Amended and Restated Revolving Credit Agreement
(Bridge Loan Facility)
among
AIMCO Properties, L.P.,
a Delaware limited partnership,
Bank of America National Trust and Savings Association,
as the Agent,
and
Bank of America National Trust and Savings Association
as the initial Lender
May 5, 1997
TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS.........................................................1
1.01 Defined Terms.........................................................1
1.02 Other Definitional Provisions.........................................8
1.03 Accounting Principles................................................10
ARTICLE II THE FACILITY......................................................10
2.01 Amounts and Terms of Bridge Commitments..............................10
2.02 Note.................................................................11
2.03 Procedure for Borrowing..............................................11
2.04 Conversion and Continuation Elections................................13
2.05 Optional Prepayments.................................................15
2.06 Mandatory Prepayments of Loans.......................................15
2.07 Application of Proceeds..............................................15
2.08 Repayment............................................................15
2.09 Interest.............................................................15
2.10 Fees.................................................................16
2.11 Computation of Fees and Interest.....................................16
2.12 Payments by the Company..............................................17
2.13 Security.............................................................17
2.14 Loan and Funded Project Conditions...................................18
2.15 Payments by the Banks to the Agent...................................20
2.16 Sharing of Payments, Etc.............................................21
ARTICLE III TAXES, YIELD PROTECTION AND ILLEGALITY...........................21
3.01 Taxes................................................................21
3.02 Illegality...........................................................24
3.03 Increased Costs and Reduction of Return..............................25
3.04 Funding Losses.......................................................25
3.05 Inability to Determine Rates.........................................26
3.06 Certificates of Lender...............................................26
3.07 Survival.............................................................26
ARTICLE IV CONDITIONS PRECEDENT..............................................26
4.01 Conditions of First Loan.............................................26
4.02 Conditions to Each Loan..............................................27
ARTICLE V REPRESENTATIONS AND WARRANTIES.....................................28
5.01 Representations under the Revolving Credit Agreement.................28
5.02 Title to the Funded Projects.........................................28
5.03 Governmental Authorization...........................................28
5.07 Certain Representations Concerning Funded Projects...................29
5.05 Equity Interests Pledge Agreements...................................29
5.06 Use of Proceeds; Margin Regulations..................................29
5.07 Not a "Foreign Person................................................29
5.08 Full Disclosure......................................................29
ARTICLE VI AFFIRMATIVE COVENANTS.............................................30
6.01 Financial Information................................................30
6.02 Certificates; Other Information......................................30
6.03 Notices..............................................................30
6.04 Insurance............................................................31
6.05 Environmental Laws...................................................31
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6.06 Use of Proceeds......................................................31
6.07 Inspection of Property and Books and Records.........................31
6.08 Additional Guaranties................................................32
6.09 Covenants Relating to Funded Projects................................32
6.10 Payment of Obligations...............................................32
6.11 Further Assurances...................................................33
6.12 Covenant to Indemnify Regarding Construction and Other Risks.........33
6.13 Indemnity Regarding Hazardous Substances.............................34
ARTICLE VII NEGATIVE COVENANTS...............................................36
7.01 Liens................................................................36
7.02 Disposition of Funded Projects.......................................36
7.03 Use of Proceeds......................................................36
ARTICLE VIII EVENTS OF DEFAULT...............................................36
8.01 Event of Default.....................................................36
8.02 Remedies.............................................................38
8.03 Rights Not Exclusive.................................................38
ARTICLE IX THE AGENT.........................................................38
9.01 Appointment and Authorization........................................38
9.02 Delegation of Duties.................................................39
9.03 Liability of Agent...................................................39
9.04 Reliance by Agent....................................................39
9.05 Notice of Default....................................................40
9.06 Credit Decision......................................................40
9.07 Indemnification......................................................41
9.08 Agent in Individual Capacity.........................................41
9.09 Successor Agents.....................................................42
9.10 Collateral Matters...................................................42
ARTICLE X MISCELLANEOUS......................................................42
10.01 Amendments and Waivers..............................................42
10.02 Notices.............................................................43
10.03 No Waiver; Cumulative Remedies......................................44
10.04 Costs and Expenses..................................................44
10.05 Indemnity...........................................................45
10.06 Marshalling; Payments Set Aside.....................................45
10.07 Successors and Assigns..............................................45
10.08 Assignments, Participations, etc....................................45
10.09 Setoff..............................................................47
10.10 Notification of Addresses, Lending Offices, Etc.....................48
10.11 Counterparts........................................................48
10.12 Severability........................................................48
10.13 No Third Parties Benefited..........................................48
10.14 Time................................................................48
10.15 Governing Law.......................................................48
10.16 Waiver of Jury Trial................................................48
10.17 Arbitration.........................................................49
10.18 Notice of Claims; Claims Bar........................................49
10.19 Entire Agreement....................................................50
10.20 Interpretation......................................................50
10.21 Exculpation of Banks................................................50
10.22 Relationship........................................................50
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AMENDED AND RESTATED CREDIT AGREEMENT
(Bridge Loan)
This AMENDED AND RESTATED CREDIT AGREEMENT (BRIDGE LOAN) (this
"Agreement") is entered into as of May 5, 1997, among AIMCO PROPERTIES, L.P., a
Delaware limited partnership (the "Company"), the lenders from time to time
party to this Agreement (the "Lenders"), BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION, as one of the Lenders ("BofA"), and BANK OF AMERICA
NATIONAL TRUST AND SAVINGS ASSOCIATION, as Agent (the "Agent").
A. Pursuant to that certain Credit Agreement, dated as of
August 12, 1996, by and between BofA, as a lender and the agent, and the
Company, as amended (as so amended, the "Previous Credit Agreement"), BofA made
available to the Company a bridge loan facility in the amount of up to Twenty-
Five Million Dollars ($25,000,000).
B. BofA, the Lenders and the Company desire to replace the
Previous Credit Agreement with this Agreement thereby making available to the
Company a bridge loan facility upon the terms and conditions set forth in this
Agreement. Upon the Closing Date (as defined below), the lending commitments of
any Lender to the Company under the Previous Credit Agreement shall be
cancelled.
C. As of the date hereof, the outstanding principal balance
under the Previous Credit Agreement is $4,119,739.
D. Concurrently herewith, the Lenders, the Company, and the
Agent are entering into that certain Amended and Restated Credit Agreement
(Secured Revolver-to-Term Facility), which makes available to the Company a
revolver-to-term credit facility in an amount not to exceed One Hundred Million
Dollars ($100,000,000) (the "Revolving Credit Agreement).
NOW, THEREFORE, in consideration of the mutual agreements,
provisions and covenants contained herein, the parties hereby agree as follows:
ARTICLE I
DEFINITIONS
1.01 DEFINED TERMS. Capitalized terms used but not defined
herein have the meanings set forth in the Revolving Credit Agreement. In
addition to the terms defined elsewhere in this Agreement, the following terms
have the following meanings:
"AFFILIATE" means, as to any Person, any other Person which,
directly or indirectly, is in control of, is controlled by, or is under common
control with, such Person. A Person shall
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be deemed to control another Person if the controlling Person possesses,
directly or indirectly, the power to direct or cause the direction of the
management and policies of the other Person, whether through the ownership of
voting securities, by contract or otherwise. Without limitation, any director,
executive officer or beneficial owner of five percent (5%) or more of the equity
of a Person shall, for the purposes of this Agreement, be deemed to control the
other Person. In no event shall any Lender be deemed an "Affiliate" of the
Company.
"AGENT" means Bank of America National Trust and Savings
Association, in its capacity as Agent, and any successor Agent appointed
hereunder.
"AGENT-RELATED PERSONS" has the meaning specified in Section 9.03.
"AGGREGATE BRIDGE COMMITMENT" means the combined Bridge
Commitments of the Lenders, in the amount of up to $25,000,000 which amount upon
the date hereof is $15,000,000 but may be increased in accordance with Section
2.01(c) below to up to $25,000,000.
"AGREEMENT" means this Revolving Credit Agreement (Bridge Loan),
as amended, supplemented or modified from time to time.
"APPLICABLE MARGIN" means
(a) with respect to Base Rate Loans, [0.0%]; and
(b) with respect to LIBOR Loans, the Applicable LIBOR
Margin then in effect under the Revolving Credit Agreement plus 0.25%.
"ASSIGNEE" has the meaning specified in Section 10.08(a).
"ASSIGNMENT AND ACCEPTANCE" has the meaning specified in Section
10.08(a).
"ATTORNEY COSTS" means and includes all reasonable fees and
disbursements of any law firm or other external counsel, the allocated cost of
internal legal services and all disbursements of internal counsel.
"LENDER" means each of the lenders party to this Agreement, and
includes BofA in its individual capacity.
"LENDER AFFILIATE" means a Person that is engaged primarily in the
business of commercial lending and is a Subsidiary of a Lender or of a Person of
which a Lender is a Subsidiary.
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"BANKRUPTCY CODE" means the Federal Bankruptcy Reform Act of 1978
(12 U.S.C. Section 101, ET. SEQ.), as amended from time to time.
"BASE RATE" means the higher of:
(a) the annual rate of interest publicly announced from
time to time by the Reference Lender as its "reference" rate. The "reference"
rate is a rate set based upon various factors including the Reference Lender's
costs and desired return, general economic conditions, and other factors, and is
used as reference points for pricing some loans. Any change in the Base Rate
shall take effect on the day specified in the public announcement of such
change; or
(b) one-half of one percent (0.5%) per annum above the
latest Federal Funds Rate.
"BASE RATE LOAN" means a Loan that bears interest based on the
Base Rate.
"BOFA" means Bank of America National Trust and Savings
Association, other than in its capacity as the Agent hereunder.
"BORROWING NOTICE" means a notice given by the Company to the
Agent pursuant to Section 2.03, in substantially the form of EXHIBIT A.
"BRIDGE AVAILABILITY" shall mean at any time the Bridge
Commitment, minus the outstanding balance of all Loans at such time.
"BRIDGE COMMITMENT" means the amount set forth opposite each
Lender's name in SCHEDULE 2.01 (such amount as the same may be reduced or
increased as a result of one or more assignments pursuant to Section 10.08).
"BRIDGE COMMITMENT PERCENTAGE" means, as to any Lender, the
percentage equivalent of such Lender's Bridge Commitment divided by the
Aggregate Bridge Commitment.
"BRIDGE FACILITY" has the meaning specified in Section 2.01(a).
"BRIDGE FACILITY MATURITY DATE" means the earlier of (i) the
Conversion Date, (ii) the date on which the Aggregate Commitment under (and as
such term is defined in) the Revolving Credit Agreement is reduced to zero, and
(iii) August 12, 1998; subject, however, to earlier acceleration pursuant to the
provisions of the Loan Documents.
"BUSINESS DAY" means any day other than a Saturday, Sunday or
other day on which commercial lenders are authorized or required by law to close
in New York City or the city in which the Agent's office charged with
administration of the Loans is
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located; except in cases in which it relates to any LIBOR Loan, in which cases
"Business Day" means such a day on which dealings are carried on in the London
dollar interbank market.
"CAPITAL ADEQUACY REGULATION" means any guideline, request or
directive of any central lender or other Governmental Authority having
jurisdiction, or any other law, rule or regulation, whether or not having the
force of law, regarding capital adequacy of any Lender or of any corporation
controlling a Lender.
"CLOSING DATE" means the date on which all conditions precedent
set forth in Section 4.01 are satisfied or waived by all Lenders; said date
shall occur no later than the Closing Date under the Revolving Credit Agreement.
"COLLATERAL" means all property interests, now owned or hereafter
acquired, of the Company or any Wholly-Owned Subsidiary in or upon which a Lien
now or hereafter exists in favor of the Agent on behalf of the Lenders hereunder
or under the Equity Interests Pledge Documents.
"DEFAULT" means any event or circumstance which, with the giving
of notice, the lapse of time, or both, would (if not cured or otherwise
remedied) constitute an Event of Default.
"DISPOSITION" means the sale, lease, conveyance, transfer,
encumbrance, mortgage, hypothecation or other disposition of (whether in one or
a series of transactions) any Funded Project or portion thereof or interest
therein.
"DOLLARS", "DOLLARS" and "$" each mean lawful money of the United
States.
"DOMESTIC LENDING OFFICE" means, with respect to each Lender, the
office of that Lender designated as such on the signature pages hereto or such
other office of a Lender as it may from time to time specify in writing to the
Company and the Agent.
"ELIGIBLE ASSIGNEE" means (a) a commercial bank organized under
the laws of the United States, or any state thereof, and having a combined
capital and surplus of at least $100,000,000, (b) a commercial bank organized
under the laws of any other country which is a member of the Organization for
Economic Cooperation and Development (the "OECD"), or a political subdivision of
any such country, and having a combined capital and surplus of at least
$100,000,000, provided that such commercial bank is acting through a branch or
agency located in the country in which it is organized or another country which
is also a member of the OECD, and (c) any Lender Affiliate.
"EQUITY INTERESTS PLEDGE AGREEMENTS" shall mean the pledge
agreements delivered from time to time pursuant to Section 2.13.
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"EQUITY INTERESTS PLEDGE DOCUMENTS" means, collectively, (a) the
Equity Interests Pledge Agreements delivered by the Company or any Wholly-Owned
Subsidiary to the Agent for the benefit of the Lenders pursuant hereto, (b) all
financing statements (or comparable documents) now or hereafter filed in
accordance with the UCC (or comparable law) against the Company or any Wholly-
Owned Subsidiary as debtor in favor of the Lenders or the Agent for the benefit
of the Lenders as secured party pursuant to the Equity Interests Pledge
Agreements, and (c) any amendments, supplements, modifications, renewals,
replacements, consolidations, substitutions and extensions of any of the
foregoing.
"EVENT OF DEFAULT" means any of the events or circumstances
specified in Section 8.01.
"EVENT OF LOSS" means, with respect to any Funded Project, any of
the following: (a) any loss, destruction or damage of such Funded Project, (b)
any pending or threatened institution of any proceedings for the condemnation or
seizure of such Funded Project or for the exercise of any right of eminent
domain, or (c) any actual condemnation, seizure or taking, by exercise of the
power of eminent domain or otherwise, of such Funded Project, or confiscation of
such property or requisition of the use of such Funded Project.
"FEDERAL FUNDS RATE" means, for any period, the rate set forth in
the weekly statistical release designated as H.15(519), or any successor
publication, published by the Federal Reserve Board (including any such
successor, "H.15(519)") for such day opposite the caption "Federal Funds
(Effective)". If on any relevant day such rate is not yet published in
H.15(519), the rate for such day will be the rate set forth in the daily
statistical release designated as the Composite 3:30 p.m. Quotations for U.S.
Government Securities, or any successor publication, published by the Federal
Reserve Bank of New York (including any such successor, the "Composite 3:30 p.m.
Quotation") for such day under the caption "Federal Funds Effective Rate". If
on any relevant day the appropriate rate for such previous day is not yet
published in either H.15(519) or the Composite 3:30 p.m. Quotations, the rate
for such day will be the arithmetic mean of the rates for the last transaction
in overnight Federal funds arranged prior to 9:00 a.m. (New York time) on that
day by each of three (3) leading brokers of Federal funds transactions in New
York City selected by the Agent.
"FUNDED PROJECT" means any one of the Initial Funded Projects or
any other multi-family apartment project with respect to which the Company or a
Wholly-Owned Subsidiary owns or will, prior to or simultaneously upon the
release of any Loan funds hereunder on account thereof, acquire a fee simple
estate, subject only to normal and customary title exceptions, and which has
been approved by the Lenders in accordance with Section 2.14 below. A project
shall cease being a "Funded Project" hereunder in accordance with Section 7.02
hereof.
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"INDEMNIFIED COST" has the meaning specified in Section 6.10.
"INDEMNIFIED LIABILITIES" has the meaning specified in Section
10.05.
"INDEMNIFIED PARTY" has the meaning specified in Section 6.10.
"INDEMNIFIED PERSON" has the meaning specified in Section 10.05.
"INDIVIDUAL BRIDGE LOAN LIMITATION" has the meaning set forth in
Section 2.14(b).
"INDIVIDUAL BRIDGE LOAN MATURITY DATE" means, with respect to each
Loan, the date which is the earlier of (i) sixty (60) days after the
disbursement of such Loan, (ii) the Bridge Facility Maturity Date or (iii) in
the case of the Initial Funded Projects, the date designated as such on SCHEDULE
1.01 attached hereto, subject, however, to earlier acceleration pursuant to the
provisions of the Loan Documents.
"INITIAL FUNDED PROJECTS" means the multi-family apartment
projects so designated on SCHEDULE 1.01 attached hereto.
"INTEREST PAYMENT DATE" means, with respect to any Base Rate Loan
and any LIBOR Loan, the thirtieth day and the sixtieth day after each Loan has
been funded, unless such Loan is sooner repaid in full.
"INTEREST PERIOD" means, with respect to any LIBOR Loan, the
period commencing on the Business Day on which the Loan is disbursed or on the
Pricing Conversion Date on which the Loan is continued as or converted to the
LIBO Rate and ending on the date one (1) or two (2) months thereafter, as
selected by the Company in its Borrowing Notice or Notice of
Conversion/Continuation; PROVIDED that:
(a) if any Interest Period would otherwise end on a day
that is not a Business Day, such Interest Period shall be extended to the next
succeeding Business Day unless the result of such extension would be to carry
such Interest Period into another calendar month, in which event such Interest
Period shall end on the immediately preceding Business Day;
(b) any Interest Period that begins on the last Business
Day of a calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such Interest Period)
shall end on the last Business Day of the calendar month at the end of such
Interest Period; and
(c) no Interest Period for any Loan shall extend beyond
the Individual Bridge Loan Maturity Date for that Loan.
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"KNOWLEDGE OF THE COMPANY" means the actual knowledge (after
reasonable inquiry) of any of the officers of the Company or the REIT and each
other Person with executive responsibility for any aspect of the Company's or
the REIT's business.
"LENDING OFFICE" means, with respect to any Lender, the office or
offices of the Lender specified as its "Lending Office" opposite its name on the
signature pages hereto, or such other office or offices of the Lender as it may
from time to time specify in writing to the Company and the Agent.
"LIBO RATE" means, for each Interest Period for any LIBOR Loan, an
interest rate per annum (rounded upward to the nearest 1/100th of 1%) determined
pursuant to the following formula:
LIBO Rate = LIBOR
-------------------------
1.00 - Reserve Percentage
Where,
(i) "LIBOR" means the per annum rate of interest,
rounded upward, if necessary, to the nearest 1/16th of one percent (0.0625%), at
which the Reference Lender's London branch, London, England, would offer U.S.
dollar deposits in amounts and for periods comparable to those of the applicable
LIBOR Loan and Interest Period to major lenders in the London U.S. dollar inter-
lender market at approximately 11:00 a.m., London time, on the first Business
Day after the Borrowing Notice or Notice of Conversion/Continuation for such
LIBOR Loan is delivered to the Agent; and
(ii) "RESERVE PERCENTAGE" means the total of the maximum
reserve percentages from time to time for determining the reserves to be
maintained by member lenders of the Federal Reserve System for Eurocurrency
Liabilities, as defined in Federal Reserve Board Regulation D, whether or not
applicable to any Lender. The Reserve Percentage shall be expressed in decimal
form and rounded upward, if necessary, to the nearest 1/100th of one percent,
and shall include marginal, emergency, supplemental, special and other reserve
percentages.
"LIBOR LOAN" means a Loan that bears interest based on the LIBO
Rate.
"LOAN" has the meaning specified in Section 2.01(a).
"LOAN DOCUMENTS" means this Agreement, the Equity Interests Pledge
Documents and the REIT Guaranty Documents.
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"MATERIAL ADVERSE EFFECT" means a material adverse change in, or a
material adverse effect upon, any of (a) the assets, operations, business,
condition (financial or otherwise), or prospects of the Company, the REIT and
their respective Subsidiaries, taken as a whole, (b) the ability of the Company,
the REIT and their respective Subsidiaries to perform under any Loan Document
and avoid any Event of Default, (c) the ability of the REIT and the Subsidiaries
party thereto to perform under the REIT Guaranty Documents.
"NOTE" means a promissory note of the Company payable to the order
of a Lender in substantially the form of EXHIBIT B, evidencing the aggregate
indebtedness of the Company to such Lender resulting from Loans made by such
Lender.
"NOTICE OF CONVERSION/CONTINUATION" means a notice given by the
Company to the Agent pursuant to Section 2.04, in substantially the form of
EXHIBIT C.
"OBLIGATIONS" means all Loans, and other Indebtedness, advances,
debts, liabilities, obligations, covenants and duties owed by the Company, the
REIT or any of their respective Subsidiaries to the Agent, any Lender, or any
other Person required to be indemnified under any Loan Document, of any kind or
nature, present or future, whether or not evidenced by any note, guaranty or
other instrument, arising under this Agreement or under any other Loan Document,
whether or not for the payment of money, whether arising by reason of an
extension of credit, loan, guaranty, indemnification or in any other manner,
whether direct or indirect (including those acquired by assignment), absolute or
contingent, due or to become due, now existing or hereafter arising and however
acquired.
"OTHER TAXES" has the meaning specified in Section 3.01(b).
"OUTSTANDING AMOUNT" means the aggregate principal amount of all
outstanding Loans.
"PARTICIPANT" has the meaning specified in Section 10.08(d).
"PAYMENT OFFICE" means the address for payments set forth on the
signature page hereto in relation to the Agent or such other address as the
Agent may from time to time specify in accordance with Section 10.02.
"PRICING CONVERSION DATE" means any date on which the Company
elects to (a) convert a Base Rate Loan to a LIBOR Loan or a LIBOR Loan to a Base
Rate Loan or (b) continue an existing LIBOR Loan for an additional Interest
Period.
"REFERENCE LENDER" means BofA.
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"REIT" means Apartment Investment and Management Company, a
Maryland corporation.
"REIT GUARANTY DOCUMENTS" shall mean a guaranty of the
Obligations, in the form of EXHIBIT D attached hereto, and such other documents
relating to such guaranty as the Agent may require, duly executed by the REIT,
AIMCO-GP, Inc., AIMCO-LP, Inc., AIMCO Holdings, L.P., AIMCO Holdings QRS, Inc.,
AIMCO Somerset, Inc., and AIMCO/OTC QRS, Inc., together with the guaranties
delivered pursuant to Section 6.08.
"REQUISITE LENDERS" means, as of any date of determination, (a) if
there is one Lender hereunder, that Lender, and (b) if there are two (2) or more
Lenders hereunder, then two (2) or more Lenders (for purposes of counting
Lenders, BofA and all affiliates of BofA collectively count as one Lender, and
in order to qualify as one of the two (2) necessary Lenders, a Lender must hold
a minimum Bridge Commitment of $5,000,000), holding at least sixty-six and two-
thirds percent (66-2/3%) of the outstanding balance of the Loans, or, if there
are no Loans outstanding, having at least sixty-six and two thirds percent
(66-2/3%) of the Aggregate Bridge Commitment.
"TAXES" has the meaning specified in Section 3.01(a).
"WHOLLY-OWNED SUBSIDIARY" means a Subsidiary of the Company or the
REIT one hundred percent (100%) of the Stock or other equity or other beneficial
interests (in the case of Persons other than corporations) is owned directly or
indirectly by (i) the Company and/or (ii) the REIT, and which in each such case
has been formed in accordance with Section 7.07 of the Revolving Credit
Agreement; provided, however, that where such term is qualified with respect to
a specific Person (e.g., "Wholly-Owned Subsidiary of the REIT") such term means
a Subsidiary (i) one hundred percent (100%) of the Stock or other equity or
other beneficial interests (in the case of Persons other than corporations) is
owned directly or indirectly by such Person, and (ii) which is formed in
compliance with Sections 7.07 of the Revolving Credit Agreement.
1.02 OTHER DEFINITIONAL PROVISIONS.
(a) DEFINED TERMS. Unless otherwise specified herein or
therein, all terms defined in this Agreement shall have the defined meanings
when used in any certificate or other document made or delivered pursuant
hereto. The meaning of defined terms shall be equally applicable to the
singular and plural forms of the defined terms. Terms (including uncapitalized
terms) not otherwise defined herein but defined in the UCC shall have the
meanings set forth therein.
(b) THE AGREEMENT. The words "hereof", "herein",
"hereunder" and words of similar import when used in this Agreement shall refer
to this Agreement as a whole and not to any particular provision of this
Agreement; and section, schedule and
9
exhibit references are to this Agreement unless otherwise specified.
(c) CERTAIN COMMON TERMS.
(i) The term "documents" includes any and all
instruments, documents, agreements, certificates, indentures, notices and other
writings, however evidenced.
(ii) The term "including" is not limiting and
means "including without limitation."
(iii) The term "ratably" means, at any time that
Loans may be outstanding, in accordance with the amount of the outstanding Loans
of the respective Lenders; and, at any time that no Loans are outstanding, in
accordance with the outstanding Bridge Commitments of the respective Lenders.
(d) PERFORMANCE; TIME. Whenever any performance
obligation hereunder (other than a payment obligation) is stated to be due or
required to be satisfied on a day other than a Business Day, such performance
shall be made or satisfied on the next succeeding Business Day. In the
computation of periods of time from a specified date to a later specified date,
the word "from" means "from and including"; the words "to" and "until" each mean
"to but excluding," and the word "through" means "to and including". If any
provision of this Agreement refers to any action taken or to be taken by any
Person, or which such Person is prohibited from taking, such provision shall be
interpreted to encompass any and all means, direct or indirect, of taking, or
not taking, such action.
(e) CONTRACTS. Unless otherwise expressly provided
herein, references to agreements and other contractual instruments shall be
deemed to include all subsequent amendments and other modifications thereto, but
only to the extent such amendments and other modifications are not prohibited by
the terms of any Loan Document.
(f) LAWS. References to any statute or regulation are
to be construed as including all statutory and regulatory provisions
consolidating, amending or replacing the statute or regulation.
(g) CAPTIONS. The captions and headings of this
Agreement are for convenience of reference only and shall not affect the
construction of this Agreement.
(h) INDEPENDENCE OF PROVISIONS. The parties acknowledge
that this Agreement and other Loan Documents may use several different
limitations, tests or measurements to regulate the same or similar matters, and
that such limitations, tests and measurements are cumulative and must each be
performed, except as expressly stated to the contrary in this Agreement.
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1.03 ACCOUNTING PRINCIPLES.
(a) GAAP. Unless the context otherwise clearly
requires, all accounting terms not expressly defined herein shall be construed,
and all financial computations required under this Agreement shall be made, in
accordance with GAAP, consistently applied.
(b) FISCAL YEAR; QUARTER. References herein to "fiscal
year" and "fiscal quarter" refer to such fiscal periods of the Company.
ARTICLE II
THE FACILITY
2.01 AMOUNTS AND TERMS OF BRIDGE COMMITMENTS.
(a) BRIDGE LOANS. Subject to the terms and conditions
of this Agreement and the Note, each Lender severally agrees, on the terms and
conditions hereinafter set forth, to make loans to the Company (each such loan,
a "Loan" and all such loans collectively, the "Bridge Facility") from time to
time on any Business Day during the period from the Closing Date until the
Bridge Facility Maturity Date, in such amounts as the Company may request that
do not exceed (i) in the aggregate, the lesser of (A) such Lender's Bridge
Commitment, or (B) such Lender's Bridge Commitment Percentage of the Bridge
Availability, or (ii) with respect to any single Funded Project, such Lender's
Bridge Commitment Percentage of the Individual Bridge Loan Limitation for such
Funded Project as determined in accordance with Section 2.13 hereof. Each Loan
shall be in a principal amount at least equal to One Million Dollars
($1,000,000) and integral multiples of $100,000 in excess thereof. No Loans
shall be made after the Bridge Facility Maturity Date. Within the foregoing
limitations, and subject to the other terms and conditions hereof, the Company
may borrow under this Section 2.01(a), repay or prepay pursuant to Section 2.05
and reborrow pursuant to this Section 2.01(a). In the event that any Lender
increases its "Commitment" under (and as such term is defined in) the Revolving
Credit Agreement, or any Additional Lender (as so defined) increases the
Aggregate Commitment (as so defined) thereunder, pursuant to Section 2.01(a)(iv)
thereof, then automatically upon the effectiveness of such increase under the
Revolving Credit Agreement, the Bridge Commitments of the Lenders shall be
adjusted as provided in SCHEDULE 2.01, and any such Additional Lender shall,
automatically upon the adjustment date under the Additional Lender Agreement (as
so defined) delivered by it, become a lender party to this Agreement.
(b) BRIDGE CREDIT USAGE. The Company shall use the
proceeds of all Loans for the purposes described in Section 2.14(a) hereof.
