy level of at least seventy percent (70%) based on the average during
the Occupancy Period. If requested by the Agent, the Syndication Agent or the
Documentation Agent, the Borrower will provide to the Agent written assessments
from third party independent environmental consultants for all Sub-Pool Real
Estate properties acquired after the date of this Agreement. If Majority
Lenders determine that there are material environmental conditions existing on
or risks to such properties, the properties will be excluded from the Pool.
B. Notwithstanding the foregoing, the maximum value of the Pool or of the
Operating Sub-Pool Value that can be attributable to the Homestead Loans, the
Homestead Mortgages and the Homestead Property is ten percent (10%) of the value
of the Pool or of the Operating Sub-Pool Value before adding the effect of the
Homestead Loans, the Homestead Mortgages and the Homestead Property.
C. If any Pool Real Estate is owned by a Subsidiary, then it may be
included in the Pool only if:
(i) the owner of the Pool Real Estate is either (1) a wholly owned
Subsidiary of the Borrower or (2) if not a wholly owned Subsidiary, then
(x) the value of the Pool Real Estate owned by such Subsidiary ("Partial
Subsidiary Real Estate") to be used in the calculation in clause (A) above
shall be as provided in clause (A) multiplied by the cumulative percentage
interest of the Subsidiary owned by the Borrower, (y) the maximum value of
the Pool or of the Operating Sub-Pool Value that can be attributable to
Partial Subsidiary Real Estate is ten percent (10%) of the value of the
Pool or of the Operating Sub-Pool Value before adding the effect of the
Partial Subsidiary Real Estate, and (z) the Borrower controls the right to
sell or refinance the Partial Subsidiary Real Estate; and
(ii) the owner of the Pool Real Estate (1) executes a guaranty in the
form of Exhibit I attached hereto and hereby made a part hereof and
delivers it to the Agent, together with such Subsidiary's Organizational
Documents and current certificates of existence and
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good standing for the state in which it is organized and such guaranty must
remain in full force and effect, but if such Subsidiary is not wholly owned
by the Borrower, so long as such owner has no Indebtedness other than
Indebtedness the payment of which such Subsidiary is not obligated to make
other than to the extent of any security therefor, and other than
Indebtedness to the Borrower subordinated to the said Indebtedness incurred
under this Agreement on terms satisfactory to the Agent, and (2) would not
at any time be in default of Sections 7.1(g), (h), (i), (j), or (k) of said
subsections were applicable to said owner.
5.16 Year 2000. The Borrower is taking and will take reasonable efforts to
comply with its Year 2000 Plan and to address the Year 2000 Plan on a timely
basis. The Borrower will provide the Agent with written notice of any
deficiencies it discovers in its Year 2000 Plan or if there is any change in the
status, timing or cost of implementing its Year 2000 Plan which would reasonably
be expected to result in a Default or have a Material Adverse Effect. The Agent
and the Lenders acknowledge that (a) due to the inherent complexity and nature
of the Year 2000 Problem, it is impossible to ensure that the Year 2000 Problem
will be successfully addressed and (b) the Year 2000 Plan depends on factors
beyond the control of Borrower (including, without limitation, timely provision
of software products and services and upgrades or replacements for embedded
control systems by vendors or other providers thereof and the Year 2000 Problem
being satisfactorily addressed by other Persons with whom Borrower does business
or conducts its operations).
6. Negative Covenants.
The Borrower covenants and agrees with the Agent and the Lenders that prior
to the termination of this Agreement it will not do any of the following:
6.1 Indebtedness. Create, incur, suffer or permit to exist, or assume
or guarantee, directly or indirectly, contingently or otherwise, or become or
remain liable with respect to any Indebtedness (A) with a final maturity of five
(5) years or less (not including any renewal or extension options) in excess of
$1,000,000,000.00 in the aggregate, in all cases whether direct, indirect,
absolute, contingent or otherwise; except (a) Indebtedness incurred by Borrower
which has an Acceptable Credit Rating at the time of issuance, (b) Non-recourse
Debt, (c) Indebtedness in the final five (5) years or less of a full payment
amortization schedule providing for periodic payments over the remaining life
where no more than fifty percent (50%) of the original loan amount is amortized
in said final five (5) year or less period, (d) credit enhancement provided by
or on behalf of the Borrower for tax exempt bonds if said credit enhancement has
an expiration date or a maturity date of one (1) year or more, and (e)
Indebtedness secured by multifamily real estate properties and assumed by
Borrower in connection with the purchase of said properties by Borrower (but not
incurred or assumed in anticipation of such purchase) not to exceed
$100,000,000.00 in the aggregate. For the purposes of the foregoing calculation
under (c) above, simultaneously issued tranches of Indebtedness under the same
indenture shall be combined and treated as a single debt issuance; or (B)
secured by a Lien if, immediately after giving effect to such secured
Indebtedness
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and the application of the proceeds thereof, the aggregate amount of
Indebtedness secured by a Lien would exceed forty percent (40%) of an amount
equal to (i) the total assets of the Borrower and its Subsidiaries on a
consolidated basis, (valued at cost without deduction for depreciation), less
(ii) all intangibles (other than the unrealized gain on the Homestead Loans) all
determined in accordance with Generally Accepted Accounting Principles, as of
the end of the calendar quarter covered in the Borrower's Annual Report on Form
10-K or Quarterly Report on Form 10-Q, as the case may be, most recently filed
with the Securities Exchange Commission (or, if such filing is not permitted
under the Securities Exchange Act of 1934, with the Agent) prior to the
incurrence of such additional Indebtedness. The term "intangibles" shall
include, without limitation, (1) deferred charges, (2) the amount of any write-
up in the book value of any assets contained in any balance sheet resulting from
revaluation thereof or any write-up in excess of the cost of such assets
acquired, and (3) the aggregate of all amounts appearing on the assets side of
any such balance sheet for franchise, licenses, permits, patents, patent
applications, copyrights, trademarks, trade names, goodwill, treasury stock,
experimental or organizational expenses and other like intangibles.
6.2 Mergers, Consolidations and Acquisitions of Assets. In any single
transaction or series of related transactions, directly or indirectly: (a)
liquidate or dissolve; (b) other than a merger or consolidation in which the
Borrower is the surviving entity and the value of the assets of the other party
to such merger or consolidation is less than twenty percent (20%) of the value
of the assets of the Borrower on a consolidated basis (in accordance with
Generally Accepted Accounting Principles) after such merger or consolidation, be
a party to any merger or consolidation; (c) other than an acquisition in which
the Borrower acquires all or substantially all of the assets of another Person
and the value of the assets acquired is less than twenty percent (20%) of the
value of the assets of the Borrower on a consolidated basis (in accordance with
Generally Accepted Accounting Principles) after such acquisition, acquire all or
substantially all of the assets of any Person; or (d) except for periodic sales
not exceeding twenty-five percent (25%) of the Borrower's total assets on a
consolidated basis (in accordance with Generally Accepted Accounting Principles)
in any calendar year, or sales or leases executed in the ordinary course of
business, sell, convey or lease all or any substantial part of its assets.
6.3 Redemption. At any time redeem, retire or otherwise acquire,
directly or indirectly, any shares of its capital stock if such action would
cause the Borrower to not be in compliance with this Agreement.
6.4 Nature of Business. Change the nature of its business or enter into
any business which is substantially different from the business in which it is
presently engaged.
6.5 Transactions with Related Parties. Enter into any transaction or
agreement with any officer, director, or holder of more than five percent (5%)
(based on voting rights) of the issued and outstanding capital stock of the
Borrower (or any Affiliate of the Borrower), unless the same is upon terms
substantially similar to those obtainable from qualified wholly unrelated
sources, or complies
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with the requirements of the Statement of Policy for Real Estate Investment
Trusts promulgated by the North American Security Administrators Association, as
amended from time to time. Agent and each Lender hereby consent to the retention
by Borrower of Homestead Loans and Homestead Mortgages owned as of the date of
this Agreement with an aggregate Homestead Mortgage Amount which does not exceed
$325,000,000.00, in each case to the extent not on terms substantially similar
to those obtainable from unrelated sources.
6.6 Loans and Investments. Make any loan, advance, extension of credit
or capital contribution to, or make or have any investment in, any Person, or
make any commitment to make any such extension of credit or investment, except
(a) travel advances in the ordinary course of business to officers, employees
and agents; (b) readily marketable securities issued or fully guaranteed by the
United States of America (or investments or money market accounts consisting of
the same); (c) commercial paper rated "Prime 1" by Xxxxx'x Investors Service,
Inc. or A-1 by Standard and Poor's Rating Services (or investments or money
market accounts consisting of the same); (d) certificates of deposit or
repurchase certificates issued by financial institutions acceptable to the Agent
(or investments or money market accounts consisting of the same), all of the
foregoing b, c and d not having a maturity of more than one (1) year from the
date of investment thereof; (e) securities received in settlement of liabilities
created in the ordinary course of business, or securities in Persons engaged
primarily in the business of investment in and operation of commercial real
estate properties received in exchange for Property sold to such Persons so long
as the market value of such securities does not exceed ten percent (10%) of the
value of the assets of the Borrower on a consolidated basis (in accordance with
Generally Accepted Accounting Principles) prior to such investment; (f)
investments in Subsidiaries through which the Borrower invests in real estate
assets and acquisition and/or construction loans encumbered by Property of or to
be acquired by the Borrower; (g) the Borrower's existing forty percent (40%)
joint venture interest investment in KP/M PTA Joint Venture I and investments in
Unconsolidated Affiliates that are engaged primarily in the business of
investment in and operation of multifamily real estate properties, so long as
the aggregate amount of such investments described in this (g) does not exceed
fifteen percent (15%) of the value of the assets of the Borrower on a
consolidated basis (in accordance with Generally Accepted Accounting Principles)
after giving effect to such investments; (h) equity investments or capital
contributions in, and loans, advances, and extensions of credit to, PTR
Development Services, so long as (1) the equity investments or capital
contributions do not exceed ten percent (10%) of the value of the assets of the
Borrower on a consolidated basis (in accordance with Generally Accepted
Accounting Principles) after giving effect to such investments, (2) the loans,
advances and extensions of credit are secured by valid and enforceable first
priority liens on real estate, (3) the Borrower shall at all times beneficially
own at least ninety percent (90%) of the economic interest in PTR Development
Services, and (4) the financial condition and results of operations of PTR
Development Services shall be consolidated with those of the Borrower for
purposes of the Borrower's financial statements; (i) loans, advances, and
extensions of credit to Persons (who are not Affiliates of the Borrower) secured
by valid and enforceable first priority liens on real estate for the purpose of
acquiring and developing multifamily properties for eventual ownership by, or to
be
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acquired by, the Borrower prior to, or within a reasonable period of time
consistent with a business purpose after, the completion of construction or
development of such multifamily property; (j) investments permitted under
Section 6.2 of this Agreement, and (k) Homestead Loans secured by Homestead
Mortgages owned as of the date of this Agreement, so long as the aggregate
Homestead Mortgage Amount does not exceed the lesser of $325,000,000.00 or 10%
of the value of the assets of the Borrower on a consolidated basis (in
accordance with Generally Accepted Accounting Principles). The Borrower will
not mortgage, pledge, hypothecate or encumber in any manner the loans, advances
or extensions of credit made pursuant to Sections 6.6(h), (i) or (k).
6.7 Limiting Agreements. Without affecting the provisions of Section 5.15
of this Agreement, but cumulative of and in addition thereto:
(a) Except for the Indenture dated February 1, 1994 between the Borrower
and Xxxxxx Guaranty Trust Company of New York, as Trustee, neither Borrower nor
any of its Subsidiaries has entered into, and after the date hereof, neither
Borrower nor any of its Subsidiaries shall enter into, any agreement, instrument
or transaction which has or may have the effect of prohibiting or limiting
Borrower's ability to pledge to Agent as security for the Loans assets now or
hereafter owned by Borrower up to the value described in this Section 6.7.
Borrower shall take, and shall cause its Subsidiaries to take, such actions as
are necessary (including, without limitation, otherwise limiting the amount of
secured indebtedness of the Borrower and its Subsidiaries) to preserve the right
and ability of Borrower to pledge assets up to the value described in this
Section 6.7 as security for the Loans without any such pledge after the date
hereof causing or permitting the acceleration (after the giving of notice or the
passage of time, or otherwise) of any other indebtedness of Borrower or any of
its Subsidiaries. For the purpose of this paragraph, the Historical Value of
the assets to be kept available by Borrower to be pledged as security for the
Loans shall be assets having an aggregate Historical Value of not less than one
hundred thirty-three percent (133%) of the Commitment; provided however that the
foregoing shall not be construed as a maximum amount of collateral which could
be required or accepted by the Lenders under any other agreement or in any
proceeding.
(b) Borrower shall, upon demand, provide to the Lenders such evidence as
the Lenders may reasonably require to evidence Borrower's compliance with this
covenant, which evidence shall include, without limitation (i) copies of any
agreements or instruments which would in any way restrict or limit Borrower's
ability to pledge assets as security for indebtedness, or which provide for the
occurrence of a default (after the giving of notice or the passage of time, or
otherwise) if assets are pledged in the future as security for indebtedness of
the Borrower or any of its Subsidiaries, (ii) a summary of the total debt of
Borrower and its Subsidiaries, and (iii) a summary of any of such debt which is
secured by any mortgage, pledge, lien, charge, encumbrance or other security
interest.
(c) Nothing in this covenant shall be construed as an obligation of
Borrower to, or request by the Lenders that Borrower, grant any mortgage, pledge
or security interest in any of its properties.
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6.8 Nature of Assets. (a) In its own name or the name of any of its
Subsidiaries, own or lease, directly or indirectly, land not improved for
multifamily use, other than land that is either under development or planned for
commencement of development within one (1) year from the date it was acquired,
with an aggregate Historical Value in excess of ten percent (10%) of the value
of the assets of the Borrower on a consolidated basis (in accordance with
Generally Accepted Accounting Principles), or (b) allow the Historical Value of
the income producing properties owned or leased, directly or indirectly, by the
Borrower and its Subsidiaries which are not multifamily properties and not
Homestead Village or the Homestead Mortgages, to exceed five percent (5%) of the
value of the assets of the Borrower on a consolidated basis (in accordance with
Generally Accepted Accounting Principles).
