CREDIT AGREEMENT
(ACQUISITION SUB FACILITY)
among
AIMCO/NHP Holdings, Inc.,
a Delaware corporation,
Bank of America National Trust and Savings Association,
as the Agent,
and
Bank of America National Trust and Savings Association
and
Xxxxx Xxxxxx Mortgage Capital Group, Inc.
as the initial Lenders
May 5, 1997
TABLE OF CONTENTS
PAGE
ARTICLE I DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.01 Defined Terms. . . . . . . . . . . . . . . . . . . . 1
1.02 Other Definitional Provisions. . . . . . . . . . . .15
1.03 Accounting Principles1 . . . . . . . . . . . . . . . 6
ARTICLE II THE FACILITY . . . . . . . . . . . . . . . . . . . . . . . . .16
2.01 Amounts and Terms of Commitments . . . . . . . . . .16
2.02 Note . . . . . . . . . . . . . . . . . . . . . . . .16
2.03 Procedures for Borrowings. . . . . . . . . . . . . .17
2.04 Conversion and Continuation Elections. . . . . . . .19
2.05 Optional Prepayments . . . . . . . . . . . . . . . .20
2.06 Mandatory Prepayments of Loans . . . . . . . . . . .20
2.07 Application of Proceeds. . . . . . . . . . . . . . .21
2.08 Repayment. . . . . . . . . . . . . . . . . . . . . .21
2.09 Interest . . . . . . . . . . . . . . . . . . . . . .21
2.10 Fees . . . . . . . . . . . . . . . . . . . . . . . .22
2.11 Computation of Fees and Interest . . . . . . . . . .22
2.12 Payments by the Company. . . . . . . . . . . . . . .23
2.13 Payments by the Lenders to the Agent . . . . . . . .23
2.14 Sharing of Payments, Etc.. . . . . . . . . . . . . .24
ARTICLE III TAXES, YIELD PROTECTION AND ILLEGALITY . . . . . . . . . . . .24
3.01 Taxes. . . . . . . . . . . . . . . . . . . . . . . .24
3.02 Illegality . . . . . . . . . . . . . . . . . . . . .27
3.03 Increased Costs and Reduction of Return. . . . . . .28
3.04 Funding Losses . . . . . . . . . . . . . . . . . . .28
3.05 Inability to Determine Rates . . . . . . . . . . . .29
3.06 Certificates of Lender . . . . . . . . . . . . . . .29
3.07 Survival . . . . . . . . . . . . . . . . . . . . . .29
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ARTICLE IV CONDITIONS PRECEDENT . . . . . . . . . . . . . . . . . . . . .29
4.01 Conditions of First Loan . . . . . . . . . . . . . .29
4.02 Conditions to Each Loan, Continuation or Conversion.32
ARTICLE V REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . . . . .32
5.01 Existence and Power. . . . . . . . . . . . . . . . .32
5.02 Authorization; No Conflict . . . . . . . . . . . . .33
5.03 Governmental Authorization . . . . . . . . . . . . .33
5.04 Binding Effect . . . . . . . . . . . . . . . . . . .33
5.05 Litigation . . . . . . . . . . . . . . . . . . . . .33
5.06 Subsidiaries; Interests in Other Entities. . . . . .34
5.07 Taxes. . . . . . . . . . . . . . . . . . . . . . . .34
5.08 Employees. . . . . . . . . . . . . . . . . . . . . .34
5.09 Collateral Documents . . . . . . . . . . . . . . . .34
5.10 Regulated Entities . . . . . . . . . . . . . . . . .34
5.11 Use of Proceeds. . . . . . . . . . . . . . . . . . .35
5.13 No Default . . . . . . . . . . . . . . . . . . . . .35
5.14 NHP. . . . . . . . . . . . . . . . . . . . . . . . .35
5.15 Full Disclosure. . . . . . . . . . . . . . . . . . .35
ARTICLE VI AFFIRMATIVE COVENANTS. . . . . . . . . . . . . . . . . . . . .35
6.01 Financial Information. . . . . . . . . . . . . . . .36
6.02 Certificates; Other Information. . . . . . . . . . .36
6.03 Notices. . . . . . . . . . . . . . . . . . . . . . .36
6.04 Preservation of Existence, Etc.. . . . . . . . . . .37
6.06 Payment of Obligations . . . . . . . . . . . . . . .37
6.07 Compliance with Laws . . . . . . . . . . . . . . . .38
6.08 Use of Proceeds. . . . . . . . . . . . . . . . . . .38
6.09 Inspection of Property and Books and Records . . . .38
6.10 Further Assurances . . . . . . . . . . . . . . . . .38
6.11 Solvency . . . . . . . . . . . . . . . . . . . . . .39
ARTICLE VII NEGATIVE COVENANTS . . . . . . . . . . . . . . . . . . . . . .39
7.01 Liens. . . . . . . . . . . . . . . . . . . . . . . .39
7.02 Indebtedness . . . . . . . . . . . . . . . . . . . .39
7.03 Contingent Obligations . . . . . . . . . . . . . . .40
7.04 Lease Obligations. . . . . . . . . . . . . . . . . .40
7.05 Disposition of Properties. . . . . . . . . . . . . .40
7.06 Consolidations and Mergers . . . . . . . . . . . . .40
7.07 Liquidations; Issuances of Stock . . . . . . . . . .41
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7.08 Changes in Business Investments. . . . . . . . . . .42
7.09 Restricted Payments. . . . . . . . . . . . . . . . .42
7.10 Transactions with Affiliates . . . . . . . . . . . .42
ARTICLE VIII EVENTS OF DEFAULT. . . . . . . . . . . . . . . . . . . . . . .42
8.01 Event of Default . . . . . . . . . . . . . . . . . .42
8.02 Remedies . . . . . . . . . . . . . . . . . . . . . .44
8.03 Rights Not Exclusive . . . . . . . . . . . . . . . .45
8.04 Certain Requirements in Order to Pursue
the Guaranty . . . . . . . . . . . . . . . . . . .45
ARTICLE IX THE AGENT . . . . . . . . . . . . . . . . . . . . . . . . . .45
9.01 Appointment and Authorization. . . . . . . . . . . .45
9.02 Delegation of Duties . . . . . . . . . . . . . . . .46
9.03 Liability of Agent . . . . . . . . . . . . . . . . .46
9.04 Reliance by Agent. . . . . . . . . . . . . . . . . .46
9.05 Notice of Default. . . . . . . . . . . . . . . . . .47
9.06 Credit Decision. . . . . . . . . . . . . . . . . . .47
9.07 Indemnification. . . . . . . . . . . . . . . . . . .48
9.08 Agent in Individual Capacity . . . . . . . . . . . .48
9.09 Successor Agents . . . . . . . . . . . . . . . . . .49
9.10 Collateral Matters . . . . . . . . . . . . . . . . .49
ARTICLE X MISCELLANEOUS. . . . . . . . . . . . . . . . . . . . . . . . .49
10.01 Amendments and Waivers . . . . . . . . . . . . . . .49
10.02 Notices. . . . . . . . . . . . . . . . . . . . . . .50
10.03 No Waiver; Cumulative Remedies . . . . . . . . . . .51
10.04 Costs and Expenses . . . . . . . . . . . . . . . . .51
10.05 Indemnity. . . . . . . . . . . . . . . . . . . . . .52
10.06 Marshalling; Payments Set Aside. . . . . . . . . . .52
10.07 Successors and Assigns . . . . . . . . . . . . . . .52
10.08 Assignments, Participations, etc.. . . . . . . . . .52
10.09 Setoff . . . . . . . . . . . . . . . . . . . . . . .54
10.10 Notification of Addresses, Lending Offices, etc. . .55
10.11 Counterparts . . . . . . . . . . . . . . . . . . . .55
10.12 Severability . . . . . . . . . . . . . . . . . . . .55
10.13 No Third Parties Benefited . . . . . . . . . . . . .55
10.14 Time . . . . . . . . . . . . . . . . . . . . . . . .55
10.15 Governing Law. . . . . . . . . . . . . . . . . . . .55
10.16 Waiver of Jury Trial . . . . . . . . . . . . . . . .55
10.17 Arbitration. . . . . . . . . . . . . . . . . . . . .56
10.18 Notice of Claims; Claims Bar . . . . . . . . . . . .56
10.19 Entire Agreement . . . . . . . . . . . . . . . . . .57
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10.20 Interpretation . . . . . . . . . . . . . . . . . . .57
10.21 Relationship . . . . . . . . . . . . . . . . . . . .57
10.22 Consent to Jurisdiction and Service of Process . . .57
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CREDIT AGREEMENT
(Acquisition Sub Facility)
This CREDIT AGREEMENT is entered into as of May 5, 1997, AIMCO/NHP
HOLDINGS, INC., a Delaware corporation (the "Company"), 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, XXXXX XXXXXX MORTGAGE
CAPITAL GROUP, INC., as one of the Lenders, and BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION, as Agent (the "Agent").
IN CONSIDERATION OF the mutual agreements, provisions and covenants
contained herein, the parties hereby agree as follows:
ARTICLE I
DEFINITIONS
1.01 DEFINED TERMS. Capitalized terms used but not defined herein
shall have the meanings set forth in the Operating Partnership Credit Agreement.
In addition to the terms defined elsewhere in this Agreement, the following
terms have the following meanings:
"AFFILIATE" means, as to any Person, any other Person which, directly
or indirectly, is in control of, is controlled by, or is under common control
with, such Person. A Person shall be deemed to control another Person if the
controlling Person possesses, directly or indirectly, the power to direct or
cause the direction of the management and policies of the other Person, whether
through the ownership of voting securities, by contract or otherwise. Without
limitation, any director, executive officer or beneficial owner of five percent
(5%) or more of the equity of a Person shall, for the purposes of this
Agreement, be deemed to control the other Person. In no event shall any Lender
be deemed an "Affiliate" of the Company.
"AGENT" means Bank of America National Trust and Savings Association,
in its capacity as Agent, and any successor Agent appointed hereunder.
"AGENT-RELATED PERSONS" has the meaning specified in Section 9.03.
"AGGREGATE COMMITMENT" means the combined Commitments of the Lenders,
in the amount of up to $76,000,000.
"AGREEMENT" means this Credit Agreement, as amended, supplemented or
modified from time to time.
"AIMCO GROSS ASSET VALUE" shall have the meaning set forth in the REIT
Guaranty Documents.
"APPLICABLE LIBOR MARGIN", with respect to LIBOR Loans, shall mean
2.50%.
"APPLICABLE MARGIN" means
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(a) with respect to Base Rate Loans, 1.0%; and
(b) with respect to LIBOR Loans, the Applicable LIBOR Margin.
"ASSIGNEE" has the meaning specified in Section 10.08(a).
"ASSIGNMENT AND ACCEPTANCE" has the meaning specified in Section
10.08(a).
"ATTORNEY COSTS" means and includes all reasonable fees and
disbursements of any law firm or other external counsel, the allocated cost of
internal legal services and all disbursements of internal counsel.
"BANKRUPTCY CODE" means the Federal Bankruptcy Reform Act of 1978 (12
U.S.C. Section 101, ET. SEQ.), as amended from time to time.
"BASE RATE" means the higher of:
(a) the annual rate of interest publicly announced from time to
time by the Reference Lender as its "reference" rate. The "reference" rate is a
rate set based upon various factors including the Reference Lender's costs and
desired return, general economic conditions, and other factors, and is used as
reference points for pricing some loans. Any change in the Base Rate shall take
effect on the day specified in the public announcement of such change; or
(b) one-half of one percent (0.5%) per annum above the latest
Federal Funds Rate.
"BASE RATE LOAN" means a Loan that bears interest based on the Base
Rate.
"BOFA" means Bank of America National Trust and Savings Association,
other than in its capacity as the Agent hereunder.
"BORROWING NOTICE" means a notice given by the Company to the Agent
pursuant to Section 2.03, in substantially the form of EXHIBIT A.
"BRIDGE LOAN AGREEMENT" means that certain Amended and Restated Credit
Agreement (Bridge Loan Facility) dated as of May 5, 1997, by and among the
Operating Partnership, BofA as the agent and the lenders party thereto which
provides, inter alia, that the lenders party thereto will make available to the
Operating Partnership a credit facility in the amount of up to Twenty-Five
Million Dollars ($25,000,000.00), as the same may be amended, supplemented, or
modified from time to time.
"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 LEASE" means any leasing or similar arrangement which, in
accordance with GAAP, is classified as a capital lease.
2
"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.
"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 with any bank that is owed
Indebtedness in excess of $50,000 by the Company or in excess of $1,000,000, the
REIT, the Operating Partnership or any Subsidiary (other than the Obligations)
unless such bank waives in writing (in form and substance satisfactory to the
Requisite Lenders) its right to set-off such Investment against such
Indebtedness;
(c) demand deposits on deposit in accounts maintained at commercial
lenders 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.
"CLOSING DATE" means the date on which all conditions precedent set
forth in Section 4.01 are satisfied or waived by all Lenders; said date shall
occur no later than the earlier of (i) May 7, 1997 or (ii) the "Closing Date"
under (and as such term is defined in) the Operating Partnership Credit
Agreement.
"CODE" means the Internal Revenue Code of 1986, as amended from time
to time, and any regulations promulgated thereunder.
"COLLATERAL" means all property interests, now owned or hereafter
acquired, in or upon which a Lien now or hereafter exists in favor of the Agent
on behalf of the Lenders hereunder or under the Collateral Documents.
"COLLATERAL DOCUMENTS" means, collectively, (a) the Stock Pledge
Agreements and all security agreements, and other similar agreements executed by
the REIT and the Common Stockholders in favor of the Lenders or the Agent for
the benefit of the Lenders as security for the REIT Guaranty Documents now or
hereafter delivered to the Lenders or the Agent pursuant to or in connection
with the transactions contemplated hereby, (b) all financing statements (or
comparable documents) now or hereafter filed in accordance with the UCC (or
comparable law) relating thereto, (c) any other documents executed in order to
establish, perfect or protect any of the liens or security interests granted in
any of the foregoing, and (d) any amendments, supplements, modifications,
renewals, replacements, consolidations, substitutions and extensions of any of
the foregoing.
"COMMITMENT", with respect to each Lender, shall mean that Lender's
Commitment as specified in SCHEDULE 1.01.
3
"COMMITMENT EXPIRATION DATE" means (i) the date on which the
Commitments of the Lenders hereunder have been terminated in accordance with the
terms set forth herein; (ii) the date on which each Lender has funded the entire
amount of its Commitment, (iii) the date on which the Company shall have
acquired all of the NHP Stock pursuant to the NHP Stock Purchase Agreement;
(iv) any date on which the NHP Stock Purchase Agreement is terminated; or
(v) October 1, 1997.
"COMMITMENT PERCENTAGE" means, as to any Lender, the percentage
equivalent of such Lender's Commitment divided by the Aggregate Commitment.
"COMMON STOCKHOLDERS" means Xxxxx Xxxxxxxxx and Xxxxx X. Xxxxxxxxx.
"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. 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.
"DEFAULT" means any event or circumstance which, with the giving of
notice, the lapse of time, or both, would (if not cured or otherwise remedied)
constitute an Event of Default.
"DISPOSITION" means the sale, lease, conveyance, transfer 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.
"DOLLARS", "DOLLARS" and "$" each mean lawful money of the United
States.
"DOMESTIC LENDING OFFICE" means, with respect to each Lender, the
office of that Lender designated as such on the signature pages hereto or such
other office of a Lender as it may from time to time specify in writing to the
Company and the Agent.
"ELIGIBLE ASSIGNEE" means (a) a commercial bank organized under the
laws of the United States, or any state thereof, and having a combined capital
and surplus of at least $100,000,000, (b) a commercial bank organized under the
laws of any other country which is a member of the Organization for Economic
Cooperation and Development (the "OECD"), or a political subdivision of any such
country, and having a combined capital and surplus of at least $100,000,000,
provided that such commercial bank is acting through a branch or agency located
in the country in which it is organized or another country which is also a
member of the OECD, and (c) any Lender Affiliate.
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"EVENT OF DEFAULT" means any of the events or circumstances specified
in Section 8.01.
"EXCHANGE ACT" means the Securities and Exchange Act of 1934, and
regulations promulgated thereunder.
"EXCLUDED PROCEEDS" shall have the meaning set forth in the Guaranty.
"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.
"GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board and the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board (or agencies with similar functions of
comparable stature and authority within the accounting profession), or in such
other statements by such other entity as may be in general use by significant
segments of the U.S. accounting profession, which are applicable to the
circumstances as of the date of determination.
"GOVERNMENTAL AUTHORITY" means any nation or government, any state or
other political subdivision thereof, any central bank (or similar monetary or
regulatory authority) thereof, any entity exercising executive, legislative,
judicial, regulatory or administrative functions of or pertaining to government,
and any corporation or other entity owned or controlled, through stock or
capital ownership or otherwise, by any of the foregoing.
"GP CORP" means AIMCO-GP, Inc., a Delaware corporation.
"GUARANTOR EVENT OF DEFAULT" means an "Event of Default" (as such term
is defined in the REIT Guaranty Documents).
"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,
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or (d) otherwise to assure or hold harmless the holder of any such primary
obligation against loss in respect thereof. 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.
"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 non-contingent), (d) all obligations evidenced by notes, bonds,
debentures or similar instruments, including obligations so evidenced incurred
in connection with the acquisition of Properties, (e) all indebtedness created
or arising under any conditional sale or other title retention agreement, or
incurred as financing, in either case with respect to Properties acquired by the
Person (even though the rights and remedies of the seller or lender 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 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 June 30,
2001, (i) all indebtedness referred to in clauses (a) through (h) above secured
by (or for which the holder of such Indebtedness has an existing right,
contingent or otherwise, to be secured by) any Lien upon or in Properties
(including accounts and contract rights) owned by such Person, even though such
Person has not assumed or become liable for the payment of such Indebtedness,
and (j) all Guaranty Obligations in respect of indebtedness or obligations of
others of the kinds referred to in clauses (a) through (h) above.
"INDEMNIFIED LIABILITIES" has the meaning specified in Section 10.05.
"INDEMNIFIED PERSON" has the meaning specified in Section 10.05.
"INITIAL LOAN" shall mean the Loans made by all Lenders on the Closing
Date in the aggregate amount of $72,600,000.00.
"INSOLVENCY PROCEEDING" means (a) any case, action or proceeding
before any court or other Governmental Authority relating to bankruptcy,
reorganization, insolvency, liquidation, receivership, dissolution, winding-up
or relief of debtors, or (b) any general assignment for the benefit of
creditors, composition, marshalling of assets for creditors or other, similar
arrangement in respect of its creditors generally or any substantial portion of
its creditors; in each case as undertaken under U.S. Federal, State or foreign
law.
"INTEREST PAYMENT DATE" means each of July 3, 1997 and October 3,
1997.
"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) or three (3) months thereafter, as
selected by the Company in its Borrowing Notice or Notice of
Conversion/Continuation; PROVIDED that:
(a) if any Interest Period would otherwise end on a day that is not a
Business Day, such Interest Period shall be extended to the next succeeding
Business Day unless the result of such extension would be to carry such Interest
Period into another
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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 Maturity
Date.
"INTRA-COMPANY DEBT" means Indebtedness (whether book-entry or
evidenced by a term, demand or other note or other instrument) owed by the
Operating Partnership, the REIT or any of their respective Subsidiaries to any
Subsidiary, and incurred or assumed for the purpose of capitalizing a Subsidiary
of the REIT or the Operating Partnership. As of the date hereof, Intra-Company
Debt includes the Indebtedness listed in SCHEDULE 1.01C attached to the
Operating Partnership Credit Agreement and Indebtedness of the Subsidiaries
under the promissory notes of Subsidiaries assigned to the Operating Partnership
and described on SCHEDULE 7.02 attached to the Operating Partnership Credit
Agreement.
"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.
"IRS" means the Internal Revenue Service or any agency successor
thereto.
"KNOWLEDGE OF THE COMPANY" means the actual knowledge (after
reasonable inquiry) of any of the officers of the Company, the Operating
Partnership or the REIT and each other Person with executive responsibility for
any aspect of the Company's, the Operating Partnership's or the REIT's business.
"LENDER" means each of the lenders party to this Agreement, and
includes BofA in its individual capacity.
"LENDER AFFILIATE" means a Person that is engaged primarily in the
business of commercial lending and is a Subsidiary of a Lender or of a Person of
which a Lender is a Subsidiary.
"LENDING OFFICE" means, with respect to any Lender, the office or
offices of the Lender specified as its "Lending Office" opposite its name on the
signature pages hereto, or such other office or offices of the Lender as it may
from time to time specify in writing to the Company and the Agent.
"LIBO RATE" means, for each Interest Period for any LIBOR Loan, an
interest rate per annum (rounded upward to the nearest 1/100th of 1%) determined
pursuant to the following formula:
LIBO Rate = LIBOR
-------------------------
---
1.00 - Reserve Percentage
7
Where,
(i) "LIBOR" means the per annum rate of interest, rounded
upward, if necessary, to the nearest 1/16th of one percent (0.0625%), at which
the Reference Lender's London branch, London, England, would offer U.S. dollar
deposits in amounts and for periods comparable to those of the applicable LIBOR
Loan and Interest Period to major banks in the London U.S. dollar inter-bank
market at approximately 11:00 a.m., London time, on the first Business Day after
the Borrowing Notice or Notice of Conversion/Continuation for such LIBOR Loan is
delivered to the Agent; and
(ii) "RESERVE PERCENTAGE" means the total of the maximum reserve
percentages from time to time for determining the reserves to be maintained by
member 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" has the meaning specified in Section 2.01(a).
"LOAN DOCUMENTS" means this Agreement, the Note, the Collateral
Documents, the REIT Guaranty Documents, and all other documents delivered to the
Agent or the Lenders in connection therewith.
"MANAGEMENT ENTITY" shall mean each of the following Persons and any
successor thereto which conducts the management business described in the SEC
Report, as well as any Subsidiary of the Operating Partnership or the REIT which
is engaged in the business of managing multi-family apartment projects or other
real estate projects: Property Asset Management Services, L.P., a Delaware
limited partnership, Property Asset Management Services, Inc., a Delaware
corporation, Property Asset Management Services-CA, LLC, a California limited
liability company; each of the "Service LLC's" referred to in the SEC Report;
and any Subsidiary formed to conduct the management business currently conducted
by NHP.
"MATERIAL ADVERSE EFFECT" means either: (a) in the case of the
Company, a material adverse change in, or a material adverse effect upon, any of
(i) the assets, operations, business, condition (financial or otherwise), or
prospects of the Company, or (ii) the ability of the Company to perform under
any Loan Document and avoid any Event of Default (other than, in either such
case, resulting from the sale or pledge of the NHP Stock or any change in the
market value thereof); (b) in the case of the Operating Partnership, the REIT
and their
8
respective Subsidiaries, a material adverse change in, or a material adverse
effect upon, any of (i) the assets, operations, business, condition (financial
or otherwise), or prospects of the Operating Partnership, the REIT and their
respective Subsidiaries, taken as a whole, (ii) the ability of the Operating
Partnership, the REIT and their respective Subsidiaries party thereto to perform
under any Loan Document and avoid any Event of Default, or (iii) the ability of
the Operating Partnership, the REIT and their respective Subsidiaries party
thereto to perform under the REIT Guaranty Documents; or (c) a material adverse
effect upon the ability to consummate the transactions under the NHP Merger
Agreement.
"MATURITY DATE" shall mean the Scheduled Maturity Date, subject to
earlier acceleration as provided herein.
"MAXIMUM DISBURSEMENT AMOUNT" shall mean, in relation to any requested
Subsequent Loan, an amount (rounded down to the nearest $100,000 in the case of
the first Subsequent Loan, and rounded up to the nearest $100,000 in the case of
the second Subsequent Loan) equal to the lesser of (i) 55.8824% of the purchase
price (at not more than $20.00 per share) payable under the NHP Stock Purchase
Agreement for the shares of NHP Stock proposed to be acquired in part with the
proceeds of such Subsequent Loan, (ii) the cash portion proposed to be paid by
the Company of the purchase price for such shares of NHP Stock payable pursuant
to the NHP Stock Purchase Agreement (the amount of which cash portion shall be
calculated based upon a valuation of the portion of the purchase price payable
for such shares of NHP Stock in the form of Stock of the REIT at the greater of
$26.75 per share or the fair market value thereof, as determined in good faith
by the Company, at the time of such payment) and (iii) the remaining unfunded
Aggregate Commitment of the Lenders.
"MERGER SUB" means AIMCO/NHP Acquisition Corp., a Delaware
corporation.
"XXXXX'X" shall mean Xxxxx'x Investors Service, a Delaware
corporation, and its successors and assigns.
"NET ISSUANCE PROCEEDS" shall have the meaning set forth in the REIT
Guaranty Documents.
"NET SALE PROCEEDS" shall have the meaning set forth in the REIT
Guaranty Documents.
"NHP" means NHP, Incorporated, a Delaware corporation.
"NHP COMBINATION DATE" means the date on which the Company, the REIT,
any of their Subsidiaries shall have acquired one hundred percent (100%) of the
common stock of NHP or shall have consummated a merger with NHP, whichever is
the earlier.
"NHP MERGER AGREEMENT" means that certain Agreement and Plan of
Merger, dated April 21, 1997, entered into among the REIT, the Merger Sub and
NHP.
"NHP STOCK" means the shares of stock in NHP owned by the Company from
time to time.
9
"NHP STOCK PURCHASE AGREEMENT" means that certain Stock Purchase
Agreement dated as of April 16, 1997, among the REIT and the NHP Shareholders.
"NHP-RELATED REAL ESTATE ACQUISITION AGREEMENT" means the Real Estate
Acquisition Agreement to be entered into among the NHP Shareholders and Phemus
Corporation, as the sellers, the Operating Partnership and the REIT.
"NHP REVOLVING CREDIT AGREEMENT" means that certain Revolving Credit
Agreement, dated as of August 18, 1995, among NHP and its subsidiaries, The
First National Bank of Boston, as Lead Agent, and Fleet Bank of Massachusetts,
National Association, and Xxxxxx Guaranty Trust Company of New York, as
Co-Agents, as amended by that certain First Amendment thereto, dated as of
November 10, 1995, that certain Consent and Amendment Agreement, dated as of
March 27, 1996, and that certain Amendment No. 2 thereto, dated as of February
11, 1997.
"NHP SHAREHOLDERS" means Demeter Holdings Corporation and Capricorn
Investors, L.P.
"NOTE" means a promissory note of the Company payable to the order of
a Lender in substantially the form of EXHIBIT B, evidencing the aggregate
indebtedness of the Company to such Lender resulting from Loans made by such
Lender.
"NOTICE OF CONVERSION/CONTINUATION" means a notice given by the
Company to the Agent pursuant to Section 2.04, in substantially the form of
EXHIBIT C.
"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.
"OBLIGATIONS" means all Loans, and other Indebtedness, advances,
debts, liabilities, obligations, covenants and duties owed by the Company, the
REIT, the Operating Partnership 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.
"OPERATING PARTNERSHIP" means AIMCO Properties, L.P., a Delaware
limited partnership
"OPERATING PARTNERSHIP CREDIT AGREEMENT" means that certain Amended
and Restated Credit Agreement (Secured Revolver-to-Term Facility) dated as of
May 5, 1997, by and among the Operating Partnership, BofA as the agent and a
lender and the other lenders named therein, as the same may be amended,
supplemented, or modified from time to time.
10
"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 (which, in
the case of the REIT, shall be as reflected in the SEC Report), 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 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" has the meaning specified in Section 3.01(b).
"OUTSTANDING AMOUNT" means the aggregate principal amount of all
outstanding Loans from time to time.
"PARTICIPANT" has the meaning specified in Section 10.08(d).
"PAYMENT OFFICE" means the address for payments set forth on the
signature page hereto in relation to the Agent or such other address as the
Agent may from time to time specify in accordance with Section 10.02.
"PERSON" means an individual, partnership, corporation, business
trust, joint stock company, trust, limited liability company, unincorporated
association, joint venture or governmental authority.
"PROPERTY" means any estate or interest in any kind of property or
asset, whether real, personal or mixed, and whether tangible or intangible.
"REFERENCE LENDER" means BofA.
"REIT" means Apartment Investment and Management Company, a Maryland
corporation.
"REIT GUARANTY DOCUMENTS" shall mean a guaranty of the Obligations, in
the form of EXHIBIT D attached hereto, and such other documents relating to such
guaranty as the Agent may require, duly executed by the REIT and the Operating
Partnership and together with all Collateral Documents.
"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.
11
"REQUISITE LENDERS" means, as of any date of determination, (a) if
there is only one Lender hereunder having a minimum Commitment of $5,000,000,
that Lender, and (b) if there are two (2) or more Lenders hereunder each having
a minimum Commitment of $5,000,000, then two (2) or more Lenders (for purposes
of counting Lenders, BofA and all affiliates of BofA collectively count as one
Lender, and in order to qualify as one of the two (2) necessary Lenders, a
Lender must hold a minimum Commitment of $5,000,000), holding at least sixty-six
and two-thirds percent (66-2/3%) of the outstanding balance of the Loans, or, if
there are no Loans outstanding, having at least sixty-six and two-thirds percent
(66-2/3%) of the Aggregate Commitment.
"RESPONSIBLE OFFICER" means, in relation to the REIT, the Chief
Executive Officer or the Vice Chairman of the REIT, and, in relation to the
Operating Partnership, the Chief Executive Officer or any Vice President of the
general partner of the Operating Partnership, in its capacity as the general
partner of the Company, and/or any other officer of the REIT or the general
partner of the Operating Partnership having substantially the same authority and
responsibility, or, with respect to financial matters, the Chief Financial
Officer or the Treasurer of the REIT or the general partner, respectively, or
any other officer having substantially the same authority and responsibility;
and in relation to the Company means the president, vice president, treasurer or
chief financial officer.
"S&P" shall mean Standard & Poor's Ratings Group and its successors
and assigns.
"SBI" shall mean Xxxxx Xxxxxx Mortgage Capital Group, Inc.
"SCHEDULED MATURITY DATE" means the earlier of: (a) six months after
the Closing Date or (b) ten (10) days after the NHP Combination Date.
"SEC" means the Securities and Exchange Commission, or any successor
thereto.
"SEC REPORT" means the Annual Report of the REIT on Form 10-K filed
with the SEC for the year ending December 31, 1996.
"SOLVENT" means, as to any Person at any time, that (a) the fair value
of the Property of such Person is greater than the amount of such Person's
liabilities (including disputed, contingent and unliquidated liabilities) as
such value is established and liabilities evaluated for purposes of Section
101(31) of the Bankruptcy Code and, in the alternative, for purposes of the
Uniform Fraudulent Transfer Act; (b) the present fair saleable value of the
Property of such Person is not less than the amount that will be required to pay
the probable liability of such Person on its debts as they become absolute and
matured; (c) such Person is able to realize upon its Property and pay its debts
and other liabilities (including disputed, contingent and unliquidated
liabilities) as they mature in the normal course of business; (d) such Person
does not intend to, and does not believe that it will, incur debts or
liabilities beyond such Person's ability to pay as such debts and liabilities
mature; and (e) such Person is not engaged in business or a transaction, and is
not about to engage in business or a transaction, for which such Person's
property would constitute unreasonably small capital.
"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
12
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).
"STOCK PLEDGE AGREEMENT" means a stock pledge agreement in
substantially the form of EXHIBIT E, duly executed and delivered by the REIT and
the Common Stockholders and pledging their interests in the Company as security
for the REIT Guaranty Documents.
"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).
"SUBSEQUENT LOAN" means any Loan made subsequent to the Initial Loans.
"TAXES" has the meaning specified in Section 3.01(a).
"UCC" means the Uniform Commercial Code as in effect in any relevant
jurisdiction.
"UNITED STATES" and "U.S." each mean the United States of America.
"UNITS" shall mean the units of limited partnership interest in the
Operating Partnership issued and outstanding from time to time.
1.02 OTHER DEFINITIONAL PROVISIONS
(a) DEFINED TERMS. Unless otherwise specified herein or therein, all
terms defined in this Agreement shall have the defined meanings when used in any
certificate or other document made or delivered pursuant hereto. The meaning of
defined terms shall be equally applicable to the singular and plural forms of
the defined terms. Terms (including uncapitalized terms) not otherwise defined
herein but defined in the UCC shall have the meanings set forth therein.
(b) THE AGREEMENT. The words "hereof", "herein", "hereunder" and
words of similar import when used in this Agreement shall refer to this
Agreement as a whole and not to any particular provision of this Agreement; and
section, schedule and 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."
13
(iii) The term "ratably" means, at any time that Loans may be
outstanding, in accordance with the amount of the outstanding Loans of the
respective Lenders; and, at any time that no Loans are outstanding, in
accordance with the outstanding Commitments of the respective Lenders.
(d) PERFORMANCE; TIME. Whenever any performance obligation hereunder
(other than a payment obligation) is stated to be due or required to be
satisfied on a day other than a Business Day, such performance shall be made or
satisfied on the next succeeding Business Day. In the computation of periods of
time from a specified date to a later specified date, the word "from" means
"from and including"; the words "to" and "until" each mean "to but excluding,"
and the word "through" means "to and including". If any provision of this
Agreement refers to any action taken or to be taken by any Person, or which such
Person is prohibited from taking, such provision shall be interpreted to
encompass any and all means, direct or indirect, of taking, or not taking, such
action.
(e) CONTRACTS. Unless otherwise expressly provided herein,
references to agreements and other contractual instruments shall be deemed to
include all subsequent amendments and other modifications thereto, but only to
the extent such amendments and other modifications are not prohibited by the
terms of any Loan Document.
(f) LAWS. References to any statute or regulation are to be
construed as including all statutory and regulatory provisions consolidating,
amending or replacing the statute or regulation.
(g) CAPTIONS. The captions and headings of this Agreement are for
convenience of reference only and shall not affect the construction of this
Agreement.
(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.
1.03 ACCOUNTING PRINCIPLES
(a) GAAP. Unless the context otherwise clearly requires, all
accounting terms not expressly defined herein shall be construed, and all
financial computations required under this Agreement shall be made, in
accordance with GAAP, consistently applied.
(b) FISCAL YEAR; QUARTER. References herein to "fiscal year" and
"fiscal quarter" refer to such fiscal periods of the Company.
14
ARTICLE II
THE FACILITY
2.01 AMOUNTS AND TERMS OF COMMITMENTS
(a) THE LOANS. Each Lender severally agrees, on the terms and
conditions hereinafter set forth, to make loans to the Company (each such loan,
a "Loan") from time to time on any Business Day during the period from the
Closing Date to the Commitment Expiration Date, in an aggregate amount not to
exceed at any time the amount set forth opposite such Lender's name in SCHEDULE
2.01 (such amount as the same may be reduced or increased as a result of one or
more assignments pursuant to Section 10.08, such Lender's "Commitment").
(b) USAGE. The Company shall use the proceeds of the Loans to pay
the cash portion of the acquisition price for the NHP Stock payable under the
NHP Stock Purchase Agreement and for no other purpose.
