==============================================================================
CREDIT AGREEMENT
among
XXXXX XXXXXXXXXX RESIDENTIAL, L.P.,
a Delaware limited partnership
THE BANKS NAMED HEREIN,
BANK ONE, ARIZONA, NA,
as Administrative Agent
and
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION
and
XXXXX FARGO BANK, NATIONAL ASSOCIATION
as Co-Agents
Dated as of September 24, 1996
==============================================================================
TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . . . . . 3
SECTION 1.1 Defined Terms . . . . . . . . . . . . . . . . . . . . . . . 3
SECTION 1.2 Terms Generally . . . . . . . . . . . . . . . . . . . . . 16
ARTICLE II THE CREDITS. . . . . . . . . . . . . . . . . . . . . . . . . 18
SECTION 2.1 Commitments . . . . . . . . . . . . . . . . . . . . . . . 18
SECTION 2.2 Loans . . . . . . . . . . . . . . . . . . . . . . . . . . 18
SECTION 2.3 Notice of Borrowings. . . . . . . . . . . . . . . . . . . 19
SECTION 2.4 Excess Balance Repayment. . . . . . . . . . . . . . . . . 19
SECTION 2.5 Fees. . . . . . . . . . . . . . . . . . . . . . . . . . . 20
SECTION 2.6 Notes; Repayment of Loans . . . . . . . . . . . . . . . . 20
SECTION 2.7 Interest on Loans . . . . . . . . . . . . . . . . . . . . 21
SECTION 2.8 Default Interest. . . . . . . . . . . . . . . . . . . . . 21
SECTION 2.9 Alternate Rate of Interest. . . . . . . . . . . . . . . . 21
SECTION 2.10 Termination and Reduction of Commitments. . . . . . . . . 22
SECTION 2.11 Conversion and Continuation of Loans. . . . . . . . . . . 22
SECTION 2.12 Prepayment. . . . . . . . . . . . . . . . . . . . . . . . 23
SECTION 2.13 Reserve Requirements; Change in Circumstances . . . . . . 24
SECTION 2.14 Change in Legality. . . . . . . . . . . . . . . . . . . . 25
SECTION 2.15 Indemnity . . . . . . . . . . . . . . . . . . . . . . . . 26
SECTION 2.16 Pro Rata Treatment. . . . . . . . . . . . . . . . . . . . 27
SECTION 2.17 Sharing of Setoffs. . . . . . . . . . . . . . . . . . . . 27
SECTION 2.18 Payments. . . . . . . . . . . . . . . . . . . . . . . . . 28
SECTION 2.19 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . 28
SECTION 2.20 Termination or Assignment of Commitments Under
Certain Circumstances . . . . . . . . . . . . . . . . . . 30
SECTION 2.21 Extension . . . . . . . . . . . . . . . . . . . . . . . . 31
ARTICLE III REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . . . . 32
SECTION 3.1 Organization; Powers, etc . . . . . . . . . . . . . . . . 32
SECTION 3.2 Authorization, etc. . . . . . . . . . . . . . . . . . . . 32
SECTION 3.3 Enforceability. . . . . . . . . . . . . . . . . . . . . . 33
SECTION 3.4 Financial Condition and Information . . . . . . . . . . . 33
SECTION 3.5 No Material Adverse Change. . . . . . . . . . . . . . . . 33
SECTION 3.6 Litigation. . . . . . . . . . . . . . . . . . . . . . . . 33
SECTION 3.7 Federal Reserve Regulations . . . . . . . . . . . . . . . 34
SECTION 3.8 Investment Company Act. . . . . . . . . . . . . . . . . . 34
SECTION 3.9 Public Utility Holding Company Act. . . . . . . . . . . . 34
SECTION 3.10 Tax Returns . . . . . . . . . . . . . . . . . . . . . . . 34
SECTION 3.11 ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . 34
SECTION 3.12 Title to Properties: Possession . . . . . . . . . . . . . 34
SECTION 3.13 Use of Proceeds . . . . . . . . . . . . . . . . . . . . . 35
SECTION 3.14 Environmental and Safety Matters. . . . . . . . . . . . . 35
SECTION 3.15 No Default. . . . . . . . . . . . . . . . . . . . . . . . 35
SECTION 3.16 Significant Debt Agreements . . . . . . . . . . . . . . . 35
SECTION 3.17 Compliance with Law . . . . . . . . . . . . . . . . . . . 35
SECTION 3.18 Survival of Representations . . . . . . . . . . . . . . . 35
SECTION 3.19 Solvent . . . . . . . . . . . . . . . . . . . . . . . . . 35
SECTION 3.20 Loans . . . . . . . . . . . . . . . . . . . . . . . . . . 35
ARTICLE IV CONDITIONS TO CREDIT EVENTS. . . . . . . . . . . . . . . . . 36
SECTION 4.1 Credit Events . . . . . . . . . . . . . . . . . . . . . . 36
SECTION 4.2 First Credit Event. . . . . . . . . . . . . . . . . . . . 36
ARTICLE V AFFIRMATIVE COVENANTS. . . . . . . . . . . . . . . . . . . . 39
SECTION 5.1 Existence . . . . . . . . . . . . . . . . . . . . . . . . 39
SECTION 5.2 Insurance . . . . . . . . . . . . . . . . . . . . . . . . 39
SECTION 5.3 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . 39
SECTION 5.4 Financial Statements; Reports, etc. . . . . . . . . . . . 40
SECTION 5.5 Litigation and Other Notices. . . . . . . . . . . . . . . 41
SECTION 5.6 Maintaining Records: Access to Premises and Records . . . 42
SECTION 5.7 Use of Proceeds . . . . . . . . . . . . . . . . . . . . . 42
SECTION 5.8 REIT Status . . . . . . . . . . . . . . . . . . . . . . . 42
SECTION 5.9 Interest Rate Agreements. . . . . . . . . . . . . . . . . 42
SECTION 5.10 Board of Directors of the General Partner . . . . . . . . 43
ARTICLE VI NEGATIVE COVENANTS . . . . . . . . . . . . . . . . . . . . . 44
SECTION 6.1 Liens . . . . . . . . . . . . . . . . . . . . . . . . . . 44
SECTION 6.2 Mergers, Consolidations, Sales of Assets. . . . . . . . . 44
SECTION 6.3 Business of Borrower and General Partner. . . . . . . . . 44
SECTION 6.4 ERISA Liabilities . . . . . . . . . . . . . . . . . . . . 44
SECTION 6.5 Organizational Documents. . . . . . . . . . . . . . . . . 44
SECTION 6.6 Large Purchase Approval . . . . . . . . . . . . . . . . . 44
SECTION 6.7 Other Purchase Notice . . . . . . . . . . . . . . . . . . 45
SECTION 6.8 Financial Ratios. . . . . . . . . . . . . . . . . . . . . 45
SECTION 6.9 Calculation of Its Financial Covenants. . . . . . . . . . 45
SECTION 6.10 Distributions . . . . . . . . . . . . . . . . . . . . . . 45
SECTION 6.11 Permitted Investments . . . . . . . . . . . . . . . . . . 45
SECTION 6.12 Floating Rate Indebtedness. . . . . . . . . . . . . . . . 46
SECTION 6.13 Financial Covenants Noncompliance . . . . . . . . . . . . 46
SECTION 6.14 Debt. . . . . . . . . . . . . . . . . . . . . . . . . . . 46
ARTICLE VII EVENTS OF DEFAULT. . . . . . . . . . . . . . . . . . . . . . . 47
SECTION 7.1 Event of Default. . . . . . . . . . . . . . . . . . . . . 47
SECTION 7.2 Remedies. . . . . . . . . . . . . . . . . . . . . . . . . 49
SECTION 7.3 Occurrence and Declaration of an Event of Default . . . . 50
SECTION 7.4 Enforcement of Remedies . . . . . . . . . . . . . . . . . 50
SECTION 7.5 Approval Process for Proposed Plans . . . . . . . . . . . 51
ARTICLE VIII THE ADMINISTRATIVE AGENT; INTERBANK AGREEMENT . . . . . . . . 53
SECTION 8.1 Appointment . . . . . . . . . . . . . . . . . . . . . . . 53
SECTION 8.2 Liability . . . . . . . . . . . . . . . . . . . . . . . . 53
SECTION 8.3 Action by Administrative Agent. . . . . . . . . . . . . . 54
SECTION 8.4 Qualification, Replacement of Administrative Agent. . . . 55
SECTION 8.5 Agent as Bank . . . . . . . . . . . . . . . . . . . . . . 58
SECTION 8.6 Ownership and Possession of Loan Documents. . . . . . . . 58
SECTION 8.7 Indemnification . . . . . . . . . . . . . . . . . . . . . 58
SECTION 8.8 Independent Credit Analysis . . . . . . . . . . . . . . . 59
SECTION 8.9 Process for Obtaining Approval of the Banks . . . . . . . 59
SECTION 8.11 Relationship with the Borrower. . . . . . . . . . . . . . 60
SECTION 8.12 Payments. . . . . . . . . . . . . . . . . . . . . . . . . 61
SECTION 8.13 Application of Payments . . . . . . . . . . . . . . . . . 62
SECTION 8.14 Defaults. . . . . . . . . . . . . . . . . . . . . . . . . 63
SECTION 8.15 Purchase of Defaulting Bank's Interest After Default. . . 65
SECTION 8.16 Purchase Price and Payment for Defaulting Bank's Interest 65
ARTICLE IX MISCELLANEOUS. . . . . . . . . . . . . . . . . . . . . . . . 67
SECTION 9.1 Notices . . . . . . . . . . . . . . . . . . . . . . . . . 67
SECTION 9.2 Survival of Credit Agreement. . . . . . . . . . . . . . . 67
SECTION 9.3 Binding Effect. . . . . . . . . . . . . . . . . . . . . . 67
SECTION 9.4 Successors and Assigns. . . . . . . . . . . . . . . . . . 68
SECTION 9.5 Expenses; Indemnity . . . . . . . . . . . . . . . . . . . 71
SECTION 9.6 Applicable Law. . . . . . . . . . . . . . . . . . . . . . 72
SECTION 9.7 Waivers; Amendment. . . . . . . . . . . . . . . . . . . . 72
SECTION 9.8 Interest Rate Limitation. . . . . . . . . . . . . . . . . 72
SECTION 9.9 Entire Agreement. . . . . . . . . . . . . . . . . . . . . 73
SECTION 9.10 Waiver of Jury Trial. . . . . . . . . . . . . . . . . . . 73
SECTION 9.11 Severability. . . . . . . . . . . . . . . . . . . . . . . 73
SECTION 9.12 Counterparts. . . . . . . . . . . . . . . . . . . . . . . 73
SECTION 9.13 Headings. . . . . . . . . . . . . . . . . . . . . . . . . 73
SECTION 9.14 Alternative Dispute Resolution. . . . . . . . . . . . . . 74
SECTION 9.15 Jurisdiction; Consent to Service of Process . . . . . . . 74
SECTION 9.16 Confidentiality . . . . . . . . . . . . . . . . . . . . . 75
EXHIBIT "A" FORM OF BORROWING NOTICE
EXHIBIT "B" FORM OF NOTE
EXHIBIT "C" FORM OF ASSIGNMENT AND ACCEPTANCE
EXHIBIT "D" FORM OF COUNSEL OPINION OF BORROWER AND GENERAL PARTNER
EXHIBIT "E" FORM OF ADMINISTRATIVE QUESTIONNAIRE
EXHIBIT "F" FORM OF COMPLIANCE CERTIFICATE
SCHEDULE 2.1 COMMITMENTS OF BANKS
CREDIT AGREEMENT
BY THIS CREDIT AGREEMENT (together with any amendments or
modifications, the "Credit Agreement"), entered into as of
September 24, 1996 by and among XXXXX XXXXXXXXXX RESIDENTIAL,
L.P., a Delaware limited partnership (the "Borrower"), the banks
listed in Schedule 2.1 (the "Banks"), BANK ONE, ARIZONA, NA, a
national banking association, as administrative agent for the
Banks (in such capacity, the "Administrative Agent") and Bank of
America National Trust and Savings Association and Xxxxx Fargo
Bank, National Association, as Co-Agents, in consideration of the
mutual promises herein contained and for other valuable
consideration, the parties hereto do agree as follows:
RECITALS
A. The Borrower has asked that the Banks provide lending commitments
in an aggregate principal amount of $225,000,000.00 at any time outstanding
on a revolving credit basis on and after the date hereof and at any time and
from time to time prior to the Maturity Date.
B. The Banks have agreed to provide financial accommodations to the
Borrower pursuant to this Credit Agreement in an amount not to exceed the
Maximum Commitment, which amount is $225,000,000.00.
C. The proceeds of such borrowings are to provide funds for the
following purposes:
1. Working capital for Borrower's business
operations;
2. Payment of dividends;
3. Payment of pre-development and development
costs with respect to real estate projects;
4. Payment of acquisition costs with respect to
real estate properties;
5. Payment of capital expenditures with respect
to real estate properties;
6. Making of equity investments;
7. Repayment of existing indebtedness with
respect to real estate properties;
8. Payment of scheduled principal payments with
respect to remaining indebtedness; and
9. General corporate purposes.
D. The Banks are willing to extend such credit to the Borrower on the
terms and subject to the conditions herein set forth.
E. The lending commitments of any Bank to the Borrower and the General
Partner pursuant to that Credit Agreement dated December 1, 1995 as amended
by that Modification Agreement dated July 23, 1996 (as amended, the "1995
Agreement") shall be terminated upon the execution and delivery of this
Credit Agreement by the Borrower to the Banks and the satisfaction of those
conditions precedent specified in Section 4.2 hereof. At such time, said
Credit Agreement and that Unconditional Guarantee of Payment dated December
1, 1995 related thereto shall be terminated and of no force and effect after
which that Note dated December 1, 1995 related thereto shall be canceled and
returned to Borrower.
Accordingly, the Borrower, the Banks and the Administrative Agent agree
as follows:
-2-
ARTICLE I
DEFINITIONS
SECTION 1.1 DEFINED TERMS. Although terms may be defined elsewhere
herein, as used in this Credit Agreement, unless the context otherwise
requires, the following terms shall have the meanings specified below:
"ADJUSTED ASSET VALUE" of a Person shall mean, on any date of
determination, such Person's EBITDA, annualized on the basis of the most
recent quarter, divided by 9.50%.
"ADJUSTED NET WORTH" of a Person shall mean seventy-five percent (75.0%)
times the net of such Person's Gross Asset Value after subtracting from its
Gross Asset Value its Total Liabilities and its Intangible Assets.
"ADJUSTED NOI" shall mean with respect to a Project, its Project NOI
adjusted as follows:
(a) For a Project that became a Stabilized Project
our (4) or more quarters ago, its Adjusted NOI shall be
equal to its Project NOI calculated on a basis of its most
recent rolling four quarter period.
(b) For a Project that became a Stabilized
Project less than four (4) quarters ago, its Adjusted
NOI shall be equal to the sum of its Project NOI for
the quarter when it became a Stabilized Project and
each subsequent quarter, which sum shall be annualized.
(c) For a Project acquired by the Borrower or the
General Partner during the prior twelve (12) month
period that is not a Stabilized Project, its Adjusted
NOI shall be equal to its Project NOI calculated on a
basis of its most recent rolling four quarter period,
adjusted if necessary for a three percent (3%)
management fee and a $135.00 per apartment unit annual
reserve.
"ADMINISTRATION FEES" shall have the meaning assigned to such term in
Section 2.5(d).
"ADMINISTRATIVE AGENT" shall have the meaning assigned to such term in
the Preamble, and any successor thereto.
"ADMINISTRATIVE QUESTIONNAIRE" shall mean an Administrative
Questionnaire in the form of Exhibit "E" hereto.
"AFFILIATE" shall mean, when used with respect to a specified Person,
another Person that directly, or indirectly through one or more
intermediaries, Controls or is Controlled by or is under common Control with
the Person specified.
-3-
"AGGREGATE VALUE" shall mean an amount equal to the sum of the following
with respect to all Unencumbered Assets that shall have been included by the
Borrower in the most recent calculation of the Aggregate Value furnished by
it to the Administrative Agent:
(a) as to all such Unencumbered Assets that are
Stabilized Projects, an amount equal to (i) their
Adjusted NOI divided by 9.5%, (ii) then divided by
175.0%;
(b) as to all such fully completed Unencumbered
Assets that are not Stabilized Projects, an amount
equal to seventy-five percent (75%) of their book value
according to GAAP;
(c) as to all such Unencumbered Assets under
construction, an amount equal to fifty percent (50%) of
their book value according to GAAP;
provided, however, that:
(i) the sum of (b) and (c) above shall
not exceed thirty percent (30%) of the total
Aggregate Value; and
(ii) the amount of (c) shall not exceed
fifteen percent (15%) of the total Aggregate
Value.
"ALTERNATIVE PLAN": See Section 7.4(c).
"ANNIVERSARY DATE" shall mean September 24, 1997.
"APPLICABLE MARGIN" shall mean on any date, with respect to Eurodollar
Loans, the applicable spread set forth below based upon the ratings
applicable on such date to the Borrower's or the General Partner's Index Debt
from at least two of the Rating Agencies, one of which shall be S&P or
Xxxxx'x, or if no Index Debt is then outstanding, the indicative ratings
established by the respective rating agencies in respect of the Borrower or
the General Partner on its notional senior unsecured long-term indebtedness:
Eurodollar
Loan Spread
-----------
CATEGORY 1
RATING
A- or above by S&P 1.25%
A3 or above by Xxxxx'x
Equivalent by another Rating Agency
-4-
CATEGORY 2
RATING
BBB by S&P or above 1.375%
Baa2 by Xxxxx'x or above
Equivalent by another Rating Agency
CATEGORY 3
RATING
BBB- by S&P or above 1.50%
Baa3 by Xxxxx'x or above
Equivalent by another Rating Agency
CATEGORY 4
RATING
BB+ or below by S&P or not rated 1.75%
Ba1 or below by Xxxxx'x or not rated
Equivalent by another Rating Agency
For purposes of the foregoing, (i) unless the ratings for Index Debt
established or deemed to have been established by the two Rating Agencies
with the highest such ratings, one which shall be S&P or Xxxxx'x, shall fall
within a single Category, the Applicable Margin shall be determined by
reference to the lower rating; (ii) if no two Rating Agencies shall have in
effect a rating for Index Debt or established an indicative rating in respect
of the Borrower or the General Partner or its notional senior unsecured
long-term indebtedness, then the Applicable Margin shall be determined by
reference to Category 4; and (iii) if any rating for Index Debt established
or deemed to have been established by a Rating Agency shall be changed (other
than as a result of a change in the rating system of such Rating Agency),
such change shall be effective as of the date on which it is first announced
by the applicable rating agency. Each change in the Applicable Margin shall
apply during the period commencing on the effective date of such change and
ending on the date immediately preceding the effective date of the next such
change. If the rating system of a Rating Agency shall change, or if no Rating
Agency shall any longer have in effect a rating for Index Debt or established
an indicative rating in respect of the Borrower or the General Partner or its
notional senior unsecured long-term indebtedness, and clause (ii) above shall
not be applicable, the Borrower and the Banks, acting through the
Administrative Agent, shall negotiate in good faith to amend the references
to specific ratings in this definition to reflect such changed rating system
or the non-availability of ratings from such rating agency.
"APPROVED PLAN" See Section 7.5(a).
-5-
"ASSIGNMENT AND ACCEPTANCE" shall mean an assignment and acceptance entered
into by a Bank and an assignee, accepted by the Administrative Agent and, if
assignee is not a Bank, consented to by the Borrower, in the form of Exhibit
"C".
"AVAILABLE COMMITMENT" shall mean at any time an amount that, together with
the amount of any Debt of the Borrower and the General Partner that is not
secured by any Lien on any of the property or assets of the Borrower or the
General Partner, equals the Aggregate Value.
"BANKS" shall have the meaning assigned to such term in the Preamble.
"BOARD" shall mean the Board of Governors of the Federal Reserve System of
the United States.
"BOAZ" shall mean Bank One, Arizona, NA.
"BORROWER" shall have the meaning assigned to such term in the Preamble.
"BORROWER REPRESENTATIVE" shall mean a Person designated as such by the
Borrower.
"BORROWING" shall mean a group of Loans made by the Banks on a single date.
"BORROWING NOTICE" shall mean a notice given pursuant to Section 2.3, a
form of which is attached hereto as Exhibit "A".
"BUSINESS DAY" shall mean any day (other than a day which is a Saturday,
Sunday or legal holiday in the State of Arizona, State of California, the
State of New York or State of Rhode Island) on which banks are open for
business in Phoenix, Arizona, Los Angeles, California, New York City, New
York and Providence, Rhode Island; PROVIDED, HOWEVER, that, when used in
connection with a Eurodollar Loan, the term "Business Day" shall also exclude
any day on which banks are not open for dealings in dollar deposits in the
London interbank market.
"CAPITAL LEASE" shall mean any lease of any property (whether real,
Personal or mixed) required by GAAP to be accounted for as a capital lease on
the balance sheet of the lessee.
"CAPITAL LEASE OBLIGATIONS" of any Person shall mean the obligations of
such Person to pay rent or other amounts under any Capital Lease and, for the
purposes of this Credit Agreement, the amount of such obligations at any time
shall be the capitalized amount thereof at such time determined in accordance
with GAAP.
A "CHANGE IN CONTROL" shall be deemed to have occurred if, after the date
hereof, (a) any Person or group (within the meaning of Rule 13d-3, as in
effect on the date hereof, promulgated by the SEC under the 1934 Act) (other
than Xxxxxxx X. Xxxxx or Xxxxx Xxxxxxxxxx or any group including either of
them), shall acquire, directly or indirectly, beneficially or of record,
shares
-6-
representing more than fifty percent (50%) of the aggregate ordinary voting
power represented by the issued and outstanding capital stock of the General
Partner; or (b) a majority of the seats (other than vacant seats) on the
board of directors become occupied by Persons not members of said board on
the date hereof that were neither (i) nominated by the board of directors of
the General Partner, nor (ii) appointed by directors so nominated.
"CLOSING DATE" shall mean the date of the first Credit Event hereunder.
"CO-AGENTS" shall mean Bank of America National Trust and Savings
Association and Xxxxx Fargo Bank, National Association. The Co-Agents shall
have no right, duties or responsibilities under the Loan Documents beyond
those of a Bank.
"CODE" shall mean the Internal Revenue Code of 1986, as the same may be
amended from time to time.
"COMMITMENT" shall mean, with respect to each Bank, the revolving credit
commitment of such Bank hereunder as set forth in Schedule "2.1" hereto
(which amount shall not be less than $10,000,000.00) as such Bank's
Commitment may be permanently terminated or reduced from time to time
pursuant to Section 2.10 or 2.20. The Commitments shall automatically and
permanently terminate on the Maturity Date.
"COMMITMENT FEE" shall have the meaning assigned to such term in Section
2.5(a).
"COMPLIANCE CERTIFICATE" shall have the meaning assigned to such term in
Section 5.4(c) in the form of Exhibit "F" attached hereto.
"CONTROL" shall mean the exercise of the power to direct or cause the
direction of the management or policies of a Person, whether through the
exercise of rights of ownership under voting securities, under contract or
otherwise, and "Controlling" and "Controlled" shall have meanings correlative
thereto.
"CREDIT AGREEMENT" shall have the meaning assigned to such term in the
Preamble.
"CREDIT EVENT" shall have the meaning given such term in Article IV.
"CURRENT BANK": See Section 8.15.
"CURRENT FINANCIAL STATEMENT DATE" shall mean December 31,
1995.
"CURRENT MATURITY DATE" shall mean September 24, 1999.
"DECLARATION OF DEFAULT": See Section 7.3.
-7-
"DEBT" of a Person shall mean each of the following (without duplication):
(a) obligations of that Person to any other Person for payment of borrowed
money, (b) Capital Lease Obligations, (c) notes and drafts drawn or accepted
by that Person payable to any other Person, whether or not representing
obligations for borrowed money (but without duplication of indebtedness for
borrowed money), (d) any obligation for the purchase price of property the
payment of which is deferred for more than one year or evidenced by a note or
equivalent instrument, (e) Guarantees of Debt of third parties, and (f) a
recourse or nonrecourse payment obligation of any other Person that is
secured by a Lien on any property of the first Person, whether or not assumed
by the first Person, up to the fair market value (from time to time) of such
property (absent manifest evidence to the contrary, the fair market value of
such property shall be the amount determined under GAAP for financial
reporting purposes).
"DEBT SERVICE" of a Person shall mean its Interest Expense plus its
scheduled amortization payments of principal of any Debt, excluding any
principal payments due on the maturity date of such Debt.
"DEFAULT" shall mean any event or condition which upon notice, lapse of
time or both would constitute an Event of Default.
"DEFAULT PLAN": See Section 7.4(a).
"DEFAULTING BANK": See Section 8.14.
"DESIGNATED OFFICER" shall mean any of the Chairman of the Board,
President, the Chief Financial Officer, the General Counsel, the Secretary,
the Treasurer and the Assistant Treasurer of the General Partner.
"DOLLARS" or "$" shall mean lawful money of the United States of America.
"DUFF" means Duff & Xxxxxx Credit Rating Co.
"EBITDA" of a Person shall mean, for any period, such Person's net income
(before any deductions for minority interest attributable to any limited
partners in the Borrower) plus interest expense, taxes, depreciation and
amortization expenses to the extent deducted in determining such net income
plus any earnings distributed by any unconsolidated Affiliates, plus (or
minus) any extraordinary losses (or gains) from asset sales, asset writeoffs
and debt forgiveness. "EBITDA" shall exclude all extraordinary gains.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
the same may be amended from time to time.
