Credit Agreement
(Unsecured Revolver-to-Term Facility)
among
AIMCO Properties, L.P.,
a Delaware limited partnership,
Bank of America National Trust and Savings Association,
as the Agent, initial Lender and Issuing Lender
and
BankBoston, N.A.
as the Documentation Agent and an initial Lender
January 26, 1998
2
TABLE OF CONTENTS
PAGE
ARTICLE I.
DEFINITIONS . . . . . . . . . . . . . 1
1.1 Defined Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Adjusted EBITDA . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.2 Other Definitional Provisions . . . . . . . . . . . . . . . . . . . 30
(a) Defined Terms . . . . . . . . . . . . . . . . . . . . . . . 30
(b) The Agreement . . . . . . . . . . . . . . . . . . . . . . . 30
(c) Certain Common Terms. . . . . . . . . . . . . . . . . . . . 30
(d) Performance; Time . . . . . . . . . . . . . . . . . . . . . 31
(e) Contracts . . . . . . . . . . . . . . . . . . . . . . . . . 31
(f) Laws. . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
(g) Captions. . . . . . . . . . . . . . . . . . . . . . . . . . 31
(h) Independence of Provisions. . . . . . . . . . . . . . . . . 31
(i) Sophisticated Parties . . . . . . . . . . . . . . . . . . . 31
1.3 Accounting Principles . . . . . . . . . . . . . . . . . . . . . . . 31
(a) GAAP. . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
(b) Fiscal Year; Quarter. . . . . . . . . . . . . . . . . . . . 32
ARTICLE II.
THE FACILITY. . . . . . . . . . . . . 32
2.1 Amounts and Terms of Commitments. . . . . . . . . . . . . . . . . . 32
(a) Revolving Loans . . . . . . . . . . . . . . . . . . . . . . 32
(i) Revolving Loans. . . . . . . . . . . . . . . . . . . 32
(ii) Letters of Credit. . . . . . . . . . . . . . . . . . 32
(iii) Limits on Revolving Loans and Letters of Credit. . . 33
(iv) Extension of Revolver Maturity Date; Conversion. . . 34
(b) Revolving Credit Usage. . . . . . . . . . . . . . . . . . . 35
(c) Amounts and Terms of Term Loan. . . . . . . . . . . . . . . 35
2.2 Note. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
2.3 Procedure for Borrowing . . . . . . . . . . . . . . . . . . . . . . 36
(a) Borrowing Notice. . . . . . . . . . . . . . . . . . . . . . 36
(i) Designation of Interest Rate . . . . . . . . . . . . 36
(ii) Timing of Notice . . . . . . . . . . . . . . . . . . 36
(iii) Contents of Notice . . . . . . . . . . . . . . . . . 36
(b) Notice to Lenders . . . . . . . . . . . . . . . . . . . . . 36
(c) Funding of Commitment . . . . . . . . . . . . . . . . . . . 37
2.4 Conversion and Continuation Elections . . . . . . . . . . . . . . . 37
(a) Conversion/Continuation Notice. . . . . . . . . . . . . . . 37
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(i) Designation of Interest Rate . . . . . . . . . . . . 37
(ii) Timing of Notice . . . . . . . . . . . . . . . . . . 37
(iii) Contents of Notice . . . . . . . . . . . . . . . . . 38
(b) Automatic Conversions . . . . . . . . . . . . . . . . . . . 38
(i) Default; Event of Default. . . . . . . . . . . . . . 38
(ii) Failure to Provide Notice. . . . . . . . . . . . . . 38
(iii) Failure to Maintain Minimum Loss . . . . . . . . . . 38
(c) Notice to Lenders . . . . . . . . . . . . . . . . . . . . . 38
2.5 Optional Prepayments; Optional Reductions of the Revolving
Commitment . . . . . . . . . . . . . . . . . . . . . . . . . . 38
2.6 Mandatory Prepayments of Loans; Mandatory Amortization and
Reductions . . . . . . . . . . . . . . . . . . . . . . . . . . 39
(a) Total Available Commitment. . . . . . . . . . . . . . . . . 39
(b) Amortization. . . . . . . . . . . . . . . . . . . . . . . . 39
2.7 Application of Proceeds . . . . . . . . . . . . . . . . . . . . . . 39
2.8 Repayment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
2.9 Interest. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
(a) Rates . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
(b) Payment Dates . . . . . . . . . . . . . . . . . . . . . . . 40
(c) Default Rates . . . . . . . . . . . . . . . . . . . . . . . 40
(d) Limitations for Applicable Law. . . . . . . . . . . . . . . 40
2.10 Fees. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
(a) Arrangement Fee . . . . . . . . . . . . . . . . . . . . . . 40
(b) Administrative Agency Fees. . . . . . . . . . . . . . . . . 41
(c) Commitment Fees . . . . . . . . . . . . . . . . . . . . . . 41
(d) Conversion Fee. . . . . . . . . . . . . . . . . . . . . . . 41
(e) Unencumbered Asset Pool Adjustment Fee. . . . . . . . . . . 41
(f) Letter of Credit Fees . . . . . . . . . . . . . . . . . . . 41
(g) Extension Fee . . . . . . . . . . . . . . . . . . . . . . . 42
(h) Accrued Fees. . . . . . . . . . . . . . . . . . . . . . . . 42
2.11 Computation of Fees and Interest. . . . . . . . . . . . . . . . . . 42
(a) Computation Period. . . . . . . . . . . . . . . . . . . . . 42
(b) Notice. . . . . . . . . . . . . . . . . . . . . . . . . . . 42
(c) Detail of Calculation . . . . . . . . . . . . . . . . . . . 42
2.12 Payments by Borrower. . . . . . . . . . . . . . . . . . . . . . . . 42
(a) Terms of Payments . . . . . . . . . . . . . . . . . . . . . 42
(b) Business Days . . . . . . . . . . . . . . . . . . . . . . . 43
(c) Reliance of Agent on Payments by Borrower . . . . . . . . . 43
2.13 Unencumbered Asset Pool; Additions and Exclusions of Properties . . 43
(a) Unencumbered Asset Pool . . . . . . . . . . . . . . . . . . 43
(i) Request for Total Available Commitment Increase. . . 43
(ii) Acceptance of Qualified Properties . . . . . . . . . 43
(iii) Conditions to Inclusion of Proposed Properties in
Unencumbered Asset Pool. . . . . . . . . . . . . . . 45
(A) Acceptances. . . . . . . . . . . . . . . . . 45
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(B) Officers' Certificate. . . . . . . . . . . . 45
(b) Exclusion of Property From the Unencumbered Asset Pool. . . 45
2.14 Payments by Lenders to Agent. . . . . . . . . . . . . . . . . . . . 46
(a) Reliance of Agent on Payments by the Lenders. . . . . . . . 46
(b) Obligations of Agent; Lender. . . . . . . . . . . . . . . . 46
2.15 Sharing of Payments, Etc. . . . . . . . . . . . . . . . . . . . . . 46
2.16 Participation Purchased by Lenders in the Letter of Credit
Liability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
ARTICLE III.
TAXES, YIELD PROTECTION AND ILLEGALITY . . . . . . 48
3.1 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
3.2 Illegality. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
3.3 Increased Costs and Reduction of Return . . . . . . . . . . . . . . 52
3.4 Funding Losses. . . . . . . . . . . . . . . . . . . . . . . . . . . 53
3.5 Inability to Determine Rates. . . . . . . . . . . . . . . . . . . . 53
3.6 Certificates of Lenders . . . . . . . . . . . . . . . . . . . . . . 54
3.7 Survival. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
ARTICLE IV.
CONDITIONS PRECEDENT. . . . . . . . . . . 54
4.1 Conditions of Effectiveness . . . . . . . . . . . . . . . . . . . . 54
(a) Conditions to Effectiveness . . . . . . . . . . . . . . . . 54
(i) Credit Agreement and Notes . . . . . . . . . . . . . 54
(ii) REIT Guaranty Documents. . . . . . . . . . . . . . . 54
(iii) Subordination Agreements . . . . . . . . . . . . . . 54
(iv) Resolutions; Incumbency. . . . . . . . . . . . . . . 54
(v) Organization Documents . . . . . . . . . . . . . . . 55
(vi) Certificate. . . . . . . . . . . . . . . . . . . . . 55
(vii) Documentation regarding the NHP Incorporated
Acquisition. . . . . . . . . . . . . . . . . . . . . 55
(viii) Legal Opinions . . . . . . . . . . . . . . . . . . . 55
(ix) Costs; Expenses; Fees. . . . . . . . . . . . . . . . 56
(x) Other Documents. . . . . . . . . . . . . . . . . . . 56
(b) Deferred Conditions . . . . . . . . . . . . . . . . . . . . 56
4.2 Conditions to Each Loan . . . . . . . . . . . . . . . . . . . . . . 56
(a) Borrowing Notice. . . . . . . . . . . . . . . . . . . . . . 56
(b) Other Documents . . . . . . . . . . . . . . . . . . . . . . 56
(c) Total Available Commitment. . . . . . . . . . . . . . . . . 56
(d) Representations and Warranties. . . . . . . . . . . . . . . 56
(e) No Existing Default . . . . . . . . . . . . . . . . . . . . 56
(f) No Material Adverse Effect. . . . . . . . . . . . . . . . . 57
(g) No Future Advance Notice. . . . . . . . . . . . . . . . . . 57
(h) Continuing Representations. . . . . . . . . . . . . . . . . 57
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4.3 Conversion Conditions . . . . . . . . . . . . . . . . . . . . . . . 57
(a) Representations and Warranties. . . . . . . . . . . . . . . 57
(b) No Existing Default . . . . . . . . . . . . . . . . . . . . 57
(c) Outstanding Amount. . . . . . . . . . . . . . . . . . . . . 57
(d) No Material Adverse Effect. . . . . . . . . . . . . . . . . 57
(e) Certificate . . . . . . . . . . . . . . . . . . . . . . . . 57
(f) Evidence regarding Total Available Commitment . . . . . . . 57
(g) Conversion Fee. . . . . . . . . . . . . . . . . . . . . . . 58
ARTICLE V.
REPRESENTATIONS AND WARRANTIES . . . . . . . . 58
5.1 Existence and Power . . . . . . . . . . . . . . . . . . . . . . . . 58
(a) Organization. . . . . . . . . . . . . . . . . . . . . . . . 58
(b) Power and Authority . . . . . . . . . . . . . . . . . . . . 58
(c) Due Qualification . . . . . . . . . . . . . . . . . . . . . 58
(d) Compliance with Legal Requirements. . . . . . . . . . . . . 58
5.2 Authorization; No Conflict. . . . . . . . . . . . . . . . . . . . . 58
(a) Organization Documents. . . . . . . . . . . . . . . . . . . 58
(b) Contractual Obligations . . . . . . . . . . . . . . . . . . 59
(c) Requirements of Law . . . . . . . . . . . . . . . . . . . . 59
5.3 Governmental Authorization. . . . . . . . . . . . . . . . . . . . . 59
5.4 Binding Effect. . . . . . . . . . . . . . . . . . . . . . . . . . . 59
5.5 Litigation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
5.6 Title to Properties . . . . . . . . . . . . . . . . . . . . . . . . 59
5.7 Subsidiaries; Interests in Other Entities;
Changes in Organizational Structure . . . . . . . . . . . . . . . 60
5.8 Financial Condition . . . . . . . . . . . . . . . . . . . . . . . . 60
5.9 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
5.10 ERISA Compliance. . . . . . . . . . . . . . . . . . . . . . . . . . 60
(a) Schedule 5.10 . . . . . . . . . . . . . . . . . . . . . . . 60
5.11 Environmental Matters . . . . . . . . . . . . . . . . . . . . . . . 62
(a) Environmental Laws. . . . . . . . . . . . . . . . . . . . . 62
(b) Environmental Permits . . . . . . . . . . . . . . . . . . . 62
(c) Orders. . . . . . . . . . . . . . . . . . . . . . . . . . . 62
(d) Hazardous Materials . . . . . . . . . . . . . . . . . . . . 63
5.12 Regulated Entities. . . . . . . . . . . . . . . . . . . . . . . . . 63
5.13 Use of Proceeds; Margin Regulations . . . . . . . . . . . . . . . . 63
5.14 REIT and Tax Status; Stock Exchange Listing . . . . . . . . . . . . 63
5.15 Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
5.16 No Default. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
5.17 Full Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . 64
5.18 Not a "Foreign Person." . . . . . . . . . . . . . . . . . . . . . . 64
5.19 Defects . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
5.20 Property Documents. . . . . . . . . . . . . . . . . . . . . . . . . 64
iv
5.21 Condemnation. . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
5.22 Violation of Laws; Permits. . . . . . . . . . . . . . . . . . . . . 65
5.23 Utilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
5.24 Leases. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
5.25 Year 2000 Compliance. . . . . . . . . . . . . . . . . . . . . . . . 65
ARTICLE VI.
AFFIRMATIVE COVENANTS. . . . . . . . . . . 66
6.1 Financial Information . . . . . . . . . . . . . . . . . . . . . . . 66
(a) Annual Financial Statements . . . . . . . . . . . . . . . . 66
(b) Quarterly Financial Statements. . . . . . . . . . . . . . . 66
(c) Quarterly Operating Statements for Unencumbered Asset Pool;
Management Entities . . . . . . . . . . . . . . . . . . . 66
(d) Borrower Plans and Projections. . . . . . . . . . . . . . . 67
6.2 Certificates; Other Information . . . . . . . . . . . . . . . . . . 67
(a) Accounting Certificates . . . . . . . . . . . . . . . . . . 67
(b) Officers' Certificates. . . . . . . . . . . . . . . . . . . 67
(c) Periodic Reports and Filings; Press Releases. . . . . . . . 67
(d) Accountants' Reports. . . . . . . . . . . . . . . . . . . . 67
(e) Other Information . . . . . . . . . . . . . . . . . . . . . 67
(f) Organizational Chart. . . . . . . . . . . . . . . . . . . . 68
6.3 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
(a) Default; Event of Default . . . . . . . . . . . . . . . . . 68
(b) Litigation. . . . . . . . . . . . . . . . . . . . . . . . . 68
(c) Environmental Matters . . . . . . . . . . . . . . . . . . . 68
(d) ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
(e) Material Adverse Effects. . . . . . . . . . . . . . . . . . 69
(f) Excluded Properties . . . . . . . . . . . . . . . . . . . . 69
(g) Material Transactions or Occurrences. . . . . . . . . . . . 69
(h) Failure to Qualify as a REIT. . . . . . . . . . . . . . . . 69
(i) Accounting Changes. . . . . . . . . . . . . . . . . . . . . 69
(j) Legal Compliance. . . . . . . . . . . . . . . . . . . . . . 69
(k) Cross-Default . . . . . . . . . . . . . . . . . . . . . . . 69
6.4 Preservation of Existence, Etc. . . . . . . . . . . . . . . . . . . 70
6.5 Maintenance of Property . . . . . . . . . . . . . . . . . . . . . . 70
6.6 Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
6.7 Payment of Obligations. . . . . . . . . . . . . . . . . . . . . . . 70
6.8 Compliance with Laws. . . . . . . . . . . . . . . . . . . . . . . . 71
6.9 Environmental Laws. . . . . . . . . . . . . . . . . . . . . . . . . 71
6.10 Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . 71
6.11 Maintenance of REIT Status; Stock Exchange Listing. . . . . . . . . 71
6.12 Inspection of Property and Books and Records. . . . . . . . . . . . 71
6.13 Further Assurances. . . . . . . . . . . . . . . . . . . . . . . . . 72
(a) Full Disclosure . . . . . . . . . . . . . . . . . . . . . . 72
v
(b) Further Acts. . . . . . . . . . . . . . . . . . . . . . . . 72
(c) Additional Guaranties . . . . . . . . . . . . . . . . . . . 72
6.14 Communication with Accountants. . . . . . . . . . . . . . . . . . . 72
6.15 Solvency. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
6.16 Covenants Relating to Unencumbered Asset Pool Properties. . . . . . 73
(a) Maintenance . . . . . . . . . . . . . . . . . . . . . . . . 73
(b) Leases. . . . . . . . . . . . . . . . . . . . . . . . . . . 73
(c) Material Agreements . . . . . . . . . . . . . . . . . . . . 73
(d) Management Contracts. . . . . . . . . . . . . . . . . . . . 73
(e) Construction. . . . . . . . . . . . . . . . . . . . . . . . 73
(f) Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
ARTICLE VII.
NEGATIVE COVENANTS . . . . . . . . . . . 74
7.1 Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
(a) Existing Liens. . . . . . . . . . . . . . . . . . . . . . . 74
(b) Certain Liens . . . . . . . . . . . . . . . . . . . . . . . 74
(c) Tax Liens . . . . . . . . . . . . . . . . . . . . . . . . . 74
(d) Bankers Liens . . . . . . . . . . . . . . . . . . . . . . . 74
(e) Other Statutory Liens . . . . . . . . . . . . . . . . . . . 74
(f) Employment-Related Liens. . . . . . . . . . . . . . . . . . 75
(g) Judgment Liens. . . . . . . . . . . . . . . . . . . . . . . 75
(h) Easements, Etc. . . . . . . . . . . . . . . . . . . . . . . 75
(i) Liens Securing Financing. . . . . . . . . . . . . . . . . . 75
7.2 Indebtedness. . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
(a) Existing or Contemplated Indebtedness . . . . . . . . . . . 75
(b) Certain Indebtedness. . . . . . . . . . . . . . . . . . . . 76
(c) Accounts Payable. . . . . . . . . . . . . . . . . . . . . . 76
(d) Contingent Obligations. . . . . . . . . . . . . . . . . . . 76
(e) Intra-Company Debt. . . . . . . . . . . . . . . . . . . . . 76
(f) Additional Indebtedness . . . . . . . . . . . . . . . . . . 76
(g) REIT Indebtedness . . . . . . . . . . . . . . . . . . . . . 76
7.3 Contingent Obligations. . . . . . . . . . . . . . . . . . . . . . . 77
(a) Ordinary Course Endorsements. . . . . . . . . . . . . . . . 77
(b) Rate Contracts. . . . . . . . . . . . . . . . . . . . . . . 77
(c) Letter of Credit Reimbursement Obligations. . . . . . . . . 77
(d) Exceptions to Nonrecourse Guaranties. . . . . . . . . . . . 77
7.4 Lease Obligations . . . . . . . . . . . . . . . . . . . . . . . . . 77
(a) Existing Leases . . . . . . . . . . . . . . . . . . . . . . 77
(b) Ordinary Course Leases. . . . . . . . . . . . . . . . . . . 77
7.5 Disposition of Properties . . . . . . . . . . . . . . . . . . . . . 77
7.6 Consolidations and Mergers. . . . . . . . . . . . . . . . . . . . . 78
7.7 Liquidations; Material Organization Changes; New Subsidiaries . . . 79
7.8 Investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
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7.9 Restricted Payments and Demands . . . . . . . . . . . . . . . . . . 80
7.10 Transactions with Affiliates. . . . . . . . . . . . . . . . . . . . 80
7.11 Special Covenants Relating to the REIT. . . . . . . . . . . . . . . 81
7.12 Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . 81
7.13 Taxation of Borrower. . . . . . . . . . . . . . . . . . . . . . . . 81
7.14 ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81
7.15 Intentionally Omitted . . . . . . . . . . . . . . . . . . . . . . . 82
7.16 Financial Covenants . . . . . . . . . . . . . . . . . . . . . . . . 82
7.17 Accounting Changes. . . . . . . . . . . . . . . . . . . . . . . . . 82
7.18 Transfers of Non-Owned Interests in the Management Entities . . . . 82
ARTICLE VIII.
EVENTS OF DEFAULT. . . . . . . . . . . . 83
8.1 Event of Default. . . . . . . . . . . . . . . . . . . . . . . . . . 83
(a) Non-Payment . . . . . . . . . . . . . . . . . . . . . . . . 83
(b) Representation or Warranty. . . . . . . . . . . . . . . . . 83
(c) Specific Defaults . . . . . . . . . . . . . . . . . . . . . 83
(d) Other Defaults. . . . . . . . . . . . . . . . . . . . . . . 83
(e) Cross-Default . . . . . . . . . . . . . . . . . . . . . . . 83
(f) Bankruptcy or Insolvency. . . . . . . . . . . . . . . . . . 84
(g) Involuntary Proceedings . . . . . . . . . . . . . . . . . . 84
(h) ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . 85
(i) Monetary Judgments. . . . . . . . . . . . . . . . . . . . . 85
(j) Non-monetary Judgments. . . . . . . . . . . . . . . . . . . 85
(k) Guaranty Documents. . . . . . . . . . . . . . . . . . . . . 86
(l) Material Adverse Effect . . . . . . . . . . . . . . . . . . 86
(m) Ownership . . . . . . . . . . . . . . . . . . . . . . . . . 86
(n) Material Licenses or Permits. . . . . . . . . . . . . . . . 87
(o) Environmental Liens . . . . . . . . . . . . . . . . . . . . 87
(p) Intra-Company Debt. . . . . . . . . . . . . . . . . . . . . 87
(q) Preferred Stock . . . . . . . . . . . . . . . . . . . . . . 87
8.2 Remedies. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87
(a) Termination of Commitment . . . . . . . . . . . . . . . . . 87
(b) Acceleration. . . . . . . . . . . . . . . . . . . . . . . . 87
(c) Obligations under Letters of Credit . . . . . . . . . . . . 88
(d) Other Remedies. . . . . . . . . . . . . . . . . . . . . . . 88
8.3 Rights Not Exclusive. . . . . . . . . . . . . . . . . . . . . . . . 88
ARTICLE IX.
THE AGENT. . . . . . . . . . . . . . 88
9.1 Appointment and Authorization . . . . . . . . . . . . . . . . . . . 88
9.2 Delegation of Duties. . . . . . . . . . . . . . . . . . . . . . . . 89
9.3 Liability of Agent. . . . . . . . . . . . . . . . . . . . . . . . . 89
vii
9.4 Reliance by Agent . . . . . . . . . . . . . . . . . . . . . . . . . 90
(a) Generally . . . . . . . . . . . . . . . . . . . . . . . . . 90
(b) Conditions Precedent. . . . . . . . . . . . . . . . . . . . 90
9.5 Notice of Default . . . . . . . . . . . . . . . . . . . . . . . . . 90
9.6 Credit Decision . . . . . . . . . . . . . . . . . . . . . . . . . . 90
9.7 Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . 91
9.8 Agent in Individual Capacity. . . . . . . . . . . . . . . . . . . . 92
9.9 Successor Agents. . . . . . . . . . . . . . . . . . . . . . . . . . 92
ARTICLE X.