7. Events of Default and Remedies.
------------------------------
7.1. Events of Default. If any of the following events shall occur,
then, as to the events described in Sections 7.1(b), (c), and (d), if the event
has not been waived, cured or remedied within twenty (20) days after the Agent
gives the Borrower notice of such event, at any time thereafter, and as to all
of the other events described herein, at any time, the Agent may do any or all
of the following: (1) without notice to the Borrower, declare the Notes to be,
and thereupon the Notes shall forthwith become, immediately due and payable,
together with all accrued interest thereon, without notice of any kind, notice
of acceleration or of intention to accelerate, presentment and demand or
protest, all of which are hereby expressly waived; (2) without notice to the
Borrower, terminate the Commitment; (3) exercise, as may any other Lender, its
rights of offset against each account and all other Property of the Borrower in
the possession of the Agent or any such Lender, which right is hereby granted by
the Borrower to the Agent and each Lender; and (4) exercise any and all other
rights pursuant to the Credit Documents:
(a) The Borrower shall fail to pay or prepay any principal of or
interest on the Notes or any fee or any other obligation hereunder within
five (5) days after it was due; or
(b) The Borrower shall (i) fail to pay when due, or within any
applicable period of grace, any principal of or interest on any other
Indebtedness, other than Non-recourse Debt or Disqualified Stock, in excess
of $25,000,000.00 in principal amount, or Non-recourse Debt in excess of
$50,000,000.00 in principal amount; or (ii) fail to comply with Section
1004 of the Indenture dated February 1, 1994 between the Borrower and
Xxxxxx Guaranty Trust Company of New York, as Trustee, as said Section 1004
may be amended with the consent of the Majority Lenders; or
(c) Any written representation or warranty made in any Credit
Document by or on behalf of the Borrower, when taken as a whole shall prove
to have been incorrect, false or misleading in any material respect; or
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(d) Default shall occur in the punctual and complete performance of
any covenant of the Borrower or any other Person other than the Agent or
the Lenders contained in any Credit Document not specifically set forth in
this Section; or
(e) A final judgment or judgments in the aggregate for the payment of
money in excess of $25,000,000.00 shall be rendered against the Borrower
and the same shall remain undischarged for a period of thirty (30) days
during which execution shall not be effectively stayed; or
(f) Any court shall finally determine, that the Agent or any Lender
does not have a valid Lien as provided for herein on any security which may
have been provided to the Agent or any Lender by the Borrower under the
Credit Documents, or such other Person; or
(g) Any order shall be entered in any proceeding against the Borrower
decreeing the dissolution, liquidation or split-up thereof, and such order
shall remain in effect for more than thirty (30) days; or
(h) The Borrower shall make a general assignment for the benefit of
creditors or shall petition or apply to any tribunal for the appointment of
a trustee, custodian, receiver or liquidator of all or any substantial part
of its business, estate or assets or shall commence any proceeding under
any bankruptcy, reorganization, arrangement, insolvency, readjustment of
debt, dissolution or liquidation law of any jurisdiction, whether now or
hereafter in effect; or
(i) Any such petition or application shall be filed or any such
proceeding shall be commenced against the Borrower and the Borrower by any
act or omission shall indicate approval thereof, consent thereto or
acquiescence therein, or an order shall be entered appointing a trustee,
custodian, receiver or liquidator of all or any substantial part of the
assets of the Borrower or granting relief to the Borrower or approving the
petition in any such proceeding, and such order shall remain in effect for
more than ninety (90) days; or
(j) The Borrower shall fail generally to pay its debts as they become
due or suffer any writ of attachment or execution or any similar process to
be issued or levied against it or any substantial part of its Property
which is not released, stayed, bonded or vacated within thirty (30) days
after its issue or levy; or
(k) The Borrower shall have concealed, removed, or permitted to be
concealed or removed, any part of its Property, with intent to hinder,
delay or defraud its creditors or any of them, or made or suffered a
transfer of any of its Property which may be fraudulent under any
bankruptcy, fraudulent conveyance or similar law; or shall have made any
transfer
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of its Property to or for the benefit of a creditor at a time when other
creditors similarly situated have not been paid.
7.2 Remedies Cumulative. No remedy, right or power conferred upon the
Agent or the Lenders is intended to be exclusive of any other remedy, right or
power given hereunder or now or hereafter existing at law, in equity, or
otherwise, and all such remedies, rights and powers shall be cumulative.
8. The Agent.
---------
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8.1 Appointment, Powers and Immunities. (a) Each Lender hereby irrevocably
appoints and authorizes the Agent to act as its agent hereunder and under the
other Credit Documents with such powers as are specifically delegated to the
Agent by the terms hereof and thereof, together with such other powers as are
reasonably incidental thereto. The Agent (i) shall not have any duties or
responsibilities except those expressly set forth in this Agreement and the
other Credit Documents, and shall not by reason of this Agreement or any other
Credit Document be a trustee for any Lender; (ii) shall not be responsible to
any Lender for any recitals, statements, representations or warranties contained
in this Agreement or any other Credit Document, or in any certificate or other
document referred to or provided for in, or received by any of them under, this
Agreement or any other Credit Document, or for the value, validity,
effectiveness, genuineness, enforceability, execution, filing, registration,
collectibility, recording, perfection, existence or sufficiency of this
Agreement or any other Credit Document or any other document referred to or
provided for herein or therein or any property covered thereby or for any
failure by any Party or any other Person to perform any of its obligations
hereunder or thereunder, and shall not have any duty to inquire into or pass
upon any of the foregoing matters; (iii) shall not be required to initiate or
conduct any litigation or collection proceedings hereunder or any other Credit
Document except to the extent requested by the Majority Lenders; (iv) SHALL NOT
BE RESPONSIBLE FOR ANY MISTAKE OF LAW OR FACT OR ANY ACTION TAKEN OR OMITTED TO
BE TAKEN BY IT HEREUNDER OR UNDER ANY OTHER CREDIT DOCUMENT OR ANY OTHER
DOCUMENT OR INSTRUMENT REFERRED TO OR PROVIDED FOR HEREIN OR THEREIN OR IN
CONNECTION HEREWITH OR THEREWITH, INCLUDING, WITHOUT LIMITATION, PURSUANT TO ITS
OWN NEGLIGENCE, BUT NOT INCLUDING AND EXCEPT FOR THE GROSS NEGLIGENCE OR WILLFUL
MISCONDUCT OF THE AGENT; (v) shall not be bound by or obliged to recognize any
agreement among or between the Borrower, the Agent, and any Lender other than
this Agreement and the other Credit Documents, regardless of whether the Agent
has knowledge of the existence of any such agreement or the terms and provisions
thereof; (vi) shall not be charged with notice or knowledge of any fact or
information not herein set out or provided to the Agent in accordance with the
terms of this Agreement or any other Credit Document; (vii) shall not be
responsible for any delay, error, omission or default of any mail, telegraph,
cable or wireless agency or operator, and (viii) shall not be responsible for
the acts or edicts of any Governmental Authority. The Agent may employ agents
and attorneys-in-fact and shall not be responsible for the negligence or
misconduct of any such agents or attorneys-in-fact selected by it with
reasonable care.
(b) Without the prior written consent of Agent and all of the Lenders,
Agent shall not (i) modify or amend in any respect whatsoever the interest rate
provisions of the Credit Documents, (ii) increase the Commitment above
$750,000,000.00, (iii) extend the Maturity Date other than in accordance with
the express provisions of the Credit Documents, (iv) extend or reduce the due
date for, or change the amount of, the scheduled payments of principal or
interest on the Loans or the Fee, (v) amend the definition of Majority Lenders
or any requirement that certain actions be taken only with the consent of a
certain number of the Lenders, (vi) amend Section 5.15 of this Agreement; or
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(vii) release any Subsidiary from a guaranty required under and delivered
pursuant to Section 5.15.C. From time to time upon Agent's request, each Lender
shall execute and deliver such documents and instruments as may be reasonably
necessary to enable Agent to effectively administer and service the Loan in its
capacity as lead lender and servicer and in the manner contemplated by the
provisions of this Agreement.
(c) All information provided to the Agent under or pursuant to the Credit
Documents, and all rights of the Agent to receive or request information, or to
inspect information or Property, shall be by the Agent on behalf of the Lenders.
If any Lender requests that it be able to receive or request such information,
or make such inspections, in its own right rather than through the Agent, the
Borrower will cooperate with the Agent and such Lender in order to obtain such
information or make such inspection as such Lender may reasonably require.
(d) The Borrower shall be entitled to rely upon a written notice or a
written response from the Agent as being pursuant to concurrence or consent of
the Majority Lenders unless otherwise expressly stated in the Agent's notice or
response.
8.2 Reliance. The Agent shall be entitled to rely upon any certification,
notice or other communication (including any thereof by telephone, telex,
telecopy, telegram or cable) believed by it to be genuine and correct and to
have been signed or sent by or on behalf of the proper Person or Persons, and
upon advice and statements of legal counsel (which may be counsel for the
Borrower), independent accountants and other experts selected by the Agent. The
Agent shall not be required in any way to determine the identity or authority of
any Person delivering or executing the same. As to any matters not expressly
provided for by this Agreement or any other Credit Document, the Agent shall in
all cases be fully protected in acting, or in refraining from acting, hereunder
and thereunder in accordance with instructions of the Majority Lenders, and any
action taken or failure to act pursuant thereto shall be binding on all of the
Lenders. If any order, writ, judgment or decree shall be made or entered by any
court affecting the rights, duties and obligations of the Agent under this
Agreement or any other Credit Document, then and in any of such events the Agent
is authorized, in its sole discretion, to rely upon and comply with such order,
writ, judgment or decree which it is advised by legal counsel of its own
choosing is binding upon it under the terms of this Agreement, the relevant
Credit Document or otherwise; and if the Agent complies with any such order,
writ, judgment or decree, then it shall not be liable to any Lender or to any
other Person by reason of such compliance even though such order, writ, judgment
or decree may be subsequently reversed, modified, annulled, set aside or
vacated.
8.3 Defaults. The Agent shall not be deemed to have constructive knowledge
of the occurrence of a Default (other than the non-payment of principal of or
interest on Loans) unless it has received notice from a Lender or the Borrower
specifying such Default and stating that such notice is a "Notice of Default".
In the event that the Agent receives such a notice of the occurrence of a
Default, or whenever the Agent has actual knowledge of the occurrence of a
Default, the Agent
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shall give prompt written notice thereof to the Lenders (and shall give each
Lender prompt notice of each such non-payment). The Agent shall (subject to
Section 8.7 hereof) take such action with respect to such Default as shall be
directed by the Majority Lenders and within its rights under the Credit
Documents and at law or in equity, provided that, unless and until the Agent
shall have received such directions, the Agent may (but shall not be obligated
to) take such action, or refrain from taking such action, permitted hereby with
respect to such Default as it shall deem advisable in the best interests of the
Lenders and within its rights under the Credit Documents in order to preserve,
protect or enhance the collectibility of the Loans, at law or in equity.
8.4 Rights as a Lender. With respect to the Commitment and the Loans made,
Agent, in its capacity as a Lender hereunder shall have the same rights and
powers hereunder as any other Lender and may exercise the same as though it were
not acting in its agency capacity, and the term "Lender" or "Lenders" shall,
unless the context otherwise indicates, include the Agent in its individual
capacity. The Agent may (without having to account therefor to any other Lender)
as a Lender, and to the same extent as any other Lender, accept deposits from,
lend money to and generally engage in any kind of banking, trust, letter of
credit, agency or other business with the Borrower (and any of its Affiliates)
as if it were not acting as the Agent but solely as a Lender. The Agent may
accept fees and other consideration from the Borrower (in addition to the fees
heretofore agreed to between the Borrower and the Agent) for services in
connection with this Agreement or otherwise without having to account for the
same to the Lenders.
8.5 Indemnification. The Lenders agree to indemnify the Agent, its
officers, directors, agents and Affiliates, ratably in accordance with each
Lender's respective Percentage, for any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind and nature whatsoever (INCLUDING BUT NOT LIMITED TO,
THE CONSEQUENCES OF THE NEGLIGENCE OF THE AGENT) which may be imposed on,
incurred by or asserted against the Agent in any way relating to or arising out
of this Agreement or any other Credit Document or any other documents
contemplated by or referred to herein or therein, or the transactions
contemplated hereby or thereby (including, without limitation, interest,
penalties, reasonable attorneys' fees and amounts paid in settlement in
accordance with the terms of this Section 8, but excluding, unless a Default has
occurred and is continuing, normal administrative costs and expenses incident to
the performance of its agency duties hereunder) or the enforcement of any of the
terms hereof or thereof or of any such other documents, INCLUDING BUT NOT
LIMITED TO THE NEGLIGENCE OF THE AGENT, provided that no Lender shall be liable
for any of the foregoing to the extent they arise from the gross negligence or
willful misconduct of the party to be indemnified, or from the Agent's default
in the express obligations of the Agent to the Lenders provided for in this
Agreement. The obligations of the Lenders under this Section 8.5 shall survive
the termination of this Agreement and the repayment of the Obligations.
8.6 Non-Reliance on Agent and Other Lenders. Each Lender agrees that it
has received current financial information with respect to the Borrower and that
it has, independently and without
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reliance on the Agent or any other Lender and based on such documents and
information as it has deemed appropriate, made its own credit analysis of the
Borrower and decision to enter into this Agreement and that it will,
independently and without reliance upon the Agent or any other Lender, and based
on such documents and information as it shall deem appropriate at the time,
continue to make its own analysis and decisions in taking or not taking action
under this Agreement or any of the other Credit Documents. The Agent shall not
be required to keep itself informed as to the performance or observance by any
Party of this Agreement or any of the other Credit Documents or any other
document referred to or provided for herein or therein or to inspect the
properties or books of the Borrower or any Party except as specifically required
by the Credit Documents. Except for notices, reports and other documents and
information expressly required to be furnished to the Lenders by the Agent
hereunder or the other Credit Documents, the Agent shall not have any duty or
responsibility to provide any Lender with any credit or other information
concerning the affairs, financial condition or business of the Borrower or any
other Party (or any of their affiliates) which may come into the possession of
the Agent. Each Lender assumes all risk of loss in connection with its
Percentage in the Loans to the full extent of its Percentage therein. The Agent
assumes all risk of loss in connection with its Percentage in the Loans to the
full extent of its Percentage therein.
8.7 Failure to Act. Except for action expressly required of the Agent, as
the case may be, hereunder, or under the other Credit Documents, the Agent shall
in all cases be fully justified in failing or refusing to act hereunder and
thereunder unless it shall receive further assurances to its satisfaction by the
Lenders of their indemnification obligations under Section 8.5 hereof against
any and all liability and expense which may be incurred by it by reason of
taking or continuing to take any such action.
8.8 Resignation of Agent. Subject to the appointment and acceptance of a
successor Agent as provided below, the Agent may resign at any time by giving
notice thereof to the Lenders and the Borrower. Upon any such resignation, (i)
the Majority Lenders without the consent of the Borrower shall have the right to
appoint a successor Agent so long as such successor Agent is also a Lender at
the time of such appointment and (ii) the Majority Lenders shall have the right
to appoint a successor Agent that is not a Lender at the time of such
appointment so long as the Borrower consents to such appointment (which consent
shall not be unreasonably withheld). If no successor Agent shall have been so
appointed by the Majority Lenders and accepted such appointment within 30 days
after the retiring Agent's giving of notice of resignation, then the retiring
Agent may, on behalf of the Lenders, and with the consent of the Borrower which
shall not be unreasonably withheld, appoint a successor Agent. Any successor
Agent shall be a bank which has an office in the United States and a combined
capital and surplus of at least $250,000,000.00. Upon the acceptance of any
appointment as Agent hereunder by a successor Agent, such successor Agent shall
thereupon succeed to and become vested with all the rights, powers, privileges
and duties of the retiring Agent, and the retiring Agent shall be discharged
from its duties and obligations as Agent thereafter arising hereunder and under
any other Credit Documents, but shall not be discharged from any liabilities for
its actions as Agent prior to the date of discharge. Such successor Agent shall
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promptly specify by notice to the Borrower its principal office referred to in
Section 2.1 and Section 2.3 hereof. After any retiring Agent's resignation
hereunder as Agent, the provisions of this Section 8 shall continue in effect
for its benefit in respect of any actions taken or omitted to be taken by it
while it was acting as the Agent.
8.9 No Partnership. Neither the execution and delivery of this Agreement
nor any of the other Credit Documents nor any interest the Lenders, the Agent or
any of them may now or hereafter have in all or any part of the Obligations
shall create or be construed as creating a partnership, joint venture or other
joint enterprise between the Lenders or among the Lenders and the Agent. The
relationship between the Lenders, on the one hand, and the Agent, on the other,
is and shall be that of principals and agent only, and nothing in this Agreement
or any of the other Credit Documents shall be construed to constitute the Agent
as trustee or other fiduciary for any Lender or to impose on the Agent any duty,
responsibility or obligation other than those expressly provided for herein and
therein.
