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EXHIBIT 10.1
AMENDED AND RESTATED CREDIT AGREEMENT
(Unsecured Revolver-To-Term Facility)
This AMENDED AND RESTATED CREDIT AGREEMENT is entered into as
of October 1, 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 an unsecured revolver-to-term
credit facility in the aggregate principal amount of up to $155,000,000 pursuant
to that certain Credit Agreement, dated as of January 26, 1998, by and between
BofA, as a lender and the agent, the other lenders party thereto and Borrower as
amended by that certain First Amendment to Credit Agreement dated as of May 8,
1998 and that certain Second Amendment to Credit Agreement dated as of May 21,
1998 (collectively, the "Previous Credit Agreement"). The entire outstanding
principal balance under such Credit Agreement is being refinanced and the
letters of credit issued thereunder in the amount of $8,673,898 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
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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.
"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 $100,000,000.
"Ambassador Pool Portfolio" means the aggregate Indebtedness
in respect of individual Properties in the original principal amount of
$203,580,000 secured by or issued in connection with the following reimbursement
agreements: (a) Amended and Restated Master Reimbursement Agreement, dated as of
December 1, 1996, by and between Federal National Mortgage Association ("Xxxxxx
Xxx") and Ambassador VIII, L.P., as amended and assigned; and (b) Master
Reimbursement Agreement (Pool-2 Properties), dated as of December 1, 1996, by
and between Xxxxxx Mae and Ambassador I, L.P., as amended and assigned.
"Agreement" means this Credit Agreement, as amended,
supplemented or modified from time to time.
"Ancillary Services" means asset management, accounting,
ordering and inventory services and other property related.
"Apartment Property Cap Rate" means (a) initially, 9.6% and
(b) on 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
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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:
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XXXXX 0 XXXXX 0 XXXXX 0 XXXXX 4
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< 60% and < 80% and < 100% and
UAP Utilization < 35% > 35% > 60% > 80%
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Applicable Base Rate Margin (bps) minus 25 0 plus 25 plus 50
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Any change in the UAP Utilization causing it to move into a different Level on
the table will immediately change the Applicable Base Rate Margin.
"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):
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XXXXX 0 XXXXX 0 XXXXX 0 XXXXX 4
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< 60% and < 80% and < 100%
UAP Utilization < 35% > 35% > 60% and > 80%
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Annual Fee (bps) 125 150 175 200
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Any change in the UAP Utilization causing it to move into a different Level on
the table will immediately change the Applicable LC Fee.
"Applicable LIBOR Margin" means, with respect to LIBOR Loans,
on any date during an Interest Period, the applicable spread set forth below:
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XXXXX 0 XXXXX 0 XXXXX 0 XXXXX 4
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< 60% and < 80% and < 100% and
UAP Utilization < 35% > 35% > 60% > 80%
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Applicable LIBOR Margin (bps) 125 150 175 200
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Any change in the UAP Utilization causing it to move into a different Level on
the table will immediately change the Applicable LIBOR Margin.
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"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).
"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. ss.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.
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"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.
"Borrowing Ratio" means the quotient of 1 divided by 1.75
multiplied by 100 and expressed as a percentage.
"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.
"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.
"Captiva Club Property" means that certain Qualified Property
comprised of a 376 unit apartment project and related properties, situated in
Tampa, Florida.
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"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 and funds held by Bank of America
Cash Investments Services, including without, limitation, Pacific Horizon Funds,
FundsSweep and overnight repos) 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;
(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".
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"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
October 1, 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 the 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, plus the Borrower's pro-rata share of Adjusted EBITDA in
respect of any unconsolidated Person.
"Consolidated EBITDA-to-Fixed Charges Ratio" means for any
period of determination, the ratio computed as follows:
Consolidated EBITDA-to-Fixed [Consolidated EBITDA]
Charges Ratio= divided by
Consolidated Fixed Charges
"Consolidated EBITDA-to-Interest Ratio" means for any period of
determination, the ratio computed as follows:
Consolidated EBITDA-to-Interest [Consolidated EBITDA]
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Ratio= 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, an amount equal to the sum
of (x) the Interest Expense for the Borrower and the REIT and their
proportionate share of the Interest Expense of their respective Subsidiaries for
such period plus (y) the Borrower's and the REIT's pro-rata share of Interest
Expense in respect of any unconsolidated Person, minus (z) amounts expended for
amortization of loan costs in respect of items in clauses (x) or (y).
"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 (a) the aggregate amount of Total Indebtedness
for Borrower, the REIT and their respective Subsidiaries as of such date;
provided, however, that with respect to Indebtedness which is not Recourse and
for which Borrower, the REIT or any of their respective Subsidiaries is not
fully liable, then Total Indebtedness shall only include the pro rata share of
Indebtedness for which such Person is liable, plus (b) the Borrower's, REIT's
and any Subsidiaries' pro-rata share of Total Indebtedness in respect of any
unconsolidated Person; .
