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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------------------
SCHEDULE 14D-1/A
TENDER OFFER STATEMENT PURSUANT TO SECTION 14(D)(1)
OF THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. 1)
AND
SCHEDULE 13D/A
UNDER THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. 2)
------------------------------------
CONSOLIDATED CAPITAL PROPERTIES V
(Name of Subject Company)
COOPER RIVER PROPERTIES, L.L.C.
INSIGNIA PROPERTIES, L.P.
INSIGNIA PROPERTIES TRUST
INSIGNIA FINANCIAL GROUP, INC.
(Bidders)
UNITS OF LIMITED PARTNERSHIP INTEREST
(Title of Class of Securities)
NONE
(Cusip Number of Class of Securities)
------------------------------------
JEFFREY P. COHEN
SENIOR VICE PRESIDENT
INSIGNIA FINANCIAL GROUP, INC.
375 PARK AVENUE, SUITE 3401
NEW YORK, NEW YORK 10152
(212) 750-6070
(Name, Address and Telephone Number of Person Authorized
to Receive Notices and Communications on Behalf of Bidders)
COPY TO:
JOHN A. HEALY, ESQ.
ROGERS & WELLS LLP
200 PARK AVENUE
NEW YORK, NEW YORK 10166
(212) 878-8000
------------------------------------
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AMENDMENT NO. 1 TO SCHEDULE 14D-1/AMENDMENT NO. 2 TO SCHEDULE 13D
This Amendment No. 1, which amends and supplements the Tender Offer
Statement on Schedule 14D-1 originally filed with the Commission on July 30,
1998, (the "Schedule 14D-1") by Cooper River Properties, L.L.C. (the
"Purchaser"), Insignia Properties, L.P. ("IPLP"), Insignia Properties Trust
("IPT") and Insignia Financial Group, Inc. ("Insignia"), also constitutes
Amendment No. 2 to the Statement on Schedule 13D of the Purchaser, IPLP, IPT,
Insignia and Andrew L. Farkas, originally filed with the Commission on March
12, 1998, as amended by Amendment No. 1 filed with the Commission on July 30,
1998 (and together with the Schedule 14D-1, the "Schedules"). The Schedules
relate to the tender offer of the Purchaser to purchase up to 40,000 of the
outstanding units of limited partnership interest ("Units") of Consolidated
Capital Properties V, at a purchase price of $33 per Unit, net to the seller in
cash, upon the terms and subject to the conditions set forth in the Offer to
Purchase dated July 30, 1998 (the "Offer to Purchase") and the related
Assignment of Partnership Interest (which, together with any supplements or
amendments, collectively constitute the "Offer"). Capitalized terms used but
not defined herein have the meanings ascribed to them in the Schedule 14D-1 and
the Offer to Purchase.
This amendment hereby supplements the Schedule 14D-1 to include as
Exhibit (b)(1) the credit agreement referred to in Section 12 of the Offer to
Purchase.
ITEM 11. MATERIAL TO BE FILED AS EXHIBITS.
(b)(1) Credit Agreement, dated December 30, 1977.
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SIGNATURE
After due inquiry and to the best of my knowledge and belief, I certify
that the information set forth in this statement is true, complete and correct.
Dated: August 18, 1998
COOPER RIVER PROPERTIES, L.L.C.
By: /s/ JEFFREY P. COHEN
Jeffrey P. Cohen
Manager
INSIGNIA PROPERTIES, L.P.
By: Insignia Properties Trust,
its General Partner
By: /s/ JEFFREY P. COHEN
Jeffrey P. Cohen
Senior Vice President
INSIGNIA PROPERTIES TRUST
By: /s/ JEFFREY P. COHEN
Jeffrey P. Cohen
Senior Vice President
INSIGNIA FINANCIAL GROUP, INC.
By: /s/ FRANK M. GARRISON
Frank M. Garrison
Executive Managing Director
SOLELY FOR PURPOSES OF, AND INSOFAR AS THIS
FILING CONSTITUTES, AMENDMENT NO. 2 TO THE
STATEMENT ON SCHEDULE 13D
/s/ ANDREW L. FARKAS
----------------------------------------
By: Jeffrey P. Cohen, Attorney-in-Fact
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EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION
----------- -----------
(b)(1) Credit Agreement, dated December 30, 1997.
4
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================================================================================
CREDIT AGREEMENT
dated as of December 30, 1997
by and among
INSIGNIA PROPERTIES, L.P.,
as Borrower,
the Lenders referred to herein,
FIRST UNION NATIONAL BANK,
as Administrative Agent
and
LEHMAN COMMERCIAL PAPER INC.,
as Syndication Agent
================================================================================
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<TABLE>
<CAPTION>
TABLE OF CONTENTS
<S> <C>
ARTICLE I - DEFINITIONS.........................................................................................1
SECTION 1.1 Definitions....................................................................................1
SECTION 1.2 General.......................................................................................12
SECTION 1.3 Other Definitions and Provisions..............................................................12
ARTICLE II - CREDIT FACILITY...................................................................................12
SECTION 2.1 Commitment....................................................................................12
SECTION 2.2 Procedure for Advances of Loans...............................................................13
SECTION 2.3 Repayment of Loans............................................................................13
SECTION 2.4 Revolving Credit Notes........................................................................14
SECTION 2.5 Increase/Reduction of the Aggregate Commitment................................................14
SECTION 2.6 Termination of Credit Facility................................................................15
SECTION 2.7 Use of Proceeds...............................................................................15
ARTICLE III - GENERAL LOAN PROVISIONS..........................................................................15
SECTION 3.1 Interest......................................................................................15
SECTION 3.2 Notice and Manner of Conversion or Continuation of Loans......................................17
SECTION 3.3 Fees..........................................................................................17
SECTION 3.4 Manner of Payment.............................................................................17
SECTION 3.5 Crediting of Payments and Proceeds............................................................18
SECTION 3.6 Adjustments...................................................................................18
SECTION 3.7 Nature of Obligations of Lenders Regarding Loans; Assumption by the
Administrative Agent..........................................................................18
SECTION 3.8 Changed Circumstances.........................................................................19
SECTION 3.9 Reimbursement.................................................................................22
SECTION 3.10 Capital Requirements..........................................................................22
SECTION 3.11 Taxes.........................................................................................22
SECTION 3.12 Claims for Increased Costs and Taxes..........................................................24
ARTICLE IV - CLOSING; CONDITIONS OF CLOSING AND BORROWING......................................................25
SECTION 4.1 Closing........................................................................................25
SECTION 4.2 Conditions to Closing and Initial Loan.........................................................25
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SECTION 4.3 Conditions to All Loans........................................................................27
SECTION 4.4 Delivery of Certificates by Administrative Agent...............................................28
ARTICLE V - REPRESENTATIONS AND WARRANTIES OF THE BORROWER.....................................................28
SECTION 5.1 Representations and Warranties.................................................................28
SECTION 5.2 Survival of Representations and Warranties, Etc................................................33
ARTICLE VI - FINANCIAL INFORMATION AND NOTICES.................................................................34
SECTION 6.1 Financial Statements and Information...........................................................34
SECTION 6.2 Officer's Compliance Certificate...............................................................35
SECTION 6.3 Accountants' Certificate.......................................................................35
SECTION 6.4 Other Reports..................................................................................35
SECTION 6.5 Notice of Litigation and Other Matters.........................................................35
ARTICLE VII - AFFIRMATIVE COVENANTS............................................................................36
SECTION 7.1 Preservation of Existence and Related Matters..................................................36
SECTION 7.2 Maintenance of Property........................................................................36
SECTION 7.3 Insurance......................................................................................36
SECTION 7.4 Accounting Methods and Financial Records.......................................................36
SECTION 7.5 Payment and Performance of Obligations.........................................................36
SECTION 7.6 Compliance With Laws and Approvals.............................................................37
SECTION 7.7 Environmental Laws.............................................................................37
SECTION 7.8 Compliance with ERISA..........................................................................37
SECTION 7.9 Compliance With Agreements.....................................................................37
SECTION 7.10 Visits and Inspections37
SECTION 7.11 Pledge of Partner Interests38
SECTION 7.12 Further Assurances38
SECTION 7.13 Application of Non-Operational Distributions38
SECTION 7.14 Year 2000 Compatibility38
ARTICLE VIII - FINANCIAL COVENANTS.............................................................................38
SECTION 8.1 Maximum Leverage................................................................................39
SECTION 8.2 Interest and Dividend Coverage..................................................................39
SECTION 8.3 Interest Coverage Ratio.........................................................................39
<PAGE>
ARTICLE IX - NEGATIVE COVENANTS..........................................................................39
SECTION 9.1 Limitations on Debt.......................................................................39
SECTION 9.2 Limitations on Contingent Obligations.....................................................40
SECTION 9.3 Negative Pledge; Limitation on Lien.......................................................40
SECTION 9.4 Limitations on Loans, Advances, Investments and Acquisitions..............................40
SECTION 9.5 Limitations on Mergers and Liquidation....................................................42
SECTION 9.6 Limitations on Sale of Assets.............................................................42
SECTION 9.7 Limitations on Distributions..............................................................42
SECTION 9.8 Transactions with Affiliates..............................................................43
SECTION 9.9 Certain Accounting Changes................................................................43
SECTION 9.10 Lines of Business.........................................................................43
SECTION 9.11 Restrictive Agreements....................................................................43
ARTICLE X - DEFAULT AND REMEDIES.........................................................................43
SECTION 10.1 Events of Default.........................................................................43
SECTION 10.2 Remedies..................................................................................45
SECTION 10.3 Rights and Remedies Cumulative; Non-Waiver; etc...........................................46
ARTICLE XI - THE AGENTS..................................................................................46
SECTION 11.1 Appointment and Authorization.............................................................46
SECTION 11.2 Delegation of Duties......................................................................46
SECTION 11.3 Exculpatory Provisions....................................................................46
SECTION 11.4 Reliance by the Agents....................................................................47
SECTION 11.5 Notice of Default.........................................................................47
SECTION 11.6 Non-Reliance on the Agents and Other Lenders..............................................47
SECTION 11.7 Indemnification...........................................................................48
SECTION 11.8 Agent in Its Individual Capacity..........................................................48
SECTION 11.9 Resignation of the Agent; Successor Agent.................................................48
ARTICLE XII - MISCELLANEOUS..............................................................................49
SECTION 12.1 Notices...................................................................................49
SECTION 12.2 Expenses; Indemnity.......................................................................51
SECTION 12.3 Governing Law.............................................................................52
SECTION 12.4 Consent to Jurisdiction...................................................................52
SECTION 12.5 Waiver of Jury Trial......................................................................52
SECTION 12.6 Reversal of Payments......................................................................52
SECTION 12.7 Accounting Matters........................................................................53
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SECTION 12.8 Successors and Assigns; Participations....................................................53
SECTION 12.9 Amendments, Waivers and Consents..........................................................56
SECTION 12.10 Performance of Duties.....................................................................56
SECTION 12.11 No Fiduciary Relationship.................................................................56
SECTION 12.12 All Powers Coupled with Interest..........................................................56
SECTION 12.13 Survival of Indemnities...................................................................57
SECTION 12.14 Titles and Captions.......................................................................57
SECTION 12.15 Severability of Provisions................................................................57
SECTION 12.16 Counterparts..............................................................................57
SECTION 12.17 Term of Agreement.........................................................................57
SECTION 12.18 Independent Effect of Covenants...........................................................57
</TABLE>
<PAGE>
Exhibits and Schedules
----------------------
EXHIBITS
--------
Exhibit A - Form of Revolving Credit Note
Exhibit B - Form of Notice of Borrowing
Exhibit C - Form of Notice of Conversion/Continuation
Exhibit D - Form of Officer's Compliance Certificate
Exhibit E - Form of Assignment and Acceptance
Exhibit F - Form of Guaranty Agreement
Exhibit G - Form of IPLP Pledge Agreement
Exhibit H - Form of IPT Pledge Agreement
Exhibit I - Form of Notice of Account Designation
SCHEDULES
---------
Schedule 1 - Lenders and Commitments
Schedule 5.1(h) - Employee Benefit Plans
Schedule 5.1(q) - Debt and Contingent Obligations
Schedule 5.1(r) - Litigation
Schedule 9.4 - Existing Loans, Advances and Investments
Schedule 9.8 - Transactions with Affiliates
<PAGE>
CREDIT AGREEMENT
THIS CREDIT AGREEMENT, dated as of the 30th day of December, 1997, by
and among INSIGNIA PROPERTIES, L.P., a Delaware limited partnership, the
Lenders who are or may become a party to this Agreement (the "Lenders"), FIRST
UNION NATIONAL BANK, as Administrative Agent for the Lenders, and LEHMAN
COMMERCIAL PAPER INC., as Syndication Agent.
STATEMENT OF PURPOSE
The Borrower has requested and the Lenders have agreed to extend a
credit facility to the Borrower on the terms and conditions in this Agreement.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged by the parties hereto, the parties
hereby agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1. Definitions. The following terms when used in this
Agreement shall have the meanings assigned to them below:
"Actual Knowledge" means information actually known to Andrew L.
Farkas, James A. Aston, Ronald Uretta, John K. Lines, Thomas R. Shuler, Carroll
Vinson, William Jarrard or Frank Garrison, or any other individual hereafter
holding the office of the Borrower currently held by such individuals, in each
case at the date of determination.
"Adjusted DCFO" means, as of any date of determination, an amount
equal to the aggregate of the Borrower's Pro Rata Portion of the DCFO of each
Real Estate Entity in which the Borrower owns an equity interest after giving
effect to any acquisition by the Borrower of an equity interest in such Real
Estate Entity during the quarterly period ending on the determination date,
plus all fee and other income received by the Borrower during such quarterly
period (excluding extraordinary items) less all fees and expenses paid by the
Borrower or IPT during such period not reimbursed.
"Adjusted Portfolio Equity" means, as of any date of determination
and with respect to each Real Estate Entity, an amount equal to the Pro Rata
Portion of the EFV of the real property owned by each Real Estate Entity whose
Leverage is less than sixty percent (60%) less an amount equal to the Pro Rata
Portion of the Debt of such Real Estate Entity.
"Administrative Agent" means First Union in its capacity as
Administrative Agent hereunder, and any successor thereto appointed pursuant to
Section 11.9.
<PAGE>
"Administrative Agent's Office" means the office of the Administrative
Agent specified in or determined in accordance with the provisions of Section
12.1.
"Affiliate" means, with respect to any Person, any other Person (other
than a Subsidiary of such first Person) which directly or indirectly through
one or more intermediaries, controls, or is controlled by, or is under common
control with, such first Person or any of its Subsidiaries.
"Agents" means the collective reference to the Administrative Agent
and the Syndication Agent; "Agent" means either of such Persons.
"Aggregate Commitment" means the aggregate amount of the Lenders'
Commitments hereunder, as such amount may be increased or reduced at any time
or from time to time pursuant to Section 2.5. On the Closing Date, the
Aggregate Commitment shall be Fifty Million Dollars ($50,000,000).
