Exhibit 10.16
REIMBURSEMENT AGREEMENT
This Reimbursement Agreement is made and entered into as of the 25th
day of January, 2000 by (NAME), having an address at (HOME) (the "Participant"),
in favor of Colonial Realty Limited Partnership, a Delaware limited partnership
("Colonial"), and Colonial Properties Trust, an Alabama real estate investment
trust (the "REIT") (Colonial and the REIT are referred to herein individually
and collectively as the "Guarantors").
Preliminary Statements
A. The Participant applied for and obtained a loan from the Lenders (as
hereinafter defined) in the original principal amount of (DLRSWORDS) ($DLRS) for
the purpose of purchasing (UNITSWORDS) (UNITS) Class A Units (the "Purchased
Units") of Colonial (the "Participant Loan").
B. In order to induce the Lenders to make the Participant Loan,
Colonial and the REIT executed and delivered a Facility and Guaranty Agreement
dated as of December 17, 1999 among Colonial, the REIT, the financial
institutions named therein (the "Lenders") and Bank One, NA, individually and as
Agent for the Lenders (the "Guaranty"; capitalized terms used in this Agreement
and not otherwise defined shall have the respective meanings used therein).
C. In order to induce Colonial and the REIT to execute and deliver the
Guaranty, the Participant has agreed to execute and deliver this Agreement in
favor of Colonial, the REIT and the Other Guarantors pursuant to which the
Participant will reimburse Colonial, the REIT and the Other Guarantors on demand
in accordance with the provisions set forth hereinbelow.
NOW, THEREFORE, in consideration of the foregoing and for other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Participant hereby agrees as follows:
Section 1. Absolute and Unconditional Reimbursement Obligation.
(a) The Participant hereby absolutely and unconditionally agrees,
subject to subsection (b) of this Section 1, (i) to reimburse the Guarantors
fully and promptly, upon demand, for all amounts paid by the Guarantors to the
Lenders pursuant to the Guaranty with respect to the Participant Loan, (ii) to
pay any and all expenses incurred by the Guarantors in enforcing their rights
under this Agreement, and (iii) to pay to the Guarantors interest accrued on all
such amounts and expenses referred to in the foregoing clauses (i) and (ii),
from the date such amounts and expenses were paid or incurred by the Guarantors
until the date the Participant makes all such reimbursements and payments
hereunder, at the rate set forth in the Note executed by the Participant in
connection with the Participant Loan (the "Note") (whether or not the
Participant Loan is then outstanding).
(b) Notwithstanding the provisions of Section 1(a), the parties hereto
agree that under the circumstances set forth below, the Guarantors will pay
certain amounts (set forth below) in respect of the Note that the Participant
would be obligated to pay but for the provisions of this Section 1(b), and the
Participant shall have no obligation to reimburse the Guarantors on account of
such payments.
(i) Upon the (x) death of the Participant at a time when the
Participant Loan is still outstanding, or (y) (i) the Disability or
Retirement (as such terms are defined in that certain Registration
Rights and Lock-up Agreement of even date herewith between the parties
hereto (the "Lock-up Agreement")) of the Participant at a time when the
Participant Loan is still outstanding, and (ii) the election by the
Participant within 30 days after such Disability or Retirement to
exercise his or her Redemption Right (as defined in the Lock-up
Agreement) pursuant to Section 2(b) of the Lock-up Agreement, the
Guarantors agree to pay the Early Payment Fee owed by the Participant
to the Lenders and the prepayment administrative fee of $375 owed by
the Participant to Bank One, NA for its own account (the
"Administrative Fee") pursuant to the terms of the Note. In such cases,
the Guarantors also agree to pay to the Lenders all principal and
interest due on the Participant Loan, to the extent that such sums are
not paid out of the proceeds of the redemption of the Purchased Units
pursuant to the provisions of the Lock-up Agreement and the letter of
direction referred to therein, and the Participant shall have no
obligation to reimburse the Guarantors on account of such payments. The
Participant agrees that it is a condition precedent to the obligations
of the Guarantors under this paragraph that the Participant shall have
exercised his or her Redemption Right as aforesaid and that all of the
proceeds of such redemption (or so much thereof as may be necessary)
shall have been applied to the payment in full of the principal and
interest (including without limitation the deferred interest) under the
Note, or in the event the proceeds of such redemption are insufficient
to pay such principal and interest in full, then to the payment of so
much of such principal and interest as can be paid with such proceeds.