"Consolidated Unsecured Interest" means, for any period of
determination, Consolidated Interest Expense incurred in respect of any
Unsecured Debt for such period.
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"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 Indebted ness" 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.
"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(c) 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.
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"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.
"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 (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 on a
consolidated basis, plus Borrower's and REIT's pro-rata share of unconsolidated
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 (i) extraordinary losses or
extraordinary gains (including gains or losses from the sale of Properties) and
(ii) any amortization of capitalized financing expenses or charges related to
restructuring of Indebtedness (excluding such expenses or
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charges in connection with renewals or extensions of existing Indebtedness in
the ordinary course of business).
"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 As signee.
"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.
"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,
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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.
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"Estimated Remediation Cost" means all costs associated with
performing work to remediate contamination of real property or groundwater,
including engineering and other 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.
"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, dated as of February 4, 1998, by and among the REIT, the Borrower,
AIMCO/Bluffs, L.L.C., AIMCO Chesapeake, L.P., AIMCO Elm Creek, L.P., AIMCO
Lakehaven, L.P., AIMCO Los Arboles, L.P. and Washington Mortgage Financial
Group, Ltd. and (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.
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"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 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 (excluding
amortization of financing costs), 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) together with adjustments for the non-cash deferred portion of
any income tax provision for unconsolidated subsidiaries and the payment of
dividends on preferred Stock, 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
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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" has the meaning set forth in the Xxxxxx
Unsecured Facility Documents attached hereto as Schedule 1.1C.
"Guarantor Subsidiaries" means the Persons listed on Schedule
1.1E 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 or Exhibit F2.
"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.
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"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 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,
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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 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. Solely for purposes of determining the ratio of
Consolidated Total Indebtedness to Gross Asset Value, Indebted ness shall
exclude security deposits, accounts payable and accrued liabilities and any
prepaid rent.
"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.
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"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:
(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
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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.
"Xxxxxx Maximum Availability" means, as of any date of
determination, an amount equal to 62.5% of the Xxxxxx Unsecured Asset Value.
"Xxxxxx Unsecured Facility" means that certain unsecured credit
facility in the maximum principal amount of $300,000,000 evidenced by the Xxxxxx
Unsecured Facility Documents.
"Xxxxxx Unsecured Facility Documents" means all documents
relating to the Xxxxxx Unsecured Facility, including that certain Interim Term
Loan Agreement,
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dated as of October 1, 1998, by and among the REIT, the Borrower the several
lenders from time to time party thereto, Xxxxxx Brothers, Inc., as Arranger,
Xxxxxx Commercial Paper, Inc., as Syndication Agent, and Xxxxxx Commercial Paper
Inc., as Administrative Agent, and all documents, instruments and agreements
related thereto all dated as of the date of the Interim Term Loan Agreement.
"Xxxxxx Unencumbered Asset Value" has the same meaning as the
term "Unencumbered Asset Value" defined on Schedule 1.1D.
"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.
"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
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,
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(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.
"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, Term Advance or Swing
Line Loan, 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 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 or providing Ancillary
Services, including, without limitation, the Persons listed on Schedule 1.1E.
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"Marketable Securities" means the securities of any Person
which securities are treated by such Person as "marketable securities" in
accordance with GAAP and which are quoted on the New York Stock Exchange,
American Stock Exchange or the Nasdaq National Market System. On any date of
determination, the value of any Marketable Securities shall be determined in
accordance with GAAP.
"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.
"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 Total Available Commitments (without taking into account the limitation
in clause (1) of the definition thereof), minus (ii) the Outstanding Amount,
minus (iii) the aggregate amounts outstanding under the Xxxxxx Unsecured
Facility.
"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
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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, without double counting, real estate taxes and
insurance premiums paid or accrued by Borrower (whether by direct payment or by
deposit into reserves for future payment), or, to the extent applicable for
purposes of calculating Net Operating Income, the applicable prior owner of such
Property 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.
"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
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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-1.
"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.
"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'
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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.
"Owned or Controlled Management Company EBITDA" means EBITDA of
a Qualified Management Entity which is earned pursuant to property management
agreements for Properties (a) in which Borrower has a controlling general
partner or managing member interest in the Person owning the Property coupled
with the sole and absolute discretion to select, appoint and retain the
Management Entity as the property manager and/or provider of Ancillary Services
for the Property or (b) which have an enforceable and collectible termination
penalty in favor of the Qualified Management Entity, in an amount not less than
the aggregate amount of property management fees which would otherwise be paid
to the Qualified Management Entity over the remaining term of the applicable
property management agreements.