"Agreement" means this Credit Agreement, as amended, modified,
restated or supplemented from time to time.
"Applicable Law" means in respect of any Person all provisions of
constitutions, statutes, laws, rules, treaties, regulations and orders of all
Governmental Authorities and all orders and decrees of all courts and
arbitrators applicable to such Person.
"Applicable Margin" means as to the LIBOR Rate, 2.50% per annum.
"Assignment and Acceptance" shall have the meaning assigned thereto in
Section 12.8.
"Base Rate" means, at any time, the higher of (a) the Prime Rate or
(b) the Federal Funds Rate plus 1/2 of 1%, as applicable; each change in the
Base Rate shall take effect simultaneously with the corresponding change or
changes in the Prime Rate or the Federal Funds Rate, as applicable.
"Base Rate Loan" means any Loan bearing interest at a rate based upon
the Base Rate as provided in Section 3.1(a).
"Borrower" means IPLP in its capacity as borrower hereunder.
"Business Day" means (a) for all purposes other than as set forth in
clause (b) below, any day, other than a Saturday, Sunday or legal holiday, on
which banks in Greenville, South Carolina, Charlotte, North Carolina and New
York, New York are open for the conduct of their commercial banking business,
and (b) with respect to all notices and determinations in connection with, and
payments of principal and interest on, any LIBOR Rate Loan, any day that is a
Business Day described in clause (a) and that is also a day for trading by and
between banks in Dollar deposits in the London interbank market.
"Capital Expenditures" means, with respect to any Person for any
period, the aggregate cost of all assets acquired by such Person during such
period which should, in accordance with GAAP, be classified as capital assets
on the balance sheet of such Person.
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"Capital Lease" means, with respect to the Borrower and its
Subsidiaries, any lease of any property that is, in accordance with GAAP,
classified and accounted for as a capital lease on a consolidated balance sheet
of the Borrower and its Subsidiaries.
"Closing Date" means December 30, 1997.
"Code" means the Internal Revenue Code of 1986, and the rules and
regulations thereunder, each as amended or supplemented from time to time.
"Commitment" means, as to any Lender, the obligation of such Lender to
make Loans to the Borrower hereunder in an aggregate principal amount at any
time outstanding not to exceed the amount set forth opposite such Lender's name
on Schedule 1, as the same may be reduced or modified at any time or from time
to time pursuant to Sections 2.5, 2.6 and 12.8.
"Commitment Percentage" means, as to any Lender at any time prior to
the Termination Date, the ratio (expressed as a percentage) of (a) the amount
of the Commitment of such Lender to (b) the Aggregate Commitment of all of the
Lenders, and on and after the Termination Date, the ratio of (c) the amount of
the Loans of such Lender to (d) the aggregate amount of all Loans then
outstanding.
"Contingent Obligation" means, with respect to the Borrower, without
duplication, any obligation, contingent or otherwise, of the Borrower pursuant
to which the Borrower has directly or indirectly guaranteed any Debt or other
obligation of any other Person and, without limiting the generality of the
foregoing, any obligation, direct or indirect, contingent or otherwise, of the
Borrower (a) to purchase or pay (or advance or supply funds for the purchase or
payment of) such Debt or other obligation (whether arising by agreement to keep
well, to purchase assets, goods, securities or services or to take-or-pay) or
(b) entered into for the purpose of assuring in any other manner the obligee of
such Debt or other obligation of the payment thereof or to protect such obligee
against loss in respect thereof (in whole or in part); provided, that the term
Contingent Obligation shall not include (i) endorsements for collection or
deposit in the ordinary course of business, and (ii) for purposes of
determining compliance by IPT and the Borrower with Section 9.2, the
obligations set forth on Schedule 5.1(q) .
"Credit Facility" means the revolving credit facility established
pursuant to Article II.
"DCFO" means, as to any period of time, the aggregate NOI for such
period of each Real Estate Entity in which the Borrower owns an equity interest
less with respect to each Real Estate Entity for such period the sum of the
following:
(i) Cash Interest Expense, plus
(ii) All principal payments (other than in connection with
refinancings) on the Debt of such Real Estate Entity, plus
(iii) An amount equal to the greater of (x) the capital
expenditures (exclusive of capital expenditures to restore
newly-acquired properties to their original condition in accordance
with a budget provided to the Agents within ninety (90) days after the
acquisition) less funded capital expenditures or (y) an amount equal
to $500 for each
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apartment unit and $.20 per square foot for each commercial
property owned by such Real Estate Entity.
"Debt" means, with respect to any Person at any date and without
duplication, the sum of the following calculated in accordance with GAAP: (a)
all Debt for Money Borrowed, (b) all obligations to pay the deferred purchase
price of property or services of the Borrower, except trade payables arising in
the ordinary course of business not more than ninety (90) days past due, (c)
all Debt of any other Person secured by a Lien on any asset of such Person, (d)
all Contingent Obligations of the Borrower and (e) all net obligations incurred
by the Borrower pursuant to Hedging Agreements; provided that the obligations
of the Borrower to pay the purchase price in connection with investments and
acquisitions permitted hereunder shall not be included in Debt.
"Debt for Money Borrowed" means, with respect to any Person at any
date and without duplication, the sum of the following calculated in accordance
with GAAP: (a) all liabilities, obligations and indebtedness for borrowed money
including, but not limited to, obligations evidenced by bonds, debentures,
notes or other similar instruments of the Borrower, (b) all obligations of such
Person as lessee under Capital Leases, and (c) all obligations, contingent or
otherwise, of any such Person relative to the face amount of letters of credit,
whether or not drawn, and banker's acceptances issued for the account of such
Person.
"Default" means any of the events specified in Section 10.1 which with
the passage of time, the giving of notice or any other condition, would
constitute an Event of Default.
"Dollars" or "$" means, unless otherwise qualified, dollars in lawful
currency of the United States.
"EFV" means the estimated fair value of the real property owned
by any Real Estate Entity as determined by the Borrower based on assumptions
consistent with those set forth in the December 31, 1996 valuation schedules
provided to the Agents and reasonably acceptable to the Agents.
"Eligible Assignee" means, with respect to any assignment of the
rights, interest and obligations of a Lender hereunder, a Person that is at the
time of such assignment (a) a commercial bank organized under, or which has a
branch or agency licensed under, the laws of the United States or any state
thereof, having combined capital and surplus in excess of $500,000,000, (b) a
finance company, insurance company or other financial institution which in the
ordinary course of business extends credit of the type extended hereunder and
that has total assets in excess of $500,000,000, (c) already a Lender hereunder
(whether as an original party to this Agreement or as the assignee of another
Lender), (d) the successor (whether by transfer of assets, merger or otherwise)
to all or substantially all of the commercial lending business of the assigning
Lender, (e) any Affiliate of the assigning Lender that is not a competitor of
the Borrower and is engaged in the business of making commercial loans in the
ordinary course of its business, or (f) any other Person that has been approved
in writing as an Eligible Assignee by the Agents and the Borrower, which
approval by Borrower shall not be unreasonably withheld or delayed.
Notwithstanding the foregoing, if a Lender proposes to assign its right,
interest and obligations hereunder to a Person that is at the time of such
assignment either (i) a competitor of the Borrower, or (ii) an Affiliate of a
competitor of the Borrower or a Person who is not engaged in the business of
making
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commercial loans in the ordinary course of its business, then it shall
be within the Borrower's sole discretion whether such Person is an Eligible
Assignee.
"Employee Benefit Plan" means any employee benefit plan within the
meaning of Section 3(3) of ERISA which (a) is maintained for employees of the
Borrower or any ERISA Affiliate or (b) has at any time within the preceding six
years been maintained for the employees of the Borrower or any current or
former ERISA Affiliate.
"Environmental Laws" means any and all federal, state and local laws,
statutes, ordinances, rules, regulations, permits, licenses, approvals,
interpretations and orders of courts or Governmental Authorities, relating to
the protection of human health or the environment, including, but not limited
to, requirements pertaining to the manufacture, processing, distribution, use,
treatment, storage, disposal, transportation, handling, reporting, licensing,
permitting, investigation or remediation of Hazardous Materials. Environmental
Laws include, without limitation, the Comprehensive Environmental Response,
Compensation, and Liability Act (42 U.S.C. ss. 9601 et. seq.), the Hazardous
Material Transportation Act (49 U.S.C. ss. 331 et. seq.), the Resource
Conservation and Recovery Act (42 U.S.C. ss. 6901 et. seq.), the Federal Water
Pollution Control Act (33 U.S.C. ss. 1251 et. seq.), the Clean Air Act (42
U.S.C. ss. 7401 et. seq.), the Toxic Substances Control Act (15 U.S.C. ss. 2601
et. seq.), the Safe Drinking Water Act (42 U.S.C. ss. 300, et. seq.), the
Environmental Protection Agency's regulations relating to underground storage
tanks (40 C.F.R. Parts 280 and 281), and the Occupational Safety and Health Act
(29 U.S.C. ss. 651 et. seq.), analogous state statutes, and the rules and
regulations promulgated under the foregoing as such statutes are amended or
modified from time to time.
"ERISA" means the Employee Retirement Income Security Act of 1974, and
the rules and regulations thereunder, each as amended or modified from time to
time.
"ERISA Affiliate" means any Person which is, together with the
Borrower, treated as a single employer within the meaning of Section 414(b),
(c), (m) or (o) of the Code or Section 4001(b) of ERISA.
"Event of Default" means any of the events specified in Section 10.1,
provided that any requirement for passage of time, giving of notice, or any
other condition, has been satisfied.
"FDIC" means the Federal Deposit Insurance Corporation, or any
successor thereto.
"Federal Funds Rate" means, the rate per annum (rounded upwards, if
necessary, to the next higher 1/100th of 1%) representing the daily effective
federal funds rate as quoted by the Administrative Agent and confirmed in
Federal Reserve Board Statistical Release H.15 (519) or any successor or
substitute publication selected by the Administrative Agent. If, for any
reason, such rate is not available, then "Federal Funds Rate" shall mean the
average of the quotations for the day for such transactions received by the
Administrative Agent from three brokers of national standing. Rates for
weekends or holidays shall be the same as the rate for the most immediate
preceding Business Day.
"First Union" means First Union National Bank, a national banking
association, and its successors.
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"Fiscal Quarter" means any quarter of any Fiscal Year.
"Fiscal Year" means any fiscal year of the Borrower ending on
December 31.
"Funded Capital Expenditures" means, with respect to any Person for
any period, all Capital Expenditures during such period for which funds have
been set aside or reserved and which will not be paid from operating revenues
of such Person.
"Funded Debt" means all of the Borrower's Debt for Borrowed Money
(other than Subordinated Debt).
"GAAP" means generally accepted accounting principles, as recognized
by the American Institute of Certified Public Accountants or the Financial
Accounting Standards Board, consistently applied and maintained on a consistent
basis for the Borrower and its Subsidiaries throughout the period indicated and
consistent with the prior financial practice of the Borrower, provided,
however, that any accounting principle or practice required to be changed by
such American Institute of Certified Public Accounts or the Financial
Accounting Standards Board (or other appropriate board or committee of either)
in order to continue as a generally accepted accounting principal or practice
may be so changed.
"General Partner" means IPT in its capacity as general partner of the
Borrower.
"Governmental Approvals" means all authorizations, consents,
approvals, licenses and exemptions of, registrations and filings with, and
reports to, all Governmental Authorities.
"Governmental Authority" means any nation, province, state or
political subdivision thereof, and any government or any Person exercising
executive, legislative, 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.
"Guaranty Agreement" means the reference to the Guaranty Agreement of
even date executed by IPT in favor of the Administrative Agent for the ratable
benefit of the Agents and the Lenders substantially in the form of Exhibit F,
as such agreement may be amended or supplemented.
"Hazardous Materials" means any substances or materials (a) which are
or become defined as hazardous wastes, hazardous substances, pollutants,
contaminants, chemical substances or mixtures or toxic substances under any
Environmental Law, (b) which are toxic, explosive, corrosive, flammable,
infectious, radioactive, carcinogenic, mutagenic or otherwise harmful to human
health or the environment and are or become regulated by any Governmental
Authority, (c) the presence of which require investigation or remediation under
any Environmental Law, (d) the discharge or emission or release of which
requires a permit or license under any Environmental Law or other Governmental
Approval, (e) which are deemed by a court of law or a Governmental Authority to
constitute a nuisance, a trespass or pose a health or safety hazard to persons
or neighboring properties, (f) which are materials consisting of underground or
aboveground storage tanks, whether empty, filled or partially filled with any
substance, or (g) which contain asbestos, polychlorinated biphenyls, urea
formaldehyde foam insulation, petroleum hydrocarbons, petroleum derived
substances or waste, crude oil, nuclear fuel, natural gas or synthetic gas.
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"Hedging Agreement" means any agreement with respect to an interest
rate swap, collar, cap, floor or a forward rate agreement or other agreement
regarding the hedging of interest rate risk exposure executed in connection
with hedging the interest rate exposure of the Borrower under this Agreement,
and any confirming letter executed pursuant to such hedging agreement, all as
amended or modified.
"Insignia" means Insignia Financial Group, Inc., a Delaware
corporation.
"Interest Expense" means, with respect to the Borrower for any period,
the gross cash interest expense (including but without limitation interest
expense attributable to Capital Leases but excluding interest expense with
respect to Subordinated Debt) of the Borrower, all determined for such period
in accordance with GAAP.
"Interest Period" shall have the meaning assigned thereto in Section
3.1(b).
"IPLP" means Insignia Properties, L.P., a Delaware limited partnership.
"IPLP Pledge Agreement" means the Pledge Agreement of even date
executed by IPLP in favor of the Administrative Agent for the ratable benefit
of the Agents and the Lenders substantially in the form of Exhibit G, as such
Pledge Agreement may be amended or supplemented, with the consent of the
Lenders.
"IPT" means Insignia Properties Trust, a Maryland real estate
investment trust.
"IPT Advisory Agreement" means the Second Amended and Restated
Advisory Agreement dated August 1, 1997 among the Borrower, IPT and Insignia.
"IPT Pledge Agreement" means the Pledge Agreement of even date
executed by IPT in favor of the Administrative Agent for the ratable benefit of
the Agents and the Lenders substantially in the form of Exhibit H, as such
Pledge Agreement may be amended or supplemented, with the consent of the
Lenders.
"Lehman" means Lehman Commercial Paper Inc., a Delaware corporation,
and its successors.
"Lender" means each Person executing this Agreement as a Lender set
forth on the signature pages hereto and each Person that hereafter becomes a
party to this Agreement as a Lender pursuant to Section 12.8.
"Lending Office" means, with respect to any Lender, the office of such
Lender maintaining such Lender's Commitment Percentage of the Loans.
"Leverage" means, with respect to any Real Estate Entity, an amount
determined by dividing the Debt of such Real Estate Entity by the EFV of the
real property owned by such Real Estate Entity.
