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EXHIBIT 10.7
EXHIBIT I
FORM OF INTRA-COMPANY SUBORDINATION AGREEMENT
This INTRA-COMPANY SUBORDINATION AGREEMENT (together with all
amendments and supplements hereto, this "AGREEMENT"), is dated as of August ___,
1999 by and among AIMCO PROPERTIES, L.P., a Delaware limited partnership (the
"COMPANY"), each of the parties designated as a "LENDER" on Annex 1 attached
hereto (each, an "INTRA-COMPANY LENDER", and collectively, the "INTRA-COMPANY
LENDERS"), BANK OF AMERICA, N.A. ("BANK OF AMERICA"), as Issuing Lender, BANK OF
AMERICA, N.A., as one of the Lenders, a Co-Lead Agent and Administrative Agent
(the "AGENT") for the Lenders, BANKBOSTON, N.A., as one of the Lenders, a
Co-Lead Agent and Syndication Agent, and FIRST UNION NATIONAL BANK, as one of
the Lenders and Documentation Agent. Capitalized terms used in this Agreement
without definition have the meanings specified in the Agreement (as defined
herein.)
RECITALS
A. In accordance with that certain Credit Agreement (the
"Credit Agreement"), dated of even date herewith, by and among the Company, Bank
of America (as Issuing Lender, Co-Lead Agent and Administrative Agent, and as a
Lender), BankBoston, N.A. (as a Co-Lead Agent, Syndication Agent and as a
Lender), First Union National Bank (as Documentation Agent and as a Lender) and
the other Lenders from time to time party thereto, such Lenders have agreed to
provide up to a $300,000,000 credit facility to the Company. As used herein, the
term "Credit Facility" shall refer individually to each of the credit facilities
available to the Company under the Credit Agreement and shall refer collectively
to all such credit facilities, including, without limitation, all obligations
with respect to principal, premium, if any, interest, and default interest, if
any, and all other obligations secured by the Loan Documents.
B. Each of the Intra-Company Lenders has made a loan or loans
(each, an "Intra-Company Loan", and collectively the "Intra-Company Loans") to
certain Subsidiaries of the REIT, Borrower or any of their Subsidiaries and
other Persons in which the REIT, Borrower or any of their Subsidiaries has any
equity interest (collectively, the "Intra-Company Borrowers"). Each
Intra-Company Loan is in the principal amount described on Annex 1, and is
evidenced by a promissory note or notes dated as of the date set forth on Annex
1.
C. To induce the Lenders to make the Loans under the Credit
Agreement, each of the Intra-Company Lenders desires to subordinate the
Intra-Company Loan or Intra-Company Loans made by such Intra-Company Lender to
the Credit Facility and to the obligations of each of the guarantors (the "REIT
Guarantors") under the REIT Guaranty Documents and to make certain agreements in
favor of the Agent and the Lenders. (As used herein, "Applicable Intra-Company
Loan" means, with respect to any Intra-Company lender, an Intra-Company Loan
made by such Intra-Company Lender to an Intra-Company Borrower.)
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AGREEMENT
NOW, THEREFORE, in consideration of the foregoing recitals and
for other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereby agree as follows:
1. Approval of Credit Facility. Each of the Intra-Company
Lenders acknowledges that it has received, and each Intra-Company Lender hereby
consents to, the Loan Documents.
2. Payment Subordination.
(a) Each Intra-Company Lender agrees that any Applicable
Intra-Company Loan is and shall be subject, subordinate and rendered junior, in
right of payment, to the prior indefeasible payment and performance in full, for
a period of time in excess of all applicable preference or other similar periods
under applicable bankruptcy, insolvency or creditors' rights laws, of the Credit
Facility and all obligations under the Loan Documents, including, without
limitation, all obligations of the REIT Guarantors under the REIT Guaranty
Documents.