"Xxxxxxxx Bond" means that certain bond titled "State of
Florida Housing Finance Agency Multifamily Housing Revenue Refunding Bond 1994
Series A (Xxxxxxxx Apartments Project)", dated March 31, 1994 with a maturity of
March 1, 2024 and in the original principal amount of $13,250,000. As of the
date hereof, the registered owner of the Xxxxxxxx Bond is Ambassador X, L.P., a
Delaware limited partnership.
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"Xxxxxxxx Bond Documents" means the documents and instruments
evidencing the Xxxxxxxx Bond, including the following: (1) Loan Agreement, dated
as of March 1, 1994 between the Florida Housing Financing Agency ("AGENCY") and
FPI Xxxxxxxx, Ltd., ("DEVELOPER"); (2) $13,250,000 Promissory Note, dated March
31, 1994; (3) Amended and Restated Land Use Restriction Agreement, dated as of
March 1, 1994, among the Agency, the Developer and Sun Bank, National
Association ("TRUSTEE"); (4) First Mortgage and Security Agreement, dated as of
March 1, 1994, from the Developer to the Trustee for the benefit of the Agency;
(5) Assignment of Rents and Leases, dated as of March 1, 1994, from the
Developer to the Agency; (6) Environmental Indemnity Agreement, dated as of
March 1, 1994, from the Developer, Xxxxx X. Xxxxxxxx and Xxxxxxxx Enterprises,
L.P. to the Agency, the Trustee, and General Electric Capital Corporation; and
(7) together with all other related documents and agreements executed in
connection with and evidencing or securing the Xxxxxxxx Bonds.
"Xxxxxxxx Bond Value" means, as of any date, if the Xxxxxxxx
Property is in the Unencumbered Asset Pool, an amount equal to the product of
(X) the Borrowing Ratio times (Y) the outstanding principal amount of the
Xxxxxxxx Bond as of such date; provided, however, that from and after October 1,
1999, the Xxxxxxxx Bond Value shall be zero ($0) and in no event shall the
principal amount of the Xxxxxxxx Bond ever exceed $13,250,000.
"Xxxxxxxx Property" means the multifamily apartment Property
owned by Ambassador X, L.P. which is located in Hillsborough County, Florida and
commonly known as "Xxxxxxxx Apartments."
"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.
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"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.
"Previous Credit Agreement" is defined in the preamble to this
Agreement.
"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, the REIT or their
respective Subsidiaries owns at least a 95% interest in the capital and profits
thereof, (b) which is a Guarantor Subsidiary, (c) which is controlled, directly
or indirectly by (i) Borrower or the REIT, (ii) Xxxxx X. Xxxxxxxxx, (iii) Xxxxx
X. Xxxxxxxxx, (iv) any Person controlled by Xxxxx X. Xxxxxxxxx and Xxxxx X.
Xxxxxxxxx, (v) any other Person reasonably satisfactory to the Requisite
Lenders, or (vi) any combination of the foregoing clauses (i)-(v), and (d) which
has no Indebtedness (other than Intra-Company Debt).
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"Qualified Management Entity EBITDA" means, on any date of
determination, Borrower's proportionate share of the aggregate EBITDA from all
Qualified Management Entities for the most recent complete calendar quarter, as
annualized.
"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 de scribed 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 which is a Guarantor Subsidiary.
"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 agreements or arrangements designed to
provide protection against fluctuations in interest or currency exchange rates.
"Rating Agency" means any of S&P, Xxxxx'x or D&P.
"Recourse" means, with respect to any Indebtedness or Guaranty
Obliga tion 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 willful 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, condem nation awards and tenant security deposits; (e) breach of
covenants relating to
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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.
"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,
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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
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1.75 to 1.0., 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 October 1, 1999, 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.
"Senior Unsecured Notes" means any senior unsecured notes
issued by Borrower, the REIT or their respective Subsidiaries, the proceeds of
which shall be used to repay all or any part of the Xxxxxx Unsecured Facility
and which comply with the requirements of Section 7.2(h). The Senior Unsecured
Notes shall not be senior to any of the Borrower's obligations under this
Agreement and the other Loan Documents.
"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
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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 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).
"Swing Line Note" means a promissory note of Borrower payable
to the order of BofA in substantially the form of EXHIBIT D-2.
"Swing Line Loan" means an advance under and usage of the Total
Commitment (the aggregate principal amount of which may never exceed the lesser
of (i) $30,000,000 or (ii) the Total Available Commitments minus the Outstanding
Amount), as described in, and subject to Section 2.1(d).
"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).
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"Term Commitment" means, with respect to any Lender, the amount
set forth opposite the Lenders 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 (1) the Aggregate Commitment or (2) an amount determined as
follows,
for any period of determination, an amount equal to the lesser
of (a) 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));
LESS (Y) the aggregate amount of all Unsecured Debt of Borrower
(on a consolidated basis);
PLUS (Z) an amount equal to the Unencumbered Management Entity
Value;
PLUS (AA) an amount equal to the Xxxxxxxx Bond Value;
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and (b), while any amount is outstanding under the Xxxxxx Unsecured
Facility, the Xxxxxx Maximum Availability.