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(c) INCREASE IN COMMITMENTS. The Agent may from time to
time prior to the Bridge Loan Maturity Date arrange an increase in the Aggregate
Bridge Commitment in accordance with this Section 2.01(c); provided, that the
aggregate amount of all such Aggregate Bridge Commitment increases shall not
exceed $10,000,000 and in no event shall the Aggregate Bridge Commitment exceed
$25,000,000. Agent may arrange either for an existing Lender to increase its
Commitment or arrange for one or more lenders not a party to this Agreement, but
qualifying as an Eligible Assignee (each such person, an "Additional Lender"),
to assume such additional Commitment(s) (provided that any Additional Lender
shall have a Commitment of not less than $1,250,000) by becoming a party to this
Agreement by signing an Additional Lender Agreement (in substantially the form
attached to the Revolving Credit Agreement) and such other documentation as the
Agent may reasonably request to effectuate such transaction. If, after giving
effect to any increase in the Bridge Loan Commitments as aforesaid, the
respective Bridge Commitment Percentages of the Lenders are not the same as the
respective Bridge Commitment Percentages of the Lenders immediately prior to
such increase, the Company shall prepay any outstanding Loans, together with
interest thereon and any amounts due pursuant to Section 3.04, effective as of
the date of such increase, which payments shall be applied in accordance with
each Lender's Bridge Commitment Percentage prior to giving effect to such
increase, and may reborrow such Bridge Loans from each Lender in accordance with
each Lender's revised Bridge Commitment Percentage after giving effect to such
increase. The Agent and the Lenders shall use reasonable efforts to effect any
such increase so as to minimize amounts due pursuant to Section 3.04. Increases
in Bridge Commitments pursuant to this Section shall be made concurrently with
Commitments under the Revolving Credit Agreement, as more fully described
therein.
2.02 NOTE. The Loans made by each Lender shall be evidenced by a
Note dated the Closing Date payable to the order of that Lender in an amount
equal to its Bridge Commitment. Each Lender shall endorse on the schedules
annexed to the Note, the date, amount and maturity of each Loan made by it and
the amount of each payment of principal made by the Company with respect
thereto. Each Lender is irrevocably authorized by the Company to endorse its
Note, and each Lender's record shall be conclusive absent manifest error;
PROVIDED, HOWEVER, that the failure of a Lender to make, or an error in making,
a notation thereon with respect to any Loan shall not limit or otherwise affect
the obligations of the Company hereunder or under any such Note to such Lender.
As of the Closing Date, the Notes shall evidence each Lender's Bridge Commitment
Percentage of the outstanding advances made under the Previous Credit Agreement
(together with all accrued interest thereon as of the date hereof and all
interest accruing hereafter), which advances shall, for all purposes hereof, be
deemed to have been made under this Agreement and shall be subject to the terms
and conditions hereof. All such advances shall be evidenced by the Notes and
shall be secured by the Collateral Documents and shall bear interest at
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the rates and for the remainder of the Interest Periods established under the
Previous Credit Agreement.
2.03 PROCEDURE FOR BORROWING.
(a) BORROWING NOTICE. Each Loan shall be made upon the
irrevocable written notice (including notice via facsimile confirmed immediately
by a telephone call) of the Company in the form of a Borrowing Notice, as
follows:
(i) DESIGNATION OF INTEREST RATE. The Company
shall have the right to elect that a Loan be made as a LIBOR Loan or a Base Rate
Loan; PROVIDED that, unless the Agent shall otherwise agree in writing, the
Company may not elect that a Loan be made as a LIBOR Loan if after giving effect
to such Loan there shall be more than five (5) different LIBOR Loans
outstanding.
(ii) APPROVAL OF FUNDED PROJECT. The Company
shall have delivered to the Lenders the notice and other information required
under, and the Lenders shall have approved the Funded Project to which such Loan
relates in accordance with, Section 2.14 below.
(iii) TIMING OF NOTICE. Each Borrowing Notice
shall be submitted to and received by the Agent prior to 9:00 a.m. (California
time) (A) at least three (3) Business Days prior to the specified borrowing
date, in the case of LIBOR Loans; and (B) at least one (1) Business Day prior to
the specified borrowing date, in the case of Base Rate Loans.
(iv) CONTENTS OF NOTICE. Each Borrowing Notice
shall set forth the following information with respect to the Loan subject
thereto:
(A) a single, specific borrowing date,
which shall be a Business Day;
(B) a single, exact amount for the Loan,
which for any LIBOR Loan, shall be in an aggregate minimum principal amount of
$1,000,000 or any multiple of $100,000 in excess thereof;
(C) whether the Loan is to be made as a
LIBOR Loan or a Base Rate Loan;
(D) if the Loan is to be made as a LIBOR
Loan, the applicable Interest Period. If a Borrowing Notice shall fail to
specify the applicable Interest Period for any LIBOR Loan requested, such Loan
will instead be made as a Base Rate Loan;
(E) subject to 2.03(c) with respect to
Loans for Initial Funded Projects, the address and wiring in-
13
structions for the escrow closing the acquisition of the Funded Project to which
the Loan will be applied.
(b) NOTICE TO LENDERS. Upon receipt of a Borrowing
Notice conforming with the terms of Section 2.03(a), the Agent shall promptly
notify each Lender thereof and of the amount of such Lender's Bridge Commitment
Percentage of the Loan described therein.
(c) FUNDING OF BRIDGE COMMITMENT. Each Lender shall
make the amount of its Bridge Commitment Percentage of the Loan described in any
Borrowing Notice available to the Agent for the account of the Company at the
Payment Office by 9:00 a.m. (California time) on the borrowing date specified
therein in funds immediately available to the Agent. Unless any applicable
condition specified in Article IV has not been satisfied, such funds shall then
be made available to the Company by the Agent in the aggregate of the amounts
made available to the Agent by the Lenders (in like funds as received by the
Agent), either (i) in the case of a Funded Project to be acquired in part with
the proceeds of such Loan, at the escrow closing for the acquisition of such
Funded Project or (ii) in the case of any other Funded Project, by crediting the
account of the Company. Notwithstanding the foregoing, with respect to any
Funded Project encumbered by any Liens securing Indebtedness, the Agent may, in
its sole discretion, either fund the applicable Loan proceeds into an escrow, if
applicable, or disburse such Loan proceeds directly to the account of the
creditor whose Lien is being concurrently repaid upon satisfactory evidence that
on or before such repayment the Lien will be released or reconveyed.
(d) FREQUENCY OF BORROWINGS. No more than four (4)
Borrowing Notices may be given in any calendar month.
2.04 CONVERSION AND CONTINUATION ELECTIONS.
(a) NOTICE OF CONVERSION/CONTINUATION. Each conversion
or continuation of an outstanding Base Rate Loan or LIBOR Loan shall be made
upon the irrevocable written notice (including notice via facsimile confirmed
immediately by a telephone call) of the Company in the form of a Notice of
Conversion/Continuation, as follows:
(i) DESIGNATION OF INTEREST RATE. The Company
shall have the right to make the following elections with respect to the
conversion or continuation of any outstanding Base Rate Loan or LIBOR Loan:
(A) to convert, on any Business Day, any
Base Rate Loan, in a minimum principal amount of $1,000,000 or an integral
multiple of $100,000 in excess thereof, into a LIBOR Loan; or
(B) to convert, on the last day of any
Interest Period with respect to a LIBOR Loan (or, on any other
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day of any Interest Period, upon payment of any loss or expense incurred or
sustained by any Lender with respect to the early termination of such LIBOR Loan
prior to the last day of the Interest Period as provided in Section 3.04), such
LIBOR Loan into a Base Rate Loan; or
(C) to continue, on the last day of any
Interest Period with respect to a LIBOR Loan (or, on any other day of any
Interest Period, upon payment any loss or expense incurred or sustained by any
Lender with respect to the early termination of such LIBOR Loan prior to the
last day of the Interest Period as provided in Section 3.04), such LIBOR Loan
(or any part thereof in a minimum principal amount of $1,000,000 or an integral
multiple of $100,000 in excess thereof) for a subsequent Interest Period;
PROVIDED, that unless the Agent shall otherwise agree in writing, the Company
may not elect to have any outstanding LIBOR Loan or Base Rate Loan (or any
portion thereof) continued as or converted into a LIBOR Loan if (A) a Default or
Event of Default shall exist, (B) after giving effect to the such continuation
or conversion there shall be more (i) than five different LIBOR Loans
outstanding or (ii) the aggregate outstanding principal amount of all LIBOR
Loans shall have been reduced, by payment, prepayment, or partial conversion to
less than $1,000,000.
(ii) TIMING OF NOTICE. Each Notice of
Conversion/Continuation shall be submitted to and received by the Agent prior to
9:00 a.m. (California time): (A) at least three (3) Business Days prior to the
Pricing Conversion Date of any outstanding Loan to be converted into or
continued as a LIBOR Loan; and (B) at least one (1) Business Day prior to the
Pricing Conversion Date of any outstanding Loan to be converted into or
continued as a Base Rate Loan.
(iii) CONTENTS OF NOTICE. The Notice of
Conversion/Continuation shall set forth the following information with respect
to the Loan subject thereto:
(A) the Pricing Conversion Date, which
shall be a Business Day;
(B) the amount of the LIBOR Loan or Base
Rate Loan to be converted or continued;
(C) whether such Loan is to be converted
into/continued as a LIBOR Loan or a Base Rate Loan; and
(D) if such Loan (or any portion thereof)
is to be converted into/continued as a LIBOR Loan, the applicable Interest
Period.
(b) AUTOMATIC CONVERSIONS. Any outstanding LIBOR Loan
shall automatically convert to a Base Rate Loan, effective
15
on the last day of the applicable Interest Period, if as of such date:
(i) DEFAULT; EVENT OF DEFAULT. A Default or
Event of Default shall exist;
(ii) FAILURE TO PROVIDE NOTICE. The Company shall
have failed to submit a Notice of Conversion/Continuation for such Loan in
compliance with the terms of Section 2.04(a); or
(iii) FAILURE TO MAINTAIN MINIMUM LOANS. If the
aggregate outstanding principal amount of LIBOR Loans having the same Interest
Period shall have been reduced, by payment, prepayment, or partial conversion to
be less than $1,000,000.
(c) NOTICE TO LENDERS. Upon receipt of a Notice of
Conversion/Continuation conforming with the terms of Section 2.04(a), or an
automatic conversion pursuant to Section 2.04(b), the Agent shall promptly
notify each Lender thereof. All conversions and continuations shall be made pro
rata according to the respective outstanding principal amounts of the Loans
converted or continued.
2.05 OPTIONAL PREPAYMENTS. Subject to Section 3.04, the Company
may, at any time and from time to time, ratably prepay Loans in whole or in
part, in an aggregate minimum amount of $1,000,000 or an integral multiple of
$100,000 in excess thereof, upon (a) at least three (3) Business Days' prior
notice, if the Loans to be prepaid are LIBOR Loans, and (b) at least one
Business Day's prior notice, if the Loans to be prepaid are Base Rate Loans.
Such notice of prepayment shall specify (i) the amount of such prepayment, (ii)
the date of such prepayment, which shall be a Business Day, and (iii) whether
such prepayment is of LIBOR Loans, Base Rate Loans, or any combination thereof.
Such notice shall not thereafter be revocable by the Company and the Agent shall
promptly notify each Lender thereof and of such Lender's Bridge Commitment
Percentage of such prepayment. If a prepayment notice is given, the payment
amount specified therein shall be due and payable on the date specified therein,
together with accrued interest to such date on the amount prepaid and any
amounts required to be paid pursuant to Section 3.04.
2.06 MANDATORY PREPAYMENTS OF LOANS . If at any time the
Outstanding Amount exceeds the then applicable Bridge Availability, the Company
shall, within three (3) days thereafter, prepay Loans in an amount sufficient to
reduce the Outstanding Amount to the then applicable Bridge Availability.
2.07 APPLICATION OF PROCEEDS. Unless otherwise instructed by
the Company, any prepayments pursuant to Section 2.05 or Section 2.06 made (i)
on a day other than the last day of an Interest Period for any Loan shall be
applied first to any Base Rate Loans then outstanding and then to any LIBOR
Loans then outstanding, in the inverse order of such LIBOR Loans' stated
16
maturities and (ii) on the last day of an Interest Period for any LIBOR Loan
shall be applied first to such maturing LIBOR Loan, then to any Base Rate Loans
outstanding, and then to any other LIBOR Loans then outstanding, in the inverse
order of such LIBOR Loans' stated maturities.
2.08 REPAYMENT. Subject to Section 2.06, the Company shall
repay each Loan on the applicable Individual Bridge Loan Maturity Date.
2.09 INTEREST.
(a) RATES. Subject to Section 2.09(c), each Loan shall
bear interest on the outstanding principal amount thereof from the date such
Loan is made until the date such Loan becomes due, at a rate per annum equal to
the LIBO Rate or the Base Rate, as the case may be, PLUS the Applicable Margin.
(b) PAYMENT DATES. Interest on each Loan shall be
payable in arrears on each Interest Payment Date and the Individual Bridge Loan
Maturity Date. Interest shall also be payable on the date of any prepayment of
Loans pursuant to Section 2.05 or Section 2.06 for the portion of the Loans so
prepaid. During the existence of any Event of Default, interest shall be
payable on demand.
(c) DEFAULT RATES. While any Event of Default exists or
after acceleration and during the continuation thereof, and after as well as
before any entry of judgment thereon, the Company shall pay interest (after as
well as before judgment to the extent permitted by law) on all outstanding
Obligations at a rate per annum which is determined by increasing the Applicable
Margin then in effect by three percent (3%) per annum; PROVIDED, HOWEVER, that,
on and after the expiration of the Interest Period applicable to any LIBOR Loan
outstanding on the date of occurrence of such Event of Default or acceleration,
the outstanding Obligations shall, during the continuation of such Event of
Default or after acceleration and during the continuation thereof, bear interest
at a fluctuating rate per annum equal to the Base Rate plus three percent (3%).
(d) LIMITATIONS FOR APPLICABLE LAW. Anything herein to
the contrary notwithstanding, payments of interest shall not be required, for
any period for which interest is computed hereunder, to the extent (but only to
the extent) that contracting for or receiving such payments by the respective
Lender would be contrary to the provisions of any law applicable to such Lender
limiting the highest rate of interest which may be lawfully contracted for,
charged or received by such Lender, and in such event the Company shall pay such
Lender interest at the highest rate permitted by applicable law.
2.10 FEES. The Company shall pay to the Agent for the account
of each Lender ratably a fee equal to .25% of the amount of each Loan not
prepaid or repaid on or prior to the Individual
17
Bridge Loan Maturity Date thereof using the proceeds of a Revolving Loan under
the Revolving Credit Agreement. Such fee shall be due and payable on the date
of such payment or prepayment or, if such Loan has not been paid in full on the
Individual Bridge Loan Maturity Date therefor, on such Individual Bridge Loan
Maturity Date.
2.11 COMPUTATION OF FEES AND INTEREST.
(a) COMPUTATION PERIOD. All computations of fees and
interest under this Agreement shall be made on the basis of a 360-day year and
actual days elapsed. Interest and fees shall accrue during each period for
which interest or fees are computed from the first day thereof to the last day
thereof.
(b) NOTICE. The Agent shall, with reasonable
promptness, notify the Company and the Lenders of each determination of a LIBO
Rate, PROVIDED that no failure to do so shall relieve the Company of any
obligation hereunder. Any change in the interest rate on a Loan resulting from
a change in the Reserve Percentage (as defined in the definition of "LIBO Rate")
shall become effective as of the opening of business on the day on which such
change becomes effective. The Agent shall with reasonable promptness notify the
Company and the Lenders of the effective date and the amount of each such
change, PROVIDED that no failure to do so shall relieve the Company of any
obligation hereunder. Each determination of an interest rate by the Agent
pursuant to any provision of this Agreement shall be conclusive and binding on
the Company and the Lenders in the absence of manifest error.
(c) DETAIL OF CALCULATION. The Agent shall, at the
request of the Company or any Lender, deliver to the Company or such Lender, as
the case may be, a statement showing the quotations used by the Agent in
determining any interest rate.
2.12 PAYMENTS BY THE COMPANY.
(a) TERMS OF PAYMENTS. All payments (including
prepayments) to be made by the Company on account of principal, interest, fees
and other amounts required hereunder shall be made without setoff or
counterclaim and shall, except as otherwise expressly provided herein, be made
to the Agent for the ratable account of the Lenders at the Payment Office, in
dollars and in immediately available funds, no later than 9:00 a.m. (California
time) on the date specified herein. The Agent shall promptly distribute to each
Lender such Lender's Bridge Commitment Percentage (or other applicable share as
expressly provided herein) of such principal, interest, fees or other amounts
(in like funds as received). Any payment which is received by the Agent later
than 9:00 a.m. (California time) shall be deemed to have been received on the
immediately succeeding Business Day, and any applicable interest or fee shall
continue to accrue.
18
(b) BUSINESS DAYS. Whenever any payment hereunder shall
be stated to be due on a day other than a Business Day, such payment shall be
made on the next succeeding Business Day, and such extension of time shall be
included in the computation of interest or fees, as the case may be; subject to
the provisions set forth in the definition of "Interest Period".
(c) RELIANCE OF AGENT ON PAYMENTS BY THE COMPANY.
Unless the Agent shall have received notice from the Company prior to the date
on which any payment is due to the Lenders hereunder that the Company will not
make such payment in full, the Agent may assume that the Company has made such
payment in full to the Agent on such date, and the Agent may (but shall not be
required to), in reliance upon such assumption, cause to be distributed to each
Lender on such due date the amount then due such Lender. If and to the extent
the Company shall not have made such payment in full to the Agent, each Lender
shall repay to the Agent on demand such amount distributed to such Lender,
together with interest thereon for each day from the date such amount is
distributed to such Lender until the date such Lender repays such amount to the
Agent, at the Federal Funds Rate as in effect for each such day.
2.13 SECURITY. In connection with the acquisition of a Funded
Project by or for a Wholly-Owned Subsidiary using Loan proceeds, the Company
shall deliver to the Agent a Equity Interests Pledge Agreement pledging to the
Agent for the ratable benefit of the Lenders all of the Stock (or other equity
or beneficial interest if such Person is not a corporation) in such Wholly-Owned
Subsidiary owned by the Company, the REIT and any other Wholly-Owned Subsidiary,
substantially in the form of EXHIBIT E hereto, together with financing
statements or stock certificates, as applicable, and such legal opinions or
other evidence as the Agent may require to assure or confirm that the Agent
holds for the benefit of the Lenders a duly perfected, first-priority Lien on
such Stock (or other interests).
2.14 LOAN AND FUNDED PROJECT CONDITIONS.
(a) PURPOSE OF LOANS. Any Loan funds advanced with
respect to an Initial Funded Project shall be applied by the Company first to
repay Indebtedness secured by Liens on the applicable Initial Funded Project,
and then for general working capital purposes. The proceeds of all Loans
advanced for Funded Projects other than the Initial Funded Projects shall be
used by the Company solely as a source of short term bridge financing for Funded
Projects owned or to be acquired by the Company or any Wholly-Owned Subsidiary.
The Company shall not use any Loan for any purpose other than as described in
this Section 2.14(a). Each Loan to be used for acquisition of a Funded Project
shall be funded directly into the escrow at a title company approved by Agent
for the Company's acquisition of such Funded Project and shall be released
therefrom only in accordance with instructions approved by the Agent.
19
(b) LIMITATION ON AMOUNT; ACCEPTANCE BY THE LENDERS. No
Loan shall exceed fifty percent (50%) of the acquisition cost (exclusive of
prorations and closing costs), as certified to the Lenders by the Company in the
applicable Borrowing Notice, for the Funded Project designated in the applicable
Borrowing Notice to be acquired or financed with the proceeds of such Loan (such
limitation, the "INDIVIDUAL BRIDGE LOAN LIMITATION"). The Company shall deliver
to the Agent at least thirty (30) days prior written notice of its intention to
request a Loan hereunder for acquisition or financing of a proposed Funded
Project. Prior to the making of any Loan, the Lenders shall have the right, in
their sole discretion, after performing such due diligence as the Lenders desire
in their sole discretion, to approve or disapprove the use of a Loan hereunder
for acquisition or financing of any proposed Funded Project. The Lenders shall
not unreasonably withhold their acceptance of an apartment project owned, or to
be acquired, in fee simple by the Company or any Wholly-Owned Subsidiary offered
as a Funded Project hereunder if, through the due diligence contemplated hereby,
the Lenders determine that the project is of a quality and character, and is
located in a geographical market, which is consistent with the then-current or
any previous Funded Projects hereunder and with the then current or previous
Borrowing Base Properties under the Revolving Credit Agreement or under the
Previous Credit Agreement. Prior to the Lenders' approval of any Loan, the
Company shall at its sole expense provide the Lenders with all requested due
diligence materials and information with respect to the Funded Project proposed
to be acquired or financed with the proceeds of such Loan, which materials and
information shall be in a form acceptable to the Lenders in their sole
discretion, and shall be provided at least thirty (30) days prior to the date on
which Borrower intends to request a Loan for acquisition or financing of such
proposed Funded Project. Such materials and information shall include, without
limitation, the following:
(i) a preliminary title report and an ALTA survey
meeting the Agent's customary requirements;
(ii) an environmental site assessment with respect
to such Funded Project, dated as of a recent date, prepared by a qualified firm
acceptable to the Agent, identifying any conditions or operations on such
property that are not in compliance with any Environmental Laws and any
Hazardous Materials located thereon, showing Estimated Remediation Costs, if
any, and stating that there are no conditions on such property or other items
requiring further investigation or remediation, and any follow-on or
supplemental report required by the Agent, together with the Agent's standard
form Environmental Questionnaire and Disclosure Statement completed by the
Company;
(iii) current, certified rent roll and other
reports of the financial and operating results (for the most recent 12-month
period) and projections for the property in such format as the Agent may
require;
20
(iv) if required by the Agent, evidence of the
zoning, subdivision and entitlements status of the property, including, without
limitation, copies of the certificate of occupancy and any other material
permits, licenses or approvals required for the property;
(v) a copy of the purchase and sale agreement(s)
by which the Company or such Wholly-Owned Subsidiary has acquired or is to
acquire the property; and
(vi) such other items as the Agent may reasonably
request.
The Company acknowledges that the review of the due diligence materials
described in this Section 2.14(b) will require advance notice to the Agent and
the Lenders, and the Company undertakes to provide as much advance notice as
possible to achieve timely review of such materials.
(c) CONDITIONS TO INCLUSION OF PROPOSED FUNDED PROJECTS.
Each of the following conditions must be satisfied (or waived by the Agent in
writing) prior to the Lenders' agreement to advance a Loan in connection with
the acquisition or financing of any apartment project as a proposed Funded
Project:
(A) ACCEPTANCES. The Lenders shall have
agreed to accept the apartment project offered by the Company for inclusion as a
Funded Project in the Lenders' sole and absolute discretion in accordance with
Section 2.14(b) above, and the Agent shall have so notified the Company in
writing. Any such acceptance shall be subject to the satisfaction of the other
conditions set forth in this Section 2.14(c). Each apartment project designated
in this Agreement as an Initial Funded Project shall be subject to the same
conditions for acceptance as a Funded Project as other projects hereafter
offered by the Company for inclusion as a Funded Project.
(B) INSURANCE. The Company shall have
provided the Agent with evidence satisfactory to the Requisite Lenders that the
Company has obtained adequate casualty insurance and liability insurance with
respect to such Funded Project;
(C) OFFICERS' CERTIFICATE. The Company
shall have delivered to the Agent a certificate of two Responsible Officers
substantially in the form of EXHIBIT F confirming (i) that all conditions
precedent set forth in this Section 2.14(c) (other than those based solely upon
the approval of the Agent, the Lenders, or the Requisite Lenders) have been
satisfied with respect to such project; (ii) that all financial and operating
information delivered to the Agent pursuant to Section 2.14(b), subject to
audit, is complete and correct to the knowledge of the Company and setting forth
in detail the calculation which would be required for the calculation of the
Revolving Facility Debt Service Coverage-Based Principal Limit for such project
under the Revolving Credit Agreement; (iii) that the
21
Company would not be required to prepay any Loan with respect to such Funded
Project pursuant to Section 2.14(d); and (iv) the Company's purchase price for
the property, upon which the Agent and the Lenders shall be entitled to rely;
and
(D) EQUITY INTERESTS PLEDGE AGREEMENT.
The Company shall have delivered to the Agent a Equity Interests Pledge
Agreement if required pursuant to Section 2.13, together with such legal
opinions or other evidence to confirm the Lien thereof as further provided in
Section 2.13.
Under no circumstances shall the Agent or the Lenders have or be
deemed to have any Lien on any Funded Project as security for the Obligations.
(d) MANDATORY PREPAYMENT FOR FUNDED PROJECT. The
Company shall be required to prepay in full all Loans advanced with respect to
the acquisition of a Funded Project:
(i) Within ten (10) days after demand from the
Agent to the Company following the occurrence of any one of the following
events:
(A) any Event of Loss with respect to such
Funded Project; or
(B) the occurrence of an adverse change in
the environmental condition of the Funded Project from that described in the
materials described in Section 2.14(b)(ii) above;
(ii) Immediately upon any Disposition of such
Funded Project or any portion thereof or interest therein.
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2.15 PAYMENTS BY THE LENDERS TO THE AGENT.
(a) RELIANCE OF AGENT ON PAYMENTS BY THE LENDERS.
Unless the Agent shall have received notice from a Lender on the Closing Date
or, with respect to each borrowing after the Closing Date, at least one Business
Day prior to the date of any proposed borrowing, that such Lender will not make
available to the Agent for the account of the Company the amount of that
Lender's Bridge Commitment Percentage of the Loan to be funded on such date, the
Agent may assume that each Lender has made such amount available to the Agent on
the borrowing date, and the Agent may (but shall not be required to), in
reliance upon such assumption, make available to the Company a corresponding
amount on such date. If and to the extent any Lender shall not have made its
full amount available to the Agent and the Agent in such circumstances has made
available to the Company such amount, that Lender shall on the next Business Day
following the date of such borrowing make such amount available to the Agent,
together with interest at the Federal Funds Rate for and determined as of each
day during such period. A certificate of the Agent submitted to any Lender with
respect to amounts owing under this Section 2.15(a) shall be conclusive, absent
manifest error. If such amount is so made available, such payment to the Agent
shall constitute such Lender's Loan (as of the date of the borrowing) for all
purposes of this Agreement. If such amount is not made available to the Agent
on the next Business Day following the borrowing date, the Agent shall notify
the Company of such failure to fund and, upon demand by the Agent, the Company
shall pay such amount to the Agent for the Agent's account, together with
interest thereon for each day elapsed since the date of such borrowing, at a
rate per annum equal to the interest rate applicable at the time to the Loans
comprising such borrowing.
(b) OBLIGATIONS OF AGENT; LENDER. The failure of any
Lender to make any Loan on any date of borrowing shall not relieve any other
Lender of any obligation hereunder to make a Loan on the date of such borrowing,
but no Lender shall be responsible for the failure of any other Lender to make
the Loan to be made by such other Lender on the date of any borrowing.
2.16 SHARING OF PAYMENTS, ETC. If, other than as expressly
contemplated elsewhere herein, any Lender shall obtain on account of the Loans
made by it any payment (whether voluntary, involuntary, through exercise of any
right of setoff, or otherwise) in excess of its Bridge Commitment Percentage of
payments on account of the Loans obtained by all the Lenders, such Lender shall
forthwith (a) notify the Agent of such fact, and (b) purchase from the other
Lenders such participations in the Loans made by them as shall be necessary to
cause such purchasing Lender to share the excess payment ratably with each of
them; PROVIDED, HOWEVER, that if all or any portion of such excess payment is
thereafter recovered from the purchasing Lender, such purchase shall to that
extent be rescinded and each other Lender shall repay to the purchasing Lender
the purchase price paid thereto together with a percentage (calculated by
23
dividing (i) the amount of such paying Lender's required repayment by (ii) the
total amount so recovered from the purchasing Lender) of any interest or other
amount paid or payable by the purchasing Lender in respect of the total amount
so recovered. The Company agrees that any Lender so purchasing a participation
from another Lender pursuant to this Section 2.16 may, to the fullest extent
permitted by law, exercise all of such purchasing Lender's rights of payment
(including the right of setoff, but subject to Section 10.08) with respect to
such participation as fully as if such purchasing Lender were the direct
creditor of the Company in the amount of such participation. The Agent shall
keep records (which shall be conclusive and binding in the absence of manifest
error) of participations purchased pursuant to this Section 2.16 and shall in
each case notify the Lenders following any such purchases.
ARTICLE III
TAXES, YIELD PROTECTION AND ILLEGALITY
3.01 TAXES.
(a) Subject to Section 3.01(g), any and all payments by
the Company to the Agent or the Lenders under this Agreement shall be made free
and clear of, and without deduction or withholding for, any and all present or
future taxes, levies, imposts, deductions, charges or withholdings, and all
liabilities with respect thereto, excluding such taxes (including income taxes
or franchise taxes) as are imposed on or measured by the recipient's net income
by the jurisdiction under the laws of which the recipient is organized or
maintains a Lending Office, or otherwise does business, or any political
subdivision thereof (all such non-excluded taxes, levies, imposts, deductions,
charges, withholdings and liabilities being hereinafter referred to as "Taxes").
(b) In addition, the Company shall 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 or from the
execution, delivery, recordation or registration of, or otherwise with respect
to, this Agreement or any other Loan Documents (hereinafter referred to as
"Other Taxes").
(c) The Company shall indemnify and hold harmless the
Agent and each Lender for the full amount of Taxes or Other Taxes (including any
Taxes or Other Taxes imposed by any jurisdiction on amounts payable under this
Section 3.01) paid by the Agent or such Lender and any liability (including
penalties, interest, additions to tax and expenses) arising therefrom or with
respect thereto, whether or not such Taxes or Other Taxes were correctly or
legally asserted. Payment under this indemnification shall be made within
thirty (30) days from the date the Agent or any Lender makes written demand
therefor.