MISCELLANEOUS. . . . . . . . . . . . . 93
10.1 Amendments and Waivers. . . . . . . . . . . . . . . . . . . . . . . 93
(a) Generally . . . . . . . . . . . . . . . . . . . . . . . . . 93
(b) Matters Requiring Unanimous Consent . . . . . . . . . . . . 93
(c) Matters Requiring Agents' Consent . . . . . . . . . . . . . 94
10.2 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 94
(a) Delivery. . . . . . . . . . . . . . . . . . . . . . . . . . 94
(b) Receipt . . . . . . . . . . . . . . . . . . . . . . . . . . 94
(c) Reliance. . . . . . . . . . . . . . . . . . . . . . . . . . 94
10.3 No Waiver; Cumulative Remedies. . . . . . . . . . . . . . . . . . . 94
10.4 Costs and Expenses. . . . . . . . . . . . . . . . . . . . . . . . . 95
(a) Facility Expenses . . . . . . . . . . . . . . . . . . . . . 95
(b) Enforcement Expenses. . . . . . . . . . . . . . . . . . . . 95
(c) Property Diligence Expenses . . . . . . . . . . . . . . . . 95
10.5 Indemnity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 95
10.6 Marshalling; Payments Set Aside . . . . . . . . . . . . . . . . . . 96
10.7 Successors and Assigns. . . . . . . . . . . . . . . . . . . . . . . 96
10.8 Assignments, Participations, etc. . . . . . . . . . . . . . . . . . 96
(a) Assignments . . . . . . . . . . . . . . . . . . . . . . . . 96
(b) Rights of Assignee. . . . . . . . . . . . . . . . . . . . . 97
(c) Replacement Notes . . . . . . . . . . . . . . . . . . . . . 97
(d) Participations. . . . . . . . . . . . . . . . . . . . . . . 97
(e) Assignments to Federal Reserve Bank . . . . . . . . . . . . 98
10.9 Setoff. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 98
10.10 Notification of Addresses, Lending Offices, Etc . . . . . . . . . . 98
10.11 Counterparts. . . . . . . . . . . . . . . . . . . . . . . . . . . . 99
10.12 Severability. . . . . . . . . . . . . . . . . . . . . . . . . . . . 99
10.13 No Third Parties Benefited. . . . . . . . . . . . . . . . . . . . . 99
10.14 Time. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 99
10.15 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . 99
10.16 Waiver of Jury Trial. . . . . . . . . . . . . . . . . . . . . . . . 99
10.17 Arbitration . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100
(a) Mandatory Arbitration . . . . . . . . . . . . . . . . . . . 100
(b) Provisional Remedies, Self-Help and Foreclosure . . . . . . 100
viii
10.18 Notice of Claims; Claims Bar. . . . . . . . . . . . . . . . . . . . 100
10.19 Entire Agreement. . . . . . . . . . . . . . . . . . . . . . . . . . 101
10.20 Interpretation. . . . . . . . . . . . . . . . . . . . . . . . . . . 101
10.21 Exculpation of Lenders. . . . . . . . . . . . . . . . . . . . . . . 101
10.22 Relationship. . . . . . . . . . . . . . . . . . . . . . . . . . . . 101
10.23 Confidentiality . . . . . . . . . . . . . . . . . . . . . . . . . . 101
ix
SCHEDULES
Schedule 1.1A Initial Unencumbered Asset Pool Properties
Schedule 1.1B Intra-Borrower Indebtedness
Schedule 2.1(a)(i) Revolving and Term Commitments of the Lenders
Schedule 4.1(a)(vii) NHP Acquisition Documents
Schedule 5.5 Litigation
Schedule 5.7 Organizational Chart
Schedule 5.9 Existing Tax Sharing Agreement
Schedule 5.10 ERISA Disclosures
Schedule 5.11 Environmental Disclosures
Schedule 5.26 Non-Guarantor Subsidiaries
Schedule 7.2 Indebtedness
EXHIBITS
Exhibit A Initial Unencumbered Asset Pool Properties
Exhibit B Borrowing Notice
Exhibit C Form of Revolver to Term Certificate
Exhibit D Form of Note
Exhibit E Conversion/Continuation Notice
Exhibit F1 Form of Payment Guaranty
Exhibit F2 Form of Payment Guaranty
Exhibit G Form of Letter of Credit
Exhibit H Unencumbered Asset Pool Certificate
Exhibit I Opinion Requirements
Exhibit J Compliance Certificate
Exhibit K Assignment and Acceptance
Exhibit L Subordination Agreement
x
DEFINED TERMS
PAGE
----
Adjusted EBITDA. . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Affiliate. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Agent. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Agent-Related Persons. . . . . . . . . . . . . . . . . . . . . . . . . 2
Aggregate Commitment . . . . . . . . . . . . . . . . . . . . . . . . . 2
Agreement. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Apartment Property Cap Rate. . . . . . . . . . . . . . . . . . . . . . 2
Applicable Base Rate Margin. . . . . . . . . . . . . . . . . . . . . . 2
Applicable LC Fee. . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Applicable LIBOR Margin. . . . . . . . . . . . . . . . . . . . . . . . 3
Applicable Margin. . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Assignee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Assignment and Acceptance. . . . . . . . . . . . . . . . . . . . . . . 4
Assumed Interest Rate. . . . . . . . . . . . . . . . . . . . . . . . . 4
Attorney Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Bankruptcy Code. . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Base Rate. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Base Rate Loan . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
BofA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Borrowing Notice . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Business Day . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Capital Adequacy Regulation. . . . . . . . . . . . . . . . . . . . . . 4
Capital Expenditures . . . . . . . . . . . . . . . . . . . . . . . . . 5
Capital Lease. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Capital Lease Obligations. . . . . . . . . . . . . . . . . . . . . . . 5
Carrying Value . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Cash Equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
CERCLA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Class B. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Closing Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Code . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Commitment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Commitment Percentage. . . . . . . . . . . . . . . . . . . . . . . . . 6
Consolidated EBITDA. . . . . . . . . . . . . . . . . . . . . . . . . . 6
Consolidated EBITDA-to-Fixed Charges Ratio . . . . . . . . . . . . . . 7
Consolidated EBITDA-to-Interest Ratio. . . . . . . . . . . . . . . . . 7
Consolidated Fixed Charges . . . . . . . . . . . . . . . . . . . . . . 7
Consolidated Interest Expense. . . . . . . . . . . . . . . . . . . . . 7
Consolidated Scheduled Amortization. . . . . . . . . . . . . . . . . . 7
Consolidated Total Indebtedness. . . . . . . . . . . . . . . . . . . . 7
Consolidated Unsecured Interest Incurred . . . . . . . . . . . . . . . 7
xi
Contingent Obligation. . . . . . . . . . . . . . . . . . . . . . . . . 7
Contractual Obligation . . . . . . . . . . . . . . . . . . . . . . . . 8
Controlled Group . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Conversion Conditions. . . . . . . . . . . . . . . . . . . . . . . . . 8, 57
Conversion Date. . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Conversion Option. . . . . . . . . . . . . . . . . . . . . . . . . . . 35
Conversion/Continuation Notice . . . . . . . . . . . . . . . . . . . . 8
Credit Rating. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
D&P. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Default. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Disposition. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Domestic Lending Office. . . . . . . . . . . . . . . . . . . . . . . . 9
Due Diligence Package. . . . . . . . . . . . . . . . . . . . . . . . . 9
EBITDA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Eligible Assignee. . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Environmental Claims . . . . . . . . . . . . . . . . . . . . . . . . . 10
Environmental Laws . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Environmental Permits. . . . . . . . . . . . . . . . . . . . . . . . . 10, 62
ERISA. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
ERISA Affiliate. . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
ERISA Event. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Estimated Remediation Cost . . . . . . . . . . . . . . . . . . . . . . 11
Event of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Exchange Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Extension Request. . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Federal Funds Rate . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Federal Reserve Board. . . . . . . . . . . . . . . . . . . . . . . . . 12
Finance Subsidiary . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Finance Subsidiary Loan. . . . . . . . . . . . . . . . . . . . . . . . 12
FNMA/Washington Mortgage Documents . . . . . . . . . . . . . . . . . . 11
Form 10-K filing . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Form 10-Q filing . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Form 1001. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12, 50
Form 4224. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12, 50
Funds From Operations. . . . . . . . . . . . . . . . . . . . . . . . . 12
GAAP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Governmental Authority . . . . . . . . . . . . . . . . . . . . . . . . 13
GP Corp. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Gross Asset Value. . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Guarantor Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . 13
Guaranty Obligation. . . . . . . . . . . . . . . . . . . . . . . . . . 14
Hazardous Materials. . . . . . . . . . . . . . . . . . . . . . . . . . 14
Historical Value . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Imputed Capital Expenditures . . . . . . . . . . . . . . . . . . . . . 15
Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
xii
Indemnified Liabilities. . . . . . . . . . . . . . . . . . . . . . . . 15
Indemnified Person . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Initial Unencumbered Asset Pool. . . . . . . . . . . . . . . . . . . . 15
Insolvency Proceeding. . . . . . . . . . . . . . . . . . . . . . . . . 16
Interest Expense . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Interest Payment Date. . . . . . . . . . . . . . . . . . . . . . . . . 16
Interest Period. . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Intra-Company Debt . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Intra-Company Loan Subordination Agreement . . . . . . . . . . . . . . 17
Investment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Investment Grade Credit Rating . . . . . . . . . . . . . . . . . . . . 17
IRS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Issuing Lender . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Knowledge of Borrower. . . . . . . . . . . . . . . . . . . . . . . . . 17
Lender . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Lender Affiliate . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Lending Office . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Letter of Credit . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Letter of Credit Liability . . . . . . . . . . . . . . . . . . . . . . 18
LIBO Rate. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
LIBOR. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
LIBOR Loan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Lien . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Loan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Loan Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Loans. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Management Company Attributable Interest Expense . . . . . . . . . . . 19
Management Entity. . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Margin Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Material Adverse Effect. . . . . . . . . . . . . . . . . . . . . . . . 19
Maximum Unsecured Indebtedness . . . . . . . . . . . . . . . . . . . . 19
Xxxxx'x. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Multiemployer Plan . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Net Issuance Proceeds. . . . . . . . . . . . . . . . . . . . . . . . . 20
Net Operating Income . . . . . . . . . . . . . . . . . . . . . . . . . 20
Net Worth. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
NHP. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Non-Guarantor Subsidiaries . . . . . . . . . . . . . . . . . . . . . . 21, 65
Note . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Notice of Lien . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
NYSE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Obligations. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Ordinary Course of Business. . . . . . . . . . . . . . . . . . . . . . 21
Organizational Chart . . . . . . . . . . . . . . . . . . . . . . . . . 21
Organizational Documents . . . . . . . . . . . . . . . . . . . . . . . 22
xiii
Other Taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22, 49
Outside Period Letter of Credit. . . . . . . . . . . . . . . . . . . . 22
Outstanding Amount . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Participant. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Payment Office . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
PBGC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Permitted Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . 22, 75
Permitted Liens. . . . . . . . . . . . . . . . . . . . . . . . . . . . 22, 74
Person . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Pricing Conversion Date. . . . . . . . . . . . . . . . . . . . . . . . 22
Pro Forma Revolver Debt Service. . . . . . . . . . . . . . . . . . . . 23
Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Property Liability . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Qualified Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Qualified Property . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Qualified Wholly-Owned Subsidiary. . . . . . . . . . . . . . . . . . . 23
Rate Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Reference Lender . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
REIT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
REIT Guaranty Documents. . . . . . . . . . . . . . . . . . . . . . . . 24
REIT Status. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Reportable Event . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Requirement of Law . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Requisite Lenders. . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Reserve Percentage . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Responsible Officer. . . . . . . . . . . . . . . . . . . . . . . . . . 25
Restricted Cash. . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Revolver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25, 32
Revolver DSC Principal Limit . . . . . . . . . . . . . . . . . . . . . 26
Revolver DSC Ratio . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Revolver Maturity Date . . . . . . . . . . . . . . . . . . . . . . . . 26
Revolver to Term Certificate . . . . . . . . . . . . . . . . . . . . . 6, 25
Revolving Commitment . . . . . . . . . . . . . . . . . . . . . . . . . 25
Revolving Loan . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26, 32
S&P. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Scheduled Amortization . . . . . . . . . . . . . . . . . . . . . . . . 26
SEC. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
SEC Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Solvent. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Stabilized . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Stock. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Subsidiary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27, 48
Term Advance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27, 35
xiv
Term Commitment. . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Term Loan. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27, 35
Term Loan Maturity Date. . . . . . . . . . . . . . . . . . . . . . . . 27
Total Available Commitments. . . . . . . . . . . . . . . . . . . . . . 28
Total Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . 28
U.S. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
UCC. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Unencumbered Asset Pool. . . . . . . . . . . . . . . . . . . . . . . . 29
Unencumbered Asset Pool NOI. . . . . . . . . . . . . . . . . . . . . . 29
Unencumbered Asset Pool NOI to Unsecured Interest Incurred Rat . . . . 29
Unencumbered Asset Pool Value. . . . . . . . . . . . . . . . . . . . . 29
Unencumbered Management Entity Value . . . . . . . . . . . . . . . . . 29
Unfunded Pension Liabilities . . . . . . . . . . . . . . . . . . . . . 29
United States. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Units. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Unqualified Property . . . . . . . . . . . . . . . . . . . . . . . . . 30
Wholly-Owned Subsidiary. . . . . . . . . . . . . . . . . . . . . . . . 30
xv
CREDIT AGREEMENT
(Unsecured Revolver-To-Term Facility)
This CREDIT AGREEMENT is entered into as of January 26, 1998, among
AIMCO PROPERTIES, L.P., a Delaware limited partnership (the "Borrower"), the
lenders from time to time party to this Agreement (the "Lenders"), BANK OF
AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION ("BofA"), as one of the Lenders
and as the Issuing Lender, BANK OF AMERICA NATIONAL TRUST AND SAVINGS
ASSOCIATION, as Agent (the "Agent"), and BANKBOSTON, N.A., as one of the Lenders
and the Documentation Agent.
RECITAL
BofA made available to Borrower a secured revolver-to-term credit
facility in the aggregate principal amount of up to $100,000,000 pursuant to
that certain Credit Agreement, dated as of May 5, 1997, by and between BofA, as
a lender and the agent, the other lenders party thereto and Borrower. The
entire outstanding principal balance under such Credit Agreement is being
refinanced and the letters of credit issued thereunder in the amount of $614,739
will be rolled into letters of credit hereunder in accordance with Section
2.1(a)(ii).
NOW, THEREFORE, the parties hereto agree as follows:
ARTICLE I.
DEFINITIONS
1.1 DEFINED TERMS. In addition to the terms defined elsewhere in
this Agreement, the following terms have the following meanings:
"ADJUSTED EBITDA" means, for any period of determination, for any
Person, such Person's EBITDA (or as applicable, its pro-rata share of EBITDA)
less the aggregate amount of such Person's Imputed Capital Expenditures.
Adjusted EBITDA with respect to any Unqualified Property will take into account
the Person's pro-rata share of Imputed Capital Expenditures.
"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 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 Borrower.
1
"AGENT" means Bank of America National Trust and Savings Association,
in its capacity as Agent, and any successor Agent appointed hereunder.
"AGENT-RELATED PERSONS" is defined in Section 9.3.
"AGGREGATE COMMITMENT" means the combined Commitments of the Lenders.
As of the Closing Date the Aggregate Commitment is $50,000,000.
"AGREEMENT" means this Credit Agreement, as amended, supplemented or
modified from time to time.
"APARTMENT PROPERTY CAP RATE" means (a) initially, 9.6% and (b) on
each anniversary date of the Revolver Maturity Date and for each year
thereafter, as applicable, shall change to the national average capitalization
rate for Class B apartment properties as published in the then current CB
Commercial Investor Survey or if the survey is no longer published, an
equivalent survey selected by Agent.
"APPLICABLE BASE RATE MARGIN" means, with respect to Base Rate Loans,
on any date of determination, the applicable spread set forth below:
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
XXXXX 0 XXXXX 0 XXXXX 0 XXXXX 0 XXXXX 5
--------------------------------------------------------------------------------
BBB/
Baa2 to Non
BBB+/ BBB- Investment
Credit Rating X/X0 X-/X0 Baa1 /Baa3 Grade
--------------------------------------------------------------------------------
Applicable Base Rate 0 0 0 50 50
Margin (bps)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Any change in Borrower's Credit Rating causing it to move into a different Level
on the table will immediately change the Applicable Base Rate Margin. If
Borrower's Credit Rating is such that the Rating Agencies' ratings are split
between a higher and a lower range on the table, the Applicable Base Rate Margin
will be based upon the lower of such two Credit Ratings. If only one Rating
Agency provides a Credit Rating for Borrower, then the Applicable Base Rate
Margin will be based on the spread in Level 5.
2
"APPLICABLE LC FEE" means, on any date of determination, the following
annual fee, as applicable, which shall be due and payable as provided in Section
2.10(f):
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
XXXXX 0 XXXXX 0 XXXXX 0 XXXXX 0 XXXXX 5
--------------------------------------------------------------------------------
BBB/
Baa2 to Non
BBB+/ BBB- Investment
Credit Rating X/X0 X-/X0 Baa1 /Baa3 Grade
--------------------------------------------------------------------------------
Annual Fee (bps) 65 75 85 105 105
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Any change in Borrower's Credit Rating causing it to move into a different Level
on the table will immediately change the Applicable LC Fee. If Borrower's
Credit Rating is such that the Rating Agencies' ratings are split between a
higher and a lower range on the table, the Applicable LC Fee will be based upon
the lower of such two Credit Ratings. If only one Rating Agency provides a
Credit Rating for Borrower, then the Applicable LC Fee will be based on the
spread in Level 5.
"APPLICABLE LIBOR MARGIN" means, with respect to LIBOR Loans, on any
date during an Interest Period, the applicable spread set forth below:
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
XXXXX 0 XXXXX 0 XXXXX 0 XXXXX 0 XXXXX 5
--------------------------------------------------------------------------------
BBB/
Baa2 to Non
BBB+/ BBB- Investment
Credit Rating X/X0 X-/X0 Baa1 /Baa3 Grade
--------------------------------------------------------------------------------
Applicable LIBOR Margin (bps) 60 70 80 100 100
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Any change in Borrower's Credit Rating causing it to move into a different Level
on the table will immediately change the Applicable LIBOR Margin. If Borrower's
Credit Rating is such that the Rating Agencies' ratings are split between a
higher and a lower range on the table, the Applicable LIBOR Margin will be based
upon the lower of such two Credit Ratings. If only one Rating Agency sets
Borrower's Credit Rating, then the Applicable LIBOR Margin will be based on the
spread in Level 5.
"APPLICABLE MARGIN" means (a), with respect to Base Rate Loans, the
Applicable Base Rate Margin, and (b) with respect to LIBOR Loans, the Applicable
LIBOR Margin.
"ASSIGNEE" is defined in Section 10.8(a).
"ASSIGNMENT AND ACCEPTANCE" is defined in Section 10.8(a).
3
"ASSUMED INTEREST RATE" means, on any date of determination, an annual
rate equal to the yield on U.S. Treasury obligations having a maturity of seven
(7) years from such date of determination (or the closest maturity date
thereafter), plus two percent (2.00%). For any fiscal quarter, the Assumed
Interest Rate will be based on the yield on such U.S. Treasury obligations as
published for the last Business Day of the preceding fiscal quarter, except on
the Conversion Date, in which case the Assumed Interest Rate will be based on
the yield on such obligations as published for the Business Day prior to the
date Borrower delivers its request for conversion under Section 4.3.
"ATTORNEY COSTS" means 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.
"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 a reference point for pricing some loans); any
change in the reference 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 written notice (including notice via
facsimile confirmed immediately by a telephone call) from Borrower to Agent in
accordance with Section 2.3 and substantially in the form of EXHIBIT B.
"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 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.
4
"CAPITAL EXPENDITURES" means, for any period and with respect to any
Person, the aggregate of all expenditures by such Person for the acquisition or
leasing of fixed or capital assets or additions to equipment (including
replacements, capitalized repairs and improvements during such period) which
should be capitalized under GAAP on a consolidated balance sheet of such Person.
For the purpose of this definition, the purchase price of equipment which is
purchased simultaneously with the trade-in of existing equipment owned by such
Person or with insurance proceeds shall be included in Capital Expenditures only
to the extent of the gross amount of such purchase price, less the credit
granted by the seller of such equipment for such equipment being traded in at
such time, or the amount of such proceeds, as the case may be.
"CAPITAL LEASE" means any leasing or similar arrangement which, in
accordance with GAAP, is classified as a capital lease.
"CAPITAL LEASE OBLIGATIONS" means, with respect to any Person, the
amount at which such Person's obligations under Capital Leases are required to
be carried on the balance sheet of such Person in accordance with GAAP.
"CARRYING VALUE" means, with respect to any asset or liability of any
Person, the amount at which such asset or liability has been recorded or, in
accordance with GAAP, should have been recorded, in the books of account of such
Person, as reduced by any reserves or write-downs which have been announced, set
aside or taken or, in accordance with GAAP, should have been set aside or taken,
with respect thereto; PROVIDED, HOWEVER, that, if more than one method of
recording the amount of any asset or liability, or the setting aside or taking
of any reserves or write-downs with respect thereto, is permitted under GAAP,
the permitted method actually used shall be controlling for purposes of
determining Carrying Value, provided that such method is used in a manner
consistent with prior periods.
"CASH EQUIVALENTS" means:
(a) securities issued or fully guaranteed or insured by the
United States Government or any agency thereof and backed by the full faith and
credit of the United States having maturities of not more than six months from
the date of acquisition;
(b) certificates of deposit, time deposits, demand deposits,
eurodollar time deposits, repurchase agreements, reverse repurchase agreements,
or bankers' acceptances, having in each case a tenor of not more than three (3)
months, issued by the Agent, or by any U.S. commercial bank (or any branch or
agency of a non-U.S. bank licensed to conduct business in the U.S.) having
combined capital and surplus of not less than $100,000,000 whose short-term
securities are rated at least A-1 by S&P and P-1 by Xxxxx'x; PROVIDED, HOWEVER,
such Investments may not be made in amounts in excess of $1,000,000 with any
lender that is owed Indebtedness in excess of $1,000,000 by Borrower, the REIT
or any Subsidiary (other than the Obligations) unless such bank waives in
writing (in form and substance satisfactory to the Requisite Lenders) its right
to set-off such Investment against such Indebtedness;
5
(c) demand deposits on deposit in accounts maintained at
commercial banks having membership in the FDIC and in amounts not exceeding the
maximum amounts of insurance thereunder; and
(d) commercial paper of an issuer rated at least A-1 by S&P or
P-1 by Xxxxx'x and in either case having a tenor of not more than three (3)
months.
"CERCLA" is defined in the definition of "Environmental Laws".
"CLASS B" means, with respect to any rental apartment property, that
such apartment property is generally recognized as a Class B property in
accordance with prevailing national real estate industry standards, pursuant to
prevailing appraisal methods and procedures.
"CLOSING DATE" means the date on which all conditions precedent to the
effectiveness of this Agreement in Section 4.1(a) are satisfied or waived by all
Lenders. The Closing Date shall occur no later than January 26, 1998.
"CODE" means the Internal Revenue Code of 1986, as amended from time
to time, and any regulations promulgated thereunder.
"COMMITMENT" means, with respect to a Lender, that Lender's Revolving
Commitment (during the term of the Revolver) or Term Commitment (during the term
of the Term Loan), as applicable.
"COMMITMENT PERCENTAGE" means, as to any Lender, the percentage
equivalent of such Lender's Commitment divided by the Aggregate Commitment.
"COMPLIANCE CERTIFICATE" means a certificate signed by at least two
Responsible Officers and delivered to Agent and each Lender pursuant to Section
6.2 and substantially in the form of EXHIBIT J.
"CONSOLIDATED EBITDA" means, for any period, and without double
counting any item, the sum of the Adjusted EBITDA for Borrower, the REIT and
their respective Subsidiaries for such period on a consolidated basis PLUS the
Borrower's pro-rata share of aggregate EBITDA for each of the Management
Entities.
"CONSOLIDATED EBITDA-TO-FIXED CHARGES RATIO" means, for any period of
determination, the ratio computed as follows:
Consolidated EBITDA-to-Fixed [Consolidated EBITDA minus Imputed
Capital Expenditures]
Charges Ratio = divided by
Consolidated Fixed Charges
"CONSOLIDATED EBITDA-TO-INTEREST RATIO" means, for any period of
determination, the ratio computed as follows:
6
Consolidated EBITDA-to-Interest Ratio= [Consolidated EBITDA minus Imputed
Capital Expenditures]
divided by
Consolidated Interest Expense
"CONSOLIDATED FIXED CHARGES" means, for any period of determination,
the sum of the Consolidated Interest Expense for such period, plus Consolidated
Scheduled Amortization for such period, plus dividends accrued (whether or not
declared or payable) on the REIT's preferred Stock during such period plus any
cumulative unpaid dividends on such preferred Stock carried over to such period
from a prior period, excluding, however, any cumulative unpaid dividends from
preferred Stock in any of the Management Entities, plus the aggregate amount of
expenses in connection with the issuance of bonds and related matters, any
scheduled principal amortization in respect of any Indebtedness, plus payments
into sinking funds in respect of any Indebtedness.
"CONSOLIDATED INTEREST EXPENSE" means, for any period of
determination, and without double counting any item, the sum of the Interest
Expense for Borrower, the REIT and their respective Subsidiaries for such period
on a consolidated basis, excluding (a) amounts expended for amortization of loan
costs and (b) the amount of any Management Company Attributable Interest
Expense.
"CONSOLIDATED SCHEDULED AMORTIZATION" means, for any period of
determination, and without double counting any item, the sum of the Scheduled
Amortization for Borrower, the REIT and their respective Subsidiaries for such
period on a consolidated basis.
"CONSOLIDATED TOTAL INDEBTEDNESS" means as of any date, and without
double counting any item, the aggregate amount of Total Indebtedness for
Borrower, the REIT and their respective Subsidiaries as of such date.
"CONSOLIDATED UNSECURED INTEREST" means, for any period of
determination, Consolidated Interest Expense incurred in respect of any
Unsecured Debt for such period.
"CONTINGENT OBLIGATION" means, as to any Person, (a) any Guaranty
Obligation of that Person, and (b) any direct or indirect obligation or
liability, contingent or otherwise, of that Person, (i) in respect of any letter
of credit or similar instrument issued for the account of that Person or as to
which that Person is otherwise liable for reimbursement of drawings, (ii) as a
partner or joint venturer in any partnership or joint venture, (iii) to purchase
any materials, supplies or other Property from, or to obtain the services of,
another Person if the relevant contract or other related document or obligation
requires that payment for such materials, supplies or other Property, or for
such services, shall be made regardless of whether delivery of such materials,
supplies or other Property is ever made or tendered, or such services are ever
performed or tendered, or (iv) incurred pursuant to any Rate Contract. Except
as provided in the definition of "Total Indebtedness" below, the amount of any
Contingent Obligation shall (subject, in the case of Guaranty Obligations, to
the last sentence of the definition of "Guaranty Obligation") be deemed equal to
the maximum reasonably anticipated liability in respect thereof.
7
"CONTRACTUAL OBLIGATION" means, as to any Person, any provision of any
security issued by such Person or of any agreement, undertaking, contract,
mortgage, deed of trust, indenture, or other instrument, document or agreement
to which such Person is a party or by which it or any of its Property is bound.
"CONTROLLED GROUP" means Borrower and all Persons (whether or not
incorporated) under common control or treated as a single employer with Borrower
pursuant to Section 414(b), (c), (m) or (o) of the Code.
"CONVERSION/CONTINUATION NOTICE" means a notice given by Borrower to
the Agent pursuant to Section 2.4, in substantially the form of EXHIBIT E.
"CONVERSION CONDITIONS" is defined in Section 4.3.
"CONVERSION DATE" means the date (a) on which all Conversion
Conditions are satisfied and the Revolver is converted into the Term Loan or (b)
pursuant to Section 2.1(a)(iv)(2), Borrower elects the Conversion Option. The
Conversion Date will be set forth in the certificate delivered to and approved
by the Agent pursuant to Section 4.3(e) below.
"CREDIT RATING" means, with respect to any Person, the lowest rating
assigned by a Rating Agency to the Person's senior unsubordinated, unsecured and
non-credit enhanced long term indebtedness; provided, however, that in all
events, if a Person's senior unsubordinated long term indebtedness is only rated
by one Rating Agency, then it shall be deemed to have a Credit Rating below
Investment Grade.
"DEFAULT" means any event or circumstance which, with the giving of
notice, the lapse of time, or both, would (if not cured) constitute an Event of
Default.
"DESIGNATED ENTITY" means Borrower and any of its Subsidiaries that
owns any Unencumbered Asset Pool Property or is a Management Entity.
"DISPOSITION" means the sale, lease, conveyance, transfer or other
disposition of (whether in one or a series of transactions) any Property,
including accounts and notes receivable (with or without recourse) and
sale-leaseback transactions, but otherwise excluding Permitted Liens.
"DOCUMENTATION AGENT" means, as of the Closing Date, BankBoston, N.A.,
an initial Lender. Documentation Agent shall have no responsibilities or duties
in addition to those of a Lender as provided under this Agreement.
"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
Borrower and the Agent.
8
"DUE DILIGENCE PACKAGE" means, with respect to any Property added to
the Unencumbered Asset Pool after the Closing Date, the due diligence and
underwriting materials customarily prepared by or for Borrower (or its
Subsidiaries) in connection with the acquisition of the Property, which due
diligence and underwriting materials shall be in the same format as prior Due
Diligence Packages previously delivered to Agent.
"D&P" means Duff & Xxxxxx Credit Rating Co.
"EBITDA" means, for any period, the sum determined in accordance with
GAAP, of the following, for any Person on a consolidated basis (in the case of
Borrower or the REIT, before deducting for minority interests in Borrower)
(a) the net income (or net loss) of such Person during such Period PLUS (b) all
amounts treated as expenses for depreciation, Interest Expense and the
amortization of intangibles of any kind to the extent included in the
determination of such net income (or loss), PLUS (c) all accrued taxes on or
measured by income to the extent included in the determination of such net
income (or loss); PROVIDED, HOWEVER, that net income (or loss) shall be computed
for these purposes without giving effect to extraordinary losses or
extraordinary gains.
"ELIGIBLE ASSIGNEE" means (a) a commercial bank or savings and loan
association or savings bank organized under the laws of the United States, or
any state thereof, and having a combined capital and surplus of at least
$500,000,000, (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 $500,000,000, 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,
(c) any Lender Affiliate, and (d) any other person which is an "accredited
investor" (as defined in Regulation D under the Securities Act) which extends
credit or buys loans as one of its businesses, including insurance companies,
mutual funds and lease finance companies in each case with a capital and surplus
of at least $500,000,000; provided, however, that in no event may an Affiliate
of Borrower be an Eligible Assignee.
"ENVIRONMENTAL CLAIMS" means all claims, however asserted, by any
Governmental Authority or other Person alleging potential liability or
responsibility for violation of any Environmental Law or for release or injury
to the environment or threat to public health, personal injury (including
sickness, disease or death), property damage, natural resources damage, or
otherwise alleging liability or responsibility for damages (punitive or
otherwise), cleanup, removal, remedial or response costs, restitution, civil or
criminal penalties, injunctive relief, or other type of relief, resulting from
or based upon (a) the presence, placement, discharge, emission or release
(including intentional and unintentional, negligent and non-negligent, sudden or
non-sudden, accidental or non-accidental placement, spills, leaks, discharges,
emissions or releases) of any Hazardous Material at, in, or from Property,
whether or not owned by Borrower, or (b) any other circumstances forming the
basis of any violation, or alleged violation, of any Environmental Law.
9
"ENVIRONMENTAL LAWS" means all federal, state or local laws, statutes,
common law duties, rules, regulations, ordinances and codes, together with all
administrative orders, directed duties, requests, licenses, authorizations and
permits of, and agreements with, any Governmental Authorities, in each case
relating to environmental, health, safety and land use matters; including the
Comprehensive Environmental Response, Compensation and Liability Act of 1980
("CERCLA"), the Hazardous Material Transportation Act, the Federal Water
Pollution Control Act, the Clean Air Act, the Federal Water Pollution Control
Act of 1972, the Solid Waste Disposal Act, the Federal Resource Conservation and
Recovery Act, the Occupational Safety and Health Act, the Toxic Substances
Control Act and the Emergency Planning and Community Right-to-Know Act, each as
amended or supplemented, and any analogous future or present local, municipal,
state or federal statutes and regulations promulgated pursuant thereto, each as
in effect as of the date of any determination.
"ENVIRONMENTAL PERMITS" is defined in Section 5.11(b).
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and the rules and regulations promulgated thereunder.
"ERISA AFFILIATE" means any trade or business (whether or not
incorporated) under common control with Borrower within the meaning of Section
414(b), 414(c) or 414(m) of the Code.