Notwithstanding anything to the contrary herein, on and after the Conversion
Date, the Aggregate Commitments shall not exceed 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.
"Total Obligations" mean, as of any date, the sum of
Consolidated Total Indebtedness plus the aggregate amount of any outstanding
preferred Stock issued by the REIT or any Subsidiary.
"UAP Utilization" means, on any date of determination, the
ratio of the aggregate amount of Consolidated Unsecured Indebtedness outstanding
to the Unencumbered Asset Pool Value, expressed as a percentage. UAP
Utilization shall be determined as of any date of a borrowing under this
Agreement or any prepayment of the Xxxxxx Unsecured Facility and shall take into
account any changes to Consolidated Unsecured Indebtedness and/or Unsecured
Asset Pool Value caused by any such borrowing or prepayment. The UAP Utilization
shall be evidenced by pro-forma Compliance Certificate delivered with any
Borrowing Notice and/or paydown of the Xxxxxx Unsecured Facility as provided in
Section 6.2(h).
"UCC" means the Uniform Commercial Code as in effect in any
relevant jurisdiction.
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"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) (1) aggregate Net
Operating Income during the preceding four calendar quarters (or, if such
Properties were Stabilized, Qualified Properties for at least one calendar
quarter but less than four calendar quarters, the annualized aggregate Net
Operating Income from the date such Properties became Stabilized, Qualified
Properties), plus (2), in the case of Properties which have been Qualified
Properties for less than one calendar quarter, the annualized aggregate Net
Operating Income for the calendar quarter immediately preceding the quarter in
which it became a Qualified Property, plus (3), in the case of the Captiva Club
Property, until such time as it becomes a Stabilized Property for at least one
calendar quarter, the annualized aggregate Net Operating Income during the
calendar quarter ending August 31, 1998, 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 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 (less amounts
included pursuant to clause (2) of the definition thereof), 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 Borrowing Pool Cashflow" means, as of any date of
determination, the sum of Unencumbered Asset Pool NOI plus Qualified Management
Entity EBITDA.
"Unencumbered Borrowing Pool Cashflow to Unsecured Interest
Ratio" means, for any period of determination, the ratio computed as follows:
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Unencumbered Borrowing Pool Cashflow [Unencumbered Asset Pool NOI + Qualified Management
Unsecured Interest Ratio = Entity EBITDA]
divided by
Consolidated Unsecured Interest
"Unencumbered Management Entity Value" means, as of any date of
determination, an amount equal to the sum of (a) (W) Borrower's proportionate
share of the aggregate Owned or Controlled Management Entity EBITDA from all
Qualified Management Entities for the most recent complete calendar quarter, as
annualized, multiplied by (X) 3.5 plus (b) (Z) Borrower's proportionate share of
the aggregate EBITDA (other than Owned or Controlled Management Company EBITDA)
from all Qualified Management Entities for the most recent complete calendar
quarter, as annualized, multiplied by (Z) 2.0. EBITDA earned pursuant to
management agreements (A) which are cancelled or transferred to a Person which
is not a Qualified Management Entity or (B) for which Borrower has received
notice that any such agreement is to be terminated within 12 months shall be
excluded from the calculation of Unencumbered Management Entity Value for the
quarter in which such cancellation, transfer or notice occurs and thereafter.
"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, 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
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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 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
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including". If any provision of this Agreement refers to any action taken or to
be taken by any Person, or which such Person is prohibited from taking, such
provision shall be interpreted to encompass any and all means, direct or
indirect, of taking, or not taking, such action.
(e) Contracts. Unless otherwise expressly provided herein,
references to agreements and other contractual instruments shall be deemed to
include all subsequent amendments and other modifications thereto, but only to
the extent such amendments and other modifications are not prohibited by the
terms of any Loan Document.
(f) Laws. References to any statute or regulation are to be
construed as including all statutory and regulatory provisions consolidating,
amending or replacing the statute or regulation.
(g) Captions. The captions and headings of this Agreement are
for convenience of reference only and shall not affect the construction of this
Agreement.
(h) Independence of Provisions. The parties acknowledge that
this Agreement and other Loan Documents may use several different limitations,
tests or measurements to regulate the same or similar matters, and that such
limitations, tests and measurements are cumulative and must each be performed,
except as expressly stated to the contrary in this Agreement.
(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.
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(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 other
than Swing Line Loans (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 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 $25,000,000. 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
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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 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
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(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) [Intentionally Omitted]
(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 assets and other Investments
permitted hereunder, Capital Expenditures and redevelopment projects.
(c) Amounts and Terms of Term Loan; Conversion. On or before
the Revolver Maturity Date, 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,
further, 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). 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
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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.
(d) Swing Line Loans.