(b) Each Intra-Company Lender agrees not to ask, demand, xxx
for, take or receive from an Intra-Company Borrower or any other Person,
directly or indirectly, in cash, securities or other property or by set-off or
in any other manner (including without limitation from or by way of collateral),
payment of all or any amounts owing with respect to any Applicable Intra-Company
Loan; nor to accept any such payment; and each of the Intra-Company Borrowers,
and the Company agrees not to make any such payment; unless and until, in each
such case, the Credit Facility and all other obligations under the Loan
Documents, including, without limitation, all obligations of the REIT Guarantors
under the REIT Guaranty Documents, shall have been indefeasibly paid and
performed in full, for a period of time in excess of all applicable preference
or other similar periods under applicable bankruptcy, insolvency or creditors'
rights laws; provided, however, payments may be made under Intra-Company Loans,
other than the Finance Subsidiary Loan, in accordance with Section 7.07 of the
Credit Agreement.
3. In Furtherance of Subordination.
(a) Upon any distribution of all or any of the assets of any of
the Intra-Company Borrowers (a) in the event of any insolvency or bankruptcy
case or proceeding, or any receivership, liquidation, reorganization or other
similar case or proceeding in connection therewith, relative to any of the
Intra-Company Borrowers or to any of their creditors, as such, or to its assets,
(b) in the event of any liquidation, dissolution or other winding up of any of
the Intra-Company Borrowers, whether voluntary or involuntary and whether or not
involving insolvency or bankruptcy, (c) in the event of any assignment for the
benefit of creditors or any other marshaling of assets and liabilities of any of
the Intra-Company Borrowers, or (d) in any manner inconsistent with the
provisions of this Agreement, then and in any such event the holder of the
Credit Facility shall receive indefeasible payment in full of all amounts due or
to become
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due (whether or not an Event of Default has occurred or the maturity of the
Credit Facility has been declared due and payable prior to the date on which it
would otherwise have become due and payable) on or in respect to the Credit
Facility, including any post-petition interest thereon, before any of the
Intra-Company Lenders is entitled to receive any payment on account of principal
of (or premium, if any) or interest on any Applicable Intra-Company Loan.
(b) Each Intra-Company Lender agrees that, so long as the
Credit Facility shall remain unpaid, such Intra-Company Lender shall not loan or
advance any additional funds to the Company, the REIT, or any of their
respective Subsidiaries, other than the Applicable Intra-Company Loan.
(c) Subject to the proviso in Section 2(b) hereof, all payments
with respect to an Intra-Company Loan or distributions received by an
Intra-Company Lender contrary to the provisions of this Agreement shall be
received in trust for the benefit of the Lenders, shall be segregated from other
funds and property held by such Intra-Company Lender, and shall be forthwith
paid over to the Agent for the ratable benefit of the Lenders in the same form
as so received (with any necessary endorsement) to be applied (in the case of
cash) to, or held as collateral (in the case of non-cash property or securities)
for, the payment or prepayment of the Credit Facility.
4. No Commencement of Any Proceedings. Each Intra-Company
Lender agrees that, so long as the Credit Facility shall remain unpaid, such
Intra-Company Lender will not commence, or join with any creditor other than
Lenders in commencing, or cause the Intra-Company Borrower to commence, any
proceeding referred to in Section 3(a).
5. No Disposition or Amendment of or Exercise of Remedies With
Respect to an Intra-Company Loan. So long as the Credit Facility remains unpaid,
each Intra-Company Lender agrees that it will not:
(a) Sell, assign, transfer, endorse, pledge, encumber or
otherwise enter into any Disposition of the Applicable Intra-Company Loan or any
interest therein; or
(b) Enter into any amendment, modification, extension, renewal
or replacement of or accept any collateral or guaranty for any Applicable
Intra-Company Loan; or
(c) Take, or permit to be taken, any action to assert, collect
or enforce any Applicable Intra-Company Loan or any part thereof, or to exercise
any of such Intra-Company Lender's remedies with respect to any Applicable
Intra-Company Loan.