9. Renewal and Extension.
Neither the Agent nor any Lenders have any agreement or obligation to
extend or renew the Revolving Credit Termination Date. But in the event such an
extension is requested by the Borrower and any Lender decides to consider such
renewal and extension request, such request and consideration will be governed
by the following terms and conditions:
9.1 Procedure for Consideration of Renewal and Extension Requests.
(a) The Borrower may request the Agent and the Lenders to extend the
current Revolving Credit Termination Date by successive one (1) year intervals
by executing and delivering to the Agent a written request for extension (the
"Extension Request") at least seventy-five (75) days (but not more than ninety
(90) days) prior to the Determination Date. If all of the Lenders shall have
notified the Agent on or prior to the date which is forty-five (45) days prior
to the Determination Date that they accept such Extension Request, the Revolving
Credit Termination Date shall be extended for one (1) year. If any Lender shall
not have notified Agent on or prior to the date which is forty-five (45) days
prior to the Determination Date that it accepts such Extension Request, the
Revolving Credit Termination Date shall not be extended. The Agent shall
promptly notify the Borrower whether the Extension Request has been accepted or
rejected as well as which Lender or Lenders rejected the Borrower's Extension
Request (each such Lender a "Rejecting Lender").
(b) Notwithstanding the preceding subsection (a), within thirty (30) days
after notification from the Agent that the Extension Request has been rejected
(a "Notice of Rejection"), and provided that the aggregate amount of Lender
Commitments of the Rejecting Lenders does not exceed twenty percent (20%) of the
Commitment, the Borrower may either (i) demand that the Rejecting Lender, and
upon such demand the Rejecting Lender shall promptly, assign its Lender
-53-
Commitment to another financial institution subject to and in accordance with
the provisions of Section 10.5 of this Agreement for a purchase price equal to
the unpaid balance of principal, accrued interest, the unpaid balance of the Fee
and expenses owing to the Rejecting Lender pursuant to this Agreement, or (ii)
pay to the Rejecting Lender the unpaid balance of principal, accrued interest,
the unpaid balance of the Fee and expenses owing to the Rejecting Lender
pursuant to this Agreement, whereupon the Rejecting Lender shall no longer be a
party to this Agreement or have any rights or obligations hereunder or under any
other Credit Documents, and the Commitment shall immediately and permanently be
reduced by an amount equal to the Lender Commitment of the Rejecting Lender. If
all Rejecting Lenders have either assigned their Lender Commitments to other
financial institutions as contemplated by the preceding clause (i) or have been
paid the amounts specified in the preceding clause (ii), then the Borrower's
Extension Request which was initially rejected shall be deemed to have been
granted and accordingly the Revolving Credit Termination Date shall be extended
by one (1) year, otherwise the Revolving Credit Termination Date shall not be
extended. If the aggregate of Lender Commitments of the Rejecting Lenders
exceeds twenty percent (20%) of the Commitment, the Revolving Credit Termination
Date shall not be extended.
9.2 Conditions to Renewal and Extension. Any agreement of the Lenders to
extend the Revolving Credit Termination Date under Section 9.1 of this Agreement
shall be conditioned upon, among other things, the following terms and
conditions (which shall be in addition to those required by Sections 2.7, 3 and
9.1 of this Agreement):
(a) Execution by the Borrower of a renewal and extension agreement
for each Note in Proper Form.
(b) Such other documents, instruments and items as Agent or any
Lender shall require in its sole discretion.
9.3 No Obligation to Renew and Extend. Notwithstanding the procedures and
terms and conditions for any renewal and extension of the Revolving Credit
Termination Date, neither the Agent nor any Lender has any obligation,
commitment or present intent to extend the Revolving Credit Termination Date,
and the Revolving Credit Termination Date may not be extended except in
accordance with a written agreement signed by the Agent, the Lenders, the
Borrower and any other Person to be charged with compliance therewith.
10. Miscellaneous.
10.1 No Waiver, Amendments. No waiver of any Default shall be deemed to be
a waiver of any other Default. No failure to exercise or delay in exercising any
right or power under any Credit Document shall operate as a waiver thereof, nor
shall any single or partial exercise of any such right or power preclude any
further or other exercise thereof or the exercise of any other right or power.
Except as may be prohibited by Section 8.1 hereof, no amendment, modification or
waiver
-54-
of any Credit Document shall be effective unless the same is in writing and
signed by the Borrower, the Agent and the Majority Lenders. No notice to or
demand on the Borrower or any other Person shall entitle the Borrower or any
other Person to any other or further notice or demand in similar or other
circumstances.
10.2 Notices. All notices under the Credit Documents shall be in writing
and either (i) delivered against receipt therefor, or (ii) mailed by registered
or certified mail, return receipt requested, in each case addressed as set forth
herein, or to such other address as a party may designate. Notices shall be
deemed to have been given (whether actually received or not) when delivered (or,
if mailed, on the next Business Day). Provided, however, that as between the
Agent and the Lenders and among the Lenders, notice may be given by telecopy or
facsimile effective upon the earlier of actual receipt or confirmation of
receipt by telephone.
10.3 Venue. XXXXXX COUNTY, TEXAS SHALL BE A PROPER PLACE OF VENUE TO
ENFORCE PAYMENT OR PERFORMANCE OF THIS AGREEMENT AND THE OTHER CREDIT DOCUMENTS,
UNLESS THE AGENT SHALL GIVE ITS PRIOR WRITTEN CONSENT TO A DIFFERENT VENUE. THE
BORROWER HEREBY IRREVOCABLY SUBMITS TO THE NONEXCLUSIVE JURISDICTION OF THE
STATE AND FEDERAL COURTS IN THE STATE OF TEXAS AND AGREES AND CONSENTS THAT
SERVICE OF PROCESS MAY BE MADE UPON IT IN ANY PROCEEDING ARISING OUT OF ANY OF
THE CREDIT DOCUMENTS BY SERVICE OF PROCESS AS PROVIDED BY TEXAS LAW. THE
BORROWER HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY
OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY SUIT,
ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO ANY OF THE CREDIT DOCUMENTS
IN THE DISTRICT COURTS OF XXXXXX COUNTY, TEXAS, OR IN THE UNITED STATES DISTRICT
COURT FOR THE SOUTHERN DISTRICT OF TEXAS, HOUSTON DIVISION, AND HEREBY FURTHER
IRREVOCABLY WAIVES ANY CLAIMS THAT ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT
IN ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. THE BORROWER (A)
AGREES TO DESIGNATE AND MAINTAIN AN AGENT FOR SERVICE OF PROCESS IN THE STATE OF
TEXAS IN CONNECTION WITH ANY SUCH SUIT, ACTION OR PROCEEDING AND TO DELIVER TO
THE AGENT EVIDENCE THEREOF AND (B) IRREVOCABLY CONSENTS TO THE SERVICE OF
PROCESS OUT OF ANY OF THE AFOREMENTIONED COURTS IN ANY SUCH SUIT, ACTION OR
PROCEEDING BY NOTICE GIVEN AS PROVIDED FOR IN THIS AGREEMENT. NOTHING HEREIN
SHALL AFFECT THE RIGHT OF THE AGENT OR THE LENDERS TO COMMENCE LEGAL PROCEEDINGS
OR OTHERWISE PROCEED AGAINST THE BORROWER IN ANY JURISDICTION OR TO SERVE
PROCESS IN ANY MANNER PERMITTED BY APPLICABLE LAW. THE BORROWER HEREBY
IRREVOCABLY AGREES THAT ANY LEGAL ACTION OR PROCEEDING AGAINST THE AGENT OR
-55-
ANY LENDER ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT OR THE OTHER
CREDIT DOCUMENTS SHALL BE BROUGHT AND MAINTAINED IN THE DISTRICT COURTS OF
XXXXXX COUNTY, TEXAS, OR THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN
DISTRICT OF TEXAS, HOUSTON DIVISION.
10.4 Choice of Law. THIS AGREEMENT, THE NOTES AND THE OTHER CREDIT
DOCUMENTS HAVE BEEN NEGOTIATED, EXECUTED AND DELIVERED IN THE STATE OF TEXAS AND
SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS
OF THE STATE OF TEXAS, INCLUDING ALL APPLICABLE FEDERAL LAW, FROM TIME TO TIME
IN FORCE IN THE STATE OF TEXAS.
10.5 Survival; Parties Bound; Successors and Assigns. (a) All
representations, warranties, covenants and agreements made by or on behalf of
the Borrower in connection herewith shall survive the execution and delivery of
the Credit Documents, shall not be affected by any investigation made by any
Person, and shall bind the Borrower and its successors, trustees, receivers and
assigns and inure to the benefit of the successors and assigns of the Agent and
the Lenders; provided, however, that the Borrower may not assign or transfer any
of its rights or obligations hereunder without the prior written consent of the
Agent and all of the Lenders, and any such assignment or transfer without such
consent shall be null and void.
(b) Subject to Sections 10.5(d) and (e) of this Agreement, a Lender
may assign all or part of its Loans and its Lender Commitment to an Eligible
Institution so long as such assignment shall (1) include the voting rights and
all other rights and obligations attributable thereto, and include a written
assumption by the assignee of the assigning Lender's obligations under the
Credit Documents, (2) require the written consent of the Borrower (so long as no
Default is in existence) and the Agent, such consent not to be unreasonably
withheld, (3) be in a minimum amount of $10,000,000.00 if assigned to a Person
not already a Lender, (4) in the case of a partial assignment, not reduce the
Lender's Lender Commitment to an amount less than $10,000,000.00, and (5)
include payment to the Agent by the Lender of a service fee for each assignment
equal to $3,000.00.
(c) Subject to Section 10.5(d) and (e) of this Agreement, a Lender
may sell participating interests in any of its Loans to an Eligible Institution
so long as such participation shall (1) limit the voting rights of the
participant, if any, to the ability to vote for changes in the amount of the
Commitment, the interest rate on the Loans, and the Maturity Date, (2) for the
Committed Loans, if the participant is not an Affiliate of the participating
Lender, require the written consent of the Borrower (so long as no Default is in
existence) and the Agent, such consent not to be unreasonably withheld and, if
the participant is an Affiliate of the participating Lender, require written
notice to the Agent and the Borrower but not any consent of the Agent, the
Borrower or any other Lender, (3) for Committed Loans be in a minimum principal
amount of at least $10,000,000.00
-56-
if participated to a Person not already a Lender, and (4) not reduce the
Lender's Lender Commitment which has not been participated to less than
$10,000,000.00. In connection with any sale of a participating interest made in
compliance with this Agreement, (i) the participating Lender shall continue to
be liable for its Lender Commitment and its other obligations under the Credit
Documents, (ii) the Agent, the Borrower and the other Lenders shall continue to
deal solely and directly with the participating Lender in connection with such
Lender's rights and obligations under the Credit Documents, and (iii) the
participant may not require the participating Lender to take or refrain from
taking any action under the Credit Documents that is in conflict with the terms
and provisions of the Credit Documents.
(d) A Lender may assign all or any part of its Loans or its Lender
Commitment to an Affiliate of the Lender with written consent of the Borrower
(so long as no Default is in existence) and the Agent, such consent not to be
unreasonably withheld.
(e) Notwithstanding any provision hereof to the contrary, (i) any
Lender may assign and pledge all or any portion of its Lender Commitment and
Loans to a Federal Reserve Bank; provided, however, that any such assignment or
pledge shall not relieve such Lender from its obligations under the Credit
Documents; (ii) the Agent may not assign or participate $30,000,000.00 of its
Lender Commitment to any Person other than an Affiliate of the Agent without the
prior written consent of all of the Lenders and the Borrower; and (iii) Chase
may assign, sell or participate all or any portion of the Swing Loan without the
consent of the Borrower, the Agent or any other Lender.
(f) The term of this Agreement shall be until the final maturity of
the Notes and the payment of all amounts due under the Credit Documents.
(g) Any Lender (each, a "Designating Lender") may at any time
designate one Designated Lender to fund Money Market Loans on behalf of such
Designating Lender subject to the terms of this Section 10.5(g), and the
provisions in Sections 10.5(b) and (c) shall not apply to such designation. No
Lender may designate more than one (1) Designated Lender. The parties to each
such designation shall execute and deliver to the Agent for its acceptance a
Designation Agreement. Upon such receipt of an appropriately completed
Designation Agreement executed by a Designating Lender and a designee
representing that it is a Designated Lender, the Agent will accept such
Designation Agreement and will give prompt notice thereof to the Borrower,
whereupon, (i) the Borrower shall execute and deliver to the Designating Lender
a Designated Lender Note payable to the order of the Designated Lender, (ii)
from and after the effective date specified in the Designation Agreement, the
Designated Lender shall become a party to this Agreement with a right (subject
to the provisions of Section 2.8(b)) to make Money Market Loans on behalf of its
Designating Lender pursuant to Section 2.8 after the Borrower has accepted a
Money Market Loan (or portion thereof) of the Designating Lender, and (iii) the
Designated Lender shall not be required to make payments with respect to any
obligations in this Agreement except to the extent of excess
-57-
cash flow of such Designated Lender which is not otherwise required to repay
obligations of such Designated Lender which are then due and payable; provided,
however, that regardless of such designation and assumption by the Designated
Lender, the Designating Lender shall be and remain obligated to the Borrower,
Agent and the Lenders for each and every obligation of the Designating Lender
and its related Designated Lender with respect to this Agreement, including,
without limitation, any indemnification obligations under Section 8.5 hereof and
any sums otherwise payable to the Borrower by the Designated Lender. Each
Designating Lender shall serve as the administrative agent of the Designated
Lender and shall on behalf of, and to the exclusion of, the Designated Lender:
(1) receive any and all payments made for the benefit of the Designated Lender
and (2) give and receive all communications and notices and take all actions
hereunder, including, without limitation, votes, approvals, waivers, consents
and amendments under or relating to this Agreement and the other Credit
Documents. Any such notice, communication, vote, approval, waiver, consent or
amendment shall be signed by the Designating Lender as administrative agent for
the Designated Lender and shall not be signed by the Designated Lender on its
own behalf, and shall be binding upon the Designated Lender to the same extent
as if signed by the Designated Lender on its own behalf. The Borrower, the Agent
and the Lenders may rely thereon without any requirement that the Designated
Lender sign or acknowledge the same. No Designated Lender may assign or transfer
all or any portion of its interest hereunder or under any other Credit Document,
other than assignments to the Designating Lender which originally designated
such Designated Lender or otherwise in accordance with the provisions of
Sections 10.5(b) and (c). The Agent and each Lender agrees that it will not
institute against any Designated Lender or join any other Person in instituting
against any Designated Lender any bankruptcy, reorganization, arrangement,
insolvency or liquidation proceeding under any federal or state bankruptcy or
similar law, until the later to occur of (x) one year and one day after the
payment in full of the latest maturing commercial paper note issued by such
Designated Lender and (y) the Revolving Credit Termination Date.
10.6 Counterparts. This Agreement may be executed in several identical
counterparts, and by the parties hereto on separate counterparts, and each
counterpart, when so executed and delivered, shall constitute an original
instrument, and all such separate counterparts shall constitute but one and the
same instrument.
10.7 Usury Not Intended; Refund of Any Excess Payments. It is the intent
of the parties in the execution and performance of this Agreement to contract in
strict compliance with the usury laws of the State of Texas and the United
States of America from time to time in effect. In furtherance thereof, the
Agent, the Lenders and the Borrower stipulate and agree that none of the terms
and provisions contained in this Agreement or the other Credit Documents shall
ever be construed to create a contract to pay for the use, forbearance or
detention of money with interest at a rate in excess of the Ceiling Rate and
that for purposes hereof "interest" shall include the aggregate of all charges
which constitute interest under such laws that are contracted for, reserved,
taken, charged or received under this Agreement. In determining whether or not
the interest paid or payable, under any specific contingency, exceeds the
Ceiling Rate, the Borrower, the Agent and the
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Lenders shall, to the maximum extent permitted under applicable law, (a)
characterize any nonprincipal payment as an expense, fee or premium rather than
as interest, (b) exclude voluntary prepayments and the effects thereof, and (c)
"spread" the total amount of interest throughout the entire contemplated term of
the Loans. The provisions of this paragraph shall control over all other
provisions of the Credit Documents which may be in apparent conflict herewith.
10.8 Captions. The headings and captions appearing in the Credit Documents
have been included solely for convenience and shall not be considered in
construing the Credit Documents.