-8-
"ERISA AFFILIATE" shall mean any trade or business (whether or not
incorporated) that is a member of a group of which the General Partner is a
member and which is treated as a single employer under Section 414 of the
Code.
"ERISA LIABILITIES" shall mean at any time the minimum liability with
respect to Plans that would be required to be reflected at such time as a
liability on the consolidated balance sheet of the General Partner under GAAP.
"EURODOLLAR LENDING OFFICE," with respect to any Bank (or transferee) or
the Administrative Agent, shall mean such office or branch as such Bank (or
transferee) or the Administrative Agent has designated to the Borrower herein
in Schedule "2.1" as the office or branch of such Bank (or transferee) or the
Administrative Agent which shall constitute the Lending Office thereof for
Eurodollar Loans.
"EURODOLLAR LOAN" shall mean any Loan bearing interest at a rate determined
by reference to the LIBO Rate in accordance with the provisions of Article II.
"EVENT OF DEFAULT" shall have the meaning assigned to such term in Article
VII.
"EXTENSION FEE" shall have the meaning assigned to such term in Section
2.5(c).
"FACILITY FEE" shall have the meaning assigned to such term in Section
2.5(b).
"FACILITY FEE PERCENTAGE" shall mean (i) one-quarter percent (0.25%) if the
daily unused amount during the preceding calendar quarter (or any shorter
period described in Section 2.5(b)) averages less than sixty percent (60%) of
the Total Commitment, or (ii) otherwise, one-eighth percent (0.125%).
"FEDERAL FUNDS EFFECTIVE RATE" shall mean, for any day, the weighted
average of the rates on overnight Federal funds transactions with members of
the Federal Reserve System arranged by Federal funds brokers, as published on
the next succeeding Business Day by the Federal Reserve Bank of San
Francisco, or, if such rate is not so published for any day which is a
Business Day, the average of the quotations for the day of such transactions
received by the Administrative Agent from three Federal funds brokers of
recognized standing selected by it.
"FEE LETTER" shall mean that letter agreement between the Borrower and the
Administrative Agent with respect to the payment of Administrative Fees
hereunder.
"FEES" shall mean the Commitment Fees, the Facility Fees, the
Administration Fees and the Extension Fees.
"FINANCIAL COVENANTS" shall mean those financial covenants described in
Sections 6.8 through 6.12.
-9-
"FINANCIAL OFFICER" of any corporation shall mean the chief financial
officer, principal accounting officer, treasurer or controller of such
corporation.
"FITCH" shall mean Fitch Investor's Service.
"FLOATING RATE INDEBTEDNESS" of a Person shall mean its variable rate Debt,
including without limitation that of its unconsolidated Affiliates which is
recourse to such Person and any Debt that reprices within 365 days, but
excluding any "low-floater" tax-exempt bonds and any such Debt for which such
Person is protected from interest rate risk to the satisfaction of the Banks.
"FUNDS FROM OPERATIONS" of the General Partner shall mean, at any date of
determination, its "funds from operations" as determined in accordance with
policies and standards promulgated from time to time by the National
Association of Real Estate Investment Trusts, calculated on the basis of its
most recent rolling four quarter period.
"GAAP" shall mean generally accepted accounting principles as currently in
effect in the United States.
"GENERAL PARTNER" shall mean Xxxxx Xxxxxxxxxx Residential, Inc., a Maryland
corporation, the general partner of the Borrower.
"GOVERNMENTAL AUTHORITY" shall mean any federal, state, local or foreign
court or governmental agency, authority, instrumentality or regulatory body
having jurisdiction over Borrower or the General Partner or any of their
assets.
"GROSS ASSET VALUE" of a Person shall mean the sum of such Person's
Adjusted Asset Value as hereinafter adjusted, cash and cash equivalents, the
book value of construction in process and land held for development,
excluding without limitation restricted cash; provided that for purposes of
calculating Gross Asset Value, Adjusted Asset Value shall not include any
positive EBITDA generated by any construction in process.
"GUARANTEE" of or by any Person shall mean any obligation, contingent or
otherwise, of such Person guaranteeing or having the economic effect of
guaranteeing any Debt of any other Person (the "Primary Obligor") in any
manner, whether directly or indirectly, and including without limitation any
obligation of such Person, direct or indirect, (a) to purchase or pay (or
advance or supply funds for the purchase or payment of) such Debt or to
purchase (or to advance or supply funds for the purchase of) any security for
the payment of such Debt, (b) to purchase property, securities or services
for the purpose of assuring the owner of such Debt of the payment of such
Debt or (c) to maintain working capital, equity capital or other financial
statement condition or liquidity of the Primary Obligor so as to enable the
Primary Obligor to pay such Debt; PROVIDED, HOWEVER, that the term Guarantee
shall not include endorsements for collection or deposit, in either case in
the ordinary course of business.
-10-
"GUARANTY" shall mean that Unconditional Guarantee of Payment dated as of
even date herewith from the General Partner to the Administrative Agent for
the benefit of the Banks, as such Guaranty shall be amended, modified and
restated from time to time.
"INDEX DEBT" shall mean with respect to Applicable Margin a Person's
senior, unsecured, non-credit-enhanced long-term indebtedness for borrowed
money.
"INTANGIBLE ASSETS" of a Person shall mean all intangible, non-current
assets of such Person.
"INTEREST EXPENSE" of a Person shall mean all interest expense incurred by
such Person during the relevant period, plus its pro-rata share of interest
expense in its unconsolidated Affiliates and all interest expense incurred by
such Person on any obligations for which such Person is wholly or partially
liable during the relevant period. "Interest Expense" shall not include any
interest that is capitalized.
"INTEREST PAYMENT DATE" shall mean the first day of each month.
"INTEREST PERIOD" shall mean as to any Eurodollar Loan, the period
commencing on the date of the related Borrowing or conversion and ending on
the numerically corresponding day (or, if there is no numerically
corresponding day, on the last day) in the calendar month that is 1, 2, 3, or
6 months thereafter, as the Borrower may elect; PROVIDED, HOWEVER, that if
any Interest Period would end on a day other than a Business Day, such
Interest Period shall be extended to the next succeeding Business Day unless
such next succeeding Business Day would fall in the next calendar month, in
which case such Interest Period shall end on the next preceding Business Day.
Interest shall accrue from and including the first day of an Interest Period
to but excluding the last day of such Interest Period.
"LENDING OFFICE," with respect to any Bank (or transferee) or the
Administrative Agent, shall mean such office or branch as such Bank (or
transferee) or the Administrative Agent has designated to the Borrower herein
as the office or branch of that Bank (or transferee) or the Administrative
Agent from which Loans are to be made.
"LIBO RATE" shall mean, with respect to any Eurodollar Loan for any
Interest Period, an interest rate per annum (rounded upwards, if necessary,
to the next 100th of 1%) equal to the composite London interbank offered rate
for dollar deposits approximately equal in principal amount to such
Eurodollar Loan and for a maturity comparable to such Interest Period
appearing on the display designated as page "LIBO" on the Reuters System, or
such other display as the Reuters System shall from time to time use to
present such London interbank offered rates, at approximately 11:00 a.m.,
London time, two Business Days prior to the commencement of such Interest
Period.
"LIEN" shall mean any mortgage, pledge, security interest or similar lien.
-11-
"LOAN DOCUMENTS" shall mean this Credit Agreement, the Notes, the Fee
Letter, the Guaranty and all documents executed by the parties pursuant to
the terms of this Credit Agreement.
"LOANS" shall mean the revolving loans made by the Banks to the Borrower
pursuant to Section 2.3. Each Loan shall be a Eurodollar Loan or Variable
Loan.
"MARGIN STOCK" shall have the meaning given such term under Regulation U.
"MATURITY DATE" shall mean the earliest of the following: (a) the date the
Banks exercise their option to declare the Loans fully due and payable after
the occurrence of an Event of Default and the continuation thereof, or (b)
the Current Maturity Date, unless Borrower shall have exercised its option
pursuant to Section 2.21 to extend the Maturity Date, then September 24, 2000.
"MAXIMUM COMMITMENT" shall mean $225,000,000.00.
"MAXIMUM NUMBER" shall mean ten (10) for the purposes of Section 2.2(b).
"MINIMUM ADDITIONAL AMOUNT" shall mean $100,000.00 for the purposes of
Sections 2.2(a), 2.10(b), 2.11(b), and 2.12(a).
"MINIMUM AMOUNT" shall mean $500,000.00 for the purposes of Sections
2.2(a), 2.10(b), 2.11(b), and 2.12(a).
"MOODY'S" shall mean Xxxxx'x Investors Service, a Delaware corporation, and
its successors and assigns.
"MULTI-EMPLOYER PLAN" shall mean a multi-employer plan as defined in
Section 4001(a)(3) of ERISA to which the General Partner or any ERISA
Affiliate (other than one considered an ERISA Affiliate only pursuant to
subsection (m) or (o) of Section 414 of the Code) is making or accruing an
obligation to make contributions, or has within any of the preceding two plan
years made or accrued an obligation to make contributions.
"NET WORTH" of a Person shall mean such Person's net worth as determined
under GAAP.
"1934 ACT" shall mean the United States Securities Exchange Act of 1934, as
amended.
"1995 AGREEMENT" shall have the meaning assigned to such term in Recital E.
"NOTE" and "NOTES" shall mean, severally and collectively, revolving credit
notes of the Borrower executed and delivered as provided in Section 2.6, as
such Notes shall be amended, modified, extended and restated from time to
time.
-12-
"PBGC" shall mean the Pension Benefit Guaranty Corporation referred to and
defined in ERISA.
"PERMITTED LIEN" shall mean a Lien permitted under Section 6.1.
"PERSON" shall mean any natural Person, corporation, business trust, joint
venture, association, company, partnership or government, or any agency or
political subdivision thereof.
"PLAN" shall mean any pension plan (other than a Multi-employer Plan) that
is (i) a qualified plan under Section 401(a) of the Code, (ii) subject to the
provisions of Title IV of ERISA or Section 412 of the Code and (iii)
maintained for employees of the General Partner or any ERISA Affiliate.
"PROJECT" shall mean an apartment community consisting of non-high rise
buildings, which is either under construction or has been completed, that is
not primarily oriented to students or elderly congregate care, and that is
located either in Arizona, California, Colorado, Nevada, New Mexico or Utah.
The Administrative Agent and the Banks acknowledge that as of the Closing
Date, all apartment communities owned by the Borrower and the General Partner
qualify as "Projects."
"PROJECT EXPENSES" shall mean the sum of (A) a replacement reserve of at
least $135.00 per unit per year, plus (B) all expenses actually incurred in
each calendar month by or on behalf of the Borrower or the General Partner
for: (i) lease-up, operation, cleaning, and maintenance costs of the Project
for the month in question, determined on an accrual basis (including, but not
limited to, the cost of all utilities supplied to the Project to the extent
the utilities are not separately charged or metered to tenants of the
Project); (ii) promotional expenses of the Project (including the cost of
brochures, advertising fees, broker fees, and tenant locator/referral fees);
(iii) repairs to the Project; (iv) insurance actually maintained by the
Borrower or the General Partner in the amounts and with the coverage
specified by the Borrower or the General Partner; (v) compensation payable to
all persons employed by the Borrower or the General Partner's manager in
connection with the operation, maintenance, repair, and management of the
Project including the property management agent's standard benefits package
for its employees; (vi) the cost of complying with rules, regulations, and
orders of governmental authorities; (vii) accounting and legal fees relating
to the operation and management of the Project (including collection costs);
(viii) all real and personal property taxes determined on an accrual basis
and prorated, whether or not such taxes are due or payable; (ix) all sales
and use taxes paid by the Borrower or the General Partner or its manager (and
not paid or reimbursed by tenants) to appropriate governmental authorities;
(x) a management fee equal to the higher of that actually incurred or three
percent (3%) of Project Receipts; and (xi) all homeowners association fees,
general assessments, special assessments, or improvement district assessment
levied or assessed against the Project, whether by a school, hospital,
municipality, or other governmental agency determined on an accrual basis and
prorated, whether or not such assessments are due or payable. For the
-13-
purposes of calculating the "Project Expenses," all prepaid expenses shall be
amortized on a monthly basis over the period to which such expenses relate.
"PROJECT NOI" shall mean, as to any period, with respect to any Project,
the excess of its Project Receipts over its Project Expenses.
"PROJECT RECEIPTS" shall mean all gross income from the Project, using the
actual vacancy factor, including, except as otherwise provided below, rental
income, forfeited security deposits, laundry income, cleaning charges,
administrative vending income, parking fees, recreation room charges,
telephone and cable revenues, and similar items actually received by Borrower
or the General Partner in the operation and rental of the Project during any
given period, determined on a gross receipts basis. The term "Project
Receipts" shall NOT include refundable (to the extent not forfeited) or
unforfeited security or other deposits, refundable cleaning charges,
refundable pet fees, refundable key charges, refundable tenant maintenance
charges, any other refundable charges, or sales or use taxes collected from
or reimbursed by tenants of the Project.
"PROPOSED PLAN": See Section 7.5(a).
"QUALIFIED BANK" shall mean a financial institution, with a reported
capital and surplus of not less than $10 billion, and possessing a rating as
to its senior, unsecured long-term indebtedness from S&P or Moody's of at
least BAA1 or its equivalent.
"RATING AGENCIES" shall mean S&P, Xxxxx'x, Fitch and Duff, each being a
Rating Agency.
"REGISTER" shall have the meaning given such term in Section 9.4(d).
"REGULATION D" shall mean Regulation D of the Board as from time to time in
effect and all official rulings and interpretations thereunder or thereof.
"REGULATION G" shall mean Regulation G of the Board as from time to time in
effect and all official rulings and interpretations thereunder or thereof.
"REGULATION T" shall mean Regulation T of the Board as from time to time in
effect and all official rulings and interpretations thereunder or thereof.
"REGULATION U" shall mean Regulation U of the Board as from time to time in
effect and all official rulings and interpretations thereunder or thereof.
"REGULATION X" shall mean Regulation X of the Board as from time to time in
effect and all official rulings and interpretations thereunder or thereof.
-14-
"REIT" shall mean an entity that qualifies as a real estate investment
trust under Sections 856, ET SEQ., of the Code.
"REPORTABLE EVENT" shall mean any reportable event as defined in Section
4043(b) of ERISA or the regulations issued thereunder with respect to a Plan
(other than a Plan maintained by an ERISA Affiliate which is considered an
ERISA Affiliate only pursuant to subsection (m) or (o) of Section 414 of the
Code).
"REPRESENTATIVE" of a Person shall mean any natural person(s) who may be
designated as such by written certificate furnished to the Administrative
Agent containing the specimen signature of such person(s) and signed by such
Person.
"REQUIRED BANKS" shall mean, at any time, Banks having Commitments
representing at least 66-2/3% of the Total Commitment.
"RESERVE FOR REPLACEMENT" shall mean a pro-forma amount (which amount need
not be deposited into a reserve fund) equal to $135.00 per year per apartment
unit owned by the Borrower or the General Partner.
"S&P" shall mean Standard & Poor's Ratings Group and its successors and
assigns.
"SEC" shall mean the United States Securities and Exchange Commission.
"SECURED DEBT" of a Person shall mean that portion of such Person's Total
Liabilities secured by real property.
"SIGNIFICANT DEBT AGREEMENT" shall mean all documents, instruments and
agreements executed by the Borrower or the General Partner evidencing,
securing or ensuring any Indebtedness or any guaranty in excess of
$1,000,000.00 in outstanding principal (or principal equivalent) amount.
"STABILIZED PROJECT" shall mean a Project whose average occupancy factor
has equaled or exceeded eighty-five percent (85%) for at least one prior
quarter.
"SUBSIDIARY" of a Person shall mean any corporation, association or other
business entity of which more than 50% of the total voting power of shares of
stock entitled in ordinary circumstances to vote in the election of
directors, managers or trustees thereof is at the time owned or controlled,
directly or indirectly, by that Person, by one or more of the other
Subsidiaries of that Person, or by any combination thereof.
"TOTAL COMMITMENT" shall mean at any time the aggregate amount of the
Banks' Commitments, as in effect at such time, which amount shall not exceed
the Maximum Commitment.
-15-
"TOTAL LIABILITIES" of a Person shall mean all liabilities of such Person
including without limitation, any mortgage debt whether recourse or
non-recourse, letters of credit issued for the account of such Person,
unsecured debt, accounts payable, subordinated debt, the full amount of such
Person's liability under any Guarantees, any loans to any partnership of
which such Person is a general partner and such Person's share of
non-recourse debt in unconsolidated Affiliates; provided, however, that
"Total Liabilities" shall not include any minority interest attributable to
any limited partners in the Borrower but only to the extent such minority
interest is convertible to stock (common or preferred) of the General Partner
or, as to any consolidated joint venture, the share of any non-recourse debt
that is properly allocable to such Person's joint venture partner.
"TREASURY CONSTANT MATURITIES RATE" means the yield in percent per annum as
calculated for each Business Day by the United States Treasury Department for
U.S. Government securities adjusted to five (5) year Treasury Constant
Maturities, averaged for a calendar week, presently reported weekly in the
Federal Reserve Statistical Release H.15 (519).
"TYPE," when used in respect of any Loan, shall refer to the Rate by
reference to which interest on such Loan is determined. For purposes hereof,
"Rate" shall include the LIBO Rate and the Variable Rate.
"UNENCUMBERED ASSET" shall mean a Project, wholly owned by the Borrower or
the General Partner, which shall not be subject to any Liens, stock pledges,
negative pledges (other than pursuant to this Credit Agreement) or pledges of
partnership interests.
"UNENCUMBERED NOI" shall mean the sum of the Adjusted NOI of all
Unencumbered Assets.
"UNSECURED INTEREST EXPENSE" of the General Partner shall mean its Interest
Expense incurred with respect to that portion of its Total Liabilities that
is not secured by a Lien on any of the property or assets of the Borrower or
of the General Partner.
"VARIABLE LOAN" shall mean any Loan bearing interest at a rate determined
by reference to the Variable Rate in accordance with the provisions of
Article II.
"VARIABLE RATE" shall mean, for any day, a rate per annum equal to the
Prime Rate in effect on such day. For purposes hereof, "Prime Rate" shall
mean the rate of interest per annum publicly announced from time to time by
the Administrative Agent as its prime rate in effect at its principal office
in Phoenix, Arizona; each change in the Prime Rate shall be effective on the
date such change is publicly announced as effective.
SECTION 1.2 TERMS GENERALLY. The definitions in Section 1.1 shall apply
equally to both the singular and plural forms of the terms defined. Whenever
the context may require, any pronoun shall include the corresponding
masculine, feminine and neuter forms. All references
-16-
herein to Articles, Sections, Exhibits and Schedules shall be deemed
references to Articles and Sections of, and Exhibits and Schedules to, this
Credit Agreement unless the context shall otherwise require. Except as
otherwise expressly provided herein, all terms of an accounting or financial
nature shall be construed in accordance with GAAP, as in effect from time to
time. All financial statements, to the extent applicable, shall be presented
on a consolidated basis.
-17-
ARTICLE II
THE CREDITS
SECTION 2.1 COMMITMENTS. Subject to the terms and conditions herein set
forth, each Bank agrees, severally and not jointly, to make Loans to the
Borrower, at any time and from time to time on and after the date hereof and
until the Maturity Date, in an aggregate principal amount at any time
outstanding not to exceed such Bank's Commitment, subject, however, to the
conditions that (a) at no time shall (i) the outstanding aggregate principal
amount of all Loans made by all Banks exceed (ii) the lesser of the Available
Commitment or the Total Commitment and (b) at all times the outstanding
aggregate principal amount of all Loans made by each Bank shall equal the
product of (i) the percentage which its Commitment represents of the Total
Commitment times (ii) the outstanding aggregate principal amount of all
Loans. Each Bank's Commitment is set forth opposite its respective name in
Schedule 2.1. Such Commitments may be terminated or reduced from time to
time pursuant to Sections 2.10 and 2.20.
Within the foregoing limits, the Borrower may borrow, pay or prepay and
reborrow hereunder, on and after the date hereof and prior to the Maturity
Date, subject to the terms, conditions and limitations set forth herein.
SECTION 2.2 LOANS.
(a) Each Loan shall be made as part of a Borrowing consisting of Loans
made by the Banks ratably in accordance with their Commitments; PROVIDED,
HOWEVER, that the failure of any Bank to make any Loan shall not in itself
relieve any other Bank of its obligation to lend hereunder (it being
understood, however, that no Bank shall be responsible for the failure of any
other Bank to make any Loan required to be made by such other Bank). The
Loans comprising any Borrowing shall be in an aggregate principal amount
which is an integral multiple of the Minimum Additional Amount and not less
than the Minimum Amount (or an aggregate principal amount equal to the
remaining balance of the available Commitments).
(b) Each Bank may make any Eurodollar Loan by causing at its option any
domestic branch or Eurodollar Lending Office of such Bank to make such Loan;
provided that any exercise of such option shall not affect the obligation of
the Borrower to repay such Loan in accordance with the terms of this Credit
Agreement and the applicable Note. The Borrower shall not be entitled to
request any Borrowing which, if made, would result in the aggregate number of
separate Loans of any Bank being outstanding hereunder at any one time
exceeding the Maximum Number (provided that all Borrowings of Variable Rate
Loans shall be considered to be a single Loan). For purposes of the
foregoing, Loans having different Interest Periods, regardless of whether
they commence on the same date, shall be considered separate Loans, and
Eurodollar Loans having the same Interest Period and the same Borrowing shall
be considered to be a single Loan.
-18-
(c) Subject to Section 2.4, each Bank shall make each Loan to be made by
it hereunder on the proposed date thereof by wire transfer of immediately
available funds to the Administrative Agent in Phoenix, Arizona, not later
than 11:00 a.m., Arizona time, and the Administrative Agent shall by 12:00
noon, Arizona time, credit the amounts so received to the general deposit
account of the Borrower with the Administrative Agent (or such other account
as the Borrower may designate) or, if a Borrowing shall not occur on such
date because any condition precedent herein specified shall not have been
met, return the amounts so received to the respective Banks. Loans shall be
made by the Banks pro rata in accordance with Section 2.16. Unless the
Administrative Agent shall have received notice from a Bank prior to any
Borrowing that such Bank will not make available to the Administrative Agent
such Bank's portion of such Borrowing, the Administrative Agent may assume
that such Bank has made such portion available to the Administrative Agent on
the date of such Borrowing in accordance with this paragraph (c) and the
Administrative Agent may, in reliance upon such assumption, make available to
the Borrower on such date a corresponding amount. If and to the extent that
such Bank shall not have made such portion available to the Administrative
Agent, such Bank and the Borrower severally agree to repay to the
Administrative Agent forthwith on demand such corresponding amount together
with interest thereon, for each day from the date such amount is made
available to the Borrower until the date such amount is repaid to the
Administrative Agent at (i) in the case of the Borrower, the interest rate
applicable at the time to the Loans comprising such Borrowing and (ii) in the
case of such Bank, the Federal Funds Effective Rate. If such Bank shall
repay to the Administrative Agent such corresponding amount, such amount
shall constitute such Bank's Loan as part of such Borrowing for purposes of
this Credit Agreement.
(d) Notwithstanding any other provision of this Credit Agreement, the
Borrower shall not be entitled to request any Borrowing if the Interest
Period requested with respect thereto would end after the Maturity Date.
SECTION 2.3 NOTICE OF BORROWINGS. In order to request a Borrowing, the
Borrower shall give to the Administrative Agent written or telecopy notice
(or telephone notice promptly confirmed in writing or by telecopy in the form
of Exhibit "A") (a "Borrowing Notice") (a) in the case of a Eurodollar Loan
Borrowing, not later than 9:30 a.m., Arizona time, three Business Days before
a proposed Borrowing, and (b) in the case of a Variable Loan Borrowing, not
later than 9:30 a.m., Arizona time, on the day of a proposed Borrowing. Such
notice shall be irrevocable and shall in each case specify (i) whether any
Loan then being requested is to be a Eurodollar Loan or a Variable Loan; (ii)
the date of such Borrowing (which shall be a Business Day) and the amount
thereof; and (iii) if any Loan is to be a Eurodollar Loan, the Interest
Period with respect thereto. If no election as to the Type of Loan is
specified in any such notice, then the requested Loan shall be a Variable
Loan. If no Interest Period with respect to any Eurodollar Loan is specified
in any such notice, then the Borrower shall be deemed to have selected an
Interest Period of one month's duration.
SECTION 2.4 EXCESS BALANCE REPAYMENT. There shall be due and payable from
Borrower to the Banks, and Borrower shall repay to the Banks upon five (5)
days notice from the
-19-
Administrative Agent, from time to time, any amount by which the outstanding
aggregate principal amount of all Loans made by all Banks exceeds the lesser
of the Available Commitment or the Total Commitment. The notice from the
Administrative Agent shall include evidence and calculations reasonably
necessary for it to have made the repayment determination.
SECTION 2.5 FEES.
(a) In connection with the Commitment, the Borrower agrees to pay to the
Administrative Agent for distribution to the Banks pursuant to Section 8.9 a
fee (the "Commitment Fee") in the amount of $843,750.00.