2.02 NOTE. The Loan made by each Lender shall be evidenced by a Note
dated the Closing Date payable to the order of that Lender in an amount equal to
its Commitment.
2.03 PROCEDURES FOR BORROWINGS
(a) INITIAL LOANS.
(i) BORROWING NOTICE. The Initial Loans shall be made upon the
irrevocable written notice (including notice via facsimile confirmed immediately
by a telephone call) of the Company in the form of a Borrowing Notice delivered
to each Lender, subject to the following:
(A) DESIGNATION OF INTEREST RATE. The Initial Loans shall
be made as Base Rate Loans. On the Closing Date the Company shall deliver to
the Agent a Notice of Conversion/Continuation requesting the conversion of the
entire amount of such Loans to a LIBOR Loan as of a date no later than the
fourth (4th) Business Day after the date such Loan is disbursed.
(B) TIMING OF NOTICE. The Borrowing Notice for the Initial
Loans shall be submitted to and received by each Lender prior to 12:00 noon
(California time) on the specified borrowing date.
(ii) FUNDING OF COMMITMENT. Each Lender shall directly fund in
accordance with the Company's written instructions its Commitment Percentage of
the Initial Loans described in the initial Borrowing Notice on the borrowing
date specified therein by wire transfer of immediately available funds. The
Agent is not responsible for the receipt of funds transferred by SBI, and is
authorized to assume that SBI has funded on the same date as BofA funds an
amount equal to the funds advanced by BofA.
(b) SUBSEQUENT LOANS.
15
(i) BORROWING NOTICE FOR A SUBSEQUENT LOAN. Each Subsequent
Loan shall be made upon the irrevocable written notice (including notice via
facsimile confirmed immediately by a telephone call) of the Company in the
form of a Borrowing Notice for a Subsequent Loan, as follows:
(A) DESIGNATION OF INTEREST RATE. The Company shall have the right to
elect that a Subsequent Loan be made as a LIBOR Loan or a Base Rate Loan;
PROVIDED that after giving effect to such Subsequent Loan there shall not be
more than three (3) different LIBOR Loans outstanding; and provided further
that, except as otherwise provided in Section 2.04(a), if the Company elects
that a Subsequent Loan be made as a Base Rate Loan, on the date such Loan is
disbursed, Company shall deliver to the Agent a Notice of
Conversion/Continuation requesting the conversion of the entire amount of
such Loans to a LIBOR Loan as of a date no later than the fourth (4th)
Business Day after the date such Loan is disbursed.
(B) TIMING OF NOTICE. Each Borrowing Notice for a Subsequent Loan shall
be submitted to and received by the Agent prior to 9:00 a.m. (California
time) (A) at least three (3) Business Days prior to the specified borrowing
date, in the case of LIBOR Loans; and (B) at least one (1) Business Day prior
to the specified borrowing date, in the case of Base Rate Loans.
(C) CONTENTS OF NOTICE. Each Borrowing Notice for a Subsequent Loan shall
set forth the following information with respect to the Subsequent Loan subject
thereto:
(I) a single, specific borrowing date, which shall be a Business Day;
(II) a single, exact amount for the Subsequent Loan, which for any LIBOR
Loan, shall be in an aggregate minimum principal amount of $1,000,000 or any
multiple of $100,000 in excess thereof (except for the final disbursement);
(III) whether the Subsequent Loan is to be made as a LIBOR Loan or a Base
Rate Loan;
(IV) if the Subsequent Loan is to be made as a LIBOR Loan, the applicable
Interest Period. If a Borrowing Notice for a Subsequent Loan shall fail to
specify the applicable Interest Period for any LIBOR Loan requested, the Agent
is hereby irrevocably instructed and authorized by the Company and the Lenders
that the applicable Interest Period shall be thirty (30) days; and
(V) a calculation of the Maximum Disbursement Amount relating to the NHP
Stock to be acquired with the requested Subsequent Loan.
(ii) NOTICE TO LENDERS. Upon receipt of a Borrowing Notice
for a Subsequent Loan conforming with the terms of Section 2.03(b), the Agent
shall promptly notify each Lender thereof and of the amount of such Lender's
Commitment Percentage of the Subsequent Loan described therein.
(iii) FUNDING OF COMMITMENT. Each Lender shall make the
amount of its Commitment Percentage of the Subsequent Loan described in any
Borrowing Notice for a Subsequent Loan available to the Agent for the account
of the Company at the Payment Office by 9:00 a.m. (California time) on the
borrowing date specified therein in funds
16
immediately available to the Agent; provided, that in no event shall the amount
funded by any Lender exceed the Maximum Disbursement Amount for the requested
Subsequent Loan. Unless any applicable condition specified in Article IV has
not been satisfied, such funds shall then be made available to the Company by
the Agent at such office by crediting the account of the Company with the
aggregate of the amounts made available to the Agent by the Lenders (in like
funds as received by the Agent).
(iv) FREQUENCY OF BORROWINGS. No more than two (2) Borrowing
Notices for Subsequent Loans may be given. No Subsequent Loan shall be
requested or disbursed subsequent to the Commitment Expiration Date. Amounts
prepaid may not be reborrowed.
2.04 CONVERSION AND CONTINUATION ELECTIONS.
(a) NOTICE OF CONVERSION/CONTINUATION. Each conversion or
continuation of an outstanding Loan shall be made upon the irrevocable
written notice (including notice via facsimile confirmed immediately by a
telephone call) of the Company in the form of a Notice of
Conversion/Continuation, as follows:
(i) DESIGNATION OF INTEREST RATE. The Company shall have the
right to make the following elections with respect to the conversion or
continuation of any outstanding 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 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 of any loss or expense incurred or sustained by any Lender with
respect to the early termination of such LIBOR Loan prior to the last day of
the Interest Period as provided in Section 3.04), such LIBOR Loan (or any
part thereof in a minimum principal amount of $1,000,000 or an integral
multiple of $100,000 in excess thereof) for a subsequent Interest Period;
PROVIDED, that unless the Agent shall otherwise agree in writing, the Company
may not elect to have any outstanding LIBOR Loan or Base Rate Loan (or any
portion thereof) continued as or converted into a LIBOR Loan if (A) a Default
or Event of Default shall exist, (B) after giving effect to such continuation
or conversion there shall be more (i) than three (3) different LIBOR Loans
outstanding or (ii) the aggregate outstanding principal amount of all LIBOR
Loans shall have been reduced, by payment or prepayment, to less than
$1,000,000.
(ii) TIMING OF NOTICE. Each Notice of Conversion/Continuation
shall be submitted to and received by the Agent prior to 9:00 a.m.
(California time) at least three (3) Business Days prior to the date on which
the requested conversion or continuation is to become effective.
(A) the date on which the requested conversion or
continuation is to become effective, which shall be a Business Day;
(B) the amount of the Loan to be converted or continued;
and
17
(C) the applicable Interest Period for the LIBOR Loan
into which such Loan is to be converted or which is to be continued.
(b) AUTOMATIC CONVERSIONS.
(i) Except as provided in Sections 2.04 (b)(ii), 3.02 and
3.05, any outstanding LIBOR Loan shall, effective on the last day of the
applicable Interest Period for such Loan, automatically convert to a LIBOR
Loan having a one month Interest Period, unless the Company shall have
delivered to the Agent at least three (3) Business Days prior to the last day
of the Interest Period for such outstanding LIBOR Loan a Notice of
Conversion/ Continuation requesting the conversion of such Loan to a LIBOR
Loan having a longer Interest Period. In the event of any such automatic
conversion, the Company shall be deemed to have delivered to the Agent a
Notice of Conversion/Continuation requesting such Loan for such thirty (30)
day Interest Period, and the Company hereby releases the Agent and the
Lenders from any claims or liabilities as a result of their reliance upon
such instructions.
(ii) 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:
(A) DEFAULT; EVENT OF DEFAULT. A Default or Event of
Default shall exist; or
(B) FAILURE TO MAINTAIN MINIMUM LOANS. If the aggregate
outstanding principal amount of LIBOR Loans having the same Interest Period
shall have been reduced, by payment, prepayment, or partial conversion to be
less than $1,000,000.
(c) NOTICE TO LENDERS. Upon receipt of a Notice of
Conversion/Continuation conforming with the terms of Section 2.04(a), or an
automatic conversion pursuant to Section 2.04(b), the Agent shall promptly
notify each Lender thereof. All conversions and continuations shall be made
pro rata according to the respective outstanding principal amounts of the
Loans converted or continued.
2.05 OPTIONAL PREPAYMENTS. Subject to Section 3.04, the Company
may, at any time and from time to time, ratably prepay Loans in whole or in
part, in an aggregate minimum amount of $1,000,000 or an integral multiple of
$100,000 in excess thereof.
2.06 MANDATORY PREPAYMENTS OF LOANS.
(a) On July 3, 1997, the Company shall prepay the Loan in an amount
equal to the lesser of (i) 4.75% of the increase in AIMCO Gross Asset Value,
if any, from March 31, 1997 to June 30, 1997 (other than any increase
resulting from Excluded Proceeds or the consummation of the acquisition by
the Company of the NHP Stock and the formation of the Company) or (ii) the
sum of the Net Issuance Proceeds plus Net Sale Proceeds (other than Excluded
Proceeds) received during such period. (b) On October 3, 1997, the
Company shall prepay the Loan in an amount equal to (i) the lesser of (A)
4.75% of the increase in AIMCO Gross Asset Value, if any, from March 31, 1997
to September 30, 1997 (other than any increase resulting from Excluded
Proceeds or the consummation of the acquisition by the Company of the NHP
Stock and the formation of the Company) or (B) the sum of the Net Issuance
Proceeds plus Net Sale
18
Proceeds (other than Excluded Proceeds) received during such period minus (ii)
the amount of any prepayment under Section 2.06 (a) above.
2.07 APPLICATION OF PROCEEDS. Unless otherwise instructed by the
Company, any prepayments pursuant to Section 2.05 or Section 2.06 made (i) on
a day other than the last day of an Interest Period for any Loan shall be
applied first to any Base Rate Loans then outstanding and then to any LIBOR
Loans then outstanding, in the inverse order of such LIBOR Loans' stated
maturities and (ii) on the last day of an Interest Period for any LIBOR Loan
shall be applied first to such maturing LIBOR Loan, then to any Base Rate
Loans outstanding, and then to any other LIBOR Loans then outstanding, in the
inverse order of such LIBOR Loans' stated maturities.
2.08 REPAYMENT. Subject to Section 2.06, the Company shall repay
all Obligations on the Maturity Date.
2.09 INTEREST.
(a) RATES. Subject to Section 2.09(c), each Loan shall bear
interest on the outstanding principal amount thereof from the date such Loan
is made until the date such Loan becomes due, at a rate per annum equal to
the LIBO Rate or the Base Rate, as the case may be, PLUS the Applicable
Margin.
(b) PAYMENT DATES. Interest on each Loan shall be payable in
arrears on each Interest Payment Date and the Maturity Date. Interest shall
also be payable on the date of any prepayment of Loans pursuant to Section
2.05 or Section 2.06 for the portion of the Loans so prepaid. During the
existence of any Event of Default, interest shall be payable on demand.
(c) DEFAULT RATES. While any Event of Default exists or after
acceleration and during the continuation thereof, the Company shall pay
interest on all outstanding Obligations at a rate per annum which is
determined by increasing the Applicable Margin 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, bear
interest at a fluctuating rate per annum equal to the Base Rate plus the
Applicable Margin plus three percent (3%); and provided further, that in the
event the Obligations remain unpaid after the Scheduled Maturity Date, the
Company shall pay interest on all outstanding Obligations at a rate per annum
which is determined by increasing the Applicable Margin by three and one-half
percent (3.50%) per annum (at all times during the first three months after
the Scheduled Maturity Date) and by five and one-half percent (5.50%) per
annum (at all times after the first three months after the Scheduled Maturity
Date) until all Obligations are paid in full. The increased rates applicable
under this Section shall apply after as well as before judgment to the extent
permitted by law.
(d) LIMITATIONS FOR APPLICABLE LAW. Anything herein to the
contrary notwithstanding, payments of interest shall not be required, for any
period for which interest is computed hereunder, to the extent (but only to
the extent) that contracting for or receiving such payments by the respective
Lender would be contrary to the provisions of any law applicable to such
Lender limiting the highest rate of interest which may be lawfully contracted
for, charged or received by such Lender, and in such event the Company shall
pay such Lender interest at the highest rate permitted by applicable law.
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2.10 FEES.
(a) FACILITY FEES. Upon the due execution and delivery of this
Agreement by the Company, the Agent and each of the Lenders which are the
initial Lenders party to this Agreement, the Company shall pay to the Agent
for the account of each Lender ratably an amount equal to 1.50% of the
Aggregate Commitment of the initial Lenders as a facility fee.
(b) ADDITIONAL FACILITY FEES. On the Scheduled Maturity Date, if
the Loans have not been paid in full on or prior to such date, the Company
shall pay to the Agent for the account of each Lender ratably an amount equal
to 2.00% of the Outstanding Amount on such date as an additional facility
fee. On the date which is three months after the Scheduled Maturity Date, if
the Loans have not been paid in full on or prior to such date, the Company
shall pay to the Agent for the account of each Lender ratably an amount equal
to an additional 2.00% of the Outstanding Amount on such date as an
additional facility fee. Nothing contained herein shall be deemed to extend
the Maturity Date.
2.11 COMPUTATION OF FEES AND INTEREST.
(a) COMPUTATION PERIOD. All computations of fees and interest
under this Agreement shall be made on the basis of a 360-day year and actual
days elapsed, except that interest on Base Rate Loans shall be computed on
the basis of a 365/366 day year and actual days elapsed. Interest and fees
shall accrue during each period for which interest or fees are computed from
the first day thereof to the last day thereof.
(b) NOTICE. The Agent shall, with reasonable promptness, notify
the Company and the Lenders of each determination of a LIBO Rate, PROVIDED
that no failure to do so shall relieve the Company of any obligation
hereunder. Any change in the interest rate on a Loan resulting from a change
in the Reserve Percentage (as defined in the definition of "LIBO Rate") shall
become effective as of the opening of business on the day on which such
change becomes effective. The Agent shall with reasonable promptness notify
the Company and the Lenders of the effective date and the amount of each such
change, PROVIDED that no failure to do so shall relieve the Company of any
obligation hereunder. Each determination of an interest rate by the Agent
pursuant to any provision of this Agreement shall be conclusive and binding
on the Company and the Lenders in the absence of manifest error.
(c) DETAIL OF CALCULATION. The Agent shall, at the request of the
Company or any Lender, deliver to the Company or such Lender, as the case may
be, a statement showing the quotations used by the Agent in determining any
interest rate.
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2.12 PAYMENTS BY THE COMPANY.
(a) TERMS OF PAYMENTS. All payments (including prepayments) to be
made by the Company on account of principal, interest, fees and other amounts
required hereunder shall be made without setoff or counterclaim and shall,
except as otherwise expressly provided herein, be made to the Agent for the
ratable account of the Lenders at the Payment Office, in dollars and in
immediately available funds, no later than 9:00 a.m. (California time) on the
date specified herein. The Agent shall promptly distribute to each Lender
such Lender's 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 hereunder shall be stated
to be due on a day other than a Business Day, such payment shall be made on
the next succeeding Business Day, and such extension of time shall be
included in the computation of interest or fees, as the case may be; subject
to the provisions set forth in the definition of "Interest Period."
(c) RELIANCE OF AGENT ON PAYMENTS BY THE COMPANY. Unless the Agent
shall have received notice from the Company prior to the date on which any
payment is due to the Lenders hereunder that the Company will not make such
payment in full, the Agent may assume that the Company has made such payment
in full to the Agent on such date, and the Agent may (but shall not be
required to), in reliance upon such assumption, cause to be distributed to
each Lender on such due date the amount then due such Lender. If and to the
extent the Company shall not have made such payment in full to the Agent,
each Lender shall repay to the Agent on demand such amount distributed to
such Lender, together with interest thereon for each day from the date such
amount is distributed to such Lender until the date such Lender repays such
amount to the Agent, at the Federal Funds Rate as in effect for each such day.
21
2.13 PAYMENTS BY THE LENDERS TO THE AGENT.
(a) RELIANCE OF AGENT ON PAYMENTS BY THE LENDERS. Unless the Agent
shall have received notice from a Lender on the Closing Date 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, the Agent may assume that each Lender has made such amount
available to the Agent on the borrowing date, and the Agent may (but shall
not be required to), in reliance upon such assumption, make available to the
Company a corresponding amount on such date. If and to the extent any Lender
shall not have made its full amount available to the Agent and the Agent in
such circumstances has made available to the Company such amount, that Lender
shall on the next Business Day following the date of such borrowing make such
amount available to the Agent, together with interest at the Federal Funds
Rate for and determined as of each day during such period. A certificate of
the Agent submitted to any Lender with respect to amounts owing under this
Section 2.13(a) shall be conclusive, absent manifest error. If such amount
is so made available, such payment to the Agent shall constitute such
Lender's Loan (as of the date of the borrowing) for all purposes of this
Agreement. If such amount is not made available to the Agent on the next
Business Day following the borrowing date, the Agent shall notify the Company
of such failure to fund and, upon demand by the Agent, the Company shall pay
such amount to the Agent for the Agent's account, together with interest
thereon for each day elapsed since the date of such borrowing, at a rate per
annum equal to the interest rate applicable at the time to the Loans
comprising such borrowing, and the Company 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.
2.14 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. The Company
agrees that any Lender so purchasing a participation from another Lender
pursuant to this Section 2.14 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 10.09) with respect to such
participation as fully as if such purchasing Lender were the direct creditor
of the Company in the amount of such participation. The Agent shall keep
records (which shall be conclusive and binding in the absence of manifest
error) of participations purchased pursuant to this Section 2.14 and shall in
each case notify the Lenders following any such purchases.
22
ARTICLE III
TAXES, YIELD PROTECTION AND ILLEGALITY
3.01 TAXES.
(a) Subject to Section 3.01(g), any and all payments by the Company
to the Agent or the Lenders under this Agreement shall be made free and clear
of, and without deduction or withholding for, any and all present or future
taxes, levies, imposts, deductions, charges or withholdings, and all
liabilities with respect thereto, excluding such taxes (including income
taxes or franchise taxes) as are imposed on or measured by the recipient's
net income by the jurisdiction under the laws of which the recipient is
organized or maintains a Lending Office, or otherwise does business, or any
political subdivision thereof (all such non-excluded taxes, levies, imposts,
deductions, charges, withholdings and liabilities being hereinafter referred
to as "Taxes").
(b) In addition, the Company shall pay any present or future stamp
or documentary taxes or any other excise or property taxes, charges or
similar levies which arise from any payment made hereunder or from the
execution, delivery, recordation or registration of, or otherwise with
respect to, this Agreement or any other Loan Documents (hereinafter referred
to as "Other Taxes").
(c) The Company shall indemnify and hold harmless the Agent and
each Lender for the full amount of Taxes or Other Taxes (including any Taxes
or Other Taxes imposed by any jurisdiction on amounts payable under this
Section 3.01) paid by the Agent or such Lender and any liability (including
penalties, interest, additions to tax and expenses) arising therefrom or with
respect thereto, whether or not such Taxes or Other Taxes were correctly or
legally asserted. Payment under this indemnification shall be made within
thirty (30) days from the date the Agent or any Lender makes written demand
therefor.
(d) If the Company shall be required by law to deduct or withhold
any Taxes or Other Taxes from or in respect of any sum payable hereunder to
the Agent or any Lender, then, subject to Section 3.01(g):
(i) the sum payable shall be increased as necessary so that,
after making all required deductions (including deductions applicable to
additional sums payable under this Section 3.01) the Agent or such Lender, as
the case may be, receives an amount equal to the sum it would have received
had no such deductions been made;
(ii) the Company shall make such deductions; and
(iii) the Company shall pay the full amount deducted to the
relevant taxation authority or other authority in accordance with applicable
law.
(e) Within 30 days after the date of any payment by the Company of
Taxes or Other Taxes, the Company shall furnish to the Agent the original or
a certified copy of a receipt evidencing payment thereof, or other evidence
of payment satisfactory to the Agent.
23
(f) Each Lender which is a foreign Person (i.e., a Person other
than a United States Person for United States Federal income tax purposes)
agrees that:
(i) such Lender shall, no later than the Closing Date (or, in
the case of a Lender which becomes a party hereto pursuant to Section 10.08
after the Closing Date, the date upon which such Lender becomes a party
hereto), deliver to the Company through the Agent two (2) accurate and
complete signed originals of Internal Revenue Service Form 4224 or any
successor thereto ("Form 4224"), or two (2) accurate and complete signed
originals of Internal Revenue Service Form 1001 or any successor thereto
("Form 1001"), as appropriate, in each case indicating that the Lender is on
the date of delivery thereof entitled to receive payments of principal,
interest and fees under this Agreement free from withholding of United States
Federal income tax;
(ii) if at any time such Lender makes any changes
necessitating a new form, such Lender shall with reasonable promptness
deliver to the Company through the Agent in replacement for, or in addition
to, the forms previously delivered by such Lender hereunder, two (2) accurate
and complete signed originals of Form 4224, or two (2) accurate and complete
signed originals of Form 1001, as appropriate, in each case indicating that
such Lender is on the date of delivery thereof entitled to receive payments
of principal, interest and fees under this Agreement free from withholding of
United States Federal income tax;
(iii) such Lender shall, before or promptly after the
occurrence of any event (including the passing of time but excluding any
event mentioned in (ii) above) requiring a change in or renewal of the most
recent Form 4224 or Form 1001 previously delivered by such Lender, deliver to
the Company through the Agent two (2) accurate and complete original signed
copies of Form 4224 or Form 1001, as appropriate, in replacement of the forms
previously delivered by such Lender; and
(iv) such Lender shall, promptly upon the Company's reasonable
request to that effect, deliver to the Company such other forms or similar
documentation as may be required from time to time by any applicable law,
treaty, rule or regulation in order to establish such Lender's tax status for
withholding purposes.
(g) The Company shall not be required to pay any additional amounts
in respect of United States Federal or state income tax pursuant to Section
3.01(d) to any Lender or any duly appointed assignee for the account of any
Lending Office of such Lender or assignee:
(i) if the obligation to pay such additional amounts arises
as a result of a failure by such Lender or assignee to comply with its
obligations under Section 3.01(f) in respect of such Lending Office;
(ii) if such Lender or assignee shall have delivered to the
Company a Form 4224 in respect of such Lending Office pursuant to Section
3.01(f), and such Lender or assignee shall not at any time be entitled to
exemption from deduction or withholding of United States Federal income tax
in respect of payments by the Company hereunder for 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
24
(iii) if such Lender or assignee shall have delivered to the
Company a Form 1001 in respect of such Lending Office pursuant to Section
3.01(f), and such Lender or assignee shall not at any time be entitled to
reduction, partial exemption or exemption from deduction or withholding of
United States federal income tax in respect of payments by the Company
hereunder for the account of such Lending Office for any reason other than a
change in United States law or regulations or any applicable tax treaty or
regulations or in the official interpretation of such law, treaty or
regulations by any governmental authority charged with the interpretation or
administration thereof (whether or not having the force of law) after the
date of delivery of such Form 1001.
(h) If, at any time, the Company requests any Lender to deliver any
forms or other documentation pursuant to Section 3.01(f)(iv), then the
Company shall, on demand of such Lender, through the Agent reimburse such
Lender for any costs and expenses (including Attorney Costs) reasonably
incurred by such Lender in the preparation or delivery of such forms or other
documentation.
(i) If the Company is required to pay additional amounts to the
Agent or any Lender pursuant to Section 3.01(d), then such Lender shall use
its reasonable best efforts (consistent with legal and regulatory
restrictions) to change the jurisdiction of its Lending Office so as to
eliminate any such additional payment by the Company which may thereafter
accrue if such change in the judgment of such Lender is not otherwise
disadvantageous to such Lender.
3.02 ILLEGALITY.
(a) If any Lender shall determine that the introduction of any
Requirement of Law or any change therein or in the interpretation or
administration thereof has made it unlawful, or that any central bank or
other Governmental Authority has asserted that it is unlawful, for such
Lender or its Lending Office to make LIBOR Loans, then, on notice thereof by
such Lender to the Company through the Agent, the obligation of such Lender
to make LIBOR Loans shall be suspended until such Lender shall have notified
the Agent and the Company that the circumstances giving rise to such
determination no longer exist.
(b) If any Lender shall reasonably determine that it is unlawful to
maintain any LIBOR Loan, the Company shall notify Lender that the Company
shall either (i) prepay in full all LIBOR Loans of such lender then
outstanding, together with interest accrued thereon, or (ii) elect to convert
in accordance with Section 2.04 all LIBOR Loans then outstanding, after
payment to such Lender of all interest accrued thereon, into Base Rate Loans,
either on the last day of the Interest Period thereof if such Lender may
lawfully continue to maintain such LIBOR Loans to such day, or immediately if
such Lender may not lawfully continue to maintain such LIBOR Loans, together
with any amounts required to be paid in connection therewith pursuant to
Section 3.04.
(c) If the obligation of any Lender to make or maintain LIBOR Loans
has been terminated, the Company may elect, by giving notice to such Lender
through the Agent, that all Loans which would otherwise be made by such
Lender as LIBOR Loans shall instead be made as Base Rate Loans.
25
3.03 INCREASED COSTS AND REDUCTION OF RETURN.
(a) If any Lender shall determine that, due to either (i) the
introduction of or any change in or in the interpretation of any Requirement
of Law or (ii) the compliance with any guideline or request from any central
bank or other Governmental Authority (whether or not having the force of
law), there shall be any increase in the cost to such Lender of agreeing to
make or of making, funding or maintaining any LIBOR Loans hereunder, then the
Company shall be liable for, and shall from time to time, upon written demand
therefor by such Lender (with a copy of such demand to the Agent), which
demand shall set forth the basis of such increased cost in reasonable detail,
pay to the Agent for the account of such Lender, such additional amounts as
are sufficient to compensate such Lender for such increased costs.
(b) If any Lender shall have reasonably determined that (i)
the introduction of any Capital Adequacy Regulation, (ii) any change in any
Capital Adequacy Regulation, (iii) any change in the interpretation or
administration of any Capital Adequacy Regulation by any central bank or
other Governmental Authority charged with the interpretation or
administration thereof, or (iv) compliance with any Capital Adequacy
Regulation by such Lender (or its Lending Office) or any corporation
controlling such Lender, effects or would effect an increase in the amount of
capital required or expected to be maintained by such Lender or any
corporation controlling such Lender (taking into consideration such Lender's
or such corporation's policies with respect to capital adequacy and such
Lender's desired return on capital), then, upon written demand of such Lender
(with a copy to the Agent), which demand shall set forth in reasonable detail
the basis for any such increase in required capital, the Company shall
immediately pay to such Lender, from time to time as specified by such
Lender, additional amounts sufficient to compensate such Lender for such
increase.
(c) If any Lender shall have determined that any of the events
described in Sections 3.03(a) or 3.03(b) affects or would affect an increase
in cost or reduction of return resulting in additional Obligations hereunder,
such Lender shall, with reasonable promptness, notify the Company and the
Agent of such determination, PROVIDED that no failure to do so shall relieve
the Company of any Obligation hereunder.
3.04 FUNDING LOSSES. The Company agrees to reimburse each Lender
for, and to hold each Lender harmless from, any loss or expense that such
Lender may sustain or incur as a consequence of:
(a) the failure of the Company to make any required payment or
prepayment of principal of any LIBOR Loan or Base Rate Loan (including
payments to be made after any acceleration thereof);
(b) the failure of the Company to borrow, continue or convert
a Loan after the Company has given (or is deemed to have given) a Borrowing
Notice or a Notice of Conversion/Continuation;
(c) the failure of the Company to make any prepayment after
the Company has given a notice in accordance with Section 2.05;
(d) the prepayment of a LIBOR Loan on a day which is not the
last day of the Interest Period with respect thereto; or
26
(e) the conversion of any LIBOR Loan to a Base Rate Loan on a
day that is not the last day of the Interest Period with respect thereto;
such amount or amounts to include an amount equal to the excess, if any, of
(a) the amount of interest that would have accrued on the amount not paid,
not borrowed, not prepaid, prepaid, or converted for the period from the date
of such failure to pay, failure to borrow, failure to prepay, prepayment, or
conversion to the last day of then current Interest Period (or in the case of
a failure to borrow, the Interest Period which would have commenced on the
date of such failure) at the interest rate applicable to that LIBOR Loan,
over (b) the amount of interest that would accrue to the Lender on such
amount at the LIBO Rate in effect on such date by placing such amount on
deposit for a comparable period with leading lenders in the London interbank
market.
3.05 INABILITY TO DETERMINE RATES. If the Agent shall have
determined that for any reason adequate and reasonable means do not exist for
ascertaining the LIBO Rate for any requested Interest Period with respect to
a proposed LIBOR Loan or that the LIBO Rate applicable pursuant to Section
2.09(a) for any requested Interest Period with respect to a proposed LIBOR
Loan does not adequately and fairly reflect the cost to such Lenders of
funding such Loan, the Agent will forthwith give notice of such determination
to the Company and each Lender. Thereafter, the obligation of the Lenders to
make or maintain LIBOR Loans hereunder shall be suspended until the Agent
revokes such notice in writing. Upon receipt of such notice, the Company may
revoke any Borrowing Notice or Notice of Conversion/Continuation then
submitted by it. If the Company does not revoke such notice, the Lenders
shall make, convert or continue the Loans, as proposed by the Company, in the
amount specified in the applicable notice submitted by the Company, but such
Loans shall be made, converted or continued as Base Rate Loans instead of
LIBOR Loans.
3.06 CERTIFICATES OF LENDERS. Any Lender claiming reimbursement or
compensation pursuant to this Article III, shall deliver to the Company (with
a copy to the Agent) a certificate setting forth in reasonable detail a
summary of the basis of such demand and the amount payable to such Lender
hereunder.
3.07 SURVIVAL. The agreements and obligations of the Company in
this Article III shall survive the payment of all other obligations.
ARTICLE IV
CONDITIONS PRECEDENT
4.01 CONDITIONS OF FIRST LOAN. The obligation of each Lender to
make its Loan hereunder on the Closing Date is subject to the condition that
the Agent shall have received, on or before the Closing Date, the following,
in the case of agreements, documents and other instruments, in form and
substance satisfactory to the Agent, each Lender and their respective counsel
in their sole discretion and in sufficient copies for each Lender:
(a) CREDIT AGREEMENT AND NOTES. This Agreement executed by
the Company, the Agent and each of the Lenders, and Notes executed by the
Company in favor of each of the Lenders; the Notes shall be dated the Closing
Date;
(b) REIT GUARANTY DOCUMENTS. The REIT Guaranty Documents
executed by the REIT and the Operating Partnership; the Stock Pledge
Agreement executed
27
by the REIT and the Common Stockholders; and delivery to the Agent of all
original shares of the Stock in the Company together with endorsements
thereof in blank;
(c) SUBORDINATION AGREEMENT. Such subordination agreements
relating to the Intra-Company Debt as the Requisite Lenders may require, in
form and substance satisfactory to the Requisite Lenders;
(d) RESOLUTIONS; INCUMBENCY.
(i) Certified copies of the resolutions of the boards of
directors of the Company, the REIT, GP Corp and the other corporations party
(whether directly or as general partners) to the Loan Documents, authorizing
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 the Company the execution, delivery and performance by the
Company of this Agreement and the other Loan Documents to be delivered
hereunder and the borrowing of the Loans; and
(ii) A certificate of the Secretary or Assistant
Secretary of the Company, the REIT, GP Corp and 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;
(e) ORGANIZATIONAL DOCUMENTS. Each of the following documents:
(i) certified copies of the Organizational Documents of
the Company, the REIT, GP Corp, the Operating Partnership and, if requested
by 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
(ii) a good-standing certificate for the Company, the
REIT, GP Corp, the Operating Partnership and, if requested by Lender, any
Subsidiary thereof, from the secretary of state of the state of organization
thereof, dated as of recent date;
(f) CERTIFICATE. A certificate signed by a duly authorized
Responsible Officer of the Company, the REIT and the Operating Partnership,
dated as of the Closing Date, stating that:
(i) the representations and warranties of the Company
contained in Article V hereof and of the Company, the REIT and the Operating
Partnership contained in the Loan Documents are true and correct on and as of
such date, as though made on and as of such date;
(ii) no Default or Event of Default exists or would result
from the initial borrowing; and
(iii) all conditions precedent set forth in this Section
4.01 have been satisfied (other than those based solely on the approval of the
Agent, the Lenders, or the Requisite Lenders);
(g) LEGAL OPINIONS. The Agent shall have received favorable
opinions of counsel to the Company and the parties signatory to the REIT
Guaranty Documents and the Stock Pledge Agreement, and addressed to the Agent
and the Lenders, which comply with the opinion requirements set forth on EXHIBIT
F in a form approved by Agent;
28
(h) DOCUMENTATION REGARDING THE NHP STOCK PURCHASE AGREEMENT,
THE MERGER AGREEMENT AND THE REAL ESTATE ASSETS. The Agent shall have
received copies of the NHP Stock Purchase Agreement and the NHP Merger
Agreement, each certified by a duly authorized Responsible Officer as being
true, correct and complete, together with (i) evidence that all material
conditions precedent (including, without limitation, all governmental
approval contingencies) under the NHP Stock Purchase Agreement to the
consummation of the sale of at least 6,496,071 shares of the NHP Stock
thereunder shall, upon funding of the initial Loans hereunder, be satisfied
and that the balance of the consideration for such Stock (consisting of
shares of Stock in the REIT having a value of at least $60,000,000 based on
the current market value thereof) shall have been issued to the NHP
Shareholders; and (ii) evidence of the approval of the NHP Merger Agreement
by the Board of Directors of NHP;
(i) COSTS; EXPENSES; FEES. Payment of all costs, expenses, and
accrued and unpaid fees (including legal fees and expenses) to the extent then
due and payable on the Closing Date, including any arising under Sections 2.10,
3.01 and 10.04;
(j) SBI ENGAGEMENT LETTER. The REIT and SBI shall have entered
into a separate engagement letter relating to the retention of SBI for certain
underwriting and other services; and
(k) OTHER DOCUMENTS. Such other approvals, opinions, or
documents as the Agent or the Requisite Lenders may reasonably request.
4.02 CONDITIONS TO EACH LOAN, CONTINUATION OR CONVERSION. The
obligation of each Lender to make its Initial Loan or any Subsequent Loan and
any continuation or conversion thereof is subject to the satisfaction of the
following conditions precedent:
(a) BORROWING NOTICE. The Agent shall have received a
Borrowing Notice or Notice of Conversion/Continuation in compliance with the
terms of Section 2.03 or Section 2.04, as applicable;
(b) REPRESENTATIONS AND WARRANTIES. The representations and
warranties made by the Company, the REIT, the Operating Partnership and the
Common Stockholders 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; and
(c) NO EXISTING DEFAULT. No Default or Event of Default shall
exist or shall result from the making, continuation or conversion of such
Loan.