10.9 Severability. If any provision of any Credit Documents shall be
invalid, illegal or unenforceable in any respect under any applicable law, the
validity, legality and enforceability of the remaining provisions shall not be
affected or impaired thereby.
10.10 Disclosures. Every reference in the Credit Documents to disclosures
of the Borrower to the Agent and the Lenders in writing, to the extent that such
references refer to disclosures at or prior to the execution of this Agreement,
shall be deemed strictly to refer only to written disclosures delivered to the
Agent and the Lenders in an orderly manner concurrently with the execution
hereof.
10.11 No Novation. THE PARTIES HERETO HAVE ENTERED INTO THIS AGREEMENT AND
THE OTHER CREDIT DOCUMENTS SOLELY TO AMEND, RESTATE AND RESTRUCTURE THE TERMS
OF, AND THE OBLIGATIONS TO THE EXISTING LENDERS OWING UNDER AND IN CONNECTION
WITH, THE ORIGINAL CREDIT AGREEMENT. THE PARTIES DO NOT INTEND THIS AGREEMENT
NOR THE TRANSACTIONS CONTEMPLATED HEREBY TO BE, AND THIS AGREEMENT AND THE
TRANSACTIONS CONTEMPLATED HEREBY SHALL NOT BE CONSTRUED TO BE, A NOVATION OF ANY
OF THE OBLIGATIONS OWING BY THE BORROWER UNDER OR IN CONNECTION WITH THE
ORIGINAL CREDIT AGREEMENT.
10.12 Limitation of Liability. NO OBLIGATION OR LIABILITY WHATSOEVER OF THE
BORROWER WHICH MAY ARISE AT ANY TIME UNDER THIS AGREEMENT OR ANY OBLIGATION OR
LIABILITY WHICH MAY BE INCURRED BY IT PURSUANT TO ANY OTHER CREDIT DOCUMENT
SHALL BE PERSONALLY BINDING UPON, NOR SHALL RESORT FOR THE ENFORCEMENT THEREOF
BE HAD TO THE PRIVATE PROPERTY OF, ANY OF THE BORROWER'S TRUSTEES OR
SHAREHOLDERS REGARDLESS OF WHETHER SUCH OBLIGATION OR LIABILITY IS IN THE NATURE
OF CONTRACT, TORT OR OTHERWISE.
10.13 Entire Agreement. THIS AGREEMENT AND THE OTHER CREDIT DOCUMENTS
TOGETHER CONSTITUTE A WRITTEN AGREEMENT AND REPRESENT THE FINAL AGREEMENT
BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS OR SUBSEQUENT
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ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL
AGREEMENTS BETWEEN THE PARTIES.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date set forth above.
ARCHSTONE COMMUNITIES TRUST
By:________________________________
Name:______________________________
Title:_____________________________
Address:
0000 Xxxxx Xxxxxxx Xxxxxx
Xxxxx 000
Xxxxxxxxx, Xxxxxxxx 00000
Attention: Corporate Finance
-00-
Xxxxxx Xxxxxxxxxx: $66,666,667.00 CHASE BANK OF TEXAS,
Percentage: 8.888888889% NATIONAL ASSOCIATION
as Agent and as a Lender
By:________________________________
Name:______________________________
Title:_____________________________
Address:
000 Xxxx Xxxxxx
Xxxxxxx, Xxxxx 00000
Attention: Manager, Real Estate Group
Telecopy No.: 000-000-0000
Telephone No.: Xxxx Xxxxxx
000-000-0000
-61-
Lender Commitment: $66,666,666.00 XXXXXX GUARANTY TRUST COMPANY
Percentage: 8.888888888% OF NEW YORK
By:________________________________
Name:______________________________
Title:_____________________________
Address:
00 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxx X'Xxxxxxx
Telecopy No: 000-000-0000
Telephone No.: Xxx X'Xxxxxxx
000-000-0000
-62-
Lender Commitment: $66,666,666.00 XXXXX FARGO BANK, NATIONAL
Percentage: 8.888888888% ASSOCIATION
By:________________________________
Name:______________________________
Title:_____________________________
Address:
0000 Xxxxx Xxxxx Xxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxx 00000
Attention: Xxxx Xxx Xxxxx
Telecopy No: 000-000-0000
Telephone No. Xxxx Xxx Xxxxx
000-000-0000
-63-
Lender Commitment: $40,000,000.00 GUARANTY FEDERAL BANK, F.S.B.
Percentage: 5.33333%
By:________________________________
Name:______________________________
Title:_____________________________
Address:
0000 Xxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
Attention: Xxxxx Xxxxx
Telecopy No.: 000-000-0000
Telephone No.: Xxxxx Xxxxx
000-000-0000
-64-
Lender Commitment: $20,000,000.00 NORWEST BANK NEW MEXICO,
Percentage: 2.66667% NATIONAL ASSOCIATION
By:________________________________
Name:______________________________
Title:_____________________________
Address:
0000 Xxxxx xx Xxxxxxx
Xxxxx Xx, Xxx Xxxxxx 00000
Attention: Xxx Xxxxxxx
Telecopy No.: 505-983-6232
Telephone No.: Xxx Xxxxxxx
000-000-0000
-65-
Lender Commitment: $60,000,000.00 COMMERZBANK
Percentage: 8.00000% AKTIENGESELLSCHAFT, LOS ANGELES
BRANCH
By:________________________________
Name:______________________________
Title:_____________________________
By:________________________________
Name:______________________________
Title:_____________________________
Address:
(1) 000 Xxxx Xxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Telecopy No.: 000-000-0000
(2) Commerzbank Aktiengesellschaft
New York Branch
0 Xxxxx Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: Xxxxxxxxx Xxxxxx
Telecopy No: 212-266-7235
Telephone No.: Xxxxxxxxx Xxxxxx
000-000-0000
-66-
Lender Commitment: $60,000,000.00 BANK OF AMERICA NATIONAL TRUST
Percentage: 8.00000% AND SAVINGS ASSOCIATION
By:________________________________
Name:______________________________
Title:_____________________________
Address:
000 Xxxxx Xxxxxx Xxxxxx
0xx Xxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxx Xxxxxx
Telecopy No.: 000-000-0000
Telephone No.: Xxxx Xxxxxx
000-000-0000
-67-
Lender Commitment: $40,000,000.00 FLEET NATIONAL BANK
Percentage: 5.33333%
By:________________________________
Name:______________________________
Title:_____________________________
Address:
111 Westminster, Mail Stop RIMO215
Xxxxxxxxxx, Xxxxx Xxxxxx 00000
Attention: Xxxx Xxxxxx
Telecopy No: 000-000-0000
Telephone No. Xxxx Xxxxxx
000-000-0000
-68-
Lender Commitment: $25,000,000.00 BANK HAPOALIM, B.M.,
Percentage: 3.33333% San Xxxxxxxxx Xxxxxx
By:________________________________
Name:______________________________
Title:_____________________________
By:________________________________
Name:______________________________
Title:_____________________________
Address:
000 Xxxxxxxxxx Xxxxxx, Xxxxx 000
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Attention: Xxx Xxxxxxx
Telecopy No: 000-000-0000
Telephone No. Xxx Xxxxxxx
000-000-0000
-69-
Lender Commitment: $25,000,000.00 BANK ONE, ARIZONA, NA
Percentage: 3.33333%
By:________________________________
Name:______________________________
Title:_____________________________
Address:
Commercial Real Estate
000 X. Xxxxxxx, 00xx Xxxxx, XX0-0000
Xxxxxxx, Arizona 85004
Attention: Xxxx Xxxxxxxx
Telecopy No: 000-000-0000
Telephone No. Xxxx Xxxxxxxx
000-000-0000
-70-
Lender Commitment: $35,000,000.00 UNION BANK OF CALIFORNIA, N.A.
Percentage: 4.66667%
By:________________________________
Name:______________________________
Title:_____________________________
By:________________________________
Name:______________________________
Title:_____________________________
Address:
000 Xxxxxxxxxx, X-000
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxxxx X. Xxxxxx
Telecopy No: 000-000-0000
Telephone No. Xxxxxxxx X. Xxxxxx
000-000-0000
-71-
Lender Commitment: $20,000,000.00 BANK OF MONTREAL, CHICAGO
Percentage: 2.00000% BRANCH
By:________________________________
Name:______________________________
Title:_____________________________
Address:
000 X. XxXxxxx Xxxxxx, 00X
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxxxx Xxxxxxxx
Telecopy No: 000-000-0000
Telephone No.: Xxxxxxxxx Xxxxxxxx
000-000-0000
-72-
Lender Commitment: $25,000,000.00 SUMMIT BANK
Percentage: 3.33333%
By:_______________________________
Name:_____________________________
Title:____________________________
Address:
000 Xxxxxx Xxxxxx
Xxxxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxx
Telecopy No: 000-000-0000
Telephone No.: Xxxxxxx X. Xxxxxx
000-000-0000
-73-
Lender Commitment: $25,000,000.00 DG BANK DEUTSCHE
Percentage: 3.33333% GENOSSENSCHAFTSBANK, CAYMAN
ISLAND BRANCH
By:_______________________________
Name:_____________________________
Title:____________________________
Address:
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxx X'Xxxxxxx
Telecopy No: 000-000-0000
Telephone No.: Xxxxx X'Xxxxxxx
000-000-0000
-74-
Lender Commitment: $20,000,000.00 DRESDNER BANK AG NEW YORK
Percentage: 2.66667% BRANCH
By:_______________________________
Name:_____________________________
Title:____________________________
Address:
00 Xxxx Xxxxxx
Xxx Xxxx, XX 00000-0000
Attention: Xxxxxxxx Xxxxxxxxx
Telecopy No: 000-000-0000
Telephone No.: Xxxxxxxx Xxxxxxxxx
000-000-0000
-75-
Lender Commitment: $35,000,000.00 WACHOVIA BANK, N.A.
Percentage: 4.66667%
By:_______________________________
Name:_____________________________
Title:____________________________
Address:
000 Xxxxxxxxx Xxxxxx, X.X.
Mail Code GA1810
Xxxxxxx, XX 00000
Attention: Xxxx Xxxx
Telecopy No: 000-000-0000
Telephone No.: Xxxx Xxxx
000-000-0000
-76-
Lender Commitment: $40,000,000.00 FIRST UNION NATIONAL BANK
Percentage: 5.33333%
By:_______________________________
Name:_____________________________
Title:____________________________
Address:
000 Xx. Xxxxxxx Xxxxxx, 0xx Xxxxx
Xxxxxxxxx, XX 00000-0000
Attention: Xxxx X. Xxxxxxxx
Telecopy No: 000-000-0000
Telephone No.: Xxxx X. Xxxxxxxx
000-000-0000
-77-
Lender Commitment: $20,000,000.00 MELLON BANK, N.A.
Percentage: 2.66667%
By:_______________________________
Name:_____________________________
Title:____________________________
Address:
Xxx Xxxxxx Xxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Attention: Xxxxx XxXxxx
Telecopy No: 000-000-0000
Telephone No.: Xxxxx XxXxxx
000-000-0000
-78-
Lender Commitment: $10,000,000.00 BANK OF IRELAND
Percentage: 1.33333%
By:_______________________________
Name:_____________________________
Title:____________________________
Address:
Xxxxxxxx House/Int'l Financial Services
Center
Xxxxxx 0, Xxxxxxx
Attention: Xxxxxxx Xxxx
Telecopy No: 0000-000-0000
Telephone No.: Xxxxxxx Xxxx
0000-000-0000
-79-
Lender Commitment: $25,000,000.00 AMSOUTH BANK
Percentage: 3.33333%
By:_______________________________
Name:_____________________________
Title:____________________________
Address:
0000 Xxxxx Xxxxxx Xxxxx, 0xx Xxxxx
Xxxxxxxxxx, XX 00000
Attention: Xxxxxxxx Xxxxx
Telecopy No: 000-000-0000
Telephone No.: Xxxxxxxx Xxxxx
000-000-0000
-80-
Lender Commitment: $25,000,000.00 BAYERISCHE HYPOTHEKEN UND
Percentage: 3.333333333% WECHSEL BANK
By:_______________________________
Name:_____________________________
Title:____________________________
Address:
00 Xxx Xxxx, 00xx Xxxx
(Financial Xxxxxx Xxxxxxxx)
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx Xxxxxx
Telecopy No: 000-000-0000
Telephone No.: Xxxxxxx Xxxxxx
000-000-0000
-81-
OFFICER'S CERTIFICATE
---------------------
Archstone Communities Trust (The "Borrower"), Chase Bank of Texas, National
Association, as Agent (the "Agent") and certain other Lenders (the "Lenders")
entered into that certain Amended and Restated Credit Agreement (as amended,
supplemented and restated from time to time, (the "Agreement") dated as of
July 27, 1998. Any term used herein and not otherwise defined shall
have the meaning ascribed to it in the Agreement.
The undersigned hereby certifies that:
I. I am a Vice President of the Borrower.
--------------
II. The attached financial statements were prepared in conformity with
generally accepted accounting principles consistently applied (except for the
omission of footnote disclosures and appropriately disclosed consistency
exceptions) and present fairly the financial position of the Borrower as of the
date thereof and the results of its operations for the period covered thereby
subject to normal year-end adjustments.