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"LIBOR" means the rate for deposits in Dollars for a period equal to
the Interest Period selected which appears on the Telerate Page 3750 at
approximately 11:00 a.m., London time, two (2) Business Days prior to the
commencement of the applicable Interest Period. If, for any reason, such rate
is not available, then "LIBOR" shall mean the rate per annum at which, as
determined by First Union in its reasonable judgment, Dollars are being offered
to leading banks at approximately 11:00 a.m., London time, two (2) Business
Days prior to the commencement of the applicable Interest Period for settlement
in immediately available funds by leading banks in the London interbank market
for a period equal to the Interest Period selected and in an amount
approximately equal to the applicable Loan.
"LIBOR Rate" means a rate per annum (rounded upwards, if necessary, to
the next higher 1/100th of 1%) determined by the Administrative Agent pursuant
to the following formula:
LIBOR Rate = LIBOR
-----------------------------
1.00-LIBOR Reserve Percentage
"LIBOR Rate Loan" means any Loan bearing interest at a rate based upon
the LIBOR Rate as provided in Section 3.1(a).
"LIBOR Reserve Percentage" means, for any day, the percentage
(expressed as a decimal and rounded upwards, if necessary, to the next higher
1/100th of 1%) which is in effect for such day as prescribed by the Board of
Governors of the Federal Reserve System (or any successor) for determining the
maximum reserve requirement (including without limitation any basic,
supplemental or emergency reserves) in respect of Eurocurrency Liabilities as
defined in Regulation D of the Board of Governors of the Federal Reserve
System.
"Lien" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such asset.
For the purposes of this Agreement, a Person shall be deemed to own subject to
a Lien any asset which it has acquired or holds subject to the interest of a
vendor or lessor under any conditional sale agreement, Capital Lease or other
title retention agreement relating to such asset.
"Loan" means any revolving credit loan made to the Borrower pursuant
to Section 2.1, and all such Loans collectively as the context requires.
"Loan Documents" means, collectively, this Agreement, the Revolving
Credit Notes, the Security Documents, and each other document, instrument and
agreement executed and delivered by the Borrower, its Subsidiaries or their
counsel in connection with this Agreement or otherwise referred to herein or
contemplated hereby, all as may be amended or supplemented from time to time.
"Material Adverse Effect" means, with respect to IPT or the Borrower,
a material adverse effect on the properties, business, operations or condition
(financial or otherwise) of IPT or the Borrower or the ability of IPT or the
Borrower to perform the payment or other material obligations under the Loan
Documents to which it is a party or which would materially impair the
enforceability of any of the Loan Documents against any Person party thereto,
other than the Agents or any of the Lenders or their Affiliates.
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"Material Contract" means (a) any contract or other agreement, written
or oral, of the Borrower involving monetary liability of or to the Borrower in
an amount in excess of $1,000,000 per annum, or (b) any other contract or
agreement, written or oral, of the Borrower the failure to comply with which
could reasonably be expected to have a Material Adverse Effect.
"Maturity Date" shall have the meaning given thereto in Section 2.6.
"Moody's" means Moody's Investors Service, Inc., a Delaware
corporation, and its successors; provided that, if such corporation shall be
dissolved or liquidated or shall no longer perform the functions of a
securities rating agency, then "Moody's" shall mean any other nationally
recognized securities rating agency reasonably acceptable to the Borrower which
is designated by the Required Lenders by notice to Administrative Agent and the
Borrower.
"Multiemployer Plan" means a "multiemployer plan" as defined in
Section 4001(a)(3) of ERISA to which the Borrower or any ERISA Affiliate is
making, or is accruing an obligation to make, contributions within the
preceding six years.
"Net Operating Income" means, with respect to the Borrower for any
period, the net operating income (or loss) of the Borrower for such period
determined in accordance with GAAP.
"NOI" means for any period:
(a) With respect to any Real Estate Entity in which the
Borrower owned a limited partner or other equity interest prior to the
first day of the quarter ending on the date of such determination, the
Net Operating Income of such Real Estate Entity for the period of four
fiscal quarters ending on the date of determination;
(b) With respect to any Real Estate Entity in which the
Borrower did not own a limited partner or other equity interest on the
first day of the quarter ending on the date of determination (a "New
Real Estate Entity") and for which audited financial statements for
the most recently-completed fiscal year of such New Real Estate Entity
are available, the Net Operating Income of such New Real Estate Entity
for the period of four fiscal quarters ending on the date of
determination; and
(c) With respect to any New Real Estate Entity for which
audited financial statements are not available, 75% of the pro forma Net
Operating Income of the New Real Estate Entity for the period of four
consecutive fiscal quarters commencing on the date of determination.
"Notice of Borrowing" shall have the meaning assigned thereto in
Section 2.2(a).
"Notice of Conversion/Continuation" shall have the meaning assigned
thereto in Section 3.2.
"Obligations" means, in each case, whether now in existence or
hereafter arising: (a) the principal of and interest on (including interest
accruing after the filing of any bankruptcy or similar petition) the Loans, (b)
all payment and other obligations owing by the Borrower to any Lender, an
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Affiliate of any Lender, or any Agent under any Hedging Agreement and (c) all
other fees and commissions (including attorney's fees), charges, indebtedness,
loans, liabilities, financial accommodations, obligations, covenants and duties
owing by the Borrower to any Lender or Agent, of every kind, nature and
description, direct or indirect, absolute or contingent, due or to become due,
contractual or tortious, liquidated or unliquidated, and whether or not
evidenced by any note, and whether or not for the payment of money under or in
respect of this Agreement, any Revolving Credit Note or any of the other Loan
Documents.
"Other Taxes" shall have the meaning assigned thereto in Section
3.11(b).
"PBGC" means the Pension Benefit Guaranty Corporation or any successor
agency.
"Pension Plan" means any Employee Benefit Plan, other than a
Multiemployer Plan, which is subject to the provisions of Title IV of ERISA or
Section 412 of the Code and which (a) is maintained for employees of the
Borrower or any ERISA Affiliates or (b) has at any time within the preceding
six years been maintained for the employees of the Borrower or any of their
current or former ERISA Affiliates.
"Person" means an individual, corporation, limited liability company,
partnership, association, trust, business trust, joint venture, joint stock
company, pool, syndicate, sole proprietorship, unincorporated organization,
Governmental Authority or any other form of entity or group thereof.
"Pledge Agreements" means the collective reference to the IPLP Pledge
Agreement and the IPT Pledge Agreement.
"Prime Rate" means, at any time, the rate of interest per annum
publicly announced from time to time by First Union as its prime rate then in
effect. The parties hereto acknowledge that the rate announced publicly by
First Union as its Prime Rate is an index or base rate and shall not
necessarily be its lowest or best rate charged to its customers or other banks.
"Pro Rata Portion" means, with respect to any Real Estate Entity, the
ratio (expressed as a percentage) of (a) the equity interest owned by the
Borrower in such Real Estate Entity to (b) the total equity in such Real Estate
Entity.
"Real Estate Entity" means any limited partnership, limited liability
company, corporation or other Person which has as its principal business the
ownership of real property or debt secured by real property.
"Register" shall have the meaning assigned thereto in Section 12.8(d).
"Required Lenders" means, at any date, any combination of holders of
greater than fifty percent of the aggregate unpaid principal amount of the
Revolving Credit Notes, or if no amounts are outstanding under the Revolving
Credit Notes, any combination of Lenders whose Commitment Percentages aggregate
greater than fifty percent.
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"Revolving Credit Notes" means the separate Revolving Credit Notes
made by the Borrower payable to the order of each Lender, substantially in the
form of Exhibit A hereto, evidencing the Credit Facility, and any amendments
and modifications thereto, any substitutes therefor, and any replacements,
restatements, renewals or extension thereof, in whole or in part; "Note" means
any of such Revolving Credit Notes.
"S&P" means Standard & Poor's Ratings Group, a division of the
McGraw-Hill Companies, a New York corporation, and its successors; provided
that, if such division shall be dissolved or liquidated or shall no longer
perform the functions of a securities rating agency, then "S&P" shall mean any
other nationally recognized securities rating agency reasonably acceptable to
the Borrower which is designated by the Required Lenders by notice to
Administrative Agent and the Borrower.
"Security Documents" means the collective reference to the Guaranty
Agreement and the Pledge Agreements and each other agreement or writing
pursuant to which the Borrower or the Guarantor pledges or grants a security
interest in any property or assets securing the Obligations or any such Person
guaranties the payment and/or performance of the Obligations.
"Solvent" means, as to the Borrower on a particular date, that the
Borrower (a) has capital sufficient to carry on its business and transactions
and all business and transactions in which it is about to engage and is able to
pay its debts as they mature and (b) is not "Insolvent" as defined under the
United States Bankruptcy Code or any applicable State insolvency law.
"Subordinated Debt" means the collective reference to all Debt of the
Borrower which (a) has a scheduled maturity date more than one year after the
Maturity Date hereunder, (b) is not subject to any scheduled amortization or
mandatory redemption feature of any kind, and (c) is subordinated with respect
to payment, remedies and covenants to the Obligations and (with respect to Debt
which is incurred by the Borrower after the date hereof) otherwise subordinated
thereto to the reasonable satisfaction of the Agents and Required Lenders.
"Subsidiary" means, as to any Person, any corporation, partnership or
other entity of which more than fifty percent (50%) of the outstanding capital
stock or other ownership interests having ordinary voting power to elect a
majority of the board of directors or other managers of such corporation,
partnership or other entity is at the time, directly or indirectly, owned by
such Person (irrespective of whether, at such time, capital stock or other
ownership interest of any other class or classes shall have or might have
voting power by reason of the happening of any contingency).
"Syndication Agent" means Lehman in its capacity as Syndication Agent.
"Taxes" shall have the meaning assigned thereto in Section 3.11(a).
"Termination Date" means the date on which the Credit Facility
terminates pursuant to Section 2.6.
"Termination Event" means: (a) a "Reportable Event" described in
Section 4043 of ERISA for which notice has not been waived, or (b) the
withdrawal of the Borrower or any ERISA Affiliate from a Pension Plan during a
plan year in which it was a "substantial employer" as defined in Section
4001(a)(2) of ERISA, or (c) the institution of proceedings to terminate, or the
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appointment of a trustee with respect to, any Pension Plan by the PBGC, or (d)
any other event or condition which would constitute grounds under Section
4042(a) of ERISA for the termination of, or the appointment of a trustee to
administer, any Pension Plan, or (e) the imposition of a Lien pursuant to
Section 412 of the Code or Section 302 of ERISA, or (f) any event or condition
which results in the reorganization or insolvency of a Multiemployer Plan under
Sections 4241 or 4245 of ERISA which results in a Material Adverse Effect, or
(g) any event or condition which results in the termination of a Multiemployer
Plan under Section 4041A of ERISA or the institution by PBGC of proceedings to
terminate a Multiemployer Plan under Section 4042 of ERISA which results in a
Material Adverse Effect.
"United States" means the United States of America.
SECTION 1.2 General. Unless otherwise specified, a reference in this
Agreement to a particular section, subsection, Schedule or Exhibit is a
reference to that section, subsection, Schedule or Exhibit of this Agreement.
Wherever from the context it appears appropriate, each term stated in either
the singular or plural shall include the singular and plural, and pronouns
stated in the masculine, feminine or neuter gender shall include the masculine,
the feminine and the neuter. Any reference herein to "Charlotte time" shall
refer to the applicable time of day in Charlotte, North Carolina.
SECTION 1.3 Other Definitions and Provisions.
(a) Use of Capitalized Terms. Unless otherwise defined therein, all
capitalized terms defined in this Agreement shall have the defined meanings
when used in this Agreement, the Revolving Credit Notes and the other Loan
Documents or any certificate, report or other document made or delivered
pursuant to this Agreement.
(b) Miscellaneous. The words "hereof", "herein" and "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.
ARTICLE
CREDIT FACILITY
SECTION.2.1 Commitment. Subject to the terms and conditions of this
Agreement, each Lender severally irrevocably commits to make Loans to the
Borrower from time to time from the Closing Date through the Termination Date
as requested by the Borrower in accordance with the terms of Section 2.2;
provided, that (a) the aggregate principal amount of all outstanding Loans
(after giving effect to any amount requested and funded and the use of the
proceeds thereof) shall not exceed the Aggregate Commitment and (b) the
principal amount of outstanding Loans from any Lender to the Borrower shall not
at any time exceed such Lender's Commitment. Each Loan by a Lender shall be in
a principal amount equal to such Lender's Commitment Percentage of the
aggregate principal amount of Loans requested on such occasion. Subject to the
terms and conditions hereof, the Borrower may borrow, repay and reborrow Loans
hereunder until the Termination Date.
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SECTION 2.2 Procedure for Advances of Loans.
(a) Requests for Borrowing. The Borrower shall give the Administrative
Agent irrevocable prior written notice substantially in the form attached
hereto as Exhibit B (a "Notice of Borrowing") not later than 12:00 noon
(Charlotte time) (i) at least one Business Day before each Base Rate Loan and
(ii) at least three (3) Business Days before each LIBOR Rate Loan, of its
intention to borrow, specifying (A) the date of such borrowing, which shall be
a Business Day, (B) the amount of such borrowing, which shall be with respect
to Base Rate Loans in an aggregate principal amount of $2,500,000 or a whole
multiple of $500,000 in excess thereof and with respect to LIBOR Rate Loans in
an aggregate principal amount of $5,000,000 or a whole multiple of $1,000,000
in excess thereof, (C) whether the Loans are to be LIBOR Rate Loans or Base
Rate Loans or a combination thereof and, if a combination thereof, the amount
allocable to each and (D) in the case of a LIBOR Rate Loan, the duration of the
Interest Period applicable thereto. Notices received after 12:00 noon
(Charlotte time) shall be deemed received on the next Business Day. The
Administrative Agent shall promptly notify and furnish each Lender with a copy
of each Notice of Borrowing.
(b) Disbursement of Loans. Not later than 1:00 p.m. (Charlotte time)
on the proposed borrowing date, each Lender will make available to the
Administrative Agent, for the account of the Borrower, at the office of the
Administrative Agent in funds immediately available to the Administrative
Agent, such Lender's Commitment Percentage of the Loans to be made on such
borrowing date. The Borrower hereby irrevocably authorizes the Administrative
Agent to disburse the proceeds of each borrowing requested pursuant to this
Section 2.2 in immediately available funds by crediting or wiring such proceeds
to the deposit account of the Borrower maintained with the Administrative Agent
as identified in the most recent Notice of Account Designation substantially in
the form of Exhibit I hereto (a "Notice of Account Designation") delivered by
the Borrower to the Administrative Agent or as may be otherwise agreed upon by
the Borrower and the Administrative Agent from time to time. Subject to Section
3.7 hereof, the Administrative Agent shall not be obligated to disburse the
amounts to be funded by a Lender pursuant to this Section 2.2 to the extent
that such Lender has not made such amounts available to the Administrative
Agent.
SECTION 2.3 Repayment of Loans.