(d) DISBURSEMENT LIMIT. The requested Subsequent Loan shall
not exceed the Maximum Disbursement Amount for the NHP Stock to be acquired
therewith;
(e) NO MATERIAL ADVERSE EFFECT. No act, omission, change,
occurrence or event which has a Material Adverse Effect shall have occurred
since the Closing Date.
Each Borrowing Notice and Notice of Continuation/Conversion submitted by the
Company hereunder shall constitute a representation and warranty by the
Company hereunder, as of the date of such notice and as of the date of the
making, continuation or conversion of the corresponding Loan, that the
conditions in this Section 4.02 have been satisfied.
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ARTICLE V
REPRESENTATIONS AND WARRANTIES
The Company represents and warrants to the Agent and each Lender
that:
5.01 EXISTENCE AND POWER. The Company is a Delaware corporation,
the Operating Partnership is a Delaware limited partnership, the REIT is a
Maryland corporation, and each of the Company, the Operating Partnership and
the REIT:
(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 Organizational Documents of the Company and 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; and
(d) COMPLIANCE WITH LEGAL REQUIREMENTS. Is in compliance with
all Requirements of Law applicable to it.
5.02 AUTHORIZATION; NO CONFLICT. The execution, delivery and
performance by the Company, the Operating Partnership and the REIT of this
Agreement, any other Loan Document to which such Person is party, and the
Organizational Documents for the Company have been duly authorized by all
necessary partnership, corporate or other organizational action, and do not
and will not:
(a) ORGANIZATIONAL 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 the Loan Documents) 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 Requirement of Law
applicable to it.
5.03 GOVERNMENTAL AUTHORIZATION. No approval, consent, exemption,
authorization, or other action by, or notice to, or filing with, any
Governmental Authority (except for recordings in connection with the Liens
granted to the Agent under the Collateral Documents) is necessary or required
in connection with the execution, delivery or performance by, or enforcement
against, the Company, the Operating Partnership or the REIT of this
Agreement, any other Loan Document or the Organizational Documents for the
Company.
5.04 BINDING EFFECT. This Agreement and each other Loan Document to
which the Company, the Operating Partnership or the REIT 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,
30
insolvency, or similar laws affecting the enforcement of creditors' rights
generally or by equitable principles relating to enforceability.
5.05 LITIGATION. There are no actions, suits, proceedings, claims
or disputes pending, or to the Knowledge of the Company, threatened or
contemplated, at law, in equity, in arbitration or before any Governmental
Authority, (a) against the Company, the Operating Partnership, the REIT, any
Management Entity, any of their Subsidiaries or any of their respective
Properties, which purport to affect or pertain to this Agreement, or any
other Loan Document, or any of the transactions contemplated hereby or
thereby, or (b) which purports to affect or pertain to the NHP Stock Purchase
Agreement or the NHP Merger Agreement or the NHP-Related Real Estate
Acquisition Agreement as of the date hereof or the Closing Date or, if the
same would have a Material Adverse Effect, after the Closing Date. No
injunction, writ, temporary restraining order or any other order of any
nature has been issued by any court or other Governmental Authority
purporting to enjoin or restrain the execution, delivery and performance of
this Agreement any other Loan Document, the NHP Stock Purchase Agreement, the
NHP Merger Agreement or the NHP-Related Real Estate Acquisition Agreement, or
directing that the transactions provided for herein or therein not be
consummated as herein or therein provided, remains in effect as of the date
hereof or the Closing Date or, if the same would have a Material Adverse
Effect, after the Closing Date.
5.06 SUBSIDIARIES; INTERESTS IN OTHER ENTITIES. Except for the NHP
Stock, the Company has no interest in any corporation, partnership or other
entity.
5.07 TAXES. The Company has filed all Federal and other material
tax returns and reports required to be filed. All tax returns filed by the
Company are complete and correct; the Company has paid all Federal and other
material taxes, assessments, fees and other governmental charges for which
they are liable (whether or not reflected on any tax returns) and have fully
satisfied any taxes, assessments, fees, and other governmental charges levied
or imposed upon them or their Properties, income or assets or otherwise due
and payable, except those which are being contested in good faith by
appropriate proceedings and for which adequate reserves have been provided in
accordance with GAAP and no Notice of Lien has been filed or recorded; there
is no proposed tax assessment against the Company which would, if the
assessment were made, have a Material Adverse Effect; and (iv) the Company
has 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 the Company 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. The Company is not a party to any tax sharing agreement.
5.08 EMPLOYEES. The Company has no employees.
5.09 COLLATERAL DOCUMENTS. When executed, delivered and recorded
pursuant hereto, the Collateral Documents shall be effective to create in
favor of the Agent, for the benefit of the Lenders, legal, valid and
enforceable first-priority Liens in the Collateral and the proceeds thereof.
All action shall have been taken that is necessary or appropriate to perfect
the Agent's Lien, for the benefit of the Lenders, in the Collateral. All
representations and warranties of any other Person party to any Collateral
Documents that are contained therein are true and correct.
5.10 REGULATED ENTITIES. The Company is not (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.
31
5.11 USE OF PROCEEDS. The proceeds of the Loans are intended to be
and shall be used solely for the purposes set forth in and permitted by
Sections 2.01(b) and Section 6.08.
5.12 [Intentionally deleted]
5.13 NO DEFAULT. No Default or Event of Default exists or would
result from the incurring of any Obligations by the Company, the REIT or the
Operating Partnership. Neither the Company, nor the REIT, nor the Operating
Partnership, 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.
5.14 NHP. All of the representations and warranties set forth in
the NHP Stock Purchase Agreement and the Merger Agreement given by the REIT or
the Operating Partnership or, to the best knowledge of the Company, given by any
other Person are true and correct.
5.15 FULL DISCLOSURE. None of the representations or warranties
made by the Company, the Operating Partnership, the REIT, or any other Person
(other than the Agent and the Lenders) in the Loan Documents or by the Company,
the Operating Partnership or the REIT in the NHP Stock Purchase Agreement or the
NHP Merger Agreement 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 therewith, contains any untrue statement of a material fact or omits
any material fact required to be stated therein or necessary to make the
statements made therein, in light of the circumstances under which they are
made, not misleading. There is no fact, to the Knowledge of the Company, which
would have a Material Adverse Effect which has not been disclosed herein or in
other documents, certificates and statements furnished to the Agent and each
Lender hereunder or pursuant hereto. In the course of the due diligence of NHP
by the REIT, the Operating Partnership and the Company in connection with the
transactions contemplated by the NHP Stock Purchase Agreement and the NHP Merger
Agreement, no material adverse information concerning NHP or its assets,
operations, business, condition (financial or otherwise) or prospects was
discovered which is not publicly disclosed in the reports and statements filed
by NHP with the SEC or otherwise previously disclosed to the Lenders in writing
by the REIT. The copies of all documents delivered to the Agent and/or the
Lenders from time to time in connection with this Agreement are and shall be
true and complete copies of the originals thereof and have not been or shall not
be amended except as disclosed to the Agent and/or the Lenders, as applicable.
ARTICLE VI
AFFIRMATIVE COVENANTS
The Company covenants and agrees that, so long as any Lender shall
have any Commitment hereunder, or any Loan or other obligation shall remain
unpaid or unsatisfied, unless the Requisite Lenders waive compliance in writing:
6.01 FINANCIAL INFORMATION. The Company shall deliver to the
Agent and to each Lender, in form and detail satisfactory to the Agent and the
Lenders:
(a) FINANCIAL STATEMENTS. Such balance sheets, statements
of operations, stockholders' equity (where applicable) and cash flows, as the
Agent or any Lender may reasonably request from time to time; and
32
(b) FINANCIAL STATEMENTS AND OTHER INFORMATION FOR NHP. Until
the NHP Combination Date, within five (5) days after the receipt thereof by
the Company, the Operating Partnership, the REIT or any Subsidiary thereof,
such periodic, quarterly, annual and special financial statements, reports,
press releases, proxy statements and other information as may be received by
any such Person in its capacity as a shareholder in NHP or under the NHP
Merger Agreement; and within five (5) days after the delivery of any thereof
by any such Person, copies of any reports, proxy statements, tender or
exchange offers or other information provided by such Person to NHP or to the
shareholders thereof or to the SEC in respect of such Person's ownership of
or intentions or proposals with respect to NHP; and within five (5) days
after the Company, the Operating Partnership, the REIT or any Subsidiary
obtains Knowledge, information concerning the progress of the merger with NHP
and of the approvals of the shareholders of NHP and the REIT required to be
obtained as a condition thereto and as to satisfaction of any other material
condition to such merger; and within five (4) days after the execution
thereof, a copy of the NHP-Related Real Estate Acquisition Agreement.
6.02 CERTIFICATES; OTHER INFORMATION. The Company shall furnish to
the Agent with sufficient copies for each Lender:
(a) OFFICERS' CERTIFICATES. Within forty-five (45) days after
the end of each fiscal quarter, a compliance certificate, substantially in
the form of EXHIBIT G, signed by at least two (2) Responsible Officers
stating that, to the best of such officers' knowledge, the Company 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;
(b) ACCOUNTANTS' REPORTS. Promptly after the same are
received, copies of all reports which the independent certified public
accountants of the Company deliver to the Company; and
(c) OTHER INFORMATION. Promptly, such additional financial
and other information as the Agent may or any Lender from time to time
reasonably request.
6.03 NOTICES. The Company shall promptly (and in no event later
than ten (10) days after the Company has reason to know of the same) notify
the Agent and each Lender of:
(a) DEFAULT; EVENT OF DEFAULT. The occurrence of any Default
or Event of Default, and of the occurrence or existence of any event or
circumstance that is likely to become a Default or Event of Default. Each
notice under Section 6.03(a) shall describe with particularity the clause or
provision of this Agreement this or other Loan Document that has been
breached or violated.;
(b) LITIGATION. The commencement of, or any material
development in, any litigation, arbitration or proceeding (a) affecting the
Company or (b) which, if adversely determined, would reasonably be expected
to have a material adverse effect on the ability to consummate the
transactions under the NHP Merger Agreement;
(c) 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 financial statements of the Company delivered to
the Agent pursuant to Section 6.01(a).
(d) MATERIAL TRANSACTIONS. The consummation of any material
Disposition of any Property or of any other material transaction by the
Company;
33
(e) ACCOUNTING CHANGES. Any change in the Company's
accounting policies or financial reporting practices;
(f) LEGAL COMPLIANCE. Any material notice received from any
Governmental Authority asserting that the Company is not in compliance with
any Requirements of Law; and
(g) CROSS-DEFAULT. Any notice received by the Company, the
Operating Partnership, the REIT, any Management Entity or any of their
Subsidiaries of any default under any Indebtedness or Guaranty Obligation
described in Section 8.01(e). Each notice pursuant to this section shall be
accompanied by a written statement, signed by at least two (2) Responsible
Officers, setting forth details of the occurrence referred to therein and the
provisions of this Agreement affected, and stating what action the Company,
the Operating Partnership or the REIT proposes to take with respect thereto.
6.04 PRESERVATION OF EXISTENCE, ETC. Except as permitted under
Sections 7.06 and 7.07 below, the Company shall (a) preserve and maintain in
full force and effect its 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.
6.05 [Intentionally deleted]
6.06 PAYMENT OF OBLIGATIONS. The Company shall 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 the
Company or such Person, (b) all lawful claims which, if unpaid, would by law
become a Lien upon its Properties, (c) all Indebtedness, as and when due and
payable, but subject to any subordination provisions contained in any
instrument or agreement evidencing such Indebtedness, and (d) all Contractual
Obligations.
6.07 COMPLIANCE WITH LAWS. The Company shall comply with all
Requirements of Law and all orders of any Governmental Authority having
jurisdiction over it or its business, including, without limitation, all
securities laws and regulations.
6.08 USE OF PROCEEDS. The Company shall use the proceeds of the
Loans solely in accordance with Section 2.01(b) above.
6.09 INSPECTION OF PROPERTY AND BOOKS AND RECORDS. The Company
shall 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 the Company. The Company shall permit representatives of the Agent or any
Lender 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 the
Company and at any time during normal business hours and as often as may be
reasonably desired, upon no less than forty-eight (48) hours advance notice
to the Company; PROVIDED, HOWEVER, when an Event of Default exists, the Agent
or any Lender may visit and inspect at the expense of the Company such
Properties at any time during business hours and without advance notice.
34
6.10 FURTHER ASSURANCES.
(a) FULL DISCLOSURE. The Company will ensure that all other
written information, exhibits and reports furnished to any Agent or Lender by
the Company do not contain any untrue statement of a material fact and do not
and will not omit to state any material fact or any fact necessary to make
the statements contained therein not misleading in light of the circumstances
in which made, and will promptly disclose to the Agent and the Lenders and
correct any defect or error that may be discovered therein or in any Loan
Document or in the execution, acknowledgment or recordation thereof.
(b) FURTHER ACTS. Promptly upon request by the Agent or the
Requisite Lenders, the Company shall (and shall cause the REIT and the
Operating Partnership to) do, execute, acknowledge, deliver, record,
re-record, file, re-file, register and re-register, any and all such further
acts, security agreements, assignments, estoppel certificates, financing
statements and continuations thereof, termination statements, notices of
assignment, transfers, certificates, assurances and other instruments that
the Agent or such Lenders, as the case may be, may reasonably require from
time to time in order (i) to carry out more effectively the purposes of this
Agreement or any other Loan Document, (ii) to subject to the Liens created by
any of the Collateral Documents any of the Collateral, (iii) to perfect and
maintain the validity, effectiveness and priority of any of the Collateral
Documents and the Liens intended to be created thereby, and (iv) to better
assure, convey, grant, assign, transfer, preserve, protect and confirm to the
Agent and Lenders the rights granted or now or hereafter intended to be
granted under any Loan Document, or any other document executed in connection
herewith or therewith.
6.11 SOLVENCY. The Company shall at all times be Solvent.
ARTICLE VII
NEGATIVE COVENANTS
The Company 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:
7.01 LIENS. The Company shall not, 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, consisting of
cash or Cash Equivalents, other than 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 and as to which Liens
waivers have been obtained to the extent required in the definition of "Cash
Equivalents"; PROVIDED that (a) 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 (b) such deposit account is not intended by the
depositor to provide collateral to the depository institution.
7.02 INDEBTEDNESS. The Company shall not create, incur, assume,
suffer to exist, or otherwise become or remain directly or indirectly liable
with respect to, any Indebtedness except the following ("PERMITTED
INDEBTEDNESS"):
(a) CERTAIN INDEBTEDNESS. Indebtedness incurred pursuant to
this Agreement;
35
(b) 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;
(c) CONTINGENT OBLIGATIONS. Indebtedness consisting of
Contingent Obligations permitted by Section 7.03; and
(d) OTHER INDEBTEDNESS. Other Indebtedness incurred by the
Company provided that either (i) the proceeds of such Indebtedness are used
to pay in full all of the outstanding Obligations or (ii) in any other case,
Lenders holding Commitment Percentages aggregating at least 75% shall have
approved the terms of such Indebtedness proposed to be incurred by the
Company and all of the Net Issuance Proceeds of such Indebtedness are used to
prepay the outstanding Obligations in compliance with Section 2.05 of this
Agreement.
7.03 CONTINGENT OBLIGATIONS. The Company shall not create, incur,
assume or suffer to exist any Contingent Obligations except endorsements for
collection or deposit in the Ordinary Course of Business and except those
arising from the acquisition of the NHP Stock or under the NHP Merger Agreement
or arising in connection with the transactions contemplated hereby.
7.04 LEASE OBLIGATIONS. The Company shall not 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.
7.05 DISPOSITION OF PROPERTIES. The Company shall not, directly or
indirectly, make any Disposition of any Property, or enter into any agreement to
do so, unless such Disposition is at fair market value (as determined in good
faith by the Company's Board of Directors) and is for consideration consisting
exclusively of cash or Cash Equivalents; provided, however, that, so long as no
Event of Default is then continuing hereunder or would result therefrom, the
Company may make a Disposition of the NHP Stock to the Merger Sub for
consideration other than cash or Cash Equivalents immediately prior to and
solely in connection with the consummation of the merger described in the NHP
Merger Agreement and following satisfaction of all material conditions precedent
thereto, so long as, if the Obligations are not to be paid in full effective
upon the consummation of such merger, (i) the Merger Sub shall assume all of the
Obligations of the Company under the Loan Documents pursuant to an assumption
agreement in form and substance reasonably satisfactory to the Agent and the
Requisite Lenders in their discretion (which assumption obligations shall be
part of the debts, liabilities and duties assumed by the surviving entity in
such merger); (ii) there shall be no material adverse effect therefrom upon the
Agent or the Lenders, in the reasonable opinion of the Agent and the Requisite
Lenders; (iii) the REIT, the Operating Partnership and the Common Stockholders
shall ratify and reaffirm their obligations under the REIT Guaranty Documents in
form and substance reasonably satisfactory to the Agent and the Requisite
Lenders in their discretion in connection therewith; and (iv) the Agent and the
Lenders bear no cost or expense in connection with such matters.
7.06 CONSOLIDATIONS AND MERGERS. The Company shall not merge or
consolidate with or into any Person; provided, however, that the Agent and the
Lenders shall agree to permit the Company to be consolidated with or merged
into a special purpose Subsidiary of the REIT as the surviving entity solely in
connection with the consummation of the merger under the NHP Merger Agreement,
so long as: (i) no Event of Default is then continuing hereunder; (ii) there
shall be no material adverse effect therefrom upon the Agent or the Lenders, in
the reasonable opinion of the Agent and the Requisite Lenders; (iii) such
36
surviving entity assumes all of the Obligations of the Company under the Loan
Documents pursuant to an assumption agreement in form and substance reasonably
satisfactory to the Agent and the Requisite Lenders in their discretion and
executes all such documents and takes such other actions as may be necessary to
maintain, preserve, perfect and protect the rights and interests of the Agent
and the Lenders arising under the Loan Documents; (iv) the Operating
Partnership, the REIT and the Common Stockholders reaffirm and ratify in writing
all of their respective obligations under the Loan Documents in connection with
such merger or consolidation, in form and substance reasonably satisfactory to
the Agent and the Requisite Lenders in their discretion; (v) the Agent and the
Lenders receive such favorable legal opinions from counsel to the Company, the
REIT, the Operating Partnership and such surviving entity in connection with
such matters as they may reasonably request; and (vi) the Agent and the Lenders
bear no cost or expense in connection with such matters.
7.07 LIQUIDATIONS; ISSUANCES OF STOCK.
(a) The Company shall not liquidate, wind-up or dissolve, or
amend its Organizational Documents in any respect; provided, however, that the
Agent and the Lenders shall agree to permit all of the assets of the Company to
be transferred to the REIT or a special purpose Subsidiary of the REIT in
connection with the liquidation of the Company solely in connection with the
consummation of the merger under the NHP Merger Agreement, so long as: (i) no
Event of Default is then continuing hereunder; (ii) there shall be no material
adverse effect therefrom upon the Agent or the Lenders, in the reasonable
opinion of the Agent and the Requisite Lenders; (iii) such transferee assumes
the Obligations of the Company under the Loan Documents pursuant to an
assumption agreement in form and substance reasonably satisfactory to the Agent
and the Requisite Lenders in their discretion; (iv) the Operating Partnership,
the REIT and the Common Stockholders reaffirm and ratify in writing all of their
respective obligations under the REIT Guaranty Documents in connection with such
transfer and liquidation, in form and substance reasonably satisfactory to the
Agent and the Requisite Lenders in their discretion and such Persons and such
transferee execute all such other documents and take such other actions as may
be necessary to maintain, preserve, perfect and protect the rights and interests
of the Agent and the Lenders under the Loan Documents; (v) the Agent and the
Lenders receive such favorable legal opinions from counsel to the Company, the
REIT, the Operating Partnership and such transferee in connection with such
matters as they may reasonably request; and (vi) the Agent and the Lenders bear
no cost or expense in connection with such matters.
(b) The Company shall not issue any Stock to any Person other
than the Operating Partnership or a Common Stockholder on the date hereof and
only if such Person has pledged such Stock to the Agent for the ratable benefit
of the Lenders pursuant to the Stock Pledge Agreement or an amendment thereto;
provided, however, that the Agent and the Lenders shall agree to permit the
Stock of the Company pledged to them under the Stock Pledge Agreement to be
transferred to the REIT or a special purpose Subsidiary of the REIT subject to
the security interests and all other rights in their favor created under the
Stock Pledge Agreement solely in connection with the consummation of the merger
under the NHP Merger Agreement, so long as: (i) no Event of Default is then
continuing hereunder; (ii) there shall be no material adverse effect therefrom
upon the Agent or the Lenders, in the reasonable opinion of the Agent and the
Requisite Lenders; (iii) such transferee assumes the Obligations of a Pledgor
(as such term is defined in the Stock Pledge Agreement) pursuant to an
assumption agreement in form and substance reasonably satisfactory to the Agent
and the Requisite Lenders in their discretion and executes all such documents
and takes such other actions as may be necessary to maintain, preserve, perfect
and protect the rights and interests of the Agents and the Lenders in the Stock
so transferred and arising under the Stock Pledge Agreement; (iv) the Company,
the Operating Partnership, the REIT and the Common Stockholders reaffirm and
ratify in writing all of their respective obligations under the Loan Documents
in connection with such transfer, in form and substance reasonably satisfactory
to
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the Agent and the Requisite Lenders in their discretion and execute all such
other documents and take such other actions as may be necessary to maintain,
preserve, perfect and protect the rights and interests of the Agent and the
Lenders under the Loan Documents; (v) the Agent and the Lenders receive such
favorable legal opinions from counsel to the Company, the REIT, the Operating
Partnership and such transferee in connection with such matters as they may
reasonably request; and (vi) the Agent and the Lenders bear no cost or expense
in connection with such matters.
7.08 INVESTMENTS. The Company shall not 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:
(a) cash and Cash Equivalents;
(b) NHP Stock; and
(c) promissory notes delivered to the Company by the Common
Stockholders in exchange for Stock.
7.09 RESTRICTED PAYMENTS. The Company shall not declare or make, or
permit any of their respective Subsidiaries to declare or make, any distribution
of any Properties, including cash, rights or obligations, on account of any
Stock, or purchase, redeem or otherwise acquire for value any of its Stock, now
or hereafter outstanding to any Person (all of the foregoing, collectively,
"distributions").
7.10 TRANSACTIONS WITH AFFILIATES. The Company shall not enter into
any transaction with any Affiliate of the Company or of the REIT, the Operating
Partnership or any of their Subsidiaries, except (a) for the transactions under
NHP Stock Purchase Agreement or the NHP Merger Agreement or as expressly
permitted by this Agreement, or (b) in the Ordinary Course of Business and
pursuant to the reasonable requirements of the business of the Company or such
Person; in each case (a) and (b), upon fair and reasonable terms no less
favorable to the Company than would obtain in a comparable arm's-length
transaction with a Person not such an Affiliate.
ARTICLE VIII
EVENTS OF DEFAULT
8.01 EVENT OF DEFAULT. Any of the following shall constitute an
"Event of Default":
(a) NON-PAYMENT. The Company shall fail to pay, (i) when and as
required to be paid herein, any amount of principal of any Loan, or (ii) within
five days after the same shall become due, any amount of interest on any Loan or
any fee or other amount payable hereunder or pursuant to any other Loan
Document; or
(b) REPRESENTATION OR WARRANTY. Any representation or warranty by
the Company, the REIT, the Operating Partnership or any Common Stockholder made
or deemed made herein, in any Loan Document, or in any certificate, document or
financial or other statement by the Company, the REIT, the Operating
Partnership, any Common Stockholder, 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
38
(c) SPECIFIC DEFAULTS. The Company shall fail to perform or
observe any term, covenant or agreement contained in Section 6.08 and/or in
Article VII; or
(d) OTHER DEFAULTS. The Company, the REIT, the Operating
Partnership or any Common Stockholder shall fail to perform or observe any other
term or covenant contained in this Agreement or any Loan Document (other than as
set forth elsewhere in this Section 8.01), and such default shall continue
uncured for a period of 10 days after the earlier of (i) the date upon which a
Responsible Officer knew or received written notice of such failure or (ii) the
date upon which written notice thereof is given to the Company by Agent or any
Lender; or
(e) CROSS-DEFAULT. The Company shall fail, after any applicable
cure period:
(A) to make any payment (and which uncured failure to pay is
continuing) in respect of any Indebtedness or Guaranty Obligation when due which
in the aggregate exceeds $500,000 (whether by scheduled maturity, required
prepayment, acceleration, demand, or otherwise), other than a payment with
respect to Intra-Company Debt where the obligee has not commenced pursuing its
remedies; or
(B) to perform or observe any other condition or covenant, or any
other event shall occur or condition exist, under any agreement or instrument
relating to any such Indebtedness or Guaranty Obligation, if the effect of such
failure, event or condition is to cause, or to permit the holder or holders of
such Indebtedness or the beneficiary or beneficiaries of such Indebtedness (or a
trustee or agent on behalf of such holder or holders or beneficiary or
beneficiaries) to cause, such Indebtedness to be declared to be due and payable
prior to its stated maturity, or such Guaranty Obligation to become payable or
cash collateral in respect thereof to be demanded; or
(C) to perform or observe any condition or covenant of the
subordination agreement in favor of the lenders relating to the Intra-Company
Debt; or
(f) BANKRUPTCY OR INSOLVENCY. The Company, the REIT, the Operating
Partnership, any of their Subsidiaries or any Management Entity or, at any time
prior to the NHP Combination Date, NHP 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 the Company, the REIT, the Operating Partnership, any
of their Subsidiaries, or any Management Entity or, at any time prior to the NHP
Combination Date, NHP or any writ, judgment, warrant of attachment, execution or
similar process, shall be issued or levied against a substantial part of such
Person's Properties, and any such proceeding or petition shall not be dismissed,
or such writ, judgment, warrant of attachment, execution or similar process
shall not be released, vacated or fully bonded within sixty (60) days after
commencement, filing or levy; (ii) the Company, the REIT, the Operating
Partnership, any of their Subsidiaries or, at any time prior to the NHP
Combination Date, NHP 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) the Company, the
REIT, the Operating Partnership, any of their Subsidiaries or any Management
Entity or, at any time prior to the NHP Combination Date, NHP shall acquiesce in
the appointment of a receiver, trustee, custodian, conservator, liquidator,
mortgagee in
39
possession (or agent therefor), or other similar Person for itself or a
substantial portion of its Property or business; or
(h) MONETARY JUDGMENTS. One or more final (non-interlocutory)
judgments, orders or decrees shall be entered against the Company, involving in
the aggregate a liability (not fully covered by insurance) as to any single or
related series of transactions, incidents or conditions, of $500,000 or more,
and the same shall remain unvacated and unstayed pending appeal for a period of
thirty (30) days after the entry thereof; or
(i) NON-MONETARY JUDGMENTS. Any non-monetary judgment, order or
decree shall be rendered against the Company, 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
(j) REIT GUARANTY DOCUMENTS. The occurrence of any Guarantor Event
of Default.
8.02 REMEDIES.
If any Event of Default occurs, the Agent shall, at the request
of, or may, with the consent of, the Requisite Lenders:
(a) TERMINATION OF 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) 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 8.01(f) or 8.01(g) (in the case of clause (i) of Section
8.01(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.
8.03 RIGHTS NOT EXCLUSIVE. The rights provided for in this
Agreement and the other Loan Documents are cumulative and are not exclusive of
any other rights, powers, privileges or remedies provided by law or in equity,
or under any other instrument, document or agreement now existing or hereafter
arising.
8.04 CERTAIN REQUIREMENTS IN ORDER TO PURSUE THE GUARANTY. Each
Lender intends that this Agreement creates a loan facility between such Lender
and the Company, and is not intended to be a loan to the REIT, the Operating
Partnership or any other Subsidiary thereof. Each Lender is relying on the
Company for repayment of the Obligations owing to such Lender, and neither the
Agent nor any Lender shall pursue the Guaranty, which is intended to guaranty
the Company's Obligations in the event the Company fails to perform under this
Agreement, unless the Agent has provided the Company 10 Business Days to perform
its Obligations hereunder, pursuant to and to the extent required by Section
2.01 of the Guaranty.
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ARTICLE IX
THE AGENT
9.01 APPOINTMENT AND AUTHORIZATION. Each Lender hereby irrevocably
appoints, designates and authorizes the Agent to take such action on its behalf
under the provisions of this Agreement and each other Loan Document and to
exercise such powers and perform such duties as are expressly delegated to it by
the terms of this Agreement or any other Loan Document, together with such
powers as are reasonably incidental thereto. Notwithstanding any provision to
the contrary contained elsewhere in this Agreement or in any other Loan
Document, Agent shall not have any duties or responsibilities except those
expressly set forth herein, nor shall Agent have or be deemed to have any
fiduciary relationship with any Lender, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Agreement or any other Loan Document or otherwise exist on the part of Agent.
9.02 DELEGATION OF DUTIES. 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.
9.03 LIABILITY OF AGENT. The Agent, its respective Affiliates, or
their respective officers, directors, employees, agents, or attorneys-in-fact
(all of the foregoing being collectively referred to as the "Agent-Related
Persons") shall not (a) be liable for any action taken or omitted to be taken by
any of them under or in connection with this Agreement or any other Loan
Document (except for its own gross negligence or willful misconduct), or (b) be
responsible in any manner to any of the Lenders for any recital, statement,
representation or warranty made by the Company, the Operating Partnership, the
REIT, any Subsidiary, any Common Stockholder 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 Collateral or the
validity, effectiveness, genuineness, enforceability or sufficiency of this
Agreement, any other Loan Document, or for any failure of the Company, the REIT,
the Operating Partnership, or any other party to any Loan Document to perform
its obligations hereunder or thereunder. No Agent-Related Person shall be under
any obligation to any Lender to ascertain or to inquire as to the observance or
performance of any of the agreements contained in, or conditions of, this
Agreement or any other Loan Document, or to inspect the Properties, books or
records of the Company, the REIT, the Operating Partnership, any Subsidiary, any
Common Stockholder or Affiliates thereof.
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9.04 RELIANCE BY AGENT.
(a) GENERALLY. The Agent shall be entitled to rely, and shall be
fully protected in relying, upon any writing, resolution, notice, consent,
certificate, affidavit, letter, telegram, telecopy, telex or telephone message,
statement or other document or conversation believed by it to be genuine and
correct and to have been signed, sent or made by the proper Person or Persons,
and upon advice and statements of legal counsel (including counsel to the
Company), independent accountants and other experts selected by the Agent. The
Agent shall be fully justified in failing or refusing to take any action under
this Agreement or any other Loan Document unless it shall first receive such
advice or concurrence of the Requisite Lenders as it deems appropriate and, if
it so requests, it shall first be indemnified to its satisfaction by the Lenders
against any and all liability and expense which may be incurred by it by reason
of taking or continuing to take any such action. The Agent shall in all cases
be fully protected in acting, or in refraining from acting, under this Agreement
or any other Loan Document in accordance with a request or consent of the
Requisite Lenders, and such request and any action taken or failure to act
pursuant thereto shall be binding upon all of the Lenders.
(b) CONDITIONS PRECEDENT. For purposes of determining compliance
with the conditions specified in Sections 4.01 and 4.02 (as to the initial
borrowing hereunder), each Lender that has executed this Agreement shall be
deemed to have consented to, approved or accepted or to be satisfied with each
document or other matter required thereunder to be consented to or approved by
or acceptable or satisfactory to such Lender, unless an officer of the Agent
responsible for the transactions contemplated by the Loan Documents shall have
received notice from such Lender prior to the initial borrowing specifying its
objection thereto and either such objection shall not have been withdrawn by
notice to the Agent to that effect or such Lender shall not have made available
to the Agent the Lender's ratable portion of such borrowing.
9.05 NOTICE OF DEFAULT. The Agent shall not be deemed to have
knowledge or notice of the occurrence of any Default or Event of Default, except
with respect to defaults in the payment of principal, interest and fees required
to be paid to the Agent for the account of the Lenders, unless the Agent shall
have received written notice from a Lender or the Company referring to this
Agreement, describing such Default or Event of Default and stating that such
notice is a "notice of default." In the event that the Agent receives such a
notice, the Agent shall give notice thereof to the Lenders. The Agent shall
take such action with respect to such Default or Event of Default as shall be
requested by the Requisite Lenders in accordance with Article VIII; PROVIDED,
HOWEVER, that unless and until the Agent shall have received any such request,
it may (but shall not be obligated to) take such action, or refrain from taking
such action, with respect to such Default or Event of Default as it shall deem
advisable or in the best interest of the Lenders.
9.06 CREDIT DECISION. Each Lender expressly acknowledges that none
of the Agent-Related Persons has made any representation or warranty to such
Lender and that no act by the Agent hereinafter taken, including any review of
the affairs of the Company, the REIT, the Operating Partnership, any Subsidiary,
or any Common Stockholder shall be deemed to constitute any representation or
warranty by the Agent to any Lender. Each
42
Lender represents to the Agent that such Lender has, independently and without
reliance upon the Agent and based on such documents and information as such
Lender has deemed appropriate, made its own appraisal of and investigation into
the business, prospects, operations, Properties, financial and other condition
and creditworthiness of the Company, the REIT, the Operating Partnership,
Subsidiary, or Common Stockholder and all applicable lender regulatory laws
relating to the transactions contemplated thereby (including, without
limitation, applicable margin regulations), and made its own decision to enter
into this Agreement and extend credit to the Company hereunder. Each Lender
also represents that it will, independently and without reliance upon the Agent
and based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit analysis, appraisals and decisions in
taking or not taking action under this Agreement and the other Loan Documents,
and to make such investigations as it deems necessary to inform itself as to the
business, prospects, operations, Properties, financial and other condition and
creditworthiness of the Company, the REIT, the Operating Partnership, the
Subsidiaries and Common Stockholders. Except for notices, reports and other
documents expressly herein required to be furnished to the Lenders by the Agent,
Agent shall have no duty or responsibility to provide any Lender with any credit
or other information concerning the business, prospects, operations, Properties,
financial and other condition or creditworthiness of the Company, the REIT, the
Operating Partnership, the Subsidiaries and Common Stockholders which may come
into the possession of any of the Agent-Related Persons.