The Participant further agrees that in the event the Guarantors make
payment of any of the sums contemplated by this paragraph prior to the
time that the proceeds of such redemption are available, the proceeds
of such redemption shall be paid directly to the Guarantors and the
Guarantors shall keep all or so much of such proceeds as is necessary
to reimburse the Guarantors for all amounts paid by the Guarantors to
the Lenders on account of the principal and interest (including without
limitation the deferred interest) of the Note and return the unused
balance, if any, of such proceeds to the Participant.
(ii) In the event that the Accelerated Maturity Date (as
defined in the Lock-up Agreement) occurs as a result of a Program Event
of Default, the Guarantors agree to pay the Early Payment Fee and the
Administrative Fee required under the terms of the Note, and the
Participant shall have no obligation to reimburse the Guarantors on
account of such payment.
(c) This Agreement shall be a continuing agreement and the liability of
the Participant hereunder shall be absolute and unconditional, shall be
performed strictly in accordance with the terms of this Agreement and shall not
be affected, modified or diminished by reason of: (i) any assignment, renewal,
modification or extension of the Participant Loan or the Guaranty; (ii) any
modification or waiver of or change in any of the terms, covenants, conditions
or provisions of the Participant Loan or of the Guaranty; (iii) any dealings or
transactions occurring between the Lenders and the Guarantors whether or not
notice thereof is given to the Participant; (iv) any default or failure of the
Participant fully to perform any of its obligations, covenants or agreements
with respect to the Participant Loan or as set forth in this Agreement; (v) any
substitution of a new guaranty for the Guaranty; (vi) the invalidity or lack of
enforceability of the Participant Loan or the Guaranty or any provision of any
thereof, or (vii) any other circumstance which might otherwise constitute a
defense available to, or a discharge of, the Participant in respect of the
Participant Loan or this Agreement.
(d) This Agreement shall continue to be effective or be restated, as
the case may be, if at any time any payment of the principal of or interest on
the Participant Loan is rescinded or must otherwise be returned by the Lenders
upon the insolvency or bankruptcy of the Participant or otherwise, all as though
such payment had not been made.
Section 2. Right of Setoff. Upon the occurrence and during the
continuance of any Event of Default, the Guarantors are authorized at any time
and from time to time, without notice to the Participant (any such notice being
expressly waived by the Participant) to set off and apply any and all amounts
owing by the Guarantors to the Participant (including, without limitation, base
salary, bonuses, performance units, distributions payable on the Purchased Units
and dividends payable on any Common Shares issued in connection with the
redemption thereof, but excluding the Purchased Units themselves and any "margin
stock" (as defined in Regulation U of the Board of Governors of the Federal
Reserve System) against any and all of the obligations of the Participant now or
hereafter existing under this Agreement, irrespective of whether or not the
Guarantors shall have made any demand under this Agreement and although such
obligations may be unmatured. The Guarantors agree promptly to notify the
Participant after any such setoff and application, provided that the failure to
give such notice shall not affect the validity of such setoff and application.
The rights of the Guarantors under this Section are in addition to the other
rights and remedies which the Guarantors may have.
Section 3. Indemnification. The Participant hereby agrees to indemnify,
defend and hold the Guarantors harmless from and against all demands, claims,
actions or causes of action, assessments, losses, damages, liabilities, costs
and expenses, including without limitation, interest penalties and reasonable
attorneys' fees and expenses (collectively "Damages") asserted against,
resulting to, imposed upon or incurred directly or indirectly by the Guarantors
by reason of or resulting from a breach of any representation, warranty,
covenant or agreement of the Participant contained in or made pursuant to this
Agreement.
Section 4. Full Disclosure. No representation or warranty of the
Participant in or pursuant to this Agreement, including any financial or other
information provided by Participant, contains any untrue statement of a material
fact, or omits to state any material fact necessary in order to make the
statements contained herein or therein, in the light of the circumstances under
which they are made, not misleading.