(a) Repayment on Termination Date. The Borrower shall repay the
outstanding principal amount of all Loans in full, together with all accrued
but unpaid interest thereon, on the Termination Date.
(b) Mandatory Repayment of Excess Loans. If at any time the outstanding
principal amount of all Loans exceeds the Aggregate Commitment, the Borrower
shall repay within ten (10) Business Days after notice from the Administrative
Agent, by payment to the Administrative Agent for the account of the Lenders,
the Loans in an amount equal to such excess. Each such repayment shall be
accompanied by accrued interest on the amount repaid and any amount required to
be paid pursuant to Section 3.9 hereof.
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(c) Optional Repayments. The Borrower may at any time and from time to
time repay the Loans, in whole or in part without premium (but subject to
Section 3.9), upon irrevocable prior notice to the Administrative Agent not
later than 12:00 noon (Charlotte time) (i) at least three (3) Business Days
with respect to LIBOR Rate Loans and (ii) at least one (1) Business Day with
respect to Base Rate Loans specifying the date and amount of repayment and
whether the repayment is of LIBOR Rate Loans, Base Rate Loans, or a combination
thereof, and, if of a combination thereof, the amount allocable to each. Upon
receipt of such notice, the Administrative Agent shall promptly notify each
Lender. If any such notice is given, the amount specified in such notice shall
be due and payable on the date set forth in such notice. Partial repayments
shall be in an aggregate amount of $2,500,000 or a whole multiple of $500,000
in excess thereof with respect to Base Rate Loans and $5,000,000 or a whole
multiple of $1,000,000 in excess thereof with respect to LIBOR Rate Loans.
SECTION 2.4 Revolving Credit Notes. Each Lender's Loans and the
obligation of the Borrower to repay such Loans shall be evidenced by a
Revolving Credit Note executed by the Borrower payable to the order of such
Lender representing the Borrower's obligation to pay such Lender's Commitment
or, if less, the aggregate unpaid principal amount of all Loans made and to be
made by such Lender to the Borrower hereunder, plus interest and all other
fees, charges and other amounts due thereon. Each Revolving Credit Note shall
be dated the Closing Date and shall bear interest on the unpaid principal
amount thereof at the applicable interest rate per annum specified in Section
3.1.
SECTION 2.5 Increase/Reduction of the Aggregate Commitment.
(a) The Borrower shall have the option, which may be exercised upon at
least three (3) Business Days prior written notice to the Administrative Agent
not later than one hundred eighty (180) days after the Closing Date, to
increase the Aggregate Commitment from Fifty Million Dollars ($50,000,000) to
Seventy Million Dollars ($70,000,000), subject to the satisfaction of each of
the following conditions:
(i) The merger of IPT and Angeles Mortgage Investment (the
"IPT/Angeles Merger") shall have been consummated;
(ii) No Default or Event of Default shall have occurred and
be continuing; and
(iii) The Borrower shall have paid to First Union and Lehman
the fees and amounts set forth or referenced in Section 3.3(b) of
this Agreement.
(b) The Borrower shall have the right at any time and from time to
time, upon at least three (3) Business Days prior written notice to the
Administrative Agent, to permanently reduce, in whole at any time or in part
from time to time, without premium, the Aggregate Commitment in an aggregate
principal amount not less than $1,000,000 or any whole multiple of $1,000,000
in excess thereof.
(c) Each permanent reduction permitted pursuant to this Section 2.5
shall be accompanied by a payment of principal sufficient to reduce the
aggregate outstanding Loans of the Lenders to an amount not in excess of the
Aggregate Commitment as so reduced and by
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payment of accrued interest on the amount of such repaid principal. Any
reduction of the Aggregate Commitment to zero shall be accompanied by payment
of all outstanding Obligations and, if such reduction is permanent, termination
of the Commitments and Credit Facility. Any repayment of a LIBOR Rate Loan
resulting from the reduction of the Aggregate Commitment shall, if such
repayment occurs on a day which is not the last day of the then current
Interest Period applicable thereto, be subject to the provisions of Section 3.9
hereof.
SECTION 2.6 Termination of Credit Facility. The Credit Facility shall
terminate on the earliest of (a) the third anniversary of the Closing Date (the
"Maturity Date"), (b) the date of termination by the Borrower pursuant to
Section 2.5(a) and (c) the date of termination by the Administrative Agent on
behalf of the Lenders pursuant to Section 10.2(a).
SECTION 2.7 Use of Proceeds. The Borrower shall use the proceeds of
the Loans to make investments permitted by and subject to the limitations of
Section 9.4(c). The proceeds of the Loans may also be used to reimburse the
Borrower for amounts previously expended by the Borrower to fund such
acquisitions subject to compliance by the Borrower with Section 9.4(c).
ARTICLE
GENERAL LOAN PROVISIONS
SECTION 3.1 Interest.
(a) Interest Rate Options. Subject to the provisions of this Section
3.1, at the election of the Borrower, the aggregate principal balance of the
Revolving Credit Notes or any portion thereof shall bear interest at the Base
Rate or the LIBOR Rate plus the Applicable Margin. The Borrower shall select
the rate of interest and Interest Period, if any, applicable to any Loan at the
time a Notice of Borrowing is given pursuant to Section 2.2 or at the time a
Notice of Conversion/Continuation is given pursuant to Section 3.2. Each Loan
or portion thereof bearing interest based on the Base Rate shall be a "Base
Rate Loan" and each Loan or portion thereof bearing interest based on the LIBOR
Rate shall be a "LIBOR Rate Loan". Any Loan or any portion thereof as to which
the Borrower has not duly specified an interest rate as provided herein shall
be deemed a Base Rate Loan.
(b) Interest Periods. In connection with each LIBOR Rate Loan, the
Borrower, by giving notice at the times described in Section 3.1(a), shall
elect an interest period (each, an "Interest Period") to be applicable to such
Loan, which Interest Period shall be a period of one (1), two (2), three (3) or
six (6) months with respect to each LIBOR Rate Loan; provided that:
(i) the Interest Period shall commence on the date of advance
of or conversion to any LIBOR Rate Loan or and, in the case of immediately
successive Interest Periods, each successive Interest Period shall commence on
the date on which the next preceding Interest Period expires;
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(ii) if any Interest Period would otherwise expire on a day
that is not a Business Day, such Interest Period shall expire on the
next succeeding Business Day; provided, that if any Interest Period
with respect to a LIBOR Rate Loan would otherwise expire on a day that
is not a Business Day but is a day of the month after which no further
Business Day occurs in such month, such Interest Period shall expire
on the next preceding Business Day;
(iii) any Interest Period with respect to a LIBOR Rate Loan
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 relevant calendar month at the end of such
Interest Period;
(iv) no Interest Period shall be permitted to extend beyond
the Termination Date; and
(v) there shall be no more than five (5) Interest Periods
outstanding at any time.
(c) Default Rate. Upon the occurrence and during the continuance of an
Event of Default, (i) all outstanding LIBOR Rate Loans shall upon the request
of the Required Lenders bear interest at a rate per annum two percent (2%) in
excess of the rate then applicable to LIBOR Rate Loans until the end of the
applicable Interest Period and thereafter at a rate equal to two percent (2%)
in excess of the rate then applicable to Base Rate Loans, and (ii) all
outstanding Base Rate Loans shall bear interest at a rate per annum equal to
two percent (2%) in excess of the rate then applicable to Base Rate Loans. To
the maximum extent permitted by applicable law, interest shall continue to
accrue on the Revolving Credit Notes after the filing by or against the
Borrower of any petition seeking any relief in bankruptcy or under any act or
law pertaining to insolvency or debtor relief, whether state, federal or
foreign.
(d) Interest Payment and Computation. Interest on each Base Rate Loan
shall be payable in arrears on the last Business Day of each fiscal quarter and
interest on each LIBOR Rate Loan shall be payable on the last day of each
Interest Period applicable thereto, provided that, in the case of an Interest
Period in excess of three (3) months, accrued interest shall also be paid on
the day which is three (3) months after the commencement of such Interest
Period. All interest rates, fees and commissions provided hereunder shall be
computed on the basis of a 360-day year and assessed for the actual number of
days elapsed.
(e) Maximum Rate. In no contingency or event whatsoever shall the
aggregate of all amounts deemed interest hereunder or under any of the
Revolving Credit Notes and charged or collected pursuant to the terms of this
Agreement or pursuant to any of the Revolving Credit Notes exceed the highest
rate permissible under any Applicable Law which a court of competent
jurisdiction shall, in a final determination, deem applicable hereto. In the
event that such a court determines that the Lenders have charged or received
interest hereunder in excess of the highest applicable rate, the rate in effect
hereunder shall automatically be reduced to the maximum rate permitted by
Applicable Law and the Lenders shall at the Administrative Agent's option
promptly refund to the Borrower any interest received by Lenders in excess of
the maximum lawful rate or shall apply such excess to the principal balance of
the Obligations. It is the intent hereof that the Borrower not pay or contract
to pay, and that neither the
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Administrative Agent nor any Lender receive or contract to receive, directly or
indirectly in any manner whatsoever, interest in excess of that which may be
paid by the Borrower under Applicable Law.
SECTION 3.2 Notice and Manner of Conversion or Continuation of Loans.
Provided that no Default (other than a Default arising from any of the events
specified in Section 10.1(e), (f) and (n) hereof) or Event of Default has
occurred and is then continuing, the Borrower shall have the option to (a)
convert at any time all or any portion of its outstanding Base Rate Loans in a
principal amount equal to $5,000,000 or any whole multiple of $1,000,000 in
excess thereof into one or more LIBOR Rate Loans or (b) upon the expiration of
any Interest Period, (i) convert all or any part of its outstanding LIBOR Rate
Loans in a principal amount equal to $2,500,000 or a whole multiple of $500,000
in excess thereof into Base Rate Loans or (c) upon the expiration of any
Interest Period, continue the relevant LIBOR Rate Loans as LIBOR Rate Loans.
Whenever the Borrower desires to convert or continue Loans as provided above,
the Borrower shall give the Administrative Agent irrevocable prior written
notice in substantially the form attached as Exhibit C (a "Notice of
Conversion/ Continuation") not later than 12:00 noon (Charlotte time) three (3)
Business Days before the day on which a proposed conversion or continuation of
such Loan is to be effective specifying (A) the Loans to be converted or
continued, and, in the case of any LIBOR Rate Loan to be converted or
continued, the last day of the Interest Period therefor, (B) the effective date
of such conversion or continuation (which shall be a Business Day), (C) the
principal amount of such Loans to be converted or continued, and (D) the
Interest Period to be applicable to such converted or continued LIBOR Rate
Loan. The Administrative Agent shall promptly notify the Lenders of such Notice
of Conversion/Continuation.
SECTION 3.3 Fees.
(a) Commitment Fee. The Borrower shall pay to the Administrative Agent,
for the account of the Lenders, a non-refundable commitment fee (the
"Commitment Fee") of 0.25% per annum for so long as Loans under Section 2.1 are
limited to an aggregate amount of $50,000,000 and 0.375% per annum for each
day, if any, after the Borrower elects to increase the Aggregate Commitment to
Seventy Millions Dollars ($70,000,000) in accordance with Section 2.5(a). The
Commitment Fee due to each Lender shall commence to accrue on the date hereof
and shall cease to accrue on the earlier of (i) the termination of the
Commitment of such Lender and (ii) the Termination Date. The Commitment Fee
shall be payable in arrears (i) on the last Business Day of each fiscal quarter
during the term of this Agreement with the first payment due on March 31, 1998,
and (ii) on the Termination Date. Such Commitment Fee shall be promptly
distributed by the Administrative Agent to the Lenders pro rata in accordance
with the Lenders' respective Commitment Percentages.
(b) Other Fees. The Borrower agrees to pay to First Union and Lehman,
for their respective accounts, the fees set forth in the separate fee letter
agreement executed by the Borrower in favor of such Persons dated October 24,
1997, as amended by letter agreement of even date.
SECTION 3.4 Manner of Payment. Except as otherwise provided herein,
each payment (including repayments described in Article II) by the Borrower on
account of the principal of or interest on the Loans or of any fee, commission
or other amounts payable to the
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Lenders under this Agreement or any Revolving Credit Note shall be made not
later than 1:00 p.m. (Charlotte time) on the date specified for payment under
this Agreement to the Administrative Agent for the account of the Lenders pro
rata in accordance with their respective Commitment Percentages at the
Administrative Agent's Office, in Dollars, in immediately available funds and
shall be made without any set-off, counterclaim or deduction whatsoever. Any
payment received after such time but before 2:00 p.m. (Charlotte time) on such
day shall be deemed a payment on such date for the purposes of Section 10.1,
but for all other purposes shall be deemed to have been made on the next
succeeding Business Day. Any payment received after 2:00 p.m. (Charlotte time)
shall be deemed to have been made on the next succeeding Business Day for all
purposes. Upon receipt by the Administrative Agent of each such payment, the
Administrative Agent shall credit each Lender's account with its pro rata share
of such payment in accordance with such Lender's Commitment Percentage and
shall wire advice of the amount of such credit to each Lender. Subject to
Section 3.1(b)(ii), if any payment under this Agreement or any Revolving Credit
Note shall be specified to be made upon a day which is not a Business Day, it
shall be made on the next succeeding day which is a Business Day and such
extension of time shall in such case be included in computing any interest if
payable along with such payment.
SECTION 3.5 Crediting of Payments and Proceeds. In the event that the
Borrower shall fail to pay any of the Obligations when due and the Obligations
have been accelerated pursuant to Section 10.2, all payments received by the
Lenders upon the Revolving Credit Notes and the other Obligations and all net
proceeds from the enforcement of the Obligations shall be applied first to all
expenses then due and payable by the Borrower hereunder, then to all indemnity
obligations then due and payable by the Borrower hereunder, then to all
Administrative Agent's fees then due and payable, then to all commitment and
other fees and commissions then due and payable, then to accrued and unpaid
interest on the Revolving Credit Notes and then to the principal amount of the
Revolving Credit Notes, in that order.
SECTION 3.6 Adjustments. If any Lender (a "Benefitted Lender") shall at
any time receive any payment of all or part of its Loans, or interest thereon,
or if any Lender shall at any time receive any collateral in respect to its
Loans (whether voluntarily or involuntarily, by set-off or otherwise) in a
greater proportion than any such payment to and collateral received by any
other Lender, if any, in respect of such other Lender's Loans, or interest
thereon, such Benefitted Lender shall purchase for cash from the other Lenders
such portion of each such other Lender's Loans, or shall provide such other
Lenders with the benefits of any such collateral, or the proceeds thereof, as
shall be necessary to cause such Benefitted Lender to share the excess payment
or benefits of such collateral or proceeds ratably with each of the Lenders;
provided, that if all or any portion of such excess payment or benefits is
thereafter recovered from such Benefitted Lender, such purchase shall be
rescinded, and the purchase price and benefits returned to the extent of such
recovery, but without interest. The Borrower agrees that each Lender so
purchasing a portion of another Lender's Loans may exercise all rights of
payment with respect to such portion as fully as if such Lender were the direct
holder of such portion.