"ERISA EVENT" means (a) a Reportable Event with respect to a Qualified
Plan or a Multiemployer Plan; (b) a withdrawal by Borrower or any ERISA
Affiliate from a Qualified Plan subject to Section 4063 of ERISA during a plan
year in which it was a substantial employer (as defined in Section 4001(a)(2) of
ERISA); (c) a complete or partial withdrawal by Borrower or any ERISA Affiliate
from a Multiemployer Plan; (d) the filing of a notice of intent to terminate,
the treatment of a plan amendment as a termination under Section 4041 or 4041A
of ERISA or the commencement of proceedings by the PBGC to terminate a Qualified
Plan or Multiemployer Plan subject to Title IV of ERISA; (e) a failure by
Borrower or any member of the Controlled Group to make required contributions to
a Qualified Plan or Multiemployer Plan when due; (f) an event or condition which
might reasonably be expected to constitute grounds under Section 4042 of ERISA
for the termination of, or the appointment of a trustee to administer, any
Qualified Plan or Multiemployer Plan pursuant to Section 4042 of ERISA; (g) the
imposition of any liability under Title IV of ERISA, other than PBGC premiums
due but not delinquent under Section 4007 of ERISA, upon Borrower or any ERISA
Affiliate; (h) an application for a funding waiver or an extension of any
amortization period pursuant to Section 412 of the Code with respect to any
Plan; (i) a non-exempt prohibited transaction occurs with respect to any Plan
for which Borrower or any Subsidiary of Borrower may be directly or indirectly
liable; or (j) a violation of the applicable requirements of Section 404 or 405
of ERISA or the exclusive benefit rule under Section 401(a) of the Code by any
fiduciary or disqualified person with respect to any Plan for which Borrower or
any member of the Controlled Group may be directly or indirectly liable.
"ESTIMATED REMEDIATION COST" means all costs associated with
performing work to remediate contamination of real property or groundwater,
including engineering and other
10
professional fees and expenses, costs to remove, transport and dispose of
contaminated soil, costs to "cap" or otherwise contain contaminated soil, and
costs to pump and treat water and monitor water quality.
"EVENT OF DEFAULT" means any of the events or circumstances specified
in Section 8.1.
"EXCHANGE ACT" means the Securities and Exchange Act of 1934, as
amended, and regulations promulgated thereunder from time to time.
"EXTENSION REQUEST" means a written request from Borrower to Agent to
extend the Revolver Maturity Date as provided in Section 2.1(a)(iv)(1).
"FNMA/WASHINGTON MORTGAGE FACILITY DOCUMENTS" means all documents
relating to credit facilities in an amount up to $50,000,000 secured by
Properties not in the Unencumbered Asset Pool now or hereafter provided to
Borrower for general partnership purposes including (i) a Master Credit Facility
Agreement, to be entered into by, among Borrower, GP-Corp, AIMCO-LP, Inc., a
Delaware corporation, and certain other parties and Washington Mortgage
Financial Group, Ltd. and substantially in the form of the Master Credit
Facility Agreement delivered to Agent on January 8, 1998 (ii) all amendments,
extensions and renewals of any of the foregoing.
"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.
"FEDERAL RESERVE BOARD" means the Board of Governors of the Federal
Reserve System or any successor thereof.
"FINANCE SUBSIDIARY" means AIMCO Properties Finance Partnership, L.P.,
a Delaware limited partnership.
"FINANCE SUBSIDIARY LOAN" means, collectively, (i) the loan in the
amount of $95,387,690 made by the Finance Subsidiary to the REIT on or around
September 12, 1995, as evidenced by that certain Promissory Note, dated as of
September 12, 1995, executed by the
11
REIT, in favor of the Finance Subsidiary, which loan has been assumed by
Borrower pursuant to that certain Redemption Agreement, dated as of April 15,
1996, between the REIT and Borrower, among others, and (ii) the loan in the
amount of $3,000,000 made by the Finance Subsidiary to the REIT on or around
September 6, 1995, as evidenced by that certain Promissory Note, dated as of
September 6, 1995, executed by the REIT, in favor of the Finance Subsidiary.
"FORM 10-K FILING" means a Form 10-K filing required to be filed under
the applicable rules and regulations of the SEC.
"FORM 10-Q FILING" means a Form 10-Q filing required to be filed under
the applicable rules and regulations of the SEC.
"FORM 1001" is defined in Section 3.1(f)(i).
"FORM 4224" is defined in Section 3.1(f)(i).
"FUNDS FROM OPERATIONS" means, with respect to Borrower, the REIT, and
their Subsidiaries on a consolidated basis, net income calculated in accordance
with GAAP, excluding gains or losses from debt restructuring and sales of
property, plus real estate depreciation and amortization, plus amortization
associated with the purchase of property management companies, and after
adjustments for unconsolidated partnerships and joint ventures (with adjustments
for unconsolidated partnerships and joint ventures calculated to reflect funds
from operations on the same basis), as interpreted by the National Association
of Real Estate Investment Trusts in its March, 1995, White Paper on Funds From
Operations.
"GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board and the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board (or agencies with similar functions of
comparable stature and authority within the accounting profession), or in such
other statements by such other entity as may be in general use by significant
segments of the U.S. accounting profession, which are applicable to the
circumstances as of the date of determination.
"GOVERNMENTAL AUTHORITY" means any nation or government, any state or
other political subdivision thereof, any central bank (or similar monetary or
regulatory authority) thereof, any entity exercising executive, legislative,
judicial, regulatory or administrative functions of or pertaining to government,
and any corporation or other entity owned or controlled, through stock or
capital ownership or otherwise, by any of the foregoing.
"GP CORP" means AIMCO-GP, Inc., a Delaware corporation. GP Corp is a
Wholly-Owned Subsidiary of the REIT and is the general partner of Borrower.
"GROSS ASSET VALUE" means, with respect to Borrower, the REIT and
their respective Subsidiaries on a consolidated basis, and without double
counting any item, the sum of: (a) Borrower's, REIT's, or their respective
Subsidiaries' Adjusted EBITDA in respect of
12
Qualified Properties for the prior four calendar quarter period through the end
of the most recent quarter, capitalized at the Apartment Property Cap Rate, PLUS
(b) Borrower's, REIT's, or their respective Subsidiaries' share of Adjusted
EBITDA in respect of Unqualified Properties for the prior four calendar quarter
period through the end of the most recent quarter, capitalized at the Apartment
Property Cap Rate, PLUS (c) an amount equal to the EBITDA of the Management
Entities from the commencement of the prior calendar quarter period annualized
and then multiplied by 8.0, PLUS (d) all cash (including Restricted Cash) and
the fair market value of all Cash Equivalents held as of the last day of such
quarter. For purposes of the definition of Gross Asset Value with respect to
any Stabilized Property which has been owned for fewer than four Calendar
Quarters, Adjusted EBITDA shall be adjusted in respect of such Property by
annualizing the Net Operating Income for the one, two or three preceding
Stabilized calendar quarters, as applicable.
"GUARANTOR SUBSIDIARIES" means AIMCO Holdings QRS, Inc., a Delaware
corporation, AIMCO/OTC QRS, Inc., a Delaware corporation, AIMCO Holdings, L.P.,
a Delaware limited partnership, AIMCO-GP, Inc., a Delaware corporation,
AIMCO-LP, Inc., a Delaware corporation, AIMCO Properties Finance Corp., a
Delaware corporation, AIMCO Somerset, Inc., a Delaware corporation, NHP
Management Company, a District of Columbia corporation, Property Asset
Management Services, L.P., a Delaware limited partnership, Property Asset
Management Services, Inc., a Delaware corporation, and Property Asset Management
Services-CA, LLC, a California limited liability company, together with such
other Persons that execute and deliver to the Agent for the ratable benefit of
the Lenders a guaranty of the Obligations in the form of EXHIBIT F1 if the
Person is a qualified REIT subsidiary or EXHIBIT F2 if the Person is not a
qualified REIT subsidiary.
"GUARANTY OBLIGATION" means, as applied to any Person, any direct or
indirect liability of that Person with respect to any Indebtedness, lease,
dividend, letter of credit or other obligation (the "primary obligation") of
another Person (the "primary obligor"), including any obligation of that Person,
whether or not contingent, (a) to purchase, repurchase or otherwise acquire such
primary obligations or any Property constituting direct or indirect security
therefor, or (b) to advance or provide funds (i) for the payment or discharge of
any such primary obligation, or (ii) to maintain working capital or equity
capital of the primary obligor or otherwise to maintain the net worth or
solvency or any balance sheet item, level of income or financial condition of
the primary obligor, or (c) to purchase securities, other Properties or services
primarily for the purpose of assuring the owner of any such primary obligation
of the ability of the primary obligor to make payment of such primary
obligation, or (d) otherwise to assure or hold harmless the holder of any such
primary obligation against loss in respect thereof. Except as set forth in the
definition of "Total Indebtedness" below, the amount of any Guaranty Obligation
shall be deemed equal to the stated or determinable amount of the primary
obligation in respect of which such Guaranty Obligation is made or, if not
stated or if indeterminable, the maximum reasonably anticipated liability in
respect thereof.
"HAZARDOUS MATERIALS" means (i) all those substances which are
regulated by, or which may form the basis of liability under, any Environmental
Law, including all substances identified under any Environmental Law as a
pollutant, contaminant, hazardous waste, hazardous
13
constituent, special waste, hazardous substance, hazardous material, or toxic
substance, or petroleum or petroleum-derived substance or waste, (ii) any other
materials or pollutants that (a) pose a hazard to any Property of Borrower or to
Persons on or about such Property or (b) cause such Property to be in violation
of any Environmental Laws, (iii) asbestos in any form which is or could become
friable, urea formaldehyde foam insulation, electrical equipment which contains
any oil or dielectric fluid containing levels of polychlorinated biphenyls in
excess of fifty parts per million, and (iv) any other chemical, material,
substance, or waste, exposure to which is prohibited, limited, or regulated by
any Governmental Authority or may or could pose a hazard to the health and
safety of the owners, occupants, or any Persons surrounding the relevant
Property.
"HISTORICAL VALUE" means the purchase price of any Qualified Property
(including improvements) and ordinary related purchase transaction costs, plus
the cost of subsequent Capital Improvements made by Borrower or any Wholly Owned
Subsidiary, less any provision for losses, all as determined in accordance with
GAAP. If the Qualified Property is purchased as part of a group of properties,
the Historical Value shall be calculated based upon a reasonable allocation of
the aggregate purchase price by Borrower or any Wholly Owned Subsidiary for all
purposes, consistent with GAAP.
"IMPUTED CAPITAL EXPENDITURES" means, for any four (4) consecutive
quarter period, an amount equal to the average number of apartment units owned
by Borrower or the REIT or their Wholly Owned Subsidiaries during such period,
multiplied by (a) with respect to the units in Class A or B market-rate
apartment projects, an amount equal to $300 per apartment unit, and (b) with
respect to the units in Class C or affordable or rent-restricted apartment
projects, an amount equal to $400 per apartment unit. With respect to apartment
units in any Unqualified Property, the calculation of Imputed Capital
Expenditures shall include the number of such units which is proportionate to
the ownership interest of Borrower or its Wholly Owned Subsidiaries in the
Unqualified Property. For any period of less than four (4) consecutive
quarters, the amount of Imputed Capital Expenditures will be appropriately
prorated.
"INDEBTEDNESS" of any Person means without duplication, (a) all
indebtedness for borrowed money, (b) all obligations issued, undertaken or
assumed as the deferred purchase price of Property or services, (c) all
reimbursement obligations with respect to surety bonds, letters of credit,
bankers' acceptances and similar instruments (in each case, to the extent
material or noncontingent), (d) all obligations evidenced by notes, bonds,
debentures or similar instruments, including obligations so evidenced incurred
in connection with the acquisition of Properties, (e) all indebtedness created
or arising under any conditional sale or other title retention agreement, or
incurred as financing, in either case with respect to Properties acquired by the
Person (even though the rights and remedies of the seller or bank under such
agreement in the event of default are limited to repossession or sale of such
properties), (f) all Capital Lease Obligations, (g) all net obligations with
respect to Rate Contracts, (h) all obligations (other than, in the case of the
REIT, the obligation to acquire Units in exchange for shares of common Stock of
the REIT) to purchase, redeem, or acquire any Stock of such Person or its
Affiliates that, by its terms or by the terms of any security into which it is
convertible or exchangeable, is, or upon the happening of any event or the
passage of time would be, required to be redeemed or repurchased
14
by such Person or its Affiliates, including at the option of the holder, in
whole or in part, or has, or upon the happening of an event or passage of time
would have, a redemption or similar payment due, before the date which is the
one (1) year anniversary of the then effective Revolver Maturity Date (i) all
indebtedness referred to in clauses (a) through (h) above secured by (or for
which the holder of such Indebtedness has an existing right, contingent or
otherwise, to be secured by) any Lien upon or in Properties (including accounts
and contract rights) owned by such Person, even though such Person has not
assumed or become liable for the payment of such Indebtedness, and (j) all
Guaranty Obligations in respect of indebtedness or obligations of others of the
kinds referred to in clauses (a) through (h) above.
"INDEMNIFIED LIABILITIES" is defined in Section 10.5.
"INDEMNIFIED PERSON" is defined in Section 10.5.
"INITIAL UNENCUMBERED ASSET POOL" means the Properties designated on
EXHIBIT A.
"INSOLVENCY PROCEEDING" means (a) 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 debtors, or (b) 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 U.S. Federal, State or foreign
law.
"INTEREST EXPENSE" means, for any period, gross interest expense
incurred for the period (including all commissions, discounts, fees and other
charges in connection with standby letters of credit and similar instruments),
including any amounts as capitalized interest, for Borrower, the REIT and their
respective Subsidiaries and the portion of the upfront costs and expenses for
Rate Contracts entered into by Borrower, the REIT and their respective
Subsidiaries (to the extent not included in gross interest expense) fairly
allocated to such Rate Contracts as expenses for such period, as determined in
accordance with GAAP; provided, that, all interest expense accrued by Borrower,
the REIT and their respective Subsidiaries during such period, even if not
payable on or before the Maturity Date, shall be included within "Interest
Expense." Notwithstanding the foregoing, interest accrued under any
Intra-Company Debt shall not be included within "Interest Expense" for any
purposes hereof.
"INTEREST PAYMENT DATE" means, with respect to any Base Rate Loan and
any LIBOR Loan, the first day of each month.
"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), two (2), three (3) or six (6) months thereafter,
as selected by Borrower in its Borrowing Notice or Conversion/Continuation
Notice; PROVIDED that:
15
(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
Revolver Maturity Date or after the Conversion Date, the Term Loan Maturity
Date.
"INTRA-COMPANY DEBT" means Indebtedness (whether book-entry or
evidenced by a term, demand or other note or other instrument) owed by Borrower,
the REIT or any of their respective Subsidiaries to Borrower, the REIT or any of
their respective Subsidiaries.
"INTRA-COMPANY LOAN SUBORDINATION AGREEMENT" means a Subordination
Agreement, in the form attached hereto as Exhibit L, with respect to
Intra-Company Debt (including the Finance Subsidiary Loan), in favor of the
Agent for the ratable benefit of the Lenders, and entered into by each of the
"Lenders" designated on SCHEDULE 1.1B and Borrower.
"INVESTMENT" means (a) any purchase or acquisition of any capital
stock, equity interest, asset, obligation or other security of or any interest
in, any Person, (b) any advance, loan, extension of credit or capital
contribution to any Person, (c) any purchase, lease, or other acquisition of
Property for investment purposes or for the purpose of resale or leasing to
another Person, and (d) any contingent or other agreement to do any of the
foregoing.
"INVESTMENT GRADE CREDIT RATING" means that Borrower's Credit Rating
from at least two Rating Agencies is at least BBB- (or its equivalent) or
better.
"IRS" means the Internal Revenue Service.
"ISSUING LENDER" means BofA, in its capacity as issuer of Letters of
Credit.
"KNOWLEDGE OF BORROWER" means the actual knowledge (after reasonable
inquiry) of any of the officers of Borrower or the REIT and each other Person
with executive responsibility for any aspect of Borrower's or the REIT's
business.
"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.
16
"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 Borrower and the Agent.
"LETTER OF CREDIT" means any letter of credit issued pursuant hereto
by the Issuing Lender for the account of Borrower for general corporate
purposes. Each Letter of Credit shall be for a term of not more than one year
from the date of issuance thereof, but shall in any event expire prior to the
one year anniversary of the Revolver Maturity Date.
"LETTER OF CREDIT LIABILITY" means, as of any date of determination,
all then existing liabilities of Borrower to the Issuing Lender in respect of
Letters of Credit, whether such liability is contingent or fixed, and shall
consist in principal amount of the sum of (a) the available amount under all
Letters of Credit (the determination of such amount to assume compliance with
all conditions for drawing) and (b) the aggregate amount which has then been
paid by, and not been reimbursed by Borrower to, the Issuing Lender under all
Letters of Credit.
"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 banks in the London U.S. dollar inter-bank
market at approximately 11:00 a.m., London time, on the first Business Day after
the Borrowing Notice or Conversion/Continuation Notice 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 banks 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.
17
"LIEN" means any mortgage, deed of trust, security agreement, pledge,
hypothecation, assignment, charge or deposit arrangement, encumbrance, lien
(statutory or other) or preference, priority or other security interest or
preferential arrangement of any kind or nature whatsoever (including those
created by, arising under or evidenced by any conditional sale or other title
retention agreement, the interest of a lessor under a Capital Lease, any
financing lease having substantially the same economic effect as any of the
foregoing, or the filing of any financing statement naming the owner of the
asset to which such lien relates as debtor, under the UCC or any comparable law)
and any contingent or other agreement to provide any of the foregoing.
"LOAN" or "LOANS" means any Revolver or Term Advance, as applicable.
"LOAN DOCUMENTS" means this Agreement, the Notes, the REIT Guaranty
Documents, and all other documents delivered to the Agent or the Lenders in
connection therewith.
"MANAGEMENT COMPANY ATTRIBUTABLE INTEREST EXPENSE" means, for any
period of determination, that portion of Interest Expense which is solely
attributable to borrowings under this Agreement in respect of the amounts
determined pursuant to clause (Z) of the definition of Total Available
Commitments. Management Company Attributable Interest Expense shall be set
forth in each Compliance Certificate and shall be an amount equal to the
aggregate amount of Interest Expense for such period multiplied by a fraction,
the numerator of which is the lesser of (A) $12.5 million and (B) the amount
calculated under clause (Z) of the definition of Total Available Commitments for
such period, and the denominator of which is an amount equal to the aggregate
outstanding principal amount of Unsecured Debt of Borrower, the REIT and their
respective Subsidiaries for such period.
"MANAGEMENT ENTITY" means any Subsidiary of Borrower or the REIT which
is primarily engaged in the business of managing multifamily apartment projects
or other real estate projects, including, without limitation, the following:
NHP Management Company, a District of Columbia corporation, Property Asset
Management Services, L.P., a Delaware limited partnership, Property Asset
Management Services, Inc., a Delaware corporation, and Property Asset Management
Services-CA, LLC, a California limited liability company.
"MARGIN STOCK" means "margin stock" as such term is defined from time
to time in Regulation G, T, U or X of the Federal Reserve Board.
"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 Borrower, the REIT and their
respective Subsidiaries, taken as a whole, (b) the ability of Borrower, the REIT
and their respective Subsidiaries to perform under any Loan Document and avoid
any Event of Default, or (c) the ability of the REIT and the Subsidiaries party
thereto to perform under the REIT Guaranty Documents.
18
"MAXIMUM UNSECURED INDEBTEDNESS" means, as of any date of
determination, the aggregate amount of Unsecured Debt of Borrower on a
consolidated basis, which amount shall not exceed an amount equal to the sum of
(i) the amount set forth in clause (a)(W) of the definition of the Total
Available Commitments, minus (ii) the amount set forth in clause (a)(X) of the
definition of Total Available Commitments, minus (iii) the aggregate outstanding
principal amount of the Revolver or Term Loan.
"MOODY'S" means Xxxxx'x Investors Service, a Delaware corporation, and
its successors and assigns.
"MULTIEMPLOYER PLAN" means a "multiemployer plan" (within the meaning
of Section 4001(a)(3) of ERISA) and to which any member of the Controlled Group
makes, is making, or is obligated to make contributions or, during the preceding
three calendar years, has made, or been obligated to make, contributions.
"NET ISSUANCE PROCEEDS" means, in respect of any issuance of Stock,
Units or Indebtedness by Borrower, the REIT or any of their respective
Subsidiaries, the proceeds in cash or Cash Equivalents (or, for purposes of
Section 7.16(a), in the case of any issuance of Units in exchange for Property,
the fair market value of the Property so acquired) received by Borrower, the
REIT or any of their respective Subsidiaries upon or substantially
simultaneously with such issuance, net of (a) the direct costs of such issuance
then payable by the recipient of such proceeds (excluding amounts payable to
Borrower, the REIT or any Affiliate of Borrower or the REIT) (b) sales, use and
other taxes paid or payable by such recipient as a result thereof, and (c) in
the case of the issuance of indebtedness secured by any Property the portion of
such proceeds used to repay Indebtedness previously incurred and secured by the
same Property.
"NET OPERATING INCOME" means for any period, as to any Property
(a) all gross revenues received from the operation of such Property during such
period (including, without limitation, payments received from insurance on
account of business or rental interruption and condemnation proceeds from any
temporary use or occupancy, in each case to the extent attributable to the
period for which such Net Operating Income is being determined, but excluding
any proceeds from the sale or other disposition of any part or all of such
Property; or from any financing or refinancing of such Property; or from any
condemnation of any part or all of such Property (except for temporary use or
occupancy); or on account of a casualty to the property (other than payments
from insurance on account of business or rental interruption); or any security
deposits paid under leases of all or a part of such Property, unless forfeited
by tenants; and similar items or transactions the proceeds of which under GAAP
are deemed attributable to capital), MINUS (b) all reasonable and customary
property maintenance and repair costs, leasing and administrative costs,
management fees assumed to be four percent (4%) of gross receipts (whether or
not actually paid pursuant to a separate management contract or otherwise) and
real estate taxes and insurance premiums actually paid by Borrower during such
period with respect to such Property (exclusive of Capital Expenditures). There
shall be no deduction for any expense not involving a cash expenditure, such as
depreciation.
19
"NET WORTH" means at any time the Gross Asset Value minus all
liabilities (as determined in accordance with GAAP) of Borrower, the REIT and
their respective Subsidiaries, inclusive of their respective shares of
Indebtedness of any unconsolidated subsidiaries. Notwithstanding the foregoing,
the liabilities of the REIT shall include the redemption amount payable under
any preferred Stock of the REIT which is optionally or mandatorily redeemable at
any time on or prior to one year after the Revolver Maturity Date (or, if
Borrower elects to convert the Revolver into the Term Loan, on or prior to one
year after the Term Loan Maturity Date).
"NHP/XXXXXX FINANCING" means those certain 27 mortgage loans in the
aggregate principal amount of approximately $92,000,000 made by Xxxxxx Brothers
Holdings Inc. d/b/a Xxxxxx Capital, a division of Xxxxxx Brothers Holdings Inc.,
to the following entities: the Borrower, Castle Rock Joint Venture, a Texas
joint venture; The Crossings II Limited Partnership, a Georgia limited
partnership; National Housing Partnership Realty Fund IV, a Maryland limited
partnership; P.A.C. Land II Limited Partnership, an Ohio limited partnership;
SAHF II Limited Partnership, a Delaware limited partnership; TAHF II Limited
Partnership, a Delaware limited partnership; and West Lake Arms Limited
Partnership, a Delaware limited partnership.
"NON-GUARANTOR SUBSIDIARIES" is defined in Section 5.26.
"NOTE" means a promissory note of Borrower payable to the order of a
Lender in substantially the form of EXHIBIT D.
"NOTICE OF LIEN" means any "notice of lien" or similar document
intended to be filed or recorded with any court, registry, recorder's office,
central filing office or other Governmental Authority for the purpose of
evidencing, creating, perfecting or preserving the priority of a Lien securing
obligations owing to a Governmental Authority.
"NYSE" means the New York Stock Exchange.
"OBLIGATIONS" means all Loans, and other Indebtedness, advances,
debts, liabilities, obligations, covenants and duties owed by Borrower, 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.
"ORDINARY COURSE OF BUSINESS" means, in respect of any transaction
involving a Person, the ordinary course of such Person's business, substantially
as intended to be conducted by any such Person as of the Closing Date, and
undertaken by such Person in good faith and not for purposes of evading any
covenant or restriction in any Contractual Obligation of such Person.
20
"ORGANIZATIONAL CHART" means the list of Subsidiaries attached as
SCHEDULE 5.7 hereto showing the REIT, Borrower, all of their Subsidiaries and
their interests in the Management Entities and any unconsolidated subsidiaries
to the extent such Persons' Indebtedness is taken into account in the
calculation of Net Worth, as the same may be modified pursuant hereto.
"ORGANIZATIONAL DOCUMENTS" means: (a) for any corporation, the
certificate or articles of incorporation, the bylaws, any supplementary
articles, certificate of determination or instrument relating to the rights of
preferred shareholders, and all duly adopted resolutions of the board of
directors (or any committee thereof) of such corporation; (b) for any
partnership, the partnership agreement, the certificate and/or statement of
partnership and all duly adopted authorizations of the partners thereof; (c) for
any limited liability company, the articles of organization and operating
agreement therefor and duly adopted authorizations or resolutions of the members
thereof; and (d) for any trust, the declaration or agreement of trust.
"OTHER TAXES" is defined in Section 3.1(b).
"OUTSTANDING AMOUNT" means, as of any date of determination, the
aggregate principal amount of all outstanding Loans (including, without
limitation, the aggregate Letter of Credit Liability).
"OUTSIDE PERIOD LETTER OF CREDIT" means any Letter of Credit having an
expiry date which is after the Revolver Maturity Date.
"PARTICIPANT" is defined in Section 10.8(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 10.2.
"PBGC" means the Pension Benefit Guaranty Corporation or any entity
succeeding to any or all of its functions under ERISA.
"PERMITTED INDEBTEDNESS" is defined in Section 7.2.
"PERMITTED LIENS" is defined in Section 7.1.
"PERSON" means an individual, partnership, corporation, business
trust, joint stock company, trust, limited liability company, unincorporated
association, joint venture or governmental authority.
"PLAN" means an employee benefit plan (defined in Section 3(3) of
ERISA) which Borrower or any member of the Controlled Group sponsors or
maintains or to which Borrower or any member of the Controlled Group makes, is
making or is obligated to make contributions, and includes any Multiemployer
Plan or Qualified Plan.
21
"PRICING CONVERSION DATE" means each date on which Borrower 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.
"PRO FORMA REVOLVER DEBT SERVICE" means, as of any date of
determination, the sum of annual pro forma payments of principal and interest
which would be due (based on a monthly repayment schedule) on an initial
principal sum equal to the Revolver DSC Principal Limit based on a mortgage
constant calculated upon the Assumed Interest Rate at such time and a
twenty-five (25) year amortization period.
"PROPERTY" means any estate or interest in any kind of property or
asset, whether real, personal or mixed, and whether tangible or intangible.
"PROPERTY LIABILITY" means, with respect to any Unencumbered Asset
Pool Property, the aggregate amount of the loss, damage or other liability or
reduction in value associated with such Property as a result of any
Environmental Claims or other adverse defect, condition, hazard, condemnation,
violation or other circumstance with respect to such Property which shall be
disclosed in each Compliance Certificate required to be delivered by Borrower
under this Agreement.
"QUALIFIED MANAGEMENT ENTITY" means, on any date of determination, a
Management Entity (a) in which Borrower or its Subsidiaries owns at least a 95%
interest in the capital and profits thereof, (b) which is a Guarantor
Subsidiary, and (c) which is controlled, directly or indirectly, by (i) Xxxxx X.
Xxxxxxxxx, (ii) Xxxxx X. Xxxxxxxxx, (iii) any Person controlled by Xxxxx X.
Xxxxxxxxx and Xxxxx X. Xxxxxxxxx, (iv) any other Person reasonably satisfactory
to the Requisite Lenders, or (v) any combination of the foregoing clauses
(i)-(iv).
"QUALIFIED PLAN" means a pension plan (as defined in Section 3(2) of
ERISA) intended to be tax-qualified under Section 401(a) of the Code and which
any member of the Controlled Group sponsors, maintains, or to which it makes, is
making or is obligated to make contributions, or in the case of a multiple
employer plan (as described in Section 4064(a) of ERISA) has made contributions
at any time during the immediately preceding period covering at least five (5)
plan years, but excluding any Multiemployer Plan.