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(d) If the Company shall be required by law to deduct or
withhold any Taxes or Other Taxes from or in respect of any sum payable
hereunder to the Agent or any Lender, then, subject to Section 3.01(g):
(i) the sum payable shall be increased as
necessary so that, after making all required deductions (including deductions
applicable to additional sums payable under this Section 3.01) the Agent or such
Lender, as the case may be, receives an amount equal to the sum it would have
received had no such deductions been made;
(ii) the Company shall make such deductions; and
(iii) the Company shall pay the full amount
deducted to the relevant taxation authority or other authority in accordance
with applicable law.
(e) Within 30 days after the date of any payment by the
Company of Taxes or Other Taxes, the Company shall furnish to the Agent the
original or a certified copy of a receipt evidencing payment thereof, or other
evidence of payment satisfactory to the Agent.
(f) Each Lender which is a foreign person (i.e., a
person other than a United States person for United States Federal income tax
purposes) agrees that:
(i) such Lender shall, no later than the Closing
Date (or, in the case of a Lender which becomes a party hereto pursuant to
Section 10.08 after the Closing Date, the date upon which such Lender becomes a
party hereto), deliver to the Company through the Agent two (2) accurate and
complete signed originals of Internal Revenue Service Form 4224 or any successor
thereto ("Form 4224"), or two (2) accurate and complete signed originals of
Internal Revenue Service Form 1001 or any successor thereto ("Form 1001"), as
appropriate, in each case indicating that the Lender is on the date of delivery
thereof entitled to receive payments of principal, interest and fees under this
Agreement free from withholding of United States Federal income tax;
(ii) if at any time such Lender makes any changes
necessitating a new form, such Lender shall with reasonable promptness deliver
to the Company through the Agent in replacement for, or in addition to, the
forms previously delivered by such Lender hereunder, two (2) accurate and
complete signed originals of Form 4224, or two (2) accurate and complete signed
originals of Form 1001, as appropriate, in each case indicating that such Lender
is on the date of delivery thereof entitled to receive payments of principal,
interest and fees under this Agreement free from withholding of United States
Federal income tax;
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(iii) such Lender shall, before or promptly after
the occurrence of any event (including the passing of time but excluding any
event mentioned in (ii) above) requiring a change in or renewal of the most
recent Form 4224 or Form 1001 previously delivered by such Lender, deliver to
the Company through the Agent two (2) accurate and complete original signed
copies of Form 4224 or Form 1001, as appropriate, in replacement of the forms
previously delivered by such Lender; and
(iv) such Lender shall, promptly upon the
Company's reasonable request to that effect, deliver to the Company such other
forms or similar documentation as may be required from time to time by any
applicable law, treaty, rule or regulation in order to establish such Lender's
tax status for withholding purposes.
(g) The Company shall not be required to pay any
additional amounts in respect of United States Federal or state income tax
pursuant to Section 3.01(d) to any Lender or any duly appointed assignee for the
account of any Lending Office of such Lender or such assignee:
(i) if the obligation to pay such additional
amounts arises as a result of a failure by such Lender or assignee to comply
with its obligations under Section 3.01(f) in respect of such Lending Office;
(ii) if such Lender or assignee shall have
delivered to the Company a Form 4224 in respect of such Lending Office pursuant
to Section 3.01(f), and such Lender or assignee shall not at any time be
entitled to exemption from deduction or withholding of United States Federal
income tax in respect of payments by the Company hereunder for the account of
such Lending Office for any reason other than a change in United States law or
regulations or in the official interpretation of such law or regulations by any
governmental authority charged with the interpretation or administration thereof
(whether or not having the force of law) after the date of delivery of such Form
4224; or
(iii) if such Lender or assignee shall have
delivered to the Company a Form 1001 in respect of such Lending Office pursuant
to Section 3.01(f), and such Lender or assignee shall not at any time be
entitled to reduction, partial exemption or exemption from deduction or
withholding of United States federal income tax in respect of payments by the
Company hereunder for the account of such Lending Office for any reason other
than a change in United States law or regulations or any applicable tax treaty
or regulations or in the official interpretation of such law, treaty or
regulations by any governmental authority charged with the interpretation or
administration thereof (whether or not having the force of law) after the date
of delivery of such Form 1001.
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(h) If, at any time, the Company requests any Lender to
deliver any forms or other documentation pursuant to Section 3.01(f)(iv), then
the Company shall, on demand of such Lender, through the Agent reimburse such
Lender for any costs and expenses (including Attorney Costs) reasonably incurred
by such Lender in the preparation or delivery of such forms or other
documentation.
(i) If the Company is required to pay additional amounts
to the Agent or any Lender pursuant to Section 3.01(d), then such Lender shall
use its reasonable best efforts (consistent with legal and regulatory
restrictions) to change the jurisdiction of its Lending Office so as to
eliminate any such additional payment by the Company which may thereafter accrue
if such change in the judgment of such Lender is not otherwise disadvantageous
to such Lender.
3.02 ILLEGALITY.
(a) If any Lender shall determine that the introduction
of any Requirement of Law or any change therein or in the interpretation or
administration thereof has made it unlawful, or that any central bank or other
Governmental Authority has asserted that it is unlawful, for such Lender or its
Lending Office to make LIBOR Loans, then, on notice thereof by such Lender to
the Company through the Agent, the obligation of such Lender to make LIBOR Loans
shall be suspended until such Lender shall have notified the Agent and the
Company that the circumstances giving rise to such determination no longer
exist.
(b) If any Lender shall reasonably determine that it is
unlawful to maintain any LIBOR Loan, the Company shall notify Lender that the
Company shall either (i) prepay in full all LIBOR Loans of such lender then
outstanding, together with interest accrued thereon, or (ii) elect to convert in
accordance with Section 2.04 all LIBOR Loans then outstanding, after payment to
such Lender of all interest accrued thereon, into Base Rate Loans, either on the
last day of the Interest Period thereof if such Lender may lawfully continue to
maintain such LIBOR Loans to such day, or immediately if such Lender may not
lawfully continue to maintain such LIBOR Loans, together with any amounts
required to be paid in connection therewith pursuant to Section 3.04.
(c) If the obligation of any Lender to make or maintain
LIBOR Loans has been terminated, the Company may elect, by giving notice to such
Lender through the Agent, that all Loans which would otherwise be made by such
Lender as LIBOR Loans shall instead be made as Base Rate Loans.
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3.03 INCREASED COSTS AND REDUCTION OF RETURN.
(a) If any Lender shall determine that, due to either
(i) the introduction of or any change in or in the interpretation of any
Requirement of Law or (ii) the compliance with any guideline or request from any
central bank or other Governmental Authority (whether or not having the force of
law), there shall be any increase in the cost to such Lender of agreeing to make
or of making, funding or maintaining any LIBOR Loans hereunder, then the Company
shall be liable for, and shall from time to time, upon written demand therefor
by such Lender (with a copy of such demand to the Agent), which demand shall set
forth the basis of such increased cost in reasonable detail, pay to the Agent
for the account of such Lender, such additional amounts as are sufficient to
compensate such Lender for such increased costs.
(b) If any Lender shall have reasonably determined that
(i) the introduction of any Capital Adequacy Regulation, (ii) any change in any
Capital Adequacy Regulation, (iii) any change in the interpretation or
administration of any Capital Adequacy Regulation by any central bank or other
Governmental Authority charged with the interpretation or administration
thereof, or (iv) compliance with any Capital Adequacy Regulation by such Lender
(or its Lending Office) or any corporation controlling such Lender, effects or
would effect an increase in the amount of capital required or expected to be
maintained by such Lender or any corporation controlling such Lender (taking
into consideration such Lender's or such corporation's policies with respect to
capital adequacy and such Lender's desired return on capital), then, upon
written demand of such Lender (with a copy to the Agent), which demand shall set
forth in reasonable detail the basis for any such increase in required capital,
the Company shall immediately pay to such Lender, from time to time as specified
by such Lender, additional amounts sufficient to compensate such Lender for such
increase.
(c) If any Lender shall have determined that any of the
events described in Sections 3.03(a) or 3.03(b) affects or would affect an
increase in cost or reduction of return resulting in an additional Obligations
hereunder, such Lender shall, with reasonable promptness, notify the Company and
the Agent of such determination, PROVIDED that no failure to do so shall relieve
the Company of any Obligation hereunder.
3.04 FUNDING LOSSES. The Company agrees to reimburse each
Lender for, and to hold each Lender harmless from, any loss or expense that such
Lender may sustain or incur as a consequence of:
(a) the failure of the Company to make any required
payment or prepayment of principal of any LIBOR Loan or Base Rate Loan
(including payments to be made after any acceleration thereof);
28
(b) the failure of the Company to borrow, continue or
convert a Loan after the Company has given (or is deemed to have given) a
Borrowing Notice or a Notice of Conversion/Continuation;
(c) the failure of the Company to make any prepayment
after the Company has given a notice in accordance with Section 2.05;
(d) the prepayment of a LIBOR Loan on a day which is not
the last day of the Interest Period with respect thereto; or
(e) the conversion of any LIBOR Loan to a Base Rate Loan
on a day that is not the last day of the Interest Period with respect thereto;
such amount or amounts to include an amount equal to the excess, if any, of (a)
the amount of interest that would have accrued on the amount not paid, not
borrowed, not prepaid, prepaid, or converted for the period from the date of
such failure to pay, failure to borrow, failure to prepay, prepayment, or
conversion to the last day of then current Interest Period (or in the case of a
failure to borrow, the Interest Period which would have commenced on the date of
such failure) at the interest rate applicable to that LIBOR Loan, over (b) the
amount of interest that would accrue to the Lender on such amount at the LIBO
Rate in effect on such date by placing such amount on deposit for a comparable
period with leading lenders in the London interbank market.
3.05 INABILITY TO DETERMINE RATES. If the Agent shall have
determined that for any reason adequate and reasonable means do not exist for
ascertaining the LIBO Rate for any requested Interest Period with respect to a
proposed LIBOR Loan or that the LIBO Rate applicable pursuant to Section 2.09(a)
for any requested Interest Period with respect to a proposed LIBOR Loan does not
adequately and fairly reflect the cost to such Lenders of funding such Loan, the
Agent will forthwith give notice of such determination to the Company and each
Lender. Thereafter, the obligation of the Lenders to make or maintain LIBOR
Loans hereunder shall be suspended until the Agent revokes such notice in
writing. Upon receipt of such notice, the Company may revoke any Borrowing
Notice or Notice of Conversion/Continuation then submitted by it. If the
Company does not revoke such notice, the Lenders shall make, convert or continue
the Loans, as proposed by the Company, in the amount specified in the applicable
notice submitted by the Company, but such Loans shall be made, converted or
continued as Base Rate Loans instead of LIBOR Loans.
3.06 CERTIFICATES OF LENDERS. Any Lender claiming reimbursement
or compensation pursuant to this Article III, shall deliver to the Company (with
a copy to the Agent) a certificate setting forth in reasonable detail a summary
of the basis of such demand and the amount payable to such Lender hereunder.
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3.07 SURVIVAL. The agreements and obligations of the Company in
this Article III shall survive the payment of all other obligations.
ARTICLE IV
CONDITIONS PRECEDENT
4.01 CONDITIONS OF FIRST LOAN. The obligation of each Lender to
make its first Loan hereunder is subject to the condition that the Agent shall
have received on or before the Closing Date, the following, in the case of
agreements, documents and other instruments, in form and substance satisfactory
to the Agent, each Lender and their respective counsel in their sole discretion
and in sufficient copies for each Lender:
(a) BRIDGE AGREEMENT AND NOTES. This Agreement executed
by the Company, the Agent and each of the Lenders, a Note executed by the
Company in favor of each of the Lenders, and the REIT Guaranty Documents
executed by the guarantors thereunder; the Notes shall be dated the Closing
Date;
(b) CERTIFICATE. A certificate signed by a duly
authorized Responsible Officer, dated as of the Closing Date, stating that:
(i) the representations and warranties of the
Company and the REIT contained in Article V hereof and of the Company, the REIT
and their Subsidiaries contained in the Loan Documents are true and correct on
and as of such date, as though made on and as of such date;
(ii) no Default or Event of Default exists or
would result from the initial borrowing;
(iii) there has occurred since December 31, 1996 no
act, omission, change or occurrence which would have a Material Adverse Effect;
and
(iv) all conditions precedent set forth in this
Section 4.01 have been satisfied (other than those based solely on the approval
of the Agent, the Lenders or the Requisite Lenders);
(c) LEGAL OPINIONS. The Agent shall have received an
opinion of Colorado counsel to the Company and addressed to the Agent and the
Lenders in form acceptable to Agent;
(d) COSTS; EXPENSES; FEES. To the extent demand has
been made therefor, payment of all costs, expenses, and accrued and unpaid fees
(including legal fees and expenses) to the extent then due and payable on the
Closing Date, including any arising under Sections 2.10, 3.01 and 10.04 and all
accrued fees, costs and expenses due or unpaid under the Previous Credit
Agreement;
30
(e) REVOLVING CREDIT AGREEMENT. The Revolving Credit
Agreement shall have become effective; and
(f) OTHER DOCUMENTS. Such other approvals, opinions, or
documents as the Agent or the Requisite Lenders may reasonably request.
4.02 CONDITIONS TO EACH LOAN. The obligation of each Lender to
make any Loan (including its first Loan) is subject to the satisfaction of the
following conditions precedent:
(a) BORROWING NOTICE. The Agent shall have received in
the case of a Loan (with, in the case of the first Loan only, a copy for each
Lender) a Borrowing Notice or Notice of Conversion/Continuation in compliance
with the terms of Section 2.03 or Section 2.04, as applicable;
(b) OTHER DOCUMENTS. The Agent shall have received such
other approvals, opinions and documents as the Agent or any Lender may
reasonably request;
(c) AVAILABILITY LIMITS. The Outstanding Amount shall
not, as a result of the making, continuation or conversion of such Loan, exceed
the Bridge Availability;
(d) REPRESENTATIONS AND WARRANTIES. The representations
and warranties made by the Company, the REIT and their respective Subsidiaries
contained in the Loan Documents, including Article V of this Agreement, shall be
true and correct on and as of the date such Loan is made, with the same effect
as if made on and as of such date;
(e) NO EXISTING DEFAULT. No Default or Event of Default
shall exist or shall result from the making, continuation or conversion of such
Loan;
(f) NO MATERIAL ADVERSE EFFECT. No act, omission,
change, occurrence or event which has a Material Adverse Effect shall have
occurred since the Closing Date; and
(g) NO FUTURE ADVANCE NOTICE. Neither the Agent nor any
Lender shall have received from the Company, the REIT or any Subsidiary thereof,
any notice that any Pledge Agreement will no longer secure, or that the REIT
Guaranty Documents will no longer guaranty, future Loans to be made under this
Agreement.
Each Borrowing Notice and Notice of Continuation/Conversion submitted by the
Company hereunder shall constitute a representation and warranty by the Company
hereunder, as of the date of such notice and as of the date of the making,
continuation or conversion of the corresponding Loan, that the conditions in
this Section 4.02 have been satisfied.
ARTICLE V
31
REPRESENTATIONS AND WARRANTIES
The Company represents and warrants to the Agent and each Lender
that:
5.01 REPRESENTATIONS UNDER THE REVOLVING CREDIT AGREEMENT. All
of the representations and warranties of the Company under the Revolving Credit
Agreement are true and correct (as if the terms "Loan Documents" and
"Obligations" as used in the Revolving Credit Agreement included not only the
"Loan Documents" and "Obligations" as defined therein but also the "Loan
Documents" and "Obligations" as defined herein).
5.02 TITLE TO THE FUNDED PROJECTS. The Company and the Wholly-
Owned Subsidiaries have good record and marketable title in fee simple to any
Funded Projects owned thereby, subject only to title exceptions disclosed to and
approved by the Lenders pursuant to Section 2.14(b).
5.03 GOVERNMENTAL AUTHORIZATION. No approval, consent,
exemption, authorization, or other action by, or notice to, or filing with, any
Governmental Authority (except for recordings in connection with the Liens
granted to the Agent under the Equity Interests Pledge Documents) is necessary
or required in connection with the execution, delivery or performance by, or
enforcement against, the Company or any of its Subsidiaries of this Agreement or
any other Loan Document.
5.04 CERTAIN REPRESENTATIONS CONCERNING FUNDED PROJECTS. The
representations of the Company under Sections 5.11 and 5.20 through 5.25,
inclusive, of the Revolving Credit Agreement made with respect to the Borrowing
Base Properties are true and correct as if made herein with respect to the
Funded Projects.
5.05 EQUITY INTERESTS PLEDGE AGREEMENTS. When executed and
delivered pursuant hereto, the Equity Interests Pledge Agreements shall be
effective to create in favor of the Agent, for the benefit of the Lenders,
legal, valid and enforceable first-priority Liens in the Collateral described
therein and the proceeds thereof. All action shall have been taken that is
necessary or appropriate to perfect the Agent's Lien, for the benefit of the
Lenders, in the Collateral. All representations and warranties of the Company
and any other Person party thereto contained in any Equity Interests Pledge
Documents are true and correct.
5.06 USE OF PROCEEDS; MARGIN REGULATIONS. The proceeds of the
Loans are intended to be and shall be used solely for the purposes set forth in
and permitted by Sections 2.01(b) and Section 6.06, and are intended to be and
shall be used in compliance with Section 7.03.
5.07 NOT A "FOREIGN PERSON." Neither the Company nor any
Wholly-Owned Subsidiary which owns a Funded Project is a
32
"foreign person" within the meaning of Section 1445(f)(3) of the Internal
Revenue Code.
5.08 FULL DISCLOSURE. None of the representations or warranties
made by the Company, the REIT, the Management Entity or any Subsidiary in the
Loan Documents as of the date such representations and warranties are made or
deemed made, and none of the statements contained in each exhibit, report,
statement or certificate furnished by or on behalf of any such Person in
connection with the Loan Documents, contains any untrue statement of a material
fact or omits any material fact required to be stated therein or necessary to
make the statements made therein, in light of the circumstances under which they
are made, not misleading. There is no fact, to the Knowledge of the Company,
which materially and adversely affects the business, operations, properties,
assets or condition (financial or otherwise) of the Company, the REIT, the
Management Entities, or any of the Subsidiaries which has not been disclosed
herein or in other documents, certificates and statements furnished to the Agent
and each Lender hereunder or pursuant hereto. The copies of all documents
delivered to the Agent and/or the Lenders from time to time in connection with
this Agreement are and shall be true and complete copies of the originals
thereof and have not been or shall not be amended except as disclosed to the
Agent and/or the Lenders, as applicable.
ARTICLE VI
AFFIRMATIVE COVENANTS
The Company covenants and agrees that, so long as any Lender
shall have any Bridge Commitment hereunder, or any Loan or other obligation
shall remain unpaid or unsatisfied, unless the Requisite Lenders waive
compliance in writing:
6.01 FINANCIAL INFORMATION. In addition to providing the
financial information required under Section 6.01 of the Revolving Credit
Agreement, the Company shall deliver to the Agent, in form and detail
satisfactory to the Agent and the Lenders, such information with respect to the
Funded Projects as is required thereunder with respect to the Borrowing Base
Properties.
6.02 CERTIFICATES; OTHER INFORMATION. The Company shall furnish
to the Agent with sufficient copies for each Lender:
(a) ACCOUNTING CERTIFICATES. Concurrently with the
delivery of the annual financial statements required under Section 6.01(a) of
the Revolving Credit Agreement, a certificate of the independent certified
public accountants reporting on such financial statements stating that, in
making the examination necessary therefor, no knowledge was obtained of any
Default or Event of Default, except as specified in such certificate;
33
(b) OFFICERS' CERTIFICATES. Concurrently with the
delivery of the quarterly and annual financial statements required under
Sections 6.01(a) and (b) of the Revolving Credit Agreement, a compliance
certificate, substantially in the form of EXHIBIT G, signed by at least two
(2) Responsible Officers stating that, to the best of such officers'
knowledge, each of the Company, the REIT and their respective Subsidiaries,
during such period, has observed or performed all of its covenants and other
agreements, and satisfied every condition contained in this Agreement and the
other Loan Documents to be observed, performed or satisfied by it, and that
such officers have no knowledge of any Default or Event of Default except as
specified in such certificate. Notwithstanding anything to the contrary
contained herein and without limiting the Banks' other rights and remedies,
if such certificate is not provided on the due date therefor, the Company
shall be prohibited from any further borrowings under the Bridge Facility
until such certificate is provided, and the Company shall make successive,
cumulative payments in the amount of ten percent (10%) of the outstanding
balance of the Loans at the end of each seven (7) day period during which the
Company continues to fail to provide such certificate after the due date
therefor;
(c) OTHER INFORMATION. Promptly, such additional
financial and other information as the Agent may from time to time reasonably
request.
6.03 NOTICES. The Company shall promptly (and in no event later
than ten (10) days after the Company has reason to know of the same) notify the
Agent and each Lender of:
(a) DEFAULT; EVENT OF DEFAULT. The occurrence of any
Default or Event of Default, and of the occurrence or existence of any event or
circumstance that is likely to become a Default or Event of Default;
(b) LEGAL COMPLIANCE. Any material notice received from
any Governmental Authority asserting that any Funded Project is not in
compliance with any Requirements of Law;
(c) DEFAULT; EVENT OF DEFAULT. The occurrence of any
Default or Event of Default, and of the occurrence or existence of any event or
circumstance that is likely to become a Default or Event of Default;
(d) MATERIAL ADVERSE EFFECT. The occurrence of any act,
development or other matter which would reasonably be expected to have a
Material Adverse Effect; and
(e) EVENTS REQUIRING MANDATORY PREPAYMENT. The
occurrence of any event or circumstance that causes, or is likely to cause, the
Company's obligation to prepay a Loan to arise under Section 2.14(d).
34
6.04 INSURANCE. The Company shall maintain, and shall cause
each Wholly-Owned Subsidiary to maintain, with financially sound and reputable
independent insurers, insurance with respect to the Funded Products against loss
or damage of the kinds customarily insured against by Persons engaged in the
same or a similar business, of such types and in such amounts as are customarily
carried under similar circumstances by such other Persons; including workers'
compensation insurance, public liability and property and casualty insurance
(which amount shall not be reduced in the absence of 30 days' prior notice to
the Agent).
6.05 ENVIRONMENTAL LAWS. The Company shall, and shall cause
each Wholly-Owned Subsidiary to, keep and maintain its Funded Projects in
compliance in all material respects with all Environmental Laws.
6.06 USE OF PROCEEDS. The Company shall use the proceeds of the
Loans solely in accordance with Section 2.01(b) above.
6.07 INSPECTION OF PROPERTY AND BOOKS AND RECORDS. The Company
shall maintain, and shall cause each Wholly-Owned Subsidiary to maintain, proper
books of record and account, in which full, true and correct entries in
conformity with GAAP consistently applied shall be made of all financial
transactions and matters involving the Funded Projects. The Company shall
permit, and shall cause each Wholly-Owned Subsidiary to permit, representatives
of the Agent or any Lender to visit and inspect any of its Funded Projects, to
conduct audits thereof, to examine their respective corporate, financial and
operating records, and make copies thereof or abstracts therefrom, all at the
expense of the Company and at any time during normal business hours and as often
as may be reasonably desired, upon no less than forty-eight (48) hours advance
notice to the Company; PROVIDED, HOWEVER, when an Event of Default exists, the
Agent or any Lender may visit and inspect at the expense of the Company such
Funded Projects at any time during business hours and without advance notice.
6.08 ADDITIONAL GUARANTIES. Promptly upon the formation by the
REIT of any Wholly-Owned Subsidiary of the REIT, the REIT shall cause such
Wholly-Owned Subsidiary to deliver to the Agent for the ratable benefit of the
Lenders a guaranty of the Obligations in the form attached hereto as EXHIBIT D.
6.09 COVENANTS RELATING TO FUNDED PROJECTS. The Company hereby
agrees as follows:
(a) MAINTENANCE. The Company shall maintain each Funded
Project in good order and condition in accordance with the Company's past
practices.
(b) LEASES. The Company shall not enter into any lease
of any Funded Project other than apartment leases or other ordinary course
leases consistent with past practice and having
35
terms of less than one (1) year on market terms. The Company shall deliver to
the Agent a copy of the standard lease forms utilized for the Funded Project
from time to time.
(c) MATERIAL AGREEMENTS. The Company shall obtain the
prior written approval of the Agent and the Requisite Lenders prior to entering
into any reciprocal easement or similar agreement, ground lease or any other
material agreement affecting any Funded Project.
(d) MANAGEMENT CONTRACTS. The Company shall obtain the
prior written approval of the Agent and the Requisite Lenders prior to entering
into any property management agreement with a Person other than the Company, one
of the Management Entities or any of their Subsidiaries, or replacing the
property manager for any Funded Project with a Person other than the Company,
one of the Management Entities or any of their Subsidiaries. The Company shall
cause all property management contracts affecting Funded Projects to permit
termination of the manager (whether such manager is one of the Management
Entities or otherwise) by the owner within thirty days' written notice, without
penalty, and the Company shall not permit the management fee payable under any
such property management agreement to exceed three percent (3%) of gross
receipts from such property per fiscal year.
(e) CONSTRUCTION. The Company shall obtain the prior
written approval of the Agent and the Requisite Lenders prior to entering into
any major construction or renovation affecting a Funded Project and shall
discharge all mechanic's liens resulting from any such construction or
renovation.
(f) LIENS. The Company shall keep each Funded Project
at all times free and clear of all Liens (unless such Liens are bonded and
thereby released of record in a manner satisfactory to the Agent), except for
title exceptions disclosed to and approved by the Lenders pursuant to Section
2.14(b)(i).
6.10 PAYMENT OF OBLIGATIONS. The Company shall, and shall cause
each Wholly-Owned Subsidiary to, pay and discharge as the same shall become due
and payable and otherwise comply with, all their respective obligations and
liabilities, including (a) all tax liabilities, assessments and governmental
charges or levies upon it or its Funded Projects, unless the same are being
contested in good faith by appropriate proceedings and adequate reserves in
accordance with GAAP are being maintained by the Company or such Person, (b) all
lawful claims which, if unpaid, would by law become a Lien upon its Funded
Projects, (c) all Indebtedness, as and when due and payable, but subject to any
subordination provisions contained in any instrument or agreement evidencing
such Indebtedness, and (d) all Contractual Obligations.
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6.11 FURTHER ASSURANCES.
(a) FULL DISCLOSURE. The Company will ensure that all
other written information, exhibits and reports furnished to any Agent or Lender
by the Company or any Wholly-Owned Subsidiary do not contain any untrue
statement of a material fact and do not and will not omit to state any material
fact or any fact necessary to make the statements contained therein not
misleading in light of the circumstances in which made, and will promptly
disclose to the Agent and the Lenders and correct any defect or error that may
be discovered therein or in any Loan Document or in the execution,
acknowledgment or recordation thereof.
(b) FURTHER ACTS. Promptly upon request by the Agent or
the Requisite Lenders, the Company shall (and shall cause each Wholly-Owned
Subsidiary to) do, execute, acknowledge, deliver, record, re-record, file, re-
file, register and re-register, any and all such further acts, deeds,
conveyances, security agreements, mortgages, deeds of trust, assignments,
estoppel certificates, financing statements and continuations thereof,
termination statements, notices of assignment, transfers, certificates,
assurances and other instruments that the Agent or such Lenders, as the case may
be, may reasonably require from time to time in order (i) to carry out more
effectively the purposes of this Agreement or any other Loan Document, (ii) to
subject to the Liens created by any of the Equity Interests Pledge Documents any
of the Collateral, (iii) to perfect and maintain the validity, effectiveness and
priority of any of the Equity Interests Pledge Documents and the Liens intended
to be created thereby, and (iv) to better assure, convey, grant, assign,
transfer, preserve, protect and confirm to the Agent and Lenders the rights
granted or now or hereafter intended to be granted under any Loan Document, or
any other document executed in connection herewith or therewith.
6.12 COVENANT TO INDEMNIFY REGARDING CONSTRUCTION AND OTHER
RISKS. The Company hereby indemnifies, defends and holds the Agent and the
Lenders and their respective affiliates, assignees, successors, officers,
directors, employees and agents (collectively, the "Indemnified Parties")
harmless from and against any and all Indemnified Costs (defined below) directly
or indirectly arising out of or resulting from construction of any improvements
on any of the Funded Projects, including any defective workmanship or materials;
or any failure to satisfy any requirements of any laws, regulations, ordinances,
governmental policies or standards, reports, subdivision maps or development
agreements that apply or pertain to any of the Funded Projects; or breach of any
representation or warranty made or given by the Company to any of the
Indemnified Parties or to any prospective or actual buyer of all or any portion
of any of the Funded Projects; or any claim or cause of action of any kind by
any party that any Indemnified Party is liable for any act or omission of the
Company, its Subsidiaries or any other person or entity in connection with the
ownership, sale, operation or
37
development of any of the Funded Projects. Upon demand by any Indemnified
Party, the Company shall defend any investigation, action or proceeding
involving any Indemnified Costs which is brought or commenced against any
Indemnified Party, whether alone or together with the Company or any other
person, all at the Company's own cost and by counsel to be approved by the
Indemnified Party in the exercise of its reasonable judgment. In the
alternative, any Indemnified Party may elect to conduct its own defense at the
expense of the Company. As used in this Agreement, "Indemnified Costs" means
all actual or threatened liabilities, claims, actions, causes of action,
judgments, orders, damages (including foreseeable and unforeseeable
consequential damages), costs, expenses, fines, penalties and losses (including
sums paid in settlement of claims and all consultant, expert and legal fees and
expenses of the relevant Indemnified Party's counsel), including those incurred
in connection with any repair or restoration work of the real property owned by
the Company, or any resulting damages, harm or injuries to the person or
property of any third parties or to any natural resources. The foregoing
indemnity shall not cover any Indemnified Costs which arise as the result of the
gross negligence or willful misconduct of any Indemnified Party. Any
Indemnified Parties who are not parties to this Agreement are also intended
beneficiaries of this Section, as well as the Agent and the Lenders.