Section 5. Representations and Warranties. The Participant represents
and warrants to the Guarantors as follows:
(a) The Participant has all right and power to enter into this
Agreement, perform its obligations hereunder and consummate
the transactions contemplated hereby.
(b) This Agreement constitutes a legal, valid and binding
obligation of the Participant, enforceable against the
Participant in accordance with its terms.
(c) Neither the execution and delivery of this Agreement, nor
compliance with the terms and provisions hereof, by the
Participant will violate any statute, regulation or ordinance
of any governmental authority or conflict with or result in
the breach of any term, condition or provision of any
agreement, contract, order or instrument to which the
Participant is a party or by which its assets or properties
are bound or constitute a default (or an event which, with the
lapse of time or the giving of notice or both, would
constitute a default) thereunder.
(d) There is not pending or, to the best of the Participant's
knowledge, threatened any suit, claim, action, litigation or
proceeding, administrative or judicial, or any governmental
investigation against the Participant or involving any of his
or her properties or assets, and there is no reasonable basis
upon which any such suit, claim, action, litigation,
proceeding or investigation could be brought or initiated.
(e) The financial statements, investor questionnaire and other
financial information, if any, delivered by the Participant to
the Guarantors prior to the date hereof are complete and
accurate in all material respects and are in compliance with
the requirements of Section 4 hereof.
(f) The Participant has not granted to any person a security interest in
his or her general intangibles.
Section 6. Covenants of the Participant. The Participant hereby agrees
that:
(a) so long as any portion of the Participant Loan remains
outstanding and unpaid, in whole or in part, or the Guaranty
remains in effect, or any amount is owing to the Guarantors
hereunder:
(i) the net worth of the Participant shall not be less than
the original principal amount of the Participant Loan;
and
(ii) the Participant shall provide promptly such financial
information to the Guarantors as the Guarantors may,
from time to time, reasonably require.
(b) The Participant shall use the proceeds of the Participant
Loan solely to purchase the Purchased Units.
Section 7. Pledge of Class A Units. (a) As security for the prompt and
complete payment and performance of all of his or her obligations under this
Agreement, the Participant hereby pledges to and grants to the Guarantors a
security interest in the following, in each case whether now owned or hereafter
acquired (the "Collateral"):
(i) all of the Participant's right, title and interest in and
to the Purchased Units, together with all shares, all dividends and other
distributions and all other rights and properties which the Participant shall
receive or shall become entitled to receive for any reason whatsoever with
respect to, upon redemption of, in substitution for or in exchange for any of
such Purchased Units (including, without limitation, all cash amounts payable
upon redemption of the Purchased Units, all shares issuable upon redemption of
the Purchased Units, and all cash or other property received or receivable upon
the sale or other disposition of any or all of the foregoing, including, without
limitation, all cash or other property received or receivable upon the sale or
disposition of any or all of the foregoing pursuant to the Lock-up Agreement and
the letter of direction referred to therein); and
(ii) all proceeds of any and all of the foregoing
(including proceeds that constitute property of the
types described above).
(b) In connection with the foregoing, the Participant hereby authorizes
and directs Colonial, on his or her behalf, to deliver to the Guarantors the
certificates evidencing such Purchased Units and is delivering to the Guarantors
herewith irrevocable unit powers duly executed in blank and undated with respect
thereto and appropriate executed UCC-1 financing statements.
(c) At any time and from time to time, upon the written request of the
Guarantors, the Participant will promptly execute and deliver any and all such
further instruments and documents and take such further actions as the
Guarantors may reasonably deem necessary or desirable to obtain the full
benefits of the security interest granted hereby and of the rights and powers
herein granted, including the execution and filing of any financing or
continuation statement under the Uniform Commercial Code as in effect from time
to time in the applicable jurisdictions (the "Code").
(d) Except as set forth below, the Participant shall be entitled to
receive all dividends and distributions payable with respect to the Collateral.
Upon the occurrence of any Event of Default, Colonial is hereby authorized to
remit all dividends and other distributions payable with respect to the
Collateral directly to the Guarantors for application against all amounts due to
the Lenders under the Note and against the Participant's obligations hereunder.