III. As of the end of the period covered by the attached financial statements
dated [end of quarter date]:
1. Tangible Net Worth Calculation
------------------------------
(Section 5.3 (d))
(A) Assets, as defined $ ____________
(B) Liabilities $ ____________
(C) Tangible Net Worth (1(A) - 1(B)
must at least equal $2,200,000,000) $ ____________
Required: $ 2.2 Billion
2. Ratio of Debt to Tangible Net Worth Ratio Calculation
-----------------------------------------------------
(Section 5.3 (a))
(A) Indebtedness $ ____________
(B) Tangible Net Worth $ ____________
(C) Debt to Tangible Net Worth Ratio (ratio
of 2(A) to 2(B)) :1.0
------------
Required: Maximum of 1.0 to 1.0
EXHIBIT A
---------
Page 1 of 6 Pages
3. Coverage Ratio Calculation
--------------------------
(Section 5.3 (b))
(A) Borrower's Funds From Operations $ __________
(B) Borrower's Interest Incurred $ __________
(C) Construction Interest $ __________
(D) Interest Expense $ __________
(E) FFO plus Interest Expense $ __________
(F) Payments and Payables on Disqualified Stock $ __________
(G) Interest Expense $ __________
(H) Payments and Payables on Disqualified Stock $ __________
plus Interest Expense $ __________
(I) Coverage Ratio (Ratio of 3(E) to 3(H)) : 1.0
----------
Required: Minimum of 2.0 to 1.0
4. Fixed Charge Coverage Ratio Calculation
---------------------------------------
(Section 5.3 (c))
(A) Borrower's Funds from Operations $ __________
(B) Borrower's Interest Expense $ __________
(C) Unit Capital Expenditures $ __________
(D) FFO plus Interest Expense minus
Unit Capital Expenditures $ __________
(E) Payments and Payables on Disqualified Stock $ __________
(F) Regularly Scheduled Principal Paid and
Payable $ __________
(G) Payments and Payables on Disqualified Stock
plus Interest Expense plus Regularly
Scheduled Principal Paid and Payable $ __________
(H) Fixed Charge Coverage Ratio
(Ratio of 4(D) to 4(G)) :1.0
-----------
Required: Minimum of 1.75 to 1.0
EXHIBIT A
---------
Page 2 of 6 Pages
5. Maximum Recourse Indebtedness Calculation
-----------------------------------------
(Section 6.1A)
(A) Indebtedness with a Final Maturity of Five Years
or less $________
(B) Investment Grade Debt included in 5(A) $________
(C) Non-recourse Debt included in 5(A)
excluded from 5(B) $________
(D) Amortizing Debt included in 5(A),
excluded from 5(B) or 5(C) $________
(E) Credit Enhancement included in 5(A),
excluded from 5(B) or 5(C) or 5(D) $________
(F) Acquisition Indebtedness included in 5(A),
excluded from 5(B) or 5(C) or 5(D) or 5(E) $________
(G) Recourse Indebtedness as Calculated: 5(A) less
5(B), 5(C), 5(D), 5(E) and 5(F) (may not exceed
$1,000,000,000) $________
6. Secured Indebtedness Ratio Calculation
---------------------------------------
(Section 6.1B)
(A) Secured indebtedness $________
(B) Assets, as defined $________
(C) Secured indebtedness ratio
(ratio of 2(A) to 2(B)) :1.0
--------
Required: Maximum of 0.4 to 1.0
7. Asset Maintenance Calculation as of Quarter-End:
------------------------------------------------
Property Pool
-------------
(Section 5.15)
(A) Historical Value of the Pool Real Estate $________
(B) Homestead Mortgage Amount $________
(C) 10% of 6(A) $________
(D) Lesser of 6(B) and 6(C) $________
(E) Value of Pool (sum of 6(A) and 6(D), must equal
at least 6(G)) $________
(F) Outstanding Unsecured Indebtedness
X1.75
--------
(G) Minimum Historical Value of Pool $________
EXHIBIT A
---------
Page 3 of 6 Pages
8. Asset Maintenance Calculation as of Quarter-End:
------------------------------------------------
Operating Sub-Pool
------------------
(Section 5.15)
(A) Historical Value of Sub-Pool Real Estate Properties $________
(B) Annualized Net Operating Income of Sub-Pool Real
Estate Properties that have reached the Calculation
Date, divided by 9% $________
(C) Historical Value of Sub-Pool Real Estate Properties
that have not reached the Calculation Date $________
(D) Sum of 7(B) and 7(C) $________
(E) Value of Sub-Pool Real Estate (lesser of 7(A)
and 7(D)) $________
(F) Homestead Mortgage Amount $________
(G) Annualized Net Operating Income of the
Homestead Property during the Occupancy Period,
divided by 11% $________
(H) 10% of 7(E) $________
(I) Value of Homestead Loans (lesser of 7(F), 7(G)
and 7(H)) $________
(J) Value of Operating Sub-Pool (sum of 7(E) and
7(I), must equal at least 7(L)) $________
(K) Outstanding Unsecured Indebtedness
X 1.50
--------
(L) Minimum Operating Sub-Pool Value $________
9. Debt to Total Asset Value Ratio Conversion
------------------------------------------
(Section 5.3 (e))
(only required in the event of a denied Extension Request)
(A) Indebtedness $Not applicable
(B) Annualized Net Operating Income of properties
that have reached the Calculation Date, divided
by 8.75% $________
(C) Book value of properties that have not reached
the Calculation Date $________
(D) Cash and Cash Equivalents excluding tenant
security and other restricted deposits
(E) Book Value of All Other Assets not
included in 8(B), 8(C) and 8(D) above,
excluding intangibles and equity investments in
EXHIBIT A
---------
Page 4 of 6 Pages
Unconsolidated Affiliates $_______
(F) Book Value of Borrower's Equity Investments in
Unconsolidated Affiliates Multiplied by
the Equity Percentage $_______
(G) Total Asset Value ( 8(B)+8(C)+8(D)+8(E)+8(F)) $_______
(H) Debt to Total Asset Value Ratio
(as a Percentage, 8(A)/8(G))
Required - If an Extension Request has been denied:
During the year before the Revolving
Credit Termination Date 55%
Thereafter 50%
IV. Attached hereto is a statement of Funds From Operations for the Borrower as
of the most recent date required by the Agreement.
V. A review of the activities of the Borrower during the period covered
by the attached financial statements has been made under my
supervision and with a view to determining whether during such period
the Borrower has kept, observed, performed and fulfilled all of its
obligations under the Agreement.
VI. (Check either (A) or (B) )
[ ] (A) The Borrower has kept, observed, performed and fulfilled each and
every one of its obligations under the Agreement during the period covered
by the attached financial statements.
[ ] (B) The Borrower has kept, observed, performed and fulfilled each and
every one of its obligations under the Agreement during the period covered
by the attached financial statements except for the following matters:
[Describe all such defaults, specifying the nature, duration and status
thereof and what action the Borrower has taken or proposes to take with
respect thereto.]
EXHIBIT A
---------
Page 5 of 6 Pages
VII. With regard to Section 1004 of the Indenture dated as of February 1,
1994 between the Borrower and Xxxxxx Guaranty Trust Company of New
York, as Trustee (and using the terms defined therein), a certificate
required thereunder showing compliance with Section 1004 is attached
(only required for the fourth quarter Officer's Certificate), and as
at the end of the period covered by the attached financial statements:
1. (A) Sum of Total Asset, Aggregate
Purchase Price of Real Estate Assets,
or Mortgages Receivable Acquired, and
Securities Offering Proceeds Received
to Purchase said Assets $Required only
(B) Maximum amount of Debt $at year-end
(C) Debt $_____________
2. (A) Consolidated Income Available
for Debt Service $____________
(B) Annual Service Charge $____________
(C) Ratio of Consolidated Income Available
for Debt Service to Annual Service Charge ____________
3. (A) Total Assets $____________
(B) Maximum Secured Debt $____________
(C) Secured Debt $____________
Date: [Date] Name:_____________________
---------------- [Vice President Name]
EXHIBIT A
---------
Page 6 of 6 Pages
POOL PROPERTY LIST
List each property separately showing the Historical Value and the
components, the city, the state, the occupancy level for the past 3 months, the
number of units, the age of the property, and net operating income.
REQUEST FOR LOAN
----------------
Date: _______________, 199__
Chase Bank of Texas,
National Association, as Agent
000 Xxxx Xxxxxx
Xxxxxxx, Xxxxx 00000
("Lender")
RE: Request for Loan Under Amended and Restated Credit Agreement (as
amended from time to time, the "Credit Agreement") dated as of July 7,
1998, among Archstone Communities Trust (the "Borrower"), the Agent
and the Lenders as signatory to the Credit Agreement
Gentlemen:
Borrower hereby requests [check as applicable] [_] a conversion of an
existing Loan as provided below, and/or [_] an advance under the Credit
Agreement, which is allowed pursuant to Section 5.9 of the Credit Agreement, in
the amount of $____________ [minimum of $1,000,000.00 and in multiples of
$100,000.00].
Maximum Principal Amount $750,000,000.00
Less the amount outstanding under the
Credit Agreement (including Swing Loans) ($__________.__)
Available amount $__________.__
Less amount requested ($__________.__)
Amount remaining to be advanced $__________.__
The advance or conversion is to be made as follows:
A. Base Rate Borrowing.
-------------------
1. Amount of Base Rate Borrowing: $__________.__
2. Date of Base Rate Borrowing _______, 199_
EXHIBIT B
---------
Page 1 of 2 Pages
B. Eurodollar Rate Borrowing:
-------------------------
1. Amount of Eurodollar Rate
Borrowing: $__________.__
2. Amount of conversion of existing
Loan to Eurodollar Rate Borrowing: $__________.__
3. Number of Eurodollar Rate
Borrowing(s) now in effect: _____________
[cannot exceed 12]
4. Date of Eurodollar Rate Borrowing
or conversion: _______, 199_
5. Interest Period: _____________
6. Expiration date of current Interest
Period as to this conversion: _______, 199_
C. Swing Loan.
-----------
1. Amount of Swing Loan: $_________.__
[minimum of $1,000,000.00 and in
multiples of $100,000.00]
2. Date of Swing Loan: _______, 199_
Borrower hereby represents and warrants that the amounts set forth above
are true and correct, that the amount above requested has actually been
incurred, that the representations and warranties contained in the Credit
Agreement are true and correct as if made as of this date, and that Borrower has
kept, observed, performed and fulfilled each and every one of its obligations
under the Credit Agreement as of the date hereof [except as follows:]
Very truly yours,
ARCHSTONE COMMUNITIES TRUST
By:_______________________________
Name:_____________________________
Title:____________________________
EXHIBIT B
---------
Page 2 of 2 Pages
$[___________] June 30, 1998
FOR VALUE RECEIVED ARCHSTONE COMMUNITIES TRUST, a Maryland real estate
investment trust (herein called "Maker") promises to pay to the order of
[_______________________________________________________________________________
___], a [_____________________________] ("Payee"), at the offices of Chase Bank
of Texas, National Association, a national banking association, as "Agent" under
the Credit Agreement, at 000 Xxxx Xxxxxx, Xxxxxxx, Xxxxx 00000, or at such other
place as the holder (the "Holder", whether or not Payee is such holder) of this
note may hereafter designate in writing, in immediately available funds and in
lawful money of the United States of America, the principal sum of
[_____________________________________________] Dollars ($[___________________])
(or the unpaid balance of all principal advanced against this note, if that
amount is less), together with interest on the unpaid principal balance of this
note from time to time outstanding at the Stated Rate and interest on all past
due amounts, both principal and accrued interest, at the Past Due Rate;
provided, that for the full term of this note the interest rate produced by the
aggregate of all sums paid or agreed to be paid to the Holder of this note for
the use, forbearance or detention of the debt evidenced hereby (including, but
not limited to, all interest on this note at the Stated Rate) shall not exceed
the Ceiling Rate.
1. Definitions. Any terms not defined herein shall have the meaning given
to them in the Amended and Restated Credit Agreement dated of even date herewith
among the Maker, the Agent and certain other Lenders (as the same may be amended
or modified the "Credit Agreement").
2. Rates Change Automatically and Without Notice. Without notice to Maker
or any other person or entity and to the full extent allowed by applicable law
from time to time in effect, the Prime Rate and the Ceiling Rate shall each
automatically fluctuate upward and downward as and in the amount by which
Agent's said prime rate, and such maximum nonusurious rate of interest permitted
by applicable law, respectively, fluctuate.
3. Calculation of Interest. Interest shall be computed for the actual
number of days elapsed in a year (up to 365, or 366 in a leap year) deemed to
consist of 360 days, unless the Ceiling Rate would thereby be exceeded, in which
event, to the extent necessary to avoid exceeding the Ceiling Rate, interest
shall be computed on the basis of the actual number of days elapsed in the
applicable calendar year in which it accrued.
4. Excess Interest Will be Refunded or Credited. If, for any reason
whatever, the interest paid or received on this note during its full term
produces a rate which exceeds the Ceiling Rate, the Holder of this note shall
refund to the payor or, at the Holder's option, credit
Page 1 of 5 Pages INITIALLED FOR
EXHIBIT C IDENTIFICATION:____
---------
against the principal of this note such portion of that interest as shall be
necessary to cause the interest paid on this note to produce a rate equal to the
Ceiling Rate.
5. Interest Will be Spread. All sums paid or agreed to be paid to the
Holder of this note for the use, forbearance or detention of the indebtedness
evidenced hereby, to the extent permitted by applicable law and to the extent
necessary to avoid violating applicable usury laws, shall be amortized,
prorated, allocated and spread in equal parts throughout the full term of this
note, so that the interest rate is uniform throughout the full term of this
note.
6. Payment Schedule. The principal of this note shall be due and payable
on the Maturity Date. Accrued and unpaid interest shall be due and payable on
each Interest Payment Date. All payments shall be applied first to accrued
interest, the balance to principal.
7. Prepayment. Maker may prepay this note only as provided in the Credit
Agreement.
8. Revolving Credit. Upon and subject to the terms and conditions of the
Credit Agreement and the other provisions of this note, Maker may borrow, repay
and reborrow against this note at any time unless and until a default (however
designated) or event (an "Event of Potential Default") which, if not cured after
notice or before the lapse of time (or both) would develop into a default under
this note, the Credit Agreement or any other Credit Documents has occurred which
the Holder has not declared to have been fully cured or waived, and (except as
the Credit Agreement or any of the other Credit Documents may otherwise provide)
there is no limit on the number of advances against this note so long as the
total unpaid principal of this note at any time outstanding does not exceed the
Payee's Lender Commitment. Interest on the amount of each advance against this
note shall be computed on the amount of the unpaid balance of that advance from
the date it is made until the date it is repaid. If Maker's right (if any) to
borrow against this note shall ever lapse because of the occurrence of any
default, it shall not be reinstated (or construed from any course of conduct or
otherwise to have been reinstated) unless and until the Holder shall declare in
a signed writing that it has been cured or waived. The unpaid principal balance
of this note at any time shall be the total of all principal lent against this
note to Maker or for Maker's account less the sum of all principal payments and
permitted prepayments on this note received by the Holder. Absent manifest
error, the Holder's computer records shall on any day conclusively evidence the
unpaid balance of this note and its advances and payments history posted up to
that day. All loans and advances and all payments and permitted prepayments made
on this note may be (but are not required to be) endorsed by the Holder on the
schedule attached hereto (which is hereby made a part hereof for all purposes)
or otherwise recorded in the Holder's computer or manual records; provided, that
any Holder's failure to make notation of (a) any principal advance or accrual of
interest shall not cancel, limit or otherwise affect Maker's obligations or any
Holder's rights with respect to that advance or accrual, or (b) any payment or
permitted prepayment of principal or interest shall not cancel, limit or
otherwise affect Maker's entitle-
Page 2 of 5 Pages INITIALLED FOR
EXHIBIT C IDENTIFICATION:____
---------
ment to credit for that payment as of the date of its receipt by the Holder.
Maker and Payee expressly agree, as expressly allowed by Chapter 346 of the
Texas Finance Code, that Chapter 346 (which relates to open-end line of credit
revolving loan accounts) shall not apply to this note or to any loan evidenced
by this note and that neither this note nor any such loan shall be governed by
Chapter 346 or subject to its provisions in any manner whatsoever.
9. Credit Agreement. This note has been issued pursuant to the terms of
the Credit Agreement, to which reference is made for all purposes. Advances
against this note by Payee or other Holder hereof shall be governed by the
Credit Agreement. Payee is entitled to the benefits of the Credit Agreement. As
additional security for this note, Maker hereby grants to Payee and all other
present and future Holders an express lien against, security interest in and
contractual right of setoff in and to, all property and any and all deposits
(general or special, time or demand, provisional or final) at any time held by
the Payee or other Holder for any Maker's credit or account.
10. Defaults and Remedies. Time is of the essence. Maker's failure to pay
any principal or accrued interest owing on this note when due and after
expiration of any applicable period for notice and right to cure such a default
which is specifically provided for in the Credit Agreement or any other
provision of this note, or the occurrence of any default under the Credit
Agreement or any other Credit Documents shall constitute default under this
note, whereupon the Holder may elect to exercise any or all rights, powers and
remedies afforded (a) under the Credit Agreement and all other papers related to
this note and (b) by law, including the right to accelerate the maturity of this
entire note.
In addition to and cumulative of such rights, the Holder is hereby
authorized at any time and from time to time after any such default, at Holder's
option, without notice to Maker or any other person or entity (all rights to any
such notice being hereby waived), to set off and apply any and all of any
Maker's deposits at any time held by the Holder, and any other debt at any time
owing by the Holder to or for the credit or account of any Maker, against the
outstanding balance of this note, in such order and manner as Holder may elect
in its sole discretion.
The Holder's right to accelerate this note on account of any late payment
or other default shall not be waived or deemed waived by the Holder by reason of
the Holder's having previously accepted one or more late payments or by reason
of any Holder's otherwise not accelerating this note or exercising other
remedies for any default, and no Holder shall ever be obligated or deemed
obligated to notify Maker or any other person that Holder is requiring strict
compliance with this note or any papers securing or otherwise relating to it
before such Holder may accelerate this note or exercise any other remedy.
Page 3 of 5 Pages INITIALLED FOR
EXHIBIT C IDENTIFICATION:____
---------
Nothing in this Section or elsewhere shall be construed as diminishing
Holder's absolute right to demand payment of all or any part of this note at any
time.
11. Legal Costs. If any Holder of this note retains an attorney in
connection with any such default or to collect, enforce or defend this note or
any papers intended to secure or guarantee it in any lawsuit or in any probate,
reorganization, bankruptcy or other proceeding, or if Maker sues any Holder in
connection with this note or any such papers and does not prevail, then Maker
agrees to pay to each such Holder, in addition to principal and interest, all
reasonable costs and expenses incurred by such Holder in trying to collect this
note or in any such suit or proceeding, including reasonable attorneys' fees.