6.13 INDEMNITY REGARDING HAZARDOUS SUBSTANCES.
(a) INDEMNITY. The Company hereby indemnifies, defends
and holds the Indemnified Parties harmless from and against any and all
Indemnified Costs directly or indirectly arising out of or resulting from any
Hazardous Substance being present or released in, on or around any part of any
Funded Project, or in the soil, groundwater or soil vapor on or under any Funded
Project, including:
(i) Any claim for such Indemnified Costs asserted
by any federal, state or local governmental agency, including the United States
Environmental Protection Agency and the California Department of Health
Services, and including any claim that any Indemnified Party is liable for any
such Indemnified Costs as an "owner" or "operator" of any Funded Project under
any law relating to Hazardous Substances; and
(ii) Any such Indemnified Costs claimed against
any Indemnified Party by any person other than a governmental agency, including
any person who may purchase or lease all or any portion of any Funded Project
from the Company or its Subsidiaries, from any Indemnified Party, or from any
other purchaser or lessee; any person who may at any time have any interest in
all or any portion of the any Funded Project; any person who may at any time be
responsible for any clean-up costs or other Indemnified Costs relating to any
Funded Project; and any person claiming to have been injured in any way as a
result of exposure to any Hazardous Substance; and
38
(iii) Any such Indemnified Costs which any
Indemnified Party reasonably believes at any time must be incurred to comply
with any law, judgment, order, regulation or regulatory directive relating to
Hazardous Substances, or which any Indemnified Party reasonably believes at any
time must be incurred to protect the public health or safety; and
(iv) Any such Indemnified Costs resulting from
currently existing conditions in, on or around any Funded Project, whether known
or unknown by the Company, its Subsidiaries or the Indemnified Parties at the
time each Funded Project is acquired, and any such Indemnified Costs resulting
from the activities of the Company, it Subsidiaries or the tenants of either of
them, or any other person in, on or around any Funded Project.
(b) NO INDEMNITY FOR GROSS NEGLIGENCE OR WILLFUL
MISCONDUCT. Notwithstanding anything contained in this Agreement which may be
construed to the contrary, the Company and its Subsidiaries shall have no
obligation to indemnify any Indemnified Party for any Indemnified Costs arising
out of the gross negligence or willful misconduct of an Indemnified Party.
(c) DEFENSE OF INDEMNIFIED PARTIES. Upon demand by any
Indemnified Party, the Company and its Subsidiaries shall defend any
investigation, action or proceeding involving any Indemnified Costs which is
brought or commenced against any Indemnified Party, whether alone or together
with the Company or any other person, all at the Company's own, cost and by
counsel to be approved by the Indemnified Party in the exercise of its
reasonable judgment. In the alternative, any Indemnified Party may elect to
conduct its own defense at the expense of the Company and its Subsidiaries.
(d) COMPLIANCE REGARDING HAZARDOUS SUBSTANCES. The
Company shall, and shall cause its Subsidiaries to, comply and cause all tenants
and any other persons who may come upon any Funded Project to comply, with all
laws, regulations and ordinances governing or applicable to Hazardous
Substances, including those requiring disclosures to prospective and actual
buyers of all or any portion of any Funded Project. The Company also shall, and
shall also cause its Subsidiaries to, comply with the recommendations of any
qualified environmental engineer or other expert which apply or pertain to any
Funded Project.
(e) NOTICES REGARDING HAZARDOUS SUBSTANCES. The Company
shall, and shall cause its Subsidiaries to, promptly notify the Agent if it
knows, suspects or believes there may be any Hazardous Substance in or around
any Funded Project, or in the soil, groundwater or soil vapor on or under such
Funded Project, or that the Company, any of its Subsidiaries or any Funded
Project may be subject to any threatened or pending investigation by any
governmental agency under any law, regulation or ordinance pertaining to any
Hazardous Substance.
39
(f) SITE VISITS, OBSERVATIONS AND TESTING. The
Indemnified Parties and their agents and representatives shall have the right at
any reasonable time to enter and visit any Funded Project for the purposes of
observing the Funded Project, taking and removing soil or groundwater samples,
and conducting tests on any part of the Funded Project. The Indemnified Parties
have no duty, however, to visit or observe the any Funded Project or to conduct
tests, and no site visit, observation or testing by any Indemnified Party shall
impose any liability on any Indemnified Party. In no event shall any site
visit, observation or testing by any Indemnified Party be a representation that
Hazardous Substances are or are not present in, on or under any Funded Project,
or that there has been or shall be compliance with any law, regulation or
ordinance pertaining to Hazardous Substances or any other applicable
governmental law. Neither the Company, its Subsidiaries nor any other party is
entitled to rely on any site visit, observation or testing by any Indemnified
Party. The Indemnified Parties owe no duty of care to protect the Company or
any other party against, or to inform the Company, its Subsidiaries or any other
party of, any Hazardous Substances or any other adverse condition affecting any
Funded Project. Any Indemnified Party shall give the Company reasonable notice
before entering any Funded Project. The Indemnified Party shall make reasonable
efforts to avoid interfering with the Company's or any tenant's use of any
Funded Project in exercising any rights provided for in this Section. Each
Indemnified Party will use reasonable business practices in conducting its site
visits, observations and testing.
ARTICLE VII
NEGATIVE COVENANTS
The Company hereby covenants and agrees that, so long as any
Lender shall have any Bridge Commitment hereunder, or any Loan or other
Obligation shall remain unpaid or unsatisfied, unless the Requisite Lenders
waive compliance in writing:
7.01 LIENS. Neither the Company nor any Wholly-Owned Subsidiary
shall, directly or indirectly, make, create, incur, assume or suffer to exist
any Lien upon or with respect to any part of its Funded Projects, whether now
owned or hereafter acquired, other than the title exceptions disclosed to and
approved by the Lenders pursuant to Section 2.14(b)(i).
7.02 DISPOSITION OF FUNDED PROJECTS. The Company shall not, and
shall not suffer or permit any of its Subsidiaries to, directly or indirectly,
make any Disposition of any Funded Project or any portion thereof or interest
therein; provided, however, so long as no Default or Event of Default is then
continuing, the Company shall have the right to make a Disposition of any Funded
Project by paying to the Agent for distribution to the Lenders an amount equal
to the greater of the Loan applicable to such Funded Project or the amount which
would be required to be paid to the Lenders so that the Outstanding Amount
40
of the Bridge Loan immediately after such Disposition would not exceed the
Bridge Availability (calculated without including the Funded Project to which
such Disposition would be effective), and upon receipt of such payment, such
project shall no longer be deemed a "Funded Project" hereunder..
7.03 USE OF PROCEEDS. The Company shall not use any portion of
the Loan proceeds, directly or indirectly, (a) to purchase or carry Margin
Stock, (b) to repay or otherwise refinance indebtedness of the Company or others
incurred to purchase or carry Margin Stock, (c) to extend credit for the purpose
of purchasing or carrying any Margin Stock, (d) to acquire any security in any
transaction that is subject to Section 13 or 14 of the Exchange Act, or (e) for
any purpose other than those permitted by Section 6.06.
ARTICLE VIII
EVENTS OF DEFAULT
8.01 EVENT OF DEFAULT. Any of the following shall constitute an
"Event of Default":
(a) NON-PAYMENT. The Company shall fail to pay,
(i) when and as required to be paid herein, any amount of principal of any Loan,
or (ii) within five days after the same shall become due, any amount of interest
on any Loan or any fee or other amount payable hereunder or pursuant to any
other Loan Document; or
(b) REPRESENTATION OR WARRANTY. Any representation or
warranty by the Company, the REIT, any Management Entity or any Subsidiary made
or deemed made herein, in any Loan Document, or in any certificate, document or
financial or other statement by the Company, the REIT, any Management Entity or
any Subsidiary, or any Responsible Officer, furnished at any time under this
Agreement, or in or under any Loan Document, shall prove to have been incorrect
in any material respect on or as of the date made or deemed made; or
(c) SPECIFIC DEFAULTS. The Company shall fail to
perform or observe any term, covenant or agreement contained in Section 2.01(b)
or in Article VII; or
(d) OTHER DEFAULTS. The Company shall fail to perform
or observe any other term or covenant contained in this Agreement or any Loan
Document, and such default shall continue unremedied for a period of 20 days
after the earlier of (i) the date upon which a Responsible Officer knew or
received written notice of such failure or (ii) the date upon which written
notice thereof is given to the Company by any Agent or Lender; or
(e) CROSS-DEFAULT. An "Event of Default" (as such term
is defined in the Revolving Credit Agreement) occurs and is continuing; or
41
(f) COLLATERAL AND GUARANTY DOCUMENTS.
(i) Any provision of a Pledge Agreement shall for
any reason (other than pursuant to the terms thereof) cease to be valid and
binding on or enforceable against the Company or other Person party thereto
(except to the extent that the same results solely from an act or omission of
the Agent or the Lenders), or the Company or such Person shall so state in
writing or bring an action to limit its obligations or liabilities thereunder;
or
(ii) Any Pledge Agreement shall for any reason
(other than pursuant to the terms thereof) cease to create a valid security
interest in the Collateral purported to be covered thereby, or such security
interest shall for any reason cease to be a perfected and first-priority
security interest; or
(iii) Any party to a Pledge Agreement (other than
the Agent or Lenders) shall fail to perform or observe any term or covenant
contained in such Pledge Agreement, and such failure shall continue unremedied
for a period of 20 days after the earlier of (A) the date upon which a
Responsible Officer knew or received written notice of such failure or (B) the
date upon which written notice thereof is given to the Company by the Agent, or
any other event or condition shall occur or exist under a Pledge Agreement that
constitutes an "Event of Default" as defined therein; or
(g) ENVIRONMENTAL LIENS. Any Funded Project shall
become subject to one or more Liens in any amount under any Environmental Law
and such Liens shall remain in place for thirty (30) days after the creation
thereof.
8.02 REMEDIES.
If any Event of Default occurs, the Agent shall, at the
request of, or may, with the consent of, the Requisite Lenders:
(a) TERMINATION OF BRIDGE COMMITMENT. Declare the
Bridge Commitment of each Lender to make Loans to be terminated, whereupon such
Bridge Commitments shall forthwith be terminated;
(b) ACCELERATION. Declare (i) the unpaid principal
amount of all outstanding Loans and all interest accrued and unpaid thereon, and
(ii) all other amounts owing or payable hereunder or under any other Loan
Document to be immediately due and payable, without presentment, demand, protest
or other notice of any kind, all of which are hereby expressly waived; and
(c) OTHER REMEDIES. Exercise on behalf of itself and
the Lenders all rights and remedies available to it and the Lenders under the
Loan Documents or applicable law;
42
PROVIDED, however, that upon the occurrence of any event specified in Section
8.01(f) or 8.01(g) of the Revolving Credit Agreement (and in the case of clause
(i) of said Section 8.01(g) upon the expiration of the sixty (60)-day period
mentioned therein), the Bridge Commitment of each Lender to make Loans shall
automatically terminate, and the unpaid principal amount of all outstanding
Loans and interest accrued and unpaid thereon, and all other amounts owing or
payable hereunder as aforesaid shall automatically become due and payable
without further act of any Agent or Lender.
8.03 RIGHTS NOT EXCLUSIVE. The rights provided for in this
Agreement and the other Loan Documents are cumulative and are not exclusive of
any other rights, powers, privileges or remedies provided by law or in equity,
or under any other instrument, document or agreement now existing or hereafter
arising.
ARTICLE IX
THE AGENT
9.01 APPOINTMENT AND AUTHORIZATION. Each Lender hereby
irrevocably appoints, designates and authorizes the Agent to take such action on
its behalf under the provisions of this Agreement and each other Loan Document
and to exercise such powers and perform such duties as are expressly delegated
to it by the terms of this Agreement or any other Loan Document, together with
such powers as are reasonably incidental thereto. Notwithstanding any provision
to the contrary contained elsewhere in this Agreement or in any other Loan
Document, Agent shall not have any duties or responsibilities except those
expressly set forth herein, nor shall Agent have or be deemed to have any
fiduciary relationship with any Lender, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Agreement or any other Loan Document or otherwise exist on the part of Agent.
9.02 DELEGATION OF DUTIES. Agent may execute any of its duties
under this Agreement or any other Loan Document by or through agents, employees
or attorneys-in-fact and shall be entitled to advice of counsel concerning all
matters pertaining to such duties. Agent shall not be responsible for the
negligence or misconduct of any agent or attorney-in-fact that it selects with
reasonable care.
9.03 LIABILITY OF AGENT. The Agent, its respective Affiliates,
or their respective officers, directors, employees, agents, or attorneys-in-fact
(all of the foregoing being collectively referred to as the "Agent-Related
Persons") shall not (a) be liable for any action taken or omitted to be taken by
any of them under or in connection with this Agreement or any other Loan
Document (except for its own gross negligence or willful misconduct), or (b) be
responsible in any manner to any of the Lenders for any recital, statement,
representation or warranty made by the Company, the REIT, any Management Entity
or Subsid-
43
iary or any Affiliate of any such Person, or any officer thereof, contained in
this Agreement or in any other Loan Document, or in any certificate, report,
statement or other document referred to or provided for in, or received by Agent
under or in connection with, this Agreement or any other Loan Document, or for
the value of any Collateral or the validity, effectiveness, genuineness,
enforceability or sufficiency of this Agreement, any other Loan Document, or for
any failure of the Company, the REIT or any other party to any Loan Document to
perform its obligations hereunder or thereunder. No Agent-Related Person shall
be under any obligation to any Lender to ascertain or to inquire as to the
observance or performance of any of the agreements contained in, or conditions
of, this Agreement or any other Loan Document, or to inspect the Properties,
books or records of the Company, the REIT, any Management Entity or Subsidiary
or Affiliates thereof.
9.04 RELIANCE BY AGENT.
(a) GENERALLY. The Agent shall be entitled to rely, and
shall be fully protected in relying, upon any writing, resolution, notice,
consent, certificate, affidavit, letter, telegram, telecopy, telex or telephone
message, statement or other document or conversation believed by it to be
genuine and correct and to have been signed, sent or made by the proper Person
or Persons, and upon advice and statements of legal counsel (including counsel
to the Company), independent accountants and other experts selected by the
Agent. The Agent shall be fully justified in failing or refusing to take any
action under this Agreement or any other Loan Document unless it shall first
receive such advice or concurrence of the Requisite Lenders as it deems
appropriate and, if it so requests, it shall first be indemnified to its
satisfaction by the Lenders against any and all liability and expense which may
be incurred by it by reason of taking or continuing to take any such action.
The Agent shall in all cases be fully protected in acting, or in refraining from
acting, under this Agreement or any other Loan Document in accordance with a
request or consent of the Requisite Lenders, and such request and any action
taken or failure to act pursuant thereto shall be binding upon all of the
Lenders.
(b) CONDITIONS PRECEDENT. For purposes of determining
compliance with the conditions specified in Sections 4.01 and 4.02 (as to the
initial borrowing hereunder), each Lender that has executed this Agreement shall
be deemed to have consented to, approved or accepted or to be satisfied with
each document or other matter required thereunder to be consented to or approved
by or acceptable or satisfactory to such Lender, unless an officer of the Agent
responsible for the transactions contemplated by the Loan Documents shall have
received notice from such Lender prior to the initial borrowing specifying its
objection thereto and either such objection shall not have been withdrawn by
notice to the Agent to that effect or such Lender shall not have made available
to the Agent the Lender's ratable portion of such borrowing.
44
9.05 NOTICE OF DEFAULT. The Agent shall not be deemed to have
knowledge or notice of the occurrence of any Default or Event of Default, except
with respect to defaults in the payment of principal, interest and fees required
to be paid to the Agent for the account of the Lenders, unless the Agent shall
have received written notice from a Lender or the Company referring to this
Agreement, describing such Default or Event of Default and stating that such
notice is a "notice of default." In the event that the Agent receives such a
notice, the Agent shall give notice thereof to the Lenders. The Agent shall
take such action with respect to such Default or Event of Default as shall be
requested by the Requisite Lenders in accordance with Article VIII; PROVIDED,
HOWEVER, that unless and until the Agent shall have received any such request,
it may (but shall not be obligated to) take such action, or refrain from taking
such action, with respect to such Default or Event of Default as it shall deem
advisable or in the best interest of the Lenders.
9.06 CREDIT DECISION. Each Lender expressly acknowledges that
none of the Agent-Related Persons has made any representation or warranty to
such Lender and that no act by the Agent hereinafter taken, including any review
of the affairs of the Company, the REIT, any Management Entity or Subsidiary,
shall be deemed to constitute any representation or warranty by the Agent to any
Lender. Each Lender represents to the Agent that such Lender has, independently
and without reliance upon the Agent and based on such documents and information
as such Lender has deemed appropriate, made its own appraisal of and
investigation into the business, prospects, operations, Properties, financial
and other condition and creditworthiness of the Company, the REIT, any
Management Entity or Subsidiary, and all applicable lender regulatory laws
relating to the transactions contemplated thereby, and made its own decision to
enter into this Agreement and extend credit to the Company hereunder. Each
Lender also represents that it will, independently and without reliance upon the
Agent and based on such documents and information as it shall deem appropriate
at the time, continue to make its own credit analysis, appraisals and decisions
in taking or not taking action under this Agreement and the other Loan
Documents, and to make such investigations as it deems necessary to inform
itself as to the business, prospects, operations, Properties, financial and
other condition and creditworthiness of the Company, the REIT, the Management
Entities and the Subsidiaries. Except for notices, reports and other documents
expressly herein required to be furnished to the Lenders by the Agent, Agent
shall have no duty or responsibility to provide any Lender with any credit or
other information concerning the business, prospects, operations, Properties,
financial and other condition or creditworthiness of the Company, the REIT, the
Management Entities and the Subsidiaries which may come into the possession of
any of the Agent-Related Persons.
9.07 INDEMNIFICATION. The Lenders shall indemnify upon demand
the Agent-Related Persons (to the extent not reimbursed by or on behalf of the
Company and without limiting the obligation
45
of the Company to do so) ratably from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses and disbursements of any kind whatsoever which may at any time
(including at any time following the repayment of the Loans) be imposed on,
incurred by or asserted against any such Person in any way relating to or
arising out of this Agreement or any document contemplated by or referred to
herein or therein or the transactions contemplated hereby or thereby or any
action taken or omitted by any such Person under or in connection with any of
the foregoing; PROVIDED, HOWEVER, that no Lender shall be liable for the payment
to the Agent-Related Persons of any portion of such liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements resulting solely from such Person's gross negligence or willful
misconduct. Without limitation of the foregoing, each Lender shall reimburse
the Agent upon demand (to the extent the Agent is not reimbursed upon demand by
the Company, unless the Agent is legally restricted from making such demand upon
the Company, in which case demand need not be made upon the Company) for its
ratable share of any costs or out-of-pocket expenses (including Attorney Costs)
incurred by the Agent in connection with the preparation, execution, delivery,
administration, modification, amendment or enforcement (whether through
negotiations, legal proceedings or otherwise) of, or legal advice in respect of
rights or responsibilities under, this Agreement, any other Loan Document, or
any document contemplated by or referred to herein to the extent that the Agent
is not reimbursed for such expenses by or on behalf of the Company. Without
limiting the generality of the foregoing, if the IRS or any authority of the
United States or other jurisdiction asserts a claim that the Agent did not
properly withhold tax from amounts paid to or for the account of any Lender
(because the appropriate form was not delivered or was not properly executed, or
because such Lender failed to notify the Agent of a change in circumstances
which rendered the exemption from, or reduction of, withholding tax ineffective,
or for any other reason), such Lender shall indemnify the Agent fully for all
amounts paid, directly or indirectly, by the Agent as tax or otherwise,
including penalties and interest, and including any taxes imposed by any
jurisdiction on the amounts payable to the Agent under this Section 9.07,
together with all costs, expenses and attorneys' fees (including allocated costs
for in-house legal services). The obligation of the Lenders in this Section
shall survive the payment of all Obligations.
9.08 AGENT IN INDIVIDUAL CAPACITY. BofA (and any other Lender
that may hereafter serve as Agent) and each of their respective Affiliates may
make loans to, issue letters of credit for the account of, accept deposits from,
acquire equity interests in and generally engage in any kind of banking, trust,
financial advisory or other business with, the Company, the REIT, the Management
Entities and the Subsidiaries and Affiliates as though BofA (or any other such
Lender) were not the agent hereunder and without notice to the Lenders. With
respect to its Loans, BofA (and any other Lender that may hereafter serve as
46
Agent), shall have the same rights and powers under this Agreement as any other
Lender and may exercise the same as though each of them were not an agent, and
the terms "Lender" and "Lenders" shall include BofA (and any other Lender that
may hereafter serve as Agent), in its individual capacity.
9.09 SUCCESSOR AGENTS. The Agent may resign as Agent upon 30
days' notice to the Lenders. If an Agent shall resign under this Agreement, the
Requisite Lenders shall appoint from among the Lenders a successor Agent for the
Lenders, which successor Agent shall, if no Default or Event of Default exists
hereunder, be subject to the approval of the Company. If no successor Agent is
appointed prior to the effective date of the resignation of the retiring Agent,
the retiring Agent shall appoint, after consulting with the Lenders and the
Company, a successor Agent. Upon the acceptance of its appointment as successor
Agent hereunder, such successor Agent shall succeed to all the rights, powers
and duties of the retiring Agent, and the term "Agent" shall mean such successor
Agent, and the retiring Agent's rights, powers and duties as Agent shall be
terminated. After any retiring Agent's resignation hereunder as Agent, the
provisions of this Article IX and Sections 10.04 and 10.05 shall inure to its
benefit as to any actions taken or omitted to be taken by it while it was an
Agent under this Agreement.
9.10 COLLATERAL MATTERS.
(a) PERFECTION. The Agent is authorized on behalf of
all the Lenders, without the necessity of any notice to or further consent from
the Lenders, from time to time to take any action with respect to any Collateral
or the Equity Interests Pledge Documents which may be necessary to perfect and
maintain perfected the security interest in and Liens upon the Collateral
granted pursuant to the Equity Interests Pledge Documents.
(b) NO OTHER COLLATERAL. Each Lender agrees with and in
favor of each other (which agreement shall not be for the benefit of the
Company, the REIT, the Management Entities or any Subsidiaries) that the
Company's obligation to such Lender under this Agreement and the other Loan
Documents is not and shall not be secured by any real property collateral now or
hereafter acquired by such Lender other than the Collateral hereunder.
ARTICLE X
MISCELLANEOUS
47
10.01 AMENDMENTS AND WAIVERS.
(a) Generally. No amendment or waiver of any provision
of this Agreement or any other Loan Document, and no consent with respect to any
departure therefrom, shall be effective unless the same shall be in writing and
signed by the Requisite Lenders, and then such amendment, waiver or consent
shall be effective only in the specific instance and for the specific purpose
for which given.
(b) MATTERS REQUIRING UNANIMOUS CONSENT. Not
withstanding the terms of Section 10.01(a), no amendment or waiver of any
provision of this Agreement or any other Loan Document, no agreement to forebear
from acting upon any departure by the Company therefrom, and no consent with
respect to any departure by the Company therefrom, shall be effective to do any
of the following unless the same is in writing and signed by all the Lenders:
(i) increase the Bridge Commitment of any Lender;
(ii) postpone or delay any date fixed for any
payment of principal, interest, fees or other amounts due hereunder or under any
Loan Document whether by acceleration or otherwise;
(iii) reduce the principal of, or the rate of
interest specified herein on, any Loan, or any fees or other amounts payable
hereunder or under any Loan Document;
(iv) change the percentage of the Bridge
Commitments or of the aggregate unpaid principal amount of the Loans required
for the Lenders or any of them to take any action hereunder;
(v) amend Section 2.16 (Sharing of Payments,
Etc.), Section 6.10 (Use of Proceeds), Section 8.02 (Remedies), Section 10.15
(Governing Law and Jurisdiction) or this Section 10.01;
(vi) release any portion of the Collateral except
for the release, upon the written request of the Company, and with the consent
of the Requisite Lenders, of the Stock in a Wholly-Owned Subsidiary upon the
repayment of all Loans made with respect to the acquisition of Funded Projects
by such Subsidiary; or
(vii) release any guarantor from liability under
the REIT Guaranty Documents.
(c) MATTERS REQUIRING AGENTS' CONSENT. Notwithstanding
the terms of Section 10.01(a), no amendment or waiver of any provision of this
Agreement or any other Loan Document, and no consent with respect to any
departure by the Company there-
48
from, shall be effective to affect the rights or duties of the Agent under
this Agreement or any other Loan Document unless the same is in writing and
signed by the Agent.
10.02 NOTICES.
(a) DELIVERY. All notices, requests and other
communications provided for hereunder shall be in writing (including, unless the
context expressly otherwise provides, telegraphic, telex, facsimile transmission
or cable communication) and mailed, telegraphed, telexed or delivered, (i) if to
the Company, to its address specified on the signature pages hereof, (ii) if to
any Lender, to its Domestic Lending Office, and (iii) if to Agent, to its
address specified on the signature pages hereof; or, as to the Company or the
Agent, to such other address as shall be designated by such party in a written
notice to the other parties, and as to each other party, at such other address
as shall be designated by such party in a written notice to the Company and the
Agent.
(b) RECEIPT. All such notices and communications shall,
when transmitted by overnight delivery, telegraphed, telecopied by facsimile,
telexed or cabled, be effective when delivered for overnight delivery or to the
telegraph company, transmitted by telecopier, confirmed by telex answerback or
delivered to the cable company, respectively, or if delivered, upon delivery,
except that notices pursuant to Article II or VIII shall not be effective until
actually received by the Agent.
(c) RELIANCE. The Company acknowledges and agrees that
any agreement of the Agent and the Lenders under Article II to receive certain
notices by telephone and facsimile is solely for the convenience and at the
request of the Company. The Agent and the Lenders shall be entitled to rely on
the authority of any Person purporting to be a Person authorized by the Company
to give such notice, and the Agent and the Lenders shall not have any liability
to the Company or any other Person on account of any action taken or not taken
by the Agent and the Lenders in reliance upon such telephonic or facsimile
notice. The obligation of the Company to repay the Loans shall not be affected
in any way or to any extent by any failure by the Agent and the Lenders to
receive written confirmation of any telephonic or facsimile notice or the
receipt by the Agent and the Lenders of a confirmation which is at variance with
the terms understood by the Agent and the Lenders to be contained in the
telephonic or facsimile notice.
10.03 NO WAIVER; CUMULATIVE REMEDIES. No failure to exercise and
no delay in exercising, on the part of any Agent or Lender, any right, remedy,
power or privilege hereunder, shall operate as a waiver thereof; nor shall any
single or partial exercise of any right, remedy, power or privilege hereunder
preclude any other or further exercise thereof or the exercise of any other
right, remedy, power or privilege.
49
10.04 COSTS AND EXPENSES. The Company shall, whether or not the
transactions contemplated hereby shall be consummated:
(a) FACILITY EXPENSES. Pay or reimburse the Agent on
demand for all costs and expenses incurred in connection with the development,
preparation or delivery of, and any amendment, supplement, waiver or
modification to, this Agreement, any Loan Document and any other documents
prepared in connection herewith or therewith, the consummation of the
transactions contemplated hereby and thereby, and any proposal for consideration
of potential Funded Projects, including, without limitation, title insurance
company charges, survey costs, recording costs and taxes, travel expenses
incurred by representatives of the Agent, and the reasonable Attorney Costs
incurred by the Agent with respect thereto;
(b) ENFORCEMENT EXPENSES. Pay or reimburse the Agent
and Lenders on demand for all costs and expenses incurred by them in connection
with the enforcement, attempted enforcement, or preservation of any rights or
remedies (including in connection with any "workout" or restructuring regarding
the Loans) under this Agreement, any other Loan Document, and any such other
documents, including reasonable Attorney Costs incurred by the Agent and Lender;
and
(c) COLLATERAL EXPENSES. Pay or reimburse the Agent on
demand for all audits, environmental inspections and reviews (including the
allocated costs of such internal services), search and filing costs, fees and
expenses, incurred or sustained by the Agent in connection with the matters
referred to under paragraphs (a) and (b) of this Section.
10.05 INDEMNITY. The Company shall indemnify and hold harmless
the Agent, each Lender and each of their respective officers, directors,
employees, counsel, agents and attorneys-in-fact (each, an "Indemnified Person")
from and against and pay them for any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, charges, expenses or
disbursements (including Attorney Costs) of any kind or nature whatsoever with
respect to the execution, delivery, enforcement, performance and administration
of this Agreement and any other Loan Documents, or the transactions contemplated
hereby and thereby, and with respect to any investigation, litigation or
proceeding related to this Agreement or the Loans or the use of the proceeds
thereof, whether or not any Indemnified Person is a party thereto (all the
foregoing, collectively, the "Indemnified Liabilities"); PROVIDED, that the
Company shall have no obligation hereunder to any Indemnified Person with
respect to Indemnified Liabilities arising from the gross negligence or willful
misconduct of such Indemnified Person. The agreements in this Section 10.05
shall survive payment of all other Obligations.