(b) The Borrower agrees to pay to each Bank, through the Administrative
Agent, quarterly in arrears for the calendar quarter ending each March 31,
June 30, September 30 and December 31 on a date not later than three Business
Days after such calendar quarter has ended and on the date on which the
Commitment of such Bank shall be terminated as provided herein, a fee (a
"Facility Fee") at a rate per annum equal to the Facility Fee Percentage from
time to time in effect on the daily unused amount of the Commitment of such
Bank for each day during the preceding calendar quarter (or shorter period
commencing with the date hereof or ending with the Maturity Date or any date
on which the Commitment of such Bank shall be terminated). All Facility Fees
shall be computed on the basis of the actual number of days elapsed in a year
of 360 days. The Facility Fee due to each Bank shall commence to accrue on
the date hereof and shall cease to accrue on the earlier of the Maturity Date
and the termination of the Commitment of such Bank as provided herein.
(c) In the event that the Borrower elects to extend the Maturity Date in
accordance with Section 2.21 and all of the Banks consent to such extension,
Borrower agrees to pay each Bank, through the Administrative Agent a fee (the
"Extension Fee") equal to one-quarter percent (0.25%) of the Commitment of
such Bank on or before the Current Maturity Date.
(d) The Borrower agrees to pay the Administrative Agent, for its own
account, the fees provided for in the Fee Letter (the "Administration Fees")
at the times provided therein.
(e) All Fees shall be paid on the dates due, in immediately available
funds, to the Administrative Agent for distribution, if and as appropriate,
among the Banks. Once paid, none of the Fees shall be refundable under any
circumstances.
SECTION 2.6 NOTES; REPAYMENT OF LOANS. The Loans made by each Bank shall
be evidenced by a single Note duly executed on behalf of the Borrower, dated
the date of said Bank's Commitment, in substantially the form attached hereto
as Exhibit "B" with the blanks appropriately filled, payable to the order of
such Bank in a principal amount equal to the Commitment of such Bank. The
outstanding principal balance of each Loan, as evidenced by the applicable
Note, shall be payable on the Maturity Date. Each Note shall bear interest
from the
-20-
date thereof on the outstanding principal balance thereof as set forth in
Section 2.7. Each Bank shall, and is hereby authorized by the Borrower to,
endorse on the schedule attached to the Note held by such Bank (or on a
continuation of such schedule attached to each such Note and made a part
thereof), or otherwise to record in such Bank's internal records, an
appropriate notation evidencing the date and amount of each Loan of such
Bank, each payment or prepayment of principal of any Loan and the other
information provided for on such schedule; PROVIDED, HOWEVER, that the
failure of any Bank to make such a notation or any error therein shall not in
any manner affect the obligation of the Borrower to repay the Loans made by
such Bank in accordance with the terms of the relevant Note.
SECTION 2.7 INTEREST ON LOANS.
(a) Subject to the provisions of Sections 2.8 and 2.9, each
Eurodollar Loan shall bear interest (computed on the basis of the actual
number of days elapsed over a year of 360 days) at a rate per annum equal to
the LIBO Rate for the Interest Period in effect for such Loan plus the
Applicable Margin. Interest on each Eurodollar Loan shall be payable on each
applicable Interest Payment Date. The LIBO Rate for each Interest Period
shall be determined by the Administrative Agent, and such determination shall
be conclusive absent manifest error. The Administrative Agent shall promptly
advise the Borrower and each Bank, as appropriate, of such determination.
(b) Subject to the provisions of Sections 2.8 and 2.9, each
Variable Loan shall bear interest (computed on the basis of the actual number
of days elapsed over a year of 360 days) at a rate per annum equal to the
Variable Rate. Interest on each Variable Loan shall be payable on each
applicable Interest Payment Date. The Variable Rate shall be determined by
the Administrative Agent, and such determination shall be conclusive absent
manifest error. The Administrative Agent shall promptly advise the Borrower
and each Bank of such determination.
SECTION 2.8 DEFAULT INTEREST.
(a) If the Borrower shall default in the payment of the principal
of or interest on any Loan or any other amount becoming due hereunder,
whether by scheduled maturity, notice of prepayment, acceleration or
otherwise, the Borrower shall on demand from time to time pay interest, to
the extent permitted by law, on such defaulted amount up to (but not
including the date of actual payment (after as well as before judgment) at a
rate per annum (computed as provided in Section 2.7(b)) equal to the interest
rate then in effect plus four percent (4.0%).
(b) In the event a payment is made in excess of fifteen (15) days
after it is due, a late fee equal to four percent (4%) of the late payment
will be charged.
SECTION 2.9 ALTERNATE RATE OF INTEREST. In the event, and on each
occasion, that on the day two Business Days prior to the commencement of any
Interest Period for a Eurodollar Loan the Administrative Agent shall have
determined that dollar deposits in the principal amounts of
-21-
said Eurodollar Loan are not generally available in the London interbank
market, or that the rates at which such dollar deposits are being offered
will not adequately and fairly reflect the cost to Banks holding a majority
of the Total Commitment of making or maintaining its Eurodollar Loan during
such Interest Period, or that reasonable means do not exist for ascertaining
the LIBO Rate, the Administrative Agent shall give immediate telecopy notice
of such determination to the Borrower and the Banks. In the event of any
such determination, until the Administrative Agent shall have advised the
Borrower and the Banks that the circumstances giving rise to such notice no
longer exist, any request by the Borrower for a Eurodollar Borrowing Loan to
Section 2.3 shall be deemed to be a request for a Variable Loan. The basis
for each such determination by the Administrative Agent hereunder shall be
explained in reasonable detail in the aforesaid notice to the Borrower and
the Banks and shall be conclusive absent manifest error.
SECTION 2.10 TERMINATION AND REDUCTION OF COMMITMENTS.
(a) The Commitments shall be automatically terminated on the
Maturity Date.
(b) Upon at least three Business Days' prior irrevocable written
or telecopy notice to the Administrative Agent, the Borrower may at any time
in whole permanently terminate, or from time to time in part permanently
reduce the Total Commitment, PROVIDED, HOWEVER, that each partial reduction
of the Total Commitment shall be in an integral multiple of the Minimum
Additional Amount and in a minimum principal amount of the Minimum Amount;
and PROVIDED FURTHER, that the Borrower shall not be permitted to terminate
or reduce the Total Commitment if, as a result, the aggregate principal
amount of all Loans outstanding hereunder would exceed the Total Commitment.
(c) Each reduction in the Commitments hereunder shall be made
ratably among the Banks in accordance with their respective Commitments. The
Borrower shall pay to the Administrative Agent for the account of the Banks,
on the date of each termination or reduction, the Facility Fees on the amount
of the Commitments so terminated or reduced accrued through the date of such
termination or reduction.
SECTION 2.11 CONVERSION AND CONTINUATION OF LOANS. The Borrower shall
have the right at any time upon prior irrevocable notice to the
Administrative Agent (i) not later than 9:30 a.m., Arizona time, on the day
of conversion, to convert any Eurodollar Loan into a Variable Loan, (ii) not
later than 9:30 a.m., Arizona time, three Business Days prior to conversion
or continuation, to convert any Variable Loan into a Eurodollar Loan or to
continue any Eurodollar Loan as a Eurodollar Loan for an additional Interest
Period, and (iii) not later than 9:30 a.m., Arizona time, three Business Days
prior to conversion, to continue the Interest Period with respect to any
Eurodollar Loan to another permissible Interest Period, subject in each case
to the following:
(a) Each conversion or continuation shall be made
pro rata among the Banks in accordance with the
respective principal amounts of the converted or
continued Loans;
-22-
(b) If less than all the outstanding principal
amount of any Loans shall be converted or continued,
the aggregate principal amount of such Loans converted
or continued shall be an integral multiple of the
Minimum Additional amount and not less than the Minimum
Amount;
(c) Any Eurodollar Loan may be converted
only at the end of the Interest Period applicable
thereto;
(d) Any portion of a Eurodollar Loan which has
not been converted into or continued as a Eurodollar
Loan shall be automatically converted at the end of the
Interest Period in effect for such Loan into a Variable
Loan.
Each notice pursuant to this Section 2.11 shall be irrevocable and shall
refer to this Credit Agreement and specify (i) the identity and amount of the
Loan that the Borrower requests be converted or continued, (ii) whether such
Loan is to be converted to or continued as a Eurodollar Loan, or a Variable
Loan, (iii) if such notice requests a conversion, the date of such conversion
(which shall be a Business Day) and (iv) if such Loan is to be converted to
or continued as a Eurodollar Loan, the Interest Period with respect thereto.
If no Interest Period is specified in any such notice with respect to any
conversion to or continuation as a Eurodollar Loan, the Borrower shall be
deemed to have selected an Interest Period of one month's duration. The
Administrative Agent shall advise the other Banks of any notice given
pursuant to this Section 2.11 and of each Bank's portion of any converted or
continued Loan. If the Borrower shall not have given notice in accordance
with this Section 2.11 to continue any Loan into a subsequent Interest Period
(and shall not otherwise have given notice in accordance with this Section
2.11 to convert such Loan), such Loan shall, at the end of the Interest
Period applicable thereto (unless repaid pursuant to the terms hereof),
automatically be continued as a Variable Loan.
SECTION 2.12 PREPAYMENT.
(a) The Borrower shall have the right at any time and from time to
time to prepay any Loan, in whole or in part, upon one Business Day's written
or telecopy notice (or telephone notice promptly confirmed by written or
telecopy notice) to the Administrative Agent; PROVIDED, HOWEVER, that each
partial prepayment shall be in an amount which is an integral multiple of the
Minimum Additional Amount and not less than the Minimum Amount.
(b) On the date of any termination or reduction of the Commitments
pursuant to Section 2.10 or 2.20, the Borrower shall pay or prepay an amount
of the Loans such that the aggregate principal amount of the Loans
outstanding will not exceed the Total Commitment after giving effect to such
termination or reduction.
(c) Each notice of prepayment shall specify the prepayment
date and the principal amount of each Loan (or portion thereof) to be
prepaid, shall be irrevocable and shall commit the Borrower to prepay such
Loan (or portion thereof) by the amount stated therein on
-23-
the date stated therein. All prepayments under this Section 2.12 shall be
subject to Section 2.15 but otherwise without premium or penalty. All
prepayments under this Section 2.12 shall be accompanied by interest on the
amount being prepaid to the date of payment.
SECTION 2.13 RESERVE REQUIREMENTS; CHANGE IN CIRCUMSTANCES.
(a) Notwithstanding any other provision herein, if after the date
of this Credit Agreement any change in applicable law or regulation (either
by way of changes in existing laws or regulations or the introductions of new
laws or regulations) or in the interpretation or administration thereof by
any Governmental Authority charged with the interpretation or administration
thereof (whether or not having the force of law) shall change the basis of
taxation of payments to any Bank of the principal of or interest on any
Eurodollar Loan made by such Bank, Fees or other amounts payable hereunder
(other than changes in respect of taxes imposed on the net income of such
Bank), or shall impose, modify or deem applicable any reserve, special
deposit or similar requirement against assets of, deposits with or for the
account of or credit extended by such Bank, including without limitation any
reserve requirement that may be applicable to "eurocurrency liabilities"
under and as defined in Regulation D, or shall impose on such Bank or the
London interbank market any other condition affecting this Credit Agreement
or any Eurodollar Loan made by such Bank, and the result of any of the
foregoing shall be to increase the cost to such Bank of making or maintaining
any Eurodollar Loan or to reduce the amount of any sum received or receivable
by such Bank hereunder or under the Notes (in respect of Eurodollar Loans
only), whether of principal, interest or otherwise, by an amount deemed by
such Bank in good faith to be material, then, subject to Section 2.20, the
Borrower will pay to such Bank upon demand such additional amount or amounts
as will compensate such Bank for such additional costs incurred or reduction
suffered.
(b) If any Bank shall have determined that the adoption after the
date hereof of any law, rule, regulation or guideline regarding capital
adequacy, or any change after the date hereof in any of the foregoing or in
the interpretation or administration of any of the foregoing by any
Governmental Authority, central bank or comparable agency charged with the
interpretation or administration thereof, or compliance by any Bank (or any
Lending Office of such Bank) or any Bank's holding company with any request
or directive promulgated after the date hereof regarding capital adequacy
(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 such Bank's capital or on the capital of such Bank's
holding company, if any, as a consequence of this Credit Agreement or the
Loans made by such Bank pursuant hereto to a level below that which such Bank
or such Bank's holding company could have achieved but for such adoption,
change or compliance (taking into consideration such Bank's policies and the
policies of such Bank's holding company with respect to capital adequacy) by
an amount deemed by such Bank in good faith to be material, then, subject to
Section 2.20, from time to time the Borrower shall pay to such Bank such
additional amount or amounts as will compensate such Bank or such Bank's
holding company for any such reduction suffered.
-24-
(c) A certificate of a Bank setting forth such amount or amounts as
shall be necessary to compensate such Bank or the holding company of either
as specified in paragraph (a) or (b) above, as the case may be, and setting
forth in reasonable detail the manner in which such amount or amounts shall
have been determined shall be delivered to the Borrower and shall be
conclusive absent manifest error. The Borrower shall pay each Bank the
amount shown as due on any such certificate delivered by it within 10 days
after its receipt of the same.
(d) Failure on the part of any Bank to demand compensation for any
increased costs or reduction in amounts received or receivable or reduction
in return on capital with respect to any period shall not constitute a waiver
of such Bank's right to demand compensation with respect to such period or
any other period; PROVIDED that each Bank will agree to submit claims under
this Section 2.13 only if it is the general policy of such Bank to make such
claims under comparable provisions of credit agreements with other similarly
situated borrowers; PROVIDED FURTHER that no Bank shall be entitled to
compensation under this Section 2.13 for any costs incurred or reduction
suffered with respect to any date unless such Bank shall have notified the
Borrower that it will demand compensation for such costs or reduction under
paragraph (c) above not more than 90 days after the later of (i) such date
and (ii) the date on which such Bank becomes aware or should have become
aware in the exercise of prudent banking practices of the event giving rise
to such costs or reduction. Notwithstanding any other provision of this
Section 2.13, no Bank shall demand compensation for any increased cost of
reduction referred to above if it shall not at the time be the general policy
or practice of such Bank to demand such compensation in similar circumstances
under comparable provisions of other credit agreements, if any. The
protection of this Section shall be available to each Bank regardless of any
possible contention of the invalidity or inapplicability of the law, rule,
regulation, guideline or other change or condition which shall have occurred
or been imposed.
(e) Without prejudice to the survival of any other agreement
contained herein, the agreements and obligations contained in this Section
2.13 shall survive the payment in full of the principal of and interest on
all Loans made hereunder.
SECTION 2.14 CHANGE IN LEGALITY.
(a) Notwithstanding any other provision herein, if any change in
any law or regulation or in the interpretation thereof by any Governmental
Authority charged with the administration or interpretation thereof shall
make it unlawful for any Bank to make or maintain any Eurodollar Loan or to
give effect to its obligations as contemplated hereby with respect to any
Eurodollar Loan, then, subject to Section 2.20, by written notice to the
Borrower and to the Administrative Agent setting forth in reasonable detail
the relevant circumstances and the effect thereof, such Bank may:
(i) Declare that Eurodollar Loans
will not thereafter be made by such Bank
hereunder, whereupon any request by the
Borrower for a Eurodollar Loan shall, as to
such Bank only, be
-25-
deemed a request for a Variable Loan unless such
declaration shall be subsequently withdrawn; and
(ii) Require that all outstanding
Eurodollar Loans made by it be converted to
Variable Loans, in which event all such
Eurodollar Loans shall be automatically
converted to Variable Loans as of the
effective date of such notice as provided in
paragraph (b) below.
In the event any Bank shall exercise its rights under (i) or (ii) above, all
payments and prepayments of principal which would otherwise have been applied
to repay the Eurodollar Loans that would have been made by such Bank or the
converted Eurodollar Loans of such Bank shall instead be applied to repay the
Variable Loans made by such Bank in lieu of, or resulting from the conversion
of, such Eurodollar Loans.
(b) For purposes of this Section 2.14, a notice to the Borrower by
any Bank shall be effective as to each Eurodollar Loan, if lawful, on the
last day of the Interest Period currently applicable to such Eurodollar Loan;
in all other cases such notice shall be effective on the date of receipt by
the Borrower.
(c) Each Bank shall use its best efforts to give prompt
notification to the Administrative Agent and the Borrower of any event or
prospective event which will give rise to the operation of paragraph (a) of
this Section.
SECTION 2.15 INDEMNITY. The Borrower shall indemnify each Bank on
demand against any Redeployment Loss (defined below, which shall not include
lost profit) or expense which such Bank may sustain or incur with respect to
a Eurodollar Loan as a consequence of (a) any failure by the Borrower to
fulfill on the date of any Borrowing hereunder the applicable conditions set
forth in Article IV, (b) any failure by the Borrower to borrow, continue or
convert any Loan hereunder after irrevocable notice of such borrowing,
continuation or conversion has been given pursuant to Section 2.3 or 2.11, as
the case may be, (c) any payment, prepayment or conversion of a Eurodollar
Loan required by any other provision of this Credit Agreement or otherwise
made or deemed made on a date other than the last day of the Interest Period
applicable thereto, (d) any default in payment or prepayment of the principal
amount of any Loan or any part thereof or interest accrued thereon, as and
when due and payable (at the due date thereof, whether by scheduled maturity,
acceleration, irrevocable notice of prepayment or otherwise) or (e) the
occurrence of any Default or Event of Default, including without limitation,
in each such case, any loss or expense sustained or incurred or to be
sustained or incurred in liquidating or employing deposits from third parties
acquired to effect or maintain such Loan or any part thereof as a Eurodollar
Loan. "Redeployment Loss" shall mean, in each circumstance, the amount equal
to any losses, costs, or expenses that a Bank may reasonably incur as a
result of such prepayment, including, without limitation, any loss, cost, or
expense incurred by reason of the liquidation of reemployment of deposits or
other funds acquired by such Bank to fund or maintain the Loan.
-26-
A certificate of any Bank setting forth in reasonable detail any amount or
amounts which such Bank is entitled to receive pursuant to this Section and
setting forth in reasonable detail the manner in which such amounts shall
have been determined shall be delivered to the Borrower and shall be
conclusive absent manifest error. Without prejudice to the survival of any
other agreement contained herein, the agreements and obligations contained in
this Section 2.15 shall survive the payment in full of the principal of and
interest on all Loans made hereunder.
SECTION 2.16 PRO RATA TREATMENT. Except as required under Section
2.14 or permitted by Section 2.20, each Borrowing, each payment or prepayment
of principal of any Loan, each payment of interest on the Loans, each payment
of the Commitment Fee, Extension Fee and Facility Fees, each reduction of the
Commitments and continuation of Eurodollar Loans for a successive Interest
Period and conversion of any Loan into a Loan of the other Type, shall be
allocated pro rata among the Banks in accordance with their respective
Commitments (or, if such Commitments shall have expired or been terminated,
in accordance with the respective principal amounts of their outstanding
Loans). Each Bank agrees that in computing such Bank's portion of any
Borrowing to be made hereunder, the Administrative Agent may, in its
discretion, round each Bank's percentage of such Borrowing to the next higher
or lower whole dollar amount.
SECTION 2.17 SHARING OF SETOFFS. Each Bank agrees that if it shall,
through the exercise of a right of banker's lien with the consent of the
Required Banks, setoff or counterclaim against the Borrower, or pursuant to a
secured claim under Section 506 of Title 11 of the United States Code or
other security or interest arising from, or in lieu of, such secured claim,
received by such Bank under any applicable bankruptcy, insolvency or other
similar law or otherwise, or by any other means, obtain payment (voluntary or
involuntary) in respect of any Loan or Loans as a result of which the unpaid
principal portion of the Loans of such Bank shall be proportionately less
than the unpaid principal portion of the Loans of any other Bank, it shall be
deemed simultaneously to have purchased from such other Bank at face value,
and shall promptly pay to such other Bank the purchase price for, a
participation in the Loans of such other Bank, so that the aggregate unpaid
principal amount of the Loans and participations in the Loans held by each
Bank shall be in the same proportion to the aggregate unpaid principal amount
of all Loans then outstanding as the principal amount of its Loans prior to
such exercise of banker's lien, setoff or counterclaim or other event was to
the principal amount of all Loans outstanding prior to such exercise of
banker's lien, setoff or counterclaim or other event; PROVIDED, HOWEVER,
that, if any such purchase or purchases or adjustments shall be made pursuant
to this Section 2.17 and the payment giving rise thereto shall thereafter be
recovered, such purchase or purchases or adjustments shall be rescinded to
the extent of such recovery and the purchase price or prices or adjustment
restored without interest. The Borrower expressly consents to the foregoing
arrangements and agrees that any Bank holding a participation in a Loan
deemed to have been so purchased may exercise any and all rights of banker's
lien, setoff or counterclaim with respect to any and all moneys owing by the
Borrower to such Bank by reason thereof as fully as if such Bank had made a
Loan directly to the Borrower in the amount of such participation.
-27-
SECTION 2.18 PAYMENTS.
(a) The Borrower shall make each payment (including without
limitation principal of or interest on any Loan or any Fees or other amounts)
hereunder and under any other Loan Document no later than 12:00 noon, Arizona
time, on the date when due in dollars to the Administrative Agent at its
offices at 000 Xxxxx Xxxxxxx Xxxxxx, Xxxxxxx, Arizona, in immediately
available funds.
(b) Whenever any payment (including without limitation principal
of or interest on any Loan or any Fees or other amounts) hereunder or under
any other Loan Document shall become due, or otherwise would occur, on a day
that is not a Business Day, such payment may be made on the next succeeding
Business Day, and such extension of time shall in such case be included in
the computation of interest or Fees, if applicable.
SECTION 2.19 TAXES.
(a) All payments by the Borrower under this Credit Agreement shall
be made without setoff or counterclaim and in such amounts as may be
necessary in order that all such payments after deduction or withholding for
or on account of any present or future taxes, levies, imposts, duties,
withholdings or other charges of whatsoever nature and all liabilities with
respect thereto, other than any taxes on or measured by the gross or net
income of a Bank pursuant to (i) the income and/or franchise tax laws of the
jurisdictions in which such Bank is incorporated or organized or in which the
principal office of such Bank or the branch that is a party to this Credit
Agreement of that Bank is located, and (ii) the income and/or franchise tax
laws of the jurisdictions in which the Lending Office or the Eurodollar
Lending Office of that Bank are then located (all such nonexcluded taxes,
levies, imposts, duties, withholdings and liabilities, net of tax credits
available with respect to such excluded taxes as a result of such
non-excluded taxes, levies, imposts, duties, withholdings and liabilities,
being hereinafter referred to as "Taxes"), shall not be less than the amounts
otherwise specified to be paid by the Borrower to or for the account of the
Administrative Agent or Bank (or any transferee or assignee (each, a
"Transferee")) under this Credit Agreement. Upon request of the Borrower in
writing, each Bank shall designate a different Lending Office or Eurodollar
Lending Office, as the case may be, if such designation will avoid the
imposition of Taxes and if such designation will not, in the sole judgment of
such Bank, be otherwise financially disadvantageous to such Bank. With
respect to each deduction or withholding for or on account of any Taxes of
the Administrative Agent or any Bank (or Transferee), Borrower shall promptly
(and in any event not later than 45 days thereafter) furnish to such
Administrative Agent or Bank (or Transferee) a receipt evidencing payment
thereof.
(b) In addition, the Borrower agrees to pay any present or future
stamp or documentary taxes or any other excise or property taxes, charges or
similar levies which arise from any payment made hereunder to the Banks or
from the execution, delivery or registration of, or otherwise with respect
to, this Credit Agreement or any other Loan Document (hereinafter referred to
as "Stamp Taxes"). By making a Loan hereunder, each Bank that is organized
outside
-28-
the United States represents and warrants that as of the Closing Date, it is
not aware of any Stamp Tax imposed by the jurisdiction in which it is
incorporated that applies to this Credit Agreement or any payment made to
such Bank hereunder.
(c) The Borrower will reimburse each Bank (or Transferee) and
the Administrative Agent for the full amount of Taxes and Stamp Taxes
(including without limitation any Taxes or Stamp Taxes imposed by any
jurisdiction on amounts payable under this Section 2.19) paid by such Bank
(or Transferee) or the Administrative Agent, as the case may be, and any
liability (including without limitation penalties, interest and expenses)
arising therefrom or with respect thereto, whether or not such Taxes or Stamp
Taxes were correctly or legally asserted by the relevant taxing authority or
other Governmental Authority. Such indemnification shall be made within 30
days after the date any Bank (or Transferee) or the Administrative Agent, as
the case may be, makes written demand therefor. If a Bank, as the result of
any Tax with respect to which the Borrower is required to make a payment
pursuant to Section 2.19 shall realize a tax credit or refund in its country
or other jurisdiction of incorporation or organization or in the jurisdiction
in which its principal office or Lending Office or Eurodollar Lending Office
is then located, which tax credit or refund would not have been realized but
for the Borrower's payment of such Tax, such Bank shall pay to the Borrower
an amount equal to such tax credit or refund (to the extent of amounts that
have been paid by the Borrower under Section 2.19 with respect to such credit
or refund) net of all out-of-pocket expenses of such Bank; PROVIDED that the
Borrower, upon the request of the Bank, agrees to return such credit or
refund (plus penalties, interest or other charges) to such Bank in the event
such Bank is required to repay such credit or refund to the relevant taxing
authority. Any amount required to be calculated pursuant to this Section
2.19(c) shall be calculated in good faith by the Bank (or Transferee) or the
Administrative Agent, and such calculation shall be conclusive and binding
upon the parties hereto.
(d) Without prejudice to the survival of any other agreement
contained herein, the agreements and obligations contained in this Section
2.19 shall survive the payment in full of the principal of and interest on
all Loans made hereunder.