9.07 INDEMNIFICATION. The Lenders shall indemnify upon demand the
Agent-Related Persons (to the extent not reimbursed by or on behalf of the
Company and without limiting the obligation of the Company to do so) ratably
from and against any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses and disbursements of any
kind whatsoever which may at any time (including at any time following the
repayment of the Loans) be imposed on, incurred by or asserted against any such
Person in any way relating to or arising out of this Agreement or any document
contemplated by or referred to herein or therein or the transactions
contemplated hereby or thereby or any action taken or omitted by any such Person
under or in connection with any of the foregoing; PROVIDED, HOWEVER, that no
Lender shall be liable for the payment to the Agent-Related Persons of any
portion of such liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements resulting solely from such
Person's gross negligence or willful misconduct. Without limitation of the
foregoing, each Lender shall reimburse the Agent upon demand (to the extent the
Agent is not reimbursed upon demand by the Company, unless the Agent is legally
restricted from making such demand upon the Company, in which case demand need
not be made upon the Company) for its ratable share of any costs or
out-of-pocket expenses (including Attorney Costs) incurred by the Agent in
connection with the preparation, execution, delivery, administration,
modification, amendment or enforcement (whether through negotiations, legal
proceedings or otherwise) of, or legal advice in respect of rights or
responsibilities under, this Agreement, any other Loan Document, or any document
contemplated by or referred to herein to the extent that the Agent is not
reimbursed for such expenses by or on behalf of the Company. Without limiting
the generality of the foregoing, if the IRS or any authority of the United
States or other jurisdiction asserts a claim that the Agent did not properly
withhold tax from amounts paid to or for the account of any Lender (because the
appropriate form was not delivered or was not properly executed, or because such
Lender failed to notify the Agent of a change in
43
circumstances which rendered the exemption from, or reduction of, withholding
tax ineffective, or for any other reason), such Lender shall indemnify the Agent
fully for all amounts paid, directly or indirectly, by the Agent as tax or
otherwise, including penalties and interest, and including any taxes imposed by
any jurisdiction on the amounts payable to the Agent under this Section 9.07,
together with all costs, expenses and attorneys' fees (including allocated costs
for in-house legal services). The obligation of the Lenders in this Section
shall survive the payment of all Obligations.
9.08 AGENT IN INDIVIDUAL CAPACITY. BofA (and any other Lender that
may hereafter serve as Agent) and each of their respective Affiliates may make
loans to, issue letters of credit for the account of, accept deposits from,
acquire equity interests in and generally engage in any kind of banking, trust,
financial advisory or other business with, the Company, the REIT, the Operating
Partnership, 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.
9.09 SUCCESSOR AGENTS. The Agent may resign as Agent upon 30 days'
notice to the Lenders. If an Agent shall resign under this Agreement, the
Requisite Lenders shall appoint from among the Lenders a successor Agent for the
Lenders, which successor Agent shall, if no Default or Event of Default exists
hereunder, be subject to the approval of the Company. If no successor Agent is
appointed prior to the effective date of the resignation of the retiring Agent,
the retiring Agent shall appoint, after consulting with the Lenders and the
Company, a successor Agent. Upon the acceptance of its appointment as successor
Agent hereunder, such successor Agent shall succeed to all the rights, powers
and duties of the retiring Agent, and the term "Agent" shall mean such successor
Agent, and the retiring Agent's rights, powers and duties as Agent shall be
terminated. After any retiring Agent's resignation hereunder as Agent, the
provisions of this Article IX and Sections 10.04 and 10.05 shall inure to its
benefit as to any actions taken or omitted to be taken by it while it was an
Agent under this Agreement.
9.10 COLLATERAL MATTERS.
(a) PERFECTION. The Agent is authorized on behalf of all the
Lenders, without the necessity of any notice to or further consent from the
Lenders, from time to time to take any action with respect to any Collateral or
the Collateral Documents which may be necessary to perfect and maintain
perfected the security interest in and Liens upon the Collateral granted
pursuant to the Collateral Documents.
(b) RELEASE. Upon request by the Agent at any time, the Lenders
will confirm in writing the Agent's authority to release particular types or
items of Collateral pursuant to Section 2.13(e) or any other provision of the
Loan Documents. The Agent shall be completely protected in taking any action
directed by all the Lenders in response to such
44
request and shall incur no liability to the Company or any Lender for failing to
take any action as to which all of the Lenders do not concur.
(c) NO OTHER COLLATERAL. Each Lender agrees with and in favor of
each other (which agreement shall not be for the benefit of the Company, the
REIT, any Subsidiaries, any Common Stockholders or any Affiliates) that the
Company's obligation to such Lender under this Agreement and the other Loan
Documents is not and shall not be secured by any real property collateral now or
hereafter acquired by such Lender other than the Collateral hereunder.
ARTICLE X
MISCELLANEOUS
10.01 AMENDMENTS AND WAIVERS.
(a) GENERALLY. No amendment or waiver of any provision of this
Agreement or any other Loan Document, and no consent with respect to any
departure therefrom, shall be effective unless the same shall be in writing and
signed by the Requisite Lenders, and then such amendment, waiver or consent
shall be effective only in the specific instance and for the specific purpose
for which given.
(b) MATTERS REQUIRING UNANIMOUS CONSENT. Notwithstanding the terms
of Section 10.01(a), no amendment or waiver of any provision of this Agreement
or any other Loan Document, no agreement to forebear from acting upon any
departure by the Company therefrom, and no consent with respect to any departure
by the Company therefrom, shall be effective to do any of the following, unless
the same is in writing and signed by all the Lenders:
(i) increase the Commitment of any Lender;
(ii) postpone or delay any date fixed for any payment of principal,
interest, fees or other amounts due hereunder or under any Loan Document whether
by acceleration or otherwise;
(iii) reduce the principal of, or the rate of interest specified
herein on, any Loan, or any fees or other amounts payable hereunder or under any
Loan Document;
(iv) change the percentage of the Commitments or of the aggregate
unpaid principal amount of the Loans required for the Lenders or any of them to
take any action hereunder;
(v) amend Section 2.15 (Sharing of Payments, Etc.), Section 6.10
(Use of Proceeds), Section 8.02 (Remedies), Section 10.15 (Governing Law and
Jurisdiction) or this Section 10.01;
(vi) release any portion of the Collateral; or
45
(vii) release any guarantor from liability under the REIT Guaranty
Documents.
(c) MATTERS REQUIRING AGENTS' CONSENT. Notwithstanding the terms
of Section 10.01(a), no amendment or waiver of any provision of this Agreement
or any other Loan Document, and no consent with respect to any departure by the
Company 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.
10.02 NOTICES.
(a) DELIVERY. All notices, requests and other communications
provided for hereunder shall be in writing (including, unless the context
expressly otherwise provides, telegraphic, telex, facsimile transmission or
cable communication) and mailed, telegraphed, telexed or delivered, (i) if to
the Company, to its address specified on the signature pages hereof, (ii) if to
any Lender, to its Domestic Lending Office, and (iii) if to Agent, to its
address specified on the signature pages hereof; or, as to the Company or the
Agent, to such other address as shall be designated by such party in a written
notice to the other parties, and as to each other party, at such other address
as shall be designated by such party in a written notice to the Company and the
Agent.
(b) RECEIPT. All such notices and communications shall, when
transmitted by overnight delivery, telegraphed, telecopied by facsimile, telexed
or cabled, be effective when delivered for overnight delivery or to the
telegraph company, transmitted by telecopier, confirmed by telex answerback or
delivered to the cable company, respectively, or if delivered, upon delivery,
except that notices pursuant to Article II or VIII shall not be effective until
actually received by the Agent.
(c) RELIANCE. The Company acknowledges and agrees that any
agreement of the Agent and the Lenders under Article II to receive certain
notices by telephone and facsimile is solely for the convenience and at the
request of the Company. The Agent and the Lenders shall be entitled to rely on
the authority of any Person purporting to be a Person authorized by the Company
to give such notice, and the Agent and the Lenders shall not have any liability
to the Company or any other Person on account of any action taken or not taken
by the Agent and the Lenders in reliance upon such telephonic or facsimile
notice. The obligation of the Company to repay the Loans shall not be affected
in any way or to any extent by any failure by the Agent and the Lenders to
receive written confirmation of any telephonic or facsimile notice or the
receipt by the Agent and the Lenders of a confirmation which is at variance with
the terms understood by the Agent and the Lenders to be contained in the
telephonic or facsimile notice.
10.03 NO WAIVER; CUMULATIVE REMEDIES. No failure to exercise and no
delay in exercising, on the part of any Agent or Lender, any right, remedy,
power or privilege hereunder, shall operate as a waiver thereof; nor shall any
single or partial exercise of any right, remedy, power or privilege hereunder
preclude any other or further exercise thereof or the exercise of any other
right, remedy, power or privilege.
46
10.04 COSTS AND EXPENSES. The Company shall, whether or not the
transactions contemplated hereby shall be consummated:
(a) FACILITY EXPENSES. Pay or reimburse the Agent and each Lender
on demand for all reasonable costs and expenses incurred by it in connection
with the development, preparation, delivery, and execution 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 (including,
without limitation, 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
(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.
10.05 INDEMNITY. The Company shall indemnify and hold harmless the
Agent, each Lender and each of their respective officers, directors, employees,
counsel, agents and attorneys-in-fact (each, an "Indemnified Person") from and
against and pay them for any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, charges, expenses or disbursements
(including Attorney Costs) of any kind or nature whatsoever with respect to the
execution, delivery or enforcement of this Agreement and any other Loan
Documents, or the transactions contemplated hereby and thereby, and with respect
to any investigation, litigation or proceeding related to this Agreement or the
Loans or the use of the proceeds thereof, whether or not any Indemnified Person
is a party thereto (all the foregoing, collectively, the "Indemnified
Liabilities"); PROVIDED, that the Company shall have no obligation hereunder to
any Indemnified Person with respect to Indemnified Liabilities arising from the
gross negligence or willful misconduct of such Indemnified Person. The
agreements in this Section 10.05 shall survive payment of all other Obligations.
10.06 MARSHALLING; PAYMENTS SET ASIDE. Neither the Agent nor any
Lender shall be under any obligation to xxxxxxxx any assets in favor of the
Company or any other Person or against or in payment of any or all of the
Obligations. To the extent that the Company makes a payment or payments to the
Agent or any Lender, or the Agent or any Lender enforces its Liens or exercises
its rights of setoff, and such payment or payments or the proceeds of such
enforcement or setoff or any part thereof are subsequently invalidated, declared
to be fraudulent or preferential, set aside or required to be repaid to a
trustee, receiver or any other party in connection with any Insolvency
Proceeding, or otherwise, then to the extent of such recovery the obligation or
part thereof originally intended to be satisfied shall be revived and continued
in full force and effect as if such payment had not been made or such
enforcement or setoff had not occurred.
10.07 SUCCESSORS AND ASSIGNS. The provisions of this Agreement shall
be binding upon and inure to the benefit of the parties hereto and their
respective successors and
47
assigns, except that the Company may not assign or transfer any of its rights or
obligations under this Agreement without the prior written consent of the Agent
and each Lender, which may be withheld in their sole and absolute discretion.
10.08 ASSIGNMENTS, PARTICIPATIONS, ETC.
(a) ASSIGNMENTS. Subject to the further provisions of this Section
10.08(a), any Lender may, with the written consent of the Agent, which consent
shall not be unreasonably withheld, at any time assign and delegate to one or
more Eligible Assignees (provided that no written consent of the Agent shall be
required in connection with any assignment and delegation by a Lender to a
Lender Affiliate of such Lender) (each an "Assignee") all, or any ratable part
of all, of the Loans, the 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 the Company and the Agent may
continue to deal solely and directly with such Lender in connection with the
interest so assigned to an Assignee until (A) written notice of such assignment,
together with payment instructions, addresses and related information with
respect to the Assignee, shall have been given to the Company and the Agent by
such Lender and the Assignee; (B) such Lender and its Assignee shall have
delivered to the Company and the Agent an Assignment and Acceptance in the form
of EXHIBIT H ("Assignment and Acceptance") together with any Note or Notes
subject to such assignment; (C) such Lender shall have paid to the Agent, for
its own account, an assignment fee in the amount of $1500, if the Assignee is a
Lender (without giving effect to the Assignment), and $3000 in all other cases;
and (D) such Lender shall have delivered to the Agent such documents as may be
required by Section 3.01(f). Any such assignment requiring the approval of the
Agent shall also require the approval of the Company (such approval not to be
unreasonably withheld or delayed), provided that the Company's failure to
approve or disapprove such assignment within five days' after receiving written
notice thereof shall be deemed approval by the Company of such assignment, and
provided further, that no such approval from the Company shall be required
during the continuation of a Default or Event of Default.
(b) RIGHTS OF ASSIGNEE. From and after the date that the Agent
notifies the assignor Lender that the Agent has received an executed Assignment
and Acceptance and payment of the assignment fee specified in Section 10.08(a),
(i) the Assignee thereunder shall, subject to Section 10.08(a), be a party
hereto and, to the extent that rights and obligations hereunder have been
assigned to it pursuant to such Assignment and Acceptance, shall have the rights
and obligations of a Lender under the Loan Documents, and (ii) the assignor
Lender shall, to the extent that rights and obligations hereunder have been
assigned by it pursuant to such Assignment and Acceptance, relinquish its rights
and be released from its obligations under the Loan Documents.
(c) REPLACEMENT NOTES. Within thirty (30) Business Days after its
receipt of notice by the Agent that the Agent has received an executed
Assignment and Acceptance and payment of the processing fee, the Company shall
execute and deliver to the Agent, new Notes evidencing such Assignee's assigned
Loans and Commitment and, if the assignor Lender has retained a portion of its
Loans and its Commitment, replacement Notes in the principal amount of the Loans
retained by the assignor Lender (such Notes to be in exchange
48
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,
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) the Company
and the Agent shall continue to deal solely and directly with the originating
Lender in connection with the originating Lender's rights and obligations under
this Agreement and the other Loan Documents, (iv) no Lender shall transfer or
grant any participating interest under which the Participant shall have rights
to approve any amendment to, or any consent or waiver with respect to, this
Agreement or any other Loan Document, except to the extent such amendment,
consent or waiver would require unanimous consent as described in the FIRST
PROVISO to Section 10.01; and (v) the Company shall have approved the transfer
or grant of any participating interest in any Loans, and Commitment of the
originating Lender to a Participant that has not theretofore previously held a
participating interest therein (such approval not to be unreasonably withheld or
delayed), provided that the Company's failure to approve or disapprove in
writing such Participant within five days' after receiving written notice
thereof shall be deemed approval by the Company of such transfer or grant to
such Participant, and provided further, that no such approval from the Company
shall be required during the continuation of a Default or Event of Default.. In
the case of any such participation, the Participant shall not have any rights
under this Agreement, or any of the other Loan Documents, and all amounts
payable by the Company hereunder shall be determined as if such Lender had not
sold such participation; except that, if amounts outstanding under this
Agreement are due and unpaid, or shall have been declared or shall have become
due and payable upon the occurrence of an Event of Default, each Participant
shall be deemed to have the right of setoff in respect of its participating
interest in amounts owing under this Agreement to the same extent as if the
amount of its participating interest were owing directly to it as a Lender under
this Agreement.
(e) ASSIGNMENTS TO FEDERAL RESERVE BANK. Notwithstanding any other
provision contained in this Agreement or any other Loan Document to the
contrary, any Lender may assign all or any portion of the Loans or Notes held by
it to any Federal Reserve Bank or the United States Treasury as collateral
security pursuant to Regulation A of the Board of Governors of the Federal
Reserve System and any Operating Circular issued by such Federal Reserve Bank,
provided that any payment in respect of such assigned Loans or Notes made by the
Company to or for the account of the assigning and/or pledging Lender in
accordance with the terms of this Agreement shall satisfy the Company's
obligations hereunder in respect of such assigned Loans or Notes to the extent
of such payment. No such assignment shall release the assigning Lender from its
obligations hereunder.
49
10.09 SETOFF. In addition to any rights and remedies of the Lenders
provided by law, if an Event of Default exists, each Lender is authorized at any
time and from time to time, without prior notice to the Company, any such notice
being waived by the Company to the fullest extent permitted by law, to set off
and apply any and all deposits (general or special, time or demand, provisional
or final) at any time held by, and other indebtedness at any time owing to, such
Lender to or for the credit or the account of the Company against any and all
obligations owing to such Lender, now or hereafter existing, irrespective of
whether the Agent or such Lender shall have made demand under this Agreement or
any Loan Document and whether such obligations may be contingent or unmatured.
Each Lender agrees to promptly notify the Company and the Agent after any such
setoff and application made by such Lender; PROVIDED, HOWEVER, that the failure
to give such notice shall not affect the validity of such setoff and
application. The rights of each Lender under this Section 10.09 are in addition
to the other rights and remedies (including other rights of setoff) that such
Lender may have. NOTWITHSTANDING THE FOREGOING, NO LENDER SHALL EXERCISE, OR
ATTEMPT TO EXERCISE, ANY RIGHT OF SETOFF, BANKER'S LIEN, OR THE LIKE, AGAINST
ANY DEPOSIT ACCOUNT OR PROPERTY OF THE COMPANY, HELD OR MAINTAINED BY ANY
LENDER, WITHOUT THE PRIOR WRITTEN CONSENT OF THE REQUISITE LENDERS.
10.10 NOTIFICATION OF ADDRESSES, LENDING OFFICES, ETC. Each Lender
shall notify the Agent in writing of any changes in the address to which notices
to such Lender should be directed, of addresses of its Offshore Lending Office,
of payment instructions in respect of all payments to be made to it hereunder
and of such other administrative information as the Agent shall reasonably
request.
10.11 COUNTERPARTS. This Agreement may be executed by one or more of
the parties to this Agreement in any number of separate counterparts, each of
which, when so executed, shall be deemed an original, and all of said
counterparts taken together shall be deemed to constitute but one and the same
instrument. A set of the copies of this Agreement signed by all the parties
shall be lodged with the Company and the Agent.
10.12 SEVERABILITY. The illegality or unenforceability of any
provision of this Agreement or any instrument or agreement required hereunder
shall not in any way affect or impair the legality or enforceability of the
remaining provisions of this Agreement or any instrument or agreement required
hereunder.
10.13 NO THIRD PARTIES BENEFITED. This Agreement is made and entered
into for the sole protection and legal benefit of the Company, the Agent and the
Lenders, and their permitted successors and assigns, and no other Person shall
be a direct or indirect legal beneficiary of, or have any direct or indirect
cause of action or claim in connection with, this Agreement or any of the other
Loan Documents. No Agent or Lender shall have any obligation to any Person not
a party to this Agreement or the other Loan Documents.
10.14 TIME. Time is of the essence of each term and provision of
this Agreement and each of the other Loan Documents.
10.15 GOVERNING LAW. THIS AGREEMENT AND THE NOTES AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE
50
GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE
INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING WITHOUT LIMITATION SECTION
5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK), WITHOUT REGARD
TO CONFLICTS OF LAWS PRINCIPLES.
10.16 WAIVER OF JURY TRIAL. THE COMPANY, THE AGENT, AND THE LENDERS
EACH WAIVE THEIR RESPECTIVE RIGHTS TO A TRIAL BY JURY OF ANY CLAIM OR CAUSE OF
ACTION BASED UPON OR ARISING OUT OF OR RELATED TO THIS AGREEMENT, THE OTHER LOAN
DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY, IN ANY ACTION,
PROCEEDING OR OTHER LITIGATION OF ANY TYPE BROUGHT BY ANY OF THE PARTIES AGAINST
ANY OTHER PARTY OR PARTIES, WHETHER WITH RESPECT TO CONTRACT CLAIMS, TORT
CLAIMS, OR OTHERWISE. SUBJECT TO SECTION 10.17 BELOW, THE COMPANY, THE AGENT,
AND THE LENDERS EACH AGREE THAT ANY SUCH CLAIM OR CAUSE OF ACTION SHALL BE TRIED
BY A COURT TRIAL WITHOUT A JURY. WITHOUT LIMITING THE FOREGOING, THE PARTIES
FURTHER AGREE THAT THEIR RESPECTIVE RIGHT TO A TRIAL BY JURY IS WAIVED BY
OPERATION OF THIS SECTION AS TO ANY ACTION, COUNTERCLAIM OR OTHER PROCEEDING
WHICH SEEKS, IN WHOLE OR IN PART, TO CHALLENGE THE VALIDITY OR ENFORCEABILITY OF
THIS AGREEMENT OR THE OTHER LOAN DOCUMENTS OR ANY PROVISION HEREOF OR THEREOF.
THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT 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 New York, New York, 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 jurisdic-
51
tion before, after, or during the pendency of any arbitration or other
proceeding. The exercise of a remedy does not waive the right of either party
to resort to arbitration.
10.18 NOTICE OF CLAIMS; CLAIMS BAR. THE COMPANY HEREBY AGREES THAT
IT SHALL GIVE PROMPT WRITTEN NOTICE TO THE AGENT OF ANY CLAIM OR CAUSE OF ACTION
IT BELIEVES IT HAS, OR MAY SEEK TO ASSERT OR ALLEGE AGAINST THE AGENT OR ANY
LENDER, WHETHER SUCH CLAIM IS BASED IN LAW OR EQUITY, ARISING UNDER OR RELATED
TO THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS, OR TO THE LOANS (OR THE
COLLATERAL THEREFOR), OR ANY ACT OR OMISSION TO ACT BY THE AGENT OR ANY LENDER
WITH RESPECT HERETO OR THERETO, AND THAT IF THE COMPANY SHALL FAIL TO GIVE SUCH
PROMPT NOTICE TO THE AGENT WITH REGARD TO ANY SUCH CLAIM OR CAUSE OF ACTION, THE
COMPANY SHALL BE DEEMED TO HAVE WAIVED, AND SHALL BE FOREVER BARRED FROM
BRINGING OR ASSERTING, SUCH CLAIM OR CAUSE OF ACTION IN ANY ARBITRATION OR ANY
SUIT, ACTION OR PROCEEDING IN ANY COURT OR BEFORE ANY GOVERNMENTAL AGENCY.
10.19 ENTIRE AGREEMENT. This Agreement, together with the other Loan
Documents, embodies the entire agreement and understanding between the Company,
the Agent and the Lenders. Accordingly, this Agreement, together with the other
Loan Documents, supersedes all prior or contemporaneous agreements and
understandings of such Persons, verbal or written, relating to the subject
matter hereof and thereof, except for any prior arrangements made with respect
to the payment by the Company of (or any indemnification for) any fees, costs,
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 the Company and other parties, and is the
product of all parties hereto. Accordingly, this Agreement and the other Loan
Documents shall not be construed against the Lenders or the Agent merely because
of the Agent's or Lender's involvement in the preparation of such documents and
agreements.
10.21 RELATIONSHIP. Nothing herein contained shall in any manner be
construed as creating any relationship between the Agent and the Lenders, on the
one hand, and the Company, on the other hand, other than as creditor and debtor.
The Company agrees to indemnify, protect, defend and hold the Agent and each
Lender harmless from and against any and all losses, liabilities, damages, and
costs and expenses (including, but not limited to, reasonable attorneys' fees
and disbursements, including reasonably allocated costs of in-house counsel)
resulting from any other construction of the parties' relationship.
10.22. CONSENT TO JURISDICTION AND SERVICE OF PROCESS. ALL JUDICIAL
PROCEEDINGS BROUGHT AGAINST COMPANY ARISING OUT OF OR RELATING TO THIS AGREEMENT
MAY BE BROUGHT IN ANY STATE OR FEDERAL COURT OF COMPETENT JURISDICTION IN THE
STATE OF NEW YORK, AND BY EXECUTION AND DELIVERY OF THIS AGREEMENT COMPANY
ACCEPTS
52
FOR ITSELF AND IN CONNECTION WITH ITS PROPERTIES, GENERALLY AND UNCONDITIONALLY,
THE NONEXCLUSIVE JURISDICTION OF THE AFORESAID COURTS AND WAIVES ANY DEFENSE OF
FORUM NON CONVENIENS AND IRREVOCABLY AGREES TO BE BOUND BY ANY JUDGMENT RENDERED
THEREBY IN CONNECTION WITH THIS AGREEMENT. Company hereby 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 provided in Section 10.04, such service being hereby acknowledged by
Company to be sufficient for personal jurisdiction in any action against Company
in any such court and to be otherwise effective and binding service in every
respect. Nothing herein shall affect the right to serve process in any other
manner permitted by law or shall limit the right of the Agent or any Lender to
bring proceedings against Company in the courts of any other jurisdiction.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered as of the day and year first written above.
COMPANY
AIMCO/NHP HOLDINGS, INC.,
a Delaware corporation
By:
Xxxxx X. Xxxxxxxxx
Vice President
Notices to be sent to:
c/o AIMCO PROPERTIES, L.P.
0000 Xxxxx Xxxxxxxx Xxxxxx
00xx Xxxxx
Xxxxxx, Xxxxxxxx 00000
Attention: Xxxxx X. Xxxxxxxxx,
Vice Chairman
Facsimile: (000) 000-0000
53
AGENT
BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION,
as Agent
By:
Name:
Title:
Notices to be sent to:
Bank of America National Trust and Savings Association CRESG #1357
000 Xxxxx Xxxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxxxxx, XX 00000
Att'n: X. Xxxxxx
Telephone: 213/000-0000
Facsimile: 213/228-5389
Payments to be made to:
BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION
000 X. Xxxxxxx Xxx.
Loan Accounting Xxxx #0000
Xxx Xxxxxxx, XX 00000
ABA #: 121 000 358
Credit Account #: 15031-00407
Attention: Xxxxx Xxxx
Ref: AIMCO/NHP Holdings, Inc.
00
X XX X
XXXX XX XXXXXXX NATIONAL TRUST AND SAVINGS ASSOCIATION,
as a Lender
By:
Name:
Title:
Notices to be sent to:
Bank of America National Trust and Savings Association CRESG #1357
000 Xxxxx Xxxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxxxxx, XX 00000
Att'n: X. Xxxxxx
Telephone: 213/000-0000
Facsimile: 213/228-5389
Payments to be made to:
BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION
000 X. Xxxxxxx Xxx.
Loan Accounting Xxxx #0000
Xxx Xxxxxxx, XX 00000
ABA #: 121 000 358
Credit Account #: 15031-00407
Attention: Xxxxx Xxxx
Ref: AIMCO/NHP Holdings, Inc.
55
XXXXX XXXXXX MORTGAGE CAPITAL GROUP, INC.,
a Delaware corporation,
as a Lender
By:
Name:
Title:
Notices to be sent to:
Xxxxx Xxxxxx Mortgage Capital Group, Inc.
000 Xxxxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx Xxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Payments to be made to:
Chase Manhattan Bank
ABA No.: 000-000-000
Ref.: AIMCO Funding
Attention: Xxxxxx Xxxxxxxxxx
56
SCHEDULES
Schedule 2.01 Commitments of the Lenders
EXHIBITS
EXHIBIT A Borrowing Notice
EXHIBIT B Note
EXHIBIT C Notice of Conversion/Continuation
EXHIBIT D Guaranty
EXHIBIT E Stock Pledge Agreement
Exhibit F Opinion Requirements
EXHIBIT G Compliance Certificate
EXHIBIT H Assignment and Acceptance
57
Schedule 2.01
Commitments of the Lenders
--------------------------------------------------------------------------------
Commitment
Bank of America National Trust and Savings Association $38,000,000
Xxxxx Xxxxxx Mortgage Capital Group, Inc. $38,000,000
--------------------
Total Commitments $76,000,000
63
EXHIBIT A
TO ACQUISITION SUB CREDIT AGREEMENT
BORROWING NOTICE
, 1997
Bank of America National Trust
and Savings Association, as Agent
CRESG #1357
000 Xxxxx Xxxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attn: Unit Manager
Re: Credit Agreement (Acquisition Sub Facility) dated as of May 5, 1997 (as the
same may be amended, modified or supplemented from time to time, the
"Agreement"), among AIMCO/NHP Holdings, Inc., a Delaware corporation (the
"Company"), the lenders from time to time party to the Agreement (the
"Lenders"), BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION, as one
of the Lenders, XXXXX XXXXXX MORTGAGE CAPITAL GROUP, INC., as one of the
Lenders, and BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION, as
Agent (the "Agent") for the Lenders
Ladies and Gentlemen:
Reference is made to the Agreement. Capitalized terms used in this
Borrowing Notice without definition have the meanings specified in the
Agreement.
Pursuant to Section 2.03 of the Agreement, notice is hereby given that the
Company desires that the Lenders make the loan described in attached SCHEDULE 1
(the "Loan"). In connection therewith, the Company and the undersigned
Responsible Officers of the Company hereby certify that:
(1) REPRESENTATIONS AND WARRANTIES. All representations and
warranties of the Company contained in the Loan Documents, including those
contained in Article V of the Agreement, are true and correct as of the date
hereof and shall be true and correct in all material respects on the date of the
Loan, both before and after giving effect to the Loan;
(2) NO DEFAULT/EVENT OF DEFAULT. No Default or Event of Default
exists as of the date hereof or will result from the making of the Loan;
1
(3) USE OF PROCEEDS. The proceeds of the Loan will be used only as
permitted under Sections 2.01(b), 6.10 and 7.12 of the Agreement;
(4) MAXIMUM DISBURSEMENT AMOUNT. The amount of the requested Loan
does not exceed the Maximum Disbursement Amount for the NHP Stock to be acquired
in part with the proceeds of the requested Loan; and
(5) NO MATERIAL ADVERSE EFFECT. No act, omission, change or event
which has a Material Adverse Effect has occurred since the Closing Date.
AIMCO/NHP Holdings, Inc.,
a Delaware corporation
By:
Name:
Its:
2
SCHEDULE 1
to Borrowing Notice
REQUESTED LOAN
AMOUNT OF REQUESTED LOAN: $
(must be $1,000,000 a multiple of
$100,000 in excess thereof)
DESIGNATION OF INTEREST RATE:
(Portion of requested Loan to be funded as Base Rate Loan and/or LIBOR Loan):
(1) BASE RATE LOAN. The following Base Rate Loan:
Amount: $
Requested Borrowing Date:
(must be a Business Day at least two (2) Business Day after date of
notice)
(2) LIBOR LOAN. The following LIBOR Loan:
(there must not, after giving effect to the requested Loan, be more
than five (5) different LIBOR Loans in effect)
Amount: $
Requested Borrowing Date:
(must be a Business Day at least three (3) Business Days after date of
notice)
Interest Period:
(1,2,3, or 6 months)
3
EXHIBIT B
TO ACQUISITION SUB CREDIT AGREEMENT
FORM OF PROMISSORY NOTE
May ___, 1997
$[3] [2]
FOR VALUE RECEIVED, AIMCO/NHP Holdings, Inc., a Delaware corporation (the
"Company"), promises to pay to the order of [4] ("Lender") the principal amount
of [5] ($ [3] ) or, if less, the aggregate amount of Loans (as
such term and all other capitalized terms used but not defined herein are
defined in the Credit Agreement referred to below) made by the Lender to the
Company pursuant to the Credit Agreement referred to below, outstanding on the
Maturity Date.
The Company also promises to make principal payments and interest on the
unpaid principal amount hereof from the date hereof until paid at the rates and
at the times which shall be determined in accordance with the provisions of the
Credit Agreement.
All payments of principal and interest in respect of this Note shall be
made in lawful money of the United States of America in same day funds at the
Payment Office. Until notified of the transfer of this Note, the Company shall
be entitled to deem the Lender or such person who has been so identified by the
transferor in writing to the Company as the holder of this Note, as the owner
and holder of this Note. The Lender and any subsequent holder of this Note
agrees that before disposing of this Note, or any part hereof, it will make a
notation hereon of all principal payments previously made hereunder of the date
to which interest hereon has been paid on the schedule attached hereto, if any;
PROVIDED, HOWEVER, that the failure to make notation of any payment made on this
Note shall not limit or otherwise affect the obligation of the Company hereunder
with respect to payments of principal or interest on this Note.
This Note is referred to in, and is entitled to the benefits of, the Credit
Agreement dated as of May 5, 1997 (the "CREDIT AGREEMENT") among the Company,
the lenders from time to time party thereto, and Bank of America National Trust
and Savings Association, as Agent (the "Agent"). The Credit Agreement, among
other things, (i) provides for the making of loans (the "LOANS") by the Lender
to the Company from time to time in an aggregate amount first above mentioned,
the indebtedness of the Company resulting from each such Loan being evidenced by
this Note, and (ii) contains provisions for acceleration of the maturity hereof
upon the happening of certain stated events and also for mandatory and optional
prepayments on account of principal hereof and certain principal payments prior
to the maturity hereof upon the terms and conditions therein specified.
1
The terms of this Note are subject to amendment only in the manner provided
in the Credit Agreement.
No reference herein to the Credit Agreement and no provision of this Note
or the Credit Agreement shall alter or impair the obligation of the Company,
which is absolute and unconditional, to pay the principal of and interest on
this Note at the place, at the respective times, and in the currency herein
prescribed.
The Company promises to pay all costs and expenses, including reasonable
attorneys' fees, incurred in the collection and enforcement of this Note. The
Company hereby waives diligence, presentment, and protest, and except as
provided in the Credit Agreement, demand and notice of every kind and, to the
full extent permitted by law, the right to plead any statute of limitations as a
defense to any demand hereunder.
This Note shall be governed by, and construed in accordance with, the laws
of the state of New York without giving effect to its choice of law doctrine.
IN WITNESS WHEREOF, the Company has caused this Note to be executed and
delivered by its duly authorized officer, as of the date and place first above
written.
AIMCO/NHP Holdings, Inc.,
a Delaware corporation
By:
Name:
Its:
2
EXHIBIT C
TO ACQUISITION SUB CREDIT AGREEMENT
NOTICE OF CONVERSION/CONTINUATION
__________________, 199___
Bank of America National Trust
and Savings Association, as Agent
CRESD #1357
000 Xxxxx Xxxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attn: Unit Manager
Re: Credit Agreement dated as of May 5, 1997(as the same may be amended,
modified or supplemented from time to time, the "Agreement"), by and among
AIMCO/NHP Holdings, Inc., a Delaware corporation (the "Company"), the
lenders from time to time party to the Agreement (the "Lenders"), BANK OF
AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION, as one of the Lenders,
XXXXX XXXXXX MORTGAGE CAPITAL GROUP, INC., as one of the Lenders, and BANK
OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION, as Agent (the "Agent")
Ladies and Gentlemen:
Reference is made to the Agreement. Capitalized terms used in this
Notice of Conversion/Continuation without definition have the meanings specified
in the Agreement.
Pursuant to Section 2.04 of the Agreement, the Company hereby elects
to convert or continue the loans described in attached SCHEDULE 1 (the "Loans").
In connection therewith, the Company and the undersigned Responsible Officers of
the Company hereby certify that:
(1) REPRESENTATIONS AND WARRANTIES. All representations and
warranties of the Company contained in the Loan Documents, including those
contained in Article V of the Agreement, are true and correct as of the date
hereof and shall be true and correct in all material respects on the date of the
continuation/conversion of the Loan, both before and after giving effect to such
continuation/conversion;
(2) NO DEFAULT/EVENT OF DEFAULT. No Default or Event of Default
exists as of the date hereof or will result from the continuation/conversion of
the Loan; and
1
(3) NO MATERIAL ADVERSE EFFECT. No act, omission, change or
event which has a Material Adverse Effect has occurred since the Closing Date.
AIMCO/NHP Holdings, Inc.,
a Delaware corporation
By:
Name:
Its:
By:
Name:
Its:
2
SCHEDULE 1
to Notice of Conversion/Continuation
LOAN TO BE CONVERTED OR CONTINUED
A. All conversions and continuations must be of a Loan, or portion thereof, in
a principal amount of $1,000,000 or a multiple of $100,000 in excess
thereof.