"QUALIFIED PROPERTY" means a Property comprising a multifamily
apartment project which is 100% owned in fee simple title directly or indirectly
by Borrower and its Wholly Owned Subsidiaries.
"QUALIFIED WHOLLY-OWNED SUBSIDIARY" means any Wholly-Owned Subsidiary
which, immediately prior to the transfer of Property thereto pursuant to Section
2.13(a)(ii), has no assets and no liabilities, and is, or will become, a
Guarantor Subsidiary.
"RATE CONTRACTS" means interest rate and currency swap agreements,
cap, floor and collar agreements, interest rate insurance, currency spot and
forward contracts and other
22
agreements or arrangements designed to provide protection against fluctuations
in interest or currency exchange rates.
"RATING AGENCY" means any of S&P, Moody's or D&P.
"RECOURSE" means, with respect to any Indebtedness or Guaranty
Obligation of any Person, that such Indebtedness or Guaranty Obligation is
recourse to the assets and/or properties of such Person; provided, however, that
with respect to nonrecourse Indebtedness secured by real property which contains
limitations to the nonrecourse nature of the obligation, such limited
nonrecourse obligations shall not be deemed "Recourse" if and to the extent the
nonrecourse exceptions are for liability of such Person for any of the following
under any applicable loan documentation: (a) fraud, waste, material
misrepresentation, or wilful misconduct; (b) indemnification with respect to
environmental matters or failure to comply with Hazardous Materials laws; (c)
failure to maintain required insurance policies; (d) misapplication of insurance
proceeds, condemnation awards and tenant security deposits; (e) breach of
covenants relating to unpermitted transfers or encumbrances of real property or
other collateral; (f) misappropriation or misapplication of property income; (g)
breach of covenants relating to unpermitted transfers of interests in a Person;
(h) failure to deliver books and records; (i) failure to pay transfer fees or
changes; or (j) other matters substantially the same as those set forth in
clauses (a) through (i) above. An obligation of a Person that is without
Recourse to the assets and/or properties of such Person but becomes Recourse
upon the occurrence of the events or circumstances described in clauses (a)
through (i) above shall not be considered a "Recourse" obligation unless such
events or circumstances have occurred.
"REFERENCE LENDER" means BofA.
"REIT" means Apartment Investment and Management Company, a Maryland
corporation.
"REIT GUARANTY DOCUMENTS" means a guaranty of the Obligations, in the
form of EXHIBIT F1 and EXHIBIT F2 attached hereto, and any documents relating to
the guaranty as the Agent requires, duly executed by the REIT and the Guarantor
Subsidiaries, together with the guaranties delivered pursuant to Section 6.13(c)
and Section 7.7(c).
"REIT STATUS" means, with respect to any Person, (a) the qualification
of such Person as a real estate investment trust under Sections 856 through 860
of the Code, and (b) the applicability to such Person and its shareholders of
the method of taxation provided for in Sections 857 ET SEQ. of the Code.
"REPORTABLE EVENT" means any of the events set forth in section
4043(b) of ERISA or the regulations thereunder, a withdrawal from a Plan
described in section 4063 of ERISA, a cessation of operations described in
section 4068(f) of ERISA, an amendment to a Plan necessitating the posting of
security under section 401(a)(29) of the Code, or a failure to make when due a
payment required by section 412(m) of the Code and section 302(e) of ERISA.
23
"REQUIREMENT OF LAW" means, as to any Person, any law (statutory or
common), treaty, rule or regulation or determination of an arbitrator or of a
Governmental Authority, in each case applicable to or binding upon the Person or
any of its Property or to which the Person or any of its Property is subject.
"REQUISITE LENDERS" means, as of any date of determination, (a) if
there is only one Lender hereunder having a minimum Commitment of $5,000,000,
that Lender, and (b) if there are two (2) or more Lenders hereunder each having
a minimum Commitment of $5,000,000, 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 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 Commitment.
"RESPONSIBLE OFFICER" means, in relation to the REIT, the Chief
Executive Officer, or the President or any Executive Vice President or Senior
Vice President of the REIT, and, in relation to Borrower, the Chief Executive
Officer or any Vice President of GP Corp, in its capacity as the general partner
of Borrower, and/or any other officer of the REIT or GP Corp having
substantially the same authority and responsibility, or, with respect to
financial matters, the Chief Financial Officer or the Treasurer of the REIT or
GP Corp, respectively, or any other officer having substantially the same
authority and responsibility.
"RESTRICTED CASH" means any cash pledged by Borrower, the REIT or any
of their respective Subsidiaries to other lenders, as indicated in the line item
for "restricted cash" in the REIT's balance sheet from time to time.
"REVOLVER" is defined in Section 2.1(a).
"REVOLVER TO TERM CERTIFICATE" means a certificate signed by at least
two Responsible Officers in connection with the conversion of the Revolver into
the Term Facility, substantially in the form attached hereto as Exhibit C.
"REVOLVING COMMITMENT" means, with respect to any Lender, the amount
set forth opposite a Lender's name in SCHEDULE 2.1(a)(i), which may be reduced
or increased as a result of one or more assignments pursuant to Section 10.8,
and which includes a Lender's participation in the Letter of Credit Liability.
"REVOLVER DSC RATIO" means the ratio determined for each fiscal
quarter during the term of the Revolver by dividing Unencumbered Asset Pool NOI
for the period from the commencement of the then current year through the end of
the most recent quarter by the aggregate Pro Forma Revolver Debt Service for
such period.
"REVOLVER DSC PRINCIPAL LIMIT" shall mean the principal balance which,
if it were outstanding under the Revolver, would produce a Revolver DSC Ratio
equal to 1.75 to 1.0.,
24
determined for any fiscal quarter based on the Revolver DSC Ratio for the period
from the beginning of the then current year through the end of the most recent
quarter.
"REVOLVER MATURITY DATE" means the maturity date of the Revolver which
shall be January 26, 2000, unless extended to January 26, 2001, and then
extended thereafter for successive one year periods, in each case as provided in
Section 2.1(a)(i), subject, however, to earlier acceleration pursuant to the
provisions of the Loan Documents.
"REVOLVING LOAN" is defined in Section 2.1(a).
"S&P" shall mean Standard & Poor's Ratings Group and its successors
and assigns.
"SCHEDULED AMORTIZATION" means, with respect to any Person, the sum,
as of any date of determination, of the current portion (I.E., such portion as
is scheduled to be paid by the obligor thereof within twelve (12) months from
the date of determination) of all regularly scheduled amortization payments due
on such Person's long-term fully amortizing mortgage Indebtedness (exclusive of
balloon payments).
"SEC" means the Securities and Exchange Commission, or any successor
thereto.
"SEC REPORT" means all filings on Form 10-K, Form 10-Q or Form 8-K
with the SEC made by the REIT pursuant to the Exchange Act and delivered to
Agent prior to the date hereof.
"SOLVENT" means, as to any Person at any time, that (a) the fair value
of the Property of such Person is greater than the amount of such Person's
liabilities (including disputed, contingent and unliquidated liabilities) as
such value is established and liabilities evaluated for purposes of Section
101(31) of the Bankruptcy Code and, in the alternative, for purposes of the
Uniform Fraudulent Transfer Act; (b) the present fair saleable value of the
Property of such Person is not less than the amount that will be required to pay
the probable liability of such Person on its debts as they become absolute and
matured; (c) such Person is able to realize upon its Property and pay its debts
and other liabilities (including disputed, contingent and unliquidated
liabilities) as they mature in the normal course of business; (d) such Person
does not intend to, and does not believe that it will, incur debts or
liabilities beyond such Person's ability to pay as such debts and liabilities
mature; and (e) such Person is not engaged in business or a transaction, and is
not about to engage in business or a transaction, for which such Person's
property would constitute unreasonably small capital.
"STABILIZED" means, with respect to any Qualified Property and as of
any date of determination, the date on which the occupancy level is at least
eighty-five percent (85%) for the most recent complete quarter.
"STOCK" means all shares, options, warrants, interests, participations
or other equivalents (regardless of how designated) of or in a corporation or
equivalent entity, whether
25
voting or nonvoting, including common stock, preferred stock, perpetual
preferred stock or any other "equity security" (as such term is defined in Rule
3a11-1 of the General Rules and Regulations promulgated by the SEC under the
Exchange Act).
"SUBSIDIARY" of a Person means any corporation, association,
partnership, joint venture, trust or other business entity of which more than
fifty percent (50%) of the Stock or other equity or beneficial interests (in the
case of Persons other than corporations) is owned or controlled directly or
indirectly by the Person, or one or more of the Subsidiaries of the Person, or a
combination thereof (regardless of whether such Stock or other interests are
entitled to voting rights). As of the date hereof, the Organizational Chart
lists all of the Subsidiaries of the REIT and Borrower.
"TAXES" is defined in Section 3.1(a).
"TERM ADVANCE" is defined in Section 2.1(c).
"TERM COMMITMENT" means, with respect to any Lender, the amount set
forth opposite the Lender's name in SCHEDULE 2.1(a)(i), which amount may be
reduced or increased as a result of one or more assignments pursuant to Section
10.8.
"TERM LOAN" is defined in Section 2.1(c).
"TERM LOAN MATURITY DATE" means the date which is three (3) years
after the Conversion Date, unless earlier accelerated as provided in the Loan
Documents.
"TOTAL AVAILABLE COMMITMENTS" means an amount which shall not exceed
the lesser of the Aggregate Commitment or an amount determined as follows:
(a) prior to the Conversion Date and for any period of determination,
an amount equal to the sum of:
(W) the lesser of
(A) the aggregate principal amount of Loans that could have
been outstanding during the most recent prior four quarters, as to which a
Compliance Certificate has been delivered, in order for the ratio of
Unencumbered Asset Pool Value to Unsecured Debt for such period to equal 1.75:1,
and
(B) the Revolver DSC Principal Limit for the period in
question;
LESS (X) the aggregate amount of all Property Liabilities
(without double counting any Property Liabilities which have previously been
taken into account in calculating Unencumbered Asset Pool Value) and subject to
the provisions of Section 2.13(a)(i));
26
LESS (Y) the aggregate amount of all Unsecured Debt of Borrower
(on a consolidated basis);
PLUS (Z) an amount equal to 20% of Unencumbered Management Entity
Value; provided, however, that in no event may more than 25% of Total Available
Commitments ever be attributed to Unencumbered Management Entity Value;
(b) on and after the Conversion Date, an amount equal to the
outstanding balance of the Revolver on the Conversion Date (as reduced by the
aggregate amount of applicable amortization payments required under Section
2.6(b)).
"TOTAL INDEBTEDNESS" means as of any date of determination and in
respect of any Person, all outstanding Indebtedness, and in the case of clause
(iii) below, Indebtedness available to be drawn, of a Person, and shall include,
without limitation: (i) such Person's share of the Indebtedness of any
partnership or joint venture in which such Person directly or indirectly holds
any interest; (ii) any Recourse or contingent obligations, directly or
indirectly, of such Person with respect to any Indebtedness of such partnership
or joint venture in excess of its proportionate share and (iii) such Person's
liability in respect of letters of credit, whether such liability is contingent
or fixed (such liability to be determined on the assumption that all conditions
for drawing upon such letters of credit have been complied with).
Notwithstanding the foregoing, Intra-Company Debt shall be excluded from the
calculation of "Total Indebtedness" but shall not otherwise be excluded as
Indebtedness for any other purpose hereof.
"UNENCUMBERED ASSET POOL" means the Initial Unencumbered Asset Pool
which are not subject to or affected by any Liens, Indebtedness, negative
pledges (other than the negative pledge given under Section 7.1 of this
Agreement) or Liens on any partnership or ownership interests in Borrower or its
Wholly Owned Subsidiaries, including such other Property as may be included
within the Unencumbered Asset Pool in accordance with Section 2.13 and excluding
any Property which is no longer included in the Unencumbered Asset Pool in
accordance with Section 2.13 and the other terms of this Agreement.
"UNENCUMBERED ASSET POOL NOI" means, for any period, with respect to
the Unencumbered Asset Pool, the sum of (X) aggregate Net Operating Income
during the preceding four quarters (annualized in the case of Properties that
have been Stabilized for only one, two or three preceding calendar quarters),
MINUS (Y) the aggregate amount of Capital Expenditures for all such Properties
for the corresponding periods in an amount equal to $300 per apartment unit per
annum in each of such Properties, during such period, or annualized period, as
applicable.
"UNENCUMBERED ASSET POOL NOI TO UNSECURED INTEREST RATIO" means, for
any period of determination, the ratio computed as follows:
Unencumbered Asset Pool NOI [Unencumbered Asset Pool NOI]
to Unsecured Interest Ratio = divided by
Consolidated Unsecured Interest
27
"UNENCUMBERED ASSET POOL VALUE" means, for any period of
determination, with respect to the Properties in the Unencumbered Asset Pool, an
amount equal to the sum of (i) Unencumbered Asset Pool NOI divided by the
Apartment Cap Rate, plus (ii) the Historical Value of any Qualified Properties
which have not been owned for a full calendar quarter; provided, however that in
no event may more than twenty-five percent (25%) of Unencumbered Asset Pool
Value be attributed to Historical Value.
"UNENCUMBERED MANAGEMENT ENTITY VALUE" means, as of any date of
determination, an amount equal to (X) Borrower's proportionate share of the
aggregate EBITDA from all Qualified Management Entities for the most recent
complete calendar quarter, as annualized, multiplied by (Y) 8.0.
"UCC" means the Uniform Commercial Code as in effect in any relevant
jurisdiction.
"UNFUNDED PENSION LIABILITIES" means the excess of a Plan's benefit
liabilities under section 4001 (a)(16) of ERISA, over the current value of that
Plan's assets, determined in accordance with the assumptions used by the Plan's
actuaries for funding the Plan pursuant to section 412 for the applicable plan
year.
"UNITED STATES" and "U.S." each mean the United States of America.
"UNITS" means the units of limited partnership interest in Borrower
issued and outstanding from time to time.
"UNSECURED DEBT" means Indebtedness (other than the Loans) which is
not secured by any Lien.
"UNQUALIFIED PROPERTY" means the Property comprising a multifamily
apartment project the fee simple interest in which is not 100% owned or leased,
directly or indirectly, by Borrower and/or its Wholly Owned Subsidiaries.
"WHOLLY-OWNED SUBSIDIARY" means a Subsidiary of Borrower 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 (A) Borrower and/or (B) the REIT; 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 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 the
specified Person.
1.2 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
28
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 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 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.
29
(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.
(i) SOPHISTICATED PARTIES. The parties acknowledge that each of them
has been represented by counsel in the preparation and negotiation of this
Agreement, that each of them is sophisticated in the transactions described
herein and that there shall be no presumption against any party drafting this
Agreement or the Loan Documents in the interpretation or construction of any of
the terms thereof.
1.3 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. Notwithstanding anything to the
contrary contained herein, all financial covenants applicable to Borrower and
the REIT hereunder shall be calculated based upon the EBITDA, Interest Expense,
Scheduled Amortization, Net Worth, Total Indebtedness, Gross Asset Value, and
other accounting items of the REIT, before any adjustment for the minority
interest attributable to the holders of limited partner interests in Borrower.
(b) FISCAL YEAR; QUARTER. References herein to "fiscal year"
and "fiscal quarter" refer to such fiscal periods of Borrower.
ARTICLE II.
THE FACILITY
2.1 AMOUNTS AND TERMS OF COMMITMENTS.
(a) REVOLVING LOANS.
(i) REVOLVING LOANS. Each Lender severally agrees, on
the terms and conditions hereinafter set forth, to make loans to Borrower (each
such loan, a "Revolving Loan" and all such loans collectively, the "Revolver")
from time to time on any Business Day during the period from the Closing Date to
the earlier of the Conversion Date or the Revolver Maturity Date. The aggregate
amount of the Revolver will not exceed the lesser of the Lender's Revolving
Commitment or such Lender's Commitment Percentage of the Total Available
Commitment.
(ii) LETTERS OF CREDIT. If Borrower is in compliance with
the conditions for the making of Revolving Loans, Borrower may request on or
before the Revolver
30
Maturity Date, through a Borrowing Notice, the Issuing Lender to deliver from
time to time Letters of Credit. Upon such request, the Issuing Lender shall
promptly issue the requested Letter of Credit in a form approved by the Issuing
Lender; provided that the maximum Letter of Credit Liability at any one time
outstanding may not exceed $5,000,000. Each Letter of Credit must have an
expiry date not later than the one year anniversary of its issuance, unless
otherwise agreed on by Issuing Lender, but in no event shall the expiry date be
later than one year after the Revolver Maturity Date. Each drawing under a
Letter of Credit is payable in full upon the date thereof by Borrower, without
notice or demand of any kind. Except with respect to an Outside Period Letter
of Credit which is drawn upon after the Revolver Maturity Date, Borrower may
obtain, in accordance with the conditions applicable to advances of the
Revolving Loans, a Revolving Loan in the amount drawn on a Letter of Credit to
reimburse BofA as the Issuing Lender for such amount. Other than draws on an
Outside Period Letter of Credit after the Revolver Maturity Date, Borrower's
liability to reimburse Issuing Lender for amounts drawn under Letters of Credit
is included within the terms "Revolving Loan" and "Loan" for all purposes of
this Agreement, and any amounts drawn shall bear interest until paid in full
(whether out of the proceeds of a Revolving Loan otherwise permitted hereunder
or otherwise) at the Base Rate plus the Applicable Base Rate Margin, subject to
Section 2.9(c). Amounts drawn on an Outside Period Letter of Credit after the
Revolver Maturity Date are due and payable by Borrower to Agent immediately and
shall accrue interest until paid at the Base Rate plus three percent (3%).
Borrower's obligations to repay drawings under any Letter of Credit and all
other amounts payable to Issuing Lender, Agent or any other Lender hereunder
shall be absolute, irrevocable and unconditional under any and all circumstances
whatsoever and irrespective of any set-off, counterclaim or defense to payment
which Borrower may have or have had against Issuing Lender, Agent or any other
Lender (except such as may arise out of Issuing Lender's, Agent's or any other
Lender's gross negligence or willful misconduct hereunder) or any other Person,
including, without limitation, any setoff, counterclaim or defense based upon or
arising out of:
(A) Any lack of validity or enforceability of this
Agreement or any of the other Loan Documents or such Letter of Credit;
(B) Any amendment or waiver of or any consent to or
departure from the terms of such Letter of Credit or the Loan Documents;
(C) The existence of any claim, setoff, defense or other
right which Borrower or any other Person may have at any time against, any
beneficiary or any transferee of such Letter of Credit (or any Person for whom
any such beneficiary or any such transferee may be acting), Issuing Lender,
Agent or any other Lender or any other Person, whether in connection with such
Letter of Credit, the Loan Documents or any unrelated transaction;
(D) Any demand, statement or any other document presented
under such Letter of Credit proving to be forged, fraudulent, invalid or
insufficient in any respect, or any statement therein being untrue or inaccurate
in any respect whatsoever or any variations in
31
punctuation, capitalization, spelling or format of the drafts or any statements
presented in connection with any drawing under such Letter of Credit;
(E) The surrender or impairment of any security for the
performance or observance of any of the terms of such Letter of Credit or the
Loan Documents; and
(F) The failure, for any reason, of any Lender to fund
advances to Borrower hereunder for any purpose.
Nothing contained herein shall constitute a waiver of any rights or remedies of
Borrower against Issuing Lender, Agent or any other Lender arising out of the
gross negligence or willful misconduct of Issuing Lender, Agent or any such
other Lender.
(iii) LIMITS ON REVOLVING LOANS AND LETTERS OF CREDIT.
Notwithstanding anything to the contrary set forth herein, after giving effect
to any Revolving Loan and after the issuance of any Letter of Credit, in no
event shall the Outstanding Amount exceed the Total Available Commitment.
Within the limitations set forth in this Section 2.1(a), and subject to the
other terms and conditions hereof, Borrower may borrow or request Letters of
Credit to be issued under this Section 2.1(a), repay or prepay pursuant to
Section 2.5 or otherwise cause Letters of Credit to be cancelled or to expire
undrawn and reborrow (subject to the limitations set forth hereinbelow) or
request additional Letters of Credit to be issued pursuant to this Section 2.1.
(iv) EXTENSION OF REVOLVER MATURITY DATE; CONVERSION.
(1) Borrower may request successive one year
extensions of the Revolver Maturity Date by delivery of an Extension Request to
Agent at least 60 days before the applicable Revolver Maturity Date. Agent
shall notify the Lenders of the Extension Request and each Lender shall notify
Agent at least 30 days before the Revolver Maturity Date if such Lender accepts
or rejects the request in each Lender's sole discretion. If all Lenders timely
accept the Extension Request, the Revolver Maturity Date will be extended for
one year, otherwise the Revolver Maturity Date will not be extended. As a
condition to the extension of the Revolver Maturity Date, Borrower shall have
paid, to the Agent for the ratable benefit of the Lenders then party hereto, the
extension fee set forth in Section 2.10(g).
(2) If the Borrower delivers an Extension Request as
provided in Section 2.1(a)(iv)(1), and any Lender (a "Rejecting Lender") shall
not have notified the Agent on or prior to the date which is thirty (30) days
prior to the Revolver Maturity Date that it accepts such request, then Agent,
upon request of Borrower, may reallocate each Rejecting Lender's Commitment
among some or all of the remaining Lenders consenting to such reallocation. If
the Revolving Commitments of a Rejecting Lender are reallocated among the
remaining Lenders pursuant to this Section, then the Rejecting Lender shall
assign to each remaining Lender such portion of such Rejecting Lender's
commitments as has been reallocated to such remaining Lender in consideration of
payment to such Rejecting Lender of all amounts
32
owing to Rejecting Lender with respect to all or such portion of the Commitment
so assigned, and Borrower shall, concurrently with such reallocation and
assignment, in exchange for Rejecting Lenders' existing Notes, issue new Notes
hereunder to remaining Lenders in order to reflect their respective revised
Commitments, which shall be automatically adjusted to reflect such reallocation.
The Notes received by the remaining Lenders in exchange for such new Notes shall
be endorsed with a legend stating that such Notes have been exchanged for new
Notes and returned to Borrower.
If any Rejecting Lender's Revolving Commitment is not reallocated as
provided for in the immediately preceding paragraph, then within 10 days after
Agent notifies Borrower that the Extension Request has been rejected, at
Borrower's request, one or more commercial banking institutions (a "New Lender")
which otherwise qualifies as an Eligible Assignee may become a party to this
Agreement as a Lender to replace all or any portion of such Rejecting Lender's
unallocated Revolving Commitment for the purpose of extending Revolving
Commitments to Borrower as provided herein with the consent of Agent. Each New
Lender shall execute a copy of this Agreement, and, at Agent's request, such
Rejecting Lender shall assign all or such portion of its Revolving Commitment to
such New Lender in consideration of payment to it of all amounts owing to such
Rejecting Lender with respect to all or such portion of its Revolving Commitment
so assigned, whereupon such New Lender shall replace such Rejecting Lender to
the extent of such assignment, and such New Lender shall become a "Lender" for
all purposes with respect to the Revolving Commitments and Revolving Loans under
this Agreement, and appropriate adjustments shall be made to this Agreement,
including the Commitment Percentages with respect to each Lender, in order to
give effect to the addition of such New Lender.
Notwithstanding anything to the contrary contained in this Section
2.1(a)(iv)(2), if following the procedures set forth above in this Section
2.1(a)(iv)(2), aggregate Revolving Commitments of remaining Lenders and New
Lenders are less than the Revolving Commitments immediately prior to the
Extension Request, the Extension Request will be deemed rejected by all Lenders;
provided, however, that in such event and not later than ten (10) days after the
Agent has notified the Borrower that the Extension Request has been rejected, if
(x) no Default has then occurred and is continuing, provided that if the Agent
shall have actual notice of such Default, it shall have provided notice thereof
to Borrower and (y) no Event of Default has then occurred and is continuing,
Borrower may notify Agent that it elects both to terminate the Revolver as of
the Revolver Maturity Date then in effect and effective as of the Conversion
Date to maintain its Loans then outstanding as Term Loans pursuant to Section
2.1(c) (the "Conversion Option"); provided, however, that Borrower shall have
delivered to Agent a Revolver to Term Certificate as a condition precedent to
the Conversion Option and paid to Agent, for the ratable benefit of the Lender,
the conversion fee as provided in Section 2.10(d).
(b) REVOLVING CREDIT USAGE. Borrower shall use the proceeds of
all Revolving Loans and all Letters of Credit for general partnership purposes,
including, without limitation, acquisitions of multi-family apartment projects
and other real estate assets, Investments in Persons engaged primarily in the
business of owning or managing real estate
33
assets and other Investments permitted hereunder, Capital Expenditures and
redevelopment projects.
(c) AMOUNTS AND TERMS OF TERM LOAN. Each Lender severally
agrees, on the terms and conditions hereinafter set forth, and provided all
Conversion Conditions have been satisfied, to continue or convert loans to
Borrower (each such loan, a "Term Advance" and all such loans collectively the
"Term Loan") from time to time on any Business Day from the Conversion Date to
the Term Loan Maturity Date, in an aggregate amount not to exceed at any time
the Term Commitment; provided, however, that after giving effect to any Term
Advance, the Outstanding Amount shall not exceed the then applicable Total
Available Commitment. Once repaid or prepaid, Borrower may not reborrow any
Term Advance.
2.2 NOTE. Each Loan will be evidenced by a Note dated the Closing
Date payable to the order of the applicable Lender in the amount of its
Commitment. The date, amount and maturity of each Loan and the amount of each
principal payment will be endorsed by the applicable Lender on the schedules
annexed to the Note. Borrower irrevocably authorizes each Lender to endorse its
Note, and each Lender's record will be conclusive absent manifest error;
PROVIDED, HOWEVER, that a Lender's failure to make, or an error in making, a
notation thereon shall not affect Borrower's obligations under this Agreement or
under any Note.
2.3 PROCEDURE FOR BORROWING.
(a) BORROWING NOTICE. Each Loan shall be made in accordance
with the terms of a Borrowing Notice delivered by Borrower to Agent, as follows:
(i) DESIGNATION OF INTEREST RATE. Borrower may elect
that a Loan be made as a LIBOR Loan or a Base Rate Loan; PROVIDED that, unless
the Agent otherwise agrees in writing, Borrower may not elect that a Loan be
made as a LIBOR Loan, if in addition to such Loan there will be more than five
(5) LIBOR Loans outstanding.
(ii) TIMING OF NOTICE. Each Borrowing Notice must be
submitted to and received by Agent before 9:00 a.m. (California time) as
follows: (A) for LIBOR Loans, at least three (3) Business Days before a
specified borrowing date; (B) for Base Rate Loans, at least one (1) Business Day
before a specified borrowing date; and (C) for a Letter of Credit, at least five
(5) Business Days before the proposed issuance date.
(iii) CONTENTS OF NOTICE. Each Borrowing Notice must
include the following information:
(A) an exact amount for the Loan (LIBOR Loans must be
in a minimum amount of $1,000,000 with additional increments of $100,000 and
there are no restrictions on the amount of Base Rate Loans);
34
(B) if the Loan is a LIBOR Loan, the applicable
Interest Period (if no Interest Period is specified for a requested LIBOR Loan,
the Loan will be made as a Base Rate Loan); and
(C) in the case of a proposed Letter of Credit, a
completed letter of credit application on the Issuing Lender's standard form
substantially in the form of EXHIBIT G.
(b) NOTICE TO LENDERS. When Agent receives a Borrowing Notice
in conformity with Section 2.3(a), it shall promptly notify each Lender thereof
and of the amount of such Lender's Commitment Percentage of the requested Loan
and in the case of a Letter of Credit it shall notify each Lender promptly upon
the issuance together with such Lender's participation in the requested Letter
of Credit.
(c) FUNDING OF COMMITMENT. Each Lender shall fund the amount of
its Commitment Percentage of the requested Loan to Agent, for Borrower's
account, at the Payment Office by 9:00 a.m. (California time) on the specified
borrowing date in funds immediately available to Agent. Unless any applicable
condition in Article IV is not satisfied, Agent will then make the amounts
received from the Lenders available to Borrower as directed in written payment
instructions from Borrower.