12. Waivers. Except only for any notices which are specifically required
by the Credit Agreement, Maker and any and all co-makers, endorsers, guarantors
and sureties severally waive notice (including, but not limited to, notice of
intent to accelerate and notice of acceleration, notice of protest and notice of
dishonor), demand, presentment for payment, protest, diligence in collecting and
the filing of suit for the purpose of fixing liability and consent that the time
of payment hereof may be extended and re-extended from time to time without
notice to any of them. Each such person agrees that his, her or its liability on
or with respect to this note shall not be affected by any release of or change
in any guaranty or security at any time existing or by any failure to perfect or
maintain perfection of any lien against or security interest in any such
security or the partial or complete unenforceability of any guaranty or other
surety obligation, in each case in whole or in part, with or without notice and
before or after maturity.
13. Rate of Return Maintenance Covenant. If at any time after the date of
this note, any Holder determines that (a) any applicable law, rule or regulation
regarding capital adequacy of general applicability has been adopted or changed,
or (b) its interpretation or administration by any governmental authority,
central bank or comparable agency has changed, and determines that such change
or the Holder's compliance with any request or directive regarding capital
adequacy of general applicability (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 the Holder's capital as a consequence
of its obligations under this note or any related papers to a level below that
which the Holder could have achieved but for such adoption, change or compliance
(taking into consideration the Holder's own capital adequacy policies) by an
amount the Holder deems to be material, then Maker promises to pay from time to
time to the order of the Holder such additional amount or amounts as will
compensate the Holder for such reduction. A certificate of any Holder setting
forth the amount or amounts necessary to compensate the Holder as specified
above shall be given to Maker as soon as practicable after the Holder has made
such determination and shall be conclusive and binding, absent manifest error.
Maker shall pay the Holder the amount shown as due on any such certificate
within 15 days after the Holder gives it. In preparing such certificate, the
Holder may employ such assumptions and make such allocations of costs and
expenses as the
Page 4 of 5 Pages INITIALLED FOR
EXHIBIT C IDENTIFICATION:____
---------
Holder in good xxxxx xxxxx reasonable and may use any reasonable averaging and
attribution method.
14. Governing Law, Jurisdiction and Venue. This note shall be governed by
and construed in accordance with the laws of the State of Texas and the United
States of America from time to time in effect.
15. General Purpose of Loan. Maker warrants and represents to Payee and
all other Holders that all loans evidenced by this note are and will be for
business, commercial, investment or other similar purpose and not primarily for
personal, family, household or agricultural use, as such terms are used in
Chapter One.
16. Participations and Assignments. Payee and each other Holder reserves
the right, exercisable in such Holder's discretion and without notice to Maker
or any other person, to sell participations, assign interests or both, in all or
any part of this note or the debt evidenced by this note, in accordance with the
Credit Agreement.
17. Limitation of Liability. No obligation or liability whatsoever of
Maker which may arise at any time under this promissory note or any obligation
or liability which may be incurred by it pursuant to any other instrument,
transaction or undertaking contemplated hereby shall be personally binding upon,
nor shall resort for the enforcement thereof be had to the private property of,
any of Maker's trustees or shareholders regardless of whether such obligation or
liability is in the nature of contract, tort or otherwise.
ARCHSTONE COMMUNITIES TRUST
By:
----------------------------------
Name:
--------------------------------
Title:
-------------------------------
Page 5 of 5 Pages INITIALLED FOR
EXHIBIT C IDENTIFICATION:____
---------
SWING LOAN NOTE
---------------
$75,000,000.00 July __, 1998
FOR VALUE RECEIVED ARCHSTONE COMMUNITIES TRUST, a Maryland real estate
investment trust (herein called "Maker") promises to pay to the order of CHASE
BANK OF TEXAS, NATIONAL ASSOCIATION, a national banking association, at 000 Xxxx
Xxxxxx, Xxxxxxx, Xxxxx 00000, or at such other place as the holder (the
"Holder", whether or not Payee is such holder) of this note may hereafter
designate in writing, in immediately available funds and in lawful money of the
United States of America, the principal sum of Seventy-Five Million Dollars
($75,000,000.00) (or the unpaid balance of all principal advanced against this
note, if that amount is less), together with interest on the unpaid principal
balance of this note from time to time outstanding at the Stated Rate and
interest on all past due amounts, both principal and accrued interest, at the
Past Due Rate; provided, that for the full term of this note the interest rate
produced by the aggregate of all sums paid or agreed to be paid to the Holder of
this note for the use, forbearance or detention of the debt evidenced hereby
(including, but not limited to, all interest on this note at the Stated Rate)
shall not exceed the Ceiling Rate.
1. Definitions. Any terms not defined herein shall have the meaning given
to them in the Amended and Restated Credit Agreement dated of even date herewith
among the Maker, and certain other Lenders (as the same may be amended or
modified the "Credit Agreement").
2. Rates Change Automatically and Without Notice. Without notice to Maker
or any other person or entity and to the full extent allowed by applicable law
from time to time in effect, the Prime Rate and the Ceiling Rate shall each
automatically fluctuate upward and downward as and in the amount by which
Holder's said prime rate, and such maximum nonusurious rate of interest
permitted by applicable law, respectively, fluctuate.
3. Calculation of Interest. Interest shall be computed for the actual
number of days elapsed in a year (up to 365, or 366 in a leap year) deemed to
consist of 360 days, unless the Ceiling Rate would thereby be exceeded, in which
event, to the extent necessary to avoid exceeding the Ceiling Rate, interest
shall be computed on the basis of the actual number of days elapsed in the
applicable calendar year in which it accrued.
4. Excess Interest Will be Refunded or Credited. If, for any reason
whatever, the interest paid or received on this note during its full term
produces a rate which exceeds the Ceiling Rate, the Holder of this note shall
refund to the payor or, at the Holder's option, credit against the principal of
this note such portion of that interest as shall be necessary to cause the
interest paid on this note to produce a rate equal to the Ceiling Rate.
Page 1 of 5 Pages
5. Interest Will be Spread. All sums paid or agreed to be paid to the
Holder of this note for the use, forbearance or detention of the indebtedness
evidenced hereby, to the extent permitted by applicable law and to the extent
necessary to avoid violating applicable usury laws, shall be amortized,
prorated, allocated and spread in equal parts throughout the full term of this
note, so that the interest rate is uniform throughout the full term of this
note.
6. Payment Schedule. The principal of this note shall be due and payable
on the Revolving Credit Termination Date. Accrued and unpaid interest shall be
due and payable on each Interest Payment Date. All payments shall be applied
first to accrued interest, the balance to principal.
7. Prepayment. Maker may prepay this note only as provided in the Credit
Agreement.
8. Revolving Credit. Upon and subject to the terms and conditions of the
Credit Agreement and the other provisions of this note, Maker may borrow, repay
and reborrow against this note at any time unless and until a default (however
designated) or event (an "Event of Potential Default") which, if not cured after
notice or before the lapse of time (or both) would develop into a default under
this note, the Credit Agreement or any other Credit Documents has occurred which
the Holder has not declared to have been fully cured or waived, and (except as
the Credit Agreement or any of the other Credit Documents may otherwise provide)
there is no limit on the number of advances against this note so long as the
total unpaid principal of this note at any time outstanding does not exceed
$75,000,000.00. Interest on the amount of each advance against this note shall
be computed on the amount of the unpaid balance of that advance from the date it
is made until the date it is repaid. If Maker's right (if any) to borrow
against this note shall ever lapse because of the occurrence of any default, it
shall not be reinstated (or construed from any course of conduct or otherwise to
have been reinstated) unless and until the Holder shall declare in a signed
writing that it has been cured or waived. The unpaid principal balance of this
note at any time shall be the total of all principal lent against this note to
Maker or for Maker's account less the sum of all principal payments and
permitted prepayments on this note received by the Holder. Absent manifest
error, the Holder's computer records shall on any day conclusively evidence the
unpaid balance of this note and its advances and payments history posted up to
that day. All loans and advances and all payments and permitted prepayments
made on this note may be (but are not required to be) endorsed by the Holder on
the schedule attached hereto (which is hereby made a part hereof for all
purposes) or otherwise recorded in the Holder's computer or manual records;
provided, that any Holder's failure to make notation of (a) any principal
advance or accrual of interest shall not cancel, limit or otherwise affect
Maker's obligations or any Holder's rights with respect to that advance or
accrual, or (b) any payment or permitted prepayment of principal or interest
shall not cancel, limit or otherwise affect Maker's entitle-
Page 2 of 5 Pages
ment to credit for that payment as of the date of its receipt by the Holder.
Maker and Payee expressly agree, as expressly allowed by Chapter 346 of the
Texas Finance Code, that Chapter 346 (which relates to open-end line of credit
revolving loan accounts) shall not apply to this note or to any loan evidenced
by this note and that neither this note nor any such loan shall be governed by
Chapter 346 or subject to its provisions in any manner whatsoever.
9. Credit Agreement. This note has been issued pursuant to the terms of
the Credit Agreement, to which reference is made for all purposes. Advances
against this note by Payee or other Holder hereof shall be governed by the
Credit Agreement. Payee is entitled to the benefits of the Credit Agreement.
As additional security for this note, Maker hereby grants to Payee and all other
present and future Holders an express lien against, security interest in and
contractual right of setoff in and to, all property and any and all deposits
(general or special, time or demand, provisional or final) at any time held by
the Payee or other Holder for any Maker's credit or account.
10. Defaults and Remedies. Time is of the essence. Maker's failure to
pay any principal or accrued interest owing on this note when due and after
expiration of any applicable period for notice and right to cure such a default
which is specifically provided for in the Credit Agreement or any other
provision of this note, or the occurrence of any default under the Credit
Agreement or any other Credit Documents shall constitute default under this
note, whereupon the Holder may elect to exercise any or all rights, powers and
remedies afforded (a) under the Credit Agreement and all other papers related to
this note and (b) by law, including the right to accelerate the maturity of this
entire note.
In addition to and cumulative of such rights, the Holder is hereby authorized
at any time and from time to time after any such default, at Holder's option,
without notice to Maker or any other person or entity (all rights to any such
notice being hereby waived), to set off and apply any and all of any Maker's
deposits at any time held by the Holder, and any other debt at any time owing by
the Holder to or for the credit or account of any Maker, against the outstanding
balance of this note, in such order and manner as Holder may elect in its sole
discretion.
The Holder's right to accelerate this note on account of any late payment or
other default shall not be waived or deemed waived by the Holder by reason of
the Holder's having previously accepted one or more late payments or by reason
of any Holder's otherwise not accelerating this note or exercising other
remedies for any default, and no Holder shall ever be obligated or deemed
obligated to notify Maker or any other person that Holder is requiring strict
compliance with this note or any papers securing or otherwise relating to it
before such Holder may accelerate this note or exercise any other remedy.
Nothing in this Section or elsewhere shall be construed as diminishing
Holder's absolute right to demand payment of all or any part of this note at any
time.
Page 3 of 5 Pages
11. Legal Costs. If any Holder of this note retains an attorney in
connection with any such default or to collect, enforce or defend this note or
any papers intended to secure or guarantee it in any lawsuit or in any probate,
reorganization, bankruptcy or other proceeding, or if Maker sues any Holder in
connection with this note or any such papers and does not prevail, then Maker
agrees to pay to each such Holder, in addition to principal and interest, all
reasonable costs and expenses incurred by such Holder in trying to collect this
note or in any such suit or proceeding, including reasonable attorneys' fees.
12. Waivers. Except only for any notices which are specifically required
by the Credit Agreement, Maker and any and all co-makers, endorsers, guarantors
and sureties severally waive notice (including, but not limited to, notice of
intent to accelerate and notice of acceleration, notice of protest and notice of
dishonor), demand, presentment for payment, protest, diligence in collecting and
the filing of suit for the purpose of fixing liability and consent that the time
of payment hereof may be extended and re-extended from time to time without
notice to any of them. Each such person agrees that his, her or its liability
on or with respect to this note shall not be affected by any release of or
change in any guaranty or security at any time existing or by any failure to
perfect or maintain perfection of any lien against or security interest in any
such security or the partial or complete unenforceability of any guaranty or
other surety obligation, in each case in whole or in part, with or without
notice and before or after maturity.
13. Rate of Return Maintenance Covenant. If at any time after the date of
this note, any Holder determines that (a) any applicable law, rule or regulation
regarding capital adequacy of general applicability has been adopted or changed,
or (b) its interpretation or administration by any governmental authority,
central bank or comparable agency has changed, and determines that such change
or the Holder's compliance with any request or directive regarding capital
adequacy of general applicability (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 the Holder's capital as a consequence
of its obligations under this note or any related papers to a level below that
which the Holder could have achieved but for such adoption, change or compliance
(taking into consideration the Holder's own capital adequacy policies) by an
amount the Holder deems to be material, then Maker promises to pay from time to
time to the order of the Holder such additional amount or amounts as will
compensate the Holder for such reduction. A certificate of any Holder setting
forth the amount or amounts necessary to compensate the Holder as specified
above shall be given to Maker as soon as practicable after the Holder has made
such determination and shall be conclusive and binding, absent manifest error.
Maker shall pay the Holder the amount shown as due on any such certificate
within 15 days after the Holder gives it. In preparing such certificate, the
Holder may employ such assumptions and make such allocations of costs and
expenses as the
Page 4 of 5 Pages
Holder in good xxxxx xxxxx reasonable and may use any reasonable averaging and
attribution method.
14. Governing Law, Jurisdiction and Venue. This note shall be governed by
and construed in accordance with the laws of the State of Texas and the United
States of America from time to time in effect.
15. General Purpose of Loan. Maker warrants and represents to Payee and
all other Holders that all loans evidenced by this note are and will be for
business, commercial, investment or other similar purpose and not primarily for
personal, family, household or agricultural use, as such terms are used in
Chapter One.
16. Participations and Assignments. Payee and each other Holder reserves
the right, exercisable in such Holder's discretion and without notice to Maker
or any other person, to sell participations, assign interests or both, in all or
any part of this note or the debt evidenced by this note, in accordance with the
Credit Agreement.
17. Limitation of Liability. No obligation or liability whatsoever of
Maker which may arise at any time under this promissory note or any obligation
or liability which may be incurred by it pursuant to any other instrument,
transaction or undertaking contemplated hereby shall be personally binding upon,
nor shall resort for the enforcement thereof be had to the private property of,
any of Maker's trustees or shareholders regardless of whether such obligation or
liability is in the nature of contract, tort or otherwise.
ARCHSTONE COMMUNITIES TRUST
By:
---------------------------
Name:
-------------------------
Title:
------------------------
Page 5 of 5 Pages
OPINION OF COUNSEL
1. The Borrower (a) is duly organized, validly existing and in good
standing under the laws of the states of Maryland and Texas; (b) has all
requisite power and authority and all material governmental licenses,
authorizations, permits and approvals to own its Property and to carry on its
business as, and in the places where, such Property is owned or such business is
now conducted, and (c) is duly qualified to do business and is in good standing
in every jurisdiction in which such qualification is necessary or desirable.
2. The execution, delivery and performance of the Credit Agreement and
the other Credit Documents (a) have all been duly authorized by all necessary
action by the Borrower; (b) are within the power and authority of the Borrower;
(c) will not contravene or violate any Legal Requirement or the Organizational
Documents of the Borrower; (d) to the best of our knowledge, will not result in
the breach of, or constitute a default under, any agreement, instrument,
judgment, license, order or permit to which the Borrower is a party or by which
the Borrower or any of its Property may be bound or affected, and (e) to the
best of our knowledge, do not result in the creation of any Lien upon any
Property of the Borrower except as expressly contemplated by the Credit
Documents.