10.06 MARSHALLING; PAYMENTS SET ASIDE. Neither the Agent nor any
Lender shall be under any obligation to xxxxxxxx
50
any assets in favor of the Company or any other Person or against or in payment
of any or all of the Obligations. To the extent that the Company makes a
payment or payments to the Agent or any Lender, or the Agent or any Lender
enforces its Liens or exercises its rights of setoff, and such payment or
payments or the proceeds of such enforcement or setoff or any part thereof are
subsequently invalidated, declared to be fraudulent or preferential, set aside
or required to be repaid to a trustee, receiver or any other party in connection
with any Insolvency Proceeding, or otherwise, then to the extent of such
recovery the obligation or part thereof originally intended to be satisfied
shall be revived and continued in full force and effect as if such payment had
not been made or such enforcement or setoff had not occurred.
10.07 SUCCESSORS AND ASSIGNS. The provisions of this Agreement
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns, except that the Company may not assign or
transfer any of its rights or obligations under this Agreement without the prior
written consent of the Agent and each Lender, which may be withheld in their
sole and absolute discretion.
51
10.08 ASSIGNMENTS, PARTICIPATIONS, ETC.
(a) ASSIGNMENTS. Subject to the further provisions of
this Section 10.08(a), any Lender may, with the written consent of the Agent,
which consent shall not be unreasonably withheld, at any time assign and
delegate to one or more Eligible Assignees (provided that no written consent of
the Agent shall be required in connection with any assignment and delegation by
a Lender to a Lender Affiliate of such Lender) (each an "Assignee") all, or any
ratable part of all, of the Loans, the Bridge Commitments and the other rights
and obligations of such Lender hereunder, in a minimum amount of $1,250,000 and
in additional increments of $62,500 so long as such Lender concurrently
transfers to such Assignee the same proportionate share of its interests and
obligations with respect to its Revolving Commitment under (and as such term is
defined in) the Revolving Credit Agreement) PROVIDED, HOWEVER, that the Company
and the Agent may continue to deal solely and directly with such Lender in
connection with the interest so assigned to an Assignee until (A) written notice
of such assignment, together with payment instructions, addresses and related
information with respect to the Assignee, shall have been given to the Company
and the Agent by such Lender and the Assignee; (B) such Lender and its Assignee
shall have delivered to the Company and the Agent an Assignment and Acceptance
in the form of EXHIBIT H ("Assignment and Acceptance") together with any Note or
Notes subject to such assignment; (C) such Lender shall have paid to the Agent,
for its own account, an assignment fee in the amount of $1500, if the Assignee
is a Lender (without giving effect to the Assignment), and $3000 in all other
cases; and (D) such Lender shall have delivered to the Agent such documents as
may be required by Section 3.01(f). Any such assignment requiring the approval
of the Agent shall also require the approval of the Company (such approval not
to be unreasonably withheld or delayed), provided that the Company's failure to
approve or disapprove such assignment within five days' after receiving written
notice thereof shall be deemed approval by the Company of such assignment, and
provided further, that no such approval from the Company shall be required
during the continuation of a Default or Event of Default.
(b) RIGHTS OF ASSIGNEE. From and after the date that
the Agent notifies the assignor Lender that the Agent has received an executed
Assignment and Acceptance and payment of the assignment fee specified in Section
10.08(a), (i) the Assignee thereunder shall, subject to Section 10.08(a), be a
party hereto and, to the extent that rights and obligations hereunder have been
assigned to it pursuant to such Assignment and Acceptance, shall have the rights
and obligations of a Lender under the Loan Documents, and (ii) the assignor
Lender shall, to the extent that rights and obligations hereunder have been
assigned by it pursuant to such Assignment and Acceptance, relinquish its rights
and be released from its obligations under the Loan Documents.
(c) REPLACEMENT NOTES. Within thirty (30) Business Days
after its receipt of notice by the Agent that the
52
Agent has received an executed Assignment and Acceptance and payment of the
processing fee, the Company shall execute and deliver to the Agent, new Notes
evidencing such Assignee's assigned Loans and Bridge Commitment and, if the
assignor Lender has retained a portion of its Loans and its Bridge Commitment,
replacement Notes in the principal amount of the Loans retained by the assignor
Lender (such Notes to be in exchange for, but not in payment of, the Notes held
by such Lender). Immediately upon each Assignee's making its payment under the
Assignment and Acceptance, this Agreement shall be deemed to be amended to the
extent, but only to the extent, necessary to reflect the addition of the
Assignee and the resulting adjustment of the Bridge Commitments arising
therefrom. The Bridge Commitment allocated to each Assignee shall reduce such
Bridge Commitment of the assigning Lender PRO TANTO.
(d) PARTICIPATIONS. Any Lender may at any time sell to
one or more commercial lenders (a "Participant") participating interests in any
Loans and Bridge Commitment of that Lender and the other interests of that
Lender (the "originating Lender") hereunder and under the other Loan Documents
so long as such Lender concurrently transfers to such Participant the same
proportionate share of its interests and obligations with respect to its
Revolving Commitment under (and as such term is defined in) the Revolving Credit
Agreement; PROVIDED, HOWEVER, that (i) the originating Lender's obligations
under this Agreement shall remain unchanged, (ii) the originating Lender shall
remain solely responsible for the performance of such obligations, (iii) the
Company and the Agent shall continue to deal solely and directly with the
originating Lender in connection with the originating Lender's rights and
obligations under this Agreement and the other Loan Documents, (iv) no Lender
shall transfer or grant any participating interest under which the Participant
shall have rights to approve any amendment to, or any consent or waiver with
respect to, this Agreement or any other Loan Document, except to the extent such
amendment, consent or waiver would require unanimous consent as described in the
FIRST PROVISO to Section 10.01; and (v) the Company shall have approved the
transfer or grant of any participating interest in any Loans and Bridge
Commitment of the originating Lender to a Participant that has not theretofore
previously held a participating interest therein (such approval not to be
unreasonably withheld or delayed), provided that the Company's failure to
approve or disapprove in writing such Participant within five days' after
receiving written notice thereof shall be deemed approval by the Company of such
transfer or grant to such Participant, and provided further, that no such
approval from the Company shall be required during the continuation of a Default
or Event of Default. In the case of any such participation, the Participant
shall not have any rights under this Agreement, or any of the other Loan
Documents, and all amounts payable by the Company hereunder shall be determined
as if such Lender had not sold such participation; except that, if amounts
outstanding under this Agreement are due and unpaid, or shall have been declared
or shall have become due and payable upon the occurrence of an Event
53
of Default, each Participant shall be deemed to have the right of setoff in
respect of its participating interest in amounts owing under this Agreement to
the same extent as if the amount of its participating interest were owing
directly to it as a Lender under this Agreement.
(e) ASSIGNMENTS TO FEDERAL RESERVE BANK.
Notwithstanding any other provision contained in this Agreement or any other
Loan Document to the contrary, any Lender may assign all or any portion of the
Loans or Notes held by it to any Federal Reserve Bank or the United States
Treasury as collateral security pursuant to Regulation A of the Board of
Governors of the Federal Reserve System and any Operating Circular issued by
such Federal Reserve Bank, provided that any payment in respect of such assigned
Loans or Notes made by the Company to or for the account of the assigning and/or
pledging Lender in accordance with the terms of this Agreement shall satisfy the
Company's obligations hereunder in respect of such assigned Loans or Notes to
the extent of such payment. No such assignment shall release the assigning
Lender from its obligations hereunder.
10.09 SETOFF.
In addition to any rights and remedies of the Lenders provided by
law, if an Event of Default exists, each Lender is authorized at any time and
from time to time, without prior notice to the Company, any such notice being
waived by the Company to the fullest extent permitted by law, to set off and
apply any and all deposits (general or special, time or demand, provisional or
final) at any time held by, and other indebtedness at any time owing to, such
Lender to or for the credit or the account of the Company against any and all
obligations owing to such Lender, now or hereafter existing, irrespective of
whether the Agent or such Lender shall have made demand under this Agreement or
any Loan Document and whether such obligations may be contingent or unmatured.
Each Lender agrees to promptly notify the Company and the Agent after any such
setoff and application made by such Lender; PROVIDED, HOWEVER, that the failure
to give such notice shall not affect the validity of such setoff and
application. The rights of each Lender under this Section 10.09 are in addition
to the other rights and remedies (including other rights of setoff) that such
Lender may have. NOTWITHSTANDING THE FOREGOING, NO LENDER SHALL EXERCISE, OR
ATTEMPT TO EXERCISE, ANY RIGHT OF SETOFF, BANKER'S LIEN, OR THE LIKE, AGAINST
ANY DEPOSIT ACCOUNT OR PROPERTY OF THE COMPANY, THE REIT, ANY MANAGEMENT ENTITY
OR ANY SUBSIDIARY HELD OR MAINTAINED BY ANY LENDER, WITHOUT THE PRIOR WRITTEN
CONSENT OF THE REQUISITE LENDERS.
10.10 NOTIFICATION OF ADDRESSES, LENDING OFFICES, ETC. Each
Lender shall notify the Agent in writing of any changes in the address to which
notices to such Lender should be directed, of addresses of its Offshore Lending
Office, of payment instructions in respect of all payments to be made to it
hereun-
54
der and of such other administrative information as the Agent shall reasonably
request.
10.11 COUNTERPARTS. This Agreement may be executed by one or
more of the parties to this Agreement in any number of separate counterparts,
each of which, when so executed, shall be deemed an original, and all of said
counterparts taken together shall be deemed to constitute but one and the same
instrument. A set of the copies of this Agreement signed by all the parties
shall be lodged with the Company and the Agent.
10.12 SEVERABILITY. The illegality or unenforceability of any
provision of this Agreement or any instrument or agreement required hereunder
shall not in any way affect or impair the legality or enforceability of the
remaining provisions of this Agreement or any instrument or agreement required
hereunder.
10.13 NO THIRD PARTIES BENEFITED. This Agreement is made and
entered into for the sole protection and legal benefit of the Company, the Agent
and the Lenders, and their permitted successors and assigns, and no other Person
shall be a direct or indirect legal beneficiary of, or have any direct or
indirect cause of action or claim in connection with, this Agreement or any of
the other Loan Documents. No Agent or Lender shall have any obligation to any
Person not a party to this Agreement or the other Loan Documents.
10.14 TIME. Time is of the essence of each term and provision of
this Agreement and each of the other Loan Documents.
10.15 GOVERNING LAW. THIS AGREEMENT AND THE NOTES SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF
COLORADO; PROVIDED THAT THE AGENT AND THE LENDERS SHALL RETAIN ALL RIGHTS
ARISING UNDER FEDERAL LAW.
10.16 WAIVER OF JURY TRIAL. THE COMPANY, THE AGENT, AND THE
LENDERS EACH WAIVE THEIR RESPECTIVE RIGHTS TO A TRIAL BY JURY OF ANY CLAIM OR
CAUSE OF ACTION BASED UPON OR ARISING OUT OF OR RELATED TO THIS AGREEMENT, THE
OTHER LOAN DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY, IN ANY
ACTION, PROCEEDING OR OTHER LITIGATION OF ANY TYPE BROUGHT BY ANY OF THE PARTIES
AGAINST ANY OTHER PARTY OR PARTIES, WHETHER WITH RESPECT TO CONTRACT CLAIMS,
TORT CLAIMS, OR OTHERWISE. SUBJECT TO SECTION 10.17 BELOW, THE COMPANY, THE
AGENT, AND THE LENDERS EACH AGREE THAT ANY SUCH CLAIM OR CAUSE OF ACTION SHALL
BE TRIED BY A COURT TRIAL WITHOUT A JURY. WITHOUT LIMITING THE FOREGOING, THE
PARTIES FURTHER AGREE THAT THEIR RESPECTIVE RIGHT TO A TRIAL BY JURY IS WAIVED
BY OPERATION OF THIS SECTION AS TO ANY ACTION, COUNTERCLAIM OR OTHER PROCEEDING
WHICH SEEKS, IN WHOLE OR IN PART, TO CHALLENGE THE VALIDITY OR ENFORCEABILITY OF
THIS AGREEMENT OR THE OTHER LOAN DOCUMENTS OR ANY PROVISION HEREOF OR THEREOF.
THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT
55
AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT AND THE
OTHER LOAN DOCUMENTS.
10.17 ARBITRATION.
(a) MANDATORY ARBITRATION. Any controversy or claim
between or among the parties arising out of or relating to this Agreement, the
Loan Documents, and any claim based on or arising from an alleged tort, shall at
the request of any party be determined by arbitration. The arbitration shall be
conducted in Los Angeles, California, in accordance with the United States
Arbitration Act (Title 9, U.S. Code), notwithstanding any choice of law
provision in this Agreement, and under the Commercial Rules of the American
Arbitration Association (the "AAA"). The arbitrator(s) shall give effect to
statutes of limitation in determining any claim. Any controversy concerning
whether an issue is arbitrable shall be determined by the arbitrator(s).
Judgment upon the arbitration award may be entered in any court having
jurisdiction. The institution and maintenance of an action for judicial relief
or pursuit of a provisional or ancillary remedy shall not constitute a waiver of
the right of any party, including the plaintiff, to submit the controversy or
claim to arbitration if any other party contests such action for judicial
relief.
(b) PROVISIONAL REMEDIES, SELF-HELP AND FORECLOSURE. No
provision of this Section 10.17 shall limit the right of any party to this
Agreement to exercise self-help remedies such as setoff, foreclosure against or
sale of any real or personal property collateral or security, or to obtain
provisional or ancillary remedies from a court of competent jurisdiction before,
after, or during the pendency of any arbitration or other proceeding. The
exercise of a remedy does not waive the right of either party to resort to
arbitration.
10.18 NOTICE OF CLAIMS; CLAIMS BAR. THE COMPANY HEREBY AGREES
THAT IT SHALL GIVE PROMPT WRITTEN NOTICE TO THE AGENT OF ANY CLAIM OR CAUSE OF
ACTION IT BELIEVES IT HAS, OR MAY SEEK TO ASSERT OR ALLEGE AGAINST THE AGENT OR
ANY LENDER, WHETHER SUCH CLAIM IS BASED IN LAW OR EQUITY, ARISING UNDER OR
RELATED TO THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS, OR TO THE LOANS
(OR THE COLLATERAL THEREFOR), OR ANY ACT OR OMISSION TO ACT BY THE AGENT OR ANY
LENDER WITH RESPECT HERETO OR THERETO, AND THAT IF THE COMPANY SHALL FAIL TO
GIVE SUCH PROMPT NOTICE TO THE AGENT WITH REGARD TO ANY SUCH CLAIM OR CAUSE OF
ACTION, THE COMPANY SHALL BE DEEMED TO HAVE WAIVED, AND SHALL BE FOREVER BARRED
FROM BRINGING OR ASSERTING, SUCH CLAIM OR CAUSE OF ACTION IN ANY ARBITRATION OR
ANY SUIT, ACTION OR PROCEEDING IN ANY COURT OR BEFORE ANY GOVERNMENTAL AGENCY.
10.19 ENTIRE AGREEMENT. This Agreement, together with the other
Loan Documents, embodies the entire Agreement and understanding between the
Company, the Agent and the Lenders. Accordingly, this Agreement, together with
the other Loan Documents, supersedes all prior or contemporaneous agreements and
56
understandings of such Persons, verbal or written, relating to the subject
matter hereof and thereof, except for any prior arrangements made with respect
to the payment by the Company of (or any indemnification for) any fees, costs or
expenses payable to or incurred (or to be incurred) by or on behalf of the Agent
or the Lenders.
10.20 INTERPRETATION. This Agreement together with the other
Loan Documents is the result of negotiations between and has been reviewed by
counsel to the Agent, the Lenders and the Company and other parties, and is the
product of all parties hereto. Accordingly, this Agreement and the other Loan
Documents shall not be construed against the Lenders or the Agent merely because
of the Agent's or Lender's involvement in the preparation of such documents and
agreements.
10.21 EXCULPATION OF LENDERS. No Lender undertakes or assumes
any responsibility or duty to the Company or any third party to select, review,
inspect, examine, supervise, pass judgment upon or inform the Company or any
third party of the existence, quality, adequacy or suitability of: (a) any
appraisals of any Funded Project, (b) any environmental report related to a
Funded Project, or (c) any other matters or items, including, but not limited
to, engineering, soils and seismic reports which are related to a Funded
Project. Any such selection, review, inspection, examination and the like is
solely for the purpose of protecting the Banks' interests and preserving the
Banks' rights under the Loan Documents, and shall not render any Lender liable
to the Company or any third party for the existence, sufficiency, accuracy,
completeness or legality thereof. No Lender owes any duty of care to protect or
inform the Company or any third party against negligent, faulty, inadequate or
defective building or construction or the existence of any environmentally
hazardous condition affecting any Funded Project.
10.22 RELATIONSHIP. Nothing herein contained shall in any manner
be construed as creating any relationship between the Agent and the Lenders, on
the one hand, and the Company, on the other hand, other than as creditor and
debtor. The Company agrees to indemnify, protect, defend and hold the Agent and
each Lender harmless from and against any and all losses, liabilities, damages,
and costs and expenses (including, but not limited to, reasonable attorneys'
fees and disbursements, including reasonably allocated costs of in-house
counsel) resulting from any other construction of the parties' relationship.
57
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed and delivered as of the day and year first written above.
COMPANY
AIMCO PROPERTIES, L.P.,
a Delaware limited partnership
By: AIMCO -GP, Inc., a Delaware
corporation, its general partner
By: . . . . . . . . . . . . . . . .
Xxxxx X. Xxxxxxxxx,
Vice President
Notices to be sent to:
0000 Xxxxx Xxxxxxxx Xxxxxx
00xx Xxxxx
Xxxxxx, Xxxxxxxx 00000
Attention: Xxxxx X. Xxxxxxxxx,
Vice Chairman
Facsimile: (000) 000-0000
58
AGENT
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION,
as Agent
By:________________________________
Name: _____________________________
Title:_____________________________
Notices to be sent to:
Bank of America National Trust and
Savings Association CRESG #1357
000 Xxxxx Xxxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxxxxx, XX 00000
Att'n: X. Xxxxxx
Telephone: 213/000-0000
Facsimile: 213/228-5389
Payments to be made to:
BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION
000 X. Xxxxxxx Xxx.
Loan Accounting Xxxx #0000
Xxx Xxxxxxx, XX 00000
ABA #: 121 000 358
Credit Account #: 15031-00407
Attention: Xxxxx Xxxx
Ref: AIMCO Bridge Loan
00
X XX X
XXXX XX XXXXXXX NATIONAL TRUST
AND SAVINGS ASSOCIATION,
as a Lender
By: . . . . . . . . . . . . . . . .
Name: . . . . . . . . . . . . . . .
Title:. . . . . . . . . . . . . . .
Notices to be sent to:
Bank of America National Trust and
Savings Association CRESG #1357
000 Xxxxx Xxxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxxxxx, XX 00000
Att'n: X. Xxxxxx
Telephone: 213/000-0000
Facsimile: 213/228-5389
Payments to be made to:
BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION
000 X. Xxxxxxx Xxx.
Loan Accounting Xxxx #0000
Xxx Xxxxxxx, XX 00000
ABA #: 121 000 358
Credit Account #: 15031-00407
Attention: Xxxxx Xxxx
Ref: AIMCO Bridge Loan
60
SCHEDULES
Schedule 1.01 Initial Funded Projects
Schedule 2.01 Bridge Commitments of the Lenders
EXHIBITS
EXHIBIT A Borrowing Notice
EXHIBIT B Note
EXHIBIT C Notice of Conversion/Continuation
EXHIBIT D Guaranty
EXHIBIT E Equity Interests Pledge Agreement
EXHIBIT F Funded Project Closing Certificate
EXHIBIT G Compliance Certificate
EXHIBIT H Assignment and Acceptance
61
Schedule 1.01
INITIAL FUNDED PROJECTS
(AS OF MAY 5, 1997)
Individual Bridge Loan
Initial Funded Project Maturity Date Therefor*
---------------------- -----------------------
NONE
* This date should match the Individual Bridge Loan Maturity Date for the
initial Funded Project applicable under the Previous Credit Agreement.
62
Schedule 2.01
BRIDGE COMMITMENTS
Lender Commitment
------ ----------
BofA $15,000,000.00
Total $15,000,000.00
63
EXHIBIT A
INITIAL BORROWING NOTICE
___________, 1997
Bank of America National Trust
and Savings Association, as Agent
CRESD #1357
000 Xxxxx Xxxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attn: Unit Manager
Re: Amended and Restated Credit Agreement (Bridge Loan), dated as of May 5,
1997 (as the same may be amended, modified or supplemented from time to
time, the "Agreement"), among AIMCO PROPERTIES, L.P., a Delaware limited
partnership (the "Company"), the banks from time to time party to the
Agreement (the "Banks"), BANK OF AMERICA NATIONAL TRUST AND SAVINGS
ASSOCIATION, as one of the Banks, and BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION, as Agent (the "Agent") for the Banks
Ladies and Gentlemen:
Reference is made to the Agreement. Capitalized terms used in this
Borrowing Notice without definition have the meanings specified in the
Agreement.
Pursuant to Section 2.03 of the Agreement, notice is hereby given that the
Company desires that the Banks make the loan described in attached SCHEDULE 1
(the "Loan"). In connection therewith, the Company and the undersigned
Responsible Officers of the Company hereby certify that:
(1) ACQUISITION COST. The amount of the Loan hereby requested does
not exceed 50% of the acquisition cost (exclusive of prorations and closing
costs) of the Funded Project to which the Loan will be applied;
(2) REPRESENTATIONS AND WARRANTIES. All representations and
warranties of the Company contained in the Loan Documents, including those
contained in Article V of the Agreement, are true and correct as of the date
hereof and shall be true and correct in all material respects on the date of the
Loan, both before and after giving effect to the Loan; PROVIDED, HOWEVER, that
the representations and warranties of the Company set forth in Section 5.01
(with respect to the representation and warranty made under Section 5.08 of the
Agreement) shall be deemed to be made with respect to the financial statements
most recently delivered to the Agent and the Banks pursuant to Section 6.01 of
the Agreement;
1
(3) NO DEFAULT/EVENT OF DEFAULT. No Default or Event of Default
exists as of the date hereof or will result from the making of the Loan;
(4) USE OF PROCEEDS. The proceeds of the Loan will be used only as
permitted under Sections 2.01(b) and 6.06 of the Agreement; and
(5) NO MATERIAL ADVERSE EFFECT. No act, omission, change or event
which has a Material Adverse Effect has occurred since the Closing Date.
AIMCO PROPERTIES, L.P.,
a Delaware limited partnership
By: AIMCO-GP, INC.
a Delaware corporation, its general
partner
By:. . . . . . . . . . . . . . . .
Name:. . . . . . . . . . . . . . .
Its: . . . . . . . . . . . . . . .
By:. . . . . . . . . . . . . . . .
Name:. . . . . . . . . . . . . . .
Its: . . . . . . . . . . . . . . .
2
SCHEDULE 1
to Borrowing Notice
REQUESTED LOAN
AMOUNT OF REQUESTED LOAN: $. . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(must be $1,000,000 or a multiple of
$100,000 in excess thereof)
DESIGNATION OF INTEREST RATE:
(Portion of requested Loan to be funded as Base Rate Loan and/or LIBOR Loan):
(1) BASE RATE LOAN. The following Base Rate Loan:
Amount: $. . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Requested Borrowing Date:. . . . . . . . . . . . . . . . . . . . . . . . .
(must be a Business Day at least two (2) Business Days after date of
notice)
(2) LIBOR LOAN. The following LIBOR Loan:
(there must not, after giving effect to the requested Loan, be more than
five (5) different LIBOR Loans in effect, and the Interest Period must not
extend beyond the Individual Bridge Loan Maturity Date for such Loan)
Amount: $. . . . . . . . . . . . . . . . .
...........................................................................
Requested Borrowing Date: . . . . . . . . . . . . . . . . .
(must be a Business Day at least three (3) Business Days after date of
notice)
Interest Period: . . . . . . . . . . . . . . . . .
(1 or 2 months)
3
EXHIBIT B
PROMISSORY NOTE
Los Angeles, California
$25,000,000.00 ________, 1997
FOR VALUE RECEIVED, AIMCO Properties, L.P., a Delaware limited partnership
(the "Company"), promises to pay to the order of BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION ("Bank") the principal amount of TWENTY FIVE MILLION
DOLLARS AND NO/100 ($25,000,000.00) or, if less, the aggregate amount of Loans
(as such term and all other capitalized terms used but not defined herein are
defined in the Amended and Restated Credit Agreement referred to below) made by
the Bank to the Company pursuant to the Amended and Restated Credit Agreement
referred to below, outstanding on the Bridge Facility Maturity Date.
The Company also promises to make principal payments and interest on the
unpaid principal amount hereof from the date hereof until paid at the rates and
at the times which shall be determined in accordance with the provisions of the
Amended and Restated Credit Agreement, including, without limitation, the
repayment of Loans no later than the applicable Individual Bridge Loan Maturity
Date.
All payments of principal and interest in respect of this Note shall be
made in lawful money of the United States of America in same day funds at the
Payment Office. Until notified of the transfer of this Note, the Company shall
be entitled to deem the Bank or such person who has been so identified by the
transferor in writing to the Company as the holder of this Note, as the owner
and holder of this Note. The Bank and any subsequent holder of this Note agrees
that before disposing of this Note, or any part hereof, it will make a notation
hereon of all principal payments previously made hereunder of the date to which
interest hereon has been paid on the schedule attached hereto, if any; PROVIDED,
HOWEVER, that the failure to make notation of any payment made on this Note
shall not limit or otherwise affect the obligation of the Company hereunder with
respect to payments of principal or interest on this Note.
This Note is referred to in, and is entitled to the benefits of, the
Amended and Restated Credit Agreement (Bridge Loan), dated as of May 5, 1997
(the "AMENDED AND RESTATED CREDIT AGREEMENT"), among the Company, the financial
institutions named therein, and BANK OF AMERICA NATIONAL TRUST AND SAVINGS
ASSOCIATION, as Agent (the "Agent"). The Amended and Restated Credit Agreement,
among other things, (i) provides for the making of loans (the "LOANS") by the
Bank to the Company from time to time in an aggregate amount first above
mentioned, the indebtedness of the Company resulting from each such Loan being
evidenced by this Note, and (ii) contains provisions for acceleration of the
1
maturity hereof upon the happening of certain stated events and also for
mandatory and optional prepayments on account of principal hereof and certain
principal payments prior to the maturity hereof upon the terms and conditions
therein specified.
The terms of this Note are subject to amendment only in the manner provided
in the Amended and Restated Credit Agreement.
No reference herein to the Amended and Restated Credit Agreement and no
provision of this Note or the Amended and Restated Credit Agreement shall alter
or impair the obligation of the Company, which is absolute and unconditional, to
pay the principal of and interest on this Note at the place, at the respective
times, and in the currency herein prescribed.
The Company promises to pay all costs and expenses, including reasonable
attorneys' fees, incurred in the collection and enforcement of this Note. The
Company hereby waives diligence, presentment, and protest, and except as
provided in the Amended and Restated Credit Agreement, demand and notice of
every kind and, to the full extent permitted by law, the right to plead any
statute of limitations as a defense to any demand hereunder.
This Note shall be governed by, and construed in accordance with, the laws
of the state of Colorado without giving effect to its choice of law doctrine.
IN WITNESS WHEREOF, the Company has caused this Note to be executed and
delivered by its duly authorized officer, as of the date and place first above
written.
AIMCO PROPERTIES, L.P.,
a Delaware limited partnership
By: AIMCO-GP, INC.,
a Delaware corporation,
its general partner
By: . . . . . . . . . . . . . . .
Its: . . . . . . . . . . . .
2
TRANSACTIONS ON NOTE
--------------------------------------------------------------------------------
AMOUNT
AMOUNT OF PRIN- INTEREST
OF LOAN CIPAL PRINCIPAL INTEREST PAID NOTATION
DATE MADE PAID BALANCE PAID THROUGH MADE BY
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
3
EXHIBIT C
NOTICE OF CONVERSION/CONTINUATION
__________________, 1997
Bank of America National Trust
and Savings Association
CRESD #1357
000 Xxxxx Xxxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attn: Unit Manager
Re: Amended and Restated Credit Agreement (Bridge Loan), dated as of May 5,
1997 (as the same may be amended, modified or supplemented from time to
time, the "Agreement"), by and among AIMCO PROPERTIES, L.P., a Delaware
limited partnership (the "Company"), the banks from time to time party to
the Agreement (the "Banks"), BANK OF AMERICA NATIONAL TRUST AND SAVINGS
ASSOCIATION, as one of the Banks, and BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION, as Agent (the "Agent")
Ladies and Gentlemen:
Reference is made to the Agreement. Capitalized terms used in this
Notice of Conversion/Continuation without definition have the meanings specified
in the Agreement.
Pursuant to Section 2.04 of the Agreement, the Company hereby elects
to convert or continue the loans described in attached SCHEDULE 1 (the "Loans").