B. Conversions/continuations to a LIBOR Loan under paragraphs (1) and (2)
below are not permitted if, after giving effect to thereto, (a) there would
be more than five (5) different LIBOR Loans in effect, or (b) the aggregate
outstanding principal amount of all LIBOR Loans would be reduced to be less
than $1,000,000.
(1) CONVERSION OF A BASE RATE LOAN INTO A LIBOR LOAN.
The following Base Rate Loan to a LIBOR Loan:
Amount: $
Requested Conversion Date:
(must be a Business Day at
least three
(3) Business Days after date
of notice)
Requested Interest Period:
(1, 2 or 3months)
(2) CONTINUATION OF A LIBOR LOAN INTO A SUBSEQUENT INTEREST PERIOD.
The following LIBOR Loan into a subsequent
Interest Period:
Amount: $
Last day of current Interest Period:
(must be a Business Day at
least three
(3) Business Days after date
of notice)
Requested Interest Period:
(1, 2 or 3 months)
3
EXHIBIT D
PAYMENT GUARANTY
(ACQUISITION SUB FACILITY)
This Payment Guaranty ("Guaranty") is made as of May 5, 1997, by
APARTMENT INVESTMENT AND MANAGEMENT COMPANY, a Maryland corporation (the
"REIT"), and AIMCO PROPERTIES, L.P., a Delaware limited partnership (the
"Operating Partnership") (each of the REIT and the Operating Partnership is
referred to herein individually and collectively as "Guarantor") in favor of
BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION ("BofA"), as the agent
(in such capacity, the "Agent") for itself and the lenders ("Lenders") from time
to time party to the Acquisition Sub Credit Agreement (as hereinafter defined).
FACTUAL BACKGROUND
Guarantor is executing this Guaranty to induce the Lenders to make a
$76,000,000 loan facility available to AIMCO/NHP Holdings, Inc., a Delaware
corporation ("Acquisition Sub") in accordance with the Credit Agreement
(Acquisition Sub Facility) (the "Acquisition Sub Credit Agreement"), dated of
even date herewith, by and among Acquisition Sub, BofA, as Agent and as a
Lender, Xxxxx Xxxxxx Mortgage Capital Group, Inc., as a Lender, and the other
Lenders from time to time party thereto. Capitalized terms used but not defined
herein shall have the meanings set forth in the Acquisition Sub Credit Agreement
or, if not defined therein, in the Operating Partnership Credit Agreement.
NOW THEREFORE, for good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, each Guarantor hereby agrees as
follows:
ARTICLE I
DEFINITIONS
1.01 DEFINED TERMS. As used herein, the following terms shall have
the meanings set forth below:
"AIMCO GROSS ASSET VALUE" means, as of any date, the total asset value
of the REIT, as determined in good faith by the Board of Directors of AIMCO in
accordance with Treasury Regulation Section 1.856-2(d)(3) and Code Section 856.
"BofA" means Bank of America National Trust and Savings Association,
other than in its capacity as the Agent under the Acquisition Sub Credit
Agreement.
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"COLLATERAL DOCUMENTS" means, collectively, (a) the Stock Pledge
Agreement and other similar agreements between any Guarantor or Common
Stockholder and the Lenders or the Agent for the benefit of the Lenders now or
hereafter delivered to the Lenders or the Agent pursuant to or in connection
with the transactions contemplated hereby, (b) all financing statements (or
comparable documents) now or hereafter filed in accordance with the UCC (or
comparable law) against any Guarantor or Common Stockholder as debtor in favor
of the Lenders or the Agent for the benefit of the Lenders as secured party, (c)
any other documents executed by any Guarantor or Common Stockholder at the
request of Agent and upon the recommendation of Agent's counsel or local counsel
in order to establish, perfect or protect any of the liens or security interests
granted in the Stock Pledge Agreement, and (d) any amendments, supplements,
modifications, renewals, replacements, consolidations, substitutions and
extensions of any of the foregoing.
"COMMON STOCKHOLDERS" means Xxxxx Xxxxxxxxx and Xxxxx X. Xxxxxxxxx.
"CREDIT AGREEMENT EVENT OF DEFAULT" means an "Event of Default" as
defined in the Acquisition Sub Credit Agreement.
"EXCLUDED PROCEEDS" shall mean the sum of (i) all Net Issuance
Proceeds or Net Sale Proceeds received by the Operating Partnership or the REIT
prior to the Closing Date, (ii) all Net Issuance Proceeds to be received by the
REIT from those certain Stock offerings expected to be consummated by the REIT
on May 5, 1997, for 1,900,000 shares of Stock and on May 6, 1997, for 400,000
shares of Stock; and (iii) all loan proceeds disbursed under the Acquisition Sub
Credit Agreement, the Operating Partnership Credit Agreement or the Bridge Loan
Agreement.
"GUARANTOR DEFAULT" means any event or circumstance which, with the
giving of notice, the lapse of time, or both, would (if not cured or otherwise
remedied) constitute a Guarantor Event of Default.
"GUARANTOR EVENT OF DEFAULT" means any of the events or circumstances
specified in Section 8.01.
"GUARANTIED INDEBTEDNESS" means all Loans, and other Indebtedness,
advances, debts, liabilities, obligations, covenants and duties owed by the
Acquisition Sub to the Agent, any Lender, or any other Person required to be
indemnified under the Acquisition Sub Credit Agreement or any other Loan
Document, of any kind or nature, present or future, whether or not evidenced by
any note, guaranty or other instrument, 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 primary, secondary, direct or
indirect (including those acquired by assignment), absolute, fixed or
contingent, due or to become due, now existing or hereafter arising and however
acquired, and including without limitation, all obligations of the Acquisition
Sub to pay principal, interest, prepayment charges, breakage costs, late
charges,
2
loan fees, and any other charges, fees and other sums, costs and expenses which
may due from time to time thereunder.
"NET SALE PROCEEDS" means, in respect of any Disposition of any
Property by the Operating Partnership, the REIT or any of their respective
Subsidiaries, the proceeds in cash or Cash Equivalents received by the Operating
Partnership, the REIT or any of their respective Subsidiaries upon or
substantially simultaneously with such Disposition, net of the direct costs of
such Disposition then payable by the recipient of such proceeds (excluding
amounts payable to the Operating Partnership, the REIT or any Affiliate of the
Operating Partnership or the REIT).
"OPERATING PARTNERSHIP CREDIT AGREEMENT" means that certain Amended
and Restated Credit Agreement (Secured Revolver-to-Term Facility) dated as of
May 5, 1997, by and among the Operating Partnership, BofA as the agent and a
lender and the other lenders named therein, as the same may be amended from time
to time. Notwithstanding the foregoing, for purposes of any incorporation
herein of any defined terms or any other provisions therein, such terms and
provisions shall be incorporated herein as such terms and provisions are set
forth in and in effect under said agreement on the date hereof, and as the same
may be amended from time to time with the consent of the Requisite Lenders
hereunder (or, if such provision would require the consent of a greater
percentage of the Lenders hereunder, then such greater percentage). Except as
otherwise provided herein, if any provision of the Operating Partnership Credit
Agreement is incorporated herein by reference, such provision shall be, subject
to the foregoing, as if fully set forth herein, but with all references therein
to the "Agent", any "Lender", the "Lenders" and the "Requisite Lenders" having
the meanings of those terms as set forth in this Guaranty.
"ORGANIZATIONAL CHART" means the organizational chart attached as
SCHEDULE 5.06 of the Operating Partnership Credit Agreement showing the REIT,
the Operating Partnership, all of their Subsidiaries and their interests in the
Acquisition Sub, the Management Entities and the Unconsolidated Partnerships, as
the same may be modified pursuant hereto.
"SBI" means Xxxxx Xxxxxx Mortgage Capital Group, Inc.
1.02 OTHER DEFINITIONAL PROVISIONS.
(a) DEFINED TERMS. Unless otherwise specified herein or
therein, all terms defined in this Guaranty 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 Guaranty shall refer to this
Guaranty as a whole and not to any particular provision of this Guaranty; and
section, schedule and exhibit references are to this Guaranty unless otherwise
specified.
3
(c) CERTAIN COMMON TERMS.
(i) The term "documents" includes any and all instruments,
documents, agreements, certificates, indentures, notices and other writings,
however evidenced.
(ii) The term "including" is not limiting and means
"including without limitation."
(iii) The term "ratably" means, at any time that Loans may be
outstanding, in accordance with the amount of the outstanding Loans of the
respective Lenders; and, at any time that no Loans are outstanding, in
accordance with the outstanding Commitments of the respective Lenders.
(d) PERFORMANCE; TIME. Whenever any performance obligation
hereunder (other than a payment obligation) is stated to be due or required to
be satisfied on a day other than a Business Day, such performance shall be made
or satisfied on the next succeeding Business Day. In the computation of periods
of time from a specified date to a later specified date, the word "from" means
"from and including"; the words "to" and "until" each mean "to but excluding,"
and the word "through" means "to and including". If any provision of this
Guaranty 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 Guaranty are for
convenience of reference only and shall not affect the construction of this
Guaranty.
(h) INDEPENDENCE OF PROVISIONS. The parties acknowledge that this
Guaranty 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 Guaranty.
4
1.03 ACCOUNTING PRINCIPLES.
(a) GAAP. Unless the context otherwise clearly requires, all
accounting terms not expressly defined herein shall be construed, and all
financial computations required under this Guaranty shall be made, in accordance
with GAAP, consistently applied.
(b) FISCAL YEAR; QUARTER. References herein to "fiscal year"
and "fiscal quarter" refer to such fiscal periods of the Operating Partnership.
ARTICLE II
GUARANTY PROVISIONS
2.01. GUARANTY OF LOAN.
(a) Guarantor absolutely, unconditionally and irrevocably
guaranties to Agent and the Lenders the full payment and performance of the
Guarantied Indebtedness and unconditionally agrees to pay to Agent and the
Lenders the full amount of the Guarantied Indebtedness in accordance with this
Guaranty. This is a guaranty of payment, not of collection.
(b) If Acquisition Sub (i) fails to pay the Guarantied
Indebtedness in full on the Scheduled Maturity Date thereof; (ii) fails to pay
the Guarantied Indebtedness in full within ten (10) Business Days after
acceleration of maturity thereof and demand for payment thereof by Agent to
Acquisition Sub, other than as described in clause (iii) below, or (iii) fails
to pay the Guarantied Indebtedness in full immediately upon acceleration of
maturity thereof as a result of any Credit Agreement Event of Default described
in Section 8.01(f) or 8.01(g) of the Acquisition Sub Credit Agreement (but only
in the case of the occurrence of any of the events described therein with
respect to the Acquisition Sub, the Operating Partnership or the REIT),
Guarantor shall, in lawful money of the United States, pay to Agent and the
Lenders, on demand, all sums due and owing on the Guarantied Indebtedness. If
the amount outstanding under the Guarantied Indebtedness is determined by a
court of competent jurisdiction or in any arbitration proceeding described in
Section 10.17 of the Acquisition Sub Credit Agreement, that determination shall
be conclusive and binding on Guarantor, regardless of whether Guarantor was a
party to the proceeding in which the determination was made or not.
2.02 REVIVAL AND REINSTATEMENT. If Agent or any Lender is required to
pay, return or restore to Acquisition Sub or any other person any amounts
previously paid on the Guarantied Indebtedness because of any Insolvency
Proceeding of Acquisition Sub or any other reason, the obligations of Guarantor
shall be reinstated and revived and the rights of Agent and such Lender shall
continue with regard to such amounts, all as though they had never been paid.
5
2.03 ADDITIONAL AND INDEPENDENT OBLIGATIONS. Guarantor's obligations under
this Guaranty are in addition to its obligations under any future guaranties,
each of which shall remain in full force and effect until it is expressly
modified or released in a writing signed by Agent and consented to by the
Lenders. Guarantor's obligations under this Guaranty are independent of those
of Acquisition Sub on the Guarantied Indebtedness. Except as provided in
Section 2.01(b)(i), Agent or the Lenders may bring a separate action, or
commence a separate arbitration proceeding, against Guarantor without first
proceeding against Acquisition Sub, any other Guarantor or person or any
security that Agent or any Lender may hold, and without pursuing any other
remedy. None of Agent's or any Lender's rights under this Guaranty shall be
exhausted by any action by Agent or any Lender until the Guarantied Indebtedness
has been paid and performed in full in cash.
2.04 OBLIGATIONS IN RESPECT OF RESTRICTED CASH.
(a) If at any time (i) the REIT or the Operating Partnership shall
make any public or private issuance of Stock (or partnership units) for cash or
Cash Equivalents (other than for Excluded Proceeds) or (ii) incur Indebtedness
for borrowed money (other than for Excluded Proceeds) or (iii) the REIT, the
Operating Partnership or any Subsidiary (other than the Acquisition Sub) shall
make any Disposition of any Property for cash or Cash Equivalents (other than
for Excluded Proceeds), the REIT shall (A) notify the Agent of such issuance,
incurrence or Disposition (including the amount of the estimated Net Issuance
Proceeds or Net Sale Proceeds thereof) and (B) immediately upon the receipt by
the Operating Partnership or the REIT of such Net Issuance Proceeds or receipt
by the Operating Partnership, the REIT or such Subsidiary of such Net Sale
Proceeds, the REIT shall cause such Net Issuance Proceeds and Net Sale Proceeds,
to be contributed to the Operating Subsidiary, and the Operating Partnership
shall deposit, as collateral for the obligations of all Guarantors under this
Guarantor, such Net Issuance Proceeds and Net Sale Proceeds, whether received by
it directly or by contribution from the REIT, (together with all interest and
earnings thereon, "Restricted Cash"), into an interest bearing deposit account
(the "Restricted Cash Account") established with and pledged to the Agent for
the ratable benefit of the Lenders pursuant to documentation in form and
substance satisfactory to the Agent and the Requisite Lenders, until the balance
in the Restricted Cash Account shall equal the outstanding amount of the
Guarantied Indebtedness together with all interest accrued but unpaid thereon
and all interest reasonably projected by the Agent to accrue thereon through the
Maturity Date of the Guarantied Indebtedness, whereupon no further such deposits
shall be required to be so made.
(b) The Operating Partnership hereby grants a perfected first
priority security interest in favor of the Agent for the ratable benefit of the
Lenders in all Restricted Cash and in the Restricted Cash Account and all sums
at any time held, deposited or invested therein, together with any interest or
other earnings thereon, and all proceeds thereof, whether accounts, general
intangibles, chattel paper, deposit accounts, instruments, documents or
securities, together with all rights of a secured party with respect thereto
(even if no further documentation is requested by the Agent or the Requisite
Lenders or executed by the Operating Partnership with respect thereto). The
Operating Partnership shall
6
execute such additional documents as the Agent or the Requisite Lenders in their
discretion may require and shall provide all other documents requested by the
Agent or the Requisite Lenders to evidence or perfect the Agent's first priority
security interest in such Restricted Cash Account and to grant to the Agent
dominion and control over the Restricted Cash Account. The Restricted Cash
Account shall be held in the name of the Operating Partnership as debtor, with
the Agent as secured party for the ratable benefit of the Lenders.
(c) All interest earned on the Restricted Cash Account shall be
retained in the Restricted Cash Account subject to the Operating Partnership's
withdrawal rights set forth herein. The Operating Partnership shall treat all
interest earned on the Restricted Cash Account as its income for federal and
state income tax purposes.
(d) Until the Guarantied Indebtedness shall have been paid in full,
no Restricted Cash shall be withdrawn from the Restricted Cash Account by the
Operating Partnership except for purposes of contributing capital to the
Acquisition Sub in amounts necessary to satisfy the prepayment obligations of
the Acquisition Sub under Section 2.06 of the Acquisition Sub Credit Agreement,
and provided that the amounts so contributed are actually used for such
purposes.
(e) Upon the occurrence and during the continuation of a Guarantor
Event of Default, and provided that Agent shall have given to the Acquisition
Sub, pursuant to and to the extent required by Section 2.01(b) of this Guaranty,
the 10 Business Days notice referred to therein, the Agent may (and, upon the
instruction of the Requisite Lenders, shall):
(i) without any advertisement or notice to or authorization from
the Operating Partnership or any other Person (all of which advertisements,
notices and/or authorizations are hereby expressly waived), withdraw, sell or
otherwise liquidate all Restricted Cash and apply the proceeds thereof to the
unpaid obligations of all Guarantors under this Guaranty in such order as the
Requisite Lenders may elect in their sole discretion, without liability for any
loss (including as a result of any sale or liquidation of any account including
such Restricted Cash before maturity) and the Operating Partnership and the REIT
hereby consents to any such withdrawal and application as a commercially
reasonable disposition of such Restricted Cash and agrees that such withdrawal
shall not result in satisfaction of the obligations of all Guarantors under this
Guaranty except to the extent the amounts are applied to such sums;
(ii) without any advertisement or notice to or authorization from
the REIT (all of which advertisements, notices and/or authorizations are hereby
expressly waived), notify any account debtor on any such Restricted Cash to make
payment directly to the Agent;
(iii) foreclose upon all or any portion of such Restricted Cash or
otherwise enforce the Agent's security interest in any manner permitted by law
or provided for in this Agreement;
7
(iv) sell or otherwise dispose of all or any portion of such
Restricted Cash at one or more public or private sales, whether or not such
Restricted Cash is present at the place of sale, for cash or credit or future
delivery, on such terms and in such manner as the Requisite Lenders may
determine;
(v) recover from the Operating Partnership all costs and
expenses, including, without limitation, reasonable attorneys' fees, incurred or
paid by the Agent in exercising any right, power or remedy provided by this
section or by law; and
(vi) exercise any other right or remedy available to the Agent or
the Lenders under applicable law or in equity.
ARTICLE III
FURTHER PROVISIONS IN RESPECT OF THE GUARANTY
3.01 RIGHTS OF AGENT AND THE LENDERS. Guarantor authorizes Agent or
any Lender to perform any or all of the following acts at any time in its sole
discretion, all without notice to Guarantor and without affecting Guarantor's
obligations under this Guaranty:
(a) Agent or the Requisite Lenders may alter any terms of the
Guarantied Indebtedness or any part of it, including renewing, compromising,
extending or accelerating, or otherwise changing the time for payment of, or
increasing or decreasing the rate of interest on, the Guarantied Indebtedness or
any part of it.
(b) Agent or any Lender may take and hold security for the Guarantied
Indebtedness or this Guaranty, accept additional or substituted security for
either, and subordinate, exchange, enforce, waive, release, compromise, fail to
perfect and sell or otherwise dispose of any such security.
(c) Upon any Credit Agreement Event of Default or Guarantor Event of
Default, Agent or any Lender may direct the order and manner of any sale of all
or any part of any security now or later to be held for the Guarantied
Indebtedness or this Guaranty, respectively, and Agent or any Lender may also
bid at any such sale.
(d) Agent or any Lender may apply any payments or recoveries from
Acquisition Sub, Guarantor or any other source, and any proceeds of any
security, to Acquisition Sub's obligations under the Loan Documents in such
manner, order and priority as Agent or such Lender may elect, whether or not
those obligations are guarantied by this Guaranty or secured at the time of the
application.
(e) Agent or any Lender may substitute, add or release any one or
more Guarantors, other guarantors or endorsers.
(f) In addition to the Guarantied Indebtedness, Agent or any Lender
may extend other credit to Acquisition Sub or any other Guarantor, and may
8
take and hold security for the credit so extended, all without affecting
Guarantor's liability under this Guaranty.
3.02 GUARANTY TO BE ABSOLUTE. Guarantor expressly agrees that
until the Guarantied Indebtedness is paid and performed in full and each and
every term, covenant and condition of this Guaranty is fully performed,
Guarantor shall not be released by or because of:
(a) Any act or event which might otherwise discharge, reduce,
limit or modify Guarantor's obligations under this Guaranty;
(b) Any waiver, extension, modification, forbearance, delay or
other act or omission of Agent or any Lender, or its failure to proceed
promptly or otherwise as against Acquisition Sub, Guarantor or any security;
(c) Any action, omission or circumstance which might increase the
likelihood that Guarantor may be called upon to perform under this Guaranty
or which might affect the rights or remedies of Guarantor as against
Acquisition Sub;
(d) Any dealings occurring at any time between Acquisition Sub
and Agent or any Lender, whether relating to the Guarantied Indebtedness or
otherwise; or
(e) Any action of Agent or any Lender described in Section 3.01
above.
Guarantor hereby acknowledges that absent this Section 3.02,
Guarantor might have a defense to the enforcement of this Guaranty as a
result of one or more of the foregoing acts, omissions, agreement, waivers or
matters. Guarantor hereby expressly waives and surrenders any defense to its
liability under this Guaranty based upon any of the foregoing acts,
omissions, agreements, waivers or matters. It is the purpose and intent of
this Guaranty that the obligations of Guarantor under it shall be absolute
and unconditional under any and all circumstances.
ARTICLE IV
WAIVERS AND SUBORDINATION BY GUARANTOR
4.01 GUARANTOR'S WAIVERS. Guarantor waives:
(a) All statutes of limitations as a defense to any action or
proceeding brought against Guarantor by Agent or any Lender, to the fullest
extent permitted by law;
(b) Except as expressly provided in Section 2.01(b)(i), any right
it may have to require Agent or any Lender to proceed against Acquisition
Sub,
9
proceed against or exhaust any security held from Acquisition Sub, or pursue
any other remedy in Agent's or any Lender's power to pursue;
(c) Any defense based on any claim that Guarantor's obligations
exceed or are more burdensome than those of Acquisition Sub;
(d) Any defense based on: (i) any legal disability of Acquisition
Sub, (ii) any release, discharge, modification, impairment or limitation of
the liability of Acquisition Sub to Agent or any Lender from any cause,
whether consented to by Agent or any Lender or arising by operation of law or
from any Insolvency Proceeding and (iii) any rejection or disaffirmance of
the Guarantied Indebtedness, or any part of it, or any security held for it,
in any such Insolvency Proceeding;
(e) Any defense based on any action taken or omitted by Agent or
any Lender in any Insolvency Proceeding involving Acquisition Sub, including
any election to have Agent's or that Lender's claim allowed as being secured,
partially secured or unsecured, any extension of credit by Lender to
Acquisition Sub in any Insolvency Proceeding, and the taking and holding by
Agent or any Lender of any security for any such extension of credit;
(f) All presentments, demands for performance, notices of
nonperformance, protests, notices of protest, notices of dishonor, notices of
acceptance of this Guaranty and of the existence, creation, or incurring of
new or additional indebtedness, and demands and notices of every kind except
for any demand or notice by Agent or any Lender to Guarantor expressly
provided for in Section 2.01;
(g) Any defense based on or arising out of any defense that
Acquisition Sub may have to the payment or performance of the Guarantied
Indebtedness or any part of it; and
(h) Any defense based on or arising out of any action of Agent or
any Lender described in Article III above.
10
4.02 WAIVERS OF SUBROGATION AND OTHER RIGHTS.
(a) During the existence of any Credit Agreement Event of
Default, Agent or any Lender, without prior notice to or consent of
Guarantor, may elect to: (i) foreclose either judicially or nonjudicially
against any security it may hold for the Guarantied Indebtedness, (ii) accept
a transfer of any such security in lieu of foreclosure, (iii) compromise or
adjust the Guarantied Indebtedness or any part of it or make any other
accommodation with Acquisition Sub or Guarantor, or (iv) exercise any other
remedy against Acquisition Sub or any security. No such action by Agent or
any Lender shall release or limit the liability of Guarantor, who shall
remain liable under this Guaranty after the action, even if the effect of the
action is to deprive Guarantor of any subrogation rights, rights of
indemnity, or other rights to collect reimbursement from Acquisition Sub for
any sums paid to Agent or any Lender, whether contractual or arising by
operation of law or otherwise. Guarantor expressly agrees that under no
circumstances shall it be deemed to have any right, title, interest or claim
in or to any property to be held by Agent or any Lender or any third party
after any foreclosure or transfer in lieu of foreclosure of any security for
the Guarantied Indebtedness.
(b) Regardless of whether Guarantor may have made any payments to
Lender, Guarantor hereby absolutely, irrevocably and unconditionally, now and
forever, waives, releases and covenants not to xxx Acquisition Sub, any
shareholder thereof or any other Guarantor in respect of: (i) all rights of
restitution, subrogation, exoneration, indemnification and contribution, all
rights to collect reimbursement and all other rights, howsoever denominated,
to recover from Acquisition Sub, any shareholder thereof or any Guarantor any
sums paid to Agent or any Lender whether pursuant hereto or otherwise paid on
the Guarantied Indebtedness, and any other rights arising from the existence,
payment, performance or enforcement of Guarantor's obligations under this
Guaranty or any Collateral Document, (ii) all rights to enforce any remedy
that the Agent or any Lender may have against Acquisition Sub, (iii) all
rights to participate in any security now or later to be held by Agent or any
Lender for the Guarantied Indebtedness, and (iv) all rights to require
Acquisition Sub to perform the Guarantied Indebtedness; in each case whether
now existing or hereafter arising and whether contractual or arising in
equity, by statute, common law or otherwise by operation of law (including
the United States Bankruptcy Code or any successor or similar statute) or
otherwise. The foregoing waivers, releases and covenants are a material part
of the consideration to the Lenders for extending the credit under the
Acquisition Sub Credit Agreement to the Acquisition Sub and may be enforced
by and inure to the benefit of Agent, each Lender, Acquisition Sub, its
shareholders and each other Guarantor from time to time.
(c) Guarantor waives all rights and defenses arising out of an
election of remedies by the Agent or any Lender, even though that election of
remedies may affect Guarantor's rights of subrogation and reimbursement
against the Acquisition Sub by the operation of law or otherwise.
11
4.03 INFORMATION REGARDING BORROWER. Before signing this
Guaranty, Guarantor investigated the financial condition and business
operations of Acquisition Sub and such other matters as Guarantor deemed
appropriate to assure itself of Acquisition Sub's ability to discharge its
obligations under the Loan Documents. Guarantor assumes full responsibility
for that due diligence, as well as for keeping informed of all matters which
may affect Acquisition Sub's ability to pay and perform its obligations to
the Agent and the Lenders. Neither Agent nor any Lender has any duty to
disclose to Guarantor any information which such party may have or receive
about Acquisition Sub's financial condition, business operations, or any
other circumstances bearing on its ability to perform.
4.04 SUBORDINATION. Any rights of Guarantor, whether now existing
or later arising, to receive payment on account of any indebtedness
(including interest) owed to it by Acquisition Sub or to receive any payment
from Acquisition Sub shall at all times be subordinate as to lien and time of
payment and in all other respects to the full and prior repayment of the
Guarantied Indebtedness. Guarantor shall not be entitled to enforce or
receive payment of any sums hereby subordinated until the Guarantied
Indebtedness has been paid and performed in full and any such sums received
in violation of this Guaranty shall be received by Guarantor in trust for the
Agent and the Lenders.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
Guarantor represents and warrants to the Agent and each Lender that:
5.01 EXISTENCE AND POWER. Guarantor:
(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, this Guaranty, the Collateral Documents to which it is a
party and the Organizational Documents of the Acquisition Sub 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; and
(d) COMPLIANCE WITH LEGAL REQUIREMENTS. Is in compliance with
all Requirements of Law applicable to it.
5.02 AUTHORIZATION; NO CONFLICT. The execution, delivery and
performance by Guarantor of this Guaranty, any Collateral Document and the
Organi-
12
zational Documents of the Acquisition Sub 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) ORGANIZATIONAL 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 the Collateral Documents) 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.
5.03 GOVERNMENTAL AUTHORIZATION. No approval, consent, exemption,
authorization, or other action by, or notice to, or filing with, any
Governmental Authority (except for recordings in connection with the Liens
granted to the Agent under the Collateral Documents) is necessary or required
in connection with the execution, delivery or performance by, or enforcement
against, Guarantor of this Guaranty, any of the Collateral Documents or the
Organizational Documents of the Acquisition Sub.
5.04 BINDING EFFECT. This Guaranty and each Collateral Document
to which Guarantor 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.
5.05 LITIGATION. Except as specifically disclosed in SCHEDULE
5.05 of the Operating Partnership Credit Agreement, there are no actions,
suits, proceedings, claims or disputes pending, or to the Knowledge of the
REIT, threatened or contemplated, at law, in equity, in arbitration or before
any Governmental Authority, against Guarantor, any Management Entity, any of
their Subsidiaries or any of their respective Properties, which (a) purport
to affect or pertain to this Guaranty, or any Collateral Document, or any of
the transactions contemplated hereby or thereby, or (b) if determined
adversely to any such Person, would reasonably be expected to have a Material
Adverse Effect. No injunction, writ, temporary restraining order or any other
order of any nature has been issued by any court or other Governmental
Authority purporting to enjoin or restrain the execution, delivery and
performance of this Guaranty or any Collateral Document, or directing that
the transactions provided for herein or therein not be consummated as herein
or therein provided.
5.06 SUBSIDIARIES; INTERESTS IN OTHER ENTITIES; CHANGES IN ORGANIZATIONAL
STRUCTURE. Except for the NHP Interests, neither the Operating Partnership, nor
the REIT, nor any of their respective Subsidiaries has any interest in any
corporation,
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partnership or other entity, except as disclosed in the Organizational Chart
and except for Subsidiaries or Unconsolidated Partnerships hereafter formed
or acquired in compliance with Section 7.07 and except for changes permitted
under Sections 7.06, 7.07 and 7.08 hereof.
5.07 FINANCIAL CONDITION. All financial statements delivered by
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.
5.08 REGULATED ENTITIES. No Guarantor is (a) an "investment
company" within the meaning of the Investment Operating Partnership Act of
1940; or (b) subject to regulation under the Public Utility Holding Operating
Partnership 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. Each Guarantor has,
to the extent required under Regulation G of the Federal Reserve Board,
registered with such Board. The incurrence by any Guarantor of its
obligations hereunder does not violate Regulations G, U or X of said Board.
5.09 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. The shares of common Stock of the REIT are listed
on the NYSE.
5.10 NO GUARANTOR DEFAULT. No Guarantor Default or Guarantor
Event of Default exists or would result from the incurring of any obligations
hereunder by the Guarantors. None of the Guarantors 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.
5.11 [INTENTIONALLY DELETED].
5.12 FULL DISCLOSURE. None of the representations or warranties
made by the Guarantors herein or in the Collateral 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
Collateral Documents, contains any untrue statement of a material fact or
omits any material fact required to be stated therein or necessary to make
the statements made therein, in light of the circumstances under which they
are made, not misleading. There is no fact, to the Knowledge of the REIT,
which materially and adversely affects the business, operations, properties,
assets or condition (financial or otherwise) of the Operating Partnership,
the REIT, the Management Entities, or any of the Subsidiaries which has not
been disclosed herein or in other documents, certificates and statements
furnished to the Agent and each Lender hereunder or pursuant hereto. The
copies of all documents delivered to the Agent and/or the Lenders from time
to time in connection with this Guaranty are and shall be
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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.
5.13 REPRESENTATIONS IN THE ACQUISITION SUB CREDIT AGREEMENT. All
of the representations and warranties of the Acquisition Sub in the
Acquisition Sub Credit Agreement are true and correct.
ARTICLE VI
AFFIRMATIVE COVENANTS
As further consideration for this Guaranty, the REIT covenants and
agrees that, so long as the Guarantied Indebtedness shall remain unpaid or
unsatisfied, unless the Requisite Lenders waive compliance in writing:
6.01 FINANCIAL INFORMATION. The REIT 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 10K for such period, and accompanied by the unqualified
opinion of a nationally-recognized independent public accounting firm stating
that such consolidated financial statements present fairly the financial
position for the periods indicated, in conformity with GAAP, and applied on a
basis consistent with prior years;
(b) QUARTERLY FINANCIAL STATEMENTS. As soon as available, but
not later than forty-five (45) days after the end of each of the first three
(3) fiscal quarters of each year, a copy of the unaudited consolidated
balance sheet of the REIT as of the end of such quarter and the related
consolidated statements of operations, stockholders' equity (where
applicable) and cash flows for the period commencing on the first day and
ending on the last day of such quarter, including the REIT's SEC Form 10Q 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; and
(c) FINANCIAL STATEMENTS AND OTHER INFORMATION FOR NHP. Until
the NHP Combination Date, within five (5) days after the receipt thereof by the
Acquisition Sub, the REIT, the Operating Partnership or any Subsidiary thereof,
such periodic, quarterly, annual and special financial statements, reports,
proxy statements and other information as may be received by any such Person in
its capacity as a shareholder in NHP, and within five (5) days after the
delivery of any thereof by any such Person, copies of any reports, proxy
statements, tender or exchange offers or
15
other information provided by such Person to NHP or to the shareholders
thereof to the SEC in respect of such Person's ownership of or intentions or
proposals with respect to NHP.
6.02 CERTIFICATES; OTHER INFORMATION. The REIT 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 6.01(a), a certificate of the
independent certified public accountants reporting on such financial
statements stating that, in making the examination necessary therefor, no
knowledge was obtained of any Guarantor Default or Guarantor Event of
Default, except as specified in such certificate;
(b) OFFICERS' CERTIFICATES. Concurrently with the delivery of
the financial statements referred to in Sections 6.01(a) and 6.01(b) above, a
compliance certificate, substantially in the form of EXHIBIT A, signed by at
least two (2) Responsible Officers (i) stating that, to the best of such
officers' knowledge, each of the REIT, the Operating Partnership 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 Guaranty and the other Collateral Documents to be observed, performed
or satisfied by it, and that such officers have no knowledge of any Guarantor
Default or Guarantor Event of Default except as specified in such
certificate; and (ii) showing in detail the calculations supporting such
statement for such period in respect of the covenants in Section 7.09 and
7.15;
(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 the Operating Partnership 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 the
Operating Partnership or the REIT;
(d) ACCOUNTANTS' REPORTS. Promptly after the same are received,
copies of all reports which the independent certified public accountants of
the Operating Partnership or the REIT deliver to the Operating Partnership or
the REIT; and
(e) OTHER INFORMATION. Promptly, revisions to the Organizational
Chart and such additional financial and other information as the Agent may
from time to time reasonably request.
6.03 NOTICES. The REIT shall promptly (and in no event later than
ten (10) days after the REIT has reason to know of the same) notify the Agent
and each Lender of:
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(a) GUARANTOR DEFAULT; GUARANTOR EVENT OF DEFAULT. The
occurrence of any Guarantor Default or Guarantor Event of Default, and of the
occurrence or existence of any event or circumstance that is likely to become
a Guarantor Default or Guarantor Event of Default. Each notice under this
Section 6.03(a) shall describe with particularity the clause or provision of
this Guaranty or other Collateral Documents that have been breached or
violated;
(b) LITIGATION. The commencement of, or any material development
in, any litigation, arbitration or proceeding affecting the REIT, the
Operating Partnership, 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 the Operating Partnership, 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 the Operating Partnership,
the REIT, any Management Entity or any of their Subsidiaries that could
reasonably be anticipated to cause such Properties (or any portion thereof)
to be subject to any material restrictions on ownership, occupancy,
transferability or use under any Environmental Laws;
(d) ERISA. The occurrence of any of the following ERISA events
affecting the REIT 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 the REIT 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;
17
(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 the Operating
Partnership and the REIT delivered to the Agent pursuant to Section 6.01(a);
(f) 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, or the
commencement of any material Development Activity, by the Operating
Partnership, the REIT, any Management Entity or any of their Subsidiaries,
including, without limitation, any material occurrences or developments
(including, without limitation, the satisfaction of applicable conditions
precedent) in connection with the transactions contemplated by the NHP Merger
Agreement; and any change in any executive officer of the REIT.