(e) Each Bank (or Transferee) that is organized outside the United
States (i) on or before the date it becomes a party to this Credit Agreement
and (ii) with respect to each Lending Office or Eurodollar Lending Office
located outside the United States of such Bank (or Transferee), on or before
the date such office or branch becomes a Lending Office or Eurodollar Lending
Office, shall deliver to the Borrower and the Administrative Agent such
certificates, documents or other evidence, as required by the Code or
Treasury Regulations issued pursuant thereto, including Internal Revenue
Service Form 1001 or Form 4224, properly completed and duly executed by such
Bank (or Transferee) establishing that payments received hereunder are (i)
not subject to withholding under the Code because such payment is effectively
connected with the conduct by such Bank (or Transferee) of a trade or
business in the United States or (ii) totally exempt from United States
Federal withholding tax under a provision of an applicable tax treaty. In
addition, each such Bank (or Transferee) shall, if legally able to do so,
thereafter deliver such certificates, documents or other evidence from time
to time establishing that payments received
-29-
hereunder are not subject to such withholding upon receipt of a written
request therefor from the Borrower or the Administrative Agent. Unless the
Borrower and the Administrative Agent have received forms or other documents
satisfactory to them indicating that payments hereunder or under the Notes
are not subject to United States Federal withholding tax, the Borrower or the
Administrative Agent shall withhold such taxes from such payments at the
applicable statutory rate.
(f) The Borrower shall not be required to pay any additional
amounts to any Bank (or Transferee) or the Administrative Agent in respect to
United States Federal withholding tax pursuant to paragraph (a) or (c) above
if the obligation to pay such additional amounts would not have arisen but
for a failure by such Bank (or Transferee) or the Administrative Agent to
deliver the certificates, documents or other evidence specified in the
preceding paragraph (e) unless such failure is attributable to (i) a change
in applicable law, regulation or official interpretation thereof or (ii) an
amendment or modification to or a revocation of any applicable tax treaty or
a change in official position regarding the application or interpretation
thereof, in each case on or after the date such Bank (or Transferee) or the
Administrative Agent becomes a party to this Credit Agreement (or, if
applicable, on or after the date a Lending Office or Eurodollar Lending
Office of such Bank (or Transferee) or Administrative Agent became a Lending
Office or Eurodollar Lending Office hereunder).
(g) Nothing contained in this Section 2.19 shall require any
Bank (or Transferee) or the Administrative Agent to make available any of its
tax returns (or any other information relating to its taxes) which it deems
to be confidential.
SECTION 2.20 TERMINATION OR ASSIGNMENT OF COMMITMENTS UNDER CERTAIN
CIRCUMSTANCES.
(a) If any Bank (or Transferee) or the Administrative Agent claims
any additional amounts payable pursuant to Section 2.13 or Section 2.19 or
exercises its rights under Section 2.14, it shall (consistent with legal and
regulatory restrictions) (i) promptly notify the Borrower (through the
Administrative Agent) of the circumstances giving rise to such additional
amounts or the exercise of such rights and (ii) file any certificate or
document requested by the Borrower or change the jurisdiction of its
applicable Lending Office or take any other action if the making of such a
filing or change or the taking of such action would avoid the need for or
reduce the amount of any such additional amounts which may thereafter accrue
or avoid the circumstances giving rise to such exercise and would not, in the
sole determination of such Bank (or Transferee), be otherwise disadvantageous
to such Bank (or Transferee).
(b) In the event that any Bank shall have delivered a notice or
certificate pursuant to Section 2.13 or 2.14, or the Borrower shall be
required to make additional payments to any Bank under Section 2.19, the
Borrower shall have the right, at its option and own expense, upon notice to
such Bank and the Administrative Agent, (i) in the case of Sections 2.13 or
2.19 only, to terminate the Commitment of such Bank or (ii) in all cases
described in this paragraph,
-30-
to require such Bank to transfer and assign without recourse (in accordance
with and subject to the restrictions contained in Section 9.4) all its
interests, rights and obligations under this Credit Agreement to another
financial institution reasonably acceptable to the Administrative Agent which
shall assume such obligations; PROVIDED that (i) no such termination or
assignment shall conflict with any law, rule or regulation or order of any
Governmental Authority and (ii) the Borrower or the assignee, as the case may
be, shall pay to the affected Bank in immediately available funds on the date
of such termination or assignment the principal of and interest accrued to
the date of payment on the Loans made by it hereunder and all other amounts
accrued for its account or owed to it hereunder.
(c) Each Bank represents and warrants to the Borrower that as
of the date hereof it is not aware of any claims available to it under
Section 2.13 or 2.14 or any circumstances which it has determined will enable
it to make any such claims.
SECTION 2.21 EXTENSION. At the option of Borrower, the Maturity Date
may be extended beyond the Current Maturity Date subject to the following
terms and conditions:
(a) Borrower (i) on or after ninety (90) days,
but no later than thirty (30) days, prior to the
Anniversary Date shall have given Administrative Agent
written notice that Borrower desires such extension,
and (ii) shall have paid to Administrative Agent in
cash or immediately available funds on or before the
commencement of the extension period, the Extension
Fee;
(b) No Event of Default and no event, that with
the giving of notice or the passage of time, or both,
would be an Event of Default, shall have occurred and
be continuing on the date of Borrower's notice of
extension to Administrative Agent or on the
commencement of the extension period; and
(c) All the Banks shall have consented to
such extension in their sole and absolute discretion.
-31-
ARTICLE III
REPRESENTATIONS AND WARRANTIES
The Borrower hereby represents and warrants to the Administrative Agent
and the Banks as follows:
SECTION 3.1 ORGANIZATION; POWERS, ETC. (a) The Borrower is duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its organization; (b) the Borrower has the power and
authority to own its property and assets and to carry on its business as now
conducted and is qualified to do business in every jurisdiction where such
qualification is required except where the failure to so qualify would not
result in a material adverse effect on the business, assets, operations or
condition (financial or otherwise) of the Borrower; (c) the Borrower has the
corporate power to execute, deliver and perform this Credit Agreement and the
other Loan Documents and to borrow hereunder; (d) the General Partner is duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its organization; (e) the General Partner has the power and
authority to own its property and assets and to carry on its business as now
conducted and is qualified to do business in every jurisdiction where such
qualification is required except where the failure to so qualify would not
result in a material adverse effect on the business, assets, operations or
condition (financial or otherwise) of the General Partner; (f) the General
Partner has the corporate power to execute, deliver and perform the Guaranty
and the other Loan Documents; and (g) the General Partner is qualified as a
"real estate investment trust" under Section 856, ET SEQ., of the Code.
SECTION 3.2 AUTHORIZATION, ETC. The execution, delivery and
performance by the Borrower of this Credit Agreement, the Borrowings
hereunder, and the issuance, execution and delivery of the Notes: (a) have
been duly authorized by all requisite partnership action; (b) will not
violate (i) any provision of law, any order of any court, or any rule,
regulation or order of any other agency of government, (ii) the partnership
agreement of the Borrower or (iii) any provision of any material indenture,
agreement or other instrument to which the Borrower is a party, or by which
the Borrower or any of its properties or assets are or may be bound; (c) will
not be in conflict with, result in a breach of or constitute (alone, with
notice, with lapse of time, or with any combination of these factors) a
default under any indenture, agreement or other instrument referred to in
(b)(iii) above; and (d) will not result in the creation or imposition of any
Lien upon any property or assets of the Borrower that is not a Permitted
Lien. Except for filings which may be required under the 1934 Act, no
registration with or consent or approval of, or other action by, any
Governmental Authority is required in connection with the execution, delivery
and performance of this Credit Agreement, the execution and delivery of the
Notes or the Borrowings hereunder.
-32-
SECTION 3.3 ENFORCEABILITY.
(a) This Credit Agreement constitutes, and each other Loan
Document when duly executed and delivered by the Borrower will constitute,
the legal, valid and binding obligation of the Borrower, enforceable in
accordance with its terms, subject, as to the enforcement of remedies, to
applicable bankruptcy, reorganization, insolvency, moratorium and other laws
of general applicability relating to or affecting creditors' rights from time
to time in effect and to general principles of equity (regardless of whether
such enforcement is considered in a proceeding at law or in equity).
(b) The Guaranty constitutes, and each other Loan Document when,
to the extent applicable, duly executed and delivered by the General Partner
will constitute, the legal, valid and binding obligation of the General
Partner, enforceable in accordance with its terms, subject, as to the
enforcement of remedies, to applicable bankruptcy, reorganization,
insolvency, moratorium and other laws of general applicability relating to or
affecting creditors' rights from time to time in effect and to general
principles of equity (regardless of whether such enforcement is considered in
a proceeding at law or in equity).
SECTION 3.4 FINANCIAL CONDITION AND INFORMATION. The General Partner
has heretofore furnished to each of the Banks copies of (i) its consolidated
balance sheet as of the Current Financial Statement Date, and its related
consolidated statements of income, stockholder's equity and cash flows for
the year ended as of the Current Financial Statement Date, including without
limitation the related notes, audited by and including the opinion of the
independent public accountants for the General Partner, and (ii) its Annual
Report and its Form 10-K for the fiscal year ended as of the Current
Financial Statement Date. Such financial statements fairly present the
financial condition of the General Partner as of the date thereof and the
results of the operations and changes in cash flows of the General Partner
for the periods covered thereby. All such financial statements, including
related schedules and notes thereto, (consolidated to the extent applicable)
have been prepared in accordance with GAAP.
SECTION 3.5 NO MATERIAL ADVERSE CHANGE. Since the Current Financial
Statement Date, there has been no material adverse change in the respective
business, operations, assets or condition (financial or otherwise) of the
Borrower or of the General Partner (except as disclosed in the financial
statements referred to in Section 3.4).
SECTION 3.6 LITIGATION. Except as set forth in the General Partner
SEC filing on Form 10-K for the year ended as of the Current Financial
Statement Date, there are no actions, suits or proceedings at law or in
equity or by or before any governmental instrumentality or other agency now
pending or, to the knowledge of the Borrower, threatened against the Borrower
or the General Partner or any property or rights of the Borrower or the
General Partner which would be reasonably likely in the aggregate to (i)
materially impair the ability of the Borrower to perform its obligations
under this Credit Agreement or the Notes or materially impair the ability of
the Borrower or the General Partner to carry on their respective businesses
substantially as now being
-33-
conducted or (ii) result in any material adverse change in their respective
businesses, assets, operations, or condition (financial or otherwise) of the
Borrower or the General Partner.
SECTION 3.7 FEDERAL RESERVE REGULATIONS.
(a) Neither the Borrower nor the General Partner is engaged
principally, or as one of its important activities, in the business of
extending credit for the purpose of purchasing or carrying Margin Stock.
(b) No part of the proceeds of any Loan will be used, whether
directly or indirectly, and whether immediately, incidentally or ultimately,
(i) to purchase or carry Margin Stock or to extend credit to others for the
purpose of purchasing or carrying Margin Stock or to refund indebtedness
originally incurred for such purpose, or (ii) for any purpose which entails a
violation of, or which is inconsistent with, the provisions of the
Regulations of the Board, including Regulation G, T, U or X.
SECTION 3.8 INVESTMENT COMPANY ACT. Neither the Borrower nor the
General Partner is an "investment company" or a company "controlled" by an
"investment company" within the meaning of the Investment Company Act of
1940, as amended.
SECTION 3.9 PUBLIC UTILITY HOLDING COMPANY ACT. Neither the Borrower
nor the General Partner is a "holding company," or a "Subsidiary company" of
a "holding company," or an "affiliate" of a "holding company" or of a
"Subsidiary company" of a "holding company," within the meaning of the Public
Utility Holding Company Act of 1935, as amended.
SECTION 3.10 TAX RETURNS. As of the filing date of the General
Partner's Form 10-K, Form 10-Q or Form 8-K most recently filed with the SEC,
each of the Borrower and the General Partner has duly filed or caused to be
filed all Federal, state and local tax returns which are required to have
been filed and has paid or caused to be paid all material taxes required to
be paid by it, except taxes the validity of which is being contested in good
faith by appropriate proceedings and with respect to which such reserves as
are required by GAAP have been set aside on its books.
SECTION 3.11 ERISA. As of the filing date of the General Partner's Form
10-K, Form 10-Q or Form 8-K most recently filed with the SEC, the General
Partner had no material undisclosed ERISA Liabilities under any Plans.
SECTION 3.12 TITLE TO PROPERTIES: POSSESSION. The Borrower and the
General Partner have fee simple title to, or valid leasehold interests in,
all their respective material properties and assets, subject only to
encumbrances, adverse claims and defects in title which do not involve any
risk of loss that is material to the Borrower or the General Partner. All
Unencumbered Assets are free and clear of all Liens other than those
permitted by Section 6.1. Each of the Borrower
-34-
and the General Partner has all licenses and rights necessary to enable it to
use all material technology used by it in its respective operations.
SECTION 3.13 USE OF PROCEEDS. The Borrower will use the proceeds of any
Borrowing hereunder solely for the purposes set forth in the Recitals.
SECTION 3.14 ENVIRONMENTAL AND SAFETY MATTERS. As of the filing date of
the General Partner's Form 10-K, Form 10-Q or Form 8-K most recently filed
with the SEC, the Borrower and the General Partner had no material
undisclosed environmental liabilities.
SECTION 3.15 NO DEFAULT. No event or condition has occurred and is
continuing that constitutes an Event of Default.
SECTION 3.16 SIGNIFICANT DEBT AGREEMENTS. Neither the Borrower nor the
General Partner is in default in any material respect under any Significant
Debt Agreement.
SECTION 3.17 COMPLIANCE WITH LAW. Each of the Borrower and the General
Partner is in substantial compliance with all laws, rules, regulations,
orders and decrees that are applicable to it or its respective properties.
SECTION 3.18 SURVIVAL OF REPRESENTATIONS. All representations and
warranties by the Borrower and the General Partner herein shall survive the
making of the Loans and the execution and delivery of the Notes; any
investigation at any time made by or on behalf of the Banks shall not
diminish the Banks' right to rely on the representations and warranties by
the Borrower and the General Partner herein.
SECTION 3.19 SOLVENT. Each of the Borrower (both before and after
giving effect to the Loans contemplated hereby) and the General Partner is
solvent, has assets having a fair value in excess of the amount required to
pay its respective probable liabilities on its existing debts as they become
absolute and matured, and has, and will have, access to adequate capital for
the conduct of its respective business and the ability to pay its respective
debts from time to time incurred in connection therewith as such debts mature.
SECTION 3.20 LOANS. Each request for a Loan or for the extension of any
financial accommodation by the Banks whatsoever shall constitute an
affirmation that the representations and warranties contained herein are, in
all material respects, true and correct as of the time of such request and no
Event of Default known to Borrower shall have occurred and be continuing.
-35-
ARTICLE IV
CONDITIONS TO CREDIT EVENTS
The obligations of the Banks to make Loans (the foregoing event being
called a "Credit Event") are subject to the satisfaction of the following
conditions:
SECTION 4.1 CREDIT EVENTS. On the date of each Credit Event:
(a) The Administrative Agent shall have received
in respect of each Borrowing a Borrowing Notice (in the
form of Exhibit "A") as required by Section 2.3.
(b) The representations and warranties set forth
in Article III hereof shall have been true and correct
in all material respects on the date hereof and the
representations and warranties set forth in Sections
3.1, 3.2, 3.3, 3.5, 3.6, 3.7, 3.8, 3.9, 3.10, 3.12,
3.13, 3.14, 3.15, 3.16, 3.17 and 3.19 shall be true and
correct in all material respects on and as of the date
of such Borrowing with the same effect as though made
on and as of such date, except to the extent such
representations and warranties expressly relate to an
earlier date.
(c) At the time of and immediately after
such Borrowing no Event of Default or Default shall
have occurred and be continuing and Borrower shall be
in compliance with all Financial Covenants.
Each Borrowing shall be deemed to constitute a representation and warranty by
the Borrower, and where appropriate the Guarantor, on the date of such
Borrowing as to the satisfaction of the conditions specified in paragraphs
(b) and (c) of this Section 4.1.
SECTION 4.2 FIRST CREDIT EVENT. On the Closing Date:
(a) Each Bank shall have received a duly executed
Credit Agreement and a duly executed Note complying
with the provisions of Section 2.6.
(b) The Administrative Agent and each Bank shall
have received favorable written opinions of counsel for
the Borrower and the General Partner, dated as of the
Closing Date and addressed to the Administrative Agent
and each Bank, to the effect set forth in Exhibit "D"
hereto, and the Borrower hereby instructs such counsel
to deliver such opinions to the Administrative Agent
and each Bank.
(c) The Administrative Agent and each Bank
shall have received the duly executed Guaranty from the
General Partner.
-36-
(d) All legal matters incident to this Credit
Agreement and the Credit Events hereunder shall be
reasonably satisfactory to the Banks and to counsel for
the Administrative Agent.
(f) The Administrative Agent and each Bank shall
have received the following:
(i) A copy of the certificate of
partnership, including all amendments
thereto, of Borrower, certified as of a
recent date by the Secretary of State of the
state of its organization, and a certificate
as to the good standing of the Borrower as of
a recent date, from such Secretary of State
and in every other state in which it is
qualified to do business;
(ii) A certificate of the Borrower
Representative dated the Closing Date and
certifying (A) that attached thereto is a
true and complete copy of the partnership
agreement of the Borrower as in effect on the
Closing Date and at all times since a date
prior to the date of the authorizations
described in clause (B) below, (B) that
attached thereto is a true and complete copy
of its partnership authorization authorizing
the execution, delivery and performance of
the Loan Documents and the Credit Events
hereunder, and that such authorizations have
not been modified, rescinded or amended and
are in full force and effect, (C) that the
partnership agreement of the Borrower has not
been amended since the date of the last
amendment thereto shown on the certificate of
good standing furnished pursuant to
subparagraph (i) above, and (D) as to the
incumbency and specimen signature of each
Borrower Representative executing any Loan
Document or any other document delivered in
connection herewith on behalf of the
Borrower; and
(iii) A certificate of another
Borrower Representative as to the specimen
signature of the Borrower Representative
executing the certificate pursuant to (ii)
above.
(f) The Administrative Agent and each Bank shall
have received the following:
(i) A copy of the certificate or
articles of incorporation, including all
amendments thereto, of the General Partner,
certified as of a recent date by the
Secretary of State of the state of its
organization, and a certificate as to the
good standing of the General
-37-
Partner as of a recent date, from such Secretary of
State and in every other state in which it is qualified
to do business;
(ii) A certificate of the Secretary
or Assistant Secretary of the General Partner
dated the Closing Date and certifying (A)
that attached thereto is a true and complete
copy of the Articles of Incorporation and the
by-laws of the General Partner as in effect
on the Closing Date and at all times since a
date prior to the date of the resolutions
described in clause (B) below, (B) that
attached thereto is a true and complete copy
of resolutions duly adopted by the Board of
Directors of the General Partner authorizing
the execution, delivery and performance of
the Loan Documents, the Guaranty and the
Credit Events hereunder, and that such
resolutions have not been modified, rescinded
or amended and are in full force and effect,
(C) that the certificate or articles of
incorporation of the General Partner have not
been amended since the date of the last
amendment thereto shown on the certificate of
good standing furnished pursuant to
subparagraph (i) above, and (D) as to the
incumbency and specimen signature of each
officer executing any Loan Document or any
other document delivered in connection
herewith on behalf of the General Partner;
and
(iii) A certificate of another
officer as to the incumbency and specimen
signature of the Secretary or Assistant
Secretary executing the certificate pursuant
to (ii) above.
(g) The Administrative Agent shall have
received a certificate, dated the Closing Date and
signed on behalf of the Borrower by a Borrower
Representative and of the General Partner by a
Designated Officer, confirming compliance with the
conditions precedent set forth in paragraphs (b) and
(c) of Section 4.1.
(h) The Administrative Agent shall have
received the Fee Letter and all Fees and other amounts
due and payable hereunder or under the other Loan
Documents on or prior to the Closing Date.
-38-
ARTICLE V
AFFIRMATIVE COVENANTS
The Borrower and, to the extent applicable, the General Partner each
covenants and agrees that, so long as this Credit Agreement shall remain in
effect or the principal of or interest on any Loan or any Fee or any other
expenses or amounts payable hereunder shall be unpaid, unless the Required
Banks shall otherwise consent in writing, it will:
SECTION 5.1 EXISTENCE. Do or cause to be done all things necessary
to preserve, renew and keep in full force and effect its existence (except as
expressly permitted by Section 6.2), material rights, licenses, permits and
franchises material to the conduct of their respective business, except where
the failure to preserve or maintain such material rights, licenses, permits
and franchises would not have a material adverse effect on the respective
business, assets, operations or conditions (financial or otherwise) of the
Borrower or the General Partner; comply in all material respects with all
applicable laws, rules, regulations, and orders (except that force majeure
events will excuse noncompliance so long as noncompliance would not
materially impair the creditworthiness of the Borrower or that of the General
Partner) whether now in effect or hereafter enacted where the failure to so
comply would be reasonably likely to have a material adverse effect on the
business, assets, operations or condition (financial or otherwise) of the
Borrower of that of the General Partner; and, at all times maintain and
preserve all material property required for the conduct of their respective
business as presently or hereafter conducted.
SECTION 5.2 INSURANCE. Maintain adequate insurance by financially
sound and reputable insurers rated A- or better by Best Rating Service of all
properties of a character usually insured by companies engaged in the same or
a similar business operating on a similar economic scale in the same vicinity
against loss or damage resulting from fire, in California earthquake, rent
loss or other risks insured against by extended coverage and of the kind
customarily insured against by such companies, and maintain in full force and
effect public liability insurance against claims for personal injury, death
or property damage occurring upon, in, about or in connection with the use of
any properties occupied or controlled by it in such amounts as shall be
customary among companies engaged in the same or similar businesses and
similarly situated and maintain such other insurance as may be required by
law; PROVIDED, HOWEVER, that nothing in this Section 5.2 shall preclude the
Borrower or the General Partner from being self-insured to the extent
customary with companies in the same or similar business.
SECTION 5.3 TAXES. Pay and discharge promptly any taxes, assessments
and governmental charges or levies imposed upon it or upon its income or
profits or in respect of its material property (real or personal), before the
same shall become delinquent; PROVIDED, HOWEVER, that neither the Borrower
nor the General Partner shall be required to pay and discharge or to cause to
be paid and discharged any such obligation, tax, assessment, charge, levy or
claim so long as the validity or amount thereof shall be contested in good
faith by appropriate proceedings and such reserves as are required by GAAP
with respect thereto have been set aside on its books.
-39-
SECTION 5.4 FINANCIAL STATEMENTS; REPORTS, ETC. Furnish to the
Administrative Agent:
(a) ANNUAL STATEMENTS OF THE GENERAL PARTNER:
Within ninety (90) days after the end of each fiscal
year, (i) a consolidated balance sheet of the General
Partner as of the close of such fiscal year and the
related consolidated statement of income and the
results of operations during such year, (ii) a
statement of stockholder's equity of the General
Partner as of the close of such fiscal year, and (iii)
a consolidated statement of cash flows of the General
Partner for such fiscal year, in each case audited and
setting forth in comparative form the figures for the
preceding fiscal year, all in reasonable detail and
accompanied by an unqualified opinion thereon of
independent public accountants of recognized national
standing selected by the General Partner and acceptable
to the Administrative Agent, to the effect that such
financial statements have been prepared in accordance
with GAAP (except for changes in which such accountants
concur) and that the examination of such accounts in
connection with such financial statements has been made
in accordance with generally accepted auditing
standards and, accordingly, includes such tests of the
accounting records and such other auditing procedures
as were considered necessary in the circumstances.
(b) QUARTERLY STATEMENTS OF THE GENERAL PARTNER:
Within forty-five (45) days after the end of each of
the first three fiscal quarters of each fiscal year of
the General Partner, an unaudited (i) balance sheet,
(ii) statement of income and (iii) statement of cash
flows, each showing the financial condition of the
General Partner as of the end of such quarter and the
results of operations for the then-elapsed portion of
the fiscal year, certified by a Financial Officer of
the General Partner as being correct and complete and
as presenting fairly the financial position and results
of operations of the General Partner in accordance with
GAAP, in each case subject to normal year-end
adjustments.
(c) COMPLIANCE CERTIFICATE: Concurrently
with each delivery of the statements referred to in (a)
and (b) above, a certificate, in the form of Exhibit
"F" attached hereto (the "Compliance Certificate"), of
a Borrower Representative and a Financial Officer of
the General Partner, certifying that to the best of
their knowledge no Event of Default or Default has
occurred, or, if such an Event of Default or Default
has occurred, specifying the nature and extent thereof,
specifying any corrective action taken or proposed to
be taken with respect thereto, and setting forth in
reasonable detail the calculations required to
demonstrate compliance with the Financial Covenants,
conditions and agreements contained in Article VI
hereof.
(iv) FILINGS: Within ten (10) days of their
filing, (i) copies of all reports (other than
preliminary proxy statements) filed by the General
Partner with the SEC (or any Governmental Authority
succeeding to any or all of the functions
-40-
of the SEC) under the requirements of the 1934 Act, or any successor statute,
and (ii) if requested by Lender, copies of the Borrower's and the General
Partner's federal tax returns.