In connection therewith, the Company and the undersigned Responsible Officers of
the Company hereby certify that:
(1) REPRESENTATIONS AND WARRANTIES. All representations and
warranties of the Company contained in the Loan Documents, including those
contained in Article V of the Agreement, are true and correct in all material
respects as of the date hereof and shall be true and correct on the date of the
continuation/conversion of the Loan, both before and after giving effect to such
continuation/conversion; PROVIDED, HOWEVER, that the representations and
warranties of the Company set forth in Section 5.01 (with respect to the
representation and warranty made under Section 5.08 of the Agreement) shall be
deemed to be made with respect to the financial statements most recently
delivered to the Agent and the Banks pursuant to Section 6.01 of the Agreement;
(2) NO DEFAULT/EVENT OF DEFAULT. No Default or Event of Default
exists as of the date hereof or will result from the continuation/conversion of
the Loan; and
1
(4) NO MATERIAL ADVERSE EFFECT. No act, omission, change or
event which has a Material Adverse Effect has occurred since the Closing Date.
AIMCO PROPERTIES, L.P., a Delaware limited
partnership
By: AIMCO-GP, INC.
a Delaware corporation, its general
partner
By:__________________________________
_____ . . . . . . . . . . . . . . . . .
Name: _______________________________
Its:_________________________________
_____ . . . . . . . . . . . . . . . . .
By:__________________________________
_____ . . . . . . . . . . . . . . . . .
Name: _______________________________
Its:_________________________________
_____ . . . . . . . . . . . . . . . . .
2
SCHEDULE 1
to Notice of Conversion/Continuation
LOAN TO BE CONVERTED OR CONTINUED
A. All conversions and continuations must be of a Loan, or portion thereof, in
a principal amount of $1,000,000 or a multiple of $100,000 in excess
thereof.
B. Conversions/continuations to a LIBOR Loan under paragraphs (2) and (3)
below are not permitted if, after giving effect to thereto, (a) there would
be more than five (5) different LIBOR Loans in effect, or (b) the aggregate
outstanding principal amount of all LIBOR Loans would be reduced to be less
than $1,000,000.
(1) CONVERSION OF A LIBOR LOAN INTO A BASE RATE LOAN.
The following LIBOR Loan to a Base Rate Loan:
Amount: $ . . . . . . .
Requested Conversion Date: . . . . . . . .
(must be a Business Day at least two (2)
Business Days after date of notice)
Last day of current Interest Period:. . . . .
_________________
(2) CONVERSION OF A BASE RATE LOAN INTO A LIBOR LOAN.
The following Base Rate Loan to a LIBOR Loan:
Amount: $ . . . . . . .
Requested Conversion Date: . . . . . . . .
(must be a Business Day at least three
(3) Business Days after date of notice)
Requested Interest Period: . . . . . . . .
(1 or 2 months)
(3) CONTINUATION OF A LIBOR LOAN INTO A SUBSEQUENT INTEREST PERIOD.
The following LIBOR Loan into a subsequent Interest Period:
Amount: $ . . . . . . .
Last day of current Interest Period:. . . . .
(must be a Business Day at least three
(3) Business Days after date of notice)
3
Requested Interest Period: . . . . . . . .
(1 month)
4
EXHIBIT D
PAYMENT GUARANTY
This Payment Guaranty ("Guaranty") is made as of May 5, 1997, by
APARTMENT INVESTMENT AND MANAGEMENT COMPANY, a Maryland corporation, AIMCO-GP,
INC., a Delaware corporation, AIMCO-LP, INC., a Delaware corporation, AIMCO
HOLDINGS, L.P., a Delaware limited partnership, AIMCO HOLDINGS QRS, INC., a
Delaware corporation, AIMCO SOMERSET, INC., a Delaware corporation, and
AIMCO/OTC QRS, INC., a Delaware corporation (each of the foregoing is referred
to herein as "Guarantor") in favor of BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION ("BofA"), as the agent for itself and the lenders
("Lenders") from time to time party to the Revolving Credit Agreement (as
hereinafter defined) and also as the agent for itself and the lenders from time
to time party to the Bridge Loan Agreement (as defined below) (in such capacity,
the "Agent").
FACTUAL BACKGROUND
Guarantor is executing this Guaranty (i) to induce the Lenders to make
a $100,000,000 revolver to term credit facility available to AIMCO Properties
L.P., a Delaware limited partnership (the "Company") in accordance with the
Amended and Restated Credit Agreement (the "Revolving Credit Agreement"), dated
of even date herewith, by and among Company, BofA (as Agent (as defined under
the Revolving Credit Agreement) and as a Lender) and the other Lenders from time
to time party thereto and (ii) to induce the Lenders to make a $25,000,000
bridge loan facility available to the Company in accordance with the Credit
Agreement (Bridge Loan) (the "Bridge Loan Agreement"), dated of even date
herewith, by and among the Company, BofA (as Agent (as defined under the Bridge
Loan Agreement) and as a Lender) and the other Lenders from time to time party
thereto. Capitalized terms used but not defined herein shall have the meanings
set forth in the Revolving Credit Agreement. As used herein, the term
"Facility" shall refer individually to each of the credit facilities available
to the Company under the Revolving Credit Agreement and the Bridge Loan
Agreement and shall refer collectively to all such credit facilities.
GUARANTY
1. GUARANTY OF LOAN. Guarantor absolutely, unconditionally and
irrevocably guaranties to Agent and the Lenders the full payment of the
Indebtedness (as hereinafter defined), and unconditionally agrees to pay to
Agent and the Lenders the full amount of the Indebtedness. This is a guaranty
of payment, not of collection. If Company defaults in the payment when due of
1
the Indebtedness or any part of it, Guarantor shall in lawful money of the
United States pay to Agent and the Lenders, on demand, all sums due and owing on
the Indebtedness, including all interest, charges, fees and other sums, costs
and expenses.
2. LOAN. In this Guaranty, the term "Indebtedness" is broadly
defined to mean and include all primary, secondary, direct, indirect, fixed and
contingent obligations of Company to pay principal, interest, prepayment
charges, breakage costs, late charges, loan fees and any other fees, charges,
sums, costs and expenses which may be owing at any time under the Loan Documents
(as such term is defined both in the Revolving Credit Agreement and in the
Bridge Loan Agreement), and shall include, without limitation, all liabilities
and obligations of the Company with respect to Letters of Credit issued under
the Revolving Credit Agreement, as any or all of such obligations may from time
to time be modified, amended, extended or renewed. If the amount outstanding
under the Indebtedness is determined by a court of competent jurisdiction or in
any arbitration proceeding described in Section 10.17 of the Revolving Credit
Agreement, that determination shall be conclusive and binding on Guarantor,
regardless of whether Guarantor was a party to the proceeding in which the
determination was made or not.
3. RIGHTS OF AGENT AND THE LENDERS. Guarantor authorizes Agent or
any Lender to perform any or all of the following acts at any time in its sole
discretion, all without notice to Guarantor and without affecting Guarantor's
obligations under this Guaranty:
(a) Agent or the Requisite Lenders may alter any terms of the
Indebtedness or any part of it, including renewing, compromising, extending or
accelerating, or otherwise changing the time for payment of, or increasing or
decreasing the rate of interest on, the Indebtedness or any part of it.
(b) Agent or any Lender may take and hold security for the
Indebtedness or this Guaranty, accept additional or substituted security for
either, and subordinate, exchange, enforce, waive, release, compromise, fail to
perfect and sell or otherwise dispose of any such security in accordance with
the terms of the Indebtedness.
(c) Agent or any Lender may direct the order and manner of any
sale of all or any part of any security now or later to be held for the
Indebtedness or this Guaranty, and Agent or any Lender may also bid at any such
sale.
(d) Agent or any Lender may apply any payments or recoveries
from Company, Guarantor or any other source, and any proceeds of any security,
to Company's obligations under the Loan Documents in such manner, order and
priority as Agent or such
2
Lender may elect, whether or not those obligations are guarantied by this
Guaranty or secured at the time of the application.
(e) Agent or any Lender may release Company of its liability for
the Indebtedness or any part of it.
(f) Agent or any Lender may substitute, add or release any one
or more Guarantors, other guarantors or endorsers.
(g) In addition to the Indebtedness, Agent or any Lender may
extend other credit to Company, and may take and hold security for the credit so
extended, all without affecting Guarantor's liability under this Guaranty.
4. GUARANTY TO BE ABSOLUTE. Guarantor expressly agrees that until
the Indebtedness is paid and performed in full and each and every term, covenant
and condition of this Guaranty is fully performed, Guarantor shall not be
released by or because of:
(a) Any act or event which might otherwise discharge, reduce,
limit or modify Guarantor's obligations under this Guaranty;
(b) Any waiver, extension, modification, forbearance, delay or
other act or omission of Agent or any Lender, or its failure to proceed promptly
or otherwise as against Company, Guarantor or any security;
(c) Any action, omission or circumstance which might increase
the likelihood that Guarantor may be called upon to perform under this Guaranty
or which might affect the rights or remedies of Guarantor as against Company;
(d) Any dealings occurring at any time between Company and Agent
or any Lender, whether relating to the Indebtedness or otherwise; or
(e) Any action of Agent or any Lender described in Section 3
above.
Guarantor hereby acknowledges that absent this Section 4,
Guarantor might have a defense to the enforcement of this Guaranty as a result
of one or more of the foregoing acts, omissions, agreement, waivers or matters.
Guarantor hereby expressly waives and surrenders any defense to its liability
under this Guaranty based upon any of the foregoing acts, omissions, agreements,
waivers or matters. It is the purpose and intent of this Guaranty that the
obligations of Guarantor under it shall be absolute and unconditional under any
and all circumstances.
3
5. GUARANTOR'S WAIVERS. Guarantor waives:
(a) All statutes of limitations as a defense to any action or
proceeding brought against Guarantor by Agent or any Lender, to the fullest
extent permitted by law;
(b) Any right it may have to require Agent or any Lender to
proceed against Company, proceed against or exhaust any security held from
Company, or pursue any other remedy in Agent's or any Lender's power to pursue;
(c) Any defense based on any claim that Guarantor's obligations
exceed or are more burdensome than those of Company;
(d) Any defense based on: (i) any legal disability of Company,
(ii) any release, discharge, modification, impairment or limitation of the
liability of Company to Agent or any Lender from any cause, whether consented to
by Agent or any Lender or arising by operation of law or from any bankruptcy or
other voluntary or involuntary proceeding, in or out of court, for the
adjustment of debtor-creditor relationships ("Insolvency Proceeding") and (iii)
any rejection or disaffirmance of the Indebtedness, or any part of it, or any
security held for it, in any such Insolvency Proceeding;
(e) Any defense based on any action taken or omitted by Agent or
any Lender in any Insolvency Proceeding involving Company, including any
election to have Agent's or that Lender's claim allowed as being secured,
partially secured or unsecured, any extension of credit by Lender to Company in
any Insolvency Proceeding, and the taking and holding by Agent or any Lender of
any security for any such extension of credit;
(f) All presentments, demands for performance, notices of
nonperformance, protests, notices of protest, notices of dishonor, notices of
acceptance of this Guaranty and of the existence, creation, or incurring of new
or additional indebtedness, and demands and notices of every kind except for any
demand or notice by Agent or any Lender to Guarantor expressly provided for in
Section 1;
(g) Any defense based on or arising out of any defense that
Company may have to the payment or performance of the Indebtedness or any part
of it; and
(h) Any defense based on or arising out of any action of Agent
or any Lender described in Sections 3 or 4 above.
6. WAIVERS OF SUBROGATION AND OTHER RIGHTS.
(a) During the existence of an Event of Default by Company,
Agent or any Lender, without prior notice to or
4
consent of Guarantor, may elect to: (i) foreclose either judicially or
nonjudicially against any real or personal property security it may hold for the
Indebtedness, (ii) accept a transfer of any such security in lieu of
foreclosure, (iii) compromise or adjust the Indebtedness or any part of it or
make any other accommodation with Company or Guarantor, or (iv) exercise any
other remedy against Company or any security. No such action by Agent or any
Lender shall release or limit the liability of Guarantor, who shall remain
liable under this Guaranty after the action, even if the effect of the action is
to deprive Guarantor of any subrogation rights, rights of indemnity, or other
rights to collect reimbursement from Company for any sums paid to Agent or any
Lender, whether contractual or arising by operation of law or otherwise.
Guarantor expressly agrees that under no circumstances shall it be deemed to
have any right, title, interest or claim in or to any real or personal property
to be held by Agent or any Lender or any third party after any foreclosure or
transfer in lieu of foreclosure of any security for the Indebtedness.
(b) Regardless of whether Guarantor may have made any payments
to Lender, Guarantor hereby waives: (i) all rights of subrogation, all rights of
indemnity, and any other rights to collect reimbursement from Company for any
sums paid to Agent or any Lender, whether contractual or arising by operation of
law (including the United States Bankruptcy Code or any successor or similar
statute) or otherwise, (ii) all rights to enforce any remedy that Lender may
have against Company, and (iii) all rights to participate in any security now or
later to be held by Agent or any Lender for the Indebtedness, in each case until
the full and indefeasible payment and performance of all Indebtedness, and all
obligations of the Guarantors hereunder.
(c) Guarantor waives all rights and defenses arising out of an
election of remedies by the Agent or any Lender, even though that election of
remedies may affect Guarantor's rights of subrogation and reimbursement against
the Company by the operation of law or otherwise. In addition, Guarantor waives
all rights and defenses that Guarantor may have because the Company's
indebtedness is secured by real property. This means, among other things:
(1) Agent and the Lenders may collect from Guarantor
without first foreclosing on any real or personal property collateral pledged by
the Company.
(2) If Agent forecloses on any real property collateral
pledged by the Company:
(A) The amount of the indebtedness may be reduced only
by the price for which that collateral is sold at the foreclosure sale, even if
the collateral is worth more than the sale price.
5
(B) Agent and the Lenders may collect from Guarantor
even if Agent or any Lender, by foreclosing on the real property collateral, has
destroyed or affected any right Guarantor may have to collect from the Company.
This is an unconditional and irrevocable waiver of any rights and
defenses Guarantor may have because the Company's indebtedness is secured by
real property.
7. REVIVAL AND REINSTATEMENT. If Agent or any Lender is required to
pay, return or restore to Company or any other person any amounts previously
paid on the Indebtedness because of any Insolvency Proceeding of Company, any
stop notice or any other reason, the obligations of Guarantor shall be
reinstated and revived and the rights of Agent and such Lender shall continue
with regard to such amounts, all as though they had never been paid.
8. INFORMATION REGARDING BORROWER. Before signing this Guaranty,
Guarantor investigated the financial condition and business operations of
Company and such other matters as Guarantor deemed appropriate to assure itself
of Company's ability to discharge its obligations under the Loan Documents.
Guarantor assumes full responsibility for that due diligence, as well as for
keeping informed of all matters which may affect Company's ability to pay and
perform its obligations to the Agent and the Lenders. Neither Agent nor any
Lender has any duty to disclose to Guarantor any information which such party
may have or receive about Company's financial condition, business operations, or
any other circumstances bearing on its ability to perform.
9. SUBORDINATION. Any rights of Guarantor, whether now existing or
later arising, to receive payment on account of any indebtedness (including
interest) owed to it by Company or any Subsidiary thereof or to receive any
payment from Company or any such Subsidiary other than those payments or
distributions permitted under Sections 7.08(b) and 7.09 of the Revolving Credit
Agreement shall at all times be subordinate as to lien and time of payment and
in all other respects to the full and prior repayment of the Indebtedness.
Guarantor shall not be entitled to enforce or receive payment of any sums hereby
subordinated until the Indebtedness has been paid and performed in full and any
such sums received in violation of this Guaranty shall be received by Guarantor
in trust for the Agent and the Lenders.
10. FINANCIAL INFORMATION. Guarantor shall keep true and correct
financial books and records, using generally accepted accounting principles
consistently applied, or such other accounting principles as the Requisite
Lenders in their reasonable judgment may find acceptable from time to time.
Guarantor represents, warrants and covenants to Agent and the Lenders that all
financial information with respect to the Guarantor delivered or to be delivered
to Agent and the Lenders by the Company with
6
respect to Guarantor under Section 6.01 of the Revolving Credit Agreement is or
shall be true and correct and fairly presents or will fairly present the
financial position of the Guarantor for the applicable period. Guarantor shall
promptly provide Agent and the Lenders with any additional audited financial
information that Guarantor may obtain, and such other information concerning its
affairs and properties as Agent or any Lender may reasonably request, including,
without limitation, signed copies of any tax returns if requested Agent or the
Lenders.
11. GUARANTOR'S REPRESENTATIONS AND WARRANTIES. Guarantor represents
and warrants that:
(a) All financial statements delivered to Agent or the Lenders
were or will be prepared in accordance with generally accepted accounting
principles, or such other accounting principles as may be acceptable to the
Requisite Lenders at the time of their preparation, consistently applied;
(b) There has been no material adverse change in Guarantor's
financial condition since the dates of the statements most recently furnished to
Agent and the Lenders; and
(c) All representations and warranties given on behalf of or
with respect to Guarantor contained in Article V of the Revolving Credit
Agreement, in Article V of the Bridge Loan Agreement and in any other Loan
Document or certification made in connection with the Revolving Credit Agreement
or Bridge Loan Agreement are true and correct.
12. COVENANTS OF GUARANTOR. Guarantor covenants and agrees that it
shall comply with and perform all covenants given on behalf of or with respect
to Guarantor (whether expressly or as a Subsidiary) contained in Articles VI and
VII of the Revolving Credit Agreement, Articles VI and VII of the Bridge Loan
Agreement and in all other Loan Documents.
13. INTENTIONALLY OMITTED.
14. REFERENCE AND ARBITRATION.
(a) MANDATORY ARBITRATION. Any controversy or claim between or
among the parties, including those arising out of or relating to this Guaranty
or the Loan Documents and any claim based on or arising from an alleged tort,
shall at the request of any party be determined by arbitration. The arbitration
shall be conducted in Los Angeles, California, in accordance with the United
States Arbitration Act (Title 9, U.S. Code), notwithstanding any choice of law
provision in this Guaranty, and under the Commercial Rules of the American
Arbitration Association (the "AAA"). The arbitrator(s) shall give effect to
statutes of limitation in determining any claim. Any controversy concerning
whether an issue is arbitrable shall be determined by
7
the arbitrator(s). Judgment upon the arbitration award may be entered in any
court having jurisdiction. The institution and maintenance of an action for
judicial relief or pursuit of a provisional or ancillary remedy shall not
constitute a waiver of the right of any party, including the plaintiff, to
submit the controversy or claim to arbitration if any other party contests such
action for judicial relief.
(b) PROVISIONAL REMEDIES, SELF-HELP AND FORECLOSURE. No
provision of this Section 14 shall limit the right of any party to exercise
self-help remedies such as setoff, foreclosure against or sale of any real or
personal property collateral or security, or to obtain provisional or ancillary
remedies from a court of competent jurisdiction before, after, or during the
pendency of any arbitration.
15. AUTHORIZATION; NO VIOLATION. Guarantor is authorized to execute,
deliver and perform under this Guaranty, which is a valid, binding, and
enforceable obligation of Guarantor in accordance with its terms, except as
enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium, or similar laws affecting creditor's rights generally. The
execution, delivery and performance of this Guaranty are not in violation of any
applicable law, regulation or ordinance, or any order or ruling of any court or
governmental agency applicable to the Guarantor. The Guaranty does not conflict
with, or constitute a breach or default under, any agreement to which Guarantor
is a party.
16. ADDITIONAL AND INDEPENDENT OBLIGATIONS. Guarantor's obligations
under this Guaranty are in addition to its obligations under any future
guaranties, each of which shall remain in full force and effect until it is
expressly modified or released in a writing signed by Agent and consented to by
the Lenders. Guarantor's obligations under this Guaranty are independent of
those of Company on the Indebtedness. Agent or the Lenders may bring a separate
action, or commence a separate arbitration proceeding against Guarantor without
first proceeding against Company, any other person or any security that Agent or
any Lender may hold, and without pursuing any other remedy. None of Agent's or
any Lender's rights under this Guaranty shall be exhausted by any action by
Agent or any Lender until the Indebtedness has been paid and performed in full
in cash.
17. NO WAIVER; CONSENTS; CUMULATIVE REMEDIES. Each waiver by Agent
or the Lenders must be in writing, and no waiver shall be construed as a
continuing waiver. No waiver shall be implied from Agent's or any Lender's
delay in exercising or failure to exercise any right or remedy against Company,
Guarantor or any security. Consent by Agent or the Lenders to any act or
omission by Company or Guarantor shall not be construed as a consent to any
other or subsequent act or omission, or as a waiver of the requirement for
Agent's or the Lenders' consent to
8
be obtained in any future or other instance. All remedies of Agent and each
Lender against Company and Guarantor are cumulative.
18. NO RELEASE. Except as otherwise provided in Section 1, Guarantor
shall not be released, in whole or in part, from its obligations under this
Guaranty except by a writing signed by Agent and all the Lenders.
19. HEIRS, SUCCESSORS AND ASSIGNS; PARTICIPATIONS. The terms of this
Guaranty shall bind and benefit the heirs, legal representatives, successors and
assigns of Agent, the Lenders and Guarantor; provided, however, that Guarantor
may not assign this Guaranty, or assign or delegate any of its rights or
obligations under this Guaranty, without the prior written consent of Agent in
each instance. Without notice to or the consent of Guarantor, Agent and any
Lender may disclose any and all information in its possession concerning
Guarantor, this Guaranty and any security for this Guaranty to any actual or
prospective purchaser of any securities issued or to be issued by Agent or such
Lender, and to any actual or prospective purchaser or assignee of any
participation or other interest in the Indebtedness and this Guaranty.
20. NOTICES.
(a) DELIVERY. All notices, requests and other communications
provided for hereunder shall be in writing (including, unless the context
expressly otherwise provides, telegraphic, telex, facsimile transmission or
cable communication) and mailed, telegraphed, telexed or delivered to its
address specified on the signature pages hereof, or to such other address as
shall be designated by such party in a written notice to the other party.
(b) RECEIPT. All such notices and communications shall, when
transmitted by overnight delivery, telegraphed, telecopied by facsimile, telexed
or cabled, be effective when delivered for overnight delivery or to the
telegraph company, transmitted by telecopier, confirmed by telex answerback or
delivered to the cable company, respectively, or if delivered, upon delivery.
(c) RELIANCE. Agent and each Lender shall be entitled to rely
on the authority of any person purporting to be a person authorized by Guarantor
to give such notice, and neither Agent nor any Lender shall have any liability
to Guarantor or any other person on account of any action taken or not taken by
Agent or such Lender in reliance upon such telephonic or facsimile notice. The
obligation of Guarantor hereunder shall not be affected in any way or to any
extent by any failure by Lender to receive written confirmation of any
telephonic or facsimile notice or the receipt by Agent or a Lender of a
confirmation
9
which is at variance with the terms understood by Agent or such Lender to be
contained in the telephonic or facsimile notice.
21. RULES OF CONSTRUCTION. In this Guaranty, the word "Company"
includes both the named Company and any other person who at any time assumes or
otherwise becomes primarily liable for all or any part of the obligations of the
named Company on the Indebtedness. The word "person" includes any individual,
company, trust or other legal entity of any kind. If this Guaranty is executed
by more than one person, the word "Guarantor" includes all such persons. The
word "include(s)" means "include(s), without limitation," and the word
"including" means "including, but not limited to." When the context and
construction so require, all words used in the singular shall be deemed to have
been used in the plural and vice versa. No listing of specific instances, items
or matters in any way limits the scope or generality of any language of this
Guaranty. All headings appearing in this Guaranty are for convenience only and
shall be disregarded in construing this Guaranty.
22. GOVERNING LAW. This Guaranty shall be governed by, and construed
in accordance with, the laws of the State of Colorado, without regard to its
choice of law rules.
23. COSTS AND EXPENSES. If any lawsuit or arbitration is commenced
which arises out of, or which relates to this Guaranty, the Loan Documents or
the Indebtedness, the prevailing party shall be entitled to recover from each
other party such sums as the court or arbitrator may adjudge to be reasonable
attorneys' fees (including allocated costs for services of in-house counsel) in
the action or proceeding, in addition to costs and expenses otherwise allowed by
law. In all other situations, including any Insolvency Proceeding, Guarantor
agrees to pay all of the Agent's and each Lender's costs and expenses, including
attorneys' fees (including allocated costs for services of the Agent's and each
Lender's in-house counsel) which may be incurred in any effort to collect or
enforce the Indebtedness or any part of it or any term of this Guaranty.
Without limiting any rights of the Agent or Lenders under the Revolving Credit
Agreement or the Bridge Loan Agreement, all amounts of any kind due and payable
under this Guaranty (whether for principal, interest, and other costs under the
Indebtedness, or for costs, fees, and expenses for which the Guarantors are
directly responsible hereunder, or otherwise) shall accrue interest from the
time the Agent or the Lenders make demand therefor hereunder until paid in full
in cash to such Agent or the Lenders at the Base Rate, as defined in the
Revolving Credit Agreement, plus three (3%) percentage points, except to the
extent that any such amounts are then accruing interest under the Indebtedness,
in which case such Base Rate plus 3% interest rate shall not be applied if the
effect would be to compound the interest to which such obligations are subject
to under the Indebtedness.
10
24. CONSIDERATION. Guarantor acknowledges that it expects to benefit
from Lenders' extension of the Facility to Company because of its relationship
to Company, because such Facility is essential to the business of the Company
and because a portion of the Indebtedness will be available for the Company to
pay certain expenses intended to be incurred by Guarantor in connection with the
conduct by Guarantor of its business. Guarantor is executing this Guaranty in
consideration of these anticipated benefits.
25. INTEGRATION; MODIFICATIONS. This Guaranty (a) integrates all the
terms and conditions mentioned in or incidental to this Guaranty, (b) supersedes
all oral negotiations and prior writings with respect to its subject matter, and
(c) is intended by Guarantor, Agent and the and Lenders as the final expression
of the agreement with respect to the terms and conditions set forth in this
Guaranty and as the complete and exclusive statement of the terms agreed to by
Guarantor, Agent and the Lenders. No representation, understanding, promise or
condition shall be enforceable against any party hereto unless it is contained
in this Guaranty. This Guaranty may not be modified except in a writing signed
by both Agent (with the consent of the Requisite Lenders) and Guarantor. No
course of prior dealing, usage of trade, parol or extrinsic evidence of any
nature shall be used to supplement, modify or vary any of the terms hereof. As
between Agent and the Lenders only, nothing contained in this Guaranty shall
alter the rights and obligations among Agent and the Lenders set forth in the
Credit Agreement.
26. MISCELLANEOUS. The illegality or unenforceability of one or more
provisions of this Guaranty shall not affect any other provision. Time is of
the essence in the performance of this Guaranty by Guarantor. The obligations
of each Guarantor under this Guaranty shall be joint and several.
Guarantors:
APARTMENT INVESTMENT AND MAN-
AGEMENT COMPANY,
a Maryland corporation
By:. . . . . . . . . . . . . .
Xxxxx X. Xxxxxxxxx
Vice Chairman
AIMCO-GP, INC.,
a Delaware corporation
By:. . . . . . . . . . . . . .
Xxxxx X. Xxxxxxxxx
Vice President
AIMCO-LP, INC.,
a Delaware corporation
By:. . . . . . . . . . . . . .
Xxxxx X. Xxxxxxxxx
Vice President
11
AIMCO HOLDINGS, LP,
a Delaware limited partnership
By: AIMCO HOLDINGS QRS, INC.,
a Delaware corporation,
General Partner
By: . . . . . . . . . . . . . . .
Xxxxx X. Xxxxxxxxx
Vice President
AIMCO HOLDINGS QRS, INC.,
a Delaware corporation
By: . . . . . . . . . . . . . . .
Xxxxx X. Xxxxxxxxx
Vice President
Address Where Notices to Guar-
antors are to be Sent:
AIMCO SOMERSET, INC., 0000 Xxxxx Xxxxxxxx Xxxxxx
a Delaware corporation 00xx Xxxxx
Xxxxxx, Xxxxxxxx 00000
By: . . . . . . . . . . . . . . .
Xxxxx X. Xxxxxxxxx
Vice President
Address Where Notices to Agent
are to be Sent:
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION
AIMCO/OTC QRS, INC., 000 Xxxxx Xxxxxx Xxxxxx, 0xx
Xxxxx
a Delaware corporation Xxx Xxxxxxx, Xxxxxxxxxx 00000
Att'n: Manager - Xxxx #0000
By: . . . . . . . . . . . . . . .
Xxxxx X. Xxxxxxxxx Addresses Where Notices to the
Vice President Lenders are to be Sent:
Per the Credit Agreement
12
Equity Interests Security Agreement
for Bridge Loan Agreement
EXHIBIT E
EQUITY INTERESTS SECURITY AGREEMENT(1)
(Bridge Loan)
THIS EQUITY INTERESTS SECURITY AGREEMENT ("Security Agreement") is
made and dated as of this _____ day of _________, 1997, by [AIMCO PROPERTIES,
L.P., A DELAWARE LIMITED PARTNERSHIP][APARTMENT INVESTMENT AND MANAGEMENT
COMPANY, A MARYLAND CORPORATION][INSERT NAME OF EACH OTHER HOLDER OF STOCK OR
OTHER EQUITY INTERESTS IN THE WHOLLY-OWNED SUBSIDIARY, THE STOCK OR OTHER
INTERESTS IN WHICH ARE INTENDED TO BE ENCUMBERED HEREBY] ("Debtor"), and Bank of
America National Trust and Savings Association, a national banking association,
as Agent ("Secured Party") for the banks ("Banks") from time to time party to
the Amended and Restated Credit Agreement described below. Capitalized terms
used but not defined herein shall have the meanings set forth in the Amended and
Restated Credit Agreement.