(g) FAILURE TO QUALIFY AS A REIT. The failure of the REIT to
maintain REIT Status or of any Subsidiary of the REIT to maintain its status
as a qualified REIT subsidiary under the Code;
(h) ACCOUNTING CHANGES. Any material change in the Operating
Partnership's or the REIT's accounting policies or financial reporting
practices; and
(i) CROSS-DEFAULT. Any notice received by the Operating
Partnership, the REIT, any Management Entity or any of their Subsidiaries of
any default under any Indebtedness or Guaranty Obligation described in
Section 8.01(e). Each notice pursuant to this section shall be accompanied
by a written statement, signed by at least two (2) Responsible Officers,
setting forth details of the occurrence referred to therein and the
provisions of this Guaranty affected, and stating what action the Operating
Partnership or the REIT proposes to take with respect thereto; and
(j) CERTAIN TRANSACTIONS.
(i) On July 3, 1997, a notice setting forth the AIMCO Gross
Asset Value as of June 30, 1997; the amount of any increase in the AIMCO
Gross Asset Value , if any, during the period from March 31, 1997 to June 30,
1997 (other than any increase resulting from Excluded Proceeds); and the sum
of the Net Issuance Proceeds plus Net Sale Proceeds (other than Excluded
Proceeds) received during such period.
(ii) On October 3, 1997, a notice setting forth the AIMCO
Gross Asset Value as of September 30, 1997; the amount of any increase in
AIMCO Gross Asset Value, if any, from March 31, 1997 to September 30, 1997
(other than any increase resulting from Excluded Proceeds); and the sum of
the Net Issuance Proceeds plus Net Sale Proceeds (other than Excluded
Proceeds) received during such period.
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6.04 PRESERVATION OF EXISTENCE, ETC.; MAINTENANCE OF PROPERTY;
INSURANCE; PAYMENT OBLIGATIONS; COMPLIANCE WITH LAWS. The REIT and the
Operating Partnership shall perform all of the covenants and agreements set
forth in Sections 6.04, 6.05, 6.06, 6.07, 6.08 and 6.09 of the Operating
Partnership Credit Agreement, each of which is incorporated herein by this
reference.
6.05 MAINTENANCE OF REIT STATUS; STOCK EXCHANGE LISTING. The REIT
shall at all times maintain its REIT Status and maintain its common Stock
listed on the NYSE, the American Stock Exchange, or Nasdaq Stock Exchange.
The REIT shall cause each Wholly-Owned Subsidiary to comply with all
requirements applicable under the Code to REIT subsidiaries.
6.06 INSPECTION OF PROPERTY AND BOOKS AND RECORDS. The REIT shall
maintain, and shall cause the Operating Partnership, 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 the REIT, the Operating Partnership,
the Management Entities and each of their Subsidiaries. The REIT shall
permit, and shall cause the Operating Partnership, 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 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 the REIT and at any
time during normal business hours and as often as may be reasonably desired,
upon no less than forty-eight (48) hours advance notice to the REIT;
PROVIDED, HOWEVER, when a Guarantor Event of Default exists, the Agent or any
Lender may visit and inspect at the expense of the REIT such Properties at
any time during business hours and without advance notice.
6.07 FURTHER ASSURANCES.
(a) FULL DISCLOSURE. The REIT will ensure that all other written
information, exhibits and reports furnished to any Agent or Lender by the
Operating Partnership, 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
this Guaranty or any Collateral Document or in the execution, acknowledgment
or recordation thereof.
(b) FURTHER ACTS. Promptly upon request by the Agent or the
Requisite Lenders, the REIT shall (and shall cause the Operating Partnership,
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,
19
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 Guaranty or any Collateral Document,
(ii) to subject to the Liens created by any of the Collateral Documents any
of the Collateral, (iii) to perfect and maintain the validity, effectiveness
and priority of any of the Collateral Documents and the Liens intended to be
created thereby, and (iv) to better assure, convey, grant, assign, transfer,
preserve, protect and confirm to the Agent and Lenders the rights granted or
onw or hereafter intended to be granted under any Loan Document, or any other
document executed in connection herewith or therewith.
6.08 COMMUNICATION WITH ACCOUNTANTS. If any Guarantor Event of
Default is continuing, the REIT authorizes the Agent and any Lender to
communicate directly with the REIT's and the Operating Partnership's
independent accountants and authorizes such accountants to disclose to such
Persons any and all financial statements and other information of any kind,
including the substance of any oral information or conversation that such
accountants may have with respect to the business, financial condition and
other affairs of the REIT and the Operating Partnership.
6.09 SOLVENCY. The REIT shall at all times be, and shall cause
the Operating Partnership to be, Solvent.
6.10 REFINANCING ACTIVITIES.
(a) In order to further assure to the Agent and the Lenders the
full repayment of the Guarantied Indebtedness, the REIT hereby agrees that,
in the event that the Guarantied Indebtedness shall not have been paid in
full on or prior to the date which is five (5) months after the Closing Date,
the REIT shall use best efforts promptly to raise capital (either through the
offering of stock (whether common or preferred, and whether publicly or in
private placements) or the sale or refinancing of Properties), in order to
cause the Guarantied Indebtedness to be repaid as soon as possible and in any
event prior to the maturity of the Guarantied Indebtedness.
(b) Without limiting the foregoing, in the event that the
Guarantied Indebtedness shall not have been paid in full on or prior to the
date which is five (5) months after the Closing Date, the REIT and the
Operating Partnership shall accept the terms and pricing presented to them by
SBI of a transaction to issue common Stock, preferred Stock and/or
Indebtedness of the REIT or the Operating Partnership in an amount which
would be sufficient to pay the Guarantied Indebtedness in full on or prior to
the Maturity Date, and shall cause such transaction to be consummated on or
prior to the Maturity Date.
ARTICLE VII
NEGATIVE COVENANTS
20
As further consideration for this Guaranty, the REIT hereby
covenants and agrees that, so long as any of the Guarantied Indebtedness
shall remain unpaid or unsatisfied, unless the Requisite Lenders waive
compliance in writing:
7.01 LIENS. Neither the Operating Partnership, 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 Permitted Liens. Nothing contained in this Guaranty
shall restrict the granting of Liens by the Acquisition Sub unless such Liens
are prohibited under the Acquisition Sub Credit Agreement.
7.02 INDEBTEDNESS. Neither the Operating Partnership, 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 except Permitted
Indebtedness. Nothing contained in this Section 7.02 shall be deemed to
excuse any lack of compliance by Operating Partnership, the REIT, or any
Subsidiary with the terms of Section 7.15 below.
7.03 CONTINGENT OBLIGATIONS. Neither the Operating Partnership,
nor the REIT, nor any of their Subsidiaries shall create, incur, assume or
suffer to exist any Contingent Obligations except as permitted under Section
7.03 of the Operating Partnership Credit Agreement, which is incorporated
herein by this reference.
7.04 LEASE OBLIGATIONS. Neither the Operating Partnership, 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 as permitted under
Section 7.04 of the Operating Partnership Credit Agreement, which is
incorporated herein by this reference.
7.05 DISPOSITION OF PROPERTIES. Neither the Operating
Partnership, nor the REIT, nor any of their Subsidiaries shall, directly or
indirectly:
(a) make any Disposition of its interest in any Management
Entity, or enter into any agreement to do so; or
(b) make any Disposition of any other Property, or enter into any
agreement to do so, unless in the case of this clause (b) such Disposition
is at fair market value, and at the time of the Disposition no Guarantor
Event of Default exists.
Nothing contained in this Guaranty shall restrict Dispositions by
the Acquisition Sub unless such Dispositions are prohibited under the
Acquisition Sub Credit Agreement.
7.06 CONSOLIDATIONS AND MERGERS. Neither the Operating
Partnership, nor the REIT, nor any of their Subsidiaries 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 any Person; except as permitted under Section
21
7.06 of the Operating Partnership Credit Agreement, which is incorporated
herein by this reference.
7.07 LIQUIDATIONS; MATERIAL ORGANIZATION CHANGES; NEW
SUBSIDIARIES. The REIT and the Operating Partnership shall perform all of
the covenants and agreements set forth in Section 7.07 of the Operating
Partnership Credit Agreement, which is incorporated herein by this reference.
7.08 INVESTMENTS. Neither the Operating Partnership, nor the
REIT, nor any Management Entity, nor any of their Subsidiaries shall directly
or indirectly own or acquire any assets or make any Investments (or incur any
Contractual Obligation or enter into any letter of intent to make any
Investments) other than:
(i) cash and Cash Equivalents;
(ii) multi-family apartment projects in fee simple or partnership
or joint venture interests therein;
(iii) ownership interests in Management Entities, provided in each
case the same are engaged in managing multi-family apartment projects;
(iv) prior to the NHP Combination Date, the ownership of Stock in
NHP by Acquisition Sub (it being understood that no Affiliate of AIMCO other
than the Acquisition Sub or, to the extent expressly permitted in the
Operating Partnership Credit Agreement, the Merger Sub, shall acquire any
Stock in NHP); and
(v) other assets not described elsewhere in this Section 7.08,
provided that the aggregate Carrying Value of such interests shall not at any
time exceed twenty-five percent (25%) of the Carrying Value of the total
assets owned by the Operating Partnership, the REIT, and their Subsidiaries.
7.09 RESTRICTED PAYMENTS AND DEMANDS.
(a) Neither the Operating Partnership 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 the Operating Partnership, 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
Guarantor Default or Guarantor Event of Default exists under Section 8.01(a) or
under Section 8.01(c) as a result of a breach of Section 7.15, the REIT, the
Operating Partnership 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%
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of Funds From Operations for such period or such amount as is necessary to
maintain REIT Status.
(b) Under no circumstances shall the REIT or the Operating
Partnership permit any payment to be made with respect to Intra-Company Debt
while any Guarantor Event of Default is continuing.
7.10 TRANSACTIONS WITH AFFILIATES. Neither the Operating
Partnership, nor the REIT, nor any Management Entity, nor any of their
Subsidiaries shall enter into any transaction with any Affiliate of the
Operating Partnership or of any such Person, except as permitted under
Section 7.10 of the Operating Partnership Credit Agreement, which is
incorporated herein by this reference.
7.11 SPECIAL COVENANTS RELATING TO THE REIT. The REIT shall
perform all of the covenants and agreements set forth in Section 7.11 of the
Operating Partnership Credit Agreement, which is incorporated herein by this
reference.
7.12 TAXATION OF THE OPERATING PARTNERSHIP. The Operating
Partnership shall at all times be taxed as a partnership under the Code and
not as an association taxable as a corporation.
7.13 ERISA. The REIT shall perform all of the covenants and
agreements set forth in Section 7.13 of the Operating Partnership Credit
Agreement, which is incorporated herein by this reference.
7.14 PREPAYMENTS. Neither the REIT nor the Operating Partnership
nor any Subsidiary shall, while the Guarantied Indebtedness is outstanding,
prepay any Indebtedness (other than the Guarantied Indebtedness and the
Indebtedness outstanding from time to time under the Operating Partnership
Credit Agreement and the Bridge Loan Agreement), unless the REIT shall have
theretofore deposited with the Agent Restricted Cash in the maximum amount
required under Section 2.04 of this Guaranty; provided, however, a prepayment
of Indebtedness shall be permitted in connection with the refinancing thereof
so long as the maximum principal amount of the loan so used to prepay any
such Indebtedness does not exceed the amount of such Indebtedness being
prepaid.
7.15 FINANCIAL COVENANTS.
(a) The REIT shall not permit the Net Worth of the REIT and its
Subsidiaries on a consolidated basis to be less at any time than $400,000,000
plus 75% of the Net Issuance Proceeds of all issuances of Stock or Units after
the Closing Date.
(b) The REIT shall not permit the ratio of Consolidated Total
Indebtedness to Gross Asset Value to exceed 0.60-to-1.00 at any time.
(c) The REIT shall not permit the Consolidated EBITDA-to-Interest
Ratio computed for any fiscal quarter or year to be less than 2.00-to-1.00.
23
(d) The REIT shall not permit the Consolidated EBITDA-to-Fixed
Charges Ratio computed for any fiscal quarter or year to be less than
1.80-to-1.00.
7.16 ACCOUNTING CHANGES. Neither the Operating Partnership nor
the REIT shall make any significant change in accounting treatment or
reporting practices, except as required by GAAP, or change its fiscal year.
ARTICLE VIII
EVENTS OF DEFAULT
8.01 GUARANTOR EVENT OF DEFAULT. Any of the following shall
constitute a "Guarantor Event of Default":
(a) NON-PAYMENT. Any Guarantor or any Common Stockholder shall
fail to pay, when and as required to be paid herein or in the Collateral
Documents, any amount payable hereunder or thereunder; or
(b) REPRESENTATION OR WARRANTY. Any representation or warranty
by any Guarantor or any Common Stockholder made or deemed made herein, in any
Collateral Document, or in any certificate, document or financial or other
statement by such Guarantor or any Common Stockholder or any Responsible
Officer, furnished at any time under this Guaranty or in or under any Collateral
Document, shall prove to have been incorrect in any material respect on or as of
the date made or deemed made; or
(c) SPECIFIC GUARANTOR DEFAULTS. The REIT or the Operating
Partnership shall fail to perform or observe any term, covenant or agreement
binding upon it contained in Section 6.06, Section 6.10 and/or in Article
VII; provided that, in the case of a violation of the terms governing the
maximum amount of distributions during any twelve (12)-month period set forth
in Section 7.09(b), such failure shall not constitute a Guarantor Event of
Default if, by the end of the third month after such twelve (12)-month
period, such violation no longer exists, so long as no distributions were
made during such twelve (12)-month period in violation of the provisions of
Section 7.09(b) which prohibit distributions while certain Guarantor Defaults
or Guarantor Events of Default exist; or
(d) OTHER GUARANTOR DEFAULTS. Any Guarantor shall fail to
perform or observe any other term or covenant contained in this Guaranty or any
Collateral Document, and such default shall continue uncured for a period of 10
days after the earlier of (i) the date upon which a Responsible Officer knew or
received written notice of such failure or (ii) the date upon which written
notice thereof is given to the REIT by Agent or any Lender; or
(e) CROSS-DEFAULT. The Acquisition Sub shall fail, after any
applicable cure period:
24
(i) to make any payment (and which uncured failure to pay is
continuing) in respect of any Indebtedness or Guaranty Obligation when due
which in the aggregate exceeds $500,000 (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
(ii) to perform or observe any other condition or covenant,
or any other event shall occur or condition exist, under any agreement or
instrument relating to any such Indebtedness or Guaranty Obligation, if the
effect of such failure, event or condition is to cause, or to permit the
holder or holders of such Indebtedness or the beneficiary or beneficiaries of
such Indebtedness (or a trustee or agent on behalf of such holder or holders
or beneficiary or beneficiaries) to cause, such Indebtedness to be declared
to be due and payable prior to its stated maturity, or such Guaranty
Obligation to become payable or cash collateral in respect thereof to be
demanded; or
(f) BANKRUPTCY OR INSOLVENCY. The Operating Partnership, the
REIT, any of their Subsidiaries, any Management Entity, any Common
Stockholder or, at any time prior to the NHP Combination Date, NHP 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 the Operating Partnership, the REIT, any of
their Subsidiaries, any Management Entity, any Common Stockholder or, at any
time prior to the NHP Combination Date, NHP or any writ, judgment, warrant of
attachment, execution or similar process, shall be issued or levied against a
substantial part of such Person's Properties, and any such proceeding or
petition shall not be dismissed, or such writ, judgment, warrant of
attachment, execution or similar process shall not be released, vacated or
fully bonded within sixty (60) days after commencement, filing or levy; (ii)
the Operating Partnership, the REIT, any of their Subsidiaries, any
Management Entity, any Common Stockholder or, at any time prior to the NHP
Combination Date, NHP 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)
the Operating Partnership, the REIT, any of their Subsidiaries or any
Management Entity, any Common Stockholder or, at any time prior to the NHP
Combination Date, NHP 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) COLLATERAL DOCUMENTS. Any provision of any Collateral
Document shall for any reason (other than pursuant to the terms thereof) cease
to be valid and binding on or enforceable against the Person party thereto
(except to the
25
extent that the same results solely from an act or omission of the Agent or
the Lenders), or such Person shall so state in writing or bring an action to
limit its obligations or liabilities thereunder.
ARTICLE IX
ARBITRATION, REFERENCE, INDEMNIFICATION, OTHER REMEDIES
9.01 REFERENCE AND ARBITRATION.
(a) MANDATORY ARBITRATION. Any controversy or claim between or
among the parties, including those arising out of or relating to this
Guaranty or the Loan Documents and any claim based on or arising from an
alleged tort, shall at the request of any party be determined by arbitration.
The arbitration shall be conducted in New York, New York, in accordance with
the United States Arbitration Act (Title 9, U.S. Code), notwithstanding any
choice of law provision in this Guaranty, and under the Commercial Rules of
the American Arbitration Association (the "AAA"). The arbitrator(s) shall
give effect to statutes of limitation in determining any claim. Any
controversy concerning whether an issue is arbitrable shall be determined by
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 9.01 shall limit the right of any party to exercise
self-help remedies such as setoff, foreclosure against or sale of any real or
personal property collateral or security, or to obtain provisional or
ancillary remedies from a court of competent jurisdiction before, after, or
during the pendency of any arbitration.
9.02 INDEMNITY. Guarantor 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 and enforcement of
this Guaranty, or the transactions contemplated hereby and thereby, and with
respect to any investigation, litigation or proceeding related to this
Guaranty, whether or not any Indemnified Person is a party thereto (all the
foregoing, collectively, the "Indemnified Liabilities"); PROVIDED, that a
Guarantor 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 9.02 shall survive payment of the Guarantied Indebtedness.
9.03 MARSHALLING; PAYMENTS SET ASIDE. Neither the Agent nor any
Lender shall be under any obligation to xxxxxxxx any assets in favor of any
Guarantor or any other Person or against or in payment of any or all of the
obligations of such
26
Guarantor under this Guaranty. To the extent that any Guarantor makes a
payment or payments to the Agent or any Lender, or the Agent or any Lender
enforces its Liens or exercises its rights of setoff, and such payment or
payments or the proceeds of such enforcement or setoff or any part thereof
are subsequently invalidated, declared to be fraudulent or preferential, set
aside or required to be repaid to a trustee, receiver or any other party in
connection with any Insolvency Proceeding, or otherwise, then to the extent
of such recovery the obligation or part thereof originally intended to be
satisfied shall be revived and continued in full force and effect as if such
payment had not been made or such enforcement or setoff had not occurred.
9.04 SETOFF. In addition to any rights and remedies of the
Lenders provided by law, if a Guarantor Event of Default exists, then
irrespective of whether the Agent or such Lender shall have made demand under
this Guaranty and whether such obligations may be contingent or unmatured,
each Lender is authorized at any time and from time to time, without prior
notice to any Guarantor, any such notice being hereby waived to the fullest
extent permitted by law, to place a hold (in the full amount of the
Guarantied Indebtedness) against any and all deposits (general or special,
time or demand, provisional or final) at any time held by such Lender to or
for the credit or the account of such Guarantor and, provided that Guarantor
shall then be obligated to pay all sums due and owing on the Guarantied
Indebtedness in accordance with Section 2.01(b) hereof, to set off and apply
any and all such deposits and other indebtedness at any time owing to such
Lender to or for the credit or the account of such Guarantor against any and
all obligations owing to such Lender, now or hereafter existing. Each Lender
agrees to promptly notify the affected Guarantor and the Agent after any such
hold, setoff or application made by such Lender; PROVIDED, HOWEVER, that the
failure to give such notice shall not affect the validity of such setoff and
application. The rights of each Lender under this Section 10.09 are in
addition to the other rights and remedies (including other rights of setoff)
that such Lender may have. NOTWITHSTANDING THE FOREGOING, NO LENDER SHALL
EXERCISE, OR ATTEMPT TO EXERCISE, ANY RIGHT OF SETOFF, BANKER'S LIEN, OR THE
LIKE, AGAINST ANY DEPOSIT ACCOUNT OR PROPERTY OF ANY GUARANTOR HELD OR
MAINTAINED BY ANY LENDER, WITHOUT THE PRIOR WRITTEN CONSENT OF THE REQUISITE
LENDERS.
ARTICLE X
MISCELLANEOUS
10.01 NO WAIVER; CONSENTS; CUMULATIVE REMEDIES. Each waiver by
Agent or the Lenders must be in writing, and no waiver shall be construed as
a continuing waiver. No waiver shall be implied from Agent's or any Lender's
delay in exercising or failure to exercise any right or remedy against
Acquisition Sub, Guarantor or any security. Consent by Agent or the Lenders
to any act or omission by Acquisition Sub or Guarantor shall not be construed
as a consent to any other or subsequent act or omission, or as a waiver of
the requirement for Agent's or the Lenders' consent to be obtained in any
future or other instance. All remedies of
27
Agent and each Lender against Acquisition Sub and Guarantor are cumulative.
As among the Agent and the Lenders only, nothing contained in this Guaranty
shall limit any of the approval rights of the Agent or the Lenders set forth
in the Loan Documents.
10.02 NO RELEASE. Guarantor shall not be released, in whole or in
part, from its obligations under this Guaranty except by a writing signed by
Agent and all the Lenders.
10.03 HEIRS, SUCCESSORS AND ASSIGNS; PARTICIPATIONS. The terms of
this Guaranty shall bind and benefit the heirs, legal representatives,
successors and assigns of Agent, the Lenders and Guarantor; provided,
however, that Guarantor may not assign this Guaranty, or assign or delegate
any of its rights or obligations under this Guaranty, without the prior
written consent of Agent in each instance. Without notice to or the consent
of Guarantor, Agent and any Lender may disclose any and all information in
its possession concerning Guarantor, this Guaranty and any security for this
Guaranty to any actual or prospective purchaser of any securities issued or
to be issued by Agent or such Lender, and to any actual or prospective
purchaser or assignee of any participation or other interest in the
Guarantied Indebtedness and this Guaranty.
10.04 NOTICES.
(a) DELIVERY. All notices, requests and other communications
provided for hereunder shall be in writing (including, unless the context
expressly otherwise provides, telegraphic, telex, facsimile transmission or
cable communication) and mailed, telegraphed, telexed or delivered to its
address specified on the signature pages hereof, or to such other address as
shall be designated by such party in a written notice to the other party.
(b) RECEIPT. All such notices and communications shall, when
transmitted by overnight delivery, telegraphed, telecopied by facsimile, telexed
or cabled, be effective when delivered for overnight delivery or to the
telegraph company, transmitted by telecopier, confirmed by telex answerback or
delivered to the cable company, respectively, or if delivered, upon delivery.
(c) RELIANCE. Agent and each Lender shall be entitled to rely on
the authority of any person purporting to be a person authorized by Guarantor
to give such notice, and neither Agent nor any Lender shall have any
liability to Guarantor or any other person on account of any action taken or
not taken by Agent or such Lender in reliance upon such telephonic or
facsimile notice. The obligation of Guarantor hereunder shall not be
affected in any way or to any extent by any failure by Lender to receive
written confirmation of any telephonic or facsimile notice or the receipt by
Agent or a Lender of a confirmation which is at variance with the terms
understood by Agent or such Lender to be contained in the telephonic or
facsimile notice.
10.05 RULES OF CONSTRUCTION. In this Guaranty, the word
"Acquisition Sub" includes both the named Acquisition Sub and any other
person who at any time
28
assumes or otherwise becomes primarily liable for all or any part of the
obligations of the named Acquisition Sub on the Guarantied Indebtedness. The
word "person" includes any individual, company, trust or other legal entity
of any kind. If this Guaranty is executed by more than one person, the word
"Guarantor" includes all such persons. All headings appearing in this
Guaranty are for convenience only and shall be disregarded in construing this
Guaranty.
10.06 GOVERNING LAW. THIS GUARANTY AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE
CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF
NEW YORK (INCLUDING WITHOUT LIMITATION SECTION 5-1401 OF THE GENERAL
OBLIGATIONS LAW OF THE STATE OF NEW YORK), WITHOUT REGARD TO CONFLICTS OF
LAWS PRINCIPLES.
10.07 COSTS AND EXPENSES. If any lawsuit or arbitration is
commenced which arises out of, or which relates to this Guaranty, the Loan
Documents or the Guarantied Indebtedness, the prevailing party shall be
entitled to recover from each other party such sums as the court or
arbitrator may adjudge to be reasonable attorneys' fees (including allocated
costs for services of in-house counsel) in the action or proceeding, in
addition to costs and expenses otherwise allowed by law. In all other
situations, including any Insolvency Proceeding, Guarantor agrees to pay all
of the Agent's and each Lender's costs and expenses, including attorneys'
fees (including allocated costs for services of the Agent's and each Lender's
in-house counsel) which may be incurred in any effort to collect or enforce
the Guarantied Indebtedness or any part of it or any term of this Guaranty.
Without limiting any rights of the Agent or Lenders under the Acquisition Sub
Credit Agreement or , all amounts of any kind due and payable under this
Guaranty (whether for principal, interest, and other costs under the
Guarantied Indebtedness, or for costs, fees, and expenses for which the
Guarantors are directly responsible hereunder, or otherwise) shall accrue
interest from the time the Agent or the Lenders make demand therefor
hereunder until paid in full in cash to such Agent or the Lenders at the Base
Rate, as defined in the Acquisition Sub Credit Agreement, plus three (3%)
percentage points, except to the extent that any such amounts are then
accruing interest under the Guarantied Indebtedness, in which case such Base
Rate plus 3% interest rate shall not be applied if the effect would be to
compound the interest to which such obligations are subject to under the
Guarantied Indebtedness.
10.08 CONSIDERATION. Guarantor acknowledges that it expects to
benefit from Lenders' extension of the loan facility under the Acquisition
Sub Credit Agreement to Acquisition Sub because of its relationship to
Acquisition Sub, because such loan facility is essential to Acquisition Sub's
acquisition of a portion of the outstanding Stock of NHP and because such
acquisition is part of Guarantor's overall plan to acquire or merge with NHP.
Guarantor is executing this Guaranty in consideration of these anticipated
benefits.
29
10.09 INTEGRATION; MODIFICATIONS. This Guaranty (a) integrates
all the terms and conditions mentioned in or incidental to this Guaranty, (b)
supersedes all oral negotiations and prior writings with respect to its
subject matter, and (c) is intended by Guarantor, Agent and the and Lenders
as the final expression of the agreement with respect to the terms and
conditions set forth in this Guaranty and as the complete and exclusive
statement of the terms agreed to by Guarantor, Agent and the Lenders. No
representation, understanding, promise or condition shall be enforceable
against any party hereto unless it is contained in this Guaranty. This
Guaranty may not be modified except in a writing signed by both Agent (with
the consent of the Requisite Lenders) and Guarantor. No course of prior
dealing, usage of trade, parol or extrinsic evidence of any nature shall be
used to supplement, modify or vary any of the terms hereof. As between Agent
and the Lenders only, nothing contained in this Guaranty shall alter the
rights and obligations among Agent and the Lenders set forth in the Credit
Agreement.
10.10 MISCELLANEOUS. The illegality or unenforceability of one
or more provisions of this Guaranty shall not affect any other provision.
Time is of the essence in the performance of this Guaranty by Guarantor. The
obligations of each Guarantor under this Guaranty shall be joint and several.
10.11 COUNTERPARTS. This Guaranty may be executed by one or
more of the parties to this Guaranty in any number of separate counterparts,
each of which, when so executed, shall be deemed an original, and all of said
counterparts taken together shall be deemed to constitute but one and the
same instrument.
10.12 SEVERABILITY. The illegality or unenforceability of any
provision of this Guaranty 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 Guaranty or any instrument or agreement required
hereunder.
10.13 WAIVER OF JURY TRIAL. GUARANTOR, 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 GUARANTY OR
THE TRANSACTIONS CONTEMPLATED HEREBY, 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 9.01 ABOVE, GUARANTOR, 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 GUARANTY OR ANY PROVISION HEREOF. THIS WAIVER SHALL APPLY TO
30
ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS
GUARANTY.
10.14 CONSENT TO JURISDICTION AND SERVICE OF PROCESS. ALL
JUDICIAL PROCEEDINGS BROUGHT AGAINST GUARANTOR ARISING OUT OF OR RELATING TO
THIS AGREEMENT MAY BE BROUGHT IN ANY STATE OR FEDERAL COURT OF COMPETENT
JURISDICTION IN THE STATE OF NEW YORK, AND BY EXECUTION AND DELIVERY OF THIS
AGREEMENT GUARANTOR ACCEPTS FOR ITSELF AND IN CONNECTION WITH ITS PROPERTIES,
GENERALLY AND UNCONDITIONALLY, THE NONEXCLUSIVE JURISDICTION OF THE AFORESAID
COURTS AND WAIVES ANY DEFENSE OF FORUM NON CONVENIENS AND IRREVOCABLY AGREES
TO BE BOUND BY ANY JUDGMENT RENDERED THEREBY IN CONNECTION WITH THIS
AGREEMENT. Guarantor hereby 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 Guarantor at its address provided in Section
10.04, such service being hereby acknowledged by Guarantor to be sufficient
for personal jurisdiction in any action against Guarantor in any such court
and to be otherwise effective and binding service in every respect. Nothing
herein shall affect the right to serve process in any other manner permitted
by law or shall limit the right of the Agent or any Lender to bring
proceedings against Guarantor in the courts of any other jurisdiction.
10.15 INTERPRETATION. This Guaranty is the result of
negotiations between and has been reviewed by counsel to the Agent, the
Lenders and the Guarantors, and is the product of all parties hereto.
Accordingly, this Guaranty 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.
31
IN WITNESS WHEREOF, the undersigned have executed this Guaranty on the date
hereinabove set forth.
Guarantors:
APARTMENT INVESTMENT AND
MANAGEMENT COMPANY,
a Maryland corporation
By:
---------------------------------
Xxxxx X. Xxxxxxxxx, Vice Chairman
AIMCO PROPERTIES, L.P.,
a Delaware limited partnership
By: AIMCO-GP, Inc.,
a Delaware corporation
By:
----------------------------------
Xxxxx X. Xxxxxxxxx, Vice President
Address Where Notices to
Guarantors are to be Sent:
0000 Xxxxx Xxxxxxxx Xxxxxx
00xx Xxxxx
Xxxxxx, Xxxxxxxx 00000
Address Where Notices to Agent
are to be Sent:
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION
000 Xxxxx Xxxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Att'n: Manager - Unit #1357
Addresses Where Notices to the Lenders are
to be Sent:
Per the Acquisition Sub Credit Agreement
32
EXHIBIT E
PLEDGE AGREEMENT
THIS PLEDGE AGREEMENT ("Pledge Agreement") is made and dated as of this
5th day of May, 1997, by AIMCO Properties L.P., a Delaware limited
partnership ("AIMCO") and Xxxxx Xxxxxxxxx and Xxxxx X. Xxxxxxxxx (each, a
"Common Stockholder," and collectively, the "Common Stockholders"; AIMCO and
the Common Stockholders are individually and collectively referred to herein
as "Pledgor") and Bank of America National Trust and Savings Association, a
national banking association ("BofA"), as Agent ("Secured Party") for BofA,
Xxxxx Xxxxxx Mortgage Capital Group, Inc., a Delaware corporation and the
other lenders ("Lenders") from time to time party to the Acquisition Sub
Credit Agreement described below. Capitalized terms used but not defined
herein shall have the meanings set forth in the Guaranty described below or,
if not defined therein, in such Acquisition Sub Credit Agreement.
RECITALS
A. The Lenders have extended credit to or for the benefit of
AIMCO/NHP Holdings, Inc., a Delaware corporation ("Acquisition Sub"), on the
terms and subject to the conditions set forth in the Acquisition Sub Credit
Agreement, dated as of May 5, 1997 (as amended, modified, waived or replaced
from time to time, the "Acquisition Sub Credit Agreement") under which the
Lenders have committed to make available to the Acquisition Sub a credit
facility of up to $76,000,000. Secured Party is the agent for the Lenders.
B. AIMCO and Apartment Investment and Management Company, a
Maryland corporation (the "REIT") (individually, a "Guarantor" and
collectively, the "Guarantors") have guarantied the obligations of
Acquisition Sub pursuant to a Payment Guaranty, dated as of May 5, 1997 (the
"Guaranty"). Pledgor has agreed to pledge and to grant to Secured Party a
security interest in and lien upon the Collateral (as defined in Paragraph 2
below) as security for all Obligations (as defined in Paragraph 3 below), for
the ratable benefit of the Lenders.
C. Pledgor is the owner of Stock in Acquisition Sub, consisting of
the interests described on SCHEDULE 1 attached hereto.
NOW, THEREFORE, in consideration of the above Recitals and for other
good and valuable consideration, the receipt and adequacy of which are hereby
acknowledged, Pledgor hereby agrees as follows:
1
AGREEMENT
1. GRANT OF SECURITY INTEREST. Pledgor hereby pledges and
grants to Secured Party a security interest in the property described in
Paragraph 2 below (collectively and severally, the "Collateral") to secure
payment and performance of the Obligations.
2. COLLATERAL. The Collateral shall consist of the following,
whether now existing or hereafter arising:
(a) SECURITIES. All shares of capital stock or other
equity or beneficial interests in the Acquisition Sub held by Pledgor,
including, without limitation, the stock described on SCHEDULE 1 attached
hereto, all related securities, warrants, options or rights to receive any
capital stock or other equity or beneficial interests, and any interest of
Pledgor in the entries of on the books of any financial intermediary
pertaining thereto. All of the foregoing are collectively referred to herein
as the "Pledged Stock";
(b) CERTIFICATES. All certificates (including, without
limitation, any certificate representing a stock dividend or a distribution
in connection with any reclassification, increase or reduction of capital, or
issued in connection with any reorganization), options or rights, whether as
an addition to, in substitution of, as evidence of, or in exchange for, any
of the Pledged Stock;
(c) ADDITIONAL SHARES. All additional shares of, and all
securities convertible into and warrants, options and other rights to
purchase or otherwise acquire, stock of any issuer of the Pledged Stock from
time to time acquired by Pledgor in any manner (which shares shall be deemed
to be part of the Pledged Stock), the certificates or other instruments
representing such additional shares, securities, warrants, options or other
rights and any interest of Pledgor in the entries on the books of any
financial intermediary pertaining to such additional shares, and all
dividends, cash, warrants, rights, instruments and other property or proceeds
from time to time received, receivable or otherwise distributed in respect of
or in exchange for any or all of such additional shares, securities,
warrants, options or other rights;
(d) DISTRIBUTIONS, DIVIDENDS, ETC. All rights of Pledgor
as a shareholder or other holder of any equity or beneficial interest in the
Acquisition Sub, including, without limitation, all management and voting
rights, all rights to distributions, dividends, the payment of money or the
distribution of other property from the Acquisition Sub (including, without
limitation, all rights to receive profits or surplus of, or other
distributions or compensation by way of income, return of capital or any
liquidating or other distribution from the Acquisition Sub and whether such
distributions or payments are on account of Pledgor's interest as a
shareholder or other holder of any equity or beneficial interest in the
Acquisition Sub, as a creditor of the
2
Acquisition Sub, or otherwise), and all rights to the assets of the
Acquisition Sub held by Pledgor or accruing to Pledgor under the
Organizational Documents for the Acquisition Sub or under applicable law.