(i) Subject to the terms and conditions hereof, if
necessary to meet Borrower's funding deadlines, BofA agrees to make Swing Line
Loans to Borrower at any time prior to the Revolver Maturity Date, not to exceed
an amount at any one time outstanding equal to the lesser of (A) $30,000,000,
and (B) the Total Available Commitments. Swing Line Loans shall constitute
Loans for all purposes hereunder.
(ii) Each request for a Swing Line Loan shall be in an
amount
equal to $1,000,000 or a greater integral multiple of $50,000. Borrower may
request a Swing Line Loan by submitting a Borrowing Notice to Agent and BofA.
Such Borrowing Notice must be received by Agent and BofA no later than 2:00
p.m. on the specified borrowing date for such Swing Line Loan. Provided that
Borrower shall have given telephonic notice to Agent and BofA no later than 2:00
p.m. on the specified borrowing date for such Swing Line Loan BofA shall make
such Swing Line Loan available to Borrower by deposit in such of Borrower's
accounts with BofA in Los Angeles, California, as Borrower designates in
writing, on or before at 3:00 p.m. on such borrowing date.
(iii) If necessary to meet Borrower's funding
deadlines, Agent
may treat any Borrowing Notice as a request for a Swing Line Loan from Borrower
and BofA may fund it as a Swing Line Loan. Within 2 Business Days after each
Swing Line Loan is funded, BofA and Agent shall request that each Lender, and
each Lender shall, on the first (1st) Business Day after such request is made,
prepay one or more Swing Line Loans in an amount equal to such Lender's
Commitment Percentage of such Swing Line Loans by funding under such Lender's
Note, such purchase to be made in accordance with the terms of Section 2.3 of
this Agreement just as if such Lender were funding a Base Rate Loan directly to
Borrower under its Note (such that all Lenders other than BofA shall fund only
under their respective Notes and not under the Swing Line Loan Note). Unless
BofA had actual knowledge when BofA funded a Swing Line Loan that Borrower had
not satisfied the conditions in this Agreement to obtain a borrowing, each
Lender's obligation to prepay the Swing Line Loans shall be absolute and
unconditional and shall not be affected by any circumstance, including, without
limitation (i) any set-off, counterclaim, recoupment, defense, or other right
which such Lender or any other
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Person may have against BofA or any other Person for any reason whatsoever, (ii)
the occurrence or continuance of a Default or the termination of any Lender's
Commitment, (iii) the occurrence of any Material Adverse Effect, (iv) any breach
of this Agreement or any other Loan Document by Borrower, any of its Affiliates,
Agent, or any other Lender, or (v) any other circumstance, happening, or event
whatsoever, whether or not similar to any of the foregoing. Any portion of a
Swing Line Loan not so prepaid may be treated by BofA as a Loan which was not
funded by the non-purchasing Lenders as contemplated in Section 2.14 of this
Agreement, and as a funding by BofA under the Aggregate Commitment in excess of
BofA's Commitment. Each Swing Line Loan, once so prepaid, shall cease to be a
Swing Line Loan for the purposes of this Agreement, but shall be deemed a
borrowing made under the Aggregate Commitment and each Lender's Commitment.
Each Swing Line Loan shall be a Base Rate Loan.
2.2 NOTE. Each Loan (other than a Swing Line 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 and each Swing Line Loan will
be evidenced by a Swing Line Note dated the Closing Date and payable to BofA in
the amount of $30,000,000. 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 (including authorizing BofA to endorse the Swing Line 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
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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);
(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 except with respect to Swing Line
Loans for which there shall be no such limitation.
2.4 CONVERSION AND CONTINUATION ELECTIONS.
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(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
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
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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 Loans. If the
aggregate outstanding principal amount of LIBOR Loans having the same Interest
Period shall have been reduced, by payment, prepayment, or partial conversion to
be less than $1,000,000.
(c) Notice to Lenders. Upon receipt of a
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.
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
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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 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
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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
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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.
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 and
the balance of any outstanding Swing Line Loans), 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
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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
which fee shall be determined on the first Business Day of each April, July,
October and January for the prior calendar quarter.
(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 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) 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
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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 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
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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:
(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;
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(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.
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(iii) Conditions to Inclusion of Proposed Properties
in Unencumbered Asset Pool. Each of the following conditions must be satisfied
(or waived by the 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.
(iv) Xxxxxxxx Property. The Xxxxxxxx Property is
hereby added to the Unencumbered Asset Pool for purposes of compliance with
Articles V, VI and VII of the Credit Agreement, notwithstanding the Liens
encumbering such Property, which Liens shall constitute Permitted Liens;
provided, however, that it shall be excluded from the Unencumbered Asset Pool
upon the occurrence of (i) any event described in Section 2.13(b) or (ii) any
pledge, transfer, sale, exchange, remarketing or refunding of the Xxxxxxxx Bond.