RECITALS
A. The Banks have extended credit to or for the benefit of
[DEBTOR][AIMCO PROPERTIES, L.P., A DELAWARE LIMITED PARTNERSHIP ("BORROWER")],
on the terms and subject to the conditions set forth in the Amended and Restated
Credit Agreement (Bridge Loan), dated as of May 5, 1997 (as amended, modified,
waived or replaced from time to time, the "Amended and Restated Credit
Agreement"). Secured Party is the agent for the Banks.
B. Pursuant to the Amended and Restated Credit Agreement, Debtor has
agreed to pledge and to grant to Secured Party a security interest in and lien
upon the Collateral (as defined in Paragraph 2 below) as security for all
Obligations, for the ratable benefit of the Banks.
C. Debtor is the owner of Stock, partnership interests, membership
interests or other equity or beneficial interests in [INSERT HERE THE NAME OF
THE WHOLLY-OWNED SUBSIDIARY, THE STOCK OR OTHER INTERESTS IN WHICH ARE INTENDED
TO BE ENCUMBERED HEREBY], a _____________ [corporation][limited
partnership][limited liability company] (the "Wholly-Owned Subsidiary"),
consisting of the interests described on SCHEDULE 1 attached hereto.
NOW, THEREFORE, in consideration of the above Recitals and for other
good and valuable consideration, the receipt and
1
adequacy of which are hereby acknowledged, Debtor hereby agrees as follows:
AGREEMENT
1. GRANT OF SECURITY INTEREST. Debtor hereby pledges and grants to
Secured Party a security interest in the property described in Paragraph 2 below
(collectively and severally, the "Collateral") to secure payment and performance
of the Obligations.
2. COLLATERAL. The Collateral shall consist of the following,
whether now existing or hereafter arising:
(a) SECURITIES. All shares of capital stock, partnership
interests, membership interests or other equity or beneficial interests in the
Wholly-Owned Subsidiary held by Debtor, and all related securities, warrants,
options or rights to receive any capital stock, partnership interests,
membership interests or other equity or beneficial interests. All of the
foregoing are collectively referred to herein as the "Pledged Equity Interests";
(b) CERTIFICATES. All certificates (including, without
limitation, any certificate representing a stock dividend or a distribution in
connection with any reclassification, increase or reduction of capital, or
issued in connection with any reorganization), options or rights, whether as an
addition to, in substitution of, as evidence of, or in exchange for, any of the
Pledged Equity Interests;
(c) DISTRIBUTIONS, DIVIDENDS, ETC. All rights of Debtor as a
shareholder, partner, member or other holder of any equity or beneficial
interest in the Wholly-Owned Subsidiary, including, without limitation, all
management and voting rights, all rights to distributions, dividends, the
payment of money or the distribution of other property from the Wholly-Owned
Subsidiary (including, without limitation, all rights to receive profits or
surplus of, or other distributions or compensation by way of income, return of
capital or any liquidating or other distribution from the Wholly-Owned
Subsidiary and whether such distributions or payments are on account of Debtor's
interest as a shareholder, partner, member or other holder of any equity or
beneficial interest in the Wholly-Owned Subsidiary, as a creditor of the Wholly-
Owned Subsidiary, or otherwise), and all rights to any tax allocations, capital
and income accounts or other rights to the assets of the Wholly-Owned Subsidiary
held by Debtor or accruing to Debtor under the Organizational Documents for the
Wholly-Owned Subsidiary or under applicable law. All such rights are
collectively referred to as the "Pledged Rights";
2
(d) BOOKS AND RECORDS. All present and future books and records
relating to the Collateral to the extent Debtor has rights therein, including,
without limitation, books of account and ledgers of every kind and nature, all
electronically recorded data relating to the Collateral or the business thereof,
all receptacles and containers for such records, and all files and
correspondence relating thereto; and
(e) PROCEEDS. All proceeds of the foregoing Collateral. For
purposes of this Security Agreement, the term "proceeds" includes whatever is
receivable or received when Collateral or proceeds is sold, collected, exchanged
or otherwise disposed of, whether such disposition is voluntary or involuntary,
and includes, without limitation, all rights to payment, including return
premiums, with respect to any insurance relating thereto.
Nothing contained herein shall be deemed to render Secured Party
or any Bank responsible for any liabilities or obligations of Debtor with
respect to the Pledged Equity Interests or any other portion of the Collateral.
3. OBLIGATIONS. The obligations secured by this Security Agreement
shall consist of the Obligations as such term is defined in the Amended and
Restated Credit Agreement.
4. REPRESENTATIONS AND WARRANTIES. Debtor hereby represents,
warrants and covenants with Secured Party that:
(a) REGARDING DEBTOR. All representations and warranties of
[[DEBTOR] [BORROWER] regarding Debtor as [the REIT] [a Subsidiary] and]
regarding the Wholly-Owned Subsidiary (either expressly or as a Wholly-Owned
Subsidiary) set forth in the Amended and Restated Credit Agreement are
incorporated herein by this reference and are true and correct as if made on the
date hereof.
(b) OWNERSHIP OF COLLATERAL. Debtor is the sole owner of and
has good title to the Collateral (or, in the case of after-acquired Collateral,
at the time Debtor acquires rights in the Collateral, will be the owner thereof)
and is the record and beneficial owner of the Pledged Equity Interests included
in the Collateral described on SCHEDULE 1;
(c) PRIORITY. Except for the security interests in favor of
Secured Party hereunder, no Person has (or, in the case of after-acquired
Collateral, at the time Debtor acquires rights therein, will have) any right,
title, claim or interest (by way of security interest or other lien or charge)
in, against or to the Collateral;
(d) ACCURACY OF INFORMATION. All information heretofore, herein
or hereafter supplied to Secured Party by or
3
on behalf of Debtor with respect to the Collateral is or will be true and
correct;
(e) DELIVERY OF DOCUMENTS, ETC. Debtor has delivered to Secured
Party (i) true and correct copies of the Organizational Documents for the
Wholly-Owned Subsidiary, (ii) all instruments, documents, chattel paper and
other items of Collateral in which a security interest is or may be perfected by
possession, and (iii) any certificated Pledged Equity Interests together with
such additional writings, including, without limitation, assignments and stock
powers, with respect thereto as Secured Party shall have requested; and
(f) PLEDGED SHARES. The Pledged Equity Interests have been
validly issued and are fully paid and nonassessable; and there are no
outstanding options, warrants or other agreements with respect thereto. The
Pledged Equity Interests, together with such interests pledged to Agent
concurrently herewith by other affiliates of [BORROWER] [DEBTOR] constitute all
of the issued and outstanding shares, partnership interests, membership
interests and the equity and beneficial interests in the Wholly-Owned
Subsidiary.
(g) ORGANIZATIONAL DOCUMENTS. The terms of the Organizational
Documents for the Wholly-Owned Subsidiary have not been modified or waived in
any respect from such documents delivered to Secured Party pursuant to
Section 4(e)(i) above.
(h) SET-OFF. Neither the Wholly-Owned Subsidiary nor any of the
other shareholders, partners, members or other holders of equity or beneficial
interests in the Wholly-Owned Subsidiary has any defense, set-off, claim or
counterclaim against Debtor which can be asserted against Secured Party, whether
in any proceeding to enforce Secured Party's rights in the Collateral or
otherwise.
(i) NO DEFAULT. There is no default by Debtor under the
Organizational Documents for the Wholly-Owned Subsidiary nor has any event
occurred which, with the passage of time or giving of notice, or both, would
constitute a default thereunder.
5. COVENANTS AND AGREEMENTS OF DEBTOR. In addition to all covenants
and agreements of Debtor set forth in any other agreement with Secured Party,
which are incorporated herein by this reference, Debtor hereby agrees:
(a) MAINTENANCE OF COLLATERAL. Debtor agrees to do all acts
that may be necessary to maintain, preserve and protect the Collateral.
(b) USE OF COLLATERAL. Debtor agrees not to use or permit any
Collateral to be used unlawfully or in violation of
4
any provision of the Loan Documents, or any applicable statute, regulation or
ordinance covering the Collateral.
(c) TAXES. Debtor agrees to pay all taxes, assessments,
charges, encumbrances and liens now or hereafter imposed upon or affecting any
Collateral prior to the time the same become delinquent, except for those being
contested in good faith by appropriate proceedings and for which the Debtor has
provided adequate reserves.
(d) FINANCING STATEMENTS. Debtor agrees to procure, execute and
deliver from time to time any endorsements, assignments, financing statements
and other writings reasonably deemed necessary or appropriate by Secured Party
to perfect, maintain and protect its security interest hereunder and the
priority thereof and to deliver promptly to Secured Party all originals of
Collateral or proceeds consisting of chattel paper or instruments.
(e) ACTIONS. Debtor agrees to appear in and defend any action
or proceeding which may affect its title to or Secured Party's interest in the
Collateral.
(f) USE OF PROCEEDS. Debtor agrees, if the Banks give value to
enable Debtor to acquire rights in or the use of any Collateral, to use such
value for such purpose.
(g) RECORDS. Debtor agrees to keep separate, accurate and
complete records of the Collateral and to provide Secured Party with such
records and such other reports and information relating to the Collateral as
Secured Party may reasonably request from time to time.
(h) SALE OR ENCUMBRANCE. Debtor agrees not to surrender or lose
possession of (other than to Secured Party), sell, encumber, or otherwise
dispose of or transfer any Collateral or right or interest therein and,
notwithstanding any provision of the Organizational Documents, to keep the
Collateral free of all levies and security interests or other Liens, charges,
preferences or priorities, except those approved in writing by Secured Party.
(i) PROCEEDS. Debtor agrees to account fully for and promptly
deliver to Secured Party, in the form received, all proceeds of the Collateral
received (except such as Debtor may be entitled to retain pursuant to clause (p)
below, endorsed to Secured Party as appropriate, and until so delivered all
proceeds shall be held by Debtor in trust for Secured Party, separate from all
other property of Debtor and identified as the property of Secured Party.
(j) LOCATION OF RECORDS. Debtor agrees to keep the records
concerning the Collateral at the location set forth
5
in Section 19 below and not to remove the records concerning the Collateral from
such location without the prior written consent of Secured Party.
(k) DISSOLUTION. Debtor agrees not to permit or take any action
to dissolve or terminate the Wholly-Owned Subsidiary.
(l) COMPLIANCE WITH LAWS. To comply with all laws, regulations
and ordinances relating to the possession, operation, maintenance and control of
the Collateral.
(m) SAFEKEEPING. That such care as Secured Party gives to the
safekeeping of its own property of like kind shall constitute reasonable care of
such Collateral when in Secured Party's possession.
(n) PAYMENT OF SECURED PARTY'S COSTS AND EXPENSES. To reimburse
Secured Party upon demand for any reasonable costs and expenses, including,
without limitation, reasonable attorneys' fees, Secured Party may incur while
exercising any right, power or remedy provided by this Security Agreement or by
law, all of which costs and expenses are included in the Obligations secured
hereby.
(o) NOTICE OF CHANGES. To give Secured Party thirty (30) days
prior written notice of any change in Debtor's residence or chief place of
business or legal name or trade name(s) or style(s) set forth in Section 19 of
this Security Agreement.
(p) DIVIDENDS ON PLEDGED RIGHTS AND PLEDGED EQUITY INTERESTS.
To account fully for and promptly deliver to Secured Party, in the form
received, any dividend or any other distribution on account of its Pledged
Rights and Pledged Equity Interests, if any, whether in cash, securities or
property by way of stock-split, spin-off, split-up or reclassification,
combination of shares or the like, or in case of any reorganization,
consolidation or merger; provided, however, that until any Event of Default
shall exist, Debtor shall be entitled to retain any cash dividends legally paid
in accordance with the Amended and Restated Credit Agreement on account of
pledged rights or Pledged Equity Interests.
(q) AMENDMENT OF ORGANIZATIONAL DOCUMENTS. Not to amend or
permit the amendment of the articles of incorporation, by-laws or other
Organizational Documents of the Wholly-Owned Subsidiary and not to take any
action, or permit any action to be taken which would dissolve or terminate the
Wholly-Owned Subsidiary.
(r) COMPLIANCE WITH AMENDED AND RESTATED CREDIT AGREEMENT. To
cause the Wholly-Owned Subsidiary to comply with
6
all the terms of the Amended and Restated Credit Agreement pursuant to which
[BORROWER] [DEBTOR] has agreed to cause the Wholly-Owned Subsidiary, either
expressly or as a Wholly-Owned Subsidiary, to take or refrain from taking any
action.
6. AUTHORIZED ACTION BY SECURED PARTY. Debtor hereby agrees that
from time to time, without presentment, notice or demand, and without affecting
or impairing in any way the rights of Secured Party with respect to the
Collateral, the obligations of Debtor hereunder or the Obligations, Secured
Party may, but shall not be obligated to and shall incur no liability to Debtor
or any third party for failure to take any act which Debtor is obligated by this
Security Agreement to do, during the existence of an Event of Default, exercise
such rights and powers as Debtor might exercise with respect to the Collateral,
and Debtor hereby irrevocably appoints Secured Party as its attorney-in-fact to,
during the existence of an Event of Default, exercise such rights and powers,
including without limitation: (i) collect by legal proceedings or otherwise and
endorse, receive and receipt for all dividends, interest, payments, proceeds and
other sums and property now or hereafter payable on or on account of the
Collateral; (ii) enter into any extension, reorganization, deposit, merger,
consolidation or other agreement pertaining to, or deposit, surrender, accept,
hold or apply other property in exchange for the Collateral; (iii) insure,
process and preserve the Collateral; (iv) transfer the Collateral to its own or
its nominee's name; (v) make any compromise or settlement, and take any action
it deems advisable, with respect to the Collateral; and (vi) to notify any
account Debtor on any Collateral to make payment directly to Secured Party.
7. DEFAULT. An "Event of Default" as defined in the Amended and
Restated Credit Agreement shall constitute an Event of Default hereunder ("Event
of Default").
8. REMEDIES. Upon the occurrence and during the continuance of any
such Event of Default, Secured Party may, at its option, and, except as
expressly provided in the Amended and Restated Credit Agreement, without notice
to or demand on Debtor and in addition to all rights and remedies available to
Secured Party under any other agreement do any one or more of the following:
(a) GENERAL ENFORCEMENT. Foreclose or otherwise enforce Secured
Party's security interest in any manner permitted by law, or provided for in
this Security Agreement;
(b) SALE, ETC. Sell, lease or otherwise dispose of any
Collateral at one or more public or private sales at Secured Party's place of
business or any other place or places, including, without limitation, any
broker's board or securities exchange, whether or not such Collateral is present
at the place
7
of sale, for cash or credit or future delivery, on such terms and in such manner
as Secured Party may determine;
(c) COSTS OF REMEDIES. Recover from Debtor all costs and
expenses, including, without limitation, reasonable attorneys' fees, incurred or
paid by Secured Party in exercising any right, power or remedy provided by this
Security Agreement or by law with respect to the Collateral;
(d) ASSEMBLY OF COLLATERAL. Require Debtor to assemble the
Collateral and make it available to Secured Party at a place to be designated by
Secured Party;
(e) TAKE POSSESSION OF COLLATERAL. Enter onto property where
Collateral is located and take possession thereof with or without judicial
process. Debtor expressly waives any constitutional or other right to a
judicial hearing prior to the time Secured Party takes possession of the
Collateral upon default as provided herein;
(f) VOTE OF PLEDGED EQUITY INTERESTS. Vote or consent, and in
connection therewith Debtor grants to Secured Party a proxy to vote or to
consent, with respect to Pledged Equity Interests or Pledged Rights;
(g) MANNER OF SALE OF PLEDGED EQUITY INTERESTS. Restrict the
prospective bidders or purchasers of Pledged Equity Interests or Pledged Rights
in this paragraph to persons or entities who (i) will represent and agree that
they are purchasing for their own account, for investment, and not with a view
to the distribution or sale of any of the Pledged Equity Interests or Pledged
Rights; and (ii) satisfy the offeree and purchaser requirements for a valid
private placement transaction under Section 4(2) of the Securities Act of 1933,
as amended (the "Act"), and under all applicable Securities and Exchange
Commission releases, rules and regulations. Debtor agrees that disposition of
any of the Pledged Equity Interests or Pledged Rights, if any, pursuant to any
private sale made as provided above may be at prices and on other terms less
favorable than if the Pledged Equity Interests or Pledged Rights were sold at
public sale, and that Secured Party has no obligation to delay the sale of any
Pledged Equity Interests or Pledged Rights for public sale under the Act.
Debtor agrees that a private sale or sales made under the foregoing
circumstances shall be deemed to have been made in a commercially reasonable
manner. In the event that Secured Party elects to sell the Pledged Equity
Interests or Pledged Rights, or part of them, and there is a public market for
the Pledged Equity Interests or Pledged Rights, in a public sale, Debtor shall,
upon demand by Secured Party, use its best efforts to register and qualify the
Pledged Equity Interests and/or Pledged Rights, under the Act and all state Blue
Sky or securities laws required by the proposed terms of sale, and all expenses
thereof shall be payable by Debtor, including, but not limited
8
to, all costs of (i) registration or qualification of, under the Act or any
state Blue Sky or securities laws or pursuant to any applicable rule or
regulation issued pursuant thereto, any Pledged Equity Interests or Pledged
Rights, and (ii) sale of such Pledged Shares, including, but not limited to,
brokers' or underwriters' commissions, fees or discounts, accounting and legal
fees, costs of printing and other expenses of transfer and sale. If any
consent, approval or authorization of any state, municipal or other governmental
department, agency or authority shall be necessary to effectuate any sale or
other disposition of Pledged Equity Interests or Pledged Rights, or any part
thereof, Debtor will execute such applications and other instruments as may be
required in connection with securing any such consent, approval or
authorization, and will otherwise use its best efforts to secure the same;
(h) MANNER OF SALE OF COLLATERAL OTHER THAN PLEDGED EQUITY
INTERESTS. Debtor shall be given five (5) business days' prior notice of the
time and place of any public sale or of the time after which any private sale or
other intended disposition of the Collateral other than Pledged Equity Interests
is to be made, which notice Debtor hereby agrees shall be deemed reasonable
notice thereof; and
(i) APPLICATION OF RECEIPTS. Secured Party shall apply all sums
received or collected from or on account of the Collateral, including, without
limitation, the proceeds of any sale thereof, to the payment of the costs and
expenses incurred in preserving and enforcing the rights of Secured Party in
effecting a sale of such Collateral (including, without limitation, reasonable
attorneys' fees and legal expenses, including fees and expenses of in-house
counsel) and to the payment of the Obligations in such order and manner as
Secured Party, in its sole discretion, elects.
9. DELIVERY TO AND RIGHTS OF PURCHASER. Upon any sale or other
disposition pursuant to this Security Agreement, Secured Party shall have the
right to deliver, assign and transfer to the purchaser thereof the Collateral or
portion thereof so sold or disposed of. Each purchaser at any such sale or
other disposition (including Secured Party) shall hold the Collateral free from
any claim or right of whatever kind, including any equity or right of redemption
of Debtor, and Debtor specifically waives (to the extent permitted by law), upon
any such sale or disposition pursuant to this Security Agreement, all rights of
redemption, stay or appraisal which it has or may have under any rule of law or
statute now existing or hereafter adopted.
10. COLLECTION OF COLLATERAL PAYMENTS.
(a) COLLECTION OF PAYMENTS. Debtor shall, at its sole cost and
expense, take all reasonable and necessary action to obtain payment, when due
and payable, of all sums due or to
9
become due with respect to any Collateral ("Collateral Payments" or a
"Collateral Payment"), including, without limitation, the taking of such action
with respect thereto as Secured Party may request, or, in the absence of such
request, as Debtor may reasonably deem advisable; provided, however, that Debtor
shall not, without the prior written consent of Secured Party, grant or agree to
any rebate, refund, compromise or extension with respect to any Collateral
Payment. Upon the request of Secured Party during the existence of an Event of
Default, Debtor will notify and direct any account Debtor who is or might become
obligated to make any Collateral Payment, to make payment thereof to Secured
Party (or to Debtor in care of Secured Party) at such address as Secured Party
may designate. Debtor will reimburse Secured Party promptly upon demand for all
out-of-pocket costs and expenses, including reasonable attorneys' fees and
litigation expenses, incurred by Secured Party in seeking to collect its
Collateral Payment.
(b) PAYMENTS IN TRUST. If an Event of Default shall occur and
be continuing, upon the request of Secured Party, Debtor will, forthwith upon
receipt, transmit and deliver to Secured Party, in the form received, all cash,
checks, drafts and other instruments for the payment of money (properly endorsed
where required so that such items may be collected by Secured Party) which may
be received by Debtor at any time as payment on account of any Collateral
Payment and if such request shall be made, until delivery to Secured Party, such
items will be held in trust for Secured Party and will not be commingled by
Debtor with any of its other funds or property. Thereafter, Secured Party is
hereby authorized and empowered to endorse the name of Debtor on any check,
draft or other instrument for the payment of money received by Secured Party on
account of any Collateral Payment if Secured Party believes such endorsement is
necessary or desirable for purposes of collection.
(c) INDEMNIFICATION. Debtor hereby indemnifies and saves
harmless Secured Party and its agents, officers and employees from and against
all liabilities and reasonable expenses on account of any adverse claim asserted
against Secured Party relating to any moneys received by Secured Party on
account of any of Debtor's Collateral Payments following the occurrence of an
Event of Default, and such obligation of Debtor shall continue in effect after
and notwithstanding the discharge of the Obligations and the release of the
security interest granted in Paragraph 1 above.
11. CUMULATIVE RIGHTS. The rights, powers and remedies of Secured
Party under this Security Agreement shall be in addition to all rights, powers
and remedies given to Secured Party by virtue of any statute or rule of law, the
Agreement or any other agreement, all of which rights, powers and remedies shall
be cumulative and may be exercised successively or concur-
10
rently without impairing Secured Party's security interest in the Collateral.
12. WAIVER. Any waiver, forbearance or failure or delay by Secured
Party in exercising any right, power or remedy shall not preclude the further
exercise thereof, and every right, power or remedy of Secured Party shall
continue in full force and effect until such right, power or remedy is
specifically waived in a writing executed by Secured Party. Debtor waives any
right to require Secured Party to proceed against any person or to exhaust any
Collateral or to pursue any remedy in Secured Party's power.
13. SETOFF. Debtor agrees that Secured Party may exercise its rights
of setoff with respect to the Obligations in the same manner as if the
Obligations were unsecured.
14. BINDING UPON SUCCESSORS. All rights of each party hereto shall
inure to the benefit of its successors and assigns, and all obligations of each
party hereto shall bind its successors and assigns.
15. ENTIRE AGREEMENT; SEVERABILITY. This Security Agreement contains
the entire security agreement between Secured Party and Debtor. If any of the
provisions of this Security Agreement shall be held invalid or unenforceable,
this Security Agreement shall be construed as if not containing those provisions
and the rights and obligations of the parties hereto shall be construed and
enforced accordingly.
16. CHOICE OF LAW. This Security Agreement shall be construed in
accordance with and governed by the laws of the State of Colorado, and, where
applicable and except as otherwise defined herein, terms used herein shall have
the meanings given them in the Uniform Commercial Code of such state. Any
disputes or claims relating to this Security Agreement shall be resolved by
arbitration in accordance with the terms and conditions set forth in the Amended
and Restated Credit Agreement.
17. AMENDMENT. This Security Agreement may not be amended or
modified except by a writing signed by each of the parties hereto.
18. NOTICES. Communications provided for herein shall be in writing
and shall be delivered, mailed, postage prepaid or communicated in accordance
with the Amended and Restated Credit Agreement.
19. ADDRESS; TRADE NAMES; RECORDS. Debtor represents that its chief
place of business is ________________________________________, Denver, Colorado,
_____, that "__________________________________________" constitutes the only
trade name or style used by Debtor; and that
11
Debtor's records concerning the Collateral are kept at Debtor's chief place of
business listed above.
20. CAPTIONS. All captions used in this Security Agreement are for
convenience only and shall not affect the construction of this Security
Agreement.
21. MODIFICATIONS. No modification or amendment of this Security
Agreement shall be effective unless in writing and signed by the parties sought
to be charged or bound hereby.
EXECUTED as of this _____ day of _______________, 1997.
PLEDGOR:
------------------------------------
By:. . . . . . . . . . . . . .
Name:. . . . . . . . . . . . .
Title: . . . . . . . . . . . .
12
ENDNOTE
(1) In connection with any request to include an apartment project as a
"Funded Project" under the Credit Agreement, the form of Equity Interests
Security Agreement attached hereto shall be modified prior to execution to
conform to comments from Secured Party's local counsel in the jurisdiction in
which the Collateral is located (including without limitation applicable and
customary provisions for such state with respect to method of foreclosure and
other remedies, and governing law), and such further additions or revisions
required by Secured Party necessary or appropriate to reflect the Debtor's
relationship to the obligations being secured under the Equity Interests
Security Agreement, including without limitation, the following provisions:
Section ____ DEBTOR'S THIRD PARTY WAIVERS.
(a) RIGHTS OF SECURED PARTY. Debtor authorizes Secured Party or any
Bank to perform any or all of the following acts at any time in its sole
discretion, all without notice to Debtor, without affecting Debtor's obligations
under this Security Agreement or any other Loan Documents and without affecting
the Liens and encumbrances against the Collateral in favor of Secured Party:
(i) Subject to the Credit Agreement, Secured Party or any Bank
may alter any terms of the Obligations or any part thereof, including
renewing, compromising, extending or accelerating, or otherwise changing
the time for payment of, or increasing or decreasing the rate of interest
on, the Obligations or any part thereof.
(ii) Secured Party or any Bank may take and hold security for the
Obligations, accept additional or substituted security, and subordinate,
exchange, enforce, waive, release, compromise, fail to perfect and sell or
otherwise dispose of any such security.
(iii) Secured Party or any Bank may direct the order and
manner of any sale of all or any part of any security now or later to be
held for the Obligations, and Secured Party or any Bank may also bid at any
such sale.
(iv) Secured Party or any Bank may apply any payments or
recoveries from Company, Debtor or any other source, and any proceeds of
any security, to the obligations under the Loan Documents in such manner,
order and priority as Secured Party or such Bank may elect.
(v) Secured Party or any Bank may release Company or any other
Person of its liability for the Obligations or any part thereof.
(vi) Secured Party or any Bank may substitute, add or release any
one or more guarantors or endorsers.
13
(vii) In addition to the Obligations, Secured Party or any
Bank may extend other credit to Company, and may take and hold security for
the credit so extended, all without affecting Debtor's liability hereunder
or under the other Loan Documents and without affecting the liens and
encumbrances against the Collateral hereunder or under the other Loan
Documents.
(b) ABSOLUTE OBLIGATIONS. Debtor expressly agrees that until all
Obligations are paid and performed in full and each and every term, covenant and
condition of this Security Agreement and each other Loan Document to which
Debtor is a party is fully performed, Debtor shall not be released of its
obligations, waivers and agreements set forth herein or in any other Loan
Document nor shall the validity, enforceability or priority of the liens and
encumbrances against the Collateral in favor of Secured Party be affected in any
manner by or because of:
(i) Any act or event which might otherwise discharge, reduce,
limit or modify Debtor's obligations hereunder or under the other Loan
Documents or the liens and encumbrances against the Collateral in favor of
Secured Party;
(ii) Any waiver, extension, modification, forbearance, delay or
other act or omission of Secured Party or any Bank or any failure to
proceed promptly or otherwise as against Company, Debtor, or any other
Person or any security;
(iii) Any action, omission or circumstance which might
increase the likelihood that Secured Party or any Bank might enforce the
rights granted under this Security Agreement or under the other Loan
Documents or which might affect the rights or remedies of Debtor as against
Company; or
(iv) Any dealings occurring at any time between Company and
Secured Party or any Bank, whether relating to the Obligations or
otherwise.
Debtor hereby expressly waives and surrenders any defense to the
performance of the obligations under this Security Agreement and under all other
Loan Documents or to the enforcement of the liens and encumbrances against the
Collateral in favor of Secured Party based upon any of the foregoing acts,
omissions, agreements, waivers or matters described in this subsection. It is
the purpose and intent of this Security Agreement that the obligations of Debtor
under this Security Agreement and under all other Loan Documents shall be
absolute and unconditional under any and all circumstances.