(e) FINANCIAL STATEMENTS OF THE BORROWER: If requested by the
Administrative Agent, within forty-five (45) days after the close of
each fiscal year and within forty-five (45) days after the close of
each interim quarterly accounting period of Borrower beginning with
the quarter and fiscal year that include the Closing Date, financial
statements of Borrower, including a balance sheet, statement of income
and expenses and statement of cash flows, all in reasonable detail and
prepared according to GAAP; all statements shall be company prepared,
shall be certified by the Borrower and shall include a reconciliation
to those financial statements provided by the General Partner pursuant
to paragraphs (a) and (b) above.
(f) PROPERTY INFORMATION: Upon reasonable request of the
Administrative Agent, all financial information maintained on
individual real estate properties owned by the Borrower and the
General Partner, including without limitation property cash flow
projections, property budgets, operating statements, leasing status
reports, contingent liability summary, note receivable summary,
summary of cash and cash equivalent, overhead, and capital improvement
budgets.
(g) PROJECTIONS: Within forty-five (45) days after the end of
each of the first three fiscal quarters of each fiscal year of the
General Partner and within forty-five (45) days after the end of each
fiscal year, projections for the next four fiscal quarters and for the
next fiscal year with respect to (i) its quarterly cash flow, (ii) its
EBITDA, (iii) its Funds From Operations, (iv) the operating results of
Projects under development, (v) the operating results of Projects in
lease-up, and (vi) the operating results of all other Projects owned
by the Borrower or the General Partner.
(h) AVAILABLE COMMITMENT: Within ten (10) days after the end of
each month, a certificate of a Financial Officer of the General
Partner, certifying as to the amount of the Available Commitment and
setting forth in reasonable detail the calculations of the Aggregate
Value.
(i) OTHER INFORMATION: Promptly, from time to time, such other
information regarding the operations, business affairs and financial
condition of the Borrower and the General Partner as the
Administrative Agent may reasonably request.
SECTION 5.5 LITIGATION AND OTHER NOTICES. Give the Administrative
Agent prompt written or telecopy notice of the following:
-41-
(a) Any Event of Default or Default and the steps, if any,
proposed to be taken by the Borrower with respect thereto;
(b) The filing or commencement of any action, suit or formal
proceeding at law or in equity or by or before any court or hearing
officer of any Governmental Authority, or any other event or
condition, which has resulted in, or which is reasonably likely to
result in, a material adverse change in the business, operations or
condition (financial or otherwise) of the Borrower or of the General
Partner and which has not been reported in the General Partner's most
recent SEC filings on Form 10-K, 10-Q or 8-K.
SECTION 5.6 MAINTAINING RECORDS: ACCESS TO PREMISES AND RECORDS.
Maintain all financial records in accordance with GAAP, and upon three (3)
Business Days prior notice permit representatives of the Administrative Agent
and each Bank to have access to such financial records and the premises of
the Borrower at reasonable times and to make such excerpts from such records
as such representatives may deem necessary.
SECTION 5.7 USE OF PROCEEDS. Use the proceeds of the Borrowings
hereunder solely for the purposes set forth in the Recitals hereto.
SECTION 5.8 REIT STATUS. With respect to the General Partner, remain
at all times qualified as a REIT and be listed on either the New York Stock
Exchange or the American Stock Exchange.
SECTION 5.9 INTEREST RATE AGREEMENTS.
(a) Borrower shall, within five (5) Business Days after the
request of the Required Banks at any time that the Treasury Constant
Maturity Rate equals or exceeds 9.25%, institute an interest rate
hedging program with respect to the Loans through the purchase or
entering into of an interest rate swap or such other interest rate
protection product ("INTEREST RATE PROTECTION PRODUCT") made available
by the Banks to their customers from time to time or by such other
financial institution acceptable to the Borrower and the Required
Banks in their reasonable discretion. Any Interest Rate Protection
Product shall be offered subject to all customary terms and conditions
pertaining thereto, including payment of applicable fees, if any, and
credit approvals in connection therewith, and for terms not extending
beyond the Maturity Date. Borrower hereby agrees any material default
by Borrower under the terms of any Interest Rate Protection Product
beyond any applicable grace period provided therein shall constitute
an Event of Default hereunder.
(b) If Borrower purchases an Interest Rate Protection Product
from a party other than any Bank ("Third Party Interest Rate
Protection Product
-42-
Issuer"), then such Interest Rate Protection Product and the Third
Party Interest Rate Protection Product Issuer shall be subject to the
Required Banks' prior written approval, not to be unreasonably
withheld, conditioned or delayed. Borrower hereby agrees any material
default by Borrower under the terms of any Interest Rate Protection
Product beyond any applicable grace period provided therein shall
constitute an Event of Default hereunder.
SECTION 5.10 BOARD OF DIRECTORS OF THE GENERAL PARTNER. With respect
to the General Partner, maintain as a majority of its board of directors who
are unaffiliated (in the sole determination of the board of directors of the
General Partner, which determination shall be final) with, and who do not
receive compensation from the General Partner (other than as a result of
status as a director of the General Partner), any advisor or any subsidiaries
thereof.
-43-
ARTICLE VI
NEGATIVE COVENANTS
The Borrower and, to the extent applicable, the General Partner each
covenants and agrees that, so long as this Credit Agreement shall remain in
effect or the principal of or interest on any Loan or any Fee or any other
expenses or amounts payable hereunder shall be unpaid unless the Required
Banks shall otherwise consent in writing which consent shall not be
unreasonably withheld, it will not:
SECTION 6.1 LIENS. Incur, create, assume or permit to exist any
Liens on any Project so long as it is an Unencumbered Asset that shall have
been included by the Borrower in the most recent calculation of the Aggregate
Value furnished by it to the Administrative Agent or on any income or rights
in respect of any thereof, to secure any Debt unless such Debt is Debt that
is otherwise permitted hereunder.
SECTION 6.2 MERGERS, CONSOLIDATIONS, SALES OF ASSETS. Merge into or
consolidate with or acquire any other Person, or permit any other Person to
merge into or consolidate with it, or sell, transfer, lease or otherwise
dispose of (in one transaction or in a series of related transactions) all or
substantially all of its assets whether now owned or hereafter acquired
except that if at the time thereof and immediately after giving effect
thereto no Event of Default or Default shall have occurred and be continuing
any other entity may be merged into the Borrower or the General Partner if
the Borrower or the General Partner shall be the surviving entity and no
Event of Default or Default has occurred or would occur as a result of such
merger or acquisition, provided that in any such merger or acquisition, the
surviving entity shall be at least as creditworthy as the Borrower or the
General Partner, as applicable, immediately prior to such merger or
acquisition. The Banks agree that they shall respond to Borrower's request
for consent to any transaction that does not comply with this Section 6.2
within thirty (30) Business Days of receipt of information reasonably
requested by each Bank in connection with such request.
SECTION 6.3 BUSINESS OF BORROWER AND GENERAL PARTNER. Substantially
change the nature of the business conducted by the Borrower or the General
Partner, which shall consist of the acquisition, construction and/or
operation of garden apartments whose buildings do not exceed three (3)
stories.
SECTION 6.4 ERISA LIABILITIES. Create or suffer to exist ERISA
Liabilities in an aggregate amount for all Plans in excess of $1,000,000.00.
SECTION 6.5 ORGANIZATIONAL DOCUMENTS. Change materially its
organizational documents.
SECTION 6.6 LARGE PURCHASE APPROVAL. Purchase any single real
property whose purchase price is in excess of $60,000,000.00; the Banks agree
that they shall respond to
-44-
Borrower's request for consent to purchase any such real property in excess
of such amount within ten (10) Business Days of receipt of such request.
SECTION 6.7 OTHER PURCHASE NOTICE. Make any material asset
acquisition other than as described in Section 6.6 without notice to the
Administrative Agent together with a certificate indicating that all
Financial Covenants shall be complied with after giving effect to such
acquisition.
SECTION 6.8 FINANCIAL RATIOS. Permit:
(a) The Adjusted Net Worth of the General Partner to be less
than $250,000,000.00 at the end of any fiscal quarter.
(b) The General Partner's ratio of its Total Liabilities to its
Gross Asset Value to be more than 0.55 to 1.0 at the end of any fiscal
quarter.
(c) The General Partner's ratio of its Secured Debt to its Gross
Asset Value to be more than 0.40 to 1.0 at the end of any fiscal
quarter.
(d) The General Partner's ratio of its EBITDA to its Interest
Expense to be less than 2.25:1.0 during its most recent four (4)
fiscal quarters.
(e) The General Partner's ratio of its EBITDA to the sum of its
Debt Service and its Reserve for Replacement to be less than 2.0:1.0
during its most recent four (4) fiscal quarters.
(f) The ratio of the General Partner's Unencumbered NOI to its
Unsecured Interest Expense to be less than 1.75 to 1.0 during its most
recent four (4) fiscal quarters.
SECTION 6.9 CALCULATION OF ITS FINANCIAL COVENANTS. Change the General
Partner's method of expensing its costs from that used with respect to its
most recent financial statement presented to the Banks before the Closing
Date.
SECTION 6.10 DISTRIBUTIONS. Make distributions to the stockholders of
the General Partner that exceed ninety-five percent (95%) of the General
Partner's Funds From Operations, subject to the limitations in Section 7.2.
SECTION 6.11 PERMITTED INVESTMENTS. Make any investments other than in
apartment communities and other assets used or useful in the Borrower's
business, provided that the Borrower may make investments in the following
but only to the extent hereinafter described:
-45-
(a) RAW LAND (I.E. LAND NOT UNDER DEVELOPMENT): An amount not to
exceed (i) ten percent (10%) of (ii) the sum of its Net Worth and the
value of any minority interests and less its Intangible Assets.
(b) CONSTRUCTION IN PROGRESS: An amount not to exceed
$150,000,000.00 at any one time.
(c) OTHER INVESTMENTS: An amount not to exceed twenty percent
(20%) of its total assets in other investments which may consist of
securities (which are to be valued at cost), mortgages, and joint
ventures and partnerships with third parties that are otherwise
unaffiliated (which are to be valued at Borrower's net equity
investment in the joint venture or partnership).
SECTION 6.12 FLOATING RATE INDEBTEDNESS. Have outstanding at any time
Floating Rate Indebtedness in excess of $225,000,000.00. For this purpose,
the amount of Floating Rate Indebtedness deemed to be outstanding under this
Credit Agreement shall be equal to the outstanding aggregate principal amount
of all Loans made by all Banks hereunder.
SECTION 6.13 FINANCIAL COVENANTS NONCOMPLIANCE. Upon any noncompliance
with the Financial Covenants and so long as such noncompliance continues,
make any Borrowings, purchase land or start new construction.
SECTION 6.14 DEBT. Incur additional Debt that consists of construction
financing.
-46-
ARTICLE VII
EVENTS OF DEFAULT
SECTION 7.1 EVENT OF DEFAULT. In case of the happening of any of the
following events (herein called "Events of Default"):
(a) default shall be made in the payment of any principal of any
Loan when and as the same shall become due and payable, whether at the
due date thereof or by acceleration thereof or otherwise and such
default shall continue for a period of one Business Day after such
default;
(b) interest on any Loan shall not be paid within five calendar
days of when and as the same shall become due and payable, whether at
the due date thereof or by acceleration thereof or otherwise and such
interest shall continue to remain unpaid for a period of one Business
Day after such five-day period;
(c) default shall be made in the payment of any Fee,
indemnification amount or any other amount due from the Borrower under
the Loan Documents (other than an amount referred to in (a) or (b)
above), when and as the same shall become due and payable, and such
default shall continue for a period of five Business Days after
receipt by the Borrower of written or telecopy notice from the
Administrative Agent of such default;
(d) any representation or warranty made by the Borrower or the
General Partner in connection with the Loan Documents or in any
report, certificate or other instrument furnished by the Borrower or
the General Partner pursuant to the Loan Documents or with the
borrowing hereunder shall prove to have been false or misleading in
any material respect when made or delivered in accordance with the
terms hereof; PROVIDED that if any such breach of representation or
warranty has been subsequently remedied (such that if made or given as
of the date of remedy it is no longer false or misleading in any
material respect) and such breach has caused no material adverse
effect on the rights or interests of any Bank under this Credit
Agreement, such breach shall no longer constitute a Default or Event
of Default hereunder.
(e) default shall be made in the due observance or performance
of any covenant or agreement to be observed or performed on the part
of the Borrower or the General Partner contained herein other than as
to the payment of money or the Financial Covenants, such default shall
continue for a period of thirty (30) days after the receipt by the
Borrower of written or telecopy notice from the Administrative Agent
of such default or, if such default cannot reasonably be cured
-47-
within such 30-day period, such additional time, not to exceed additional
sixty (60) days, as may be reasonably required to cure the same;
(f) the Borrower or the General Partner shall fail to make any
payment under any Significant Debt Agreement when due (whether due by
scheduled maturity, required prepayment, acceleration, demand or
otherwise), and such failure shall continue after the applicable grace
period, if any, specified in the agreement or instrument relating to
such Indebtedness, or any failure by the Borrower or the General
Partner to perform any covenant or agreement on either's part to be
performed under any Significant Debt Agreement shall result in the
acceleration of the maturity of a portion of such Debt;
(g) the Borrower or the General Partner shall (i) voluntarily
commence any proceeding or file any petition seeking relief under
Title 11 of the United States Code or any other Federal, state or
foreign bankruptcy, insolvency or similar law, (ii) consent to the
institution of, or fail to controvert in a timely and appropriate
manner, any such proceeding or the filing of any such petition, (iii)
apply for or consent to the appointment of a receiver, trustee,
custodian, sequestrator or similar official for such corporation or
for a substantial part of its property, (iv) file an answer admitting
the material allegations of a petition filed against it in any such
proceeding, (v) make a general assignment for the benefit of
creditors, (vi) become unable, admit in writing its inability or fail
generally to pay its debts as they become due, (vii) become insolvent,
or (viii) take corporate action for the purpose of effecting any of
the foregoing;
(h) an involuntary proceeding shall be commenced or an
involuntary petition shall be filed in a court of competent
jurisdiction seeking (i) relief in respect of the Borrower or the
General Partner or of a substantial part of its or the General
Partner's property under Title 11 of the United States Code or any
other Federal, state or foreign bankruptcy, insolvency or similar law,
(ii) the appointment of a receiver, trustee, custodian, sequestrator
or similar official for the Borrower or the General Partner or for a
substantial part of the property of any of them, or (iii) the
winding-up or liquidation of the Borrower or the General Partner and
such proceeding or petition shall continue undismissed for 60 days or
an order or decree approving or ordering any of the foregoing shall be
entered;
(i) either of (A) the occurrence of any one or more Reportable
Events or (B) a failure to make a "required payment" under the
provisions of Section 412(n)(1) of the Code shall have occurred with
respect to any Plan or Plans and the occurrence of either (A) or (B)
above shall have resulted in any of (1) liability of the General
Partner to the PBGC or to one or more Plans in an aggregate amount
exceeding $1,000,000.00, (2) the termination of the respective Plan or
Plans by the PBGC, (3) the appointment by the appropriate United
States District Court of a
-48-
trustee to administer such Plan or Plans or (4) for the imposition of a
Lien in favor of such Plan or Plans;
(j) any material provision of the Loan Documents ceases to be
valid and binding on or enforceable against the Borrower or the
General Partner, as applicable;
(k) there shall have occurred a Change in Control;
(l) the occurrence of any default under the Guaranty;
(m) noncompliance with any Financial Covenant and the
continuation thereof for sixty (60) days after notice thereof by the
Administrative Agent;
(n) the Borrower or the General Partner shall claim that the
Loan Documents, or any material provision thereof, are not valid,
binding on or enforceable against the Borrower or the General Partner,
as applicable;
(o) the entry of any judgment in excess of $1,000,000 against
the Borrower or the General Partner that is not adequately covered by
insurance; and
(p) the occurrence of any adverse change in the financial
condition of Borrower or the General Partner that the Banks, in their
reasonable discretion, deem material, or if the Banks in good faith
shall believe that the prospect of payment or performance of the Loan
is impaired.
SECTION 7.2 REMEDIES. Upon the occurrence of any Event of Default, and
at any time thereafter during the continuance of such Event of Default, the
Administrative Agent, at the request of the Required Banks, may, by written
or telecopy notice to the Borrower, take any of the following actions, plus
any other actions provided for under this Credit Agreement, the Loan
Documents or applicable law, at the same or different times:
(a) terminate forthwith the Commitments of the Banks hereunder;
(b) declare the Loans to be forthwith due and payable, whereupon
the principal of such loans, together with accrued interest thereon
and any unpaid accrued Fees and all other liabilities of the Borrower
accrued hereunder, shall become forthwith due and payable together
with interest thereon, if applicable, without presentment, demand,
protest or any other notice of any kind, all of which are hereby
expressly waived by the Borrower, anything contained herein or in any
Note to the contrary notwithstanding;
-49
(c) upon the occurrence of an Event of Default described in
Section 7.1(a), (b) or (c) and the continuation thereof, notify the
Borrower that the Borrower shall not (i) purchase any land, and (ii)
start any new construction project and notify the General Partner that
the General Partner shall not make any distributions to its
stockholders;
(d) notify the General Partner upon the occurrence of any Event
of Default other than that described in Section 7.1(a), (b) or (c) and
the continuation thereof, that the General Partner shall not make any
distributions to its stockholders except for the minimum amount
necessary to maintain its status as a REIT; and
(e) exercise its remedies against the General Partner pursuant
to the Guaranty;
PROVIDED, HOWEVER, that in the case of an Event of Default specified in
paragraph (g), (h) or (i) above involving the Borrower, without notice to the
Borrower or any other act by the Administrative Agent or the Banks, the
Commitments shall automatically terminate and all such Loans together with
all such interest, Fees and other amounts, shall become immediately due and
payable, all without presentment, demand, protest or any other notice of any
kind, all of which are hereby expressly waived by the Borrower, anything
contained herein or in any Note to the contrary notwithstanding.
SECTION 7.3 OCCURRENCE AND DECLARATION OF AN EVENT OF DEFAULT. If
the Administrative Agent obtains actual knowledge of the occurrence of an
Event of Default, the Administrative Agent shall, within five (5) Business
Days of obtaining such knowledge, give written notice of such occurrence to
each of the Banks. In addition, if any Bank obtains actual knowledge of the
occurrence of an Event of Default, that Bank shall, within five (5) Business
Days of obtaining such knowledge, give written notice of such occurrence to
the Administrative Agent and the Administrative Agent shall give written
notice of such occurrence to each of the Banks. Immediately upon the
Administrative Agent obtaining actual knowledge of the occurrence of an Event
of Default, the Administrative Agent shall send a notice (a "Declaration of
Default") to the Borrower declaring that an Event of Default has occurred.
SECTION 7.4 ENFORCEMENT OF REMEDIES.
(a) PREPARATION OF PLAN BY THE ADMINISTRATIVE AGENT. Within
thirty (30) days after the occurrence of a Declaration of Default, the
Administrative Agent shall prepare a recommended course of action for
the exercise of remedies against the Borrower ("Default Plan") and
shall submit the Default Plan to the Banks pursuant to Section 7.5.
The Default Plan shall contain a recommendation regarding the manner
that any and all rights under the Loan Documents shall be exercised.
-50-
(b) IMPLEMENTATION OF APPROVED PLAN. Once an Approved Plan has
been adopted pursuant to Section 7.5, the Administrative Agent shall
act in accordance therewith unless otherwise approved by the Required
Banks.
(c) PROPOSAL OF ALTERNATIVE PLANS. If the Administrative Agent
fails to submit a Default Plan to the Banks within 30 days after the
occurrence of a Declaration of Default, any Bank may submit to the
Administrative Agent an alternative plan (the "Alternative Plan")
incorporating the elements specified in Section 7.4(a) within fifteen
(15) days of expiration of the 30-day period. Immediately upon
receipt of an Alternative Plan, the Administrative Agent shall submit
such plan to the Banks for consideration of approval pursuant to
Section 7.5.
SECTION 7.5 APPROVAL PROCESS FOR PROPOSED PLANS.
(a) MAJORITY BANK APPROVAL PROCESS. The Default Plan, any
Alternative Plan (generically, a "Proposed Plan"), and any proposed
material modification to an Approved Plan, shall be subject to
approval according to this Section 7.5. Any Bank disapproving a
Proposed Plan shall specify in reasonable details in a written notice
to the Administrative Agent (a "Disapproval Notice") both the grounds
for such disapproval and its alternative recommendations as to matters
disapproved ("Alternative Recommendations"). Upon disapproval of a
Proposed Pan and receipt of a Disapproval Notice and Alternative
Recommendations from one or more Banks, the Administrative Agent shall
submit the Disapproval Notices, including the Alternative
Recommendations, to the Banks for reconsideration. Unless the Required
Banks approve the Proposed Plan, as modified by one or more of the
Alternative Recommendations, within ten (10) days after the
Alternative Recommendations have been given to the Banks, the matter
shall be resolved in the manner set forth in Section 7.5(b). However,
if the Required Banks approve the Proposed Plan, as modified by one or
more of the Alternative Recommendations, within the ten (10) day
period, the Proposed Plan, as so modified, will be deemed adopted (the
"Approved Plan").
(b) RESOLUTION PROCEDURES. If the Required Banks cannot agree
on a Proposed Plan pursuant to the provisions of Section 7.5(a), the
matter (the "Disputed Matter") shall be resolved in accordance with
the following provisions and procedures:
(i) The Disputed Matter will be resolved by the decision of
one neutral individual (the "Neutral") in accordance with the
provisions of this Section 7.5(b). The fees for the Neutral will
be paid by the Banks in proportion to their pro rata Commitments.
-51-
Each Bank will bear its own attorneys' fees and costs in
connection with the procedures set forth in this Section 7.5(b).
(ii) Within five (5) Business Days of expiration of the
10-day period in Section 7.5(a), if the Required Banks have not
agreed on a mutually acceptable Neutral to resolve the Disputed
Matter, the Administrative Agent shall obtain from the Center for
Public Resources a list of four (4) individuals from the CPR
Panels of Distinguished Neutrals, each of whom shall have
experience and expertise in commercial lending matters. Each of
the three (3) Banks having the largest Commitments shall be
entitled to strike one name from the list. The individual
remaining on the list after such strike rights have been
exercised will be the Neutral. If after all strike rights are
exercised, more than one individual remains on the list, the
Administrative Agent shall select the Neutral from among the
remaining individuals.
(iii) Within five (5) Business Days following
appointment of the Neutral, the Administrative Agent shall
provide the Neutral with copies of the Proposed Plan and any
Alternative Recommendations.
(iv) A hearing before the Neutral shall be held in the
offices of the Administrative Agent not earlier than 30 days from
appointment of the Neutral and not later than 45 days following
the appointment, as determined by the Neutral. The Neutral shall
advise the Banks of the date of the hearing within five (5) days
of appointment.
-52-
ARTICLE VIII
THE ADMINISTRATIVE AGENT; INTERBANK AGREEMENT
SECTION 8.1 APPOINTMENT. In order to expedite the transactions
contemplated by this Credit Agreement, Bank One, Arizona, NA, is hereby
appointed to act as Administrative Agent on behalf of the Banks, and Bank of
America National Trust and Savings Association and Xxxxx Fargo Bank, National
Association are hereby appointed as Co-Agents. Each of the Banks, and each
subsequent holder of any Note by its acceptance thereof, hereby irrevocably
authorizes the Administrative Agent to take such actions on its behalf and to
exercise such powers as are specifically delegated to the Administrative
Agent by the terms and provisions hereof and of the other Loan Documents,
together with such actions and powers as are reasonably incidental thereto.
The Administrative Agent is hereby expressly authorized by the Banks, without
hereby limiting any implied authority, (a) to receive on behalf of the Banks
all payments of principal of and interest on the Loans and all other amounts
due to the Banks hereunder, and promptly to distribute to each Bank its
proper share of each payment so received in accordance with this Article
VIII; (b) to give notice on behalf of each of the Banks to the Borrower of
any Default or Event of Default specified in this Credit Agreement of which
the Administrative Agent has actual knowledge acquired in connection with its
agency hereunder; and (c) to distribute to each Bank copies of all notices,
financial statements and other materials delivered by the Borrower pursuant
to this Credit Agreement as received by the Administrative Agent.
SECTION 8.2 LIABILITY. Neither the Administrative Agent nor any of its
directors, officers, employees or agents shall be liable as such to any Bank
for any action taken or omitted by any of them except for its or his own
gross negligence or wilful misconduct, or be responsible for any statement,
warranty or representation herein or the contents of any document delivered
in connection herewith, or be required to ascertain or to make any inquiry
concerning the performance or observance by the Borrower of any of the terms,
conditions, covenants or agreements contained in any Loan Document. The
Administrative Agent shall not be responsible to the Banks or the holders of
the Notes for the due execution, genuineness, validity, enforceability or
effectiveness of this Credit Agreement, the Notes or any other Loan Documents
or other instruments or agreements. The Administrative Agent may deem and
treat the payee of any Note as the owner thereof for all purposes hereof
until it shall have received from the payee of such Note notice, given as
provided herein, of the transfer thereof. The Administrative Agent shall in
all cases be fully protected in acting, or refraining from acting, in
accordance with written instructions signed by the Required Banks and, except
as otherwise specifically provided herein, such instructions and any action
or inaction pursuant thereto shall be binding on all the Banks and each
subsequent holder of any Note. The Administrative Agent shall, in the
absence of knowledge to the contrary, be entitled to rely on any instrument
or document believed by it in good faith to be genuine and correct and to
have been signed or sent by the proper Person or Persons. Neither the
Administrative Agent nor any of its directors, officers, employees or agents
shall have any responsibility to the Borrower on account of the failure
-53-
of or delay in performance or breach by any Bank of any of its obligations
hereunder or to any Bank on account of the failure of or delay in performance
or breach by any other Bank or the Borrower of any of their respective
obligations hereunder or under any other Loan Document or in connection
herewith or therewith. The Administrative Agent may execute any and all
duties hereunder by or through agents or employees and shall be entitled to
rely upon the advice of legal counsel selected by it with respect to all
matters arising hereunder and shall not be liable for any action taken or
suffered in good faith by it in accordance with the advice of such counsel.