SECTION 3.7 Nature of Obligations of Lenders Regarding Loans;
Assumption by the Administrative Agent. The obligations of the Lenders under
this Agreement to make the Loans are several and are not joint or joint and
several. Unless the Administrative Agent shall
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have received notice from a Lender prior to a proposed borrowing date that such
Lender will not make available to the Administrative Agent such Lender's
ratable portion of the amount to be borrowed on such date (which notice shall
not release such Lender of its obligations hereunder), the Administrative Agent
may assume that such Lender has made such portion available to the
Administrative Agent on the proposed borrowing date in accordance with Section
2.2(b) and the Administrative Agent may, in reliance upon such assumption, make
available to the Borrower on such date a corresponding amount. If such amount
is made available to the Administrative Agent on a date after such borrowing
date, such Lender shall pay to the Administrative Agent on demand an amount,
until paid, equal to the product of (a) the amount of such Lender's Commitment
Percentage of such borrowing, times (b) the average Federal Funds Rate during
such period as determined by the Administrative Agent, times (c) a fraction the
numerator of which is the number of days that elapse from and including such
borrowing date to the date on which such Lender's Commitment Percentage of such
borrowing shall have become immediately available to the Administrative Agent
and the denominator of which is 360. A certificate of the Administrative Agent
with respect to any amounts owing under this Section 3.7 shall be conclusive,
absent manifest error. If such Lender's Commitment Percentage of such borrowing
is not made available to the Administrative Agent by such Lender within three
(3) Business Days of such borrowing date, the Administrative Agent shall be
entitled to recover such amount made available by the Administrative Agent with
interest thereon at the rate per annum applicable to Base Rate Loans hereunder,
on demand, from the Borrower. The failure of any Lender to make its Commitment
Percentage of any Loan available shall not relieve it or any other Lender of
its obligation hereunder to make its Commitment Percentage of such Loan
available on such borrowing date, but no Lender shall be responsible for the
failure of any other Lender to make its Commitment Percentage of such Loan
available on the borrowing date.
In the event that, at any time when the Borrower is not in Default and
has otherwise satisfied each of the conditions in Section 4.3 hereof, a Lender
for any reason fails or refuses to fund its portion of a borrowing and such
failure shall continue for a period in excess of thirty (30) days, then, until
such time as such Lender has funded its portion of such borrowing (which late
funding shall not absolve such Lender from any liability it may have to the
Borrower), or all other Lenders have received payment in full from the Borrower
(whether by repayment or prepayment) or otherwise of an amount equal to the
principal and interest due in respect of such borrowing, such non-funding
Lender shall not have the right (A) to vote regarding any issue on which voting
is required or advisable under this Agreement or any other Loan Document, and
such Lender's Commitment Percentage of the Loans shall not be counted as
outstanding for purposes of determining "Required Lenders" hereunder, and (B)
to receive payments of principal, interest or fees from the Borrower, the
Administrative Agent or the other Lenders in respect of its Commitment
Percentage of the Loans.
SECTION 3.8 Changed Circumstances.
(a) Circumstances Affecting LIBOR Rate Availability. If with respect to
any Interest Period the Administrative Agent or any Lender (after consultation
with the Administrative Agent) shall determine that, by reason of circumstances
affecting the foreign exchange and interbank markets generally, deposits in
eurodollars, in the applicable amounts are not being quoted via Telerate Page
3750 or offered to the Administrative Agent or such Lender for such Interest
Period, then the Administrative Agent shall forthwith give notice thereof to
the Borrower. Thereafter, until the Administrative Agent notifies the Borrower
that such circumstances no longer exist, the
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obligation of any affected Lender to make or continue its portion of such LIBOR
Rate Loans shall be suspended. Upon receipt of such notice, notwithstanding
anything contained herein, the then outstanding principal amount of such
Lender's Commitment Percentage of each affected LIBOR Rate Loan, together with
accrued interest thereon, shall automatically be converted to a Base Rate Loan
on either (a) the last day of the then current Interest Period applicable to
such affected LIBOR Rate Loan if such Lender may lawfully continue to maintain
and fund its portion of such LIBOR Rate Loan to such date or (b) immediately if
such Lender may not lawfully continue to fund and maintain its portion of such
affected LIBOR Rate Loan to such day.
(b) Laws Affecting LIBOR Rate Availability. If, after the date hereof,
the introduction of, or any change in, any Applicable Law or any change in the
interpretation or administration thereof by any Governmental Authority, central
bank or comparable agency charged with the interpretation or administration
thereof, or compliance by any Lender (or any of their respective Lending
Offices) with any request or directive (whether or not having the force of law)
of any such Authority, central bank or comparable agency, shall make it
unlawful for any Lender (or its Lending Office) to honor its obligations
hereunder to make or maintain any LIBOR Rate Loan, such Lender shall promptly
give notice thereof to the Administrative Agent and the Administrative Agent
shall promptly give notice to the Borrower and the other Lenders.
Before giving any notice to the Administrative Agent pursuant to this
Section 3.8, such Lender shall designate a different lending office if such
designation will avoid the need for giving such notice and will not, in the
reasonable judgment of such Lender, be otherwise materially disadvantageous to
such Lender. Upon receipt of such notice, notwithstanding anything contained
herein, the then outstanding principal amount of such Lender's Commitment
Percentage of each affected LIBOR Rate Loan, together with accrued interest
thereon, shall automatically be converted to a Base Rate Loan on either (a) the
last day of the then current Interest Period applicable to such affected LIBOR
Rate Loan if such Lender may lawfully continue to maintain and fund its portion
of such LIBOR Rate Loan to such date or (b) immediately if such Lender may not
lawfully continue to fund and maintain its portion of such affected LIBOR Rate
Loan to such day.
(c) Increased Costs. If, after the date hereof, the introduction of, or
any change in, any Applicable Law, or in the interpretation or administration
thereof by any Governmental Authority, central bank or comparable agency
charged with the interpretation or administration thereof, or compliance by any
Lender (or its Lending Office) with any request or directive (whether or not
having the force of law) of such Authority, central bank or comparable agency:
(i) shall subject any Lender (or its Lending Office) to any
tax, duty or other charge with respect to any Revolving Credit Note or
shall change the basis of taxation of payments to any Lender (or its
Lending Office) of the principal of or interest on any Revolving
Credit Note or any other amounts due under this Agreement in respect
thereof (except taxes contemplated by Section 3.11 and for changes in
the rate of tax on the overall net income of such Lender or its
Lending Office imposed by the jurisdiction in which such Lender is
organized or is or should be qualified to do business or such Lending
Office is located); or
(ii) shall impose, modify or deem applicable any reserve
(including, without limitation, any reserve imposed by the Board of
Governors of the Federal Reserve
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System), special deposit, insurance or capital or similar requirement
against assets of, deposits with or for the account of, or credit
extended by any Lender (or its Lending Office) or shall impose on any
Lender (or its Lending Office) or the foreign exchange and interbank
markets any other condition affecting its obligation to make its
Commitment Percentage of such LIBOR Rate Loans or its Commitment
Percentage of existing LIBOR Rate Loans;
and the result of any of the foregoing is to increase the costs to such
Lender of maintaining any LIBOR Rate Loan or to reduce the yield or
amount of any sum received or receivable by such Lender under this
Agreement or under the Revolving Credit Notes in respect of a LIBOR
Rate Loan, then, the Borrower shall pay to such Lender such
additional amount or amounts as will compensate such Lender or
Lenders for such increased cost or reduction. Each Lender will
promptly notify the Borrower and the Administrative Agent of any
event of which it has knowledge, occurring after the date hereof,
which will entitle such Lender to compensation pursuant to this
Section 3.8(c) and will designate a different lending office if such
designation will avoid the need for, or reduce the amount of, such
compensation and will not, in the reasonable judgment of such Lender
made in good faith, be otherwise disadvantageous to such Lender. Any
Lender claiming compensation under this Section 3.8(c) shall notify
the Borrower of any event occurring after the Closing Date entitling
such Lender to such compensation as promptly as practicable; provided
that if such Lender fails to give such notice within forty-five (45)
days after its obtains actual knowledge of such an event, such Lender
shall, with respect to such compensation in respect of any costs
resulting from such event, only be entitled to payment under this
Section 3.8(c) for costs incurred from and after the date forty-five
(45) days prior to the date that such Lender does give such notice.
Any Lender claiming compensation under this Section 3.8(c)
shall provide the Borrower with a written certificate setting forth
the additional amount or amounts to be paid to it hereunder and
calculations therefor in reasonable detail. Such certificate shall be
presumptively correct absent manifest error. In determining such
amount, such Lender may use any reasonable averaging and attribution
methods. If any Lender demands compensation under this Section 3.8(c),
the Borrower may at any time, upon at least five (5) Business Days'
prior notice to such Lender, prepay in full such Lender's Commitment
Percentage of the then outstanding LIBOR Rate Loans, together with
accrued interest thereon to the date of prepayment, along with any
reimbursement required under Section 3.9 hereof. Concurrently with
prepaying such Commitment Percentage of LIBOR Rate Loans the Borrower
may borrow a Base Rate Loan, or a LIBOR Rate Loan not so affected,
from such Lender, and such Lender shall, if so requested, make such
Advance in an amount such that the outstanding principal amount of the
affected Revolving Credit Note or Revolving Credit Notes held by such
Lender shall equal the outstanding principal amount of such Revolving
Credit Note or Revolving Credit Notes immediately prior to such
prepayment.
(d) Effect on Other Advances. If notice has been given pursuant to
Section 3.8(a), (b) or (c) suspending the obligation of any Lender to make its
Commitment Percentage of any type of LIBOR Rate Loan, or requiring such
Lender's Commitment Percentage of LIBOR Rate Loans to be repaid or prepaid,
then, unless and until such Lender notifies the Borrower that the circumstances
giving rise to such repayment no longer apply (which notice such Lender shall
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give promptly), all advances which would otherwise be made by such Lender as
its Commitment Percentage of LIBOR Rate Loans shall, unless otherwise notified
by the Borrower, be made instead as Base Rate Loans.
SECTION 3.9 Reimbursement. Whenever any Lender shall sustain or incur
any losses, other than lost profits, or out-of-pocket expenses (a) as a
consequence of any failure by the Borrower to make any payment when due of any
amount due hereunder in connection with a LIBOR Rate Loan, (b) due to any
failure of the Borrower to borrow on a date specified therefor in a Notice of
Borrowing or Notice of Continuation/Conversion or (c) due to any payment,
prepayment or conversion of any LIBOR Rate Loan on a date other than the last
day of the Interest Period therefor, the Borrower agrees to pay to such Lender,
promptly following such Lender's demand, an amount sufficient to compensate
such Lender for all such losses and out-of-pocket expenses. Such Lender's good
faith determination of the amount of such losses or out-of-pocket expenses, as
set forth in writing and accompanied by calculations in reasonable detail
demonstrating the basis for its demand, shall be presumptively correct absent
manifest error. The obligations of the Borrower contained in this Section 3.9
shall survive for a period of one year following the payment in full of the
Revolving Credit Notes and the termination of the Commitments.
SECTION 3.10 Capital Requirements. If either (a) the introduction of,
or any change in, or in the interpretation of, any Applicable Law after the date
hereof or (b) compliance with any guideline or request made after the date
hereof by any central bank or comparable agency or other Governmental Authority
(whether or not having the force of law), has or would have the effect of
reducing the rate of return on the capital of, or has affected or would affect
the amount of capital required to be maintained by, any Lender or any
corporation controlling such Lender as a consequence of, or with reference to
the Commitments and other commitments of this type, below the rate which the
Lender or such other corporation could have achieved but for such introduction,
change or compliance, then within five (5) Business Days after written demand
by any such Lender, the Borrower shall pay to such Lender from time to time as
specified by such Lender additional amounts sufficient to compensate such
Lender or other corporation for such reduction. Any Lender claiming
compensation under this Section 3.10 shall notify the Borrower of any event
occurring after the date of this Agreement entitling such Lender to such
compensation as promptly as practicable, but in any event within forty-five
(45) days, after such Lender obtains actual knowledge thereof; provided that if
such Lender fails to give such notice within forty-five (45) days after it
obtains actual knowledge of such an event, such Lender shall, with respect to
such compensation in respect of any costs resulting from such event, only be
entitled to payment under this Section 3.10 for costs incurred from and after
the date forty-five (45) days prior to the date that such Lender does give such
notice. A certificate of such Lender setting forth the amount to be paid to
such Lender by the Borrower as a result of any event referred to in this
paragraph and supporting calculations in reasonable detail shall be
presumptively correct absent manifest error.
SECTION 3.11 Taxes.
(a) Payments Free and Clear. Any and all payments by the Borrower
hereunder or under the Revolving Credit Notes shall be made free and clear of
and without deduction for any and all present or future taxes, levies, imposts,
deductions, charges or withholding, and all liabilities with respect thereto
excluding, (i) in the case of each Lender and the Administrative
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Agent, income and franchise taxes imposed by the jurisdiction under the laws of
which such Lender or the Administrative Agent (as the case may be) is organized
or is or should be qualified to do business or any political subdivision
thereof and (ii) in the case of each Lender, income and franchise taxes imposed
by the jurisdiction of such Lender's Lending Office or any political
subdivision thereof (all such non-excluded taxes, levies, imposts, deductions,
charges, withholdings and liabilities being hereinafter referred to as
"Taxes"). If the Borrower shall be required by law to deduct any Taxes from or
in respect of any sum payable hereunder or under any Revolving Credit Note to
any Lender or the Administrative Agent, (A) the sum payable shall be increased
as may be necessary so that after making all required deductions (including
deductions applicable to additional sums payable under this Section 3.11) such
Lender or the Administrative Agent (as the case may be) receives an amount
equal to the amount such party would have received had no such deductions been
made, (B) the Borrower shall make such deductions, (C) the Borrower shall pay
the full amount deducted to the relevant taxing authority or other authority in
accordance with Applicable Law, and (D) the Borrower shall deliver to the
Administrative Agent evidence of such payment to the relevant taxing authority
or other authority in the manner provided in Section 3.11(d).
(b) Stamp and Other Taxes. In addition, the Borrower shall pay any
present or future stamp, registration, recordation or documentary taxes or any
other similar fees or charges or excise or property taxes, levies of the United
States or any state or political subdivision thereof or any applicable foreign
jurisdiction which arise from any payment made hereunder or from the execution,
delivery or registration of, or otherwise with respect to, this Agreement, the
Loans, the other Loan Documents, or the perfection of any rights or security
interest in respect thereto (hereinafter referred to as "Other Taxes"). The
Borrower shall not be liable for the payment of Other Taxes which are payable
solely by reason of the assignment by any Lender of its interests, rights and
obligations under this Agreement.