6. Rights and Obligations hereunder Not Affected. All rights
and interests of the Agent and the Lenders hereunder, and all agreements and
obligations of each Intra-Company Lender, the Company, and each Intra-Company
Borrower under this Agreement, shall remain in full force and effect
irrespective of:
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(a) any lack of validity or enforceability of the Loan
Documents or any other documents evidencing or securing the Credit Facility;
(b) any change in the time, manner or place of payment of, or
in any other term of, the Credit Facility, or any other amendment or waiver of
or any consent to departure from the Loan Documents;
(c) any exchange, release or non-perfection of any collateral
for or of any Person liable for all or any of the Credit Facility; or
(d) the rescission or return of any payment on account of the
Credit Facility by any Lender upon the insolvency, bankruptcy or reorganization
of the Company, the REIT, any of the Intra-Company Borrowers, or any of the REIT
Guarantors, or otherwise, all as though such payment had not been made.
7. Representations and Warranties. The Company and each
Intra-Company Lender represents and warrants to the Agent and the Lenders that:
(a) Each Intra-Company Lender that is a corporation,
partnership, or limited liability company:
i. Is duly organized (or formed, in the case of a
partnership or limited liability company), validly existing and in good
standing under the laws of the jurisdiction of its organization; and
ii. Has the power and authority and all governmental
licenses, authorizations, consents and approvals to perform its
obligations under this Agreement.
(b) The execution, delivery and performance by each
Intra-Company Lender of this Agreement has been duly authorized by all necessary
partnership or other organizational action, and do not and will not:
i. Contravene the terms of any Intra-Company Lender's
Organizational Documents;
ii. Conflict with, or result in any breach or
contravention of, or the creation of any Lien under, any document
evidencing any Contractual Obligation, to which each Intra-Company
Lender is a party or any order, injunction, writ or decree of any
Governmental Authority to which each Intra-Company Lender or its
Properties are subject; or
iii. Violate any Requirement of Law.
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(c) 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, each Intra-Company Lender of this Agreement.
(d) This Agreement constitutes the legal, valid and binding
obligation of each Intra-Company Lender, enforceable against each such
Intra-Company Lender in accordance with its 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.
(e) All representations and warranties of the Company with
respect to each Intra-Company Lender and each Intra-Company Borrower (whether
expressly or as a Subsidiary) set forth in the Credit Agreement and the other
Loan Documents are true and correct as if made on the date hereof.
8. Waivers. No waiver of any provision of this Agreement shall
in any event be effective unless the same shall be in writing and signed by the
Agent with any required consent from the Lenders, and then only in the specific
instance and for the specific purpose for which given. Any waiver, forbearance,
failure or delay by the Agent or any Lender in exercising any right, power or
remedy, shall not preclude the further, simultaneous or later exercise thereof,
and every right, power or remedy of the Agent or any Lender shall continue in
full force and effect until such right, power or remedy is specifically waived
in a writing executed by the Agent with any required consent from the Lenders.
9. Cumulative Rights. The rights, powers and remedies of the
Agent and the Lenders under this Agreement shall be in addition to all rights,
powers and remedies given to the Agent and the Lenders by virtue of any statute
or rule of law, the Credit Agreement, or any other agreement, all of which
rights, powers and remedies shall be cumulative and may be exercised
successively or concurrently.
10. Assignment; Successors and Assigns. Each Intra-Company
Lender hereby represents to the Agent and the Lenders that it has not assigned
or sold any interest in any Applicable Intra-Company Loan. This Agreement shall
bind the Agents, the Lenders, each Intra-Company Lender, the Company, and each
Intra-Company Borrower, and their successors and assigns and shall inure to the
benefit of their respective successors and assigns.
11. Counterpart Originals. This Agreement may be executed in
counterpart originals, each of which shall constitute the same agreement.
12. Choice of Law. This Agreement shall be governed by and
construed in accordance with the substantive laws of the State of California,
without respect to conflicts or choice of law rules.
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13. Intentionally Omitted.
14. Severability. Every provision of this Agreement is
intended to be severable. In the event any term, provision, section or
subsection of this Agreement is declared to be illegal or invalid, for any
reason whatsoever, by a court of competent jurisdiction, such illegality or
invalidity shall not affect the other terms, provisions, sections or subsections
of this Agreement, which shall remain binding and enforceable.