SECTION 8.3 ACTION BY ADMINISTRATIVE AGENT.
(a) The Banks hereby acknowledge that the Administrative Agent
shall be under no duty to take any discretionary action permitted to be taken
by it pursuant to the provisions of this Credit Agreement unless it shall be
requested in writing to do so by the Required Banks.
(b) Unless in each case consented to in writing by all the Banks,
the Administrative Agent shall not (i) agree to the modification or waiver of
any of the terms of any of the Loan Documents, or (ii) consent to any act or
omission by the Borrower, or (iii) exercise any rights which the
Administrative Agent may have with respect to the Loans, the Notes, or any of
the other Loan Documents, if any such agreement, consent or exercise would:
(i) change or modify the interest rate and repayment
provisions set forth in the Loan Documents;
(ii) increase the Maximum Commitment of the Loans;
(iii) extend the Maturity Date of the Loans;
(iv) postpone any date for payment or forgive the payment
of principal of, or interest on, the Loans or the payment of any other
sum due under the Loan Documents;
(v) change or modify or waive any Financial Covenant;
(vi) waive any Event of Default; or
(vii) allow any assignment by Borrower of any right or
interest in the Loan Documents.
(c) Upon receipt of a Borrowing Notice from the Borrower, the
Administrative Agent shall provide to each Bank a copy of such Borrowing
Notice by telecopy notice (or telephone notice promptly confirmed by
telecopy) (i) in the case of a Eurodollar Loan Borrowing, not later than
10:00 a.m., Arizona time, three Business Days before a proposed
-54-
Borrowing, and (b) in the case of a Variable Loan Borrowing, not later than
10:00 a.m., Arizona time, on the day of a proposed Borrowing.
(d) The Administrative Agent agrees to distribute to each Bank its
pro rata share of each payment or prepayment of principal of any Loan, each
payment of interest on the Loans, and each payment of the Commitment Fee,
Extension Fee and Facility Fees that is received from the Borrower prior to
12:00 noon, Arizona time, by 4:00 p.m., Arizona time.
(e) The Administrative Agent agrees to distribute promptly to each
Bank a copy of all information received from the Borrower and the General
Partner.
(f) The Administrative Agent agrees to distribute no later than
thirty (30) days after the Closing Date to each Bank a copy of the Loan
Documents.
SECTION 8.4 QUALIFICATION, REPLACEMENT OF ADMINISTRATIVE AGENT.
(a) The Administrative Agent agrees that, so long as it remains as
the Administrative Agent, its Commitment as a Bank shall not be less than the
Commitment of any other Bank. In the event that the Commitment of the
Administrative Agent as a Bank should be less than that of any other Bank for
at least ninety (90) days, the Required Banks may cause the Administrative
Agent to resign as Administrative Agent hereunder.
(b) Subject to giving thirty (30) days' prior written notice to
the Banks, the Administrative Agent may resign as Administrative Agent
hereunder without the consent of any of the Banks. In addition, if any
Governmental Authority issues an order or directive or otherwise makes a
determination (a "Governmental Order"), the effect of which is to determine
or provide that the performance by the Administrative Agent of its duties
pursuant to this Credit Agreement violates applicable laws, rules, or
regulations or is otherwise prohibited, the Administrative Agent may resign
as an agent without the consent of any of the Banks by giving 30 days prior
written notice of such resignation to the Banks unless a shorter notice
period or no notice period is required by such Governmental Order. If, by
making one or more changes in the Administrative Agent's administration of
the Loans or in such Administrative Agent's duties under this Credit
Agreement or the Loan Documents or that otherwise relate solely and
exclusively to the credit facility made available pursuant to the Loan
Documents (a "Conforming Change"), such Administrative Agent would be
permitted to continue to serve as the Administrative Agent under the
Governmental Order and if the Required Banks approve the Conforming Change
(unless the Conforming Change is a provision of this Credit Agreement that
requires approval from all of the Banks, in which case the Conforming Change
must be approved by all of the Banks), the Administrative Agent will
implement the Conforming Change and will not resign under this Section 8.4(b).
-55
(c) In addition, the Administrative Agent may be removed by the
Required Banks (determined without regard to a Bank acting as the
Administrative Agent proposed for removal) if:
(i) The Administrative Agent shall have failed to pay to
any Bank any amount due to such Bank pursuant to this Credit Agreement
within five (5) days of the date such payment is due from the
Administrative Agent to such Bank;
(ii) (A) Shall have failed to perform any of its
obligations under this Credit Agreement in any material respect
(other than the obligations referenced in Section ___ with
respect to the Administrative Agent), and such failure shall not
have been cured within 30 days after written notice by any Bank
(other than a Bank which acts as such Administrative Agent) to
such Administrative Agent of such failure, or if such failure
cannot reasonably be cured within such 30 day period, within such
longer period of time as may be necessary to complete such cure
so long as such Administrative Agent commences such cure within
such 30 day period and thereafter diligently pursues such cure to
completion;
(B) Shall institute or be subject to any bankruptcy,
insolvency, receivership, conservatorship, reorganization,
liquidation or similar proceedings under state or federal law; or
(C) Is a Defaulting Bank;
PROVIDED, HOWEVER, that the removal of such Administrative Agent shall
not in any way affect the rights and obligations of the Administrative
Agent as a Bank or relieve the Administrative Agent from liabilities
arising prior to such resignation or removal.
(d) Upon the resignation or removal of the Administrative Agent,
such Administrative Agent shall continue to act as the Administrative Agent
pursuant to this Credit Agreement for up to 60 days (or such longer period as
is specified by the Required Banks not including the resigning or removed
Administrative Agent), unless prohibited from doing so by a final order of a
Governmental Authority, in order to provide the Banks the opportunity to
obtain a successor. Notwithstanding such resignation or removal, the
Administrative Agent resigning or being removed will cooperate with the other
Banks in obtaining a new Administrative Agent. Such cooperation shall
include providing all procedures, manuals, computer software and other
systems (other than such procedures, manuals, computer software and other
systems that may be
-56-
proprietary, contain or constitute trade or similar secrets, or be subject to
any applicable privileges or confidentiality obligations) used by such
Administrative Agent in performing the duties and obligations pursuant to
this Credit Agreement to the extent that such Administrative Agent may
legally do so.
(e) The successor Administrative Agent shall be selected by the
Required Banks (other than the Bank acting as the Administrative Agent
resigning or being removed) and, unless otherwise agreed by all of the Banks,
must be a banking institution with sophisticated experience and expertise in
the operation and administration of revolving creditors held for its own
account and with net assets of at least $20,000,000,000. The resignation or
removal of the Administrative Agent shall be effective upon the earlier of
the expiration of such 60 day period (or applicable Required Banks-approved
longer period) or the acceptance of any appointment as the Administrative
Agent by a successor Administrative Agent. Upon such acceptance of the
appointment, such successor Administrative Agent shall thereupon succeed to
and become vested with all the rights, powers, privileges and duties of the
respective retiring or removed Administrative Agent, and the retiring or
removed Administrative Agent shall be discharged from duties and obligations
as the Administrative Agent under this Credit Agreement arising after the
date of such resignation or removal becomes effective. Notwithstanding the
Administrative Agent's resignation or removal as provided herein, the
provisions of this Credit Agreement shall inure to the benefit of and be
binding upon such Administrative Agent as to any actions taken or omitted to
be taken by it while it was the Administrative Agent under this Credit
Agreement.
As to any matters which, pursuant to this Credit Agreement, are
subject to the consent, approval, or direction of, or determination by, all
of the Banks or the Required Banks, the Administrative Agent or the
Co-Agents, as the case may be, shall take action in such matters as directed
by all of the Banks or the Required Banks, as the case may be, and neither
the Administrative Agent nor the Co-Agents shall be permitted or required to
exercise any discretion or take any action except upon the written
instructions or concurrence of all of the Banks or the Required Banks, as the
case may be, which instructions shall be binding upon all of the Banks. The
Administrative Agents and their respective directors, officers, agent and
employees shall be fully protected in acting or in refraining from acting
upon such instructions, but in no event shall the Administrative Agents be
required to take any action which is contrary to the Loan Documents or
applicable law, rules and regulations. With respect to any matters as to
which either this Credit Agreement or the Loan Documents grants the
Administrative Agent or the Co-Agents discretion and as to which this Credit
Agreement does not specifically impose any requirement to obtain the consent
or direction of the Banks or the Required Banks with respect to the
particular matter, the Administrative Agent may take such action or refrain
from taking action as the Administrative Agent shall determine in the
exercise of its or their reasonable discretion; however, the Administrative
Agent shall not be required to exercise any discretion or take any action
with respect to such matters, and the Administrative Agent may request a
determination or decision in such matters from the Required Banks or all of
the Banks pursuant to the procedures set forth in Section 8.3. In acting
hereunder as the Administrative Agent, the Administrative Agent shall be
acting (i) for its own account as one of the Banks and for the account of and
as agent of the other
-57-
Banks, to the extent of the pro rata Commitment of each of the Banks in the
Loans; and (ii) for its own account as the Administrative Agent and for the
account of and as agent for the Co-Agents, each to the extent of their
interests in the Loans.
SECTION 8.5 AGENT AS BANK. With respect to the Loans made by it
hereunder and the Notes issued to it, the Administrative Agent in its
individual capacity and not as an Administrative Agent shall have the same
rights and powers as any other Bank and may exercise the same as though it
were not the Administrative Agent, and the Administrative Agent and its
Affiliates may accept deposits from, lend money to and generally engage in
any kind of business with the Borrower or any Subsidiary or other Affiliate
thereof as if it were not the Administrative Agent.
SECTION 8.6 OWNERSHIP AND POSSESSION OF LOAN DOCUMENTS. Each Bank
shall own an undivided interest in the Loans and the Loan Documents equal to
its pro rata Commitment from time to time. The Administrative Agent shall
hold the Loan Documents in its possession, as agent, at its office at 000
Xxxxx Xxxxxxx Xxxxxx., 00xx Xxxxx, Xxxxxxx, Xxxxxxx 00000, or at such other
location as the Administrative Agent shall designate in writing to the Banks,
for the pro rata benefit of itself as one of the Banks and each of the other
Banks; PROVIDED, HOWEVER, that the Administrative Agent shall deliver to each
Bank an original promissory note executed by the Borrower and evidencing such
Bank's maximum Commitment. The Administrative Agent shall keep and maintain
complete and accurate files and records of all matters pertaining to the
Loans. Upon reasonable prior notice to the Administrative Agent by a Bank,
the files and records shall be made available to such Bank and its respective
representatives and agents for inspection and copying during normal business
hours.
SECTION 8.7 INDEMNIFICATION. Each Bank agrees (i) to reimburse the
Administrative Agent, on demand, in the amount of its pro rata share (based
on its Commitment hereunder) of any commercially reasonable expenses incurred
for the benefit of the Banks by the Administrative Agent, including counsel
fees and compensation of agents and employees paid for services rendered on
behalf of the Banks, which shall not have been reimbursed by the Borrower and
(ii) to indemnify and hold harmless the Administrative Agent and any of its
directors, officers, employees or agents, on demand, in the amount of such
pro rata share, from and against any and all liabilities, taxes, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind or nature whatsoever which may be imposed on,
incurred by or asserted against it in its capacity as the Administrative
Agent or any of them in any way relating to or arising out of this Credit
Agreement or any other Loan Document or any action taken or omitted by it or
any of them under this Credit Agreement or any other Loan Document, to the
extent the same shall not have been reimbursed by the Borrower; PROVIDED that
no Person shall be liable to the Administrative Agent for any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements resulting from the gross negligence
or wilful misconduct of the Administrative Agent or any of its directors,
officers, employees or agents.
-58-
SECTION 8.8 INDEPENDENT CREDIT ANALYSIS. Each Bank acknowledges that
it has, independently and without reliance upon the Administrative Agent or
any other Bank and based on such documents and information as it has deemed
appropriate, made its own credit analysis and decision to enter into this
Credit Agreement. Each Bank also acknowledges that it will, independently
and without reliance upon the Administrative Agent or any other Bank and
based on such documents and information as it shall from time to time deem
appropriate, continue to make its own decisions in taking or not taking
action under or based upon this Credit Agreement or any other Loan Document,
any related agreement or any document furnished hereunder or thereunder.
SECTION 8.9 PROCESS FOR OBTAINING APPROVAL OF THE BANKS.
(a) With respect to obtaining the consent, approval, or
determination of all of the Banks or of the Required Banks, the
Administrative Agent or any Bank may request that the Banks make a
determination pursuant to this Credit Agreement. In the case of a request by
any such Bank, the request shall be made through the Administrative Agent and
the Administrative Agent shall request a determination of the Banks in
accordance with this Section 8.9. All communications from the Administrative
Agent to the Banks requesting the Banks' determination, consent, approval,
disapproval and/or joinder shall:
(i) Be given in the form of a written notice to each of the
Banks;
(ii) Be accompanied by a description of the matter or thing
as to which such determination, approval, consent, disapproval or
joinder is requested, and shall advise each of the Banks where such
matter or thing may be inspected, or shall otherwise adequately
describe the matter or issue to be resolved;
(iii) Include, to the extent not previously provided to
the Banks, all written materials (to the extent necessary to make an
informed decision) and a description of all oral information (to the
extent necessary to make an informed decision) provided to the
Administrative Agent in respect of the matter or issue to be resolved;
and
(iv) Include such other information and recommendations as
the Administrative Agent may reasonably deem appropriate.
(b) The Banks shall reply within 15 Business Days after such
written notice is given by the Administrative Agent; PROVIDED, HOWEVER, that
if the Administrative Agent notifies the Banks that, pursuant to the Loan
Documents, the matter with respect to which such consent, approval,
disapproval ro joinder is sought requires that the Administrative Agent
respond within a certain time period and/or provides that if a response is
not given within a certain time period such approval or consent shall be
deemed given, the Banks shall reply by the earlier of (i) 3
-59-
Business Days before such time period expires (as designated by the
Administrative Agent) or (ii) 5 Business Days after such written notice is
given by the Administrative Agent.
(c) With respect to each Bank, unless the Bank shall give written
notice to the Administrative Agent that such Bank does not consent to or
approve any matter as to which such Bank's consent or approval is sought
within the applicable time frame, such Bank shall be deemed to have approved
of or consented to such recommendation or determination.
SECTION 8.10 NOTICES AND COMMUNICATIONS TO THE BANKS. All
communications to the Banks relating to the Loan Documents and the Borrowings
shall be sent by or through the Administrative Agent. The Administrative
Agent shall promptly provide the Banks with copies of all financial
statements and other materials delivered by the Borrower to the
Administrative Agent pursuant to Section 5.4 of the Credit Agreement. The
Banks agree to keep such financial statements confidential, except to the
extent disclosure is required by applicable laws, rules and regulations,
judicial process, or to the extent that such information is otherwise
publicly available and except that the Banks may deliver such information to
their Affiliates, attorneys, accountants, and consultants. The
Administrative Agent shall also, within 5 Business Day of receipt, deliver to
the Banks copies of all notices (including, without limitation, notices of
default) and other communications of a material nature relating to the
obligations which are set or received by the Administrative Agent. To the
extent any Bank receives any notices, communications, or other information
relating to the Loans, such Bank shall promptly give copies of all such items
to the Administrative Agent. Notices and other communications sent to one
Bank shall be sent concurrently to all of the Banks unless the communication
is being given by the Administrative Agent to an individual in a Bank who is
assisting the Administrative Agent in the performance of the Administrative
Agent's duties under this Credit Agreement. A Bank may, upon reasonable
notice to the Administrative Agent, examine the Administrative Agent's books
and records with respect to the Loans, provided that such Bank shall keep all
such books and records confidential, except to the extent disclosure is
required by applicable laws, rules and regulations, judicial process, or to
the extent that such information is otherwise publicly available and except
that such Bank may deliver such information to its Affiliates, attorneys,
accountants and consultants.
SECTION 8.11 RELATIONSHIP WITH THE BORROWER. Consistent with the
agency established hereunder, the Banks acknowledge and agree that the
Administrative Agent, in accordance with their respective rights and duties
under the Loan Documents, shall have the sole and exclusive authority to bind
the Administrative Agent, and the Banks with respect to matters relating to
the Loan Documents. To the extent that any matter has been approved by all
of the Banks or by a Required Bank in accordance with the provisions of this
Credit Agreement, the Administrative Agent is authorized to execute such
documents and instruments as the Administrative Agent may deem prudent to
evidence and confirm such approval.
-60-
SECTION 8.12 PAYMENTS.
(a) The Banks shall be entitled to interest on the amount of
Borrowings held by each Bank for the period of time such Borrowings are
outstanding at the rates set forth in the Credit Agreement, to the extent that
such payments are actually received from the Borrower. If permitted pursuant to
Section 2.8 of the Credit Agreement, the Administrative Agent shall charge and
collect interest at the Default Rate unless the Required Banks otherwise agree.
(b) On the Closing Date, the Commitment Fee shall be distributed
to each Bank in an amount equal to 0.375% (the "Commitment Percentage") of the
Commitment of such bank in effect on the Closing Date.
(c) Other Fees to the extent applicable shall be paid to the Banks
in accordance with Section 2.5.
(i) The Banks shall be entitled to their respective pro rata
share in all late charges ("Late Charges") under Section 2.8 of the
Credit Agreement, to the extent collected.
(ii) Amounts paid by the Borrower pursuant to any
provision of the Loan Documents providing for payment, compensation,
or reimbursement to one or more, but not necessarily all, of the
Banks, shall be paid to the Bank or Banks incurring such expenses or
otherwise entitled to compensation under any of those provisions, with
each Bank entitled to receive any payment, reimbursement, or
compensation pursuant to any of such Sections or other provisions
being obligated to provide to the Administrative Agent and the
Borrower a certificate setting forth in reasonable detail the basis
for the amount of any request for compensation, payment or
reimbursement under any of those Sections or other provisions.
(iii) Regular monthly payments of interest, payment of
the fees described in Section 2.5, and any other payments to the
Administrative Agent on behalf of the Banks (other than payments to be
applied to the outstanding principal amount of Borrowings, which
payments will be applied as provided in Section 8.13), received by the
Administrative Agent before 11:00 a.m. (Phoenix, Arizona time) on any
Business Day shall be made available to the Banks and/or the Agents
entitled thereto on or before 2:00 p.m. (Phoenix, Arizona time) on the
same Business Day. Any such payments received after 11:00 a.m.
(Phoenix, Arizona time) on any Business Day shall be made available to
the Banks on or before 11:00 a.m. (Phoenix, Arizona time) on the
immediately following Business Day.
(iv) If and to the extent any Bank shall not have made
any payment required pursuant to Section 2.2, such Bank agrees to pay
the
-61-
Administrative Agent, forthwith on demand, such amount, together with
interest thereon, for each day from such date until the date such amount is
paid to the Administrative Agent as provided in Section 2.2(c). The
failure of any Bank to make available to the Administrative Agent any
amount required pursuant to Section 2.2 shall not relieve any other Bank of
its obligation hereunder to make available as aforesaid such payment, as
specified above, nor shall any Bank be relieved of its obligations to make
such payments for any other reason.
(v) Funds shall be transferred to the Banks in
accordance with the funds transfer instructions given to the
Administrative Agent and by the Administrative Agent to the Banks from
time to time.
SECTION 8.13 APPLICATION OF PAYMENTS.
(a) All amounts which pursuant to the Loan Documents are to be
applied to the outstanding principal amount of Borrowings shall be so applied.
(b) All other monies collected or received by the Administrative
Agent on account of the Loans or in respect of security for the Loans, directly
or indirectly, shall be applied in the following order of priority, except to
the extent otherwise required by Article II of this Credit Agreement, in which
case the provisions of Article II shall control:
(i) To the payment of all costs and expenses due to
the Administrative Agent and/or the Banks pursuant to the Loan
Documents, including costs incurred in collection of such monies,
including, without limitation, the payment to the Banks of the Late
Charges referred to in Section 8.12 and the other amounts described in
Section 8.12;
(ii) To outstanding interest on the Advances, which
amount shall be allocated between the Banks in accordance with the
actual principal amount of Advances held by each Bank throughout the
period in question as determined by the Administrative Agent on a
daily basis; PROVIDED, HOWEVER, that if amounts received by the
Administrative Agent are not sufficient to pay in full all such
outstanding interest on the Advances, such amount shall be allocated
among the Banks pro rata in accordance with the amount of Advances
held by each Bank during the period in question;
(iii) To the payment of principal on the Borrowings in
accordance with the principal amount of Borrowings held by each Bank;
and
(iv) To the Banks in accordance with their respective
pro rata share.
-62-
SECTION 8.14 DEFAULTS.
(a) DEFAULTING BANKS. If for any reason any of the Banks shall
fail or refuse to abide by its obligations under the Loan Documents (each a
"Defaulting Bank"), then, in addition to the rights and remedies that may be
available to the Administrative Agent, the Co-Agents and the other Banks at law
and in equity, but subject to the notice and cure periods hereinafter set forth,
such Defaulting Bank's right to participate in the administration of the Loans
and the Loan Documents, including without limitation, any rights to consent to
or direct any action or inaction of the Administrative Agent, the Co-Agents, all
of the Banks, or to be taken into account in the calculation of the Required
Banks (other than the right to vote with respect to a decision to extend the
Maturity Date), shall be suspended during the pendency of such failure or
refusal. A Bank shall be deemed to be a Defaulting Bank if (i) such Bank shall
have failed to pay to the Administrative Agent any amount due pursuant to this
Credit Agreement within 5 Business Days after written notice by the
Administrative Agent to such Bank stating such payment is due from such Bank to
the Administrative Agent; (ii) such Bank shall have failed to perform any of its
other obligations under this Credit Agreement or the Loan Documents in any
material respect. and such failure shall not have been cured within 30 days
after written notice by the Administrative Agent to such Bank of such failure,
or if such failure cannot reasonably be cured within such 30 day period, within
such longer period of time as may be necessary to complete such cure, so long as
such Bank commences such cure within such 30-day period and thereafter
diligently pursues such cure to completion within not more than 120 days after
such written notice; or (iii) such Bank shall institute or be subject to any
bankruptcy, insolvency, receivership, conservatorship, reorganization,
liquidation or similar proceedings under state or federal law; provided,
however, in the case of a failure described in clause (i) or clause (ii) of this
sentence, if within the 5-Business Day period described in clause (i) or the 30
day period described in clause (ii), as applicable, the Bank in question in good
faith disputes such default asserting that such default has not occurred (and
provided that such Bank has satisfied its funding obligations pursuant to the
provisions of Section 2.2), such Bank shall not be deemed to be a Defaulting
Bank until such Bank is found to be in default pursuant to a final judicial or
arbitration determination and such Bank does not thereafter take the action
necessary to cure the default within 10 Business Days following the date of the
final determination. If the Administrative Agent is a Defaulting Bank, the
removal of the Administrative Agent may occur pursuant to Section 8.4. A Bank
that is a "Defaulting Bank" under the Credit Agreement will automatically be
deemed in default under this Credit Agreement and will also be a Defaulting Bank
under this Credit Agreement.
(b) CERTAIN REMEDIES WITH RESPECT TO DEFAULTING BANKS.
(i) During any period that a Bank is a Defaulting
Bank, such Bank shall not be entitled to interest with respect to its
interest in any Advances held by such Defaulting Bank and any interest
paid by the Borrower with respect to such interest shall, except as
otherwise provided in this Article 8, be allocated among the Current
Banks according to their pro rata shares.
-63-
(ii) With respect to each Defaulting Bank, any Current
Bank shall, in addition to any other rights or remedies available at
law or equity, be entitled, at its option, to do either or both of the
following:
(A) In the case of the failure of a
Defaulting Bank to pay its pro rata share (the "Defaulting
Bank's Share") in an Advance made pursuant to Section 2.2,
to pay to the Administrative Agent the Defaulting Bank's
Share (pro rata if made by more than one Current Bank, based
on the pro rata shares of the Current Banks making the
payment). If one or more of the Current Banks pays the
Defaulting Banks' Share, in addition to any other rights and
remedies available to the Banks, each Current Bank making
such payment may elect to do either of the following with
respect to the payment made by such Current Bank:
(1) Notify the Administrative
Agent to adjust the pro rata shares of the
Defaulting Bank and the Current Bank making
payment of the Defaulting Bank's Share,
allocating the Defaulting Bank's Share to
the Current Bank as of the date the Advance
was made; or
(2) Receive all amounts which
the Defaulting Bank would otherwise be
entitled to receive pursuant to this Credit
Agreement with respect to the Defaulting
Bank's Share (including interest accruing
under the Loan Documents on the Advance, to
the extent of the Defaulting Bank's Share of
such Advance), pro rata according to the
portion of the Defaulting Bank's Share paid
by such Current Bank, until such Current
Bank has been repaid the full amount of the
Defaulting Bank's Share, together with
accrued interest paid by the Borrower under
the Credit Agreement with respect thereto.