Any calculations in respect of Unencumbered Asset Pool Value shall not take into
account any amount whatsoever in respect of the Xxxxxxxx Property, other than
the Xxxxxxxx Bond Value.
(v) Captiva Club Property. Notwithstanding any
contrary provision of this Section 2.13, if the Captiva Club Property is a
Qualified Property it shall be added to the Unencumbered Asset Pool,
notwithstanding that it is not a Stabilized Property; provided, however, that if
the Captiva Club Property fails to achieve an 85% occupancy level by March 1,
1999, then thereafter it shall be excluded from the Unencumbered Asset Pool.
(b) Exclusion of Property From the Unencumbered Asset Pool. Any
Property will automatically have a value of zero for purposes of calculating the
Total
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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.
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
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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
(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
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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;
(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
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(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").
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(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 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
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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
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
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(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 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
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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.
(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
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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
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
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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;
(ii) REIT Guaranty Documents. The REIT Guaranty
Documents executed by the REIT and the Guarantor Subsidiaries;
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(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;
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(B) no Default or Event of Default exists or
would result from the initial borrowing;
(C) since June 30, 1998, 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) 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;
(viii) 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, 10.4 and under the
Previous Credit Agreement; and
(ix) Intercreditor Agreement. Such intercreditor
agreement(s) relating to the Xxxxxx Unsecured Facility as the Requisite Lenders
may require, in form and substance satisfactory to the Requisite Lenders.
(x) Insignia Acquisition. Borrower has provided Agent
with all of the material documents and agreements in connection with the
acquisition by merger of the REIT with Insignia Financial Group, Inc., pursuant
to that certain Amended and Restated Agreement and Plan of Merger by and among
the REIT, Borrower, Insignia Financial Group, Inc. and Insignia/ESG Holdings,
Inc. dated as of May 26, 1998 and the merger transaction contemplated therein
has been fully and finally consummated.
(xi) Xxxxxx Unsecured Facility. The loan transactions
contemplated in the Xxxxxx Unsecured Facility Documents shall have been, or
concurrently therewith shall be, consummated and Agent shall have received a
fully executed set of the Xxxxxx Unsecured Facility Documents together with a
copy of the compliance certificate provided in connection with the closing of
the Xxxxxx Unsecured Facility.
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(xii) Compliance Certificate. A fully executed and
complete Compliance Certificate which reflects the amount of any requested
borrowings under this Agreement and the Xxxxxx Unsecured Facility.
(xiii) 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;
(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;
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(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 the 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;
(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.
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(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.
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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
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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 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 June 30, 1998, 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
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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.
(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.
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(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 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.
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(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 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
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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 Contractual Obligation in any respect which,
individually or together with all such other defaults, would reasonably be
expected to have a Material Adverse Effect.
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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 Xxxxx
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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) 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
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(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.
5.27 XXXXXXXX BOND. Ambassador X, L.P. is the sole owner of the
Xxxxxxxx Bond. The Xxxxxxxx Bond is not encumbered by any Liens other than the
Lien of that certain Pledge and Security Agreement dated as of April 16, 1998 by
and between Ambassador X, L.P. and Borrower, as in effect on the date hereof.
Notwithstanding Section 5.6, the Liens on the Xxxxxxxx Property existing on the
date hereof constitute Permitted Liens.
5.28 XXXXXX UNSECURED FACILITY. The Xxxxxx Unsecured Facility
Documents are true, correct and complete in all respects and represent all of
the agreements and documents entered into by the parties in connection with the
Xxxxxx Unsecured Facility. The Xxxxxx Unsecured Facility Documents have not been
amended, modified or otherwise altered.
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
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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 a consolidated quarterly
operating statement for each Management Entity including, without limitation, a
schedule of all property management agreements generating Owned or Controlled
Management Company EBITDA and (ii) any other property management generating
EBITDA and the revenues generated by each such contract (in a format and with
such detail as the Agent reasonably requires and, unless otherwise required by
Agent, in a format and with such detail 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.
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
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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.
(g) Xxxxxx Compliance Certificates. Concurrently with the
delivery of all compliance certificates, calculations in respect of borrowing
base or borrowing availability under the Xxxxxx Unsecured Facility, true,
correct and complete copies thereof together with all accompanying submissions.
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(h) Supplemental Compliance Certificates. As a condition
precedent to any mandatory prepayment of the Xxxxxx Unsecured Facility from the
proceeds of any sale of any Property or other asset of the Borrower, REIT or any
Subsidiary, a Compliance Certificate (i) certifying that each of Borrower, the
REIT and their respective Subsidiaries, prior to and after giving effect to any
such mandatory prepayment, 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
no Default or Event of Default has occurred and is continuing; (ii) showing in
detail satisfactory to Agent the calculations supporting such present and
prospective statements for such period in respect of the covenants in Section
7.9 and 7.16; (iii) showing in detail satisfactory to Agent 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) and the support for the Owned or Controlled Management Company EBITDA;
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 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
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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 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,
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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
Govern mental 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 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.