3. All authorizations, consents, approvals, licenses, permissions and
registrations, if any, of or with any Governmental Authority, or to the best of
our knowledge, any other Person, required in connection with the execution,
delivery and performance of the Credit Agreement, the Note and the other Credit
Documents have been obtained.
4. The Credit Documents are legal, valid and binding obligations of the
Borrower, enforceable in accordance with their respective terms, except as
enforceability may be limited by bankruptcy, insolvency, moratorium and other
similar laws affecting the enforcement of creditors' rights generally and by
general equitable principles.
5. To the best of our knowledge and except as heretofore disclosed to the
Agent, there is no litigation or administrative proceeding pending or threatened
against, or any outstanding judgment, order decree or award affecting, the
Borrower before or by any Governmental Authority or arbitral body which in the
aggregate have, or if adversely determined could have, any material adverse
effect on the condition, business or prospects, financial or otherwise, of the
Borrower.
6. The Borrower is not an "investment company", or a copy "controlled" by
an "investment company", within the meaning of the Investment Company Act of
1940, as amended.
EXHIBIT D
---------
Page 1 of 1 Page
Form of Money Market Quote Request
To: Chase Bank of Texas, National Association (the "Agent")
From: Archstone Communities Trust (the "Borrower")
Re: Amended and Restated Credit Agreement (the "Credit Agreement"), dated
July 7, 1998 among the Borrower, the Lenders parties thereto and the
Agent
We hereby give notice pursuant to Section 2.8 of the Credit Agreement
that we request Money Market Quotes for the following proposed Money Market
Loan(s):
Date of Borrowing:
----------------------------
Principal Amount Interest Period
$
Such Money Market Quotes should offer a Money Market [Margin]
[Absolute Rate]. [The applicable base rate is the Adjusted Eurodollar Interbank
Rate].
The funding of Money Market Loans made in connection with this Money
Market Quote Request [may/may not] be made by Designated Lenders.
Terms used herein have the meanings assigned to them in the Credit
Agreement.
ARCHSTONE COMMUNITIES TRUST
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
----------------
Amount must be $20,000,000 or a larger multiple of $1,000,000.
Not less than one month (LIBOR Auction) or not less than 30 days (Absolute Rate
Auction), subject to the provisions of the definition of Interest Period.
Exhibit E
Page 1 of 1
EXHIBIT F
Form of Invitation for Money Market Quotes
To: [Name of Lender]
RE: Invitation for Money Market Quotes to Archstone Communities Trust (the
"Borrower")
Pursuant to Section 2.8 of the Amended and Restated Credit Agreement, dated
July 7, 1998 among the Borrower, the Lenders parties thereto and the
undersigned, as Agent, we are pleased on behalf of the Borrower to invite you to
submit Money Market Quotes to the Borrower for the following proposed Money
Market Loan(s):
Date of Borrowing:
----------------------------
Principal Amount Interest Period
$
Such Money Market Quotes should offer a Money Market [Margin] [Absolute
Rate]. [The applicable base rate is the Adjusted Eurodollar Interbank Rate.]
Please respond to this invitation by no later than ________ A.M. (Houston,
Texas time) on [date].
CHASE BANK OF TEXAS,
NATIONAL ASSOCIATION
By:
---------------------------------
Authorized Officer
EXHIBIT F
---------
Page 1 of 1 Page
EXHIBIT G
Form of Money Market Quote
To: Chase Bank of Texas, National Association, as Agent
RE: Money Market Quote to Archstone Communities Trust (the "Borrower")
In response to your invitation on behalf of the Borrower dated
______________________________________, 19______, we hereby make the following
Money Market Quote on the following terms:
1. Quoting Bank:
2. Person to contact at Quoting Bank:
3. We hereby offer to make Money Market Loan(s) in the following principal
amounts, for the following Interest Periods and the following rates:
Principal Interest Money Market
Amount Period [Margin] [Absolute Rate]
--------- -------- --------------------------
$
$
[Provided, that the aggregate principal amount of Money Market Loans for
which the above offers may be accepted shall not exceed
$_________________.]
We understand and agree that the offer(s) set forth above, subject to
the satisfaction of the applicable conditions set forth in the Amended and
Restated Credit Agreement dated July 7, 1998 among the Borrower, the
Lenders parties thereto and yourselves, as Agent, irrevocably obligates us
to make the Money Market Loan(s) for which any offer(s) are accepted, in
whole or in part.
Very truly yours,
[NAME OF LENDER]
Dated: By:
-------------------- ------------------------------
Authorized Officer
EXHIBIT G
---------
Page 1 of 1
EXHIBIT H
Form of Designation Agreement
Dated ____________, 199____
Reference is made to that certain Amended and Restated Credit Agreement
dated July 7, 1998 (as amended, supplemented or otherwise modified from time to
time, the "Credit Agreement") among ARCHSTONE COMMUNITIES TRUST, the Lenders
parties thereto, and CHASE BANK OF TEXAS, NATIONAL ASSOCIATION (the "Agent"), as
Agent. Terms defined in the Credit Agreement are used herein with the same
meaning.
[NAME OF DESIGNOR] (the "Designor"), [NAME OF DESIGNEE] (the "Designee"),
the Agent and Borrower agree as follows:
1. The Designor hereby designates the Designee, and the Designee hereby
accepts such designation, to have a right to make Money Market Loans pursuant to
Section 2.8 of the Credit Agreement. Any assignment by Designor to Designee of
its rights to make a Money Market Loan pursuant to such Section 2.8 shall be
effective at the time of the funding of such Money Market Loan and not before
such time.
2. Except as set forth in Section 7 below, the Designor makes no
representation or warranty and assumes no responsibility pursuant to this
Designation Agreement with respect to (a) any statements, warranties or
representations made in or in connection with any Credit Document or the
execution, legality, validity, enforceability, genuineness, sufficiency or value
of any Credit Document or any other instrument and document furnished pursuant
thereto and (b) the financial condition of the Borrower or the performance or
observance by the Borrower of any of its obligations under any Credit Document
or any other instrument or document furnished pursuant thereto.
3. The Designee (a) confirms that it has received a copy of each Credit
Document, together with copies of the financial statements referred to in
Section 5.2 of the Credit Agreement and such other documents and information as
it has deemed appropriate to make its own credit analysis and decision to enter
into this Designation Agreement; (b) agrees that it will independently and
without reliance upon the Agent, the Designor or any other Lender and based on
such documents and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking action under
any Credit Document; (c) confirms that it is a Designated Lender; (d) appoints
and authorizes the Agent to take such action as agent on its behalf and to
exercise such powers and discretion under any Credit Document as are delegated
to the Agent by the terms thereof, together with such powers and discretion as
are reasonably incidental thereto; and (e) agrees to be bound by each and every
provision of each Credit Document and further agrees that it will perform in
accordance with their terms all of the obligations which by the terms of any
Credit Document are required to be performed by it as a Lender.
EXHIBIT H
---------
Page 1 of 4
4. The Designee hereby appoints Designor as Designee's agent and attorney
in fact, and grants to Designor an irrevocable power of attorney, to receive
payments made for the benefit of Designee under the Credit Agreement, to deliver
and receive all communications and notices under the Credit Agreement and other
Credit Documents and to exercise on Designee's behalf all rights to vote and to
grant and make approvals, waivers, consents or amendments to or under the Credit
Agreement or other Credit Documents. Any document executed by the Designor on
the Designee's behalf in connection with the Credit Agreement or other Credit
Documents shall be binding on the Designee. The Borrower, the Agent and each of
the Lenders may rely on and are beneficiaries of the preceding provisions.
5. Following the execution of this Designation Agreement by the Designor
and its Designee, it will be delivered to the Agent for acceptance by the Agent.
The effective date for this Designation Agreement (the "Effective Date") shall
be the date of acceptance hereof by the Agent, unless otherwise specified on the
signature page hereto.
6. The Agent hereby agrees that it will not institute against any
Designee or join any other Person in instituting against any Designee any
bankruptcy, reorganization, arrangement, insolvency or liquidation proceeding
under any federal or state bankruptcy or similar law, until the later to occur
of (i) one year and one day after the payment in full of the latest maturing
commercial paper note issued by such Designee and (ii) the Revolving Credit
Termination Date.
7. The Designor unconditionally agrees to pay or reimburse the Designee
and save the Designee harmless against all liabilities, obligations, losses,
damages, penalties, actions and judgments, suits, costs, expenses or
disbursements of any kind or nature whatsoever which may be imposed or asserted
by any of the parties to the Credit Documents against the Designee, in its
capacity as such, in any way relating to or arising out of this Designation
Agreement or any other Credit Documents or any action taken or omitted by the
Designee hereunder or thereunder, INCLUDING THE NEGLIGENCE OF THE DESIGNEE
provided that the Designor shall not be liable for any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements if the same results from the Designee's gross
negligence or willful misconduct.
8. As of the Effective Date the Designee shall be a party to the Credit
Agreement with a right (subject to the provisions of Section 2.8(b)) to make
Money Market Loans as a Lender pursuant to Section 2.8 of the Credit Agreement
and the rights and obligations of a Lender related thereto; provided, however,
that the Designee shall not be required to make payments with respect to such
obligations except to the extent of excess cash flow of such Designee which is
not otherwise required to repay obligations of such Designee, which are then due
and payable. Notwithstanding the foregoing, the Designor, as administrative
agent for the Designee, shall be and remain obligated to the Borrower, the Agent
and the Lenders for each and every one of the obligations of the Designee and
its Designor with respect to the Credit Agreement, including, without
limitation, any
EXHIBIT H
---------
Page 2 of 4
indemnification obligations under Section 8.5 of the Credit Agreement and any
sums otherwise payable to the Borrower by the Designee.
9. This Designation Agreement shall be governed by, and construed in
accordance with, the laws of the State of Texas.
10. This Designation Agreement may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement. Delivery of an executed
counterpart of a signature page to this Designation Agreement by facsimile
transmission shall be effective as delivery of a manually executed counterpart
of this Designation Agreement.
IN WITNESS WHEREOF, the Designor and the Designee, intending to be legally
bound, have caused this Designation Agreement to be executed by their officers
thereunto duly authorized as of the date first above written.
Effective Date:
__________________, 199___
[NAME OF DESIGNOR], as Designor
By:
-----------------------------------
Title:
--------------------------------
[NAME OF DESIGNEE], as Designee
By:
-----------------------------------
Title:
--------------------------------
Applicable Lending Office
(and address for notices):
[Address]
EXHIBIT H
---------
Page 3 of 4
Accepted this _____ day of
______________, 19_____
CHASE BANK OF TEXAS,
NATIONAL ASSOCIATION, as Agent
By:
-----------------------------------
Name:
---------------------------------
Title:
--------------------------------
EXHIBIT H
---------
Page 4 of 4
FORM OF GUARANTY
THIS GUARANTY dated as of _______________ executed and delivered by each of
the undersigned, whether one or more, (all each a "Guarantor" and collectively,
the "Guarantors"), in favor of (a) CHASE BANK OF TEXAS, NATIONAL ASSOCIATION, in
its capacity as Agent (the "Agent") for the Lenders under that certain Amended
and Restated Credit Agreement dated as of July 7, 1998 by and among ARCHSTONE
COMMUNITIES TRUST (the "Borrower"), the financial institutions party thereto and
their assignees in accordance therewith (the "Lenders"), and the Agent (as the
same may be amended, restated, supplemented or otherwise modified from time to
time in accordance with its terms, the "Credit Agreement") and (b) the Lenders.
WHEREAS, pursuant to the Credit Agreement, the Lenders have made available
to the Borrower certain financial accommodations on the terms and conditions set
forth in the Credit Agreement;
WHEREAS, each Guarantor is a wholly-owned Subsidiary of the Borrower;
WHEREAS, the Borrower, each Guarantor and the other Subsidiaries of the
Borrower, though separate legal entities, are mutually dependent on each other
in the conduct of their respective businesses as an integrated operation and
have determined it to be in their mutual best interests to obtain financing from
the Agent and the Lenders through their collective efforts;
WHEREAS, each Guarantor acknowledges that it will receive direct and
indirect benefits from the Agent and the Lenders making such financial
accommodations available to the Borrower under the Credit Agreement and,
accordingly, each Guarantor is willing to guarantee the Borrower's obligations
to the Agent and the Lenders on the terms and conditions contained herein; and
WHEREAS, each Guarantor's execution and delivery of this Guaranty is one of
the conditions precedent to the Agent and the Lenders making, or continuing to
make, such financial accommodations to the Borrower.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged by each Guarantor, each Guarantor
agrees as follows:
Section 1. Guaranty. Each Guarantor hereby absolutely and unconditionally
guaranties the due and punctual payment and performance of all of the following
(collectively referred to as the "Obligations"): (a) all indebtedness and
obligations owing by the Borrower to any of the Lenders or the Agent under or in
connection with the Credit Agreement and any other Credit Document, including
without limitation, the repayment of all principal of the Loans made by the
Lenders to the Borrower under the Credit Agreement and the payment of all
interest, fees, charges, reasonable attorneys fees and other amounts payable to
any Lender or the Agent thereunder or in connection
EXHIBIT I
Page 1 of 9
therewith; (b) any and all extensions, renewals, modifications, amendments or
substitutions of the foregoing; and (c) all expenses, including, without
limitation, reasonable attorneys' fees and disbursements, that are incurred by
the Lenders or the Agent in the enforcement of any of the foregoing or any
obligation of such Guarantor hereunder.
Section 2. Guaranty of Payment and Not of Collection. This Guaranty is a
guaranty of payment, and not of collection, and a debt of each Guarantor for its
own account. Accordingly, the Lenders and the Agent shall not be obligated or
required before enforcing this Guaranty against any Guarantor: (a) to pursue any
right or remedy the Lenders or the Agent may have against the Borrower, any
other Guarantor or any other Person or commence any suit or other proceeding
against the Borrower, any other Guarantor or any other Person in any court or
other tribunal; (b) to make any claim in a liquidation or bankruptcy of the
Borrower, any other Guarantor or any other Person; or (c) to make demand of the
Borrower, any other Guarantor or any other Person or to enforce or seek to
enforce or realize upon any collateral security held by the Lenders or the Agent
which may secure any of the Obligations. In this connection, each Guarantor
hereby waives the right of such Guarantor to require any holder of the
Obligations to take action against the Borrower as provided by any Legal
Requirement.
Section 3. Guaranty Absolute. Each Guarantor guarantees that the
Obligations will be paid strictly in accordance with the terms of the documents
evidencing the same, regardless of any Legal Requirement now or hereafter in
effect in any jurisdiction affecting any of such terms or the rights of the
Agent or the Lenders with respect thereto. The liability of each Guarantor under
this Guaranty shall be absolute and unconditional in accordance with its terms
and shall remain in full force and effect without regard to, and shall not be
released, suspended, discharged, terminated or otherwise affected by, any
circumstance or occurrence whatsoever, including without limitation, the
following (whether or not such Guarantor consents thereto or has notice
thereof):
(a) (i) any change in the amount, interest rate or due date or other term
of any of the Obligations, (ii) any change in the time, place or manner of
payment of all or any portion of the Obligations, (iii) any amendment or waiver
of, or consent to the departure from or other indulgence with respect to, the
Credit Agreement, any other Credit Document, or any other document or instrument
evidencing or relating to any Obligations, or (iv) any waiver, renewal,
extension, addition, or supplement to, or deletion from, or any other action or
inaction under or in respect of, the Credit Agreement, any of the other Credit
Documents, or any other documents, instruments or agreements relating to the
Obligations or any other instrument or agreement referred to therein or
evidencing any Obligations or any assignment or transfer of any of the
foregoing;
(b) any lack of validity or enforceability of the Credit Agreement, any of
the other Credit Documents, or any other document, instrument or agreement
referred to therein or evidencing any Obligations or any assignment or transfer
of any of the foregoing;
EXHIBIT I
Page 2 of 9
(c) any furnishing to the Agent or the Lenders of any security for the
Obligations, or any sale, exchange, release or surrender of, or realization on,
any collateral security for the Obligations;
(d) any settlement or compromise of any of the Obligations, any security
therefor, or any liability of any other party with respect to the Obligations,
or any subordination of the payment of the Obligations to the payment of any
other liability of the Borrower;
(e) any bankruptcy, insolvency, reorganization, composition, adjustment,
dissolution, liquidation or other like proceeding relating to any other
Guarantor, the Borrower or any other Person, or any action taken with respect to
this Guaranty by any trustee or receiver, or by any court, in any such
proceeding;
(f) any nonperfection of any security interest or other Lien on any of the
collateral securing any of the Obligations;
(g) any act or failure to act by the Borrower or any other Person which
may adversely affect such Guarantor's subrogation rights, if any, against the
Borrower to recover payments made under this Guaranty;
(h) any application of sums paid by the Borrower or any other Person with
respect to the liabilities of the Borrower to the Agent or the Lenders,
regardless of what liabilities of the Borrower remain unpaid;
(i) any defect, limitation or insufficiency in the borrowing powers of the
Borrower or in the exercise thereof; or
(j) any other circumstance which might otherwise constitute a defense
available to, or a discharge of, any Guarantor hereunder.