All such rights are collectively referred to as the "Pledged Rights";
(e) BOOKS AND RECORDS. All present and future books and
records relating to the Collateral to the extent Pledgor has rights therein,
including, without limitation, books of account and ledgers of every kind and
nature, all electronically recorded data relating to the Collateral or the
business thereof, all receptacles and containers for such records, and all
files and correspondence relating thereto; and
(f) PROCEEDS. All proceeds of the foregoing Collateral.
For purposes of this Pledge Agreement, the term "proceeds" includes whatever
is receivable or received when Collateral or proceeds is sold, collected,
exchanged or otherwise disposed of, whether such disposition is voluntary or
involuntary, and includes, without limitation, all rights to payment,
including return premiums, with respect to any insurance relating thereto.
Nothing contained herein shall be deemed to render Secured Party or
any Lender responsible for any liabilities or obligations of Pledgor with
respect to the Pledged Stock or any other portion of the Collateral.
3. OBLIGATIONS. The obligations secured by this Pledge Agreement
shall consist of all obligations and liabilities, whether at stated maturity,
by required prepayment, declaration, acceleration, demand or otherwise
(including the payment of amounts that would become due but for the operation
of the automatic stay under Section 362(a) of the Bankruptcy Code, 11 U.S.C.
Section 362(a) or any successor provision), of all obligations and
liabilities of every nature of the Guarantors under the Guaranty, whether now
or hereafter existing, and all extensions or renewals thereof, whether for
principal, interest (including without limitation interest that, but for the
filing of a petition in bankruptcy with respect to any of the Guarantors,
would accrue on such obligations), fees, expenses, indemnities or otherwise,
whether voluntary or involuntary, direct or indirect, absolute or contingent,
liquidated or unliquidated, whether or not jointly owned with others, and
whether or not from time to time decreased or extinguished and later
increased, created or incurred, and all or any portion of such obligations or
liabilities that are paid, to the extent all or any part of such payment is
avoided or recovered directly or indirectly from Secured Party or any Lender
as a preference, fraudulent transfer or otherwise (all such obligations and
liabilities being the "Underlying Debt"), and all obligations of every nature
of Pledgor now or hereafter existing under this Pledge Agreement (all such
obligations of Pledgor, together with the Underlying Debt, being the
"Obligations").
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4. REPRESENTATIONS AND WARRANTIES. Pledgor hereby represents,
warrants and covenants with Secured Party that:
(a) OWNERSHIP OF COLLATERAL. Pledgor is the sole owner of
and has good title to the Collateral (or, in the case of after-acquired
Collateral, at the time Pledgor acquires rights in the Collateral, will be
the owner thereof) and is the record and beneficial owner of the Pledged
Stock included in the Collateral described on SCHEDULE 1.
(b) PERFECTION AND PRIORITY. The pledge of the Collateral
pursuant to this Agreement creates (together with (i) the delivery to Secured
Party of all stock certificates representing the Pledged Stock, and (ii)
filing of Uniform Commercial code financing statements with the Secretary of
State of Colorado (and, in the case of Xxxxx Xxxxxxxxx, California) a valid
and perfected first priority security interest in the Collateral, securing
the payment of the Obligations. Except for the security interests in favor
of Secured Party hereunder, no Person has (or, in the case of after-acquired
Collateral, at the time Pledgor acquires rights therein, will have) any
right, title, claim or interest (by way of security interest or other lien or
charge) in, against or to the Collateral.
(c) ACCURACY OF INFORMATION. All information heretofore,
herein or hereafter supplied to Secured Party by or on behalf of Pledgor with
respect to the Collateral is or will be true and correct.
(d) DELIVERY OF DOCUMENTS, ETC. Pledgor has delivered to
Secured Party (i) true and correct copies of the Organizational Documents for
the Acquisition Sub, (ii) all instruments, documents, chattel paper and other
items of Collateral in which a security interest is or may be perfected by
possession, and (iii) any certificated Pledged Stock together with such
additional writings, including, without limitation, assignments and stock
powers, with respect thereto as Secured Party shall have requested.
(e) PLEDGED SHARES. The Pledged Stock has been validly
issued and is fully paid and nonassessable; and there are no outstanding
options, warrants or other agreements with respect thereto. The Pledged
Stock constitutes all of the issued and outstanding shares of capital stock
and the equity and beneficial interests in the Acquisition Sub.
(f) ORGANIZATIONAL DOCUMENTS. The terms of the
Organizational Documents for the Acquisition Sub have not been modified or
waived in any respect from such documents delivered to Secured Party pursuant
to Section 4(d)(i) above.
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(g) SET-OFF. Neither the Acquisition Sub nor any of the
other shareholders, partners, members or other holders of equity or
beneficial interests in the Acquisition Sub has any defense, set-off, claim
or counterclaim against Pledgor which can be asserted against Secured Party,
whether in any proceeding to enforce Secured Party's rights in the Collateral
or otherwise.
(h) NO DEFAULT. There is no default by Pledgor under the
Organizational Documents for the Acquisition Sub nor has any event occurred
which, with the passage of time or giving of notice, or both, would
constitute a default thereunder.
5. COVENANTS AND AGREEMENTS OF PLEDGOR. In addition to all
covenants and agreements of Pledgor set forth in any other agreement with
Secured Party, which are incorporated herein by this reference, Pledgor
hereby agrees:
(a) MAINTENANCE OF COLLATERAL. Pledgor agrees to do all
acts that may be necessary to maintain, preserve and protect the Collateral.
(b) USE OF COLLATERAL. Pledgor agrees not to use or
permit any Collateral to be used unlawfully or in violation of any provision
of the Guaranty, or any applicable statute, regulation or ordinance covering
the Collateral.
(c) TAXES. Pledgor agrees to pay all taxes, assessments,
charges, encumbrances and liens now or hereafter imposed upon or affecting
any Collateral prior to the time the same become delinquent, except for those
being contested in good faith by appropriate proceedings and for which the
Pledgor has provided adequate reserves.
(d) FINANCING STATEMENTS. Pledgor agrees to procure,
execute and deliver from time to time any endorsements, assignments,
financing statements and other writings reasonably deemed necessary or
appropriate by Secured Party to perfect, maintain and protect its security
interest hereunder and the priority thereof and to deliver promptly to
Secured Party all originals of Collateral or proceeds consisting of chattel
paper or instruments.
(e) ACTIONS. Pledgor agrees to appear in and defend any
action or proceeding which may affect its title to or Secured Party's
interest in the Collateral.
(f) USE OF PROCEEDS. Pledgor agrees, if the Lenders give
value to enable Pledgor to acquire rights in or the use of any Collateral, to
use such value for such purpose.
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(g) RECORDS. Pledgor agrees to keep separate, accurate
and complete records of the Collateral and to provide Secured Party with such
records and such other reports and information relating to the Collateral as
Secured Party may reasonably request from time to time.
(h) SALE OR ENCUMBRANCE. Except as permitted under
Section 7.07 of the Acquisition Sub Credit Agreement, Pledgor agrees not to
surrender or lose possession of (other than to Secured Party), sell,
encumber, or otherwise dispose of or transfer any Collateral or right or
interest therein and, notwithstanding any provision of the Organizational
Documents, to keep the Collateral free of all levies and security interests
or other Liens, charges, preferences or priorities, except those approved in
writing by Secured Party.
(i) PROCEEDS. Pledgor agrees to account fully for and
promptly deliver to Secured Party, in the form received, all proceeds of the
Collateral received, endorsed to Secured Party as appropriate, and until so
delivered all proceeds shall be held by Pledgor in trust for Secured Party,
separate from all other property of Pledgor and identified as the property of
Secured Party.
(j) LOCATION OF RECORDS. Pledgor agrees to keep the
records concerning the Collateral at the location set forth in Section 24
below and not to remove the records concerning the Collateral from such
location without the prior written consent of Secured Party.
(k) DISSOLUTION. Except as permitted under Section 7.07
of the Acquisition Sub Credit Agreement, Pledgor agrees not to permit or take
any action to dissolve or terminate the Acquisition Sub.
(l) COMPLIANCE WITH LAWS. To comply with all laws,
regulations and ordinances relating to the possession, operation, maintenance
and control of the Collateral.
(m) SAFEKEEPING. That such care as Secured Party gives to
the safekeeping of its own property of like kind shall constitute reasonable
care of such Collateral when in Secured Party's possession.
(n) PAYMENT OF SECURED PARTY'S COSTS AND EXPENSES. To
reimburse Secured Party upon demand for any reasonable costs and expenses,
including, without limitation, reasonable attorneys' fees, Secured Party may
incur while exercising any right, power or remedy provided by this Pledge
Agreement or by law, all of which costs and expenses are included in the
Obligations secured hereby.
(o) NOTICE OF CHANGES. To give Secured Party thirty (30)
days prior written notice of any change in Pledgor's residence or chief place
of
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business or legal name or trade name(s) or style(s) set forth in Section 24
of this Pledge Agreement.
(p) DIVIDENDS ON PLEDGED RIGHTS AND PLEDGED STOCK. To
account fully for and promptly deliver to Secured Party, as additional
Collateral hereunder, in the form received, any dividend or any other
distribution on account of its Pledged Rights and Pledged Stock, if any,
whether in cash, securities or property by way of stock-split, spin-off,
split-up or reclassification, combination of shares or the like, or in case
of any reorganization, consolidation or merger. Pledgor further agrees that
it will, upon obtaining any additional shares of stock or other securities of
the Acquisition Sub referred to in Section 1(c), promptly (and in any event
within five Business Days) deliver to Secured Party a Pledge Amendment, duly
executed by Pledgor, in substantially the form of EXHIBIT A annexed hereto (a
"Pledge Amendment"), in respect of the additional Pledged Stock to be pledged
pursuant to this Pledge Agreement. Pledgor hereby authorizes Secured Party
to attach each Pledge Amendment to this Pledge Agreement and agrees that all
Pledged Stock listed on any Pledge Amendment delivered to Secured Party shall
for all purposes hereunder be considered Collateral; PROVIDED that the
failure of Pledgor to execute a Pledge Amendment with respect to any
additional Pledged Stock pledged pursuant to this Pledge Agreement shall not
impair the security interest of Secured Party therein or otherwise adversely
affect the rights and remedies of Secured Party hereunder with respect
thereto.
(q) AMENDMENT OF ORGANIZATIONAL DOCUMENTS. Not to amend
or permit the amendment of the articles of incorporation, by-laws or other
Organizational Documents of the Acquisition Sub.
(r) COMPLIANCE WITH ACQUISITION SUB CREDIT AGREEMENT. To
cause the Acquisition Sub to comply with all the terms of the Acquisition Sub
Credit Agreement.
6. AUTHORIZED ACTION BY SECURED PARTY.
(a) Pledgor hereby agrees that from time to time, without
presentment, notice or demand, and without affecting or impairing in any way
the rights of Secured Party with respect to the Collateral, the obligations
of Pledgor hereunder or the Obligations, Secured Party may, but shall not be
obligated to and shall incur no liability to Pledgor or any third party for
failure to take any act which Pledgor is obligated by this Pledge Agreement
to do, during the existence of an Event of Default, exercise such rights and
powers as Pledgor might exercise with respect to the Collateral, and Pledgor
hereby irrevocably appoints Secured Party as its attorney-in-fact to, during
the existence of an Event of Default, exercise such rights and powers,
including without limitation: (i) collect by legal proceedings or otherwise
and endorse, receive and receipt for all dividends, interest, payments,
proceeds and other
7
sums and property now or hereafter payable on or on account of the
Collateral; (ii) enter into any extension, reorganization, deposit, merger,
consolidation or other agreement pertaining to, or deposit, surrender,
accept, hold or apply other property in exchange for the Collateral; (iii)
insure, process and preserve the Collateral; (iv) transfer the Collateral to
its own or its nominee's name; (v) make any compromise or settlement, and
take any action it deems advisable, with respect to the Collateral; and (vi)
to notify any account pledgor on any Collateral to make payment directly to
Secured Party.
(b) So long as no Event of Default shall have occurred and be
continuing:
(i) Pledgor shall be entitled to exercise any and all
voting and other consensual rights pertaining to the Collateral or any part
thereof for any purpose not inconsistent with the terms of this Pledge
Agreement; PROVIDED, HOWEVER, that Pledgor shall give Secured Party at least
10 Business Days' prior written notice with respect to any shareholder vote
with respect to any act or undertaking which, if effected, would have a
Material Adverse Effect or would violate the Credit Agreement; and
(ii) Secured Party shall promptly execute and deliver (or
cause to be executed and delivered) to Pledgor all such proxies and other
instruments as Pledgor may from time to time reasonably request for the
purpose of enabling Pledgor to exercise the voting and other consensual
rights which it is entitled to exercise pursuant to paragraph (i) above.
(c) Upon the occurrence and during the continuation of an Event
of Default, and upon written notice from Secured Party to Pledgor, all rights
of Pledgor to exercise the voting and other consensual rights which it would
otherwise be entitled to exercise pursuant to Section 6(b)(i) shall cease,
and all such rights shall thereupon become vested in Secured Party who shall
thereupon have the sole right to exercise such voting and other consensual
rights;
(d) In order to permit Secured Party to exercise the voting and
other consensual rights which it may be entitled to exercise pursuant to
Section(6)(c)(i) and to receive all dividends and other distributions which
it is entitled to receive hereunder, (i) Pledgor shall promptly execute and
deliver (or cause to be executed and delivered) to Secured Party all such
proxies, dividend payment orders and other instruments as Secured Party may
from time to time reasonably request and (ii) without limiting the effect of
the immediately preceding clause (i), Pledgor hereby grants to Secured Party
an irrevocable proxy to vote the Pledged Stock and to exercise all other
rights, powers, privileges and remedies to which a holder of the Pledged
Stock would be entitled (including, without limitation, giving or withholding
written consents of shareholders,
8
calling special meetings of shareholders and voting at such meetings), which
proxy shall be effective, automatically and without the necessity of any
action (including any transfer of any Pledged Stock on the record books of
the issuer thereof) by any other Person (including the issue of the Pledged
Stock or any officer or agent thereof), upon the occurrence and during the
continuance of an Event of Default and which proxy shall only terminate upon
the payment in full of the Obligations.
7. DEFAULT. The occurrence of any Guarantor Event of Default
shall constitute an Event of Default hereunder.
8. REMEDIES. Upon the occurrence and during the continuance of
any such Event of Default, provided that Guarantor shall then be obligated to
pay all sums then due and owing on the Guarantied Indebtedness in accordance
with Section 2.01(b) of the Guaranty, Secured Party may, at its option, and,
without notice to or demand on Pledgor and in addition to all rights and
remedies available to Secured Party under any other agreement do any one or
more of the following:
(a) GENERAL ENFORCEMENT. Foreclose or otherwise enforce
Secured Party's security interest in any manner permitted by law, or provided
for in this Pledge Agreement;
(b) SALE, ETC. Sell, lease or otherwise dispose of any
Collateral at one or more public or private sales at Secured Party's place of
business or any other place or places, including, without limitation, any
broker's board or securities exchange, whether or not such Collateral is
present at the place of sale, for cash or credit or future delivery, on such
terms and in such manner as Secured Party may determine;
(c) COSTS OF REMEDIES. Recover from Pledgor all costs
and expenses, including, without limitation, reasonable attorneys' fees,
incurred or paid by Secured Party in exercising any right, power or remedy
provided by this Pledge Agreement or by law with respect to the Collateral;
(d) ASSEMBLY OF COLLATERAL. Require Pledgor to assemble
the Collateral and make it available to Secured Party at a place to be
designated by Secured Party;
(e) TAKE POSSESSION OF COLLATERAL. Enter onto property
where Collateral is located and take possession thereof with or without
judicial process. Pledgor expressly waives any constitutional or other right
to a judicial hearing prior to the time Secured Party takes possession of the
Collateral upon default as provided herein;
9
(f) VOTE OF PLEDGED STOCK. Vote or consent, and in
connection therewith Pledgor grants to Secured Party a proxy to vote or to
consent, with respect to Pledged Stock or Pledged Rights;
(g) MANNER OF SALE OF PLEDGED STOCK. Restrict the
prospective bidders or purchasers of Pledged Stock or Pledged Rights to
persons or entities who (i) will represent and agree that they are purchasing
for their own account, for investment, and not with a view to the
distribution or sale of any of the Pledged Stock or Pledged Rights; and (ii)
satisfy the offeree and purchaser requirements for a valid private placement
transaction under Section 4(2) of the Securities Act of 1933, as amended (the
"Act"), and under all applicable Securities and Exchange Commission releases,
rules and regulations. Pledgor agrees that disposition of any of the Pledged
Stock or Pledged Rights, if any, pursuant to any private sale made as
provided above may be at prices and on other terms less favorable than if the
Pledged Stock or Pledged Rights were sold at public sale, and that Secured
Party has no obligation to delay the sale of any Pledged Stock or Pledged
Rights for public sale under the Act. Pledgor agrees that a private sale or
sales made under the foregoing circumstances shall be deemed to have been
made in a commercially reasonable manner. In the event that Secured Party
elects to sell the Pledged Stock or Pledged Rights, or part of them, and
there is a public market for the Pledged Stock or Pledged Rights, in a public
sale, Pledgor shall, upon demand by Secured Party, use its best efforts to
register and qualify the Pledged Stock and/or Pledged Rights, under the Act
and all state Blue Sky or securities laws required by the proposed terms of
sale, and all expenses thereof shall be payable by Pledgor, including, but
not limited to, all costs of (i) registration or qualification of, under the
Act or any state Blue Sky or securities laws or pursuant to any applicable
rule or regulation issued pursuant thereto, any Pledged Stock or Pledged
Rights, and (ii) sale of such Pledged Shares, including, but not limited to,
brokers' or underwriters' commissions, fees or discounts, accounting and
legal fees, costs of printing and other expenses of transfer and sale. If
any consent, approval or authorization of any state, municipal or other
governmental department, agency or authority shall be necessary to effectuate
any sale or other disposition of Pledged Stock or Pledged Rights, or any part
thereof, Pledgor will execute such applications and other instruments as may
be required in connection with securing any such consent, approval or
authorization, and will otherwise use its best efforts to secure the same;
(h) MANNER OF SALE OF COLLATERAL OTHER THAN PLEDGED STOCK.
Pledgor shall be given five (5) business days' prior notice of the time and
place of any public sale or of the time after which any private sale or other
intended disposition of the Collateral other than Pledged Stock is to be
made, which notice Pledgor hereby agrees shall be deemed reasonable notice
thereof; and
(i) APPLICATION OF RECEIPTS. Secured Party shall apply
all sums received or collected from or on account of the Collateral,
including, without limitation, the proceeds of any sale thereof, to the
payment of the costs and expenses
10
incurred in preserving and enforcing the rights of Secured Party in effecting
a sale of such Collateral (including, without limitation, reasonable
attorneys' fees and legal expenses, including fees and expenses of in-house
counsel) and to the payment of the Obligations in such order and manner as
Secured Party, in its sole discretion, elects.
9. DELIVERY TO AND RIGHTS OF PURCHASER. Upon any sale or other
disposition pursuant to this Pledge Agreement, Secured Party shall have the
right to deliver, assign and transfer to the purchaser thereof the Collateral
or portion thereof so sold or disposed of. Each purchaser at any such sale
or other disposition (including Secured Party) shall hold the Collateral free
from any claim or right of whatever kind, including any equity or right of
redemption of Pledgor, and Pledgor specifically waives (to the extent
permitted by law), upon any such sale or disposition pursuant to this Pledge
Agreement, all rights of redemption, stay or appraisal which it has or may
have under any rule of law or statute now existing or hereafter adopted.
10. COLLECTION OF COLLATERAL PAYMENTS.
(a) COLLECTION OF PAYMENTS. Pledgor shall, at its sole
cost and expense, take all reasonable and necessary action to obtain payment,
when due and payable, of all sums due or to become due with respect to any
Collateral ("Collateral Payments" or a "Collateral Payment"), including,
without limitation, the taking of such action with respect thereto as Secured
Party may request, or, in the absence of such request, as Pledgor may
reasonably deem advisable; provided, however, that Pledgor shall not, without
the prior written consent of Secured Party, grant or agree to any rebate,
refund, compromise or extension with respect to any Collateral Payment. Upon
the request of Secured Party, Pledgor will notify and direct any account
pledgor who is or might become obligated to make any Collateral Payment, to
make payment thereof to Secured Party (or to Pledgor in care of Secured
Party) at such address as Secured Party may designate. Pledgor will
reimburse Secured Party promptly upon demand for all out-of-pocket costs and
expenses, including reasonable attorneys' fees and litigation expenses,
incurred by Secured Party in seeking to collect its Collateral Payment.
(b) PAYMENTS IN TRUST. Upon the request of Secured Party,
Pledgor will, forthwith upon receipt, transmit and deliver to Secured Party,
in the form received, all cash, checks, drafts and other instruments for the
payment of money (properly endorsed where required so that such items may be
collected by Secured Party) which may be received by Pledgor at any time as
payment on account of any Collateral Payment and if such request shall be
made, until delivery to Secured Party, such items will be held in trust for
Secured Party and will not be commingled by Pledgor with any of its other
funds or property. Thereafter, Secured Party is hereby authorized and
empowered to endorse the name of Pledgor on any check, draft or other
instrument for the payment of money received by Secured Party on account of
11
any Collateral Payment if Secured Party believes such endorsement is
necessary or desirable for purposes of collection.
(c) INDEMNIFICATION. Pledgor hereby indemnifies and saves
harmless Secured Party and its agents, officers and employees from and
against all liabilities and reasonable expenses on account of any adverse
claim asserted against Secured Party relating to any moneys received by
Secured Party on account of any of Pledgor's Collateral Payments and such
obligation of Pledgor shall continue in effect after and notwithstanding the
discharge of the Obligations and the release of the security interest granted
in Paragraph 1 above.
12
11. STANDARD OF CARE. The powers conferred on Secured Party
hereunder are solely to protect its interest in the Collateral and shall not
impose any duty upon it to exercise any such powers. Except for the exercise
of reasonable care in the custody of any Collateral in its possession and the
accounting for moneys actually received by it hereunder, Secured Party shall
have no duty as to any Collateral, it being understood that Secured Party
shall have no responsibility for (a) ascertaining or taking action with
respect to calls, conversions, exchanges, maturities, tenders or other
matters relating to any Collateral, whether or not Secured Party has or is
deemed to have knowledge of such matters, (b) taking any necessary steps
(other than steps taken in accordance with the standard of care set forth
above to maintain possession of the Collateral) to preserve rights against
any parties with respect to any Collateral, (c) taking any necessary steps to
collect or realize upon the Obligations or any guarantee therefor, or any
part thereof, or any of the Collateral, or (d) initiating any action to
protect the Collateral against the possibility of a decline in market value.
Secured Party shall be deemed to have exercised reasonable care in the
custody and preservation of Collateral in its possession if such Collateral
is accorded treatment substantially equal to that which Secured Party accords
its own property consisting of negotiable securities.
12. CONTINUING SECURITY INTEREST; TRANSFER OF LOANS. This
Pledge Agreement shall create a continuing security interest in the
Collateral and shall (a) remain in full force and effect until the payment in
full of all Obligations and the cancellation or termination of the
Commitments, (b) be binding upon Pledgor, its successors and assigns, and (c)
inure, together with the rights and remedies of Secured Party hereunder, to
the benefit of Secured Party and its successors, transferees and assigns.
Without limiting the generality of the foregoing clause (c), but subject to
the provisions of Section 10.08 of the Credit Agreement, any Lender may
assign or otherwise transfer any Loans held by it to any other Person, and
such other Person shall thereupon become vested with all the benefits in
respect thereof granted to Lenders herein or otherwise. Upon the payment in
full of Obligations, the cancellation or termination of the Commitments, the
security interest granted hereby shall terminate and all rights to the
Collateral shall revert to Pledgor. Upon any such termination Secured Party
will, at Pledgor's expense, execute and deliver to Pledgor such documents as
Pledgor shall reasonably request to evidence such termination and Pledgor
shall be entitled to the return, upon its request and at its expense, against
receipt and without recourse to Secured Party, of such of the Collateral as
shall not have been sold or otherwise applied pursuant to the terms hereof.
13 SECURED PARTY AS AGENT.
13
(a) Secured Party has been appointed to act as Secured Party
hereunder by Lenders, Secured Party shall be obligated, and shall have the
right hereunder, to make demands, to give notices, to exercise or refrain
from exercising any rights, and to take or refrain from taking any action
(including, without limitation, the release or substitution of Collateral),
solely in accordance with this Pledge Agreement and the Credit Pledge
Agreement.
(b) Secured Party shall at all times be the same Person that
is Agent under the Acquisition Sub Credit Agreement. Written notice of
resignation by Agent pursuant to Article IX of the Acquisition Sub Credit
Agreement shall also constitute notice of resignation as Secured Party under
this Pledge Agreement; removal of Agent pursuant to Article IX of the
Acquisition Sub Credit Agreement shall also constitute removal as Secured
Party under this Pledge Agreement; and appointment of a successor Agent
pursuant to Article IX of the Acquisition Sub Credit Agreement shall also
constitute appointment of a successor Secured Party under this Pledge
Agreement. Upon the acceptance of any appointment as Agent under Article IX
of the Acquisition Sub Credit Agreement by a successor Agent, that successor
Agent shall thereupon succeed to and become vested with all the rights,
powers, privileges and duties of the retiring or removed Secured Party under
this Pledge Agreement, and the retiring or removed Secured Party under this
Pledge Agreement shall promptly (i) transfer to such successor Secured Party
all sums, securities and other items of Collateral held hereunder, together
with all records and other documents necessary or appropriate in connection
with the performance of the duties of the successor Secured Party under this
Pledge Agreement, and (ii) execute and deliver to such successor Secured
Party such amendments to financing statements, and take such other actions,
as may be necessary to appropriate in connection with the assignment to such
successor Secured Party of the security interests created hereunder,
whereupon such retiring or removed Secured Party shall be discharged from its
duties and obligations under this Pledge Agreement. After any retiring or
removed Agent's resignation or removal hereunder as Secured Party, the
provisions of this Pledge Agreement shall insure to its benefit as to any
actions taken or omitted to be taken by it under this Pledge Agreement while
it was Secured Party hereunder.
14. CUMULATIVE RIGHTS. The rights, powers and remedies of Secured
Party under this Pledge Agreement shall be in addition to all rights, powers
and remedies given to Secured Party by virtue of any statute or rule of law,
the Acquisition Sub Credit Agreement, the Loan Documents, the Guaranty or any
other agreement, all of which rights, powers and remedies shall be cumulative
and may be exercised successively or concurrently without impairing Secured
Party's security interest in the Collateral.
15. WAIVER. Any waiver, forbearance or failure or delay by Secured
Party in exercising any right, power or remedy shall not preclude the further
exercise thereof, and every right, power or remedy of Secured Party shall
continue in full force
14
and effect until such right, power or remedy is specifically waived in a
writing executed by Secured Party. Pledgor waives any right to require
Secured Party to proceed against any person or to exhaust any Collateral or
to pursue any remedy in Secured Party's power, subject to the express
provision of Section 2.01(b) of the Guaranty.
16. SETOFF. Pledgor agrees that Secured Party may exercise its
rights of setoff with respect to the Obligations in the same manner as if the
Obligations were unsecured.
17. BINDING UPON SUCCESSORS. All rights of each party hereto shall
inure to the benefit of its successors and assigns, and all obligations of
each party hereto shall bind its successors and assigns.
18. ENTIRE AGREEMENT; SEVERABILITY; COUNTERPARTS. This Pledge
Agreement contains the entire pledge agreement between Secured Party and
Pledgor. If any of the provisions of this Pledge Agreement shall be held
invalid or unenforceable, this Pledge Agreement shall be construed as if not
containing those provisions and the rights and obligations of the parties
hereto shall be construed and enforced accordingly. This Agreement may be
executed in counterparts all of which together shall constitute but one
agreement.
19. CHOICE OF LAW. THIS PLEDGE AGREEMENT AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE
CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF
CALIFORNIA, WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES, EXCEPT TO THE
EXTENT THAT THE UNIFORM COMMERCIAL CODE PROVIDES THAT THE VALIDITY OR
PERFECTION OF THE SECURITY INTEREST HEREUNDER, OR REMEDIES HEREUNDER, IN
RESPECT OF ANY PARTICULAR COLLATERAL ARE GOVERNED BY THE LAWS OF A
JURISDICTION OTHER THAN THE STATE OF CALIFORNIA. Unless otherwise defined
herein or in the Credit Pledge Agreement, terms used in Articles 8 and 9 of
the Uniform Commercial Code in the State of California are used herein as
therein defined. Any disputes or claims relating to this Pledge Agreement
shall be resolved by arbitration in accordance with the terms and conditions
set forth in Section 10.17 of the Acquisition Sub Credit Agreement and
Section 9.01 of the Guaranty.
20. AMENDMENT. This Pledge Agreement may not be amended or
modified except by a writing signed by each of the parties hereto.
15
21. NOTICES. Communications provided for herein shall be in
writing and shall be delivered, mailed, postage prepaid or communicated in
accordance with the Acquisition Sub Credit Agreement.
22. ADDRESS; TRADE NAMES; RECORDS. The REIT represents that its
chief place of business is 0000 Xxxxx Xxxxxxxx Xxxxxx, Xxxxx 0000, Xxxxxx,
Xxxxxxxx, that "AIMCO" constitutes the only trade name or style used by the
REIT; and that the REIT's records concerning the Collateral are kept at the
REIT's chief place of business listed above. Each Common Stockholder
represents that its place of business is as follows: c/o Apartment
Investment and Management Company, 0000 Xxxxx Xxxxxxxx Xxxxxx, Xxxxx 0000,
Xxxxxx, Xxxxxxxx, and that its records concerning the Collateral are kept at
0000 Xxxxx Xxxxxxxx Xx., Xxxxx 0000, Xxxxxx, Xxxxxxxx.
23. CAPTIONS. All captions used in this Pledge Agreement are for
convenience only and shall not affect the construction of this Pledge
Agreement.
24. MODIFICATIONS. No modification or amendment of this Pledge
Agreement shall be effective unless in writing and signed by the parties
sought to be charged or bound hereby.
25. PLEDGOR'S THIRD PARTY WAIVERS.
(a) RIGHTS OF SECURED PARTY. Pledgor authorizes Secured
Party or any Lender to perform any or all of the following acts at any time
in its sole discretion, all without notice to Pledgor, without affecting
Pledgor's obligations under this Pledge Agreement or any other Loan Documents
and without affecting the Liens and encumbrances against the Collateral in
favor of Secured Party:
(i) Secured Party or any Lender may alter any terms
of the Obligations or any part thereof, including renewing,
compromising, extending or accelerating, or otherwise changing the time
for payment of, or increasing or decreasing the rate of interest on,
the Obligations or any part thereof.
(ii) Secured Party or any Lender may take and hold
security for the Obligations, accept additional or substituted security,
and subordinate, exchange, enforce, waive, release, compromise, fail to
perfect and sell or otherwise dispose of any such security.
(iii) Secured Party or any Lender may direct the
order and manner of any sale of all or any part of any security now or
later to be held for the Obligations, and Secured Party or any Lender
may also bid at any such sale.
16
(iv) Secured Party or any Lender may apply any payments or
recoveries from Company, Pledgor, any Guaranty or any other source, and
any proceeds of any security, to the obligations under the Loan
Documents and the Obligations hereunder in such manner, order and
priority as Secured Party or such Lender may elect.
(v) Secured Party or any Lender may release any Guarantor
of its liability for the Obligations or any part thereof and the
Acquisition Sub of its liability under the Acquisition Sub Credit
Agreement or the Loan Documents or any part thereof.
(vi) Secured Party or any Lender may substitute, add or
release any one or more guarantors or endorsers.
(vii) In addition to the Obligations, Secured Party or any
Lender may extend other credit to the Acquisition Sub or any Guarantor,
and may take and hold security for the credit so extended, all without
affecting Pledgor's liability hereunder and without affecting the liens
and encumbrances against the Collateral hereunder.
(b) ABSOLUTE OBLIGATIONS. Pledgor expressly agrees that until all
Obligations are paid and performed in full and each and every term, covenant and
condition of this Pledge Agreement to which Pledgor is a party is fully
performed, Pledgor shall not be released of its obligations, waivers and
agreements set forth herein nor shall the validity, enforceability or priority
of the liens and encumbrances against the Collateral in favor of Secured Party
be affected in any manner by or because of:
(i) Any act or event which might otherwise discharge,
reduce, limit or modify Pledgor's obligations hereunder or the liens
and encumbrances against the Collateral in favor of Secured Party;
(ii) Any waiver, extension, modification, forbearance, delay
or other act or omission of Secured Party or any Lender or any failure
to proceed promptly or otherwise as against the Acquisition Sub, any
Guarantor, Pledgor or any other Person or any security;
(iii) Any action, omission or circumstance which might
increase the likelihood that Secured Party or any Lender might enforce
the rights granted under this Pledge Agreement or which might affect
the rights or remedies of Pledgor as against the Acquisition Sub or any
Guarantor; or
17
(iv) Any dealings occurring at any time between the
Acquisition Sub or any Guarantor and Secured Party or any Lender,
whether relating to the Obligations or otherwise.
Pledgor hereby expressly waives and surrenders any defense to the
performance of the obligations under this Pledge Agreement or to the
enforcement of the liens and encumbrances against the Collateral in favor of
Secured Party based upon any of the foregoing acts, omissions, agreements,
waivers or matters described in this subsection. It is the purpose and
intent of this Pledge Agreement that the obligations of Pledgor under this
Pledge Agreement shall be absolute and unconditional under any and all
circumstances.