15. Integration; Modifications. This Agreement and the Loan
Documents (a) integrate all the terms and conditions mentioned in or incidental
to this Agreement and the Loan Documents, (b) supersede all oral negotiations
and prior writings with respect to their subject matter, and (c) are intended by
the parties as the final expression of the agreement with respect to the terms
and conditions set forth in this Agreement and the Loan Documents. No
representation, understanding, promise or condition shall be enforceable against
any party unless it is contained in the Loan Documents. This Agreement may not
be modified except in a writing signed by the Agent with any required consent of
the Lenders, the Company, with respect to any Intra-Company Loan affected
thereby, the applicable Intra-Company Borrower and Intra-Company Lender.
16. Attorney Costs. If any lawsuit, reference or arbitration
is commenced which arises out of, or which relates to this Agreement, including
any alleged tort action, regardless of which party commences the action, the
prevailing party shall be entitled to recover from each other party to such
action such sums as the court, referee or arbitrator may adjudge to be
reasonable Attorney Costs in the action or proceeding, in addition to costs and
expenses otherwise allowed by law. Any such Attorney Costs incurred by either
party in enforcing a judgment in its favor under this Agreement shall be
recoverable separately from and in addition to any other amount included in such
judgment, and such attorneys' fees obligation is intended to be severable from
the other provisions of this Agreement and to survive and not be merged into any
such judgment.
17. Other Intra-Company Indebtedness. If the Company, any of
the Intra-Company Lenders, or any of the Intra-Company Borrowers are either an
obligor or an obligee with respect to "Intra-Company Debt" (and whether any such
parties originated the applicable loan or accepted such loan by assignment, or
originally incurred such debt or assumed such debt), and such Intra-Company Debt
is not scheduled on Annex 1 hereto, each of the Company, the Intra-Company
Lenders, and the Intra-Company Borrowers agrees that such Intra-Company Debt
shall be considered an "Intra-Company Loan" for all purposes hereunder, the
applicable obligor and obligee with respect to such Intra-Company Loan shall be
deemed an Intra-Company Borrower or Intra-Company Lender, respectively,
hereunder, and all representations, warranties, covenants, and other provisions
herein shall apply with respect thereto.
18. Further Assurances. Each of the Company, the Intra-Company
Lenders, and the Intra-Company Borrowers agrees to execute and deliver such
additional instruments and agreements and to undertake such further acts as may
be deemed necessary or appropriate by the Agent or the Lenders in order to
effectuate the provisions of this Agreement.
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19. Consent to Jurisdiction and Service of Process. ALL
JUDICIAL PROCEEDINGS BROUGHT AGAINST INTRA-COMPANY LENDERS ARISING OUT OF OR
RELATING TO THIS AGREEMENT, OR ANY OBLIGATIONS HEREUNDER, MAY BE BROUGHT IN ANY
STATE COURT OF COMPETENT JURISDICTION IN THE STATE OF CALIFORNIA OR IN THE
UNITED STATES DISTRICT COURT FOR THE CENTRAL DISTRICT OF CALIFORNIA. BY
EXECUTING AND DELIVERING THIS AGREEMENT, EACH INTRA-COMPANY LENDER, FOR ITSELF
AND IN CONNECTION WITH ITS PROPERTIES, 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 EACH SUCH INTRA-COMPANY LENDER AT
ITS ADDRESS SET FORTH IN ANNEX 1 ATTACHED HERETO; (IV) AGREES THAT SERVICE AS
PROVIDED IN CLAUSE (III) ABOVE IS SUFFICIENT TO CONFER PERSONAL JURISDICTION
OVER EACH SUCH INTRA-COMPANY LENDER IN ANY SUCH PROCEEDING IN ANY SUCH COURT,
AND OTHERWISE CONSTITUTES EFFECTIVE AND BINDING SERVICE IN EVERY RESPECT; (V)
AGREES THAT BANK OF AMERICA RETAINS THE RIGHT TO SERVE PROCESS IN ANY OTHER
MANNER PERMITTED BY LAW OR TO BRING PROCEEDINGS AGAINST ANY INTRA-COMPANY LENDER
IN THE COURTS OF ANY OTHER JURISDICTION; AND (VI) AGREES THAT THE PROVISIONS OF
THIS SECTION 19 RELATING TO JURISDICTION AND VENUE SHALL BE BINDING AND
ENFORCEABLE TO THE FULLEST EXTENT PERMISSIBLE UNDER CALIFORNIA CODE OF CIVIL
PROCEDURE SECTION 410.40 OR OTHERWISE.