Section 4. Action with Respect to Obligations. The Lenders and the Agent
may, at any time and from time to time, without the consent of, or notice to,
any Guarantor, and without discharging any Guarantor from its obligations
hereunder take any and all actions described in Section 3 and may otherwise: (a)
amend, modify, alter or supplement the terms of any of the Obligations,
including, but not limited to, extending or shortening the time of payment of
any of the Obligations or the interest rate that may accrue on any of the
Obligations; (b) amend, modify, alter or supplement the Credit Agreement or any
other Credit Document; (c) sell, exchange, release or otherwise deal with all,
or any part, of any collateral securing any of the Obligations; (d) release any
Person liable in any manner for the payment or collection of the Obligations;
(e) exercise, or refrain from exercising, any rights against the Borrower or any
other Person (including, without limitation, any other Guarantor); and (f) apply
any sum, by whomsoever paid or however realized, to the Obligations in such
order as the Lenders or the Agent shall elect.
EXHIBIT I
Page 3 of 9
Section 5. Representations and Warranties. Each Guarantor hereby makes to
the Agent and the Lenders all of the representations and warranties made by the
Borrower with respect to or in any way relating to such Guarantor in the Credit
Agreement and the other Credit Documents, as if the same were set forth herein
in full.
Section 6. Covenants. Each Guarantor will comply with all covenants which
the Borrower is to cause such Guarantor to comply with under the terms of the
Credit Agreement or any other Credit Documents.
Section 7. Waiver. Each Guarantor, to the fullest extent permitted by
applicable law, hereby waives notice of acceptance hereof or any presentment,
demand, protest or notice of any kind, and any other act or thing, or omission
or delay to do any other act or thing, which in any manner or to any extent
might vary the risk of such Guarantor or which otherwise might operate to
discharge such Guarantor from its obligations hereunder.
Section 8. Inability to Accelerate Loan. If the Agent and/or the Lenders
are prevented from demanding or accelerating payment thereof by reason of any
automatic stay or otherwise, the Agent and/or the Lenders shall be entitled to
receive from each Guarantor, upon demand therefor, the sums which otherwise
would have been due had such demand or acceleration occurred.
Section 9. Reinstatement of Obligations. Each Guarantor agrees that this
Guaranty shall continue to be effective or be reinstated, as the case may be,
with respect to any Obligations if at any time payment of any such Obligations
is rescinded or otherwise must be restored by the Agent and/or the Lenders upon
the bankruptcy or reorganization of the Borrower or any Guarantor or otherwise.
Section 10. Subrogation. Until all of the Obligations shall have been
indefeasibly paid in full, no Guarantor shall have any right of subrogation and
each Guarantor hereby waives any right to enforce any remedy which the Agent
and/or the Lenders now have or may hereafter have against the Borrower, and each
Guarantor hereby waives any benefit of, and any right to participate in, any
security or collateral given to the Agent and the Lenders to secure payment or
performance of any of the Obligations.
Section 11. Payments Free and Clear. All sums payable by each Guarantor
hereunder, whether of principal, interest, fees, expenses, premiums or
otherwise, shall be paid in full, without set-off or counterclaim or any
deduction or withholding whatsoever (including any withholding tax or liability
imposed by any Governmental Authority, or any Legal Requirement promulgated
thereby), and if any Guarantor is required by such Legal Requirement or by such
Governmental Authority to make any such deduction or withholding, such Guarantor
shall pay to the Agent and the Lenders such additional amount as will result in
the receipt by the Agent and the Lenders of the full amount payable hereunder
had such deduction or withholding not occurred or been required.
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Section 12. Set-off. In addition to any rights now or hereafter granted
under applicable law and not by way of limitation of any such rights, each
Lender is hereby authorized by each Guarantor, at any time or from time to time,
without notice to any Guarantor or to any other Person, any such notice being
hereby expressly waived, but subject to receipt of Agent's prior written consent
exercised in its sole discretion, to set-off and to appropriate and to apply any
and all deposits (general or special, including, but not limited to,
indebtedness evidenced by certificates of deposit, whether matured or unmatured)
and any other indebtedness at any time held or owing by such Lender or any
Affiliate of such Lender, to or for the credit or the account of each Guarantor
against and on account of any of the Obligations then due and owing after the
expiration of any applicable grace periods. Each Guarantor agrees, to the
fullest extent it may effectively do so under applicable law, that any holder of
a participation in a Note, whether or not acquired pursuant to the applicable
provisions of the Credit Agreement, may exercise rights of setoff or
counterclaim and other rights with respect to such participation as fully as if
such holder of a participation were a direct creditor of such Guarantor in the
amount of such participation.
Section 13. Subordination. Each Guarantor hereby expressly covenants and
agrees for the benefit of the Agent and the Lenders that all obligations and
liabilities of the Borrower or any other Guarantor to such Guarantor of whatever
description, including without limitation, all intercompany receivables of such
Guarantor from the Borrower or any other Guarantor (collectively, the "Junior
Claims") shall be subordinate and junior in right of payment to all Obligations.
If an Event of Default shall have occurred and be continuing, then no Guarantor
shall accept any direct or indirect payment (in cash, property, securities by
setoff or otherwise) from the Borrower or any other Guarantor on account of or
in any manner in respect of any Junior Claim until all of the Obligations have
been indefeasibly paid in full.
Section 14. Avoidance Provisions. It is the intent of each Guarantor, the
Agent and the Lenders that in any Proceeding, such Guarantor's maximum
obligation hereunder shall equal, but not exceed, the maximum amount which would
not otherwise cause the obligations of such Guarantor hereunder (or any other
obligations of such Guarantor to the Agent and the Lenders) to be avoidable or
unenforceable against such Guarantor in such Proceeding as a result of
applicable law, including without limitation, (a) Section 548 of the Bankruptcy
Code of 1978, as amended (the "Bankruptcy Code") and (b) any state fraudulent
transfer or fraudulent conveyance act or statute applied in such Proceeding,
whether by virtue of Section 544 of the Bankruptcy Code or otherwise. The
applicable laws under which the possible avoidance or unenforceability of the
obligations of such Guarantor hereunder (or any other obligations of such
Guarantor to the Agent and the Lenders) shall be determined in any such
Proceeding are referred to as the "Avoidance Provisions". Accordingly, to the
extent that the obligations of any Guarantor hereunder would otherwise be
subject to avoidance under the Avoidance Provisions, the maximum Obligations for
which such Guarantor shall be liable hereunder shall be reduced to that amount
which, as of the time any of the Obligations are deemed to have been incurred
under the Avoidance Provisions, would not cause the obligations of any Guarantor
hereunder (or any other obligations of such Guarantor to the Agent and the
Lenders), to be subject to avoidance under the Avoidance Provisions. This
Section is intended
EXHIBIT I
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solely to preserve the rights of the Agent and the Lenders hereunder to the
maximum extent that would not cause the obligations of any Guarantor hereunder
to be subject to avoidance under the Avoidance Provisions, and no Guarantor nor
any other Person shall have any right or claim under this Section as against the
Agent and the Lenders that would not otherwise be available to such Person under
the Avoidance Provisions.
Section 15. Information. Each Guarantor assumes all responsibility for
being and keeping itself informed of the financial condition of the Borrower, of
the other Guarantors and of all other circumstances bearing upon the risk of
nonpayment of any of the Obligations and the nature, scope and extent of the
risks that such Guarantor assumes and incurs hereunder, and agrees that none of
the Agent or any Lender shall have any duty whatsoever to advise any Guarantor
of information regarding such circumstances or risks.
Section 16. Governing Law. THIS GUARANTY SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF TEXAS.
SECTION 17. JURISDICTION, VENUE.
(a) EACH GUARANTOR AGREES THAT THE FEDERAL DISTRICT COURT OF THE SOUTHERN
DISTRICT OF TEXAS, HOUSTON DIVISION, OR, AT THE OPTION OF THE AGENT, ANY STATE
COURT LOCATED IN XXXXXX COUNTY, TEXAS SHALL HAVE NON-EXCLUSIVE JURISDICTION TO
HEAR AND DETERMINE ANY CLAIMS OR DISPUTES BETWEEN OR AMONG ANY GUARANTOR, THE
AGENT OR ANY OF THE LENDERS, PERTAINING DIRECTLY OR INDIRECTLY TO THIS GUARANTY
OR ANY OTHER CREDIT DOCUMENT OR TO ANY MATTER ARISING HEREFROM OR THEREFROM OR
ANY COLLATERAL. EACH GUARANTOR EXPRESSLY SUBMITS AND CONSENTS IN ADVANCE TO SUCH
JURISDICTION IN ANY ACTION OR PROCEEDING COMMENCED IN SUCH COURTS. THE CHOICE OF
FORUM SET FORTH IN THIS SECTION SHALL NOT BE DEEMED TO PRECLUDE THE BRINGING OF
ANY ACTION BY THE AGENT OR ANY LENDER OR THE ENFORCEMENT BY THE AGENT OR ANY
LENDER IN ANY OTHER APPROPRIATE JURISDICTION. FURTHER, EACH GUARANTOR
IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY
OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF THE VENUE OF ANY
SUCH PROCEEDING BROUGHT IN SUCH A COURT AND ANY CLAIM THAT ANY SUCH PROCEEDING
BROUGHT IN SUCH A COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.
(b) THE FOREGOING WAIVERS HAVE BEEN MADE WITH THE ADVICE OF COUNSEL AND
WITH A FULL UNDERSTANDING OF THE LEGAL CONSEQUENCES THEREOF, AND SHALL SURVIVE
THE PAYMENT OF THE OBLIGATIONS AND ALL OTHER AMOUNTS PAYABLE HEREUNDER OR UNDER
THE OTHER CREDIT DOCUMENTS AND THE TERMINATION OF THIS GUARANTY.
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Section 18. Loan Accounts. The Agent may maintain books and accounts
setting forth the amounts of principal, interest and other sums paid and payable
with respect to the Obligations, and in the case of any dispute relating to any
of the outstanding amount, payment or receipt of Obligation or otherwise, the
entries in such account shall be binding upon each Guarantor as to the
outstanding amount of such Obligations and the amounts paid and payable with
respect thereto absent manifest error. The failure of the Agent to maintain such
books and accounts shall not in any way relieve or discharge any Guarantor of
any of its obligations hereunder.
Section 19. Waiver of Remedies. No delay or failure on the part of the
Agent or the Lenders in the exercise of any right or remedy it may have against
any Guarantor hereunder or otherwise shall operate as a waiver thereof, and no
single or partial exercise by the Agent or the Lenders of any such right or
remedy shall preclude other or further exercise thereof or the exercise of any
other such right or remedy.
Section 20. Successors and Assigns. Each reference herein to the Agent or
the Lenders shall be deemed to include such Person's respective successors and
assigns (including, but not limited to, any holder of the Obligations) in whose
favor the provisions of this Guaranty also shall inure, and each reference
herein to any Guarantor shall be deemed to include the Guarantor's successors
and assigns, upon whom this Guaranty also shall be binding. The Lenders and the
Agent may, in accordance with the applicable provisions of the Credit Agreement,
assign, transfer or sell any Obligation, or grant or sell participation in any
Obligations, to any Person or entity without the consent of, or notice to, any
Guarantor and without releasing, discharging or modifying such Guarantor's
obligations hereunder. Each Guarantor hereby consents to the delivery by the
Agent or any Lender to any assignee, transferee or participant of any financial
or other information regarding the Borrower or any Guarantor. Each Guarantor may
not assign or transfer its obligations hereunder to any Person.
SECTION 21. JOINT AND SEVERAL OBLIGATIONS. THE OBLIGATIONS OF THE
GUARANTORS HEREUNDER AND UNDER OTHER CREDIT DOCUMENTS SHALL BE JOINT AND
SEVERAL, AND ACCORDINGLY, EACH GUARANTOR CONFIRMS THAT IT IS LIABLE FOR THE FULL
AMOUNT OF THE OBLIGATIONS AND ALL OF THE OBLIGATIONS AND LIABILITIES OF EACH OF
THE OTHER GUARANTORS HEREUNDER AND UNDER OTHER COURT DOCUMENTS.
Section 22. Amendments. This Guaranty may not be amended except as provided
in the Credit Agreement.
Section 23. Payments. All payments made by any Guarantor pursuant to this
Guaranty shall be made in Dollars, in immediately available funds to the Agent
at its Lending Office, not later than 11:00 a.m., Houston, Texas time on the
date one (1) Business Day after demand therefor.
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Section 24. Notices. All notices, requests and other communications
hereunder shall be in writing and shall be given as provided in the Loan
Agreement. Each Guarantor's address for notice is set forth below its signature
hereto.
Section 25. Severability. In case any provision of this Guaranty shall be
invalid, illegal or unenforceable in any jurisdiction, the validity, legality
and enforceability of the remaining provisions shall not in any way be affected
or impaired thereby.
Section 26. Headings. Section headings used in this Guaranty are for
convenience only and shall not affect the construction of this Guaranty.
Section 27. Definitions. (a) For the purposes of this Guaranty:
"Proceeding" means any of the following: (i) a voluntary or involuntary
case concerning any Guarantor shall be commenced under the Bankruptcy Code or
any other applicable bankruptcy laws; (ii) a custodian (as defined in the
Bankruptcy Code or any other applicable bankruptcy laws) is appointed for, or
takes charge of, all or any substantial part of the property of any Guarantor;
(iii) any other proceeding under any applicable law, domestic or foreign,
relating to bankruptcy, insolvency, reorganization, winding-up or composition
for adjustment of debts, whether now or hereafter in effect, is commenced
relating to any Guarantor; (iv) any Guarantor is adjudicated insolvent or
bankrupt; (v) any order of relief or other order approving any such case or
proceeding is entered by a court of competent jurisdiction; (vi) any Guarantor
makes a general assignment for the benefit of creditors; (vii) any Guarantor
shall fail to pay, or shall state that it is unable to pay, or shall be unable
to pay, its debts generally as they become due; (viii) any Guarantor shall call
a meeting of its creditors with a view to arranging a composition or adjustment
of its debts; (ix) any Guarantor shall by any act or failure to act indicate its
consent to, approval of or acquiescence in any of the foregoing; or (x) any
corporate action shall be taken by any Guarantor for the purpose of effecting
any of the foregoing.
(b) Terms not otherwise defined herein are used herein with the respective
meanings given them in the Credit Agreement.
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IN WITNESS WHEREOF, each Guarantor has duly executed and delivered this
Guaranty as of the date and year first written above.
(GUARANTOR)
By:
------------------------------------
Name:
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Title:
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Address for Notices:
c/o Security Capital Group Incorporated
000 Xxxxxxx Xxxxxx
Xxxxx Xx, Xxx Xxxxxx 00000
Attention:
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