(c) DEBTOR'S WAIVERS. Debtor waives:
(i) All statutes of limitations as a defense to any action or
proceeding brought against Debtor or the Collateral by Secured Party or any
Bank, to the fullest extent permitted by law;
(ii) Any right it may have to require Secured Party or any Bank
to proceed against Company or any other Person, proceed against or exhaust
any security held from Company or any Person, or pursue any other remedy in
Secured Party's or such Bank's power to pursue;
14
(iii) Any defense based on any claim that Debtor's
obligations exceed or are more burdensome than those of Company;
(iv) Any defense: (A) based on any legal disability of Company,
(B) based on any release, discharge, modification, impairment or limitation
of the liability of Company to Secured Party or any Bank from any cause,
whether consented to by Secured Party or arising by operation of law, (C)
arising out of or able to be asserted as a result of any case, action or
proceeding before any court or other Governmental Authority relating to
bankruptcy, reorganization, insolvency, liquidation, receivership,
dissolution, winding-up or relief of Company or any of its affiliates , or
any general assignment for the benefit of creditors, composition,
marshalling of assets for creditors or other, similar arrangement in
respect of its creditors generally or any substantial portion of its
creditors; in each case as undertaken under any U.S. Federal or State law
(each of the foregoing described in this clause (C) being referred to
herein as an "Insolvency Proceeding"); or (D) arising from any rejection or
disaffirmance of the Obligations, or any part thereof, or any security held
therefor, in any such Insolvency Proceeding;
(v) Any defense based on any action taken or omitted by Secured
Party or any Bank in any Insolvency Proceeding involving Company, including
any election to have Secured Party's or such Bank's claim allowed as being
secured, partially secured or unsecured, any extension of credit by Secured
Party or any Bank to Company in any Insolvency Proceeding, and the taking
and holding by Secured Party or such Bank of any security for any such
extension of credit;
(vi) All presentments, demands for performance, notices of
nonperformance, protests, notices of protest, notices of dishonor, notices
of intention to accelerate, notices of acceleration, notices of acceptance
of this Security Agreement or any other Loan Document and of the
existence, creation, or incurring of new or additional indebtedness, and
demands and notices of every kind; and
(vii) Any defense based on or arising out of any defense that
Company or any of its affiliates may have to the payment or performance of
the Obligations.
(d) WAIVERS OF SUBROGATION AND OTHER RIGHTS.
(i) Upon any Event of Default, in its sole discretion, without
prior notice to or consent of Debtor, Secured Party or any Bank may elect
to: (A) foreclose against any Collateral for the Obligations, (B) accept a
transfer of any such Collateral for the Obligations in lieu of foreclosure,
(C) subject to the Credit Agreement, compromise or adjust the Obligations
or any part thereof or make any other accommodation with Company or any
Person, or (D) exercise any other remedy against Company or any Collateral
for the Obligations. No such action by Secured Party or any Bank shall
release or limit Secured Party's or the Banks' rights hereunder or under
the other Loan Documents, even if the effect of the action is to deprive
Debtor of any subrogation rights, rights of indemnity, or other rights to
collect reimbursement from Company or any other Person for any sums paid to
Secured Party or such Bank, whether contractual or arising by operation of
law or otherwise. Debtor expressly agrees that under no circumstances
shall it be deemed to have any right, title, interest or claim in or to any
real or personal
15
property to be held by Secured Party or any third party after any
foreclosure or transfer in lieu of foreclosure of any security for the
Obligations.
(ii) Regardless of whether Debtor may have made any payments to
Secured Party, Debtor forever waives: (A) all rights of subrogation, all
rights of indemnity, and any other rights to collect reimbursement from
Company on account of the Collateral encumbered by this Security Agreement,
whether contractual or arising by operation of law (including the United
States Bankruptcy Code or any successor or similar statute) or otherwise;
(B) all rights to enforce any remedy that Secured Party or any Bank may
have against Company or any Person granting collateral for the Obligations;
and (C) all rights to participate in any Collateral now or later to be hald
by Secured Party.
(e) REVIVAL AND REINSTATEMENT. If Secured Party or any Bank is
required to pay, return or restore to Company or any other Person any amounts
previously paid under the Loan Documents because of any Insolvency Proceeding of
Company, any stop notice or any other reason, the obligations of Debtor shall be
reinstated and revived and the rights of Secured Party and such Bank shall
continue with regard to such amounts, all as though they had never been paid.
(f) ELECTION OF REMEDIES. Without limiting the foregoing, Debtor
waives all rights and defenses arising out of an election of remedies by the
Secured Party or any Bank even though that election of remedies has destroyed
the Debtor's rights of subrogation and reimbursement against Company by
operation of law or otherwise.
(g) ADDITIONAL OBLIGATIONS. Debtor's obligations under this Security
Agreement are in addition to Debtor's obligations under any other existing or
future agreements, each of which shall remain in full force and effect until it
is expressly modified or released in a writing signed by Secured Party with any
required consent of the Banks. Secured Party may exercise its remedies
hereunder, without first proceeding against Company, any other Person or any
Collateral that Secured Party may hold, and without pursuing any other remedy.
Secured Party's rights under this Security Agreement shall not be exhausted by
any action by Secured Party until all Obligations have been paid and performed
in full.
(h) CONSIDERATION. Debtor acknowledges: that it expects to benefit
from the Banks' extension of the credit under the Loan Documents to Company
because of its relationship to Company; that it is receiving substantial
benefits (which are reasonably equivalent consideration for Debtor's execution
hereof) from the transaction of which that extension of indebtedness forms a
part; and that it is executing this Security Agreement in consideration of those
benefits.
(i) RIGHTS OF SECURED PARTY AND BANK. As between Secured Party and the Banks
only, nothing contained in this Section __ shall alter the rights and
obligations among Secured Party and the Banks set forth in the Credit Agreement.
16
EXHIBIT F
FUNDED PROJECT CLOSING CERTIFICATE
(PURSUANT TO SECTION 2.14 OF THE BRIDGE LOAN AGREEMENT)
Reference is made to Section 2.14 of the Amended and Restated Credit
Agreement (Bridge Loan), dated as of May 5, 1997 (as the same may be amended,
supplemented or modified from time to time, the "Bridge Loan Agreement") among
AIMCO Properties, L.P., a Delaware limited partnership ("Company"), the banks
from time to time party to the Bridge Loan Agreement (the "Banks"), BANK OF
AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION, as one of the Banks, and BANK OF
AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION, as Agent (the "Agent") for the
Banks. All capitalized terms used but not defined herein having the meanings
set forth in the Bridge Loan Agreement. The Company represents, warrants,
certifies and covenants in favor of the Agent and the Banks as follows:
1. All conditions precedent set forth in Section 2.14(c) of the
Bridge Loan Agreement with respect to the addition of the properties identified
on SCHEDULE 1 attached hereto (the "New Properties") (other than those based
solely upon the approval of the Agent, the Requisite Banks or the Banks) have
been satisfied with respect to the New Properties.
2. All financial and operating information delivered to the Agent
and the Banks pursuant to Section 2.14(b) of the Bridge Loan Agreement, subject
to audit, is complete and correct to the knowledge of the Company and sets forth
in detail the calculation of the Revolving Facility Debt Service Coverage-Based
Principal Limit under the Amended and Restated Credit Agreement (as defined in
the Bridge Loan Agreement) with the addition of the New Properties.
3. The Company would not be required to prepay any Loan with respect
to a New Property, if included as a Funded Project, pursuant to Section 2.14(d)
of the Bridge Loan Agreement.
4. The acquisition costs set forth on SCHEDULE 1 with respect to
each of the New Properties are true and correct.
5. The representations and warranties of the Company and the REIT
contained in Article V of the Bridge Loan Agreement and in the other Loan
Documents are true and correct as of the date hereof.
6. No Default or Event of Default exists or would result from the
proposed borrowing.
7. There has occurred since December 31, 1996, no act, omission,
change or occurrence which would have a Material Adverse Effect.
1
IN WITNESS WHEREOF, the undersigned, being duly authorized, have
executed this Certificate on behalf of the Company as of __________, 1997.
AIMCO PROPERTIES, L.P.,
a Delaware limited partnership
By: AIMCO-GP, INC.
a Delaware corporation, its general partner
By:. . . . . . . . . . . . . . . . . . . . .
Its: . . . . . . . . . . . . . . . . . . . .
By:. . . . . . . . . . . . . . . . . . . . .
Its: . . . . . . . . . . . . . . . . . . . .
2
SCHEDULE 1
to
Certificate of AIMCO Properties, L.P.
FUNDED PROJECT
NAME AND ADDRESS OF NEW PROPERTIES PURCHASE PRICE
---------------------------------- --------------
3
EXHIBIT G
COMPLIANCE CERTIFICATE
____________, 1997
Bank of America National Trust and
Savings Association, as Agent for
the Banks from time to time party to
the Amended and Restated Credit Agreement
Re: Amended and Restated Credit Agreement (Bridge Loan), dated as of
May 5, 1997 (as amended, modified, supplemented, restated, or
renewed from time to time, the "Amended and Restated Credit
Agreement"), by and between AIMCO PROPERTIES, L.P., a Delaware
limited partnership (the "Company"), the banks from time to time
party to the Amended and Restated Credit Agreement (the "Banks),
BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION, a national
banking association, as one of the Banks, and BANK OF AMERICA
NATIONAL TRUST AND SAVINGS ASSOCIATION, a national banking
association, as Agent for the Banks ("Agent")
Ladies and Gentlemen:
Reference is made to the Amended and Restated Credit Agreement. Each
initially capitalized term not defined in this Compliance Certificate (including
the schedules and other attachments hereto, this "Certificate") shall have the
meaning ascribed to such term in the Amended and Restated Credit Agreement.
Pursuant to Section 6.02(b) of the Amended and Restated Credit Agreement,
the undersigned hereby certifies to Agent and each of the Banks that, to the
best of the undersigned's knowledge after diligent inquiry:
(1)REVIEW OF FINANCIAL CONDITION. The undersigned has reviewed the
terms of the Amended and Restated Credit Agreement, including, without
limitation, the representations and warranties set forth in Article V thereof
and the covenants set forth in Article VI and VII thereof, and has made, or
caused to be made under his or her supervision, a review in reasonable detail of
the transactions and condition of the Company, the REIT, and their respective
Subsidiaries during the reporting periods (the "Reporting Periods") covered by
the financial statements being delivered concurrently to the Bank pursuant to
the Section 6.01 of the Amended and Restated Credit Agreement (the "Financial
Statements"). The Financial Statements accurately present the financial
position of the Company, the REIT, and their respective Subsidiaries as of the
date thereof and for the Reporting Periods covered thereby.
(2)REPRESENTATIONS AND WARRANTIES. The representations and warranties
of the Company, the REIT, and their respective Subsidiaries contained in the
Loan Documents, including those contained in Article V of the Agreement, are
true and correct in all material respects as of the date hereof and were true
and correct at all times during the Reporting Periods;
(3)COVENANTS. During the Reporting Period, the Company, the REIT, and
their respective Subsidiaries observed and performed all of their respective
covenants and other agreements under the Loan Documents, and satisfied each of
the conditions contained therein
1
to be observed, performed or satisfied by the Company, the REIT, and their
respective Subsidiaries;
(4)NO DEFAULT; EVENT OF DEFAULT. [Except as expressly set forth in
attached SCHEDULE 2,] no Default or Event of Default exists as of the date
hereof or existed at any time during the Reporting Period. [SCHEDULE 2 sets
forth a true, correct and complete description of the nature and period of
existence of each Default or Event of Default that exists as of the date hereof
or existed at any time during the Reporting Periods and the actions that the
Company, the REIT, or their respective Subsidiaries have taken, are taking and
propose to take with respect thereto].
IN WITNESS WHEREOF, this Certificate is executed by the undersigned this
____ day of ____________, 19__.
AIMCO PROPERTIES, L.P., a Delaware limited
partnership
By: AIMCO-GP, Inc.,
a Delaware corporation
Its general partner
By:
----------------------------------------
Name:
----------------------------------------
Title:
---------------------------------------
By:
----------------------------------------
Name:
----------------------------------------
Title:
----------------------------------------
2
EXHIBIT H
ASSIGNMENT AND ACCEPTANCE AGREEMENT
_________________, 1997
This ASSIGNMENT AND ACCEPTANCE AGREEMENT ("Agreement") is entered into
by _______________________________________________________________, as Assignor
("Assignor") and _____________________________________________________ as
Assignee ("Assignee"). Capitalized terms used in this Agreement without
definition have the meanings specified in the Revolving Credit Agreement
described below.
RECITALS
A. Assignor is party to the Amended and Restated Credit Agreement
dated as of May 5, 1997 (as the same may be amended, modified or supplemented
from time to time, the "Revolving Credit Agreement"), among AIMCO PROPERTIES,
L.P., a Delaware limited partnership (the "Company"), the Lenders, including
BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION, as one of the Lenders,
and BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION, as Agent (the
"Agent") for the Lenders;
B. Pursuant to the Revolving Credit Agreement, Assignor has
committed to make loans ("Revolving Loans") to the Company and to participate in
Letter of Credit Liability in an aggregate amount not to exceed $__________
("Assignor's Revolving Commitment") and the Lenders have committed to make loans
to the Company and to participate in Letter of Credit Liability, in an aggregate
amount not to exceed the current $__________ (the "Aggregate Revolving
Commitment" thereunder);
C. As of the date hereof, Assignor has made Revolving Loans to the
Company under the Credit Agreement in the aggregate principal outstanding amount
of $___________ ("Assignor's Outstanding Revolving Loans") and has participated
in Letter of Credit Liability in the amount of $____________, and the Lenders
have made Revolving Loans to the Company under the Revolving Credit Agreement in
the aggregate principal outstanding amount of $_________ and have participated
in Letter of Credit Liability in the aggregate amount of $____________;
D. Assignor is party to the Amended and Restated Credit Agreement
(Bridge Loan) dated as of May 5, 1997 (as the same may be amended, modified or
supple-
1
mented from time to time, the "Bridge Loan Agreement"), among the Company, the
Lenders, and the Agent;
E. Pursuant to the Bridge Loan Agreement, Assignor has committed to
make loans ("Bridge Loans") to the Company in an aggregate amount not to exceed
$__________, ("Assignor's Bridge Commitment") and the Lenders have committed to
make loans to the Company, in an aggregate amount not to exceed $25,000,000 (the
"Aggregate Bridge Commitment");
F. As of the date hereof, Assignor has made Bridge Loans to the
Company under the Bridge Loan Agreement in the aggregate principal outstanding
amount of $___________ ("Assignor's Outstanding Bridge Loans" and collectively
with Assignor's Outstanding Revolving Loans, "Assignor's Outstanding Loans"),
the Lenders have made Bridge Loans to the Company under the Bridge Loan
Agreement in the aggregate principal outstanding amount of $_________ and the
Lenders have made Bridge Loans to the Company under the Bridge Loan Agreement in
the aggregate principal outstanding amount of $ ___________; and
G. Assignor wishes to assign to Assignee [part of] the rights and
obligations of Assignor under the Revolving Credit Agreement in respect of
Assignor's Revolving Commitment in an amount equal to $____________ and in
respect of Assignor's Bridge Commitment in an amount equal to $___________,
together with a portion equal to Assignee's Percentage Share (as defined below)
of Assignor's Outstanding Loans and the Letter of Credit Liability (the
"Assigned Amount") on the terms and subject to the conditions set forth herein
and Assignee wishes to accept assignment of such rights and to assume such
obligations from Assignor on such terms and subject to such conditions.
NOW, THEREFORE, in consideration of the foregoing and the mutual
agreements contained herein, the parties hereto agree as follows:
1. ASSIGNMENT AND ACCEPTANCE.
(a) Subject to the terms and conditions of this Agreement, upon
the Effective Date (as hereinafter defined) (i) Assignor hereby sells, transfers
and assigns to Assignee, and (ii) Assignee hereby purchases, assumes and
undertakes from Assignor, without recourse and without representation or
warranty (except as provided in this Agreement), _____________% (the "Assignee's
Percentage Share") of (A) Assignor's Revolving Commitment (representing
___________% of the $__________ current Aggregate Revolving Commitment of all
Lenders), (B) the existing Letter of Credit Liability, (C) Assignor's Bridge
Commitment (representing ____% of the $25,000,000 Aggregate Bridge Commitment of
all Lenders), and (D) all related rights, benefits, obligations, liabilities and
indemnities of Assignor under and in connection with the Revolving Credit
Agreement and the Bridge Loan Agreement.
(b) With effect on and after the Effective Date (as defined in
Section 5), Assignee shall be a party to the Revolving Credit Agreement and the
Bridge Loan Agreement and succeed to all of the rights and be obligated to
perform all of the obligations
2
of a Lender under the Revolving Credit Agreement and the Bridge Loan Agreement
with a Revolving Commitment equal to $__________ and a Bridge Commitment of
$_____________. Assignee agrees that it will perform in accordance with their
terms all of the obligations which by the terms of the Revolving Credit
Agreement and the Bridge Loan Agreement are required to be performed by it as a
Lender. It is the intent of the parties hereto that, as of the Effective Date,
the Revolving Commitment of Assignor shall be reduced by an amount equal to
$____________ and that the Bridge Commitment of Assignor shall be reduced by an
amount equal to $____________, and Assignor shall relinquish its rights and be
released from its obligations under the Credit Agreement and the Bridge Loan
Agreement to the extent such obligations have been assumed by Assignee.
(c) After giving effect to the assignment and assumption, on the
Effective Date, Assignee's Revolving Commitment will be $_____________, its
Bridge Commitment will be $____________ and Assignee's Revolving and Bridge
Commitment Percentages will each be _____________%.
(d) After giving effect to the assignment and assumption, on the
Effective Date, Assignor's Commitment will be $______________, its Bridge
Commitment will be $____________ and Assignor's Revolving and Bridge Commitment
Percentages will each be ______________%.
2. PAYMENTS.
As consideration for the sale, assignment and transfer contemplated in
Section 1, Assignee shall pay to Assignor on the Effective Date in immediately
available funds an amount equal to $_____________, representing Assignee's
Percentage Share of the principal amount of Assignor's Outstanding Loans, and
shall assume all Assignee's Revolving Commitment Percentage of all Letter of
Credit Liability.
3. REALLOCATION OF PAYMENTS.
Any interest, fees and other payments accrued to the Effective Date
with respect to the Assignor's Revolving Commitment and Bridge Loan Commitment
and Assignor's Outstanding Loans shall be for the account of Assignor. Any
interest, fees and other payments accrued on and after the Effective Date with
respect to the Assigned Amount shall be for the account of Assignee. Each of
Assignor and Assignee agrees that it will (a) hold in trust for the other party,
any interest, fees and other amounts which it may receive to which the other
party is entitled, pursuant to the preceding sentences and (b) promptly upon
receipt, pay to the other party any such amounts which it may receive.
3
4. INDEPENDENT CREDIT DECISION.
Assignee (a) acknowledges that it has received a copy of the Revolving
Credit Agreement and the Bridge Loan Agreement and the Schedules and Exhibits
thereto, together with copies of the most recent financial statements referred
to in Section 6.01 of each of the Revolving Credit Agreement and the Bridge Loan
Agreement, and such other documents and information as it has deemed appropriate
to make its own credit and legal analysis and decision to enter into this
Agreement; and (b) agrees that it will, independently and without reliance upon
Assignor, any Agent or any other Lender and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit and legal decisions in taking or not taking action under the Revolving
Credit Agreement and the Bridge Loan Agreement.
5. EFFECTIVE DATE; NOTICES.
(a) As between Assignor and Assignee, the effective date for
this Agreement shall be ___________199__ (the "Effective Date"); PROVIDED that
the following conditions precedent have been satisfied on or before the
Effective Date:
(i) this Agreement shall be executed and delivered by
Assignor and Assignee;
(ii) Assignee shall pay to Assignor all amounts due to
Assignor under this Agreement;
(iii) to the extent required under Section 10.08(a) of each
of the Revolving Credit Agreement and the Bridge Loan Agreement, the consent of
the Agent and the Company shall have been duly obtained (or, in the case of the
Company, been deemed obtained) and shall be in full force and effect as of the
Effective Date;
(iv) Assignee shall have complied with Section 3.01(f) of
each of the Revolving Credit Agreement and the Bridge Loan Agreement (if
applicable); and
(b) Promptly following the execution of this Agreement, Assignor
shall deliver to the Company and the Agent for acknowledgment by the Agent, a
Notice of Assignment in the form of attached SCHEDULE 1.
6. AGENT.
(a) Assignee hereby acknowledges such powers delegated to the
Agent pursuant to the terms of the Credit Agreement and the Bridge Loan
Agreement.
(b) Assignee shall assume no duties or obligations held by the
Agent under the Revolving Credit Agreement or the Bridge Loan Agreement.
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7. WITHHOLDING TAX.
Assignee agrees to comply with Section 3.01(f) of each of the
Revolving Credit Agreement and the Bridge Loan Agreement (if applicable).
8. REPRESENTATIONS AND WARRANTIES.
(a) Assignor represents and warrants that (i) it is duly
organized and existing and it has the full power and authority to take, and has
taken, all action necessary to execute and deliver this Agreement and any other
documents required or permitted to be executed or delivered by it in connection
with this Agreement and to fulfill its obligations hereunder; (ii) no notices
to, or consents, authorizations or approvals of, any Person are required (other
than any already given or obtained) for its due execution, delivery and
performance of this Agreement, and apart from any agreements or undertakings or
filings required by the Revolving Credit Agreement and the Bridge Loan
Agreement, no further action by, or notice to, or filing with, any Person is
required of it for such execution, delivery or performance; (iii) this Agreement
has been duly executed and delivered by it and constitutes the legal, valid and
binding obligation of Assignor, enforceable against Assignor in accordance with
the terms hereof, subject, as to enforcement, to bankruptcy, insolvency,
moratorium, reorganization and other laws of general application relating to or
affecting creditors' rights and to general equitable principles; and (iv) it is
the legal and beneficial owner of the interest being assigned by it hereunder
and that such interest is free and clear of any Lien or other adverse claim;
(b) Assignor makes no representation or warranty in connection
with, and assumes no responsibility with respect to:
(i) the execution, legality, validity, enforceability, genuineness,
sufficiency or value of the Revolving Credit Agreement, the Bridge
Loan Agreement, any other Loan Document (as defined in both the
Revolving Credit Agreement and the Bridge Loan Agreement), or any
other instrument or document furnished in connection therewith;
(ii) any statements, warranties or representations made in or in
connection with the Revolving Credit Agreement, the Bridge Loan
Agreement, any other Loan Document, or any other instrument or
document furnished in connection therewith; or
(iii) the solvency, financial condition or financial statements of
the Company, or the performance or observance by the Company, of any
of its respective obligations under the Revolving Credit Agreement,
the Bridge Loan Agreement, any other Loan Document, or any other
instrument or document furnished in connection therewith.
(c) Assignee represents and warrants that (i) it is duly
organized and existing and it has full power and authority to take, and has
taken, all action necessary to execute and deliver this Agreement and any other
documents required or permitted to be
5
executed or delivered by it in connection with this Agreement, and to fulfill
its obligations hereunder; (ii) no notices to, or consents, authorizations or
approvals of, any Person are required (other than any already given or obtained)
for its due execution, delivery and performance of this Agreement; and apart
from any agreements or undertakings or filings required by the Revolving Credit
Agreement or the Bridge Loan Agreement, no further action by, or notice to, or
filing with, any Person is required of it for such execution, delivery or
performance; (iii) this Agreement has been duly executed and delivered by it and
constitutes the legal, valid and binding obligation of Assignee, enforceable
against Assignee in accordance with the terms hereof, subject, as to
enforcement, to bankruptcy, insolvency, moratorium, reorganization and other
laws of general application relating to or affecting creditors' rights and to
general equitable principles; and (iv) it is an Eligible Assignee.
9. FURTHER ASSURANCES.
Assignor and Assignee each hereby agrees to execute and deliver such
other instruments, and take such other action, as either party may reasonably
request in connection with the transactions contemplated by this Agreement,
including the delivery of any notices or other documents or instruments to the
Company or the Agent, which may be required in connection with the assignment
and assumption contemplated hereby.
10. MISCELLANEOUS.
(a) Any amendment or waiver of any provision of this Agreement
shall be in writing and signed by the parties hereto. No failure or delay by
either party hereto in exercising any right, power or privilege hereunder shall
operate as a waiver thereof and any waiver of any breach of the provisions of
this Agreement shall be without prejudice to any rights with respect to any
other or further breach thereof.
(b) All payments made hereunder shall be made without any set-
off or counterclaim.
(c) Assignor and Assignee shall each pay its own costs and
expenses incurred in connection with the negotiation, preparation, execution and
performance of this Agreement.
(d) This Agreement may be executed in any number of counterparts
and all of such counterparts taken together shall be deemed to constitute one
and the same instrument.
(e) THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF ______________. PROVIDED HOWEVER THAT
THE AGENT AND THE LENDERS SHALL RETAIN ALL RIGHTS ARISING UNDER FEDERAL LAW.
6
IN WITNESS WHEREOF, Assignor and Assignee have caused this Assignment
and Acceptance Agreement to be executed and delivered by their duly authorized
officers as of the date first above written.
, Assignor
------------------------------------
By:
---------------------------------------
Name
-------------------------------------
Title:
-------------------------------------
Address:
, Assignee
----------------------------------------
By:
---------------------------------------
Name
-------------------------------------
Title:
------------------------------------
Address:
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SCHEDULE 1
to Assignment and Acceptance
NOTICE OF ASSIGNMENT AND ACCEPTANCE
________________, 199__
Bank of America National Trust and
Savings Association, as Agent
CRESG #1357
000 Xxxxx Xxxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Unit Manager
AIMCO Properties, L.P.,
a Delaware limited partnership
0000 Xxxxx Xxxxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxx, Xxxxxxxx 00000
Attention: Xxxxx Xxxxxxxxx, Vice Chairman
Re: Amended and Restated Credit Agreement, dated as of
___________1997 (as the same may be amended, modified or
supplemented from time to time, the "Revolving Credit
Agreement"), and Amended and Restated Credit Agreement
(Bridge Loan), dated as of ________, 1996 (as the same may
be amended, modified or supplemented from time to time, the
"Bridge Loan Agreement"), among AIMCO PROPERTIES, L.P., a
Delaware limited partnership (the "Company"), the lenders
from time to time party to the Credit Agreement (the
"Lenders"), BANK OF AMERICA NATIONAL TRUST AND SAVINGS
ASSOCIATION, as one of the Lenders, and BANK OF AMERICA
NATIONAL TRUST AND SAVINGS ASSOCIATION, as Agent (the
"Agent") for the Lenders.
Ladies and Gentlemen:
Reference is made to the Revolving Credit Agreement and Bridge Loan
Agreement. Capitalized terms used in this Notice of Assignment and Acceptance
without definition have the meanings specified in the Revolving Credit
Agreement.
1. We hereby give notice to the Company and to the Agent of the
assignment by _____________________ ("Assignor") ______________________
("Assignee") of __________% of the right, title and interest of Assignor in and
to the Revolving Credit Agreement and the Bridge Loan Agreement, including,
without limitation, the right, title and interest of Assignor in and to:
8
(A) Assignor's Commitment under and as such term is defined in
the Revolving Credit Agreement (the "Revolving Commitment") (representing
___________% of the $__________ current Aggregate Revolving Commitment of all
Lenders),
(B) Assignor's Commitment Percentage of the outstanding loans
under the Revolving Credit Agreement (representing an amount equal to
$____________ as of the Effective Date), (C) the existing Letter of Credit
Liability,
(C) Assignor's Commitment under and as such term is defined in
the Bridge Loan Agreement (the "Bridge Commitment") (representing ____% of the
$25,000,000 Aggregate Bridge Commitment of all Lenders),
(D) Assignor's Commitment Percentage (as such term is defined in
the Bridge Loan Agreement) of the outstanding loans under the Bridge Loan
Agreement (representing an amount equal to $____________ as of the Effective
Date), and
(E) all related rights, benefits, obligations, liabilities and
indemnities of Assignor under and in connection with the Revolving Credit
Agreement and the Bridge Loan Agreement.
Before giving effect to the assignment and assumption, on the
Effective Date, Assignor's Revolving Commitment was $______________, its Bridge
Commitment was $____________ and Assignor's Revolving and Bridge Commitment
Percentages were each ______________%. After giving effect to the assignment
and assumption, on the Effective Date, Assignor's Commitment will be
$______________, its Bridge Commitment will be $____________ and Assignor's
Revolving and Bridge Commitment Percentages will each be ______________%. After
giving effect to the assignment and assumption, on the Effective Date,
Assignee's Revolving Commitment will be $_____________, its Bridge Commitment
will be $____________ and Assignee's Revolving and Bridge Commitment Percentages
will each be _____________%.
2. Assignee agrees that, upon receiving the consent of the Agent and
the Company to such assignment, Assignee will be bound by the terms of the
Revolving Credit Agreement and the Bridge Loan Agreement as fully and to the
same extent as if Assignee were the Lender originally holding the interest so
assigned to it under the Revolving Credit Agreement and the Bridge Loan
Agreement.
9
3. The following administrative details apply to Assignee:
(A) Notice Address:
Assignee name:
Address:
Att'n:
Telephone:
Telecopier:
(B) Payment Instructions:
ABA No.
Account No.
At:
Reference:
Att'n:
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IN WITNESS WHEREOF, Assignor and Assignee have caused this Notice of
Assignment and Acceptance to be executed by their respective duly authorized
officials, officers or agents as of the date first above mentioned.
Very truly yours,
[Assignor]
By: . . . . . . . . . . .
Title:. . . . . . . . . .
[Assignee]
By: . . . . . . . . . . .
Title:. . . . . . . . . .
ACKNOWLEDGED AND ASSIGNMENT
CONSENTED TO:
BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION, as Agent
By: . . . . . . . . . .
Title: . . . . . . . . .
[Add Company's Signature Block if Company's Consent is required]
AIMCO PROPERTIES, L.P., a Delaware limited partnership
By: Aimco - GP, Inc., a Delaware corporation
Its General Partner
By: . . . . . . . . . .
Title: . . . . . . . . .
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