20. Waiver of Jury Trial. EACH INTRA-COMPANY LENDER AND EACH
OTHER PARTY PARTY TO THIS AGREEMENT HEREBY AGREE TO WAIVE THEIR RESPECTIVE
RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT
OF THIS AGREEMENT. The scope of this waiver is intended to be all-encompassing
of any and all disputes that may be filed in any court and that relate to the
subject matter of this transaction, including without limitation contract
claims, tort claims, breach of duty claims, and all other common law and
statutory claims. Each party hereto acknowledges that this waiver is a material
inducement for the parties hereto to enter into a business relationship, that
each party hereto has already relied on this waiver in entering into this
Agreement and that each will continue to rely on this waiver in their related
future dealings. Each party hereto further warrants and represents that each has
reviewed this waiver with its legal counsel, and that each knowingly and
voluntarily waives its jury trial rights following consultation with legal
counsel. THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER
ORALLY OR IN WRITING (OTHER THAN BY A MUTUAL WRITTEN WAIVER SPECIFICALLY
REFERRING TO THIS SECTION 20 AND EXECUTED BY EACH OF THE PARTIES HERETO), AND
THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR
MODIFICATIONS TO THIS AGREEMENT. In the event of litigation, this Agreement may
be filed as a written consent to a trial by the court.
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21. Provisional Remedies, Self-Help and Foreclosure. No
provision of this Agreement shall limit the right of any party to exercise
self-help remedies such as setoff, foreclosure against or sale of any real or
personal property collateral or security.
[Remainder of Page Intentionally Left Blank]
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IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the date and year first set forth above.
COMPANY
AIMCO PROPERTIES, L.P., a Delaware limited
partnership
By: AIMCO-GP, INC.,
a Delaware corporation,
its general partner
By:
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Printed Name: Xxxxx X. Xxxxxxxxx
Title: President
EACH OF THE INTRA-COMPANY LENDERS
AIMCO HOLDINGS QRS, INC.,
a Delaware corporation
By:
-----------------------------------------
Printed Name: Xxxxx X. Xxxxxxxxx
Title: President
AIMCO PROPERTIES FINANCE CORP.,
a Delaware corporation
By:
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Printed Name: Xxxxx X. Xxxxxxxxx
Title: President
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AIMCO PROPERTIES FINANCE
PARTNERSHIP, L.P.,
a Delaware limited partnership
By: AIMCO PROPERTIES FINANCE CORP.,
a Delaware corporation
By:
-----------------------------------------
Printed Name: Xxxxx X. Xxxxxxxxx
Title: President
AIMCO/OTC QRS, INC.,
a Delaware corporation
By:
-----------------------------------------
Printed Name: Xxxxx X. Xxxxxxxxx
Title: President
CONSOLIDATED CAPITAL INSTITUTIONAL
PROPERTIES, a California limited partnership
By: CONCAP EQUITIES, INC.
a Delaware corporation,
General Partner
By:
-----------------------------------------
Printed Name: Xxxxx X. Xxxxxxxxx
Title: President
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CONSOLIDATED CAPITAL INSTITUTIONAL
PROPERTIES/II, a California limited partnership
By: CONCAP EQUITIES, INC.
a Delaware corporation,
General Partner
By:
--------------------------------------------
Printed Name: Xxxxx X. Xxxxxxxxx
Title: President
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LENDERS
BANK OF AMERICA, N.A.
as Co-Lead Agent and Administrative Agent
By:
------------------------------------------
Printed Name:
Title:
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BANKBOSTON, N.A.
as Co-Lead Agent and Syndication Agent
By:
------------------------------------------
Printed Name:
Title:
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