If none of the Current Banks elects to fund the Advance for
the Defaulting Bank, the Administrative Agent shall be
entitled to collect interest from the Defaulting Bank
pursuant to Section 2.2 for the period from the date on
which the payment was due (which in the case of a Bank which
disputes an alleged default pursuant to Section 2.2 shall be
the date the payment was originally due
-64-
notwithstanding the fact that the Bank was later determined to be in
default and is granted a period of time in which to cure the default)
until the date on which the payment is made and to withhold or set
off, and to apply to the payment of the defaulted amount and any
related interest, any amounts to be paid to the Defaulting Bank under
this Credit Agreement. If one or more Current Banks funds the Advance
for the Defaulting Bank and if the Administrative Agent has previously
advanced funds pursuant to Section 2.2 on behalf of the Defaulting
Bank, the Administrative Agent shall be entitled to collect from the
Defaulting Bank any interest due pursuant to Section 2.2 from the date
of the Borrowing by the Administrative Agent until the Current Bank(s)
fund the Borrowing or Protective Borrowing to the Administrative
Agent.
(B) To bring an action or suit against the
Defaulting Bank in a court of competent jurisdiction to
recover the defaulted amount and any related interest and
otherwise exercise any available rights and remedies.
SECTION 8.15 PURCHASE OF DEFAULTING BANK'S INTEREST AFTER DEFAULT. If a
Bank becomes a Defaulting Bank under Section 8.14, BOAZ (provided it is not the
Defaulting Bank) shall have the right, but not the obligation, in its sole
discretion, to acquire all of such Defaulting Bank's interest in the Commitment
and the Loans pursuant to the provisions of this Section 8.15. In the event
that BOAZ does not exercise its right to so acquire all of the Defaulting Bank's
interest in the Commitment and the Loans. within 30 days after such Bank becomes
a Defaulting Bank, then each of Banks which is not a Defaulting Bank, including
BOAZ (a "Current Bank") shall have the right. but not the obligation, in their
sole discretion to acquire (or if more than one Current Bank exercises such
right, each such Current Bank shall have the right to acquire, pro rata
according to their pro rata shares, or in such other proportions as they may
mutually agree), the interest in the Commitment and the Loans of a Defaulting
Bank. Upon any such purchase, the Defaulting Bank's interest in the Commitment
and the Loans and its rights hereunder as a Bank (but not its liability in
respect thereof or under the Loan Documents or this Credit Agreement for events
occurring prior to such purchase) shall terminate at the date of purchase, and
the Defaulting Bank shall promptly execute all documents reasonably requested to
surrender and transfer such interest including an assignment and acceptance
agreement. Current Banks exercising purchase rights under this Credit Agreement
must, as a precondition to the exercise of such rights, concurrently exercise
their corresponding purchase rights under this Credit Agreement.
SECTION 8.16 PURCHASE PRICE AND PAYMENT FOR DEFAULTING BANK'S INTEREST.
The purchase price for the interest in the Commitment and the Loans of a
Defaulting Bank shall be equal to the total outstanding Advances owned by the
Borrower to the Defaulting Bank as of the date of such purchase. Payment of the
purchase price for the Defaulting Bank's interest in the Commitment and the
Loans so acquired shall be deferred and shall be limited to and made only from
the
-65-
repayment of the outstanding principal balance of the Loans and only to the
extent such principal repayments result in permanent Commitment reductions, if
and as received by the purchasing Bank or the Banks on account of the Loans
previously owned by the Defaulting Bank. The Defaulting Bank shall not be
entitled to interest on the purchase price for the Defaulting Bank's interest in
the Commitment and the Loans, and interest paid by the Borrower with respect to
the purchased interest shall be retained by the purchasing Bank. There shall be
no recourse against any Current Bank or the Administrative Agent, for the
payment of such sums except to the extent of the receipt of payments from the
Borrower in respect of the Loans. Payments to the Defaulting Bank shall be made
promptly after the time of receipt of such payments by Administrative Agent.
-66-
ARTICLE IX
MISCELLANEOUS
SECTION 9.1 NOTICES. Notices and other communications provided for herein
shall be in writing and shall be delivered by hand or overnight courier service,
mailed or sent by telecopy, graphic scanning or other telegraphic communications
equipment of the sending party, as follows:
(a) if to the Borrower and the General Partner, to it at 0000
Xxxx Xxxxxxxxx Xxxx, Xxxxx X-000, Xxxxxxxxxx, Xxxxxxx 00000,
Attention: Xxxx X. Xxxxxx;
(b) if to the Administrative Agent, to it at Xxxx Xxxxxx Xxx
00000, Xxxxxxx, Xxxxxxx 00000, Attention: Western Region Real Estate
Finance Division, Dept. A365, Xxxxx Xxxx;
(c) if to a Bank, to it at its address (or telecopy number)
set forth in Schedule 2.1 or in the Assignment and Acceptance pursuant
to which such Bank shall have become a party hereto.
All notices and other communications given to any party hereto in accordance
with the provisions of this Credit Agreement shall be deemed to have been given
on the date of receipt if delivered by hand or overnight courier service or sent
by telecopy or other telegraphic communications equipment of the sender, or on
the date five Business Days after dispatch by certified or registered mail if
mailed, in each case delivered, sent or mailed (properly addressed) to such
party as provided in this Section 9.1 or in accordance with the latest unrevoked
direction from such party given in accordance with this Section 9.1.
SECTION 9.2 SURVIVAL OF CREDIT AGREEMENT. All covenants, agreements,
representations and warranties made by the Borrower herein and in the
certificates or other instruments prepared or delivered in connection with or
pursuant to this Credit Agreement or any other Loan Document shall be considered
to have been relied upon by the Banks and shall survive the making by the Banks
of the Loans, and the execution and delivery to the Banks of the Notes
evidencing such Loans, regardless of any investigation made by the Banks or on
their behalf, and shall continue in full force and effect as long as the
principal of or any accrued interest on any Loan or any Fee or any other amount
payable under this Credit Agreement or any other Loan Document is outstanding
and unpaid and so long as the Commitments have not been terminated.
SECTION 9.3 BINDING EFFECT. This Credit Agreement shall become effective
when it shall have been executed by the Borrower and the Administrative Agent
and when the Administrative Agent shall have received copies hereof which, when
taken together, bear the signatures of each Bank, and thereafter shall be
binding upon and inure to the benefit of the Borrower, the Administrative Agent
and each Bank and their respective successors and assigns,
-67-
except that the Borrower shall not have the right to assign its rights hereunder
or any interest herein without the prior consent of all the Banks and the
Administrative Agent.
SECTION 9.4 SUCCESSORS AND ASSIGNS.
(a) Whenever in this Credit Agreement any of the parties hereto is
referred to, such reference shall be deemed to include the successors and
assigns of such party; and all covenants, promises and agreements by or on
behalf of the Borrower, the Administrative Agent or the Banks that are contained
in this Credit Agreement shall bind and inure to the benefit of their respective
successors and assigns.
(b) Each Bank at its own expense may assign to one or more
assignees that is a Qualified Bank all or a portion of its interests, rights and
obligations under this Credit Agreement (including all or a portion of its
Commitment and the Loans at the time owing to it and the Notes held by it);
PROVIDED, HOWEVER, that (i) each such assignment shall be of a constant, and not
a varying, percentage of all the assigning Bank's rights and obligations under
this Credit Agreement, (ii) the amount of the Commitment of the assigning Bank
subject to each such assignment (determined as of the date the Assignment and
Acceptance with respect to such assignment is delivered to the Administrative
Agent) shall not be less than $10,000,000.00, (iii) the amount of the Commitment
retained by the assigning Bank, unless the Assignment and Acceptance covers all
or the remaining portion of the assigning Bank's interest, rights and
obligations under this Credit Agreement, after each such assignment shall not be
less than $10,000,000.00, (iv) the parties to each such assignment shall execute
and deliver to the Administrative Agent an Assignment and Acceptance, together
with the Note or Notes subject to such assignment, (v) any increased costs by
reason of any such assignment will not be borne by the Borrower, (vi) assignee
shall be Bank unless in each case consented to in writing by all the Banks,
(vii) the assignee, if it shall not be a Bank, shall deliver to the
Administrative Agent an Administrative Questionnaire, and (viii) if the assignee
shall not be a Bank, the Borrower shall have consented to such assignment, which
consent shall not unreasonably be withheld. Upon acceptance and recording
pursuant to paragraph (e) of this Section 9.4, from and after the effective date
specified in each Assignment and Acceptance, which effective date shall be at
least five Business Days after the execution thereof, (A) the assignee
thereunder shall be a party hereto and, to the extent of the interest assigned
by such Assignment and Acceptance, have all the rights and obligations of a Bank
under this Credit Agreement and (B) the assigning Bank thereunder shall, to the
extent of the interest assigned by such Assignment and Acceptance, be released
from its obligations under this Credit Agreement (and, in the case of an
Assignment and Acceptance covering all or the remaining portion of an assigning
Bank's rights and obligations under this Credit Agreement, such Bank shall cease
to be a party hereto (but shall continue to be entitled to the benefits of
Sections 2.13, 2.15, 2.19 and 9.5, as well as to any Fees accrued for its
account hereunder and not yet paid)).
(c) By executing and delivering an Assignment and Acceptance, the
assigning Bank thereunder and the assignee thereunder shall be deemed to confirm
to and agree with each
-68-
other and the other parties hereto as follows: (i) such assigning Bank warrants
that it is the legal and beneficial owner of the interest being assigned thereby
free and clear of any adverse claim and that its Commitment and the outstanding
balances of its Loans, without giving effect to assignments thereof which have
not become effective, are as set forth in such Assignment and Acceptance, (ii)
except as set forth in (i) above, such assigning Bank makes no representation or
warranty and assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with this Credit
Agreement, or the execution, legality, validity, enforceability, genuineness,
sufficiency or value of this Credit Agreement, any other Loan Document or any
other instrument or document furnished pursuant hereto or the financial
condition of the Borrower or the performance or observance by the Borrower of
any of its obligations under this Credit Agreement, any other Loan Document or
any other instrument or document furnished pursuant hereto; (iii) such assignee
represents and warrants that it is legally authorized to enter into such
Assignment and Acceptance; (iv) such assignee confirms that it has received a
copy of this Credit Agreement, together with copies of the most recent financial
statements delivered pursuant to Section 5.4 and such other documents and
information as it has deemed appropriate to make its own credit analysis and
decision to enter into such Assignment and Acceptance; (v) such assignee will
independently and without reliance upon the Administrative Agent, such assigning
Bank or any other Bank 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 this Credit Agreement; (vi) such assignee
appoints and authorizes the Administrative Agent to take such action as agent on
its behalf and to exercise such powers under this Credit Agreement as are
delegated to the Administrative Agent by the terms hereof, together with such
powers as are reasonably incidental thereto; and (vii) such assignee agrees that
it will perform in accordance with their terms all the obligations which by the
terms of this Credit Agreement are required to be performed by it as a Bank.
(d) The Administrative Agent shall maintain at one of its offices
in Phoenix, Arizona, a copy of each Assignment and Acceptance delivered to it
and a register for the recordation of the names and addresses of the Banks, and
the Commitment of, and principal amount of the Loans owing to, each Bank
pursuant to the terms hereof from time to time (the "Register"). The entries in
the Register shall be conclusive in the absence of manifest error and the
Borrower, the Administrative Agent and the Banks may treat each Person whose
name is recorded in the Register pursuant to the terms hereof as a Bank
hereunder for all purposes of this Credit Agreement. The Register shall be
available for inspection by the Borrower and any Bank, at any reasonable time
and from time to time upon reasonable prior notice.
(e) Upon its receipt of a duly completed Assignment and Acceptance
executed by an assigning Bank and an assignee together with the Note or Notes
subject to such assignment, an Administrative Questionnaire completed in respect
of the assignee (unless the assignee shall already be a Bank hereunder), the
Administrative Agent shall (i) accept such Assignment and Acceptance, (ii)
record the information contained therein in the Register, and (iii) give prompt
notice thereof to the Borrower and the Banks. Within five Business Days after
receipt of notice, the Borrower, at its own expense, shall execute and deliver
to the Administrative Agent, in
-69-
exchange for the surrendered Note or Notes, a new Note or Notes to the order of
such assigning Bank in a principal amount equal to the applicable Commitment
retained by it. Such new Note or Notes shall be in an aggregate principal
amount equal to the aggregate principal amount of such surrendered Note or
Notes; such new Notes shall be dated the date of the surrendered Notes which
they replace and shall otherwise be in substantially the form of Exhibit "A"
hereto. Canceled Notes shall be returned to the Borrower.
(f) Each Bank may without the consent of the Borrower or the
Administrative Agent sell participations to one or more banks or other entities
in all or a portion of its rights and obligations under this Credit Agreement
(including all or a portion of its Commitment and the Loans owing to it and the
Notes held by it); PROVIDED, HOWEVER, that (i) such Bank's obligations under
this Credit Agreement shall remain unchanged, (ii) such Bank shall remain solely
responsible to the other parties hereto for the performance of such obligations,
(iii) the participating banks or other entities shall be entitled to the benefit
of the cost protection provisions contained in Sections 2.13, 2.15 and 2.19 to
the same extent as if they were Banks (however no participating bank or entity
shall be entitled to claim a greater amount than could have been claimed by the
Bank from whom the participation was acquired), (iv) the Borrower, the
Administrative Agent and the other Banks shall continue to deal solely and
directly with such Bank in connection with such Bank's rights and obligations
under this Credit Agreement, and such Bank shall retain the sole right to
enforce the obligations of the Borrower relating to the Loans and to approve any
amendment, modification or waiver of any provision of this Credit Agreement, and
(v) the Borrower shall not incur any cost from such participation sale. No
entity acquiring a participation pursuant to this paragraph (f) shall by virtue
of such participation have any direct voting rights under this Credit Agreement,
and no agreement between the selling Bank and the purchaser of any such
participation shall give such participant any right to consent to, or instruct
such Bank with respect to, any action required or permitted to be taken by such
Bank hereunder or the exercise by such Bank of its voting rights hereunder,
except that such participant may be given the right to consent to waivers or
amendments referred to in clause (i) of the first proviso to Section 9.7(b)
herein.
(g) Any Bank or participant may, in connection with any assignment
or participation or proposed assignment or participation pursuant to this
Section 9.4, disclose to the assignee or participant or proposed assignee or
participant any information relating to the Borrower furnished to such Bank by
or on behalf of the Borrower; PROVIDED that, prior to any such disclosure of
such information, each such assignee or participant or proposed assignee or
participant shall execute an agreement whereby such assignee or participant
shall agree to preserve the confidentiality of such information on terms no less
restrictive than those applicable to Banks pursuant to Section 9.16.
(h) Any Bank may at any time assign all or any portion of its
rights under this Credit Agreement and the Notes issued to it to a Federal
Reserve Bank; PROVIDED that no such assignment shall release a Bank from any of
its obligations hereunder.
-70-
(i) The Borrower shall not assign or delegate any of its rights or
duties hereunder without the prior written consent of the Banks.
SECTION 9.5 EXPENSES; INDEMNITY.
(a) The Borrower agrees to pay all reasonable out-of-pocket
expenses reasonably incurred by the Administrative Agent in connection with the
preparation of this Credit Agreement and the other Loan Documents or in
connection with any amendments, modifications or waivers of the provisions
hereof or thereof (whether or not the transactions hereby contemplated shall be
consummated) or reasonably incurred by the Administrative Agent or any Bank in
connection with the enforcement or protection of their rights in connection with
this Credit Agreement and the other Loan Documents or in connection with the
Loans made or the Notes issued hereunder, including without limitation the
reasonable fees, charges and disbursements of the counsel for the Administrative
Agent, and, in connection with any such enforcement or protection, the
reasonable fees, charges and disbursements of counsel for the Banks. The
Borrower further agrees that it shall indemnify the Banks from and hold them
harmless against any documentary taxes, assessments or charges made by any
Governmental Authority by reason of the execution and delivery of this Credit
Agreement or any of the other Loan Documents.
(b) The Borrower agrees to indemnify the Administrative Agent,
each Bank and each of their respective directors, officers, employees and agents
(each such Person being called an "Indemnitee") against, and to hold each
Indemnitee harmless from, any and all losses, claims, damages, liabilities and
related expenses, including without limitation reasonable counsel fees, charges
and disbursements, incurred by or asserted against any Indemnitee arising out
of, in any way connected with, or as a result of (i) the execution or delivery
of this Credit Agreement or any other Loan Document or any agreement or
instrument contemplated thereby, the performance by the parties thereto of their
respective obligations thereunder or the consummation of the transactions
contemplated thereby, (ii) the use of the proceeds of the Loans, or (iii) any
claim, litigation, investigation or proceeding relating to any of the foregoing,
whether or not any Indemnitee is a party thereto; PROVIDED that such indemnity
shall not, as to any Indemnitee, be available to the extent that such losses,
claims, damages, liabilities or related expenses are determined by a court of
competent jurisdiction by final and nonappealable judgment to have resulted from
the gross negligence or wilful misconduct of such Indemnitee.
(c) The provisions of this Section 9.5 shall remain operative and
in full force and effect regardless of the expiration of the term of this Credit
Agreement, the consummation of the transactions contemplated hereby, the
repayment of any of the Loans, the invalidity or unenforceability of any term or
provision of this Credit Agreement or any other Loan Document, or any
investigation made by or on behalf of the Administrative Agent or any Bank. All
amounts due under this Section 9.5 shall be payable on written demand therefor.
-71-
SECTION 9.6 APPLICABLE LAW. THIS CREDIT AGREEMENT AND THE OTHER LOAN
DOCUMENTS SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE
STATE OF ARIZONA.
SECTION 9.7 WAIVERS; AMENDMENT.
(a) Except as otherwise provided in Section 2.13(d), no failure or
delay of the Administrative Agent or any Bank in exercising any power or right
hereunder shall operate as a waiver thereof, nor shall any single or partial
exercise of any such right or power, or any abandonment or discontinuance of
steps to enforce such a right or power, preclude any other or further exercise
thereof or the exercise of any other right or power. The rights and remedies of
the Administrative Agent and the Banks hereunder and under the other Loan
Documents are cumulative and are not exclusive of any rights or remedies which
they would otherwise have. No waiver of any provision of this Credit Agreement
or any other Loan Document or consent to any departure by the Borrower therefrom
shall in any event be effective unless the same shall be permitted by paragraph
(b) below, and then such waiver or consent shall be effective only in the
specific instance and for the purpose for which given. No notice or demand on
the Borrower in any case shall entitle the Borrower to any other or further
notice or demand in similar or other circumstances.
(b) Neither this Credit Agreement nor any provision hereof may be
waived, amended or modified except pursuant to an agreement or agreements in
writing entered into by the Borrower and the Required Banks; PROVIDED, HOWEVER,
that no such agreement shall (i) decrease the principal amount of, or extend the
maturity of or any scheduled principal payment date or date for the payment of
any interest on any Loan, or waive or excuse any such payment or any part
thereof, or decrease the rate of interest on any Loan, without the prior written
consent of each holder of a Note affected thereby, (ii) change or extend the
Commitment or decrease the Fees of any Bank without the prior written consent of
such Bank, or (iii) amend or modify the provisions of Sections 2.13, 2.14, 2.16,
2.19, 8.3(b), 9.5 or 9.6, the provisions of this Section or the definition of
"Required Banks", without the prior written consent of each Bank; PROVIDED
FURTHER that no such agreement shall amend, modify or otherwise affect the
rights or duties of the Administrative Agent hereunder without the prior written
consent of the Administrative Agent. Each Bank and each holder of a Note shall
be bound by any waiver, amendment or modification authorized by this Section
regardless of whether its Note shall have been marked to make reference thereto,
and any consent by any Bank or holder of a Note pursuant to this Section shall
bind any Person subsequently acquiring a Note from it, whether or not such Note
shall have been so marked.
SECTION 9.8 INTEREST RATE LIMITATION. Notwithstanding anything herein or
in the Notes to the contrary, if at any time the applicable interest rate,
together with all fees and charges which are treated as interest under
applicable law (collectively, the "Charges"), as provided for herein or in any
other document executed in connection herewith, or otherwise contracted for,
charged, received, taken or reserved by any Bank, shall exceed the maximum
lawful rate (the "Maximum
-72
Rate") which may be contracted for, charged, taken, received or reserved by such
Bank in accordance with applicable law, the rate of interest payable under the
Notes held by such Bank, together with all Charges payable to such Bank, shall
be limited to the Maximum Rate.
SECTION 9.9 ENTIRE AGREEMENT. This Credit Agreement and the other Loan
Documents constitute the entire contract between the parties relative to the
subject matter hereof. Any previous agreement among the parties with respect to
the subject matter hereof is superseded by this Credit Agreement and the other
Loan Documents, including without limitation the 1995 Agreement. Nothing in
this Credit Agreement or in the other Loan Documents, expressed or implied, is
intended to confer upon any party other than the parties hereto and thereto any
rights, remedies, obligations or liabilities under or by reason of this Credit
Agreement or the other Loan Documents.
SECTION 9.10 WAIVER OF JURY TRIAL. Each party hereto hereby waives, to the
fullest extent permitted by applicable law, any right it may have to a trial by
jury in respect of any litigation directly or indirectly arising out of, under
or in connection with this Credit Agreement or any of the other Loan Documents.
Each party hereto (a) certifies that no representative, agent or attorney of any
other party has represented, expressly or otherwise, that such other party would
not, in the event of litigation, seek to enforce the foregoing waiver and (b)
acknowledges that it and the other parties hereto have been induced to enter
into this Credit Agreement and the other Loan Documents, as applicable, by,
among other things, the mutual waivers and certifications in this Section 9.10.
SECTION 9.11 SEVERABILITY. In the event any one or more of the provisions
contained in this Credit Agreement or in any other Loan Document should be held
invalid, illegal or unenforceable in any respect, the validity, legality and
enforceability of the remaining provisions contained herein and therein shall
not in any way be affected or impaired thereby. The parties shall endeavor in
good-faith negotiations to replace the invalid, illegal or unenforceable
provisions with valid provisions the economic effect of which comes as close as
possible to that of the invalid, illegal or unenforceable provisions.
SECTION 9.12 COUNTERPARTS. This Credit Agreement may be executed in two or
more counterparts, each of which shall constitute an original but all of which
when taken together shall constitute but one contract, and shall become
effective as provided in Section 9.3. Delivery of an executed counterpart of a
signature page to this Credit Agreement by facsimile transmission shall be
effective as delivery of a manually executed counterpart of this Credit
Agreement.
SECTION 9.13 HEADINGS. Article and Section headings and the Table of
Contents used herein are for convenience of reference only, are not part of this
Credit Agreement and are not to affect the construction of, or to be taken into
consideration in interpreting, this Credit Agreement.
-73-
SECTION 9.14 ALTERNATIVE DISPUTE RESOLUTION.
(a) Banks, Administrative Agent and Borrower hereby agree that all
controversies and claims arising directly or indirectly out of the Loans, this
Credit Agreement or any related documents shall at the written request of any
party be arbitrated pursuant to the applicable rules of the American Arbitration
Association. The arbitration shall occur in the State of Arizona. Judgment
upon any award rendered by the arbitrator(s) may be entered in any court having
jurisdiction. The Federal Arbitration Act shall apply to the construction and
interpretation of this arbitration agreement.
(b) A single arbitrator shall have the power to render a maximum
award of one hundred thousand dollars. When any party files a claim in excess
of this amount, the arbitration decision shall be made by the majority vote of
three arbitrators. No arbitrator shall have the power to restrain any act of
any party.
(c) No provision of paragraph (a) shall limit the right of any
party to exercise self-help remedies, to foreclose against any real or personal
property collateral, or to obtain any provisional or ancillary remedies
(including but not limited to injunctive relief or the appointment of a
receiver) from a court of competent jurisdiction. At Administrative Agent's
option, it may enforce its right under a mortgage by judicial foreclosure, and
under a deed of trust either by exercise of power of sale or by judicial
foreclosure. The institution and maintenance of any remedy permitted above
shall not constitute a waiver of the rights to submit any controversy or claim
to arbitration. The statute of limitations, estoppel, waiver, laches, and
similar doctrines which would otherwise be applicable in an action brought by a
party shall be applicable in any arbitration proceeding.
SECTION 9.15 JURISDICTION; CONSENT TO SERVICE OF PROCESS.
(a) Each of the parties hereto hereby irrevocably and
unconditionally submits, for itself and its property, to the nonexclusive
jurisdiction of Arizona State court or Federal court of the United States of
America sitting in Phoenix, Arizona, and any appellate court from any thereof,
in any action or proceeding arising out of or relating to this Credit Agreement
or the other Loan Documents, or for recognition or enforcement of any judgment,
and each of the parties hereto hereby irrevocably and unconditionally agrees
that all claims in respect of any such action or proceeding may be heard and
determined in such Arizona State or, to the extent permitted by law, in such
Federal court. Each of the parties hereto agrees that a final judgment in any
such action or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by law.
Nothing in this Credit Agreement shall affect any right that any Bank may
otherwise have to bring any action or proceeding relating to this Credit
Agreement or the other Loan Documents against the Borrower or its properties in
the courts of any jurisdiction.
-74-
(b) Each of the parties hereto hereby irrevocably and
unconditionally waives, to the fullest extent it may legally and effectively do
so, 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 this Credit
Agreement or the other Loan Documents in any Arizona State or Federal court
sitting in Phoenix, Arizona. Each of the parties hereto hereby irrevocably
waives, to the fullest extent permitted by law, the defense of an inconvenient
forum to the maintenance of such action or proceeding in any such court.
(c) Each party to this Credit Agreement irrevocably consents to
service of process in the manner provided for notices in Section 9.1. Nothing
in this Credit Agreement will affect the right of any party to this Credit
Agreement to serve process in any other manner permitted by law.