(c) PLEDGOR'S WAIVERS. Pledgor waives:
(i) All statutes of limitations as a defense to any action
or proceeding brought against Pledgor or the Collateral by Secured
Party or any Lender, to the fullest extent permitted by law;
(ii) Any right it may have to require Secured Party or any
Lender to proceed against the Acquisition Sub, any Guarantor or any
other Person, proceed against or exhaust any security held from the
Acquisition Sub, any Guarantor or any Person, or pursue any other
remedy in Secured Party's or such Lender's power to pursue;
(iii) Any defense based on any claim that Pledgor's
obligations exceed or are more burdensome than those of any Guarantor
or the Acquisition Sub;
(iv) Any defense: (A) based on any legal disability of the
Acquisiton Sub or any Guarantor, (B) based on any release, discharge,
modification, impairment or limitation of the liability of the
Acquisiton Sub or any Guarantor to Secured Party or any Lender from any
cause, whether consented to by Secured Party or arising by operation of
law, (C) arising out of or able to be asserted as a result of any case,
action or proceeding before any court or other Governmental Authority
relating to any Insolvency Proceeding or (D) arising from any rejection
or disaffirmance of the Obligations, or any part thereof, or any
security held therefor, in any such Insolvency Proceeding;
(v) Any defense based on any action taken or omitted by
Secured Party or any Lender in any Insolvency
18
Proceeding involving the Acquisiton Sub or any Guarantor or any other
Pledgor, including any election to have Secured Party's or such
Lender's claim allowed as being secured, partially secured or
unsecured, any extension of credit by Secured Party or any Lender to
the Acquisiton Sub or any Guarantor in any Insolvency Proceeding, and
the taking and holding by Secured Party or such Lender of any security
for any such extension of credit;
(vi) All presentments, demands for performance, notices of
nonperformance, protests, notices of protest, notices of dishonor,
notices of intention to accelerate, notices of acceleration, notices of
acceptance of this Pledge Agreement and of the existence, creation, or
incurring of new or additional indebtedness, and demands and notices of
every kind; and
(vii) Any defense based on or arising out of any defense that
the Acquisiton Sub or any Guarantor or any of their affiliates may have
to the payment or performance of the Obligations.
(d) WAIVERS OF SUBROGATION AND OTHER RIGHTS.
(i) Upon any Event of Default, in its sole discretion,
without prior notice to or consent of Pledgor, Secured Party or any
Lender may elect to: (A) foreclose against any Collateral for the
Obligations, (B) accept a transfer of any such Collateral for the
Obligations in lieu of foreclosure, (C) compromise or adjust the
Obligations or any part thereof or make any other accommodation with
any Guarantor or any Person, or (D) exercise any other remedy against
any Guarantor or any Collateral for the Obligations. No such action by
Secured Party or any Lender shall release or limit Secured Party's or
the Lenders' rights hereunder, even if the effect of the action is to
deprive Pledgor of any subrogation rights, rights of indemnity, or
other rights to collect reimbursement from any Guarantor or any other
Person for any sums paid to Secured Party or such Lender, whether
contractual or arising by operation of law or otherwise. Pledgor
expressly agrees that under no circumstances shall it be deemed to have
any right, title, interest or claim in or to any property to be held by
Secured Party or any third party after any foreclosure or transfer in
lieu of foreclosure of any security for the Obligations.
(ii) Regardless of whether Pledgor may have made any
payments to Secured Party, Pledgor forever waives: (A) all rights of
subrogation, all rights of indemnity, and any other rights to collect
reimbursement from any Guarantor on account of the Collateral
19
encumbered by this Pledge Agreement, whether contractual or arising by
operation of law (including the United States Bankruptcy Code or any
successor or similar statute) or otherwise; (B) all rights to enforce
any remedy that Secured Party or any Lender may have against any
Guarantor or any Person granting collateral for the Obligations; and
(C) all rights to participate in any Collateral now or later to be held
by Secured Party.
(iii) Regardless of whether Pledgor may have made any
payments to Lender, Pledgor hereby absolutely, irrevocably and
unconditionally, now and forever, waives, releases and covenants not to
xxx Acquisition Sub or any shareholder thereof in respect of: (i) all
rights of restitution, subrogation, exoneration, indemnification and
contribution, all rights to collect reimbursement and all other rights,
howsoever denominated, to recover from Acquisition Sub, any shareholder
thereof any sums paid to Secured Party or any Lender whether pursuant
hereto or otherwise paid on the Underlying Debt, and any other rights
arising from the existence, payment, performance or enforcement of
Pledgor's obligations under this Pledge Agreement or any Collateral
Document, (ii) all rights to enforce any remedy that the Secured Party
or any Lender may have against Acquisition Sub, (iii) all rights to
participate in any security now or later to be held by Secured Party or
any Lender for the Underlying Indebtedness, and (iv) all rights to
require Acquisition Sub to perform the Underlying Indebtedness; in each
case whether now exiting existing or hereafter arising and whether
contractual or arising in equity, by statute, common law or otherwise
by operation of law (including the United States Bankruptcy Code or any
successor or similar statute) or otherwise. The foregoing waivers,
releases and covenants are a material part of the consideration to the
Lenders for extending the credit under the Acquisition Sub Credit
Agreement to the Acquisition Sub and may be enforced by and inure to
the benefit of Secured Party, each Lender, Acquisition Sub and its
shareholders from time to time.
(e) REVIVAL AND REINSTATEMENT. If Secured Party or any Lender
is required to pay, return or restore to the Acquisition Sub, any Guarantor
or any other Person any amounts previously paid under the Loan Documents
because of any Insolvency Proceeding affecting the Acquisition Sub or any
Guarantor or any other reason, the obligations of Pledgor shall be reinstated
and revived and the rights of Secured Party and such Lender shall continue
with regard to such amounts, all as though they had never been paid.
(f) ELECTION OF REMEDIES. Without limiting the foregoing,
Pledgor waives all rights and defenses arising out of an election of remedies
by the
20
Secured Party or any Lender even though that election of remedies has
destroyed the Pledgor's rights of subrogation and reimbursement against the
Acquisition Sub, any Guarantor or any other Pledgor by operation of law or
otherwise.
(g) ADDITIONAL OBLIGATIONS. Pledgor's obligations under this
Pledge Agreement are in addition to Pledgor's obligations under any other
existing or future agreements, each of which shall remain in full force and
effect until it is expressly modified or released in a writing signed by
Secured Party with any required consent of the Lenders. Secured Party may
exercise its remedies hereunder, without first proceeding against the
Acquisition Sub, any Guarantor, any other Person or any collateral that
Secured Party may hold, and without pursuing any other remedy. Secured
Party's rights under this Pledge Agreement shall not be exhausted by any
action by Secured Party until all Obligations have been paid and performed in
full.
(h) CONSIDERATION. Pledgor acknowledges: that it expects to
benefit from the Lenders' extension of the credit under the Loan Documents to
the Acquisitioin Sub because of its relationship to the Acquisition Sub; that
it is receiving substantial benefits (which are reasonably equivalent
consideration for Pledgor's execution hereof) from the transaction of which
that extension of indebtedness forms a part; and that it is executing this
Pledge Agreement in consideration of those benefits.
(g) INTER-CREDITOR PROVISIONS. As among the Agent and the
Lenders only, nothing contained in this Pledge Agreement shall limit any of
the approval rights of the Agent or the Lenders set forth in the Loan
Documents.
26. CONSENT TO JURISDICTION AND SERVICE OF PROCESS. ALL JUDICIAL
PROCEEDINGS BROUGHT AGAINST PLEDGOR ARISING OUT OF OR RELATING TO THIS PLEDGE
AGREEMENT MAY BE BROUGHT IN ANY STATE OR FEDERAL COURT OF COMPETENT
JURISDICTION IN THE STATES OF NEW YORK OR CALIFORNIA, AND BY EXECUTION AND
DELIVERY OF THIS PLEDGE AGREEMENT PLEDGOR ACCEPTS FOR ITSELF AND IN
CONNECTION WITH ITS PROPERTIES, GENERALLY AND UNCONDITIONALLY, THE
NONEXCLUSIVE JURISDICTION OF THE AFORESAID COURTS AND WAIVES ANY DEFENSE OF
FORUM NON CONVENIENS AND IRREVOCABLY AGREES TO BE BOUND BY ANY JUDGMENT
RENDERED THEREBY IN CONNECTION WITH THIS PLEDGE AGREEMENT. Pledgor hereby
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
Pledgor at its address provided in Section 24, such service being hereby
acknowledged by Pledgor to be sufficient for personal jurisdiction in any
action against Pledgor in any such court and to be otherwise effective and
binding service in every respect. Nothing herein shall affect the right to
serve process in any other manner permitted by law or shall limit the right
of Secured Party to bring proceedings against Pledgor in the courts of any
other jurisdiction.
21
EXECUTED as of this 5th day of May, 1997.
PLEDGOR:
AIMCO Properties L.P.,
a Delaware limited partnership
By:
------------------------------------------
Xxxxx X. Xxxxxxxxx
Vice President
--------------------------------------------
Xxxxx X. Xxxxxxxxx
---------------------------------------
Xxxxx Xxxxxxxxx
22
SCHEDULE 1
The following shares of capital stock in AIMCO/NHP Holdings, Inc.:
--------------------------------------------------------------------------
Holder Description of Par Value Quantity
Shares
--------------------------------------------------------------------------
AIMCO PROPERTIES, Series A Preferred $.01 95,000 shares
L.P., a Delaware Stock of AIMCO/NHP
limited partnership Holdings, Inc.
--------------------------------------------------------------------------
Xxxxx Xxxxxxxxx Common Stock of $.01 4,000 shares
AIMCO/NHP
Holdings, Inc.
--------------------------------------------------------------------------
Xxxxx X. Xxxxxxxxx Common Stock of $.01 1,000 shares
AIMCO/NHP
Holdings, Inc.
--------------------------------------------------------------------------
23
EXHIBIT A
PLEDGE AMENDMENT
This Pledge Amendment, dated _____________, 19__, is delivered pursuant to
Section 5(p) of the Pledge Agreement referred to below. The undersigned hereby
agree(s) that this Pledge Amendment may be attached to the Pledge Agreement
dated May 5, 1997, between the undersigned and Bank of America National Trust
and Savings Association, a national banking association, as Agent, as Secured
Party (the "Pledge Agreement"), and that the Pledged Shares listed on this
Pledge Amendment shall be deemed to be part of the Pledged Stock and shall
become part of the Collateral and shall secure payment and performance of the
Obligations.
PLEDGOR:
By
-------------------------------------
-------------------------------------------------------------------------------
Holder Description of Par Value Quantity
Shares
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
24
Exhibit F
OPINION REQUIREMENTS
1
LEGAL OPINION REQUIREMENTS
FOR THE
SYNDICATED CREDIT FACILITIES TO
AIMCO PROPERTIES, L.P. AND ITS AFFILIATES
IN CONNECTION WITH
THE ACQUISITION OF STOCK IN
NHP, INC.
OPINIONS REQUIRED UNDER CREDIT FACILITY #2 (ACQUISITION FINANCING TO THE
ACQUISITION SUBSIDIARY)
REQUIRED OPINIONS AS TO THE COMPANY COUNSEL TO OPINE
----------------------------------- ----------------
(AIMCO Properties, LP)
1. The Company is limited partnership duly organized Skadden, Arps
validly existing and in good standing under the laws of
the State of Delaware.
2. The Company has the requisite partnership power and " "
partnership authority (i) to own and operate its
properties and assets; (ii) to carry out its business as
such business is currently being conducted; (iii) to carry
out the terms and conditions applicable to it under the
Loan Documents and (iv) to acquire a preferred stock
interest in the Acquisition Subsidiary on the terms set
forth in the relevant preferred stock documents.
3. The execution, delivery and performance of the Loan " "
Documents by the Company and the acquisition of a
preferred stock interest in the Acquisition Subsidiary on
the terms set forth in the relevant preferred stock
documents have been duly authorized by all requisite
partnership action on the part of the Company and the
Loan Documents have been duly executed and delivered
by the Company.
4. The execution and delivery of the Loan Documents, " "
the consummation of the Loans and the acquisition of a
preferred stock interest in the Acquisition Subsidiary on
the terms set forth in the relevant preferred stock
documents by the Company will not conflict with or
result in a violation of any applicable law or rule
affecting the Company.
2
5. No consent, approval, authorization, or other action by, " "
or filing with, any federal, state, or local governmental
authority is required in connection with the execution
and delivery by the Company of the Loan Documents,
the consummation of the Loans or the acquisition of a
preferred stock interest in the Acquisition Subsidiary on
the terms set forth in the relevant preferred stock
documents
6. The execution and delivery of the Loans Documents, " "
the consummation of the loan by the Company and the
acquisition of a preferred stock interest in the
Acquisition Subsidiary on the terms set forth in the
relevant preferred stock documents will not conflict
with or result in a violation of the Company's
Organization Documents.
7. The execution and delivery of the Loan Documents " "
and consummation of the loans by the Company will not
conflict with or result in a violation of any judgment,
order, or decree of any court or governmental agency to
which the Company is a party or by which it is bound.
(Based on an officer's certificate as to judgments,
orders and decrees.)
8. The execution and delivery of the Loan Documents, " "
the consummation of the Loans by the Company and the
acquisition of a preferred stock interest in the
Acquisition Subsidiary on the terms set forth in the
relevant preferred stock documents will not conflict with
or result in a violation of any material contract,
indenture, instrument, or other agreement to which the
Company is a party or by which it is bound. (Based on
an officer's certificate as to material contracts, etc.)
9. The Loan Documents constitute legal, valid, and " "
binding obligations of the Company, enforceable in
accordance with their terms.
3
REQUIRED OPINIONS AS TO THE REIT COUNSEL TO OPINE
-------------------------------- ----------------
I. The REIT is a corporation duly organized, validly Maryland counsel to
existing, and in good standing under the laws of the the REIT
State of Maryland.
II. The REIT has the requisite corporate power and " "
corporate authority (i) to own and operate its properties
and assets; (ii) to carry out its business as such
business is currently being conducted; and (iii) to carry
out the terms and conditions applicable to it under the
Loan Documents.
III. The execution, delivery, and performance of the Loan " "
Documents by the REIT have been duly authorized by all
requisite corporate action on the part of the REIT and
the Loan Documents have been duly executed and delivered
by the REIT.
IV. The execution and delivery of the Loan Documents by Maryland counsel to
the REIT will not conflict with or result in a violation the REIT and Skadden,
of any applicable law or rule affecting the REIT. Arps
V. No consent, approval, authorization, or other action " "
by, or filing with, any federal, state, or local
governmental authority is required in connection with the
execution and delivery by the REIT of the Loan Documents.
VI. The execution and delivery of the Loan Documents by Maryland counsel to
the REIT will not conflict with or result in a violation the REIT
of the REIT's Organizational Documents.
VII. The execution and delivery of the Loan Documents by Maryland counsel to
the REIT will not conflict with or result in a violation the REIT and Skadden,
of any judgment, order, or decree of any court or Arps
governmental agency to which the REIT is a party or by
which it is bound. (Based on an officer's certificate as
to judgments, orders and decrees.)
VIII. The execution and delivery of the Loan Documents Skadden, Arps
by the REIT will not conflict with or result in a
violation of any contract, indenture, instrument, or
other agreement to which the REIT is a party or by which
it is bound. (Based on an officer's certificate as to
material contracts, etc.)
4
IX. The Loan Documents constitute legal, valid, and " "
binding obligations of the REIT, enforceable in accordance
with their terms.
X. Commencing with the REIT's initial taxable year ended " "
December 31, 1994, the REIT was organized in conformity
with the requirements for qualification as a real estate
investment trust under the Code, and (i) the REIT's actual
method of operation since its formation and (ii) the REIT's
proposed method of operation, including the performance of
any of its obligations pursuant to the Loan Documents, will
enable it to meet the requirements for qualification and
taxation as a real estate investment trust under the Code.
5
REQUIRED OPINIONS AS TO THE ACQUISITION
---------------------------------------
SUBSIDIARY COUNSEL TO OPINE
---------- ----------------
I. The Subsidiary is a corporation duly organized validly Skadden, Arps
existing and in good standing under the laws of the State
of Delaware.
II. The Subsidiary has the requisite partnership power and " "
partnership authority (i) to own and operate its properties
and assets; (ii) to carry out its business as such business
is currently being conducted; and (iii) to carry out the
terms and conditions applicable to it under the Loan
Documents.
III. The execution, delivery and performance of the Loan " "
Documents by the Subsidiary have been duly authorized by all
requisite partnership action on the part of the Subsidiary
and the Loan Documents have been duly executed and delivered
by the Subsidiary.
IV. The execution and delivery of the Loan Documents and " "
consummation of the Loans by the Subsidiary will not conflict
with or result in a violation of any applicable law or rule
affecting the Subsidiary.
V. No consent, approval, authorization, or other action by, " "
or filing with, any federal, state, or local governmental
authority is required in connection with the execution and
delivery by the Subsidiary of the Loan Documents and the
consummation of the Loans.
VI. The execution and delivery of the Loan Documents and " "
consummation of the Loan by the Subsidiary will not conflict
with or result in a violation of the Subsidiary's
Organizational Documents.
VII. The execution and delivery of the Loan Documents and " "
consummation of the Loans by the Subsidiary will not
conflict with or result in a violation of any judgment,
order, or decree of any court or governmental agency to
which the Subsidiary is a party or by which it is bound.
(Based on an officer's certificate as to judgments, orders
and decrees.)
6
VIII. The execution and delivery of the Loan Documents, and " "
consummation of the Loan by the Subsidiary will not conflict
with or result in a violation of any material contract,
indenture, instrument, or other agreement to which the
Subsidiary is a party or by which it is bound. (Based on an
officer's certificate as to material contracts, etc.)
IX. The Loan Documents constitute legal, valid, and binding " "
obligations of the Subsidiary, enforceable in accordance with
their terms.
X. The extension, obtaining and arranging of credit pursuant " "
to the Loan Documents and the application of the proceeds
thereof as provided in the Credit Agreement do not violate
Regulation G, U or X of the Board of Governors of the Federal
Reserve System.
XI. The REIT and the Common Stockholders are the record owners " "
of the Pledged Stock. The Pledge Agreement creates a valid
security interest in the interest of the REIT and the Common
Stockholders in the Pledged Stock (as defined in the Pledge
Agreement), which security interest is perfected by possession
by Bank of America, as Agent, of the shares evidencing the
Pledged Stock.
7
EXHIBIT G
TO ACQUISITION SUB CREDIT AGREEMENT
COMPLIANCE CERTIFICATE
____________, 1997
Bank of America National Trust and
Savings Association, as Agent
CRESG #1357
000 Xxxxx Xxxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attn: Unit Manager
Re: Credit Agreement, dated as of May 5, 1997 (as amended,
modified, supplemented, restated, or renewed from time to time, the
"Credit Agreement"), by and between AIMCO/NHP Holdings, Inc., a
Delaware corporation (the "Company"), the lenders from time to time
party to the Credit Agreement (the "Lenders"), BANK OF AMERICA
NATIONAL TRUST AND SAVINGS ASSOCIATION, a national banking
association, as one of the Lenders, XXXXX XXXXXX MORTGAGE CAPITAL
GROUP, INC., a Delaware corporation, as one of the Lenders and BANK OF
AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION, a national banking
association, as Agent for the Lenders ("Agent")
Ladies and Gentlemen:
Reference is made to the Credit Agreement. Each initially capitalized term
not defined in this Compliance Certificate (including the schedules and other
attachments hereto, this "Certificate") shall have the meaning ascribed to such
term in the Credit Agreement.
The undersigned hereby certifies to Agent and each of the Lenders that, to
the best of the undersigned's knowledge after diligent inquiry with respect to
the fiscal quarter ending _____________, 199_ (the "Reporting Period"):
(1)REPRESENTATIONS AND WARRANTIES. The representations and
warranties of the Company, the REIT, and their respective Subsidiaries contained
in the Loan Documents, including those contained in Article V of the Agreement,
are true and correct in all material respects as of the date hereof and were
true and correct at all times during the Reporting Periods;
1
(2)COVENANTS. During the Reporting Period, the Company, the
REIT, and their respective Subsidiaries observed and performed all of their
respective covenants and other agreements under the Loan Documents, and
satisfied each of the conditions contained therein to be observed, performed or
satisfied by the Company, the REIT, and their respective Subsidiaries; and
(3)NO DEFAULT; EVENT OF DEFAULT. [Except as expressly set
forth in attached SCHEDULE 1,] no Default or Event of Default exists as of the
date hereof or existed at any time during the Reporting Period. [SCHEDULE 1
sets forth a true, correct and complete description of the nature and period of
existence of each Default or Event of Default that exists as of the date hereof
or existed at any time during the Reporting Periods and the actions that the
Company, the REIT, or their respective Subsidiaries have taken, are taking and
propose to take with respect thereto].
IN WITNESS WHEREOF, this Certificate is executed by the undersigned this
____ day of ____________, 19__.
AIMCO/NHP Holdings, Inc.,
a Delaware corporation
By:
-------------------------------------
Name:
-----------------------------------
Its:
------------------------------------
By:
-------------------------------------
Name:
-----------------------------------
Its:
------------------------------------
2
SCHEDULE 1
to Compliance Certificate
DEFAULTS; EVENTS OF DEFAULT
____________, 199_
Condition(s) or event(s) constituting a Default or Event of Default:
_______________________
______________________________________________________________________________
___________
PERIOD OF EXISTENCE:
Remedial actions taken or proposed to be taken with respect to each such Default
or Event of
Default:_____________________________________________________________________
____
3
EXHIBIT H
(to Acquisition Sub Credit Agreement)
ASSIGNMENT AND ACCEPTANCE AGREEMENT
_________________, 1997
This ASSIGNMENT AND ACCEPTANCE AGREEMENT ("Agreement") is entered
into by _______________________________________________________________, as
Assignor ("Assignor") and ___________________________________________________
as Assignee ("Assignee"). Capitalized terms used in this Agreement without
definition have the meanings specified in the Acquisition Sub Credit Agreement
described below.
RECITALS
A. Assignor is party to the Credit Agreement (Acquisition Sub
Facility) dated as of May 5, 1997 (as the same may be amended, modified or
supplemented from time to time, the "Acquisition Sub Credit Agreement"),
among AIMCO/NHP Holdings, Inc., a Delaware corporation (the "Company"), the
Lenders, including BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION, as
one of the Lenders, XXXXX XXXXXX MORTGAGE CAPITAL GROUP, INC., as one of the
Lenders, and BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION, as Agent
(the "Agent") for the Lenders;
B. Pursuant to the Acquisition Sub Credit Agreement, Assignor has
committed to make a loans ("the Loan") to the Company in the amount of
$__________ ("Assignor's Commitment") and the Lenders have committed to make
loans to the Company in an aggregate amount of $76,000,000 (the "Aggregate
Commitment" thereunder);
C. As of the date hereof, Assignor has made the Loan to the Company
under the Credit Agreement in the aggregate principal outstanding amount of
___________, and the Lenders have made loans to the Company under the
Acquisition Sub Credit Agreement in the aggregate principal outstanding
amount of _________;
D. Assignor wishes to assign to Assignee [part of] the rights and
obligations of Assignor under the Acquisition Sub Credit Agreement in respect of
Assignor's Commitment in an amount equal to $____________ (the "Assigned
1
Amount") on the terms and subject to the conditions set forth herein and
Assignee wishes to accept assignment of such rights and to assume such
obligations from Assignor on such terms and subject to such conditions.
NOW, THEREFORE, in consideration of the foregoing and the mutual
agreements contained herein, the parties hereto agree as follows:
1. ASSIGNMENT AND ACCEPTANCE.
(a) Subject to the terms and conditions of this Agreement,
upon the Effective Date (as hereinafter defined) (i) Assignor hereby sells,
transfers and assigns to Assignee, and (ii) Assignee hereby purchases,
assumes and undertakes from Assignor, without recourse and without
representation or warranty (except as provided in this Agreement),
_____________% (the "Assignee's Percentage Share") of (A) the Loan made by
Assignor and (B) all related rights, benefits, obligations, liabilities and
indemnities of Assignor under and in connection with the Acquisition Sub
Credit Agreement and the Loan Documents.
(b) With effect on and after the Effective Date (as defined in
Section 5), Assignee shall be a party to the Acquisition Sub Credit Agreement
and succeed to all of the rights and be obligated to perform all of the
obligations of a Lender under the Acquisition Sub Credit Agreement with a
Commitment equal to $__________. Assignee agrees that it will perform in
accordance with their terms all of the obligations which by the terms of the
Acquisition Sub Credit Agreement are required to be performed by it as a
Lender. It is the intent of the parties hereto that, as of the Effective
Date, the Commitment of Assignor shall be reduced by an amount equal to
$____________ , and Assignor shall relinquish its rights and be released from
its obligations under the Credit Agreement to the extent such obligations
have been assumed by Assignee.
(c) After giving effect to the assignment and assumption, on
the Effective Date, Assignee's Commitment will be $_____________.
2. PAYMENTS.
As consideration for the sale, assignment and transfer contemplated
in Section 1, Assignee shall pay to Assignor on the Effective Date in
immediately available funds an amount equal to $_____________,
_________representing Assignee's Percentage Share of the outstanding
principal amount of the Loan made by Assignor.
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3. REALLOCATION OF PAYMENTS.
Any interest, fees and other payments accrued to the Effective Date with
respect to the Assignor's Commitment and the outstanding amount of the Loan made
by Assignor shall be for the account of Assignor. Any interest, fees and other
payments accrued on and after the Effective Date with respect to the Assigned
Amount shall be for the account of Assignee. Each of Assignor and Assignee
agrees that it will (a) hold in trust for the other party, any interest, fees
and other amounts which it may receive to which the other party is entitled,
pursuant to the preceding sentences and (b) promptly upon receipt, pay to the
other party any such amounts which it may receive.
4. INDEPENDENT CREDIT DECISION.
Assignee (a) acknowledges that it has received a copy of the Acquisition
Sub Credit Agreement and the Schedules and Exhibits thereto, together with
copies of the most recent financial statements referred to in Section 6.01 of
each of the Acquisition Sub Credit Agreement, and such other documents and
information as it has deemed appropriate to make its own credit and legal
analysis and decision to enter into this Agreement; and (b) agrees that it will,
independently and without reliance upon Assignor, any Agent or any other Lender
and based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit and legal decisions in taking or not
taking action under the Acquisition Sub Credit Agreement.
5. EFFECTIVE DATE; NOTICES.
(a) As between Assignor and Assignee, the effective date for this
Agreement shall be ______________199__ (the "Effective Date"); PROVIDED
that the following conditions precedent have been satisfied on or before the
Effective Date:
(i) this Agreement shall be executed and delivered by Assignor
and Assignee;
(ii) Assignee shall pay to Assignor all amounts due to Assignor
under this Agreement;
(iii) to the extent required under Section 10.08(a) of each
of the Acquisition Sub Credit Agreement, the consent of the Agent and the
Company shall have been duly obtained (or, in the case of the Company, been
deemed obtained) and shall be in full force and effect as of the Effective Date;
(iv) Assignee shall have complied with Section 3.01(f) of each
of the Acquisition Sub Credit Agreement (if applicable); and
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(b) Promptly following the execution of this Agreement, Assignor
shall deliver to the Company and the Agent for acknowledgment by the Agent, a
Notice of Assignment in the form of attached SCHEDULE 1.
6. AGENT.
(a) Assignee hereby acknowledges such powers delegated to the Agent
pursuant to the terms of the Credit Agreement.
(b) Assignee shall assume no duties or obligations held by the Agent
under the Acquisition Sub Credit Agreement.
7. WITHHOLDING TAX.
Assignee agrees to comply with Section 3.01(f) of each of the
Acquisition Sub Credit Agreement (if applicable).
8. REPRESENTATIONS AND WARRANTIES.
(a) Assignor represents and warrants that (i) it is duly organized
and existing and it has the full power and authority to take, and has taken, all
action necessary to execute and deliver this Agreement and any other documents
required or permitted to be executed or delivered by it in connection with this
Agreement and to fulfill its obligations hereunder; (ii) no notices to, or
consents, authorizations or approvals of, any Person are required (other than
any already given or obtained) for its due execution, delivery and performance
of this Agreement, and apart from any agreements or undertakings or filings
required by the Acquisition Sub Credit Agreement, no further action by, or
notice to, or filing with, any Person is required of it for such execution,
delivery or performance; (iii) this Agreement has been duly executed and
delivered by it and constitutes the legal, valid and binding obligation of
Assignor, enforceable against Assignor in accordance with the terms hereof,
subject, as to enforcement, to bankruptcy, insolvency, moratorium,
reorganization and other laws of general application relating to or affecting
creditors' rights and to general equitable principles; and (iv) it is the legal
and beneficial owner of the interest being assigned by it hereunder and that
such interest is free and clear of any Lien or other adverse claim;
(b) Assignor makes no representation or warranty in connection with,
and assumes no responsibility with respect to:
(i) the execution, legality, validity, enforceability, genuineness,
sufficiency or value of the Acquisition Sub Credit Agreement or any
other Loan Document, or any other instrument or document furnished in
connection therewith;
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(ii) any statements, warranties or representations made in or in
connection with the Acquisition Sub Credit Agreement, any other Loan
Document, or any other instrument or document furnished in connection
therewith; or
(iii) the solvency, financial condition or financial statements of the
Company, or the performance or observance by the Company, of any of
its respective obligations under the Acquisition Sub Credit
Agreement, any other Loan Document, or any other instrument or
document furnished in connection therewith.
(c) Assignee represents and warrants that (i) it is duly organized
and existing and it has full power and authority to take, and has taken, all
action necessary to execute and deliver this Agreement and any other documents
required or permitted to be executed or delivered by it in connection with this
Agreement, and to fulfill its obligations hereunder; (ii) no notices to, or
consents, authorizations or approvals of, any Person are required (other than
any already given or obtained) for its due execution, delivery and performance
of this Agreement; and apart from any agreements or undertakings or filings
required by the Acquisition Sub Credit Agreement, no further action by, or
notice to, or filing with, any Person is required of it for such execution,
delivery or performance; (iii) this Agreement has been duly executed and
delivered by it and constitutes the legal, valid and binding obligation of
Assignee, enforceable against Assignee in accordance with the terms hereof,
subject, as to enforcement, to bankruptcy, insolvency, moratorium,
reorganization and other laws of general application relating to or affecting
creditors' rights and to general equitable principles; and (iv) it is an
Eligible Assignee.
9. FURTHER ASSURANCES.
Assignor and Assignee each hereby agrees to execute and deliver such other
instruments, and take such other action, as either party may reasonably request
in connection with the transactions contemplated by this Agreement, including
the delivery of any notices or other documents or instruments to the Company or
the Agent, which may be required in connection with the assignment and
assumption contemplated hereby.
10. MISCELLANEOUS.
(a) Any amendment or waiver of any provision of this Agreement shall
be in writing and signed by the parties hereto. No failure or delay by either
party hereto in exercising any right, power or privilege hereunder shall operate
as a waiver thereof and any waiver of any breach of the provisions of this
Agreement shall be without prejudice to any rights with respect to any other or
further breach thereof.
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(b) All payments made hereunder shall be made without any set-off or
counterclaim.
(c) Assignor and Assignee shall each pay its own costs and expenses
incurred in connection with the negotiation, preparation, execution and
performance of this Agreement.
(d) This Agreement may be executed in any number of counterparts and
all of such counterparts taken together shall be deemed to constitute one and
the same instrument.
(e) THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK, PROVIDED HOWEVER THAT THE AGENT AND THE
LENDERS SHALL RETAIN ALL RIGHTS ARISING UNDER FEDERAL LAW.
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IN WITNESS WHEREOF, Assignor and Assignee have caused this Assignment and
Acceptance Agreement to be executed and delivered by their duly authorized
officers as of the date first above written.
______________________________________, Assignor
By:_______________________________________
Name _____________________________________
Title: ___________________________________
Address:
________________________________________, Assignee
By:_______________________________________
Name _____________________________________
Title: ___________________________________
Address:
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SCHEDULE 1
to Assignment and Acceptance
NOTICE OF ASSIGNMENT AND ACCEPTANCE
___________________, 199__
Bank of America National Trust and
Savings Association, as Agent
CRESG #1357
000 Xxxxx Xxxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Unit Manager
AIMCO/NHP Holdings, Inc.,
a Delaware corporation
0000 Xxxxx Xxxxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxx, Xxxxxxxx 00000
Attention: Xxxxx Xxxxxxxxx, Vice Chairman
Re: Credit Agreement, dated as of May 5, 1997
(Acquisition Sub Facility) (as the same may be amended,
modified or supplemented from time to time, the
"Acquisition Sub Credit Agreement"), as the same may be
amended, modified or supplemented from time to time, among
AIMCO/NHP Holdings, Inc., a Delaware corporation (the
"Company"), the lenders from time to time party to the
Credit Agreement (the "Lenders"), BANK OF AMERICA NATIONAL
TRUST AND SAVINGS ASSOCIATION, as one of the Lenders, and
BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION, as
Agent (the "Agent") for the Lenders.
Ladies and Gentlemen:
Reference is made to the Acquisition Sub Credit Agreement. Capitalized
terms used in this Notice of Assignment and Acceptance without definition have
the meanings specified in the Acquisition Sub Credit Agreement.
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1. We hereby give notice to the Company and to the Agent of the
assignment by _____________________ ("Assignor") ______________________
("Assignee") of __________% of the right, title and interest of Assignor in and
to the Acquisition Sub Credit Agreement, including, without limitation, the
right, title and interest of Assignor in and to:
(A) Assignor's Commitment under and as such term is defined in the
Acquisition Sub Credit Agreement representing ___________% of the $__________
current Aggregate Commitment of all Lenders,
(B) Assignor's Commitment Percentage of the outstanding Loan made by
the Assignor under the Acquisition Sub Credit Agreement (representing an amount
equal to $____________ as of the Effective Date),
(C) all related rights, benefits, obligations, liabilities and
indemnities of Assignor under and in connection with the Acquisition Sub Credit
Agreement.
Before giving effect to the assignment and assumption, on the Effective
Date, Assignor's Commitment was $______________. After giving effect to the
assignment and assumption, on the Effective Date, Assignor's Commitment will be
$______________. After giving effect to the assignment and assumption, on the
Effective Date, Assignee's Commitment will be $_____________.
2. Assignee agrees that, upon receiving the consent of the Agent and the
Company to such assignment, Assignee will be bound by the terms of the
Acquisition Sub Credit Agreement as fully and to the same extent as if Assignee
were the Lender originally holding the interest so assigned to it under the
Acquisition Sub Credit Agreement.
3. The following administrative details apply to Assignee:
(A) Notice Address:
Assignee name:
Address:
Att'n:
Telephone:
Telecopier:
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(B) Payment Instructions:
ABA No.
Account No.
At:
Reference:
Att'n:
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IN WITNESS WHEREOF, Assignor and Assignee have caused this Notice of
Assignment and Acceptance to be executed by their respective duly authorized
officials, officers or agents as of the date first above mentioned.
Very truly yours,
[Assignor]
By:
---------------------------------
Title:
------------------------------
[Assignee]
By:
---------------------------------
Title:
------------------------------
ACKNOWLEDGED AND ASSIGNMENT
CONSENTED TO:
BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION, as Agent
By:
--------------------------
Title:
-----------------------
[Add Company's Signature Block if Company's Consent is required]
AIMCO/NHP Holdings, Inc.,
a Delaware corporation
By:
--------------------------
Title:
-----------------------
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