(d) FREQUENCY OF BORROWINGS. No more than four (4) Borrowing
Notices may be given in any calendar month.
2.4 CONVERSION AND CONTINUATION ELECTIONS.
(a) CONVERSION/CONTINUATION NOTICE. 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 Borrower in the form of a
Conversion/Continuation Notice, as follows:
(i) DESIGNATION OF INTEREST RATE. Borrower 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 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 3.4), 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 3.4), 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
35
agree in writing, Borrower 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 such continuation or conversion there shall be more than five different LIBOR
Loans outstanding or the outstanding principal amount of any LIBOR Loans shall
have been reduced, by payment, prepayment, or partial conversion to less than
$1,000,000.
(ii) TIMING OF NOTICE. Each Conversion/Continuation
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 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 Conversion/Continuation
Notice 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 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. Borrower shall have
failed to submit a Conversion/Continuation Notice for such Loan in compliance
with the terms of Section 2.4(a); or
(iii) FAILURE TO MAINTAIN MINIMUM LOSS. 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
Conversion/Continuation Notice conforming with the terms of Section 2.4(a), or
an automatic conversion pursuant to Section 2.4(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.
36
2.5 OPTIONAL PREPAYMENTS; OPTIONAL REDUCTIONS OF THE REVOLVING
COMMITMENT.
(a) Subject to Section 3.4, Borrower 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 Borrower and the Agent shall promptly notify each Lender thereof
and of such Lender's 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 3.4.
(b) At any time prior to the Conversion Date, Borrower may, upon
not less than five (5) Business Days' prior notice to Agent, terminate the
aggregate Revolving Commitment of all Lenders or permanently reduce the
aggregate Revolving Commitment of all Lenders by an aggregate minimum amount of
$1,000,000 or an integral multiple of $100,000 in excess thereof; PROVIDED that
no such termination or reduction shall be permitted if, after giving effect
thereto and to any prepayments of the Loans made on the effective date thereof,
the Outstanding Amount would exceed the amount of the Total Available Commitment
and, PROVIDED, FURTHER, that once reduced in accordance with this Section
2.5(b), the aggregate Revolving Commitment of all Lenders may not be increased.
Any reduction of the aggregate Revolving Commitment of all Lenders shall be
applied to each Lender's Revolving Commitment in accordance with such Lender's
Revolving Commitment Percentage. If the Revolving Commitments are terminated in
their entirety, all accrued commitment fees under Section 2.10(c) to, but not
including, the effective date of such termination shall be payable on the
effective date of such termination.
2.6 MANDATORY PREPAYMENTS OF LOANS; MANDATORY AMORTIZATION AND
REDUCTIONS.
(a) TOTAL AVAILABLE COMMITMENT. If at any time the Outstanding
Amount exceeds the then applicable Total Available Commitment, Borrower shall
immediately prepay Loans (or cause Letters of Credit to be cancelled) in an
amount sufficient to reduce the Outstanding Amount to the then applicable Total
Available Commitment.
(b) AMORTIZATION. On the last Business Day of each March, June,
September and December following the Conversion Date, Borrower shall repay or
prepay Loans in an aggregate amount equal to one twelfth (1/12th) of the initial
outstanding balance of the Term Loan as of the Conversion Date.
2.7 APPLICATION OF PROCEEDS. Unless otherwise instructed by
Borrower, any prepayments pursuant to Section 2.5 or Section 2.6 made (i) on a
day other than the last day of an
37
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 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.
2.8 REPAYMENT. Subject to Section 2.6, unless the Revolver has
been converted into the Term Loan, Borrower shall repay all Obligations on the
Revolver Maturity Date and, if the Revolver has been converted into the Term
Loan, shall repay all Obligations on the Term Loan Maturity Date.
2.9 INTEREST.
(a) RATES. Subject to Section 2.9(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 Revolver Maturity Date or, if
the Revolver has been converted into the Term Loan, the Term Loan Maturity Date.
Interest shall also be payable on the date of any prepayment of Loans pursuant
to Section 2.5 or Section 2.6 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, Borrower 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 Borrower shall pay such
Lender interest at the highest rate permitted by applicable law.
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2.10 FEES.
(a) ARRANGEMENT FEE. Upon the due execution and delivery of this
Agreement by Borrower, the Agent and each of the Lenders which are the initial
Lenders party to this Agreement, Borrower shall pay to BofA an arrangement fee
as set forth in a separate letter agreement between Borrower and BofA.
(b) ADMINISTRATIVE AGENCY FEES. Borrower shall pay to BofA such
administrative agency fees as are set forth in a separate letter agreement
between Borrower and BofA.
(c) COMMITMENT FEES. Commencing on the date hereof and up to the
Conversion Date, Borrower shall pay to the Agent for the account of each Lender
ratably a commitment fee on the average daily unused portion of such Lender's
Commitment Percentage of the Aggregate Commitment (exclusive of the average
daily undrawn available amount of all Letters of Credit outstanding), regardless
of whether or not such Aggregate Commitment is available to be advanced
hereunder, equal to 0.1875% per annum. Such commitment fee shall accrue from
the Closing Date to the earlier of the Conversion Date or the Revolver Maturity
Date and shall be due and payable in arrears quarterly on the first Business Day
of each April, July, October and January with respect to the prior calendar
quarter, commencing on the first Business Day of April, 1998, on the Revolver
Maturity Date, and on any other date on which the Revolver is paid in full and
the Commitment permanently terminated.
(d) CONVERSION FEE. On the Conversion Date, Borrower shall pay to
the Agent for the account of each Lender then a party to this Agreement ratably
a conversion fee equal to 0.50% of the original balance of the Term Loan as of
the Conversion Date.
(e) UNENCUMBERED ASSET POOL ADJUSTMENT FEE. Without limiting
Borrower's obligations to pay costs and expenses under Section 2.13 and 10.4,
upon the addition of a project to the Unencumbered Asset Pool on or after the
date hereof, Borrower shall pay to the Agent for the ratable benefit of the
Lenders an Unencumbered Asset Pool Property adjustment fee in the amount of
$2,000 per property for each such Property added to the Unencumbered Asset Pool
on or after the date hereof after the first five (5) approved Properties.
(f) LETTER OF CREDIT FEES.
(i) Borrower shall pay to Agent for the Issuing Lender's
sole benefit an issuance fee in the amount of 0.25% of the initial face amount
of each Letter of Credit, before issuance thereof.
(ii) Borrower shall pay to Agent for the ratable benefit
of the Lenders an annual fee in an amount equal to the Applicable LC Fee.
(iii) The Applicable LC Fee will accrue when each Letter of
Credit is issued until the expiration or cancellation thereof, and shall be due
and payable in arrears
39
quarterly on the first Business Day of each April, July, October and January, on
the Revolver Maturity Date, and on any other date on which the Revolver is paid
in full and the Revolving Commitment permanently terminated.
(g) EXTENSION FEE. Within one week of the notification by the Agent
to Borrower that an Extension Request has been accepted pursuant to Section
2.1(a)(iv)(1), Borrower shall pay to Agent for the ratable benefit of the
Lenders an extension fee equal to 0.15% of the Commitment.
(h) ACCRUED FEES. Borrower ratifies and confirms its agreement to
pay all accrued but unpaid fees under the Previous Credit Agreement, which
obligation shall be paid promptly upon demand by the Agent and shall not be
superseded by this Agreement.
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
Borrower and the Lenders of each determination of a LIBO Rate, PROVIDED that no
failure to do so shall relieve Borrower 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 Borrower and the Lenders of the
effective date and the amount of each such change, PROVIDED that no failure to
do so shall relieve Borrower 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 Borrower and the Lenders in the absence of manifest
error.
(c) DETAIL OF CALCULATION. The Agent shall, at the request of
Borrower or any Lender, deliver to Borrower 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 BORROWER.
(a) TERMS OF PAYMENTS. All payments (including prepayments) to
be made by Borrower 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 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
40
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.
(b) BUSINESS DAYS. Whenever any payment under this Agreement
becomes due on a day other than a Business Day, the payment will be made on the
next succeeding Business Day, and the extension of time included in the
computation of interest or fees, as applicable; subject to the provisions set
forth in the defined term Interest Period.
(c) RELIANCE OF AGENT ON PAYMENTS BY BORROWER. Unless the Agent
shall have received notice from Borrower prior to the date on which any payment
is due to the Lenders hereunder that Borrower will not make such payment in
full, the Agent may assume that Borrower 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 Borrower 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 UNENCUMBERED ASSET POOL; ADDITIONS AND EXCLUSIONS OF PROPERTIES.
(a) UNENCUMBERED ASSET POOL. As of the Closing Date, the
Unencumbered Asset Pool consists of the Initial Unencumbered Asset Pool and each
Property therein is a Class B or better apartment project. Additional
Properties, which in all cases must be Class B or better apartment projects, may
be offered by Borrower and shall be included in the Unencumbered Asset Pool only
in accordance with the following (and any other applicable terms and conditions
contained in this Agreement):
(i) REQUEST FOR TOTAL AVAILABLE COMMITMENT INCREASE.
Borrower from time to time may request that Qualified Properties that have been
Stabilized be included in the Unencumbered Asset Pool by written request to the
Agent.
(ii) ACCEPTANCE OF QUALIFIED PROPERTIES. The Lenders may
in their sole discretion, and after performing such due diligence as the Lenders
desire in their sole discretion, accept or reject any Qualified Property which
is Stabilized offered as an addition to the Unencumbered Asset Pool, unless the
Qualified Property is a Class B or better apartment project, in which case the
Lenders must be reasonable in their acceptance or rejection of such Qualified
Property; provided, however that if Borrower then has an Investment Grade Credit
Rating and no Default or Event of Default has occurred and is continuing, then
the Lenders shall accept any Qualified Property which is a Class B or better
apartment project and Stabilized as an addition to the Unencumbered Asset Pool
unless Agent or any Lender reasonably determines that the Property is in
violation of applicable Environmental Laws. Borrower shall at its expense
provide the Agent and the Lenders with the following due diligence materials and
information with respect to any project offered as an addition to the
Unencumbered Asset Pool, at least thirty (30) days prior to the delivery by
Borrower of a Borrowing Notice relating to the project:
41
(A) the Due Diligence Package;
(B) written advice relating to such lien and judgment
searches as the Agent shall have requested of Borrower with respect to such
Property;
(C) an environmental site assessment with respect to
such Property, 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 Borrower;
(D) if required by the Agent, a report regarding
structural, siding, engineering, seismic and code/legal compliance (including
compliance with the Americans With Disabilities Act) matters;
(E) 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 setting forth in such format as the Agent may
require the information relevant to such property necessary to calculate the
Revolver DSC Principal Limit;
(F) if required by Agent, copies of the standard lease
form and the property management agreement and other material operating
agreements or contracts relating to the property;
(G) 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;
(H) a copy of the purchase and sale agreement(s) by
which Borrower or such Wholly-Owned Subsidiary has acquired the property;
(I) such other items as the Agent may reasonably
request.
Borrower acknowledges that the review of the due diligence materials described
in this Section 2.13(a)(ii) will require advance notice to the Agent and the
Lenders, and Borrower agrees to provide as much advance notice as possible to
achieve timely review of such materials.
(iii) CONDITIONS TO INCLUSION OF PROPOSED PROPERTIES IN
UNENCUMBERED ASSET POOL. Each of the following conditions must be satisfied (or
waived by the
42
Agent in writing) prior to the Lenders' acceptance of any Qualified Property
into the Unencumbered Asset Pool:
(A) ACCEPTANCES. The Lenders shall have agreed to
accept the apartment project offered by Borrower for inclusion into the
Unencumbered Asset Pool as provided in Section 2.13(a)(ii), and Agent shall have
so notified Borrower in writing. Any such acceptance shall be subject to the
satisfaction of the other conditions set forth in this Section 2.13(a)(iii).
(B) OFFICERS' CERTIFICATE. Borrower shall have
delivered to the Agent a certificate of two Responsible Officers substantially
in the form of EXHIBIT H confirming (i) that all conditions precedent set forth
in this Section 2.13(a)(iii) (other than those based solely upon the approval of
the Agent or the Lenders) have been satisfied with respect to such project;
(ii) that all financial and operating information delivered to the Agent
pursuant to Section 2.13(a)(ii), subject to audit, is complete and correct to
the knowledge of Borrower and setting forth in detail the calculation of the
Revolver DSC Principal Limit; (iii) Borrower's purchase price for the property,
upon which the Agent and the Lenders are entitled to rely; and (iv) that the
Person owning the proposed project has incurred no Indebtedness other than as
permitted under Sections 7.2(a) through (h) inclusive.
(b) EXCLUSION OF PROPERTY FROM THE UNENCUMBERED ASSET POOL. Any
Property will automatically have a value of zero for purposes of calculating the
Total Available Commitment and will be excluded from the Unencumbered Asset Pool
if, after the date the Property enters the Unencumbered Asset Pool,
(i) a material adverse change in the environmental
condition of the Property from that described in the materials described in
Section 2.13(a)(ii) occurs that is not adequately remediated in accordance with
all applicable Environmental Laws within thirty (30) days after demand from
Agent to Borrower, or such Property shall incur Property Liabilities in excess
of 10% of the value of such Property; and
(ii) immediately upon any sale, transfer or encumbrance of
such Property (or of the beneficial, stock, equity, membership or partnership
interest in the owner of such Property, other than to Borrower or one of its
Qualified Wholly Owned Subsidiaries; provided, however, that prior to any
transfer to any Qualified Wholly-Owned Subsidiary, Borrower shall have received
the prior written consent of the Agent, which consent shall not be unreasonably
withheld or delayed); and
(iii) at the end of the calendar quarter in which any such
Property ceases to be Stabilized, as set forth in the Compliance Certificate for
such calendar quarter.
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2.14 PAYMENTS BY LENDERS TO AGENT.
(a) RELIANCE OF AGENT ON PAYMENTS BY THE LENDERS. Unless Agent
has 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 Commitment Percentage
of the Loan to be funded on such date, Agent may assume that each Lender has
made such amount available to the Agent on the borrowing date, and 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 Agent and 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 Agent submitted
to any Lender with respect to amounts owing under this Section 2.14(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 Borrower of such failure to fund and, upon demand by the
Agent, Borrower 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, and Borrower may exercise any rights and
remedies it may have against the Lender that so failed to fund.
(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.
2.15 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 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
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. Borrower agrees that any Lender so purchasing a participation
from another Lender pursuant to this Section 2.15 may, to the fullest extent
permitted by law, exercise all of such purchasing Lender's rights of payment
44
(including the right of setoff, but subject to Section 10.9) with respect to
such participation as fully as if such purchasing Lender were the direct
creditor of Borrower 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 2.15 and shall in each case
notify the Lenders following any such purchases.
2.16 PARTICIPATION PURCHASED BY LENDERS IN THE LETTER OF CREDIT
LIABILITY.
(a) On the date of the issuance of each Letter of Credit (and
with respect to the letters of credit previously issued under the Credit
Agreement described in Recital A, on the Closing Date), the Issuing Lender shall
be deemed irrevocably and unconditionally to have sold and transferred to each
Lender (other than the Issuing Lender) and each Lender shall be deemed to have
irrevocably and unconditionally purchased and received from the Issuing Lender,
an undivided interest and participation, to the extent of such Lender's
Commitment Percentage in effect from time to time, in such Letter of Credit and
all Letter of Credit Liability with respect thereto. The Revolving Commitment
of each Lender hereunder shall include that Lender's share of the Letter of
Credit Liability.
(b) In the event that any reimbursement obligation under this
Agreement is not paid when due to the Issuing Lender with respect to any Letter
of Credit, the Issuing Lender shall promptly notify the Agent to that effect,
and the Agent shall promptly notify each Lender (other than the Issuing Lender)
of the amount of such reimbursement obligation and each Lender other than the
Issuing Lender shall immediately pay to the Agent for distribution to the
Issuing Lender, in lawful money of the United States and in same day funds, an
amount equal to such Lender's Commitment Percentage then in effect of the amount
of such unpaid reimbursement obligation.
(c) The obligation of each Lender other than the Issuing Lender
to make payments under subsection (b) above shall be unconditional and
irrevocable and shall be made under all circumstances, including, without
limitation, following the occurrence of any Default or any Event of Default or
any of the circumstances referred to in Section 2.1(a)(ii) hereof.
(d) Prior to the occurrence of any Event of Default, the Agent
shall promptly distribute to each Lender its Commitment Percentage (or other
applicable share as expressly provided herein) of all amounts received on
account of the obligations of Borrower to repay amounts drawn under any Letter
of Credit (in like funds as received). Following the occurrence of an Event of
Default, all amounts received by the Agent on account of such obligations shall
be disbursed by the Agent as follows:
(i) First, to the payment of expenses incurred by the
Agent in the performance of its duties and enforcement of its rights under the
Loan Documents, including, without limitation, all costs and expenses of
collection, attorneys' fees, court costs and foreclosure expenses;
45
(ii) Then, to the Lenders, pro rata in accordance with
their respective Commitment Percentages until all outstanding reimbursement
obligations for drawings on such Letter of Credit and interest accrued thereon
have been paid in full; and
(iii) Then, and if but only if there remains any available
amount which has not been drawn under such Letter of Credit, to the Agent to
hold as cash collateral for the obligation of Borrower to reimburse any future
drawings on such Letter of Credit, Borrower hereby granting to the Agent, for
the pro rata, PARI PASSU benefit of the Lenders, a security interest therein
which will be of first priority and hereby irrevocably agreeing that amounts so
held may be applied from time to time in reimbursement of drawings on such
Letter of Credit as the same may occur, until the expiration of such Letter of
Credit and payment in full of all amounts due with respect to any drawing
thereon.
(e) If any payment received from Borrower on account of any
reimbursement obligation with respect to any Letter of Credit and distributed to
a Lender under Section 2.16(d) hereof is thereafter recovered from the Issuing
Lender, each Lender which received such distribution shall, upon demand by the
Agent, repay to the Issuing Lender such Lender's ratable share of the amount so
recovered together with an amount equal to such Lender's ratable share
(according to the proportion of (i) the amount of such Lender's required
repayment to (ii) the total amount so recovered) of any interest of other amount
paid or payable by the Issuing Lender in respect of the total amount so
recovered.
ARTICLE III.
TAXES, YIELD PROTECTION AND ILLEGALITY
3.1 TAXES.
(a) Subject to Section 3.1(g), all payments by Borrower to Agent
or the Lenders under this Agreement will be made free and clear of the following
(collectively, "Taxes"), 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.
(b) In addition, Borrower shall pay any present or future stamp
or documentary taxes or any other excise or property taxes, charges or similar
levies arising 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 (collectively, "Other Taxes").
(c) Borrower 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
46
imposed by any jurisdiction on amounts payable under this Section 3.1) 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
unless and except to the extent any such Taxes or Other Taxes were imposed
solely as a result of the gross negligence or willful misconduct of Agent or
such Lender. Payment under this indemnification shall be made within thirty
(30) days from the date the Agent or any Lender makes written demand therefor.
(d) If Borrower 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 3.1(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 3.1) 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) Borrower shall make such deductions; and
(iii) Borrower 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 Borrower of
Taxes or Other Taxes, Borrower 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
10.8 after the Closing Date, the date upon which such Lender becomes a party
hereto), deliver to Borrower 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 Borrower 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
47
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;
(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 Borrower
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 Borrower's
reasonable request to that effect, deliver to Borrower 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) Borrower shall not be required to pay any additional amounts
in respect of United States Federal or state income tax pursuant to Section
3.1(d) to any Lender or any duly appointed assignee for the account of any
Lending Office of such Lender or 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 3.1(f) in respect of such Lending Office;
(ii) if such Lender or assignee shall have delivered to
Borrower a Form 4224 in respect of such Lending Office pursuant to Section
3.1(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 Borrower hereunder 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
Borrower a Form 1001 in respect of such Lending Office pursuant to Section
3.1(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 Borrower 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.
(h) If, at any time, Borrower requests any Lender to deliver any
forms or other documentation pursuant to Section 3.1(f)(iv), then Borrower
shall, on demand of such Lender, through the Agent reimburse such Lender for any
costs and expenses (including Attorney
48
Costs) reasonably incurred by such Lender in the preparation or delivery of such
forms or other documentation.
(i) If Borrower is required to pay additional amounts to the
Agent or any Lender pursuant to Section 3.1(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 Borrower which may thereafter accrue if such change in the
judgment of such Lender is not otherwise disadvantageous to such Lender.
3.2 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
Borrower through the Agent, the obligation of such Lender to make LIBOR Loans
shall be suspended until such Lender shall have notified the Agent and Borrower
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, Borrower shall notify Lender that Borrower 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 2.4 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 3.4.
(c) If the obligation of any Lender to make or maintain LIBOR
Loans has been terminated, Borrower 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.
3.3 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 Borrower 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.
49
(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,
Borrower 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 Section 3.3(a) or Section 3.3(b) effects or would effect an
increase in cost or reduction of return resulting in additional Obligations
hereunder, such Lender shall, with reasonable promptness, notify Borrower and
the Agent of such determination, PROVIDED that no failure to do so shall relieve
Borrower of any Obligation hereunder.
3.4 FUNDING LOSSES. Borrower agrees to reimburse each Lender for,
and to hold each Lender harmless from, any loss or expense that such Lender
sustains or incurs as a consequence of:
(a) the failure of Borrower 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);
(b) the failure of Borrower to borrow, continue or convert a
Loan after Borrower has given (or is deemed to have given) a Borrowing Notice or
a Conversion/Continuation Notice;
(c) the failure of Borrower to make any prepayment after
Borrower has given a notice in accordance with Section 2.5;
(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
50
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.
3.5 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 2.9(a) for any
requested Interest Period with respect to a proposed LIBOR Loan does not
adequately and fairly reflect the cost to Lenders of funding such Loan, the
Agent will forthwith give notice of such determination to Borrower 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, Borrower may revoke any Borrowing Notice
or Conversion/Continuation Notice then submitted by it. If Borrower does not
revoke such notice, the Lenders shall make, convert or continue the Loans, as
proposed by Borrower, in the amount specified in the applicable notice submitted
by Borrower, but such Loans shall be made, converted or continued as Base Rate
Loans instead of LIBOR Loans.
3.6 CERTIFICATES OF LENDERS. Any Lender claiming reimbursement or
compensation pursuant to this Article III shall deliver to Borrower (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.
3.7 SURVIVAL. The agreements and obligations of Borrower in this
Article III shall survive the payment of all other obligations.
ARTICLE IV.
CONDITIONS PRECEDENT
4.1 CONDITIONS OF EFFECTIVENESS.
(a) CONDITIONS TO EFFECTIVENESS. The effectiveness of this
Agreement 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 in its sole
discretion, and with respect to legal opinions satisfactory to each Lender and
their respective counsel in their sole discretion and in sufficient copies for
each Lender:
(i) CREDIT AGREEMENT AND NOTES. This Agreement executed
by Borrower, the Agent and each of the Lenders, and a Note executed by Borrower
in favor of each of the Lenders; the Notes shall be dated the Closing Date;
51
(ii) REIT GUARANTY DOCUMENTS. The REIT Guaranty Documents
executed by the REIT and the Guarantor Subsidiaries;
(iii) SUBORDINATION AGREEMENTS. Such subordination
agreements relating to the Intra-Company Debt and the Finance Subsidiary Loan as
the Requisite Lenders may require, in form and substance satisfactory to the
Requisite Lenders.
(iv) RESOLUTIONS; INCUMBENCY.
(A) Certified copies of the resolutions of the boards
of directors of the REIT, Borrower, GP Corp and, if required by Agent, the other
corporations party (whether directly or as general partners) to the Loan
Documents, their execution, delivery and performance thereof, including, in the
case of GP Corp, a resolution approving and authorizing in its capacity as the
general partner of Borrower the execution, delivery and performance by Borrower
of this Agreement and the other Loan Documents to be delivered hereunder and the
borrowing of the Loans;
(B) A certificate of the Secretary or Assistant
Secretary of the REIT, Borrower, GP Corp and, if required by Agent, the other
corporations party (whether directly or as general partners) to the Loan
Documents certifying the names and true signatures of the officers of such
Persons authorized to execute and deliver, as applicable, this Agreement and all
other Loan Documents to be delivered hereunder;
(v) ORGANIZATION DOCUMENTS. Each of the following
documents:
(A) certified copies of the Organizational Documents
of the REIT, Borrower and, if requested by the initial Lender, any Subsidiary
thereof as in effect on the Closing Date, and, in the case of corporate or
limited liability company articles or a certificate of limited partnership,
certified as of a recent date by the secretary of state of the state of
organization; and
(B) a good-standing certificate for the REIT, Borrower
and, if requested by Agent, any Subsidiary thereof, from the secretary of state
of the state of organization of the same as of a recent date;
(vi) CERTIFICATE. A certificate signed by a duly
authorized Responsible Officer, dated as of the Closing Date, stating that:
(A) the representations and warranties of Borrower and
the REIT contained in Article V hereof and of Borrower, 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;
(B) no Default or Event of Default exists or would
result from the initial borrowing;
52
(C) since December 31, 1996, no act, omission, change
or occurrence which would have a Material Adverse Effect shall have occurred;
and
(D) all conditions precedent set forth in this Section
4.1 have been satisfied (other than those based solely on the approval of the
Agent, the Lenders, or the Requisite Lenders);
(vii) DOCUMENTATION REGARDING THE NHP INCORPORATED
ACQUISITION. In connection with the acquisition of NHP Incorporated, a Delaware
corporation, Borrower has provided Agent with the documents listed on Schedule
1.1C attached hereto.
(viii) LEGAL OPINIONS. The Agent shall have received
favorable opinions of counsel to Borrower and the parties signatory to the REIT
Guaranty Documents, and addressed to the Agent and the Lenders which complies
with the opinion requirements set forth on EXHIBIT I in a form approved by
Agent;
(ix) 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, 3.1 and 10.4; and
(x) OTHER DOCUMENTS. Such other approvals, opinions, or
documents as the Agent or the Requisite Lenders may reasonably request.
(b) DEFERRED CONDITIONS. Any agreement by the Lenders to defer the
delivery of any of the items described in Section 4.1 above because a particular
item to be delivered is not available on the Closing Date shall not be deemed an
election by the Lenders to waive the delivery of such items; to the contrary,
all parties agree that Borrower shall be responsible, and Borrower hereby
covenants, to deliver to the Lenders no later than ten (10) Business Days after
the date this Agreement becomes effective, all of the items to be delivered by
Borrower as described in Section 4.1 which were not delivered to the Agent or
the Lenders on or prior to the Closing Date.
4.2 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 Conversion/Continuation Notice in compliance with the terms
of Section 2.3 or Section 2.4, 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;
53
(c) TOTAL AVAILABLE COMMITMENT. The Outstanding Amount shall
not, as a result of the making, continuation or conversion of such Loan, exceed
the Total Available Commitment;
(d) REPRESENTATIONS AND WARRANTIES. The representations and
warranties made by Borrower, 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 Borrower, the REIT or any Subsidiary thereof, any
notice that the REIT Guaranty Documents will no longer guaranty future Loans to
be made under this Agreement.
(h) CONTINUING REPRESENTATIONS. Each Borrowing Notice and
Conversion/Continuation Notice submitted by Borrower hereunder shall constitute
a representation and warranty by Borrower 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 applicable conditions in this Section 4.2 have been
satisfied.
4.3 CONVERSION CONDITIONS. Borrower may convert the Revolver into
the Term Loan on any Revolver Maturity Date upon at least 90 days prior written
notice to Agent. Before any conversion of the Revolver is effective, the
following conditions (collectively, the "Conversion Conditions") must be
satisfied:
(a) REPRESENTATIONS AND WARRANTIES. All representations,
warranties and certifications of Borrower, the REIT and their respective
Subsidiaries in the Loan Documents or delivered pursuant thereto shall be true
and correct on and as of the Conversion Date, before and after giving effect to
the conversion, as though made on such date;
(b) NO EXISTING DEFAULT. No Default or Event of Default shall
have occurred and be continuing as of the date such notice is given or as of the
Conversion Date or would result from such conversion;
(c) OUTSTANDING AMOUNT. The Outstanding Amount of the Term Loan
upon the Conversion Date shall not exceed the Total Available Commitment and the
only Letters of Credit outstanding shall be Outside Period Letters of Credit
with an expiry date not later than one year from the Revolver Maturity Date;
54
(d) NO MATERIAL ADVERSE EFFECT. No act, omission, change,
occurrence or event which has a Material Adverse Effect shall have occurred
since the Closing Date;
(e) CERTIFICATE. Agent shall have received and approved the
Revolver to Term Certificate.