When the Note is paid in full and all obligations of the Participant under this
Agreement have been fully paid and satisfied, the Guarantors shall remit any
such remaining dividends and other distributions to the Participant.
(e) The Participant agrees that he or she will not redeem the Purchased
Units, or sell, assign, exchange or otherwise transfer, or grant any rights in
respect of, any of the Collateral, except in full compliance with the provisions
of the Partnership Agreement and the Lock-up Agreement. In the event of any such
sale of the Purchased Units that is made in compliance with the foregoing
provisions, the Guarantors shall, subject to the payment in full of the Note and
all of the Participant's obligations under this Agreement, release the
Collateral from the security interest created hereby.
(f) Upon the occurrence of any Event of Default, the Guarantors may
exercise as to any or all of the Collateral all the rights, powers and remedies
of a secured party under the Code or other applicable law, and may elect to sell
the Collateral in one or more public or private sales in compliance with
applicable law and exercise any and all other rights and remedies which they may
have by contract or otherwise. The Participant should be obligated to pay all
sums payable hereunder even if the Guarantors do not exercise any of such
rights, powers and remedies; in the event the Guarantors do exercise any of such
rights, powers and remedies, the Participant shall remain obligated to pay all
sums payable hereunder that are not recovered by the Guarantors as a result of
such exercise.
(g) Except as expressly provided in the Code, the Guarantors shall have
no additional duty as to any Collateral in their possession or control or in the
possession or control of any agent or nominee or as to any income thereon or as
to the preservation of rights against prior parties or any other rights
pertaining thereto. The Guarantors shall be under no duty or obligation
whatsoever (i) to make or give any presentments, demands for performances,
notices of nonperformance, protests, notices of protest or notices of dishonor
in connection with any obligation or evidences of indebtedness which constitute
in whole or in part the indebtedness or other obligations secured hereunder or
(ii) to give the Participant notice of, or to exercise any subscription rights
or privileges, any rights or privileges to exchange, convert or redeem or any
other rights or privileges relating to or affecting any Collateral.
(h) The pledge and security interest created hereby shall terminate
when all obligations of the Participant under this Agreement shall have been
fully paid and satisfied, at which time the Guarantors shall deliver to the
Participant all collateral and related documents then in the custody or
possession of the Guarantors, all without recourse upon, or warranty whatsoever
by, the Guarantors.
Section 8. Remedies. All of the Guarantors' rights and remedies under
this Agreement are intended to be distinct, separate and cumulative and no such
right or remedy is intended to be to the exclusion of or be a waiver of any
other right or remedy.
Section 9. Amendments, Etc. No amendment or waiver of any provision of
this Agreement shall be effective unless it is in writing and signed by the
Participant and the Guarantors, and any such waiver shall be effective only in
the specific instance and for the specific purpose for which given.
Section 10. Waiver of Notice, Etc. The Participant hereby waives
promptness, diligence, notice of acceptance and any other notice with respect to
this Agreement and any requirement that the Guarantors protect, secure, perfect
or insure any security interest or lien or any property subject thereto or
exhaust any right or take any action against any person or entity.
Section 11. Governing Law. This Agreement and the rights and
remedies of the Guarantors and the Participant shall be governed by and
construed in accordance with the laws of the State of Alabama.
Section 12. Binding Effect. This Agreement shall inure to the benefit
of each of the Guarantors and their respective successors and assigns and shall
be fully binding upon the Participant, and his or her heirs, executors and legal
or personal representatives.
Section 13. Expenses. The Participant will, upon demand, pay to the
Guarantors the amount of any and all reasonable expenses, including the
reasonable fees and expenses of counsel and of any experts and agents, which the
Guarantors may incur in connection with (i) the exercise or enforcement of any
of the rights of the Guarantors hereunder or (ii) the failure by the Participant
to perform or observe any of the provisions hereof. The Participant also shall
be solely responsible for his or her own costs for accounting, tax, legal and
investment banking advice and all other services that the Participant may
receive with respect to this Agreement and the matters contemplated herein.
Section 14. Taxes. The Participant shall be solely responsible and
hereby agrees to pay any and all taxes applicable with respect to Purchased
Units that may be sold, including but not limited to ordinary income taxes,
capital gains taxes or any other taxes levied by any relevant taxing authority.