(c) Indemnity. The Borrower shall indemnify each Lender and the
Administrative Agent for the full amount of Taxes and Other Taxes (including,
without limitation, any Taxes and Other Taxes imposed by any jurisdiction on
amounts payable under this Section 3.11) paid by such Lender or the
Administrative Agent (as the case may be) and any liability (including
penalties, interest and expenses) arising therefrom or with respect thereto,
whether or not such Taxes or Other Taxes were correctly or legally asserted.
Such indemnification shall be made within thirty (30) days from the date such
Lender or the Administrative Agent (as the case may be) makes written demand
therefor.
(d) Evidence of Payment. Within thirty (30) days after the date of any
payment of Taxes or Other Taxes, the Borrower shall furnish to the
Administrative Agent, at its address referred to in Section 12.1, the original
or a certified copy of a receipt evidencing payment thereof or other evidence
of payment satisfactory to the Administrative Agent.
(e) Delivery of Tax Forms. Each Lender organized under the laws of a
jurisdiction other than the United States or any state thereof shall deliver to
the Borrower, with a copy to the Administrative Agent, on the Closing Date or
concurrently with the delivery of the relevant Assignment and Acceptance, as
applicable, (i) two United States Internal Revenue Service Forms 4224 or Forms
1001, as applicable (or successor forms) properly completed and certifying in
each case that such Lender is entitled to a complete exemption from withholding
or deduction for or on account of any United States federal income taxes, and
(ii) an Internal Revenue Service Form W-8
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or W-9 or successor applicable form, as the case may be, to establish an
exemption from United States backup withholding taxes. Each such Lender further
agrees to deliver to the Borrower, with a copy to the Administrative Agent, a
Form 1001 or 4224 and Form W-8 or W-9, or successor applicable forms or manner
of certification, as the case may be, on or before the date that any such form
expires or becomes obsolete or after the occurrence of any event requiring a
change in the most recent form previously delivered by it to the Borrower,
certifying in the case of a Form 1001 or 4224 that such Lender is entitled to
receive payments under this Agreement without deduction or withholding of any
United States federal income taxes (unless in any such case an event (including
without limitation any change in treaty, law or regulation) has occurred prior
to the date on which any such delivery would otherwise be required which
renders such forms inapplicable or the exemption to which such forms relate
unavailable and such Lender notifies the Borrower and the Administrative Agent
that it is not entitled to receive payments without deduction or withholding of
United States federal income taxes) and, in the case of a Form W-8 or W-9,
establishing an exemption from United States backup withholding tax. The
Borrower shall not be required to gross-up pursuant to this Section 3.11 or
otherwise for any deductions on account of withholding taxes from amounts owing
to a Lender who has not complied with this clause (e).
(f) Survival. Without prejudice to the survival of any other agreement
of the Borrower hereunder, the agreements and obligations of the Borrower
contained in this Section 3.11 shall survive the payment in full of the
Revolving Credit Notes and the termination of the Commitments.
SECTION 3.12 Claims for Increased Costs and Taxes. In the event that
any Lender shall decline to make LIBOR Rate Loans pursuant to Section 3.8(a) or
(b) hereof or shall have notified the Borrower that it is entitled to claim
compensation pursuant to Section 3.8(c), 3.10 or 3.11 hereof or is unable to
complete the form required or is subject to withholding as provided in Section
3.11 hereof (each such lender being an "Affected Lender"), the Borrower at its
own cost and expense may designate a replacement bank (a "Replacement Lender")
to assume the Commitment and the obligations of any such Affected Lender
hereunder, and to purchase the outstanding Revolving Credit Note of such
Affected Lender and such Affected Lender's rights hereunder and with respect
thereto, without recourse upon, or warranty by, or expense to, such Affected
Lender, for a purchase price equal to (unless such Lender agrees to a lesser
amount) the outstanding principal amount of the Loans of such Affected Lender
plus all interest accrued and unpaid thereon and all other amounts owing to
such Affected Lender hereunder, including without limitation, any amount which
would be payable to such Affected Lender pursuant to Section 3.8(c), and upon
such assumption and purchase by the Replacement Lender, such Replacement Lender
shall be deemed to be a "Lender" for purposes of this Agreement and such
Affected Lender shall cease to be a "Lender" for purposes of this Agreement and
shall no longer have any obligations or rights hereunder (other than any
obligations or rights which according to this Agreement shall survive the
termination of the Commitment). In the event any Lender receives a refund or
credit with respect to withholding taxes paid by the Borrower, such Lender
shall promptly repay such amounts to the Borrower.
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ARTICLE
CLOSING; CONDITIONS OF CLOSING AND BORROWING
SECTION 4.1 Closing. The closing shall take place at the offices of
Kennedy Covington Lobdell & Hickman, L.L.P. at 10:00 a.m. on December 30, 1997,
or on such other place or date as the parties hereto shall mutually agree.
SECTION 4.2 Conditions to Closing and Initial Loan. The obligation of
the Lenders to close this Agreement and to make the initial Loan are subject to
the satisfaction of each of the following conditions:
(a) Executed Loan Documents. This Agreement, the Revolving
Credit Notes, the Guaranty Agreement and the Pledge Agreements shall each have
been duly authorized, executed and delivered to the Administrative Agent by the
parties thereto, shall be in full force and effect and no Default shall exist
hereunder.
(b) Closing Certificates; etc.
(i) Certificate of IPT. The Administrative Agent shall
have received a certificate from the chief executive
officer or president of the General Partner, in form and
substance reasonably satisfactory to the Administrative Agent,
to the effect that all representations and warranties of the
Borrower contained in this Agreement and the other Loan
Documents are in all material respects true, correct and
complete to the best knowledge of such Person; that to the best
knowledge of such Person, the Borrower is not in violation of
any of the covenants contained in this Agreement and the other
Loan Documents; that, after giving effect to the transactions
contemplated by this Agreement to occur on the Closing Date, no
Default or Event of Default has occurred and is continuing; and
that to the best knowledge of such Person, the Borrower has
satisfied each of the closing conditions.
(ii) Certificate of Secretary of the General Partner.
The Administrative Agent shall have received a certificate
of the secretary or assistant secretary of the General Partner
certifying on behalf of the Borrower that attached thereto is a
true and complete copy of the certificate of limited partnership
of the Borrower and all amendments thereto, certified as of a
recent date by the appropriate Governmental Authority in its
jurisdiction of formation; that attached thereto is a true and
complete copy of the partnership agreement of the Borrower as in
effect on the date of such certification; that attached thereto
is a true and complete copy of resolutions duly adopted by the
Board of Directors or other governing body of IPT in its
capacity as general partner of the Borrower authorizing the
execution, delivery and performance of the Loan Documents to
which the Borrower is a party; and as to the incumbency and
genuineness of the signature of each officer of the General
Partner executing Loan Documents to which the Borrower is a
party.
(iii) Certificates of Good Standing. The Administrative
Agent shall have received long-form certificates as of a recent
date of the good standing of the
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Borrower and IPT under the laws of its jurisdiction of
formation and, where available, a certificate of the relevant
taxing authorities of such jurisdictions certifying that such
Person has filed required tax returns and owes no delinquent
taxes.
(iv) Opinions of Counsel. The Administrative Agent shall
have received a favorable opinion of Simpson Thacher & Bartlett,
special counsel to the Borrower and IPT, John K. Lines,
Secretary of IPT, and Douglas G. Brown, Esq., special counsel to
the Borrower and IPT with respect to certain matters of South
Carolina law, addressed to the Agents and Lenders with respect
to such Persons, the Loan Documents, the security interests
created thereunder and such other matters as the Lenders shall
reasonably request. (The opinion of Simpson Thacher & Bartlett
shall be in form and substance customary for transactions of
this type.)
(v) Insurance. Certificates or other evidence reasonably
satisfactory to the Agents that the insurance coverage
required by this Agreement and the other Loan Documents is in
full force and effect, and true, correct and complete copies of
the policies of such insurance, if requested by the
Administrative Agent.
(vi) Tax Forms. Unless the Borrower otherwise consents,
the Administrative Agent shall have received copies of the
United States Internal Revenue Service forms required by Section
3.11 hereof.
(c) No Default. No Default or Event of Default shall have
occurred and be continuing.
(d) Financial Matters.
(i) Financial Statements. The Agents shall have received
the most recent audited consolidated financial statements
of IPT and its Subsidiaries and unaudited consolidated financial
statements for the Borrower and its Subsidiaries. The Agents
shall have also received a certificate of the president or
treasurer of the General Partner in the form of Exhibit D.
(ii) Financial Condition Certificate. The Borrower
shall have delivered to the Administrative Agent a certificate,
in form and substance reasonably satisfactory to the Agents, and
certified as accurate by the chief executive officer or president
of the General Partner on behalf of the Borrower, that (A)
the Borrower is Solvent, (B) the Borrower's material payables
are current and not past due and (C) the financial data and
models previously delivered to the Agents represent the good
faith opinion (based upon the assumptions set forth therein) of
the Borrower as to the results contained therein.
(iii) Payment at Closing; Fee Letter. The Borrower shall
have paid to First Union, Lehman and the Lenders the fees
set forth or referenced in Section 3.3 of this Agreement and (to
the extent submitted for payment a reasonable time prior to the
Closing Date) any accrued and unpaid fees or commissions then
due hereunder (including, without limitation, reasonable legal
fees and expenses), and
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(to the extent submitted for payment a reasonable time
prior to the Closing Date) to any other Person such amount as
may be due thereto in connection with the transactions
contemplated hereby, including all taxes, fees and other charges
in connection with the execution, delivery, recording, filing
and registration of any of the Loan Documents. The Agents shall
have received a duly authorized and executed copy of the fee
letter agreement referred to in Section 3.3(b).
(e) Miscellaneous.
(i) Notice of Borrowing. The Administrative Agent
shall have received the Notice of Borrowing.
(ii) Proceedings and Documents. All opinions,
certificates and other instruments and all proceedings in
connection with the transactions contemplated by this
Agreement shall be in form and substance reasonably satisfactory
to the Agents and Lenders. The Agents and Lenders shall have
received copies of all other instruments and other evidence as
such Persons may reasonably request, in form and substance
reasonably satisfactory thereto with respect to the transactions
contemplated by this Agreement.
(iii) Due Diligence and Other Documents. The Borrower
shall have delivered to the Agents such other documents and
certificates as the Agents may reasonably request sufficiently
prior to the Closing Date to permit the delivery thereof, all
certified by a secretary or assistant secretary of the General
Partner on behalf of the Borrower as a true and correct copy
thereof.
(iv) Perfection. The Borrower shall have executed and
delivered to the Administrative Agent such instruments and
documents (including, without limitation, UCC Financing
Statements, stock certificates and stock powers, notices to
general partners, etc.) as the Administrative Agent may
reasonably deem necessary to perfect the Liens purported to be
granted under the Security Documents.
(v) IPT Advisory Agreement. The Borrower shall have
delivered to the Agents a fully executed counterpart of the
IPT Advisory Agreement, which shall be in full force and effect.
(vi) Letter Agreement. The Agent shall have received a
fully-executed counterpart of the letter agreement of even
date with this Agreement between Insignia Commercial Group,
Inc., Insignia Residential Group, Inc. and the Administrative
Agent confirming the right to terminate Management Agreements,
without penalty, upon the occurrence of a Default or an Event
of Default under this Agreement.
SECTION 4.3 Conditions to All Loans. The obligation of the Lenders to
make any Loan is subject to the satisfaction of the following conditions
precedent on the relevant borrowing date:
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(a) Continuation of Representations and Warranties. The
representations and warranties contained in Article V shall be true
and correct in all material respects on and as of such borrowing with
the same effect as if made on and as of such date.
(b) No Existing Default. No Default or Event of Default shall
have occurred and be continuing hereunder on the borrowing date with
respect to such Loan or after giving effect to the Loans to be made
on such date.
(c) Notice of Borrowing. The Administrative Agent shall have
received the Notice of Borrowing.
SECTION 4.4 Delivery of Certificates by Administrative Agent.
The Administrative Agent shall furnish each Lender with a copy of each
certificate delivered to the Administrative Agent pursuant to Section
4.2(b) and (d) and Section 4.3(c) hereof.
------------------------------
ARTICLE
REPRESENTATIONS AND WARRANTIES OF THE BORROWER
SECTION 5. Representations and Warranties. To induce the Agents and
Lenders to enter into this Agreement and the Lenders to make Loans hereunder,
the Borrower hereby represents and warrants to the Agents and Lenders that:
(a) Organization; Power; Qualification. The Borrower is a
limited partnership duly organized, validly existing and in good
standing under the laws of Delaware, has the power and authority to
own its properties and to carry on its business as now being and
hereafter proposed to be conducted and is duly qualified and
authorized to do business in each jurisdiction in which the character
of its properties or the nature of its business requires such
qualification and authorization, the failure in which to so qualify or
be authorized could reasonably be expected to have a Material Adverse
Effect.
(b) Authorization of Agreement, Loan Documents and Borrowing.
The Borrower has the right, power and authority and has taken all
necessary action to authorize the execution, delivery and performance
of this Agreement and each of the other Loan Documents to which it is
a party in accordance with their respective terms. This Agreement and
each of the other Loan Documents to which the Borrower is a party have
been duly executed and delivered by the duly authorized officers of
the General Partner on behalf of the Borrower, and each such document
constitutes the legal, valid and binding obligation of the Borrower,
enforceable in accordance with its terms, except as such enforcement
may be limited by bankruptcy, insolvency, reorganization, moratorium
or similar state or federal debtor relief laws from time to time in
effect which affect the enforcement of creditors' rights in general
and the availability of equitable remedies, and public policy.
(c) Compliance of Agreement, Loan Documents and Borrowing with
Laws, Etc. The execution, delivery and performance by the Borrower of
the Loan Documents to
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which it is a party, in accordance with their respective terms, the
borrowings hereunder and the transactions contemplated hereby do not
and will not, by the passage of time, the giving of notice or
otherwise, (i) require any Governmental Approval or violate any
Applicable Law relating to the Borrower, (ii) conflict with, result
in a breach of or constitute a default under the Partnership
Agreement of the Borrower or any material indenture, agreement or
other instrument to which the Borrower is a party or by which any of
its properties may be bound or any Governmental Approval relating to
the Borrower, or (iii) result in or require the creation or
imposition of any Lien upon or with respect to any property now owned
or hereafter acquired by the Borrower other than Liens arising under
the Loan Documents or permitted by Section 9.3.
(d) Compliance with Law; Governmental Approvals. The Borrower
(i) has all material Governmental Approvals required by any Applicable
Law for it to conduct its business, each of which is in full force and
effect, is final and not subject to review on appeal and is not the
subject of any pending or, to the best knowledge of the Borrower,
overtly threatened attack by direct or collateral proceeding, and (ii)
is in compliance in all material respects with each Governmental
Approval applicable to it and in compliance in all material respects
with all other Applicable Laws relating to it or any of its respective
properties, except to the extent that the failure to have any such
approval or to so be in compliance would not reasonably be expected to
have a Material Adverse Effect.