(f) EVIDENCE REGARDING TOTAL AVAILABLE COMMITMENT. Borrower
shall have delivered to the Agent, and the Agent and the Requisite Lenders shall
have approved such rent rolls, operating statements and other financial
materials relating to the Unencumbered Asset Pool and Unencumbered Management
Entity Value as may be necessary to determine the Total Available Commitment;
and
(g) CONVERSION FEE. Borrower shall have paid, on or prior to
the Conversion Date, to the Agent for the ratable benefit of the Lenders then
party hereto the conversion fee set forth in Section 2.10(d) above.
ARTICLE V.
REPRESENTATIONS AND WARRANTIES
Borrower represents and warrants to the Agent and each Lender that:
5.1 EXISTENCE AND POWER. Borrower is a Delaware limited partnership,
the REIT is a Maryland corporation, and each of Borrower, the REIT and each
Management Entity and Subsidiary:
(a) ORGANIZATION. Is duly organized, validly existing and in
good standing under the laws of the jurisdiction of its organization;
(b) POWER AND AUTHORITY. Has the power and authority and all
governmental licenses, authorizations, consents and approvals to own its
Properties, to carry on its business and to execute, deliver, and perform its
obligations under, the Loan Documents to which it is a party;
(c) DUE QUALIFICATION. Is duly qualified as a foreign
corporation, partnership, trust or other organization, and licensed and in good
standing under the laws of each jurisdiction where its ownership, lease or
operation of its Properties or the conduct of its business requires such
qualification, except, with respect to Persons that are not Designated Entities,
where a failure to be so qualified could not reasonably be expected to have a
Material Adverse Effect; and
(d) COMPLIANCE WITH LEGAL REQUIREMENTS. Is in substantial
compliance with all material Requirements of Law applicable to it.
55
5.2 AUTHORIZATION; NO CONFLICT. The execution, delivery and
performance by Borrower, the REIT and any of their Subsidiaries of this
Agreement, and any other Loan Document to which such Person is party, have been
duly authorized by all necessary partnership, corporate or other organizational
action, and do not and will not:
(a) ORGANIZATION DOCUMENTS. Contravene the terms of any of such
Person's Organizational Documents;
(b) CONTRACTUAL OBLIGATIONS. Conflict with, or result in any
breach or contravention of, or the creation of any Lien (other than pursuant to
Section 2.16(d)(iii)) under, any document evidencing any Contractual Obligation
to which such Person is a party or any order, injunction, writ or decree of any
Governmental Authority to which such Person or its Properties are subject; or
(c) REQUIREMENTS OF LAW. Violate any material Requirement of
Law applicable to it.
5.3 GOVERNMENTAL AUTHORIZATION. No approval, consent, exemption,
authorization, or other action by, or notice to, or filing with, any
Governmental Authority is necessary or required in connection with the
execution, delivery or performance by, or enforcement against, Borrower, the
REIT, or any of their Subsidiaries of this Agreement or any other Loan Document.
5.4 BINDING EFFECT. This Agreement and each other Loan Document to
which Borrower, the REIT, or any of their Subsidiaries is a party constitute the
legal, valid and binding obligations of such Person, enforceable against such
Person in accordance with their respective terms, except as enforceability may
be limited by applicable bankruptcy, insolvency, or similar laws affecting the
enforcement of creditors' rights generally or by equitable principles relating
to enforceability.
5.5 LITIGATION. Except as disclosed in SCHEDULE 5.5, there are no
actions, suits, proceedings, claims or disputes pending, or to the Knowledge of
Borrower, threatened or contemplated, at law, in equity, in arbitration or
before any Governmental Authority, against Borrower, the REIT, any Management
Entity, any of their Subsidiaries or any of their respective Properties, which
(a) purport to affect or pertain to this Agreement, or any other Loan Document,
or any of the transactions contemplated hereby or thereby, or (b) if determined
adversely to any such Person, would reasonably be expected to have a Material
Adverse Effect. No injunction, writ, temporary restraining order or any other
order of any nature has been issued by any court or other Governmental Authority
purporting to enjoin or restrain the execution, delivery and performance of this
Agreement or any other Loan Document, or directing that the transactions
provided for herein or therein not be consummated as herein or therein provided.
5.6 TITLE TO PROPERTIES. Borrower, the REIT and each of their
Subsidiaries have good record and marketable title in fee simple to or a valid
leasehold interest in all Unencumbered Asset Pool Properties, subject to no
Liens. Borrower, the REIT and their
56
Subsidiaries have good record and marketable title to, or a valid leasehold
interest in, all of their other Properties and all other real property necessary
or used in the ordinary conduct of their business, taken as a whole, subject to
no Liens, other than Permitted Liens, except for such defects in title as could
not reasonably be expected, individually or in the aggregate, to have a Material
Adverse Effect.
5.7 SUBSIDIARIES; INTERESTS IN OTHER ENTITIES; CHANGES IN
ORGANIZATIONAL STRUCTURE. Neither Borrower, nor the REIT, nor any of their
respective Subsidiaries has any interest in any corporation, partnership or
other entity, except as disclosed in the Organizational Chart and except for
interests acquired after the date of this Agreement in compliance with Sections
7.6, 7.7 and 7.8 hereof.
5.8 FINANCIAL CONDITION. All financial statements of the REIT
delivered by Borrower or the REIT hereunder: (a) were prepared in accordance
with GAAP consistently applied throughout the period covered thereby, except as
otherwise expressly noted therein; and (b) are complete, accurate and fairly
present the financial condition of the REIT as of the dates thereof and results
of operations for the periods covered thereby. All Form 10-K filings and Form
10-Q filings delivered by Borrower or the REIT show all material indebtedness
and other liabilities, direct or contingent, of Borrower and its Subsidiaries,
including liabilities for taxes, material commitments and Contingent Obligations
which are required to be disclosed therein under the SEC rules and regulations.
Since December 31, 1996, there has been no act, omission, change or event which
has had a Material Adverse Effect.
5.9 TAXES. Borrower and its Subsidiaries have filed all Federal and
other material tax returns and reports required to be filed. Except as
disclosed in the SEC Report, (i) all tax returns filed by Borrower and its
Subsidiaries are complete and correct in all material respects; (ii) Borrower
and its Subsidiaries have paid all Federal and other material taxes,
assessments, fees and other governmental charges for which they are liable and
that are due and payable and have fully satisfied any taxes, assessments, fees,
and other governmental charges levied or imposed upon them or their Properties,
income or assets or otherwise due and payable, except those which are being
contested in good faith by appropriate proceedings and for which adequate
reserves have been provided in accordance with GAAP and no Notice of Lien has
been filed or recorded; (iii) there is no proposed tax assessment against
Borrower or any of its Subsidiaries which would, if the assessment were made,
have a Material Adverse Effect; and (iv) Borrower and its Subsidiaries have no
primary, secondary or other liability for taxes of any kind arising with respect
to any individual, trust, corporation, partnership or other entity as to which
Borrower or any of its Subsidiaries is directly or indirectly liable for taxes
of any kind incurred by such individual or entity either as a transferee, or
pursuant to Treasury Regulations section 1.1502-6, or pursuant to any other
Requirement of Law. Neither Borrower nor any of its Affiliates is (nor has it
ever been) a party to any tax sharing agreement other than as disclosed on
SCHEDULE 5.9.
5.10 ERISA COMPLIANCE.
57
(a) SCHEDULE 5.10 lists all Plans and separately identifies
Plans intended to be Qualified Plans and Multiemployer Plans. All written
descriptions thereof provided to the Agent and the Lenders are true and complete
in all material respects.
(b) Each Qualified Plan, and to the best knowledge of Borrower
each Multiemployer Plan, is in compliance in all material respects with the
applicable provisions of ERISA, the Code and other Federal or state law,
including all requirements under the Code or ERISA for filing reports (which are
true and correct in all material respects as of the date filed), and benefits
have been paid in accordance with the provisions of the Plan.
(c) Each Qualified Plan and, and to the best knowledge of
Borrower, Multiemployer Plan has been determined by the IRS to qualify under
Section 401 of the Code, and the trusts created thereunder have been determined
to be exempt from tax under the provisions of Section 501 of the Code, and to
the best knowledge of Borrower nothing has occurred which would cause the loss
of such qualification or tax-exempt status.
(d) Except as disclosed in SCHEDULE 5.10, neither Borrower nor
any ERISA Affiliate has any outstanding liability under Title IV of ERISA with
respect to any Qualified Plan maintained or sponsored by Borrower or any ERISA
Affiliate, nor to the best knowledge of Borrower, with respect to any
Multiemployer Plan to which Borrower or any ERISA Affiliate contributes or is
obligated to contribute.
(e) Except as disclosed in SCHEDULE 5.10, no Qualified Plan
subject to Title IV of ERISA, and to the best knowledge of Borrower, no
Multiemployer Plan has any Unfunded Pension Liability.
(f) Except as disclosed in SCHEDULE 5.10, no member of the
Controlled Group has ever represented, promised or contracted (whether in oral
or written form) to any current or former employee (either individually or to
employees as a group) that such current or former employee(s) would be provided,
at any cost to any member of the Controlled Group, with life insurance or
employee welfare plan benefits (within the meaning of section 3(1) of ERISA)
following retirement or termination of employment. To the extent that any
member of the Controlled Group has made any such representation, promise or
contract, such member has expressly reserved the right to amend or terminate
such life insurance or employee welfare plan benefits with respect to claims not
yet incurred.
(g) Members of the Controlled Group have complied in all
material respects with the notice and continuation coverage requirements of
Section 4980B of the Code.
(h) Except as disclosed in SCHEDULE 5.10, no ERISA Event has
occurred or is reasonably expected to occur with respect to any Qualified Plan,
or, to the best knowledge of Borrower, any Multiemployer Plan.
(i) There are no pending or, to the Knowledge of Borrower,
threatened claims, actions or lawsuits, other than routine claims for benefits
in the usual and ordinary
58
course, asserted or instituted against (i) any Plan maintained or sponsored by
Borrower or its assets, (ii) any member of the Controlled Group with respect to
any Qualified Plan, or (iii) any fiduciary with respect to any Plan for which
Borrower may be directly or indirectly liable, through indemnification
obligations or otherwise.
(j) Except as disclosed in SCHEDULE 5.10, neither Borrower nor
any ERISA Affiliate has incurred nor reasonably expects to incur (i) any
liability (and no event has occurred which, with the giving of notice under
Section 4219 of ERISA, would result in such liability) under Section 4201 or
4243 of ERISA with respect to a Multiemployer Plan or (ii) any liability under
Title IV of ERISA (other than premiums due and not delinquent under Section 4007
of ERISA) with respect to a Plan.
(k) Except as disclosed in SCHEDULE 5.10, neither Borrower nor
any ERISA Affiliate has transferred any Unfunded Pension Liability to a Person
other than Borrower or an ERISA Affiliate or otherwise engaged in a transaction
that could be subject to Section 4069 or 4212(c) of ERISA.
(l) No member of the Controlled Group has engaged, directly or
indirectly, in a non-exempt prohibited transaction (as defined in Section 4975
of the Code or Section 406 of ERISA) in connection with any Plan which could
reasonably be expected to have a Material Adverse Effect.
5.11 ENVIRONMENTAL MATTERS.
(a) ENVIRONMENTAL LAWS. Except as disclosed in SCHEDULE 5.11 or
in the SEC Report, the operations and Properties of Borrower, the REIT, the
Management Entities and their Subsidiaries comply in all respects with all
Environmental Laws, except such non-compliance affecting (i) any Property in the
Unencumbered Asset Pool as would not (if enforced in accordance with
Environmental Laws) result in liability in excess of 10% of the value of such
Property or (ii) all other Properties as would not result in liability which
could reasonably be expected to result in a Material Adverse Effect.
(b) ENVIRONMENTAL PERMITS. Except as described in SCHEDULE 5.11
or in the SEC Report, Borrower, the REIT, the Management Entities and their
Subsidiaries have obtained and maintained all material licenses, permits,
authorizations and registrations required under any Environmental Law
("Environmental Permits"). All such Environmental Permits are in good standing,
and each such Person is in compliance with all terms and conditions thereof,
except, with respect to Persons that are not Designated Entities, where the
failure to be in compliance could reasonably be expected to have a Material
Adverse Effect.
(c) ORDERS. Except as specifically disclosed in SCHEDULE 5.11
or in the SEC Report, there are no outstanding written orders from or agreements
with any Governmental Authority nor any judicial or docketed administrative
proceedings respecting any Environmental Law, Environmental Claim or Hazardous
Material to which Borrower, the REIT, any Management Entity, any of their
Subsidiaries, or any of such Person's Properties or operations, is
59
subject with respect to any Unencumbered Asset Pool Property, or with respect to
any other Property that could reasonably be expected to have a Material Adverse
Effect.
(d) HAZARDOUS MATERIALS. Except as disclosed in SCHEDULE 5.11
or in the SEC Report, there are no Hazardous Materials or other conditions or
circumstances existing with respect to any Property, or arising from operations
prior to the Closing Date, that would reasonably be expected to give rise to
Environmental Claims for any such condition, circumstance or Property with
respect to any Unencumbered Asset Pool Property, or with respect to any other
Property, that could reasonably be expected to have a Material Adverse Effect.
In addition, (i) there are not located on the Properties underground storage
tanks (x) that are not properly registered or permitted under applicable
Environmental Laws, or (y) that are leaking or emitting Hazardous Materials
whether on-or off-site, and (ii) Borrower, the REIT, the Management Entities and
their Subsidiaries have notified all of their employees of the existence, if
any, of any health hazard arising from the conditions of their employment to the
extent required under any Environmental Laws and have met all notification
requirements under Title III of CERCLA and all other Environmental Laws, in each
case with respect to any Unencumbered Asset Pool Property, or with respect to
any other Property that could reasonably be expected to have a Material Adverse
Effect.
5.12 REGULATED ENTITIES. None of Borrower, the REIT, any Management
Entity, or any of their Subsidiaries is (a) an "investment company" within the
meaning of the Investment Company Act of 1940; or (b) subject to regulation
under the Public Utility Holding Company Act of 1935, the Federal Power Act, the
Interstate Commerce Act, any state public utilities code, or any other Federal
or state statute or regulation limiting its ability to incur Indebtedness.
5.13 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 2.1(b) and Section 6.10, and are intended to be and shall
be used in compliance with Section 7.12.
5.14 REIT AND TAX STATUS; STOCK EXCHANGE LISTING. The REIT currently
has REIT Status and has maintained REIT Status on a continuous basis since its
formation. Borrower is not an association taxable as a corporation under the
Code. The shares of Common Stock of the REIT are listed on the NYSE.
5.15 INSURANCE. Borrower, the REIT, the Management Entities, their
Subsidiaries and the Properties are insured with financially sound and reputable
insurance companies, in such amounts, with such deductibles and covering such
risks as are customarily carried by companies engaged in similar businesses and
owning similar Properties in localities where Borrower and the Management
Entities operate.
5.16 NO DEFAULT. No Default or Event of Default exists or would
result from the incurring of any Obligations by Borrower. Neither Borrower, nor
the REIT, nor any Management Entity, nor any of their Subsidiaries is in default
under or with respect to any
60
Contractual Obligation in any respect which, individually or together with all
such other defaults, would reasonably be expected to have a Material Adverse
Effect.
5.17 FULL DISCLOSURE. None of the representations or warranties made
by Borrower, 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 Borrower, which materially
and adversely affects the business, operations, properties, assets or condition
(financial or otherwise) of Borrower, the REIT, the Management Entities, and the
Subsidiaries, taken as a whole, that has not been disclosed herein, in the SEC
Reports, 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.
5.18 NOT A "FOREIGN PERSON." Neither Borrower nor any Wholly-Owned
Subsidiary which owns a Property in the Unencumbered Asset Pool is a "foreign
person" within the meaning of Section 1445(f)(3) of the Code.
5.19 DEFECTS. Except as disclosed to and approved in writing by the
Requisite Lenders, to the Knowledge of Borrower, there exist no material defects
that would make any Property in the Unencumbered Asset Pool unsuitable for the
present or contemplated use thereof. Except as disclosed to and approved in
writing by the Requisite Lenders, to the Knowledge of Borrower, there are no
abnormal hazards, including but not limited to earth movement or slippage,
affecting any Property in the Unencumbered Asset Pool.
5.20 PROPERTY DOCUMENTS. Prior to including any Property in the
Unencumbered Asset Pool, Borrower has delivered to the Agent, copies of all
easement agreements, reciprocal easement agreements, management agreements,
service contracts, and other agreements, instruments and documents and all
amendments thereof (whether or not recorded) which affect in any material
respect such Property (except apartment leases).
5.21 CONDEMNATION. No condemnation proceeding involving any Property
in the Unencumbered Asset Pool or any portion thereof or parking facility used
in connection therewith has been commenced or, to the Knowledge of Borrower, is
contemplated by any Governmental Authority, nor has any portion of any Property
in the Unencumbered Asset Pool or any parking facility used in connection
therewith been damaged due to fire or other casualty.
5.22 VIOLATION OF LAWS; PERMITS. None of the Properties in the
Unencumbered Asset Pool are being operated in violation of (a) any Requirements
of Law or (b) any building permits, restrictions of record, or any agreement
affecting any such property or part thereof, or (c)
61
any judgment, decree or order applicable to such property. To the Knowledge of
Borrower, all governmental permits (including, without limitation, building
permits and certificates of occupancy) necessary under applicable Requirements
of Law to lawfully construct, own, lease, occupy, use and operate each Property
in the Unencumbered Asset Pool and the improvements thereon, including, but not
limited to, all applicable zoning laws, ordinances and regulations, have been
obtained.
5.23 UTILITIES. Each Property in the Unencumbered Asset Pool has
adequate water, gas, telephone, electrical supply, storm and sanitary sewerage
facilities and means of access to and from public streets or highways.
5.24 LEASES. Except for apartment leases and other Permitted
Exceptions, there are no leases affecting any Property in the Unencumbered Asset
Pool. No rent has been collected more than one month in advance under any such
apartment lease for a Property in the Unencumbered Asset Pool other than in the
Ordinary Course of Business. No such lease or any interest therein is subject
to any present assignment or pledge. All rent due to date under each such lease
has been collected in the Ordinary Course of Business and no concession has been
granted to any lessee in the form of a waiver, release, reduction, discount or
other alteration of rent due or to become due, other than in the Ordinary Course
of Business. The interest of the lessee under each such lease is as lessee
only, with no options to purchase or rights of first refusal.
5.25 YEAR 2000 COMPLIANCE. Borrower has conducted a comprehensive
review and assessment of its computers systems and applications and made inquiry
of Borrower's key suppliers and vendors with respect to the so-called "year 2000
problem" (the risk that computer applications may not be able to properly
perform date-sensitive functions after December 31, 1999) and, based on that
review and inquiry, Borrower does not believe that the "year 2000 problem" will
result in a material adverse change in the ability of Borrower and its
Subsidiaries to manage and operate their properties and pay and perform their
obligations hereunder.
5.26 NON-GUARANTOR SUBSIDIARIES. All of the Wholly-Owned Subsidiaries
of the REIT, other than those listed on Schedule 5.26 and their non-corporate
Subsidiaries (each a "Non-Guarantor Subsidiary," and collectively, the
"Non-Guarantor Subsidiaries"), are Guarantor Subsidiaries. The Non-Guarantor
Subsidiaries collectively have a net worth, calculated in accordance with GAAP
(which may be less than fair market value), that is less than $10,000,000. The
Borrower currently expects that the assets of the Non-Guarantor Subsidiaries
shall be transferred from the REIT to the Borrower as soon as practicable,
consistent with relevant legal requirements, with prudent business practices and
with Contractual Obligations, and that the Non-Guarantor Subsidiaries may be
dissolved and liquidated.
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ARTICLE VI.
AFFIRMATIVE COVENANTS
Borrower covenants and agrees that, so long as any Lender shall have
any Commitment hereunder, or any Loan or other obligation shall remain unpaid or
unsatisfied, unless the Requisite Lenders waive compliance in writing:
6.1 FINANCIAL INFORMATION. Borrower shall deliver to the Agent and
to each Lender, in form and detail satisfactory to the Agent and the Lenders:
(a) ANNUAL FINANCIAL STATEMENTS. As soon as available, but not
later than ninety (90) days after the end of each fiscal year, a copy of the
audited consolidated balance sheet of the REIT as of the end of such year and
the related consolidated statements of operations, stockholders' equity (where
applicable) and cash flows for such fiscal year, setting forth in each case in
comparative form the figures for the previous year, including the REIT's SEC
Form 10-K for such period, and accompanied by the unqualified opinion of a
nationally-recognized independent public accounting firm stating that such
consolidated financial statements present fairly the financial position for the
periods indicated, in conformity with GAAP, and applied on a basis consistent
with prior years;
(b) QUARTERLY FINANCIAL STATEMENTS. As soon as available, but
not later than forty-five (45) days after the end of each of the first three (3)
fiscal quarters of each year, a copy of the unaudited consolidated balance sheet
of the REIT as of the end of such quarter and the related consolidated
statements of operations, stockholders' equity (where applicable) and cash flows
for the period commencing on the first day and ending on the last day of such
quarter, including the REIT's SEC Form 10-Q for such period, and accompanied by
a certificate signed by at least two (2) Responsible Officers stating that such
financial statements are complete and correct and present fairly the financial
position for the periods indicated, in conformity with GAAP for interim
financial statements, and applied on a basis consistent with prior quarters;
(c) QUARTERLY OPERATING STATEMENTS FOR UNENCUMBERED ASSET POOL;
MANAGEMENT ENTITIES. As soon as available, but not later than forty-five (45)
days after the end of each calendar quarter, a quarterly operating statement for
each Property in the Unencumbered Asset Pool and for each Management Entity (in
a format and with such detail as the Agent as previously delivered to Agent by
Borrower); and
(d) BORROWER PLANS AND PROJECTIONS. Not less than ninety (90)
days after the beginning of each fiscal year, copies of (A) Borrower's business
plan for the current and the succeeding two (2) fiscal years, (B) Borrower's
annual budgets (including capital expenditure budgets) and projections for each
Property in the Unencumbered Asset Pool; and (C) Borrower's financial
projections for the current and the succeeding two (2) fiscal years, as prepared
by Borrower's Chief Financial Officer and in a format and with such detail as
the Agent may require.
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6.2 CERTIFICATES; OTHER INFORMATION. Borrower shall furnish to the
Agent with sufficient copies for each Lender:
(a) ACCOUNTING CERTIFICATES. Concurrently with the delivery of
the financial statements referred to in Section 6.1(a), 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;
(b) OFFICERS' CERTIFICATES. Concurrently with the delivery of
the financial statements referred to in Sections 6.1(a) and 6.1(b) above, a
Compliance Certificate (i) stating that, to the best of such officers'
knowledge, each of Borrower, 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; (ii) showing in detail the calculations
supporting such statement for such period in respect of the covenants in Section
7.9 and 7.16; (iii) showing in detail the calculation of the Total Available
Commitments for such period on an asset-by-asset basis (including appropriate
detail with respect to Unencumbered Management Entity Value);
(c) PERIODIC REPORTS AND FILINGS; PRESS RELEASES. Promptly
after the same are sent or released, copies of all reports, proxy statements and
financial statements which the REIT sends to its shareholders and copies of all
press releases made by Borrower and the REIT, promptly after the same are filed,
copies of all financial statements and regular, periodical or special reports
which the REIT may make to, or file with, the SEC or any successor or similar
Governmental Authority and promptly after the same are received, copies of any
reports prepared by analysts for or with respect to Borrower or the REIT,
(d) ACCOUNTANTS' REPORTS. Promptly after the same are received,
copies of all reports which the independent certified public accountants of
Borrower or the REIT deliver to Borrower or the REIT; and
(e) OTHER INFORMATION. Promptly, such additional financial and
other information as the Agent may from time to time reasonably request.
(f) ORGANIZATIONAL CHART. Upon the request of Agent, any
subsequent revisions to the Organizational Chart.
6.3 NOTICES. Borrower shall promptly (and in no event later than ten
(10) days after Borrower 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. Each
notice under this Section 6.3(a) shall describe with
64
particularity the clause or provision of this Agreement or other Loan Documents
that have been breached or violated.
(b) LITIGATION. The commencement of, or any material
development in, any litigation, arbitration or proceeding affecting Borrower,
the REIT, any Management Entity or any Subsidiary (i) in which the amount of
damages claimed is $2,000,000 or more, (ii) in which injunctive or similar
relief is sought and which, if adversely determined, would reasonably be
expected to have a Material Adverse Effect, (iii) in which the relief sought is
an injunction or other stay of the performance of any Loan Document or (iv)
required to be reported to the SEC pursuant to the Exchange Act;
(c) ENVIRONMENTAL MATTERS. (i) Any and all material
enforcement, cleanup, removal or other governmental or regulatory actions
instituted, completed or threatened against Borrower, the REIT, any Management
Entity or any of their Subsidiaries or any of their Properties pursuant to any
Environmental Laws, (ii) all other material Environmental Claims, and (iii) any
environmental or similar condition on any real property adjoining or in the
vicinity of the Properties of Borrower, the REIT, any Management Entity or any
of their Subsidiaries that could reasonably be anticipated to cause such
Properties (or any portion thereof) to be subject to any material restrictions
on ownership, occupancy, transferability or use under any Environmental Laws;
provided, however, that with respect to any Property which is not in the
Unencumbered Asset Pool, only to the extent any of the foregoing could
reasonably be expected to have a Material Adverse Effect.
(d) ERISA. The occurrence of any of the following ERISA events
affecting Borrower or any member of its Controlled Group, together with a copy
of any notice with respect to such event that may be required to be filed with
any Governmental Authority and any notice delivered by a Governmental Authority
to Borrower or any member of its Controlled Group with respect to such event:
(i) an ERISA Event where the aggregate liability is
likely to exceed $1,000,000;
(ii) the adoption of any new Plan that is subject to Title
IV of ERISA or Section 412 of the Code by any member of the Controlled Group;
(iii) the adoption of any amendment to a Plan that is
subject to Title IV of ERISA or Section 412 of the Code, if such amendment
results in a material increase in benefits or unfunded liabilities; or
(iv) the commencement of contributions by any member of
the Controlled Group to any Plan that is subject to Title IV of ERISA or Section
412 of the Code;
(e) MATERIAL ADVERSE EFFECTS. The occurrence of any act,
omission, change or event which has a Material Adverse Effect subsequent to the
date of the most recent
65
audited financial statements of Borrower and the REIT delivered to the Agent
pursuant to Section 6.1(a);
(f) EXCLUDED PROPERTIES. The occurrence of any event or
circumstance that causes, or is likely to cause, any Qualified Property to be
excluded from the Unencumbered Asset Pool pursuant to Section 2.13(b) above;
(g) MATERIAL TRANSACTIONS OR OCCURRENCES. The consummation of
any material Investment or Disposition, of any material issuance of Stock of the
REIT (other than upon the tender of any Units for redemption or upon the
conversion of any shares of the REIT's Class B Common Stock into shares of the
REIT's Class A Common Stock) or Units, of any incurrence of material
Indebtedness or of any other material transaction entered into, by Borrower, the
REIT, any Management Entity or any of their Subsidiaries; and change in any
executive officer of the REIT;
(h) FAILURE TO QUALIFY AS A REIT. The failure of the REIT to
maintain REIT Status or of any existing Subsidiary of the REIT to maintain its
status as a qualified REIT subsidiary under the Code, if and to the extent
required by applicable law;
(i) ACCOUNTING CHANGES. Any material change in Borrower's or
the REIT's accounting policies or financial reporting practices;
(j) LEGAL COMPLIANCE. Any material notice received from any
Governmental Authority asserting that any Property in the Unencumbered Asset
Pool is not in compliance with any Requirements of Law; and
(k) CROSS-DEFAULT. Any notice received by Borrower, the REIT,
any Management Entity or any of their Subsidiaries of any default under any
Indebtedness or Guaranty Obligation described in Section 8.1(e). Each notice
pursuant to this section shall be accompanied by a written statement, signed by
at least two (2) Responsible Officers of Borrower or the REIT, setting forth
details of the occurrence referred to therein and the provisions of this
Agreement affected, and stating what action Borrower or the REIT proposes to
take with respect thereto.