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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.
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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 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.
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(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, 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
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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 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 (unless such manager is one of the Management Entities) 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.
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(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.
(g) Refinance of Ambassador Pool Portfolio. Borrower shall
refinance not less than 50% of the aggregate outstanding Indebtedness in respect
of the Ambassador Pool Portfolio on or before May 1, 1999. The refinancing of
the applicable Properties shall comply with all of the applicable covenants and
provisions of the Credit Agreement and, in all events, such Properties
(including cashflow therefrom) shall not be cross-collateralized to or
cross-defaulted to each other or to any other Properties in connection with all
or any portion of such refinancing.
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;
(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;
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(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;
(j) Xxxxxxxx Bond. Any Lien pursuant to the Xxxxxxxx Bond
Documents existing on the date hereof, together with the Lien created and
evidenced by the Pledge and Security Agreement dated as of April 14, 1998 and as
in effect on the date hereof by and between Borrower, as lender, and Ambassador
X, L.P., as pledgor; and
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(k) Xxxxxx Unsecured Facility. Any Lien pursuant to the Xxxxxx
Unsecured Facility Documents; provided, however, that in all events any such
Liens if any, shall expressly provide that they are and will remain pari passu
with any and all Liens pursuant to this Agreement and the other Loan Documents.
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;
provided however, that the foregoing prohibition shall not apply to such
provisions in the Xxxxxx Unsecured Facility Documents and in connection with any
Senior Unsecured Notes. Except as provided in this Agreement or with respect to
particular Permitted 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; provided however, that the foregoing prohibition shall not apply to
such provisions in the Xxxxxx Unsecured Facility Documents and in connection
with any Senior Unsecured Notes.
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 and Schedule 7.2(a), including the Indebtedness evidenced by the
FNMA/Washington Mortgage Facility Documents, the NHP/Xxxxxx Financing and the
Xxxxxx Unsecured Facility 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 by
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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 under 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;
(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;
(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)
which may include offerings of senior unsecured notes; provided, however, that
any Unsecured Debt must, (i) in all events, be on terms and conditions which are
not more restrictive or stringent than those contained in this Agreement and the
other Loan Documents (including financial covenants) and (ii) in no events have
a maturity date prior to the maturity of the Borrower's
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obligations under this Agreement and (iii) be in an aggregate principal amount
which does not exceed the Maximum Unsecured Indebtedness; and
(i) Xxxxxxxx Bond. The Indebtedness evidenced by the Xxxxxxxx
Bond and the obligation to repay the Xxxxxxxx Bonds.
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 Contingent Obligations set forth in Schedule 7.3
and the following :
(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;
(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;
(e) Permitted Contingent Obligations. Contingent
Obligations specifically described on Schedule 7.3; and
(f) Guaranty of Permitted Indebtedness. Any Contingent
Obligation in respect of Unsecured Debt which constitutes Permitted
Indebtedness.
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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
(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 (i) sell or
refinance a Property in the Unencumbered Asset Pool or (ii) make a Disposition
of the Xxxxxxxx Bonds, in either case 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 sum of the Outstanding Amount plus the amount
outstanding under the Xxxxxx Unsecured Facility immediately after such
Disposition would not exceed the Total Available Commitment (calculated without
including the Property so sold or refinanced or the Xxxxxxxx Bond Value, as
applicable);
(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
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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 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.
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(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 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 and the Xxxxxxxx
Bond;
(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;
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(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.
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:
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(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.
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,
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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 EBITDA OF MANAGEMENT COMPANIES. Borrower shall not permit
Owned or Controlled Management Company EBITDA to be less than 80% of all EBITDA
attributable to Management Company activity.
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) $1,464,721,000 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 occurring during any
period set forth below to be less than the following ratios during the
applicable periods:
--------------------------------------------------------------------------------
APPLICABLE PERIOD RATIO
--------------------------------------------------------------------------------
Closing Date to and including December 31, 1998 1.60 to 1.00
--------------------------------------------------------------------------------
January 1, 1999 to and including June 30, 1999 1.70 to 1.00
--------------------------------------------------------------------------------
July 1, 1999 and thereafter 1.80 to 1.00
--------------------------------------------------------------------------------
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(e) Borrower shall not permit the Unencumbered Borrowing Pool
Cashflow to Unsecured Interest Ratio computed for any fiscal quarter or year to
be less than 2.50-to-1.00.
(f) Borrower shall not permit Total Obligations at any time to
exceed an amount equal to 65% of Gross Asset Value.
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 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.