SECTION 9.16 CONFIDENTIALITY. Each Bank agrees to keep confidential (and
to cause its respective officers, directors, employees, agents and
representatives to keep confidential) the Information (as defined below), except
that any Bank shall be permitted to disclose Information (i) to such of its
officers, directors, employees, agents and representatives (including outside
counsel) as need to know such Information; (ii) to the extent required by
applicable laws and regulations or by any subpoena or similar legal process, or
requested by any bank regulatory authority (provided that such Bank shall
promptly notify Borrower (to the extent practicable and lawful, notice shall be
given to the Borrower before such disclosure is made so as to permit Borrower to
seek a protective order) of the circumstances and content of each such
disclosure and shall request confidential treatment of any Information so
disclosed); (iii) to the extent such Information (A) becomes publicly available
other than as a result of a breach of this Credit Agreement, (B) becomes
available to such Bank on a nonconfidential basis from a source other than the
Borrower or its Affiliates, or (C) was available to such Bank on a
nonconfidential basis prior to its disclosure to such Bank by the Borrower or
its Affiliates; or (iv) to the extent the Borrower shall have consented to such
disclosure in writing. As used in this Section 9.16, as to any Bank,
"Information" shall mean any financial statements, materials, documents and
other information that the Borrower or any of its Affiliates may have furnished
or may hereafter furnish
-75-
to the Administrative Agent or any Bank in connection with this Credit Agreement
or any other materials prepared by any such Person from any of the foregoing,
including without limitation projections provided pursuant to Section 5.4(g).
IN WITNESS WHEREOF, the Borrower, the Administrative Agent, and the Banks
have caused this Credit Agreement to be duly executed by their respective
authorized officers as of the day and year first above written.
XXXXX XXXXXXXXXX RESIDENTIAL, L.P., a
Delaware limited partnership
BY: XXXXX XXXXXXXXXX RESIDENTIAL,
INC., a Maryland corporation, its General
Partner
By /s/ Xxxx X. Xxxxxx
-------------------------------------------
Name Xxxx X. Xxxxxx
-----------------------------------------
Its Sr. V.P.
------------------------------------------
BORROWER
BANK ONE, ARIZONA, NA, a national banking
association
By /s/ Xxxxx Xxxx
------------------------------------------------
Name: Xxxxx Xxxx
Its: Senior Vice President
ADMINISTRATIVE AGENT
-76-
BANK ONE, ARIZONA, NA, a national banking
association
By /s/ Xxxxx Xxxx
------------------------------------------------
Name: Xxxxx Xxxx
Its: Senior Vice President
BANK
BANK OF AMERICA NATIONAL TRUST AND SAVINGS
ASSOCIATION
By: /s/ Xxxxx Xxxx
------------------------------------------------
Name: Xxxxx Xxxx
---------------------------------------------
Title: V.P.
--------------------------------------------
BANK
DRESDNER BANK
By: /s/ Xxxx X. Xxxxxxx
------------------------------------------------
Name: Xxxx X. Xxxxxxx
---------------------------------------------
Title: Asst. V.P.
--------------------------------------------
BANK
-00-
XXXXX XXXX
By: /s/ Xxxx X. Xxxxxx
------------------------------------------------
Name: Xxxx X. Xxxxxx
---------------------------------------------
Title: V.P.
--------------------------------------------
BANK
NORWEST BANK OF ARIZONA, N.A.
By: /s/ Xxxx X. Xxxxxxx
------------------------------------------------
Name: Xxxx X. Xxxxxxx
---------------------------------------------
Title: V.P.
--------------------------------------------
BANK
XXXXX FARGO BANK, NATIONAL
ASSOCIATION
By: /s/ Xxxx X. XxXxxxxx
------------------------------------------------
Name: Xxxx X. Xxxxxxxx
---------------------------------------------
Title: V.P.
--------------------------------------------
BANK
-78-
ACKNOWLEDGEMENT AND AGREEMENT OF THE
GENERAL PARTNER
The undersigned is the General Partner as so defined in that Credit
Agreement dated as of September 24, 1996 (as amended, modified and restated from
time to time the "Agreement") between Xxxxx Xxxxxxxxxx Residential, L.P., a
Delaware limited partnership (the "Borrower"), the Banks named therein, Bank
One, Arizona, NA, a national banking association, as Administrative Agent and
Bank of America National Trust and Savings Association and Xxxxx Fargo Bank
National Association as Co-Agents and hereby acknowledges and agrees as follows
as of the date of the Agreement:
(a) It is the sole general partner of the Borrower.
(b) It, to the extent applicable, joins in the
representations and warranties contained in the Agreement, including
without limitation those contained in Article III of the Agreement.
(c) It, to the extent applicable, agrees to be bound by the
agreements and covenants contained in the Agreement, including without
limitation those contained in Articles V and VI of the Agreement, and
the alternative dispute resolution provisions contained in Section
9.14 of the Agreement.
XXXXX XXXXXXXXXX RESIDENTIAL, INC., a
Maryland corporation
By /s/ Xxxx X. Xxxxxx
------------------------------------------------
Name Xxxx X. Xxxxxx
----------------------------------------------
Its Sr. V.P.
-----------------------------------------------
EXHIBIT "A"
FORM OF BORROWING NOTICE
BANK ONE, ARIZONA, NA, as Administrative
Agent for the Banks referred to below
000 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx 00000
Attention: Xxxxx Xxxx
Date ___________
Dear Sirs:
The undersigned, Xxxxx Xxxxxxxxxx Residential, L.P., a Delaware limited
partnership (the "Borrower"), refers to the Credit Agreement dated as of
September 24, 1996 (as it may hereafter be amended, modified, extended or
restated from time to time, the "Credit Agreement"), among the Borrower, the
Banks named therein, Bank One, Arizona, NA, as Administrative Agent for the
Banks and Bank of America National Trust and Savings Association and Xxxxx Fargo
Bank, National Association, as Co-Agents. Capitalized terms used herein and not
otherwise defined herein shall have the meanings assigned to such terms in the
Credit Agreement. The Borrower hereby gives you notice pursuant to Section 2.3
of the Credit Agreement that it requests a Borrowing under the Credit Agreement,
and in that connection sets forth below the terms of which such Borrowing is
requested to be made:
(A) Date of Borrowing
(which is a Business Day) __________________
(B) Principal Amount of
Borrowing(1) __________________
(C) Interest rate basis(2) __________________
(D) Interest Period and last
day, thereof(3) __________________
(1) Not less than $500,000 (and in integral multiples of $100,000) or greater
than the Total Commitment then available.
(2) Eurodollar Loans or Variable Loans.
(3) Which shall be subject to the definition of "Interest Period" and end not
later than the Maturity Date.
(E) Refinance Election
Identity _________________
Amount _________________
Upon acceptance of any or all of the Loans made by the Banks in response to
this request, the Borrower, and where appropriate the Guarantor, shall be
deemed to have represented and warranted that the conditions to lending
specified in Sections 4.1(b) and (c) of the Credit Agreement have been
satisfied.
Very truly yours,
XXXXX XXXXXXXXXX RESIDENTIAL, L.P., a
Delaware limited partnership
BY: XXXXX XXXXXXXXXX RESIDENTIAL,
INC., a Maryland corporation, its General
Partner
By______________________________________
Name____________________________________
Title___________________________________
XXXXX XXXXXXXXXX RESIDENTIAL, INC., a
Maryland corporation
By______________________________________
Name____________________________________
Title___________________________________
_________________
(continued)
Maturity Date.
(4) Identity shall include the Type and the date of the last Interest Period.
EXHIBIT "B"
FORM OF NOTE
$[________________] Phoenix, Arizona
_____________, 19__
FOR VALUE RECEIVED, the undersigned XXXXX XXXXXXXXXX RESIDENTIAL, L.P., a
Delaware limited partnership (the "Borrower"), hereby promises to pay to the
order of __________________________________________________ (the "Bank"), at
the office of BANK ONE, ARIZONA, NA (the "Administrative Agent"), at 000
Xxxxx Xxxxxxx Xxxxxx, Xxxxxxx, Xxxxxxx 00000, on (i) the Interest Payment
Date as defined in the Credit Agreement dated as of September 24, 1996, among
the Borrower, the Banks named therein, BANK ONE, ARIZONA, NA, as
Administrative Agent for the Banks and BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION and XXXXX FARGO BANK, NATIONAL ASSOCIATION as Co-Agents
(as the same may be modified, amended, extended or restated from time to
time, the "Credit Agreement"), unpaid interest which has accrued on the
aggregate unpaid principal amount of all Loans made by the Bank to the
Borrower pursuant to Article II of the Credit Agreement and (ii) on the
Maturity Date (as defined in the Credit Agreement), the lesser of the
principal of ______________________________________ DOLLARS ($____________)
and the aggregate unpaid principal amount of all Loans made by the Bank to
the Borrower pursuant to Article II of the Credit Agreement, in lawful money
of the United States of America in same day funds, and to pay interest from
the date hereof on such principal amount from time to time outstanding, in
like funds, at said office, at a rate or rates per annum and payable on such
dates as determined pursuant to the Credit Agreement.
The Borrower promises to pay interest, on demand, on any overdue principal
and, to the extent permitted by law, overdue interest from their due dates at
a rate or rates determined as set forth in the Credit Agreement.
The Borrower hereby waives diligence, presentment, demand, protest and
notice of any kind whatsoever. The nonexercise by the holder of any of its
rights hereunder in any particular instance shall not constitute a waiver
thereof in that or any subsequent instance.
All borrowings evidenced by this Note and all payments and prepayments of
the principal hereof and interest hereon and the respective dates thereof
shall be endorsed by the holder hereof on the schedule attached hereto and
made a part hereof, or on a continuation thereof which shall be attached
hereto and made a part hereof, or otherwise recorded by such holder in its
internal records; provided, HOWEVER, that any failure of the holder hereof to
make such a notation or any error in such notation shall not in any manner
affect the obligation of the Borrower to make payments of principal and
interest in accordance with the terms of this Note and the Credit Agreement.
This Note is one of the Notes referred to in the Credit Agreement which,
among other things, contains provisions for the acceleration of the maturity
hereof upon the happening of certain events, for optional and mandatory
prepayment of the principal hereof prior to the maturity thereof and for the
amendment or waiver of certain provisions of the Credit Agreement, all upon
the terms and conditions therein specified. THIS NOTE SHALL BE CONSTRUED IN
ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF ARIZONA AND ANY
APPLICABLE LAWS OF THE UNITED STATES OF AMERICA.
XXXXX XXXXXXXXXX RESIDENTIAL, L.P., a
Delaware limited partnership
BY: XXXXX XXXXXXXXXX RESIDENTIAL,
INC., a Maryland corporation, its General
Partner
By___________________________________________
Name_________________________________________
Its__________________________________________
EXHIBIT "C"
FORM OF ASSIGNMENT AND ACCEPTANCE
______________, 19___
Reference is made to the Credit Agreement dated as of September 24, 1996
(the "Credit Agreement"), among XXXXX XXXXXXXXXX RESIDENTIAL, L.P., a
Delaware limited partnership (the "Borrower"), the lenders named therein (the
"Banks"), BANK ONE, ARIZONA, NA, as Administrative Agent for the Banks (in
such capacity, the "Administrative Agent") and BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION and XXXXX FARGO BANK, NATIONAL ASSOCIATION as
Co-Agents. Terms defined in the Credit Agreement and not otherwise defined
herein shall have the meanings assigned to such terms in the Credit Agreement.
1. The Assignor hereby sells and assigns, without recourse, to the
Assignee, and the Assignee hereby purchases and assumes, without recourse,
from the Assignor, effective as of the Effective Date set forth on the
reverse hereof, the interests set forth on the reverse hereof (the "Assigned
Interest") in the Assignor's rights and obligations under the Credit
Agreement, including, without limitation, the interests set forth on the
reverse hereof in the Commitment of the Assignor on the Effective Date and
the Loans owing to the Assignor which are outstanding on the Effective Date,
together with unpaid interest accrued on the assigned Loans to the Effective
Date and the amount, if any, set forth on the reverse hereof of the Fees
accrued to the Effective Date for the account of the Assignor. Each of the
Assignor and the Assignee hereby makes and agrees to be bound by all the
representations, warranties and agreements set forth in Section 9.4(c) of the
Credit Agreement, a copy of which has been received by each such party. From
and after the Effective Date (i) the Assignee shall be a party to and be
bound by the provisions of the Credit Agreement and, to the extent of the
interests assigned by this Assignment and Acceptance, have the rights and
obligations of a Bank thereunder and under the Loan Documents and (ii) the
Assignor shall, to the extent of the interests assigned by this Assignment
and Acceptance, relinquish its rights and be released from its obligations
under the Credit Agreement.
2. This Assignment and Acceptance is being delivered to the Agent
together with (i) the Notes evidencing the Loans included in the Assigned
Interest, (ii) the appropriate forms specified in Section 2.19(e) of the
Credit Agreement, duly completed and executed by such Assignee, (iii) if the
Assignee is not already a Bank under the Credit Agreement, an Administrative
Questionnaire in the form of Exhibit "E" to the Credit Agreement and (iv) a
processing fee of $2,500.00.
3. This Assignment and Acceptance shall be governed by and construed in
accordance with the laws of the State of Arizona.
Date of Assignment:
Legal Name of Assignor:
Legal Name of Assignee:
Assignee's Address for Notice:
Effective Date of Assignment
(may not be fewer than 5 Business
Days after the Date of Assignment):
Percentage Assigned of
Facility/Commitment (set forth,to at
least 8 decimals, as apercentage of
the Facility and the aggregate
Commitments of all Banks
Principal Amount Assigned thereunder)
Facility
Commitment $________________ ______________%
Assigned:
Loans:
Fees Assigned
(if any):
The terms set forth above and
on the reverse side hereof are
hereby agreed to: Accepted(1)
__________________, as Assignor ___________________________________
By__________________________ By __________________________
Its___________________ Its___________________
_________________
(1) To be completed only if consents are required under Section 9.4(b).
__________________, as Assignor ____________________________________________
By__________________________ By __________________________
Its___________________ Its___________________
EXHIBIT "D"
COUNSEL OPINION
A. Borrower:
1. The Borrower is a limited partnership duly organized, validly
existing, and in good standing under the laws of the State of Delaware.
2. The Borrower has the requisite partnership power and partnership
authority (i) to own and operate its properties and assets; (ii) to carry out
its business as such business is currently being conducted; and (iii) to
carry out the terms and conditions applicable to it under the Loan
Documents.* The execution, delivery, and performance of the Loan Documents
by the Borrower have been duly authorized by all requisite partnership action
on the part of the Borrower and the Loan Documents have been duly executed
and delivered by the Borrower.
3. We have no knowledge of any pending or overtly threatened litigation
or other legal proceeding against the Borrower after ____________, 19___.
4. The execution and delivery of the Loan Documents and consummation of
the Loans by the Borrower will not conflict with or result in a violation of
any applicable law or rule affecting the Borrower.
5. No consent, approval, authorization, or other action by, or filing
with, any federal, state, or local governmental authority is required in
connection with the execution and delivery by the Borrower of the Loan
Documents and the consummation of the Loans.
6. The execution and delivery of the Loan Documents and consummation of
the Loan by the Borrower will not conflict with or result in a violation of
the Borrower's __________________________ (organizational documents).
7. The execution and delivery of the Loan Documents and consummation of
the Loans by the Borrower will not conflict with or result in a violation of
any judgment, order, or decree of any court or governmental agency to which
the Borrower is a party or by which it is bound.
8. The execution and delivery of the Loan Documents, and consummation of
the Loans by the Borrower will not conflict with or result in a violation of
any contract, indenture, instrument, or other agreement to which the Borrower
is a party or by which it is bound.
9. The Loan Documents constitute legal, valid, and binding obligations of
the Borrower, enforceable in accordance with their terms.
*Loan Documents: Credit Agreement, Note.
B. General Partner:
1. The General Partner is a corporation duly organized, validly existing,
and in good standing under the laws of the State of Maryland and is qualified
as a "real estate investment trust" under Sections 856, ET SEQ., of the
Internal Revenue Code.
2. The General Partner has the requisite corporate power and corporate
authority (i) to own and operate its properties and assets; (ii) to carry out
its business as such business is currently being conducted; and (iii) to
carry out the terms and conditions applicable to it under the Loan
Documents.** The execution, delivery, and performance of the Loan Documents
by the General Partner have been duly authorized by all requisite corporate
action on the part of the General Partner and the Loan Documents have been
duly executed and delivered by the General Partner.
3. We have no knowledge of any pending or overtly threatened litigation
or other legal proceeding against the General Partner after ___________, 19___.
4. The execution and delivery of the Loan Documents by the General
Partner will not conflict with or result in a violation of any applicable law
or rule affecting the General Partner.
5. No consent, approval, authorization, or other action by, or filing
with, any federal, state, or local governmental authority is required in
connection with the execution and delivery by the General Partner of the Loan
Documents.
6. The execution and delivery of the Loan Documents by the General
Partner will not conflict with or result in a violation of the General
Partner's _____________________________ (organizational documents).
7. The execution and delivery of the Loan Documents by the General
Partner will not conflict with or result in a violation of any judgment,
order, or decree of any court or governmental agency to which the General
Partner is a party or by which it is bound.
8. The execution and delivery of the Loan Documents by the General
Partner will not conflict with or result in a violation of any contract,
indenture, instrument, or other agreement to which the General Partner is a
party or by which it is bound.
9. The Loan Documents constitute legal, valid, and binding obligations of
the General Partner, enforceable in accordance with their terms.
**Loan Documents: Guaranty, Credit Agreement Acknowledgement.
EXHIBIT "E"
ADMINISTRATIVE QUESTIONNAIRE
___________________
Please accurately complete the following information and return via FAX to the
attention of ____________________, as soon as possible.
FAX Number: _________________
LEGAL NAME OF YOUR INSTITUTION TO APPEAR IN DOCUMENTATION:
______________________________________________________________________________
GENERAL INFORMATION - ALTERNATE BASE RATE LENDING OFFICE:
Institution Name:_____________________________________________________________
Street Address:_______________________________________________________________
City, State, Zip Code:________________________________________________________
GENERAL INFORMATION - EURODOLLAR LENDING OFFICE:
Institution Name:_____________________________________________________________
Street Address:_______________________________________________________________
City, State, Zip Code:________________________________________________________
CREDIT CONTACTS/NOTIFICATION METHODS:
Primary Contact:______________________________________________________________
Street Address:_______________________________________________________________
City, State, Zip Code:________________________________________________________
Phone Number:_________________________________________________________________
FAX Number:___________________________________________________________________
Backup Credit Contact:________________________________________________________
Street Address:_______________________________________________________________
City, State, Zip Code:________________________________________________________
Phone Number:_________________________________________________________________
FAX Number:___________________________________________________________________
TAX WITHHOLDING:
UNITED STATES
Non-Resident Alien or Foreign Corporation or Other Foreign Entity
_________________ YES _________________ NO
If yes, please enclose Form 4224 or 101. If no, please enclose Form W-8 or
W-9.
Tax ID Number _________________________________________
CONTACTS/NOTIFICATION METHODS:
ADMINISTRATIVE CONTACTS - BORROWINGS, PAYDOWNS, INTEREST, FEES, ETC.
Contact:______________________________________________________________________
Street Address:_______________________________________________________________
City, State, Zip Code:________________________________________________________
Phone Number:_________________________________________________________________
FAX Number:___________________________________________________________________
Telex & Answer Back:__________________________________________________________
PAYMENT INSTRUCTIONS:
Name of Bank where funds are to be transferred:
_________________________________________________________________________
Routing Transit/ABA number of Bank where funds are to be transferred:
_________________________________________________________________________
Name of Account, if applicable:
_________________________________________________________________________
Account Number:_______________________________________________________________
Additional Information:_______________________________________________________
______________________________________________________________________________
MAILINGS:
Please specify who should receive financial information:
Name:_________________________________________________________________________
Street Address:_______________________________________________________________
City, State, Zip Code:________________________________________________________
It is very important that all of the above information is accurately filled in
and returned promptly. If there is someone other than yourself who should
receive this questionnaire, please notify us of their name and FAX number and we
will FAX them a copy of the questionnaire. If you have any questions, please
call _______________ at ______________________.
EXHIBIT "F"
COMPLIANCE CERTIFICATE
XXXXX XXXXXXXXXX RESIDENTIAL, L.P.,
a Delaware limited partnership ("Borrower")
and
XXXXX XXXXXXXXXX RESIDENTIAL, INC.,
a Maryland corporation ("General Partner")
as of ___________ ("Quarter End Date")
Pursuant to Section 5.4 of that Credit Agreement dated as of September 24,
1996 (the "Agreement") among the Borrower, the Banks named therein, Bank One,
Arizona, NA (the "Administrative Agent") and Bank of America National Trust
and Savings Association and Xxxxx Fargo Bank, National Association as
Co-Agents, the Borrower and the General Partner certify as follows:
A. To the best of their knowledge [no Event of Default or Default has
occurred] [the following Event of Default has occurred _________________
___________________ and the Borrower has taken or proposes to take the
following corrective action _______________________].
B. To the best of the knowledge, as of the Quarter End Date:
1. The total number of apartment units owned by Borrower or by the
General Partner is: _________________
2. The amount of scheduled principal payments of Debt made during the
quarter: $________________
C. To the best of their knowledge, the current status of the Financial
Covenants as of the Quarter End Date is as follows:
1. Adjusted Net Worth:
- At the end of the fiscal quarter: $
-------------
- Minimum (Section 6.8(a)): $250,000,000
2. Total Liabilities to Gross Asset Value ratio:
- At the end of the fiscal quarter: X
-------------
- Maximum (Section 6.8(b)): 0.55x
3. Secured Debt to Gross Asset Value ratio:
- At the end of the fiscal quarter X
-------------
- Maximum (Section 6.8(c)): 0.40x
4. EBITDA to Interest Expense ratio:
- Most recent four (4) fiscal quarters: X
-------------
- Minimum (Section 6.8(d)) 2.25x
5. EBITDA to Debt Service and Reserve for
Replacement ratio:
- Most recent four (4) fiscal quarters: X
-------------
- Minimum (Section 6.8(e)) 2.0x
6. Unencumbered NOI to Unsecured Interest
Expense ratio:
- Unencumbered NOI $________
- Most recent four (4) fiscal quarters: X
-------------
- Minimum (Section 6.8(f)) 1.75x
7. Distributions as a Percentage of FFO:
- Actual percentage X
-------------
- Maximum (Section 6.10) 95.0%
8. Non-apartment investments:
(a) Raw Land as a Percentage of Net Worth plus
minority interests less Intangible Assets:
- Actual Amount of Raw Land Investment $________
- Actual percentage %
-------------
- Maximum (Section 6.11(a)) 10%
(b) Construction In Progress
- Actual Amount $
-------------
- Maximum (Section 6.11(b)) $150,000,000
(c) Other Investments as a Percentage
of total assets
- Actual Amount of other investments $________
- Actual percentage %
-------------
- Maximum (Section 6.11(c)) 20%
9. Floating Rate Indebtedness
- Floating Rate Indebtedness (includes
outstanding Loans and excludes low-floater
bonds and Debt with interest rate protection) $
-------------
- Maximum (Section 6.12) $225,000,000
The undersigned each hereby certifies to the Administrative Agent that as
of the date written above, the foregoing information is true and correct and
was provided from financial information prepared according to GAAP,
consistently applied. All capitalized undefined terms used herein have the
meaning given them in the Agreement.
XXXXX XXXXXXXXXX RESIDENTIAL, L.P., a
Delaware limited partnership
BY: XXXXX XXXXXXXXXX RESIDENTIAL,
INC., a Maryland corporation, its General
Partner
By:__________________________________________
Name:________________________________________
Title:_______________________________________
BORROWER
XXXXX XXXXXXXXXX RESIDENTIAL, INC., a
Maryland corporation
By:__________________________________________
Name:________________________________________
Title:_______________________________________
GENERAL PARTNER
Date:________________________________________
SCHEDULE 2.1
COMMITMENTS OF BANKS
as of September 24, 1996
Euro Lending
Office
Bank One, Arizona, NA $75,000,000.00 _________________
Bank of America National Trust and $40,000,000.00 _________________
Savings Association
000 Xxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxx Xxxxxxx, Regional
Vice President
Phone: (000) 000-0000
Fax: (000) 000-0000
Dresdner Bank $20,000,000.00 _________________
000 Xxxxx Xxxxxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxx Xxxxxx,
Assistant
Vice President
Phone: (000) 000-0000
Fax: (000) 000-0000
Fleet Bank $30,000,000.00 _________________
000 Xxxxxxxxxxxx Xxxxxx
MS RIMO215
Xxxxxxxxxx, Xxxxx Xxxxxx 00000
Attention: Xxxx X. Xxxxxx,
Vice President
Phone: (000) 000-0000
Fax: (000) 000-0000
Norwest Bank of Arizona, N.A. $20,000,000.00 _________________
0000 Xxxxx Xxxxxxx Xxxxxx XX0000
Xxxxxxx, Xxxxxxx 00000-0000
Attention: Xxxx Xxxxxxx, Vice
President
Phone: (000) 000-0000
Fax: (000) 000-0000
Xxxxx Fargo Bank, National Association $40,000,000.00 _________________
000 Xxxx Xxxxxxxxxx
Xxxxxxx, Xxxxxxx 00000
Attention: Xxxx XxXxxxx, Vice
President/Manager
Phone: (000) 000-0000
Fax: (000) 000-0000