6.4 PRESERVATION OF EXISTENCE, ETC. Borrower shall, and shall cause
the REIT, the Management Entities and each of their Subsidiaries to, (a)
preserve and maintain in full force and effect its partnership, corporate or
other organizational existence and good standing under the laws of its state or
jurisdiction of organization, and (b) preserve and maintain in full force and
effect all rights, privileges, qualifications, permits, licenses and franchises
necessary or desirable in the normal conduct of its business; provided, however,
with respect to any Person that is not a Designated Entity, then only to the
extent that the failure to do any of the foregoing could reasonably be expected
to have a Material Adverse Effect.
6.5 MAINTENANCE OF PROPERTY. Borrower shall maintain, and shall
cause the REIT, the Management Entities and each of their Subsidiaries to
maintain, and preserve all of
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their Properties, including Properties in the Unencumbered Asset Pool, in good
working order and condition in accordance with Borrower's past practices,
ordinary wear and tear excepted.
6.6 INSURANCE. Borrower shall maintain, and shall cause the REIT,
the Management Entities and each of their Subsidiaries to maintain, with
financially sound and reputable independent insurers, insurance with respect to
their Properties and business 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 liability insurance specifically insuring
Borrower and its Wholly Owned Subsidiaries from any tort, legal or other
liability resulting from their participation as general partners in partnerships
which own Property; 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). Upon the request of the Agent,
Borrower shall furnish such Agent, with sufficient copies for each Lender, at
reasonable intervals (but not more than the twice per calendar year) a
certificate signed by at least two (2) Responsible Officers of Borrower (and, if
requested by such Agent, any insurance broker of Borrower or the REIT) setting
forth the nature and extent of all insurance maintained by Borrower, the REIT,
the Management Entities and each of their Subsidiaries in accordance with this
Section 6.6 (and which, in the case of a certificate of a broker, was placed
through such broker).
6.7 PAYMENT OF OBLIGATIONS. Borrower shall, and shall cause the
REIT, the Management Entities and each of their Subsidiaries 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
Properties, unless the same are being contested in good faith by appropriate
proceedings and adequate reserves in accordance with GAAP are being maintained
by Borrower or such Person, (b) all lawful claims which, if unpaid, would by law
become a Lien upon its Properties, including Properties constituting the
Unencumbered Asset Pool, (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) payment and/or performance of all
Contractual Obligations (including any payments of preferred stock dividends);
provided, however, with respect to any Person that is not a Designated Entity,
then only to the extent the failure to do any of the foregoing could reasonably
be expected to have a Material Adverse Effect.
6.8 COMPLIANCE WITH LAWS. Borrower shall comply, and shall cause the
REIT, the Management Entities and each of their Subsidiaries to comply, in all
material respects, with all Requirements of Law of any Governmental Authority
having jurisdiction over it or its business, including, without limitation, all
securities laws and regulations.
6.9 ENVIRONMENTAL LAWS. Borrower shall, and shall cause the REIT,
the Management Entities and each of their Subsidiaries to, conduct its
operations and keep and maintain its Properties in compliance in all material
respects with all Environmental Laws. Upon the written request of the Agent or
any Lender, Borrower shall submit, and cause the REIT, the
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Management Entities and each of their Subsidiaries to submit, to the Agent and
the Lenders, at Borrower's sole cost and expense, at reasonable intervals, a
report providing an update of the status of any environmental, health or safety
compliance, hazard or liability issue identified in any notice or report
required pursuant to Section 6.3(c) that could, individually or in the
aggregate, result in liability in excess of (a) $1,000,000 with respect to any
Property in the Unencumbered Asset Pool or (b) $10,000,000 with respect to any
other Properties.
6.10 USE OF PROCEEDS. Borrower shall use the proceeds of the
Revolving Loans solely in accordance with Section 2.1(b) above.
6.11 MAINTENANCE OF REIT STATUS; STOCK EXCHANGE LISTING. Borrower
shall cause the REIT at all times to maintain its REIT Status and to maintain
its common Stock listing on the NYSE, the American Stock Exchange, or Nasdaq
Stock Exchange.
6.12 INSPECTION OF PROPERTY AND BOOKS AND RECORDS. Borrower shall
maintain, and shall cause the REIT, the Management Entities and each of their
Subsidiaries 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 Properties and
business of Borrower, the REIT, the Management Entities and each of their
Subsidiaries. Borrower shall permit, and shall cause the REIT, the Management
Entities and each of their Subsidiaries to permit, representatives of the Agent
or any Lender to visit and inspect any of their respective Properties, to
conduct audits of the Unencumbered Asset Pool, to examine their respective
corporate, financial and operating records, and make copies thereof or abstracts
therefrom, and to discuss their respective affairs, finances and accounts with
their respective directors, officers, and independent public accountants, all at
the expense of Borrower 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 Borrower; PROVIDED, HOWEVER, when an Event of Default exists,
the Agent or any Lender may visit and inspect at the expense of Borrower such
Properties at any time during business hours and without advance notice.
6.13 FURTHER ASSURANCES.
(a) FULL DISCLOSURE. Borrower will ensure that all other
written information, exhibits and reports furnished to any Agent or Lender by
Borrower, the REIT, any Management Entity or any of their Subsidiaries 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, Borrower shall (and shall cause the REIT, each Management
Entity and each of their Subsidiaries 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,
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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, and (ii) 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.
(c) ADDITIONAL GUARANTIES. Promptly upon the formation by the
REIT of any Wholly-Owned Subsidiary of the REIT which is a qualified REIT
subsidiary under the Code, 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 F1; provided, however, solely
with respect to any such Wholly-Owned Subsidiary that does not own a Property in
the Unencumbered Asset Pool, such guaranty will not be required only if such
Wholly-Owned Subsidiary is prohibited from issuing such guaranty under its
then-current financing arrangements. Prior to or concurrently with any EBITDA
of a Management Entity being included in Unencumbered Management Entity Value,
Borrower shall cause each such Management Entity to deliver to the Agent for the
ratable benefit of the Lenders a guaranty of the Obligations in the form
attached hereto as EXHIBIT F2.
6.14 COMMUNICATION WITH ACCOUNTANTS. While any Event of Default is
continuing, Borrower authorizes the Agent and any Lender to communicate directly
with Borrower's independent accountants and authorizes such accountants to
disclose to such Persons any and all financial statements and other information
of any kind, including the substance of any oral information or conversation
that such accountants may have with respect to the business, financial condition
and other affairs of Borrower.
6.15 SOLVENCY. Borrower shall at all times be, and shall cause the
REIT, each Management Entity and each of their Subsidiaries to be, Solvent.
6.16 COVENANTS RELATING TO UNENCUMBERED ASSET POOL PROPERTIES.
Borrower hereby agrees as follows:
(a) MAINTENANCE. Borrower shall maintain each Unencumbered
Asset Pool Property in good order and condition in accordance with Borrower's
past practices.
(b) LEASES. Borrower shall not enter into any lease of any
Unencumbered Asset Pool Property other than apartment leases or other ordinary
course leases consistent with past practice and having terms of less than one (1
) year on market terms. Borrower shall deliver to the Agent a copy of the
standard lease forms utilized for the Unencumbered Asset Pool Properties from
time to time.
(c) MATERIAL AGREEMENTS. Borrower shall obtain the prior
written approval of the Agent and the Requisite Lenders prior to entering into
any reciprocal easement or
69
similar agreement, ground lease or any other material agreement affecting any
Unencumbered Asset Pool Property.
(d) MANAGEMENT CONTRACTS. Borrower shall obtain and shall cause
its Affiliates to 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 Borrower, one of the Management Entities, or any of their
Subsidiaries, or replacing the property manager for any Unencumbered Asset Pool
Property with a Person other than Borrower, one of the Management Entities, or
any of their Subsidiaries. Borrower shall cause all property management
contracts affecting Unencumbered Asset Pool Properties 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
Borrower shall not permit the management fee payable under any such property
management agreement to exceed four percent (4%) of gross receipts from such
property per fiscal year.
(e) CONSTRUCTION. Borrower shall obtain the prior written
approval of the Agent and the Requisite Lenders prior to entering into any major
construction or renovation affecting a Unencumbered Asset Pool Property and
shall discharge all mechanic's liens resulting from any such construction or
renovation.
(f) LIENS. Borrower shall keep each Unencumbered Asset Pool
Property 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 Permitted Exceptions or other matters approved by the Agent and the
Requisite Lenders.
ARTICLE VII.
NEGATIVE COVENANTS
Borrower hereby covenants and agrees that, so long as any Lender shall
have any Commitment hereunder, or any Loan or other Obligation shall remain
unpaid or unsatisfied, unless the Requisite Lenders waive compliance in writing:
7.1 LIENS. Neither Borrower, nor the REIT, nor any Management
Entity, nor any of their Subsidiaries shall, directly or indirectly, make,
create, incur, assume or suffer to exist any Lien upon or with respect to any
part of its Property, whether now owned or hereafter acquired, other than the
following ("Permitted Liens"):
(a) EXISTING LIENS. Liens on the Borrower's Properties or its
Subsidiaries securing Indebtedness described in Schedule 7.2 or any renewal,
extension or refinancing thereof permitted under Section 7.2(a) below;
(b) CERTAIN LIENS. Liens created under any Loan Documents;
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(c) TAX LIENS. Liens for taxes, fees, assessments or other
governmental charges which are not delinquent or remain payable without penalty,
or to the extent that non-payment thereof is permitted by Section 6.7, provided
that no Notice of Lien has been filed or recorded;
(d) BANKERS LIENS. Liens arising solely by virtue of any
statutory or common-law provision relating to banker's liens, rights of setoff
or similar rights and remedies as to deposit accounts or other funds maintained
with a creditor depository institution; PROVIDED that (i) such deposit account
is not a dedicated cash collateral account and is not subject to restrictions
against access by the depositor in excess of those set forth by regulations
promulgated by the Federal Reserve Board, and (ii) such deposit account is not
intended by the depositor to provide collateral to the depository institution;
(e) OTHER STATUTORY LIENS. Carriers', warehousemen's,
mechanics', landlords', materialmen's, repairmen's or other similar Liens
arising in the Ordinary Course of Business, against Properties other than the
Unencumbered Asset Pool Properties, which are not delinquent or remain payable
without penalty or which are being contested in good faith and by appropriate
proceedings, which proceedings have the effect of preventing the forfeiture or
sale of the Property subject thereto;
(f) EMPLOYMENT-RELATED LIENS. Liens (other than any Lien
imposed by ERISA) consisting of pledges or deposits required in the Ordinary
Course of Business in connection with workers' compensation, unemployment
insurance and other social security legislation;
(g) JUDGMENT LIENS. Liens against Properties other than the
Unencumbered Asset Pool Properties consisting of judgment or judicial attachment
liens, provided that the enforcement of such Liens is effectively stayed or
bonded;
(h) EASEMENTS, ETC. Liens against Properties other than the
Unencumbered Asset Pool Properties consisting of easements, rights-of-way,
restrictions and other similar title exceptions incurred in the Ordinary Course
of Business which do not in any case materially detract from the value of the
Property subject thereto or interfere with the ordinary conduct of the
businesses of Borrower, the REIT and the Subsidiaries; and
(i) LIENS SECURING FINANCING. Liens securing Indebtedness
permitted under Section 7.2(f) or (g) on real and personal properties not a part
of the Unencumbered Asset Pool and not constituting ownership interests in
Borrower or any of the Subsidiaries of Borrower or the REIT.
Except with respect to specific property encumbered to secure payment of
particular Permitted Indebtedness, neither Borrower nor any of its Subsidiaries
shall enter into any agreement prohibiting the creation or assumption of any
Lien upon any of its Properties included in the Unencumbered Asset Pool or any
stock or assets, whether now owned or hereafter acquired. Except as provided in
this Agreement or with respect to particular Permitted
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Indebtedness and acquisition agreements,Borrower will not, and will not permit
any of its Subsidiaries to, create or otherwise cause or suffer to exist or
become effective any consensual encumbrance or restriction of any kind on the
ability of any such Subsidiary to (A) pay dividends or make any other
distributions on any of such Subsidiary's capital stock owned by Borrower or any
other Subsidiary of Borrower, (B) repay or prepay any Indebtedness owed by such
Subsidiary to Borrower or any other Subsidiary of Borrower, (C) make loans or
advances to Borrower or any other Subsidiary of Borrower, or (D) transfer any of
its property or assets to Borrower or any other Subsidiary of Borrower.
7.2 INDEBTEDNESS. Neither Borrower, nor the REIT, nor any Management
Entity, nor any of their Subsidiaries shall create, incur, assume, suffer to
exist, or otherwise become or remain directly or indirectly liable with respect
to, any Indebtedness whether Unsecured Debt or otherwise, except the following
("Permitted Indebtedness"):
(a) EXISTING OR CONTEMPLATED INDEBTEDNESS. Indebtedness of
Borrower and its Subsidiaries outstanding on the Closing Date and described in
SCHEDULE 7.2, including the Indebtedness evidenced or to be evidenced by the
FNMA/Washington Mortgage Facility Documents and the NHP/Xxxxxx Financing or any
renewal, refinancing or extension thereof; provided, however, that any such
renewal, refinancing or extension (i) shall not increase the principal balance
thereof or otherwise materially modify the terms thereof, (ii) shall not cause
the financial or other material covenants, when taken as a whole, to be
significantly more restrictive than (A) those existing in the applicable credit
documentation prior to such renewal, refinancing or extension or (B) the
comparable covenants in this Agreement, and (iii) other than with respect to
Indebtedness evidenced or to be evidenced by the FNMA/Washington Mortgage
Facility Documents, shall have a maturity or weighted-average life not prior to
the maturity of Borrower's obligations under this Agreement;
(b) CERTAIN INDEBTEDNESS. Indebtedness incurred pursuant to
this Agreement;
(c) ACCOUNTS PAYABLE. Accounts payable to trade creditors for
goods and services and current operating liabilities (not the result of the
borrowing of money) incurred in the Ordinary Course of Business in accordance
with customary terms and paid within the specified time, unless contested in
good faith by appropriate proceedings and reserved for in accordance with GAAP;
(d) CONTINGENT OBLIGATIONS. Indebtedness consisting of
Contingent Obligations permitted by Section 7.3;
(e) INTRA-COMPANY DEBT. Intra-Company Debt, provided that, if
the Borrower, the REIT, or a Guarantor Subsidiary is the obligor thereunder, the
obligor thereof shall have subordinated the repayment of such Intra-Company Debt
to the repayment of the Obligations pursuant to a subordination agreement in
form and substance approved by the Requisite Lenders;
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(f) ADDITIONAL INDEBTEDNESS. Indebtedness of Borrower or a
Subsidiary of Borrower that does not own any Unencumbered Asset Pool Property
for borrowed money owed to a non-Affiliate of Borrower which is not Unsecured
Debt, is not otherwise Recourse to any Borrower or any Subsidiary of Borrower
and is otherwise on such terms and in such amount that, upon incurring such
Indebtedness, Borrower will be in compliance with the terms of Section 7.16
below; and
(g) REIT INDEBTEDNESS. Indebtedness of the REIT which is on
such terms and in such amount that, upon the incurrence of such Indebtedness,
Borrower will be in compliance with the terms of Section 7.16 below.
(h) OTHER UNSECURED INDEBTEDNESS. Unsecured Debt of Borrower,
the REIT and any of their Subsidiaries (other than the Management Entities) in
an aggregate principal amount which does not exceed the Maximum Unsecured
Indebtedness.
Nothing contained in this Section 7.2 shall be deemed to excuse any lack of
compliance by Borrower, the REIT, or any Subsidiary with the terms of Section
7.16 below.
7.3 CONTINGENT OBLIGATIONS. Neither Borrower, nor the REIT, nor any
of their Subsidiaries shall create, incur, assume or suffer to exist any
Contingent Obligations except:
(a) ORDINARY COURSE ENDORSEMENTS. Endorsements for collection
or deposit in the Ordinary Course of Business;
(b) RATE CONTRACTS. Unsecured Rate Contracts entered into by
Borrower with respect to variable rate Indebtedness permitted hereunder;
(c) LETTER OF CREDIT REIMBURSEMENT OBLIGATIONS. Reimbursement
obligations of Borrower or of Subsidiaries that do not own Unencumbered Asset
Pool Properties under letters of credit provided that such obligations are on
such terms and in such amounts that, upon incurring such obligations and
assuming that all conditions for drawing on such letters of credit have been
complied with, Borrower will be in compliance with the terms of Section 7.16
below; and
(d) EXCEPTIONS TO NONRECOURSE GUARANTIES. Contingent
Obligations of the REIT, Borrower and their Subsidiaries consisting of
"exceptions to nonrecourse" guaranties of nonrecourse Indebtedness otherwise
permitted under Section 7.2 or of other Indebtedness permitted under Section
7.2.
7.4 LEASE OBLIGATIONS. Neither Borrower, nor the REIT, nor any of
their Subsidiaries shall create or suffer to exist any obligations for the
payment of rent for any Property under a lease or agreement to lease that is not
a Capital Lease, except for:
(a) EXISTING LEASES. Leases in existence on the Closing Date
(and any renewal, extension or refinancing thereof); or
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(b) ORDINARY COURSE LEASES. Leases entered into after the
Closing Date in the Ordinary Course of Business and at market rates and terms.
7.5 DISPOSITION OF PROPERTIES. Neither Borrower, nor the REIT, nor
any of their Subsidiaries shall, directly or indirectly:
(a) make any Disposition of any Unencumbered Asset Pool Property
or enter into any agreement to do so, provided, however, so long as no Default
or Event of Default is then continuing, Borrower may sell or refinance a
Property in the Unencumbered Asset Pool by paying to the Agent for distribution
to the Lenders an amount equal to the amount which would be required to be paid
to the Lenders so that the Outstanding Amount of the Loans immediately after
such sale or refinance would not exceed the Total Available Commitment
(calculated without including the Property so sold or refinanced);
(b) make any Disposition of its interest in any Management
Entity, or enter into any agreement to do so; or
(c) make any Disposition of any Unencumbered Asset Pool
Property, or enter into any agreement to do so, unless in the case of this
clause (c) such Disposition is at fair market value, and at the time of the
Disposition no Event of Default exists.
7.6 CONSOLIDATIONS AND MERGERS. Neither Borrower, nor the REIT, nor
any of their Subsidiaries shall merge or consolidate with or into, or convey,
transfer, lease or otherwise dispose of (whether in one transaction or in a
series of transactions) all or substantially all of its Properties (whether now
owned or hereafter acquired) to or in favor of, any Person, except as follows:
(a) Subsidiaries of Borrower or of the REIT may merge or
consolidate with or into, or convey, transfer, lease or otherwise dispose of
(whether in one transaction or in a series of transactions) all or substantially
all of any of their Properties (whether now owned or hereafter acquired) to or
in favor of, Borrower or another Subsidiary of Borrower or of the REIT;
(b) Subsidiaries of the REIT may merge, consolidate with or
into, or convey, transfer, lease or otherwise dispose of (whether in one
transaction or in a series of transactions) all or substantially all of any of
their Properties (whether now owned or hereafter acquired) to or in favor of the
REIT; and
(c) Borrower, the REIT or any Subsidiary may merge, or
consolidate with another Person provided that no Default or Event of Default has
occurred and is continuing and each of the following conditions are satisfied:
(i) at the inception of the transaction, Borrower, the REIT or Subsidiary are
intended to be and will be the surviving Person after the consummation of the
contemplated transaction; (ii) to the best of Borrower's knowledge, prior to the
consummation of the transaction, the transaction will not cause Borrower to be
in breach of the representations and warranties of this Agreement and the other
Loan Documents; (iii) the transaction will not cause Borrower to be in breach of
the covenants of this Agreement and the
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other Loan Documents, including financial covenants after the consummation
thereof; and (iv) Borrower provides Agent with a pro-forma Compliance
Certificate which demonstrates that after the consummation of the proposed
transaction the Borrower will be in compliance with the financial covenants of
this Agreement.
Notwithstanding the foregoing, no Subsidiary shall merge,
consolidate with or into, or convey, transfer, lease or otherwise dispose of
(whether in one transaction or in a series of transactions) all or substantially
all of its Properties (whether now owned or hereafter acquired) to or in favor
of another Subsidiary if such transaction would result in a violation of any
covenant in this Agreement.
7.7 LIQUIDATIONS; MATERIAL ORGANIZATION CHANGES; NEW SUBSIDIARIES.
(a) Neither Borrower, nor the REIT, nor any Designated Entity or
Guarantor Subsidiary, shall liquidate, wind-up or dissolve, or amend its
Organizational Documents in any respect which is, in the opinion of the
Requisite Lenders, materially adverse to the interests of the Lenders. Without
limiting the foregoing, under no circumstances (i) shall the Organizational
Documents of the REIT and Borrower be changed so as to eliminate the
transferability of Units of Borrower for common Stock in the REIT on a
one-to-one basis (subject to adjustment as provided in the Organizational
Documents of the Borrower) or (ii) shall the Organizational Documents of a
Qualified Management Entity be changed so as to eliminate or reduce any
obligation to pay preferred stock dividends, without the prior consent of the
Requisite Lenders.
(b) Neither the REIT nor any Subsidiary shall issue any
preferred Stock; provided however, the REIT or any Subsidiary may issue
preferred Stock provided that: (i) if such Stock has any mandatory redemption
feature or has a redemption feature which is exercisable at the option of the
holder thereof, then the face amount of such Stock shall be deemed Unsecured
Debt for all purposes of this Agreement; and (ii) any distributions with respect
thereto shall comply with the provisions of this Agreement (including, without
limitation, Section 7.9).
(c) No Subsidiary shall own or acquire an Unencumbered Asset
Pool Property unless such Subsidiary is a Wholly-Owned Subsidiary in which
Borrower owns at least a 98% interest (either directly or indirectly) and in
which the REIT owns not more than a 2% interest (either directly or indirectly
other than through its interest in Borrower and its Subsidiaries) and such
Subsidiary shall have delivered a guaranty of the Obligations to the Agent in
form and substance acceptable to the Agent.
(d) In no event shall Borrower cause or permit any change in the
organizational structure of Borrower, the REIT or any of their respective
Subsidiaries from that which is reflected in the Organizational Chart which is,
in the reasonable opinion of the Requisite Lenders, adverse to any Designated
Entity, without the prior written consent of the Lenders, except for mergers
permitted under Section 7.6, and changes in the equity structure of
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Subsidiaries and the formation or acquisition of Subsidiaries in accordance with
this Section 7.7 and Section 7.8.
7.8 INVESTMENTS. Neither Borrower, nor the REIT, nor any Management
Entity, nor any of their Subsidiaries shall directly or indirectly own or
acquire any assets or make any Investments (or incur any Contractual Obligation
or enter into any letter of intent to make any Investments) other than:
(i) cash and Cash Equivalents;
(ii) multi-family apartment projects in fee simple or
leasehold interests therein or partnership, joint venture interests or other
Investments (including capital contributions or partner loans) in Persons that
own multi-family apartment projects;
(iii) ownership interests in Management Entities, provided
in each case the same are engaged in managing multi-family apartment projects;
(iv) Indebtedness listed on SCHEDULE 7.2;
(v) other assets not described elsewhere in this
Section 7.8, including any Investments consisting of Intra-Company Debt not
otherwise permitted herein, provided that the aggregate Carrying Value of such
interests shall not at any time exceed fifteen percent (15%) of the Carrying
Value of the total assets owned by Borrower, the REIT, and their Subsidiaries.
7.9 RESTRICTED PAYMENTS AND DEMANDS.
(a) Neither Borrower nor the REIT shall declare or make, or
permit any of their respective Subsidiaries to declare or make, any distribution
of any Properties, including cash, rights, obligations, or partnership interests
or units, on account of any partnership interests, Units or Stock, or purchase,
redeem or otherwise acquire for value any of its partnership interests, Units or
Stock, now or hereafter outstanding to any Person other than Borrower, the REIT
or a Wholly-Owned Subsidiary (all of the foregoing, collectively,
"distributions"), except (a) for the exchange of common Stock of the REIT for
Units; (b) that if no Default or Event of Default exists under Section 8.1(a) or
under Section 8.1(c) as a result of a breach of Section 7.16, the REIT, Borrower
and all such Subsidiaries may make distributions during any twelve (12) month
period in an amount in the aggregate which does not exceed the greater of 80% of
Funds From Operations for such period or such amount as may be necessary to
maintain REIT Status.
(b) Under no circumstances shall the REIT or Borrower (i) permit
any Subsidiary to make a demand under any Intra-Company Debt which is payable
upon demand at any time after the Conversion Date, or (ii) permit any payment to
be made with respect to Intra-Company Debt while any Event of Default is
continuing.
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7.10 TRANSACTIONS WITH AFFILIATES. Neither Borrower, nor the REIT,
nor any Management Entity, nor any of their Subsidiaries shall enter into any
transaction with any Affiliate of Borrower or of any such Person (other than a
Wholly-Owned Subsidiary or a Management Entity), except (a) as expressly
permitted by this Agreement or (b) in the Ordinary Course of Business and
pursuant to the reasonable requirements of the business of Borrower or such
Person; in each case (a) and (b), upon fair and reasonable terms no less
favorable to such Person than would obtain in a comparable arm's-length
transaction with a Person not such an Affiliate.
7.11 SPECIAL COVENANTS RELATING TO THE REIT. The REIT shall not, nor
shall Borrower cause or permit the REIT to:
(a) Make any disposition of or encumber, pledge or hypothecate,
whether directly or indirectly, all or any portion of its interest in Borrower
or any Subsidiary which owns an Unencumbered Asset Pool Property at any time or
any rights to distributions or dividends therefrom other than to Borrower or a
Wholly-Owned Subsidiary;
(b) At any time and for any reason, fail to own, either directly
or through one or more Wholly-Owned Subsidiaries of the REIT, more than 50% of
the aggregate outstanding partnership interests in Borrower;
(c) Fail for any reason whatsoever, whether voluntarily or
involuntarily, either directly or through one or more Wholly-Owned Subsidiaries
of the REIT, to be the sole general partner of Borrower at any time;
(d) Use Net Issuance Proceeds for any purpose other than to make
capital contributions to GP Corp and LP Corp immediately upon the receipt
thereof by the REIT for immediate contribution thereof to Borrower;
(e) Cease to have its Common Stock listed on the NYSE, the
American Stock Exchange, or the Nasdaq Stock Exchange; or
(f) Cease to have REIT Status or fail to comply with the
requirements of the Code relating to qualified REIT subsidiaries in respect of
its ownership of any Subsidiary of the REIT to the extent required under the
Code and applicable law.
7.12 USE OF PROCEEDS. Borrower 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 Borrower or others incurred to
purchase or carry Margin Stock, (c) to extend credit for the purpose of
purchasing or carrying any Margin Stock, or (d) for any purpose other than those
permitted by Section 6.10, or (e) to finance all or any portion of the costs of
acquiring any Person in a transaction which is considered "hostile" by Agent or
generally prevailing investment banking standards.
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7.13 TAXATION OF BORROWER. Borrower shall at all times be taxed as a
partnership under the Code and not as an association taxable as a corporation.