Section 15. Term. This Agreement shall remain in full force and effect
until all obligations under this Agreement and the Guaranty have been fully
performed, regardless of any invalidity or unenforceability of any provision of
this Agreement or the Guaranty.
Section 16. Events of Default. For purposes of this Agreement, any
breach by the Participant of or default by the Participant under this Agreement,
or any representation or warranty made, or any financial or other information
provided by, the Participant to the Guarantors in connection with this Agreement
shall prove to have been incorrect in any material respect when made or
provided, or the occurrence of any Borrower Event of Repayment, shall be an
"Event of Default" under this Agreement.
Section 17. Notices. All notices and other communications permitted or
required pursuant to this Agreement shall be in writing and shall be deemed
given when delivered in person, or five (5) days after being deposited in the
United States mail, postage prepaid, as certified mail, return receipt
requested, properly addressed to the party for whom intended at the addresses
set forth below, or to such other address as any party hereto may designate for
itself by notice in accordance herewith to the others:
The Guarantors: Colonial Properties Trust
0000 Xxxxx Xxxxxx Xxxxx, Xxxxx 000
Xxxxxxxxxx, XX 00000
Attn.: Xxxxxx X. Xxxxxx, Xx.
With a copy to: Xxxxx & Xxxxxxx L.L.P.
000 00xx Xxxxxx, X.X.
Xxxxxxxxxx, XX 00000-0000
Attn.: Xxxx X. Xxx
The Participant: (BUSINESSADD)
Section 18. No Waiver. No delay or omission of the Guarantors to
exercise any right, remedy or power hereunder shall impair the same or be
construed to be a waiver of any Event of Default or an acquiescence therein. No
waiver of any Event of Default shall extend to or affect any subsequent Event of
Default, nor shall it impair any right, remedy or power available to the
Guarantors. No single or partial exercise of any right, remedy or power shall
preclude any other or further exercise thereof by the Guarantors.
Section 19. Severability. Any provision of this Agreement that is
legally determined to be unenforceable in any jurisdiction shall, as to that
jurisdiction, be ineffective to the extent of the unenforceability only without
invalidating the remaining provisions hereof, but no unenforceability in any
jurisdiction shall invalidate or render unenforceable the same or any other
provision in any other jurisdiction.
Section 20. Entire Agreement. This Agreement, including the schedules
referenced herein, constitutes the entire agreement of the parties hereto with
respect to the matters referred to herein and supersedes any and all other
understandings, negotiations, or agreements among the Participant and the
Guarantors with respect to the subject matter hereof.
Section 21. Arbitration. Any dispute, claim or controversy arising out
of or in connection with this Agreement shall be resolved through binding
arbitration in the Birmingham, Alabama metropolitan area under the commercial
arbitration rules of the American Arbitration Association (the "AAA") then in
force. The Guarantors and the Participant shall each appoint one person from a
list furnished by the AAA, and the two persons so appointed shall jointly select
a neutral third person who shall serve as the sole arbitrator. The arbitrator
shall provide a written decision stating its findings. The arbitration award
shall be final and binding among the parties, and judgment thereon may be
entered by any court having jurisdiction. In any arbitration to enforce or
construe any provision of this Agreement or otherwise arising hereunder, the
prevailing party shall be entitled to recover, in addition to any other
available relief, its reasonable attorney fees and costs incurred. If neither
party prevails on all issues, the parties' total attorney fees and costs
(including arbitrator's fees) may be allocated in the arbitrator's discretion.
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement, and made delivery thereof, as of the date first written above.
(CAPNAME)
-----------------------------
COLONIAL REALTY LIMITED
PARTNERSHIP
By: Colonial Properties Trust,
its General Partner
By: /s/ Xxxxxx X. Xxxxxx Xx.
-----------------------------
Xxxxxx X. Xxxxxx, Xx.
Chief Financial Officer
COLONIAL PROPERTIES TRUST
By: /s/ Xxxxxx X. Xxxxxx Xx.
-----------------------------
Xxxxxx X. Xxxxxx, Xx.
Chief Financial Officer