7.19 CHANGES TO XXXXXX UNSECURED FACILITY DOCUMENTS. Borrower
shall not modify, amend or alter any of the Xxxxxx Unsecured Facility Documents
or permit any modifications, amendments or alterations to any of the Xxxxxx
Unsecured Facility Documents or permit the waiver or change of any of the terms
and conditions of the Xxxxxx Unsecured Facility Documents, in each case, without
the prior consent of the Requisite Lenders.
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
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(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 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
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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, or
(E) 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 the Xxxxxx Unsecured Facility, 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
(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
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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 (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.
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(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
(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
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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
(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
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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 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
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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 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)
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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
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shall be fully justified in failing or refusing to take any action under this
Agreement or any other Loan Document unless it shall first receive such advice
or concurrence of the Requisite Lenders as it deems appropriate and, if it so
requests, it shall first be indemnified to its satisfaction by the Lenders
against any and all liability and expense which may be incurred by it by reason
of taking or continuing to take any such action. The Agent shall in all cases be
fully protected in acting, or in 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.
9.5 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.
9.6 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.
9.7 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
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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 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.
9.8 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,
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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.
9.9 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 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.
9.10 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
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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;
(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.),
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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 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
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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
(c) Property Diligence Expenses. Pay or reimburse the Agent
on demand for all audits, environmental inspections and reviews (including
the allocated costs of such
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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 marshal 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.
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(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 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
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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 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.
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(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 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
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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
CALIFORNIA; 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 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
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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 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,
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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,
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reasonable attorneys' fees and disbursements, including reasonably allocated
costs of in-house counsel) resulting from any other construction of the parties'
relationship.
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.
10.24 CONSENT TO JURISDICTION AND SERVICE OF PROCESS.
ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST BORROWER ARISING OUT OF OR RELATING TO
THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR ANY OBLIGATIONS THEREUNDER, MAY BE
BROUGHT IN ANY STATE OR FEDERAL COURT OF COMPETENT JURISDICTION IN THE STATE OF
CALIFORNIA, COUNTY OF LOS ANGELES. BY EXECUTING AND DELIVERING THIS AGREEMENT,
BORROWER, IRREVOCABLY
(I) ACCEPTS GENERALLY AND UNCONDITIONALLY THE NONEXCLUSIVE
JURISDICTION AND VENUE OF SUCH COURTS;
(II) WAIVES ANY DEFENSE OF FORUM NON CONVENIENS;
(III) AGREES THAT SERVICE OF ALL PROCESS IN ANY SUCH
PROCEEDING IN ANY SUCH COURT MAY BE MADE BY REGISTERED
OR CERTIFIED MAIL, RETURN RECEIPT REQUESTED, TO COMPANY
AT ITS ADDRESS SET FORTH HERE;
(IV) AGREES THAT SERVICE AS PROVIDED IN CLAUSE (III) ABOVE
IS SUFFICIENT TO CONFER PERSONAL JURISDICTION OVER
BORROWER IN ANY SUCH PROCEEDING IN ANY SUCH COURT, AND
OTHERWISE CONSTITUTES EFFECTIVE AND BINDING SERVICE IN
EVERY RESPECT;
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(V) AGREES THAT AGENT RETAINS THE RIGHT TO SERVE PROCESS IN
ANY OTHER MANNER PERMITTED BY LAW OR TO BRING
PROCEEDINGS AGAINST BORROWER IN THE COURTS OF ANY OTHER
JURISDICTION; AND
(VI) AGREES THAT THE PROVISIONS OF THIS SUBSECTION 10.24
RELATING TO JURISDICTION AND VENUE SHALL BE BINDING AND
ENFORCEABLE TO THE FULLEST EXTENT PERMISSIBLE UNDER
APPLICABLE LAW OR OTHERWISE.
[SIGNATURE PAGES S-1 THROUGH S-5 ATTACHED]
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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:
------------------------------------
XXXXX X. XXXXXXXXX PRESIDENT
NOTICES TO BE SENT TO:
0000 XXXXX XXXXXXXX XXXXXX
00XX XXXXX
XXXXXX, XXXXXXXX 00000
ATTENTION: XXXXX X. XXXXXXXXX,
PRESIDENT
FACSIMILE: (000) 000-0000
S-1
000
X XX X
XXXX XX XXXXXXX NATIONAL TRUST
AND SAVINGS ASSOCIATION,
AS A LENDER AND AS THE ISSUING LENDER
BY:
-------------------------------------
NAME:
-----------------------------------
TITLE:
----------------------------------
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
125
AGENT
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION,
AS AGENT
BY:
-------------------------------------
NAME:
-----------------------------------
TITLE:
----------------------------------
NOTICES TO BE SENT TO:
BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION
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
126
BANKBOSTON, N.A.
BANKBOSTON, N.A.
AS A LENDER
BY:
-------------------------------------
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: XXXXXX XXXXXXXXXXX
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
127
DOCUMENTATION AGENT
BANKBOSTON, N.A.
AS DOCUMENTATION AGENT
BY:
-------------------------------------
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-5