7.14 ERISA. Borrower shall not and shall not permit the REIT, or any
of their Subsidiaries to, (a) terminate any Plan subject to Title IV of ERISA so
as to result in any material (in the opinion of the Agent) liability to Borrower
or any ERISA Affiliate (i.e., $1,000,000 or more), (b) permit to exist any ERISA
Event or any other event or condition, which presents the risk of a material (in
the opinion of the Agent) liability to any member of the Controlled Group, (c)
make a complete or partial withdrawal (within the meaning of ERISA Section 4201
) from any Multiemployer Plan so as to result in any material (in the opinion of
the Agent) liability to Borrower or any ERISA Affiliate, (d) enter into any new
Plan or modify any existing Plan so as to increase its obligations thereunder
which could result in any material (in the opinion of the Agent) liability to
any member of the Controlled Group, or (e) permit the present value of all
nonforfeitable accrued benefits under any Plan (using the actuarial assumptions
utilized by the PBGC upon termination of a Plan) materially (in the opinion of
the Agent) to exceed the fair market value of Plan assets allocable to such
benefits, all determined as of the most recent valuation date for each such
Plan.
7.15 Intentionally Omitted.
7.16 FINANCIAL COVENANTS.
(a) Borrower shall not permit the Net Worth of the REIT and its
Subsidiaries on a consolidated basis to be less at any time than an amount equal
to (X) $746,000,000 plus (Y) 75% of the Net Issuance Proceeds of all issuances
of Stock or Units after the Closing Date.
(b) Borrower shall not permit the ratio of Consolidated Total
Indebtedness to Gross Asset Value to exceed 0.55-to-1.00 at any time.
(c) Borrower shall not permit the Consolidated
EBITDA-to-Interest Ratio computed for any fiscal quarter or year to be less than
2.25-to-1.00.
(d) Borrower shall not permit the Consolidated EBITDA-to-Fixed
Charges Ratio computed for any fiscal quarter or year to be less than
2.00-to-1.00.
(e) Borrower shall not permit the Unencumbered Asset Pool NOI to
Unsecured Interest Ratio computed for any fiscal quarter or year to be less than
1.75-to-1.00.
7.17 ACCOUNTING CHANGES. Neither Borrower nor the REIT shall make any
significant change in accounting treatment or reporting practices, except as
required by GAAP, or change its fiscal year.
7.18 TRANSFERS OF NON-OWNED INTERESTS IN THE MANAGEMENT ENTITIES. In
no event shall all or any portion of the interests in the Management Entities or
any rights therein that
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are not held directly or indirectly by Borrower be sold, transferred,
encumbered, hypothecated, voluntarily or involuntarily, without the prior
written consent of the Requisite Lenders, except for transfers by Executive
Officers resulting from the death or disability of any such Executive Officer or
occurring after such Executive Officer is no longer an employee of Borrower, the
REIT, or any of their Subsidiaries.
ARTICLE VIII.
EVENTS OF DEFAULT
8.1 EVENT OF DEFAULT. Any of the following shall constitute an
"Event of Default":
(a) NON-PAYMENT. Borrower, the REIT, or any Subsidiary 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 Borrower, 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 Borrower, 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. Borrower, the REIT, any of their
Subsidiaries or any Management Entity shall fail to perform or observe any term,
covenant or agreement contained in Section 6.6, Section 6.10, Section 6.11
and/or in Article VII; or
(d) OTHER DEFAULTS. Borrower, the REIT, any of their
Subsidiaries or any Management Entity shall fail to perform or observe any other
term or covenant contained in this Agreement or any Loan Document, and such
default shall continue uncured 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
Borrower by Agent or any Lender; or
(e) CROSS-DEFAULT.
(i) Borrower, the REIT, any of their Subsidiaries or any
Management Entity or shall fail, after any applicable cure period:
(A) to make any payment when due (and which failure is
continuing) in respect of any Indebtedness or Guaranty Obligation (1) which is
Recourse to the assets of Borrower or any Designated Entity, or (2) (X) which is
Recourse to the assets of any
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Person which is not a Designated Entity or (Y) which is not Recourse to the
assets of Borrower or its Subsidiaries and, in either case, which exceeds
$15,000,000 individually or in the aggregate (whether by scheduled maturity,
required prepayment, acceleration, demand, or otherwise) (other than a payment
with respect to Intra-Company Debt where the obligee has not commenced pursuing
its remedies); or
(B) to perform or observe any other condition or
covenant, or any other event shall occur or condition exist, under any agreement
or instrument relating to any such Indebtedness or Guaranty Obligation, if the
effect of such failure, event or condition is to cause, or to permit the holder
or holders of such Indebtedness or the beneficiary or beneficiaries of such
Indebtedness (or a trustee or agent on behalf of such holder or holders or
beneficiary or beneficiaries) to cause, such Indebtedness to be declared to be
due and payable prior to its stated maturity, or such Guaranty Obligation to
become payable or cash collateral in respect thereof to be demanded; or
(C) to perform or observe any condition or covenant of
the Intra-Company Loan Subordination Agreement;
(D) to perform or observe any condition or covenant
under any Indebtedness which is Recourse to the assets of any Designated Entity
within any applicable cure or grace periods.
(It is being understood that, for purposes of clauses (A) and (B) above, no
failure by the REIT to pay or perform any obligation with respect to an
Intra-Company Loan shall be deemed a breach or default hereunder if such failure
to pay or perform is in compliance with the Intra-Company Loan Subordination
Agreement); or
(ii) an "Event of Default" as such term is defined in the
FNMA/Washington Mortgage Facility Documents occurs and is continuing; or
(f) BANKRUPTCY OR INSOLVENCY. Borrower, the REIT, any of their
Subsidiaries or any Management Entity shall (i) become insolvent, or generally
fail to pay, or admit in writing its inability to pay, its debts as they become
due, subject to applicable grace periods, if any, whether at stated maturity or
otherwise; (ii) voluntarily cease to conduct its business in the ordinary
course; (iii) commence any Insolvency Proceeding with respect to itself; or (iv)
take any action to effectuate or authorize any of the foregoing; or
(g) INVOLUNTARY PROCEEDINGS. (i) Any Insolvency Proceeding
shall be commenced or filed against Borrower, the REIT, any of their
Subsidiaries, or any Management Entity or any writ, judgment, warrant of
attachment, execution or similar process, shall be issued or levied against a
substantial part of such Person's Properties, and any such proceeding or
petition shall not be dismissed, or such writ, judgment, warrant of attachment,
execution or similar process shall not be released, vacated or fully bonded
within sixty (60) days after commencement, filing or levy; (ii) Borrower, the
REIT or any of their Subsidiaries shall admit the material allegations of a
petition against it in any Insolvency Proceeding, or an order for relief
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(or similar order under non-U.S. law) is ordered in any Insolvency Proceeding;
or (iii) Borrower, the REIT, any of their Subsidiaries or any Management Entity
shall acquiesce in the appointment of a receiver, trustee, custodian,
conservator, liquidator, mortgagee in possession (or agent therefor), or other
similar Person for itself or a substantial portion of its Property or business;
or
(h) ERISA. (i) A member of the Controlled Group shall fail to
pay when due, after the expiration of any applicable grace period, any
installment payment with respect to its withdrawal liability under a
Multiemployer Plan; (ii) Borrower or an ERISA Affiliate shall fail to satisfy
its contribution requirements under Section 412(c)(11) of the Code, whether or
not it has sought a waiver under Section 412(d) of the Code; (iii) in the case
of an ERISA Event involving the withdrawal from a Plan of Borrower or any ERISA
Affiliate which is a "substantial employer" (as defined in Section 4001 (a)(2)
or Section 4062(e) of ERISA), the withdrawing employer's proportionate share of
that Plan's Unfunded Pension Liabilities is more than $5,000,000; (iv) in the
case of an ERISA Event involving the complete or partial withdrawal of Borrower
or an ERISA Affiliate from a Multiemployer Plan, the withdrawing employer has
incurred a withdrawal liability in an aggregate amount exceeding $5,000,000; (v)
in the case of an ERISA Event not described in clause (iii) or (iv), the
Unfunded Pension Liabilities of the relevant Plan or Plans exceed $5,000,000;
(vi) a Plan that is intended to be qualified under Section 401 (a) of the Code
shall lose its qualification, and the loss can reasonably be expected to impose
on members of the Controlled Group liability (for additional taxes, to Plan
participants, or otherwise) in the aggregate amount of $5,000,000 or more; (vii)
the commencement or increase of contributions to, or the adoption of or the
amendment of a Plan by, a member of the Controlled Group shall result in a net
increase in unfunded liabilities to the Controlled Group in excess of
$5,000,000; (viii) any member of the Controlled Group engages in or otherwise
becomes liable for a non-exempt prohibited transaction and the initial tax or
additional tax under section 4975 of the Code relating thereto might reasonably
be expected to exceed $5,000,000; (ix) a violation of section 404 or 405 of
ERISA or the exclusive benefit rule under section 401 (a) of the Code if such
violation might reasonably be expected to expose a member or members of the
Controlled Group to monetary liability in excess of $5,000,000; (x) any member
of the Controlled Group is assessed a tax under section 4980B of the Code in
excess of $5,000,000; or (xi) the occurrence of any combination of events listed
in clauses (iii) through (x) that involves a potential liability, net increase
in aggregate Unfunded Pension Liabilities, unfunded liabilities, or any
combination thereof, in excess of $5,000,000.
(i) MONETARY JUDGMENTS. One or more final (non-interlocutory)
judgments, orders or decrees shall be entered against Borrower, the REIT, any of
their Subsidiaries or any Management Entity involving individually or in the
aggregate a liability (not fully covered by insurance) of $5,000,000 or more,
and the same shall remain unvacated and unstayed pending appeal for a period of
thirty (30) days after the entry thereof; or
(j) NON-MONETARY JUDGMENTS. Any non-monetary judgment, order or
decree shall be rendered against Borrower, the REIT, any of their Subsidiaries
or any Management Entity that has or would reasonably be expected to have a
Material Adverse Effect, and there shall be any period of ten (10) consecutive
days during which a stay of enforcement of such judgment or order, by reason of
a pending appeal or otherwise, shall not be in effect; or
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(k) GUARANTY DOCUMENTS.
(i) Any provision of any Guaranty Document shall for any
reason (other than pursuant to the terms thereof) cease to be valid and binding
on or enforceable against Borrower 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 Borrower or such Person shall so state in writing or bring an
action to limit its obligations or liabilities thereunder; or
(ii) Any party to a Guaranty Document (other than the
Agent or Lenders) shall fail to perform or observe any term or covenant
contained in such Guaranty Document, and such failure shall continue uncured for
a period of 20 days after the earlier of (A) the date upon which a Responsible
Officer of Borrower knew or received written notice of such failure or (B) the
date upon which written notice thereof is given to Borrower by the Agent, or any
other event or condition shall occur or exist under a Guaranty Document that
constitutes an "Event of Default" as defined therein; or
(iii) The REIT or any Guarantor Subsidiary shall fail to
perform or observe (A) any term, covenant or agreement in Section 1, 9, or 12(a)
through (g), inclusive, of the guaranty in the REIT Guaranty Documents or
incorporated from Sections 6.6, 6.10 and 6.11 and Article VII of the Credit
Agreement into Section 12(h) of such guaranty, or (B) any other term, covenant
or agreement in the REIT Guaranty Documents, and such failure 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 Borrower or the REIT (or
any Subsidiary party thereto) by the Agent; or the REIT Guaranty Documents shall
for any reason be partially (including with respect to future advances) or
wholly revoked or invalidated, or otherwise cease to be in full force and
effect; or the REIT (or any Subsidiary party thereto) shall contest in any
manner the validity or enforceability thereof or deny that the REIT (or any
Subsidiary party thereto) has any further liability or obligation thereunder.
(l) MATERIAL ADVERSE EFFECT. There shall occur any act,
omission, change, occurrence or event which has a Material Adverse Effect; or
(m) OWNERSHIP. (i) Any Person, or a group of related Persons,
shall acquire (a) beneficial ownership of in excess of 50% of the outstanding
voting Stock of the REIT or other voting interest having ordinary voting power
to elect a majority of the directors, managers or trustees of the REIT
(irrespective of whether at the time stock of any other class or classes shall
have or might have voting power by reason of the happening of any contingency)
or (b) all or substantially all of the Properties of Borrower or the REIT, or
(ii) a majority of the Board of Directors of the REIT, at any time, shall be
composed of Persons other than (a) Persons who were members of the Board of
Directors on the date of this Agreement, or (b) Persons who subsequently become
members of the Board of Directors and who either (x) are appointed or
recommended for election with the affirmative vote of a majority of the
directors in office as of the date of this Agreement or (y) are appointed or
recommended for election with the affirmative vote of a majority of the Board of
Directors of the REIT then in office; or
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(n) MATERIAL LICENSES OR PERMITS. Borrower, the REIT, or any of
their Subsidiaries shall lose, through suspension, termination, impoundment,
revocation, failure to renew or otherwise, any license or permit material, in
each case, to the Designated Entities, taken as a whole; or
(o) ENVIRONMENTAL LIENS. Borrower, the REIT, or any of their
Subsidiaries or any of their respective properties shall become subject to one
or more Liens for costs or damages in excess of (i) with respect to any Property
in the Unencumbered Asset Pool, $1,000,000 individually or in the aggregate or
(ii) with respect to any other Property, $5,000,000, individually or in the
aggregate, and in each case under any Environmental Law and such Liens shall
remain in place for thirty (30) days after the creation thereof, or any
Unencumbered Asset Pool Property 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; or
(p) INTRA-COMPANY DEBT. If at any time after the incurrence of
any Intra-Company Debt, Borrower, the REIT, or any Wholly-Owned Subsidiary is
not the holder of such Intra-Company Debt; or if any modification or amendment
with respect to the payment terms of any Intra-Company Debt is entered into
without the prior written consent of the Requisite Lenders; or if, at any time
after the Conversion Date, the holder of any Intra-Company Debt demands any
payment whatsoever thereon; or
(q) PREFERRED STOCK. If at any time there shall occur any event
which would permit the holders of any class of preferred Stock of the REIT to
elect more than one director to the Board of Directors of the REIT.
8.2 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 COMMITMENT. Declare the Commitment of each
Lender to make Loans to be terminated, whereupon such 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;
(c) OBLIGATIONS UNDER LETTERS OF CREDIT. Declare forthwith due
and payable all obligations of Borrower with respect to the Letters of Credit,
including, without limitation, all unreimbursed drawings under the Letters of
Credit and the aggregate contingent obligation of Borrower to reimburse Agent
and Lenders for the available amount which could at any time be drawn under the
Letters of Credit (even if such amount is not then able to be drawn
83
pursuant to the terms of the Letters of Credit), without presentment, demand,
protest, notice of dishonor, notice of intent to demand or to accelerate
payment, notice of acceleration or notice of any other kind, all of which are
hereby expressly waived, and upon such declaration the same shall become
immediately due and payable, and Agent (upon the request or with the consent of
Requisite Lenders) may enforce all obligations of Borrower with respect to the
Letters of Credit to Agent and the Lenders under the Loan Documents and exercise
any and all other remedies granted to Agent and the Lenders at law, in equity or
otherwise. In addition, Agent (upon the request or with the consent of
Requisite Lenders) may: (i) exercise any remedy available to Agent or the
Lenders under any Loan Document; and/or (ii) take whatever action at law or in
equity may appear necessary or appropriate to collect any amount due or
thereafter to become due or to enforce performance and observance of all
Obligations of Borrower with respect to the Letters of Credit. Any amounts
delivered by Borrower on account of the aggregate contingent obligation of
Account Party to reimburse Lenders for the available amount which could at any
time be drawn under the Letters of Credit shall be held by the Agent as cash
collateral for the Obligations with respect to the Letters of Credit; and
(d) 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; PROVIDED, HOWEVER, that upon the occurrence of any
event specified in Section 8.1(f) or 8.1(g) (in the case of clause (i) of
Section 8.1 (g) upon the expiration of the sixty (60)-day period mentioned
therein), the 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.
8.3 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
9.1 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
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Agent. Notwithstanding anything to the contrary herein, Issuing Lender shall
act on behalf of the Lenders with respect to the Letters of Credit (and all
conditions precedent applicable to the issuance or extension thereof), until
such time and except for so long as the Agent may elect to act for the Issuing
Lender with respect thereto; PROVIDED, HOWEVER, that the Issuing Lender shall
have all of the benefits and immunities (i) for acts taken or omissions suffered
by the Issuing Lender in connection with Letters of Credit as fully as if the
term "Agent", as used in this Article IX, included the Issuing Lender with
respect to such acts or omissions, and (ii) as additionally provided in this
Agreement with respect to the Issuing Lender.
9.2 DELEGATION OF DUTIES. The 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. The Agent shall not be responsible for the
negligence or misconduct of any agent or attorney-in-fact that it selects with
reasonable care.
9.3 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 Borrower, the REIT, any Management Entity or
Subsidiary 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 the Agent under or in connection with, this Agreement or any
other Loan Document, or for the value of any property in the Unencumbered Asset
Pool or the validity, effectiveness, genuineness, enforceability or sufficiency
of this Agreement, any other Loan Document, or for any failure of Borrower, 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 Borrower,
the REIT, any Management Entity or Subsidiary or Affiliates thereof.
9.4 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 Borrower),
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
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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 refinancing 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 4.1 and 4.2 (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.
9.5 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 Borrower 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.
9.6 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 Borrower, 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 Borrower, 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 Borrower 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 Borrower, the REIT, the Management Entities and the
Subsidiaries. Except
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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 Borrower, the REIT, the Management Entities and
the Subsidiaries which may come into the possession of any of the Agent-Related
Persons.
9.7 INDEMNIFICATION. The Lenders shall indemnify upon demand the
Agent-Related Persons (to the extent not reimbursed by or on behalf of Borrower
and without limiting the obligation of Borrower 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 Borrower, unless the Agent is legally
restricted from making such demand upon Borrower, in which case demand need not
be made upon Borrower) 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 Borrower. 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 9.7,
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.
9.8 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, Borrower, 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
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Loans, BofA (and any other Lender that may hereafter serve as 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.
9.9 SUCCESSOR AGENTS. The Agent may resign as Agent upon 30 days'
notice to the Lenders. The Requisite Lenders may at any time remove the Agent
by written notice to that effect to be effective on such date as the Requisite
Lenders designate. If the Agent shall resign or be removed 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 Borrower, which
approval shall not be unreasonably withheld. 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 Borrower, 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 10.4 and 10.5 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.
ARTICLE X.
MISCELLANEOUS
10.1 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. Notwithstanding the
terms of Section 10.1(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 Borrower therefrom, and no consent with respect to any
departure by Borrower therefrom, shall be effective to do any of the following,
unless the same is in writing and signed by all the Lenders:
(i) change the Commitment of any Lender (other than
ratable changes as contemplated by this Agreement;
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(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 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 or waive Section 2.1(a)(iv) (Extension of
Revolver Maturity Date; Conversion), Section 2.13 (Unencumbered Asset Pool;
Additions, Substitutions and Exclusions of Properties), Section 2.15 (Sharing of
Payments, Etc.), Section 3.1 (Taxes), Section 3.2 (Illegality), Section 3.3
(Increased Costs and Reduction of Return), Section 4.3 (Conversion Conditions),
Section 6.10 (Use of Proceeds), Section 7.16 (Financial Covenants), Section 8.2
(Remedies), Section 10.15 (Governing Law and Jurisdiction) or this Section 10.1
(or the related definitions thereto);
(vi) release any guarantor from liability under the REIT
Guaranty Documents.
(c) MATTERS REQUIRING AGENTS' CONSENT. Notwithstanding the
terms of Section 10.1(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 Borrower therefrom, 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.
10.2 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
Borrower, 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 Borrower 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 Borrower 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
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delivered, upon delivery, except that notices pursuant to Article II or VIII
shall not be effective until actually received by the Agent.
(c) RELIANCE. Borrower 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 Borrower. The Agent and the Lenders shall be entitled to rely on the
authority of any Person purporting to be a Person authorized by Borrower to give
such notice, and the Agent and the Lenders shall not have any liability to
Borrower 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 Borrower 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.
10.3 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.
10.4 COSTS AND EXPENSES. Borrower 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 additions to the Unencumbered Asset Pool
Properties, and the syndication of this Agreement to other Lenders, as well as
all costs of the Agent and the Issuing Lender in connection with the issuance of
Letters of Credit (including, without limitation, title insurance premiums and
charges, survey costs, recording costs and taxes, travel and due diligence
expenses incurred by representatives of the Agent, and the reasonable Attorney
Costs incurred by the Agent with respect thereto, and with respect to the
Letters of Credit, amendment fees, drawing fees, check fees, foreign currency
fees, and other fees and costs the Issuing Lender normally charges in connection
therewith);
(b) ENFORCEMENT EXPENSES. Pay or reimburse the Agent and
Lenders on demand for all reasonable 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
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(c) PROPERTY DILIGENCE 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.
10.5 INDEMNITY. Borrower 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 Borrower 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 10.5 shall survive payment
of all other Obligations.
10.6 MARSHALLING; PAYMENTS SET ASIDE. Neither the Agent nor any
Lender shall be under any obligation to xxxxxxxx any assets in favor of Borrower
or any other Person or against or in payment of any or all of the Obligations.
To the extent that Borrower 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 Pending, 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.
10.7 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 Borrower 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.
10.8 ASSIGNMENTS, PARTICIPATIONS, ETC.
(a) ASSIGNMENTS. Subject to the further provisions of this
Section 10.8(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 Letter of Credit Liability, the
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Commitments and the other rights and obligations of such Lender hereunder, in a
minimum amount of $5,000,000 and in additional increments of $250,000; PROVIDED,
HOWEVER, that Borrower 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 Borrower and the Agent by such Lender and the Assignee; (B) such Lender
and its Assignee shall have delivered to Borrower and the Agent an Assignment
and Acceptance in the form of EXHIBIT K ("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 3.1(f). Any such assignment
requiring the approval of the Agent shall also require the approval of Borrower
(such approval not to be unreasonably withheld or delayed), provided that
Borrower's failure to approve or disapprove such assignment within five days
after receiving written notice thereof shall be deemed approval by Borrower of
such assignment, and provided further, that no such approval from Borrower 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 10.8(a),
(i) the Assignee thereunder shall, subject to Section 10.8(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 Agent has received an executed
Assignment and Acceptance and payment of the processing fee, Borrower shall
execute and deliver to the Agent, new Notes evidencing such Assignee's assigned
Loans and Commitment and, if the assignor Lender has retained a portion of its
Loans and its Commitment, replacement Notes in the principal amount of the Loan
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 Commitments
arising therefrom. The Commitment allocated to each Assignee shall reduce such
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,
Letter of Credit Liability and Commitment of that Lender and the other interests
of that Lender (the "originating Lender") hereunder and under the other Loan
Documents; PROVIDED, HOWEVER, that (i) the originating Lender's obligations
under this Agreement shall remain unchanged, (ii) the
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originating Lender shall remain solely responsible for the performance of such
obligations, (iii) Borrower 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 10.1; and (v) Borrower shall have
approved the transfer or grant of any participating interest in any Loan, Letter
of Credit Liability and 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 Borrower's
failure to approve or disapprove in writing such Participant within five days
after receiving written notice thereof shall be deemed approval by Borrower of
such transfer or grant to such Participant, and provided further, that no such
approval from Borrower 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 Borrower 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 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
Borrower to or for the account of the assigning and/or pledging Lender in
accordance with the terms of this Agreement shall satisfy Borrower'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.
10.9 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 Borrower, any such notice
being waived by Borrower 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 Borrower 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 Borrower 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
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Lender under this Section 10.9 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
BORROWER, 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
hereunder 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 Borrower 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 Borrower, 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. BORROWER, 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
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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, BORROWER, 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 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. BORROWER 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 ANY
ACT OR OMISSION TO ACT BY THE AGENT OR ANY LENDER WITH RESPECT HERETO OR
THERETO, AND
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THAT IF BORROWER SHALL FAIL TO GIVE SUCH PROMPT NOTICE TO THE AGENT WITH REGARD
TO ANY SUCH CLAIM OR CAUSE OF ACTION, BORROWER 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
Borrower, the Agent and the Lenders. Accordingly, this Agreement, together with
the other Loan Documents, supersedes all prior or contemporaneous agreements and
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 Borrower of (or any indemnification for) any fees, costs,
expenses, liabilities, damages or claims 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 Borrower 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 Borrower or any third party to select, review,
inspect, examine, supervise, pass judgment upon or inform Borrower or any third
party of the existence, quality, adequacy or suitability of: (a) any
environmental report, or (b) any other matters or items, including, but not
limited to, engineering, soils and seismic reports which are contemplated in the
Loan Documents. Any such selection, review, inspection, examination and the
like is solely for the purpose of protecting the Lenders' security and
preserving the Lenders' rights under the Loan Documents, and shall not render
any Lender liable to Borrower or any third party for the existence, sufficiency,
accuracy, completeness or legality thereof. No Lender owes any duty of care to
protect or inform Borrower or any third party against negligent, faulty,
inadequate or defective building or construction or the existence of any
environmentally hazardous condition affecting any Property.
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 Borrower, on the other hand, other than as creditor and
debtor. Borrower 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.
96
10.23 CONFIDENTIALITY. Agent and each Lender shall keep all
information delivered under Section 6.1(d) confidential in accordance with this
Section 10.23 and shall hold all other non-public information obtained pursuant
to the requirements of this Agreement which has been identified as confidential
by Borrower in accordance with Agent's and such Lender's customary procedures
for handling confidential information of this nature and in accordance with safe
and sound banking practices, it being understood and agreed by Borrower that in
any event Agent or a Lender may make disclosures reasonably required by any bona
fide assignee, transferee or participant in connection with the contemplated
assignment or transfer by Agent or such Lender of any Loans or any participation
therein or as required or requested by any governmental agency or representative
thereof or pursuant to legal process.
[SIGNATURE PAGES S-1 THROUGH S-5 ATTACHED]
97
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.
BORROWER
AIMCO PROPERTIES, L.P.,
a Delaware limited partnership
By: AIMCO -GP, Inc., a Delaware
corporation, its general partner
By: /s/ Xxxxx X. Xxxxxxxxx
---------------------------
Xxxxx X. Xxxxxxxxx
Vice President
Notices to be sent to:
0000 Xxxxx Xxxxxxxx Xxxxxx
00xx Xxxxx
Xxxxxx, Xxxxxxxx 00000
Attention: Xxxxx X. Xxxxxxxxx,
Vice President
Facsimile: (000) 000-0000
X-0
X XX X
XXXX XX XXXXXXX NATIONAL TRUST
AND SAVINGS ASSOCIATION,
as a Lender and as the Issuing Lender
By: /s/ Xxxxx X. Xxxxxx
--------------------------------
Name: Xxxxx X. Xxxxxx
------------------------------
Title: Vice President
-----------------------------
Notices to be sent to:
Bank of America National Trust
and Savings Association
CRES #1357
000 Xxxxx Xxxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxxxxx, XX 00000
Attention: 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: Unit Representative
Ref: AIMCO Unsecured Revolver
S-2
AGENT
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION,
as Agent
By: /s/ Xxxxx X. Xxxxxx
--------------------------------
Name: Xxxxx X. Xxxxxx
------------------------------
Title: Vice President
-----------------------------
Notices to be sent to:
Bank of America National Trust and
Savings Association
CRES #1357
000 Xxxxx Xxxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxxxxx, XX 00000
Attention: X. Xxxxxx
Telephone: 213/000-0000
Facsimile: 213/228-5389
Payments to be made to:
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION
ABA #: 121 000 358
Credit Account #: 15031-00407
Attention: Unit Representative
Ref: AIMCO Unsecured Revolver
S-3
BANKBOSTON, N.A.
BANKBOSTON, N.A.
By: /s/ Xxxxxxxx X. Xxxxx
--------------------------------
Name: Xxxxxxxx X. Xxxxx
Title: Vice President
Notices to be sent to:
BankBoston, N.A.
000 Xxxxxxx Xxxxxx
Mail Stop 01-32-04
Xxxxxx, XX 00000
Attention: Xxxxxxx Xxxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Payments to be made to:
BANKBOSTON, N.A.
ABA #: 000-000-000
Credit Account #: N/A
Attention: Xxxxx Xxxxxxx/CLS
Ref: AIMCO Unsecured Revolver
S-4