(e) Tax Returns and Payments. The Borrower has duly filed or
caused to be filed, or has received an extension for, all material
federal, state, local and other tax returns required by Applicable Law
to be filed, and has paid, or made adequate provision for the payment
of, all federal, state, local and other taxes, assessments and
governmental charges or levies upon it and its property, income,
profits and assets which are then due and payable. No Governmental
Authority has asserted any material Lien or other claim against the
Borrower with respect to unpaid taxes which has not been discharged or
resolved. The charges, accruals and reserves on the books of the
Borrower in respect of federal, state, local and other taxes for all
Fiscal Years and portions thereof since the organization of the
Borrower are in the judgment of the Borrower adequate, and the
Borrower does not have any knowledge of additional taxes or
assessments for any of such years.
(f) Intellectual Property Matters. The Borrower owns or
possesses rights to use all franchises, licenses, copyrights,
copyright applications, patents, patent rights or licenses, patent
applications, trademarks, trademark rights, trade names, trade name
rights, copyrights and rights with respect to the foregoing which are
required to conduct its business. No event has occurred which permits,
or after notice or lapse of time or both would permit, the revocation
or termination of any such rights, and (to the best of its knowledge)
the Borrower is not liable to any Person for infringement under
Applicable Law with respect to any such rights as a result of its
business operations, to the extent that such revocation, infringement
or liability would reasonably be expected to have a Material Adverse
Effect.
(g) Environmental Matters.
(i) To the Borrower's Actual Knowledge, the properties
owned by the Borrower do not contain, and to its Actual
Knowledge have not previously
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contained, any Hazardous Materials in amounts or
concentrations which (A) constitute or constituted a
violation of, or (B) could give rise to liability under,
applicable Environmental Laws, in each case which could
reasonably be expected to have a Material Adverse Effect
upon the Borrower;
(ii) To the Borrower's Actual Knowledge, such properties
and all operations of the Borrower are conducted in
compliance in all respects, and have been in compliance in
all respects, with all applicable Environmental Laws the
violation of which could reasonably be expected to have a
Material Adverse Effect upon the Borrower, and the Borrower
has not caused contamination at, under or about such
properties or such operations which could reasonably be
expected to have a Material Adverse Effect upon the
continued operation of such properties and which could
reasonably be expected to have a Material Adverse Effect
upon the Borrower;
(iii) The Borrower (a) has not received any notice of
violation, alleged violation, non-compliance, liability or
potential liability regarding environmental matters or
compliance with Environmental Laws with regard to any of
its properties or its operations, nor (b) has Actual
Knowledge that any such notice will be received or is being
overtly threatened, in each case which could reasonably be
expected to have a Material Adverse Effect upon the
Borrower;
(iv) To the Borrower's Actual Knowledge, the Borrower
has not caused Hazardous Materials to be transported
or disposed of from the properties of the Borrower in
violation of, or in a manner or to a location which gives
rise to liability under, Environmental Laws, which
violation or liability could reasonably be expected to have
a Material Adverse Effect upon the Borrower, nor to the
Borrower's Actual Knowledge has the Borrower caused any
Hazardous Materials to be generated, treated, stored or
disposed of at, on or under any of such properties in
violation of, or in a manner that could give rise to
liability under, any applicable Environmental Laws which
could reasonably be expected to have a Material Adverse
Effect upon the Borrower;
(v) No judicial proceedings or governmental or
administrative action is pending, or, to the Actual
Knowledge of the Borrower, overtly threatened, under any
Environmental Law to which the Borrower is or will be named
as a party with respect to such properties or operations of
the Borrower conducted thereon, nor are there any consent
decrees or other decrees, consent orders, administrative
orders or other orders, or other administrative or judicial
requirements outstanding under any Environmental Law with
respect to such properties or such operations which in each
case could reasonably be expected to have a Material
Adverse Effect upon the Borrower; and
(vi) To its Actual Knowledge, the Borrower has not caused
any release, or to the Borrower's Actual Knowledge,
the threat of release, of Hazardous Materials at or from
such properties, in violation of or in amounts or in a
manner that gives rise to liability under Environmental
Laws, in each case which could reasonably be expected to
have a Material Adverse Effect upon the Borrower.
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(h) ERISA.
(i) Neither the Borrower nor any ERISA Affiliate
maintains or contributes to, or has any obligation under,
any Employee Benefit Plans other than those identified on
Schedule 5.1(h);
(ii) The Borrower and each ERISA Affiliate is in material
compliance with all applicable provisions of ERISA and the
regulations and published interpretations thereunder with
respect to all Employee Benefit Plans except for any required
amendments for which the remedial amendment period as defined
in Section 401(b) of the Code has not yet expired. Each
Employee Benefit Plan that is intended to be qualified
under Section 401(a) of the Code has been determined by the
Internal Revenue Service to be so qualified, and each trust
related to such plan has been determined to be exempt under
Section 501(a) of the Code. No liability has been incurred
by the Borrower or any ERISA Affiliate which remains
unsatisfied for any taxes or penalties with respect to any
Employee Benefit Plan or any Multiemployer Plan;
(iii) No Pension Plan of the Borrower has been terminated,
and to the knowledge of the Borrower no Pension Plan
of any ERISA Affiliate has been terminated, nor has any
accumulated funding deficiency (as defined in Section 412
of the Code) been incurred (without regard to any waiver
granted under Section 412 of the Code), nor has any funding
waiver from the Internal Revenue Service been received or
requested with respect to any Pension Plan, nor has the
Borrower or any ERISA Affiliate failed to make any
contributions or to pay any amounts due and owing as
required by Section 412 of the Code, Section 302 of ERISA
or the terms of any Pension Plan prior to the due dates of
such contributions under Section 412 of the Code or Section
302 of ERISA, nor has there been any event requiring any
disclosure under Section 4041(c)(3)(C) or 4063(a) of ERISA
with respect to any Pension Plan;
(iv) Neither the Borrower nor any ERISA Affiliate has:
(A) engaged in a nonexempt prohibited transaction
described in Section 406 of the ERISA or Section 4975 of
the Code, (B) incurred any liability to the PBGC which
remains outstanding other than the payment of premiums and
there are no premium payments which are due and unpaid, (C)
failed to make a required contribution or payment to a
Multiemployer Plan, or (D) failed to make a required
installment or other required payment under Section 412 of
the Code;
(v) No Termination Event has occurred or, to the
knowledge of the Borrower, is reasonably expected to occur;
and
(vi) No proceeding, claim, lawsuit and/or investigation
(other than routine claims for benefits in the ordinary
course) is existing or, to the best knowledge of the
Borrower after due inquiry, threatened concerning or
involving any (A) employee welfare benefit plan (as defined
in Section 3(1) of ERISA)
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currently maintained or contributed to by the Borrower
or any ERISA Affiliate, (B) Pension Plan or (C)
Multiemployer Plan.
(i) Margin Stock. The Borrower is not engaged principally
in or has as one of its activities the business of
extending credit for the purpose of "purchasing" or
"carrying" any "margin stock" (as each such term is defined
or used in Regulations G and U of the Board of Governors of
the Federal Reserve System). No part of the proceeds of any
of the Loans will be used for purchasing or carrying margin
stock or for any purpose which violates, or which would be
inconsistent with, the provisions of Regulation G, T, U or
X of such Board of Governors or without executing and
delivering to the Administrative Agent a properly completed
Federal Reserve Form U-1.
(j) Government Regulation. The Borrower is not an
"investment company" or a company "controlled" by an
"investment company" (as each such term is defined or used
in the Investment Company Act of 1940, as amended) and
neither the Borrower nor any Material Subsidiary thereof
is, or after giving effect to any Loan will be, subject to
regulation under the Public Utility Holding Company Act of
1935 or the Interstate Commerce Act, each as amended, or
any other Applicable Law which limits its ability to incur
or consummate the transactions contemplated hereby.
(k) Certain Contracts and Properties. Each Material
Contract is, and after giving effect to the consummation of
the transactions contemplated by the Loan Documents will be,
in full force and effect in accordance with the terms thereof.
The Borrower has delivered to eac Agent a true and complete
copy of each Material Contract with respect to which a copy
has been requested by such Agent.
(l) Financial Statements. The balance sheet of IPT as of
September 30, 1997 and the related statements of income and
retained earnings and cash flows for the fiscal period then
ended, copies of which have been furnished to the Agents
and each Lender, fairly present the financial condition of
IPT as at such dates, and the results of the operations and
changes of financial position for the periods then ended
(subject to year-end audit adjustments). All such financial
statements have been prepared in accordance with GAAP
(other than the absence of footnotes). The Borrower has no
material Debt, obligation or other unusual forward or
long-term commitment which is not fairly reflected in the
foregoing financial statements or in the notes to IPT's
financial statements of December 31, 1996.
(m) No Material Adverse Change. Since September 30, 1997,
there has been no material adverse change in the business,
operations, or condition (financial or otherwise) of the
Borrower and no event has occurred or condition arisen that
could reasonably be expected to have Material Adverse Effect.
(n) Solvency. As of the Closing Date and after giving
effect to each Loan made hereunder, the Borrower will be
Solvent.
(o) Titles to Properties. The Borrower has such title to
the real property owned by it as is necessary to the
conduct of its business and valid and legal title to all of
its material personal property and assets, including, but
not limited to, those reflected on the
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balance sheets of the Borrower delivered pursuant to
Section 5.1(l), except those which have been disposed of by
the Borrower subsequent to such date, which dispositions
have been in the ordinary course of business or as
otherwise of a type permitted hereunder.
(p) Liens. None of the material properties and assets of
the Borrower is subject to any Lien, except Liens permitted
pursuant to Section 9.3.
(q) Debt and Contingent Obligations. Schedule 5.1(q) is a
complete and correct listing of all Debt and Contingent
Obligations of the Borrower as of the date hereof. The
Borrower has performed and is in compliance with all of the
terms of such Debt and Contingent Obligations and all
instruments and agreements relating thereto, and no default
or event of default, or event or condition which with
notice or lapse of time or both would constitute such a
default or event of default on the part of the Borrower
exists with respect to any such Debt or Contingent
Obligation.
(r) Litigation. Except as set forth on Schedule 5.1(r),
there are no actions, suits or proceedings pending nor, to
the Actual Knowledge of the Borrower, overtly threatened
against or in any other way directly relating to or
directly affecting the Borrower or any of its properties in
any court or before any arbitrator of any kind or before or
by any Governmental Authority that would reasonably be
expected to have a Material Adverse Effect.
(s) Absence of Defaults. No event has occurred or is
continuing which constitutes a Default or an Event of
Default, or which constitutes, or which with the passage of
time or giving of notice or both would constitute, a
default or event of default by the Borrower under any
Material Contract or judgment, decree or order to which the
Borrower is a party or by which the Borrower or any of its
properties may be bound or (to the extent the making of
such payment is prohibited hereunder) which would require
the Borrower to make any payment thereunder prior to the
scheduled maturity date therefor.
SECTION 5.2 Survival of Representations and Warranties, Etc. All
representations and warranties set forth in this Article V and all
representations and warranties contained in any certificate delivered pursuant
to the terms hereof, or any of the Loan Documents (including but not limited to
any such representation or warranty made in or in connection with any amendment
thereto) shall constitute representations and warranties made under this
Agreement. All representations and warranties made under this Agreement shall
be made or deemed to be made, and shall be true and correct in all material
respects, at and as of the Closing Date and the date of each Loan hereunder,
shall survive the Closing Date and the date of each Loan hereunder, shall not
be waived by the execution and delivery of this Agreement, (except to the
extent that such Lender has actual knowledge to the contrary) any investigation
made by or on behalf of the Lenders or any borrowing hereunder.
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ARTICLE VI
FINANCIAL INFORMATION AND NOTICES
Until all the Obligations have been finally and indefeasibly paid and
satisfied in full and the Commitments terminated, unless consent has been
obtained in the manner set forth in Section 12.9 hereof, the Borrower will
furnish or cause to be furnished to the Administrative Agent and each Lender at
its address set forth in Schedule 1, or such other office as may be designated
by the Agent or the applicable Lender from time to time:
SECTION 6.1 Financial Statements and Information.
(a) Quarterly Financial Statements. As soon as practicable and in any
event within forty-five (45) days after the end of each fiscal quarter (other
than the last fiscal quarter of each Fiscal Year), an unaudited consolidated
balance sheet of IPT and its Subsidiaries and an unaudited consolidated balance
sheet of the Borrower and its Subsidiaries as of the close of such fiscal
quarter and unaudited statements of income, retained earnings and cash flows
for the fiscal quarter then ended and that portion of the Fiscal Year then
ended, all in reasonable detail setting forth in comparative form the
corresponding figures for the preceding Fiscal Year and prepared in accordance
with GAAP, and certified by the president or principal accounting officer of
IPT to present fairly in all material respects the financial condition of IPT
and Subsidiaries and of the Borrower and its Subsidiaries as of their
respective dates and the results of operations of IPT and Subsidiaries and of
the Borrower and its Subsidiaries for the respective periods then ended,
subject to normal year end adjustments and the absence of footnotes.
(b) Annual Financial Statements. As soon as practicable and in any
event within ninety (90) days after the end of each Fiscal Year, an audited
consolidated balance sheet of IPT and its Subsidiaries and an unaudited
consolidated balance sheet of the Borrower and its Subsidiaries as of the close
of such Fiscal Year and audited consolidated statements of income, retained
earnings and cash flows for the Fiscal Year then ended (unaudited as to the
Borrower and its Subsidiaries), including the notes thereto, all in reasonable
detail and prepared in accordance with GAAP and setting forth in comparative
form the corresponding figures for the preceding Fiscal Year and accompanied by
a report thereon prepared by Ernst & Young, or other independent certified
public accounting firm reasonably acceptable to the Agents, that is not
qualified with respect to scope limitations imposed by IPT or its Subsidiaries
or with respect to accounting principles followed by IPT and its Subsidiaries
or not in accordance with GAAP.
(c) Annual Budget. As soon as practicable and in any event not later
than March 30 of each Fiscal Year, a budget of the Borrower and its
Subsidiaries for such Fiscal Year, such plan to be prepared in a form and on a
basis similar to the plan(s) previously furnished to the Lenders and to
include, on a quarterly basis, the following: a quarterly operating and capital
budget, an income statement, statement of cash flows and balance sheet,
accompanied by a certificate from the chief financial officer of the Borrower,
on behalf of the Borrower, to the effect that, to the best of such officer's
knowledge, such information is a good faith estimate of the financial condition
and operations of the Borrower and its Subsidiaries for such period.
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SECTION 6.2 Officer's Compliance Certificate. At each time financial
statements are delivered pursuant to Sections 6.1(a) or (b) and at such other
times as an Agent shall reasonably request or the Borrower shall elect, a
certificate on behalf of the Borrower of the president or the treasurer of the
General Partner in the form of Exhibit D.
SECTION 6.3 Accountants' Certificate. At each time financial
statements are delivered pursuant to Section 6.1(b), a certificate of the
independent public accountants certifying such financial statements addressed
to the Administrative Agent for the benefit of the Agents and Lenders:
(a) stating that in making the examination necessary for the
certification of such financial statements, they obtained no knowledge
of any Default or Event of Default or, if such is not the case,
specifying such Default or Event of Default and its nature and period
of existence; and
(b) including the calculations prepared by such accountants
required to establish whether or not the Borrower is in compliance with
the financial covenants set forth in Article VIII hereof as at the end
of each respective period.
SECTION 6.4 Other Reports. Such other information regarding the
operations, business affairs and financial condition of the Borrower as any
Agent or Lender (acting through the Administrative Agent) may reasonably
request.
SECTION 6.5 Notice of Litigation and Other Matters. Prompt (but in
no event later than ten (10) Business Days after an executive officer of the
General Partner obtains Actual Knowledge thereof) written notice of:
(a) the commencement of all proceedings and investigations by
or before any Governmental Authority and all actions and
proceedings in any court or before any arbitrator against or
involving the Borrower or any of its properties, assets or businesses
which would reasonably be expected to have Material Adverse Effect;
(b) any labor controversy that has resulted in, or threatens
to result in, a strike or other work action against the Borrower
which in any such case would reasonably be expected to have a
Material Adverse Effect;
(c) (i) any Default or Event of Default or (ii) any event
which constitutes or which with the passage of time or giving of
notice or both would constitute a default or event of default under
any Material Contract to which the Borrower is a party or by which the
Borrower or any of its properties may be bound;
(d) (i) any unfavorable determination letter from the Internal
Revenue Service regarding the qualification of an Employee Benefit
Plan under Section 401(a) of the Code (along with a copy thereof),
(ii) all notices received by the Borrower or any ERISA Affiliate of
the PBGC's intent to terminate any Pension Plan or to have a trustee
appointed to administer any Pension Plan, (iii) all notices received
by the Borrower or any ERISA Affiliate from a Multiemployer Plan
sponsor concerning the imposition or amount of withdrawal liability
pursuant to Section 4202 of ERISA and (iv) the Borrower obtaining
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knowledge or reason to know that the Borrower or any ERISA Affiliate
has filed or intends to file a notice of intent to terminate any
Pension Plan under a distress termination within the meaning of
Section 4041(c) of ERISA; and
(e) any event which would reasonably be expected to have a
Material Adverse Effect.
ARTICLE
AFFIRMATIVE COVENANTS
Until all of the Obligations have been finally paid and satisfied in
full and the Commitments terminated, unless consent has been obtained in the
manner provided for in Section 12.9, each of IPT and the Borrower will:
SECTION 7.1 Preservation of Existence and Related Matters. Except as
permitted by Section 9.5, preserve and maintain its separate existence as a
real estate investment trust and partnership, as applicable, and all rights,
franchises, licenses and privileges necessary to the conduct of its business,
and qualify and remain qualified and authorized to do business in each
jurisdiction in which the failure to so qualify would have a Material Adverse
Effect.
SECTION 7.2 Maintenance of Property. Protect and preserve all of its
properties useful in and material to its business, including copyrights,
patents, trade names and trademarks; and from time to time make or cause to be
made all renewals, replacements and additions to such property necessary for
the conduct of its business, so that the business carried on in connection
therewith may be conducted at all times.
SECTION 7.3 Insurance. Maintain insurance with financially sound and
reputable insurance companies against such risks and in such amounts as are
customarily maintained by similar businesses and as may be required by
Applicable Law; deliver to any Agent upon its request (which request shall not
be made by the Agents, in the aggregate, more than once per Fiscal Year) a
detailed list of the insurance then in effect, stating the names of the
insurance companies, the amounts and rates of the insurance, the dates of the
expiration thereof and the properties and risks covered thereby.
SECTION 7.4 Accounting Methods and Financial Records. Maintain a system
of accounting, and keep such books, records and accounts (which shall be true
and complete in all material respects) as may be required or as may be
necessary to permit the preparation of financial statements in accordance with
GAAP and in compliance with the regulations of any Governmental Authority
having jurisdiction over it or any of its properties.
SECTION 7.5 Payment and Performance of Obligations. Pay and perform all
material Obligations under this Agreement and the other Loan Documents, and pay
or perform (a) all taxes, assessments and other governmental charges that may
be levied or assessed upon it or any of its property, and (b) all other
indebtedness, obligations and liabilities in accordance with customary trade
practices; except to the extent that IPT or the Borrower is contesting any item
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described in clauses (a) or (b) of this Section 7.5 in good faith and is
maintaining adequate reserves with respect thereto in accordance with GAAP.
SECTION 7.6 Compliance With Laws and Approvals. Subject to
Section 7.7, observe and remain in compliance with all Applicable Laws and
maintain in full force and effect all Governmental Approvals, in each case
applicable to the conduct of its business and where the failure to comply or
maintain could reasonably be expected to have a Material Adverse Effect.
SECTION 7.7 Environmental Laws. (a) Use reasonable commercial efforts
to comply with all applicable Environmental Laws and use reasonable commercial
efforts to obtain, comply with and maintain any and all licenses, approvals,
notifications, registrations or permits required by applicable Environmental
Laws, in each case where the failure to so obtain or comply with which could
reasonably be expected to have a Material Adverse Effect upon IPT or the
Borrower, and (b) defend, indemnify and hold harmless the Agents and Lenders,
and their respective parents, Subsidiaries, Affiliates, employees, agents,
officers and directors, from and against any claims, demands, penalties, fines,
liabilities, settlements authorized by IPT or the Borrower, damages, costs and
expenses of whatever kind or nature known or unknown, contingent or otherwise,
arising out of, or in any way relating to the violation of, noncompliance with
or liability under any Environmental Laws applicable to the operations of IPT
or the Borrower, or any orders, requirements or demands of Governmental
Authorities related thereto, including, without limitation, reasonable
attorney's and consultant's fees, investigation and laboratory fees, response
costs, court costs and litigation expenses, except to the extent that any of
the foregoing directly result from the negligence or misconduct of the party
seeking indemnification therefor.
SECTION 7.8 Compliance with ERISA. In addition to and without limiting
the generality of Section 7.6, (a) materially comply with all applicable
provisions of ERISA and the regulations and published interpretations
thereunder with respect to all Employee Benefit Plans, (b) not take any action
or fail to take action the result of which could be a material liability to the
PBGC (other than for the payment of premiums) or to a Multiemployer Plan, (c)
not participate in any prohibited transaction that could result in any material
civil penalty under ERISA or tax under the Code, (d) operate each Employee
Benefit Plan in such a manner that will not incur any material tax liability
under Section 4980B of the Code or any material liability to any qualified
beneficiary as defined in Section 4980B of the Code and (e) furnish to any
Agent upon its request such additional information about any Employee Benefit
Plan as may be reasonably requested by such Agent.
SECTION 7.9 Compliance With Agreements. Comply in all material
respects with each material term, condition and provision of all Material
Contracts, except to the extent that IPT or the Borrower is contesting any
provision or Material Contract in good faith through applicable proceedings
and is maintaining adequate reserves in accordance with GAAP.
SECTION 7.10 Visits and Inspections. Permit representatives of any
Agent or Lender (acting through an Agent), from time to time, upon reasonable
notice and during normal business hours, to visit and inspect its properties;
inspect, audit and make extracts from its books, records and files; and discuss
with its principal officers, and (during such time as a Default or an
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Event of Default is continuing) its independent accountants, its business,
assets, liabilities, financial condition, results of operations and business
prospects.
SECTION 7.11 Pledge of Partner Interests. Pledge to the Administrative
Agent for the benefit of the Agents and Lenders, pursuant to the terms of the
IPLP Pledge Agreement substantially in the form of Exhibit G hereto, as
collateral for the Obligations, a first priority security interest in all
limited partner interest now or hereafter owned by the Borrower and in the
equity interest of any Subsidiary of the Borrower which now or hereafter owns
any limited partner interest. IPT shall pledge to the Administrative Agent for
the benefit of the Agents and Lenders, pursuant to the terms of the IPT Pledge
Agreement, as collateral for the performance of the obligations of IPT under
the Guaranty Agreement, a first priority security interest in the stock or
other equity interest of IPT in each Subsidiary which now or hereafter owns,
directly or indirectly, the general partner interest in any Real Estate Entity
in which the Borrower owns, directly or indirectly, a limited partnership
interest.
SECTION 7.12 Further Assurances. Make, execute and deliver all such
additional and further acts, things, deeds and instruments as either Agent may
reasonably require to document and consummate the transactions contemplated
hereby and to vest completely in and insure the Agents and Lenders their
respective rights under this Agreement, the Revolving Credit Notes and the
other Loan Documents.
SECTION 7.13 Application of Non-Operational Distributions. Apply all
distributions received by the Borrower from any Real Estate Entity resulting
from the sale or the refinancing of properties owned by such Real Estate Entity
("Non-Operational Distributions") to the payment of all Loans then outstanding;
provided that if no Default or Event of Default shall have occurred and be
continuing, the Non-Operational Distributions may be used by the Borrower to
purchase additional limited partner or other equity interests in Real Estate
Entities, subject to the limitations of Section 9.4(c)(ii) or distributed to
the limited partners of the Borrower, provided that immediately after giving
effect to any such distribution, (i) the Interest Coverage Ratio is greater
than 7.00 to 1.00, (ii) the Borrower is compliance on a pro forma basis with
all other financial covenants contained in this Agreement and (iii) no Default
or Event of Default exists or would result from such distribution.
SECTION 7. 14 Year 2000 Compatibility. Take all action necessary to
assure that from and after January 1, 2000 the computer-based systems of IPT
and the Borrower are able to operate and effectively process data that includes
dates on and after January 1, 2000. At the request of the Agents, IPT and the
Borrower shall provide to the Agents assurance acceptable to the Agents of the
timely year 2000 compatibility of IPT and the Borrower.
ARTICLE
FINANCIAL COVENANTS
Until all of the Obligations have been finally paid and satisfied in
full and the Commitments terminated, unless consent has been obtained in the
manner set forth in Section 12.9 hereof, the Borrower will not:
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SECTION 8.1 Maximum Leverage. Permit, as of any fiscal quarter end,
the ratio of (a) Adjusted Portfolio Equity as of such fiscal quarter end to (b)
Funded Debt as of such fiscal quarter end, to be less than 5.00 to 1.00.
SECTION 8.2 Interest and Dividend Coverage. Permit, as of any fiscal
quarter end, the ratio of (a) Adjusted DCFO for the four (4) preceding fiscal
quarters ending on such date to (b) the sum of (i) Interest Expense of the
Borrower for such period (including interest expense on Subordinated Debt) plus
(ii) an amount equal to the dividends paid which would be payable by IPT during
such period on a fully-diluted basis, to be less than 1.10 to 1.0 .
SECTION 8.3 Interest Coverage Ratio. Permit, as of any fiscal quarter
end, the ratio of (a) Adjusted DCFO for the four (4) preceding fiscal quarters
ending on such fiscal quarter end to (b) Interest Expense of the Borrower for
such period, to be less than 6.0 to 1.0.
ARTICLE
NEGATIVE COVENANTS
Until all of the Obligations have been finally paid and satisfied in
full and the Commitments terminated, unless consent has been obtained in the
manner set forth in Section 12.9 hereof, IPT and the Borrower will not:
SECTION 9.1 Limitations on Debt. Create, incur, assume or suffer to
exist any Debt except:
(a) the Obligations;
(b) Debt incurred in connection with a Hedging Agreement
entered into in the ordinary course of business for protective and not
speculative purposes;
(c) Subordinated Debt to Insignia not to exceed $100,000,000
at any one time outstanding;
(d) existing Debt set forth on Schedule 5.1(q) and the renewal
and refinancing (but not the increase) thereof;
(e) Debt consisting of Contingent Obligations permitted by
Section 9.2;
(f) Debt incurred by a Special Purpose Subsidiary to the
extent permitted under Section 9.4(e);
(g) Debt incurred for all or a portion of the deferred
purchase price of property to the extent IPT or the Borrower, as
applicable, would have been permitted under this Agreement to purchase
such property for cash; and
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(h) other Debt of the Borrower not to exceed an aggregate of
$5,000,000 at any time outstanding.
SECTION 9.2 Limitations on Contingent Obligations. Create, incur,
assume or suffer to exist any Contingent Obligations except:
(a) Contingent Obligations in favor of the Administrative
Agent for the benefit of the Agents and the Lenders;
(b) Contingent Obligations of IPT on account of Debt of
the Borrower, to the extent such Debt is permitted by Section 9.1; and
(c) other Contingent Obligations not to exceed $5,000,000 at
any one time outstanding.
SECTION 9.3 NEGATIVE PLEDGE; LIMITATION ON LIENS. CREATE, INCUR,
ASSUME OR SUFFER TO EXIST, ANY LIEN ON OR WITH RESPECT TO ANY OF ITS ASSETS OR
PROPERTIES, REAL OR PERSONAL, WHETHER NOW OWNED OR HEREAFTER ACQUIRED, EXCEPT:
(a) Liens for taxes, assessments and other governmental
charges or levies (excluding any Lien imposed pursuant to any of the
provisions of ERISA or Environmental Laws) not yet due or as to which
the period of grace, if any, related thereto has not expired or which
are being contested in good faith and by appropriate proceedings if
adequate reserves are maintained to the extent required by GAAP;
(b) the claims of materialmen, mechanics, carriers,
warehousemen, processors or landlords for labor, materials, supplies
or rentals incurred in the ordinary course of business, (i) which are
not overdue for a period of more than thirty (30) days or (ii) which
are being contested in good faith and by appropriate proceedings;
(c) Liens consisting of deposits or pledges made in the
ordinary course of business in connection with, or to secure
payment of, obligations under workers' compensation, unemployment
insurance or similar legislation or obligations under customer
service contracts;
(d) Liens constituting encumbrances in the nature of zoning
restrictions, easements and rights or restrictions of record on the
use of real property, which in the aggregate are not substantial in
amount and which do not, in any case, detract from the value of such
property or impair the use thereof in the ordinary conduct of
business; and
(e) Liens of the Administrative Agent for the benefit of the
Agents and the Lenders.
SECTION 9.4 Limitations on Loans, Advances, Investments and
Acquisitions. Purchase, own, invest in or otherwise acquire, directly or
indirectly, any capital stock, interests in any partnership or joint venture,
evidence of Debt or other obligation or security, substantially all or a
portion of the business or assets of any other Person or any other investment
or interest
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whatsoever in any other Person, or make or permit to exist, directly or
indirectly, any loans, advances or extensions of credit to, or any investment
in cash or by delivery of property in, any Person, or enter into, directly or
indirectly, any commitment in respect of the foregoing except:
(a) investments existing on the Closing Date and the other
existing loans, advances and investments described on Schedule 9.4;
(b) investments in (i) marketable direct obligations issued or
unconditionally guaranteed by the United States of America or any
agency thereof maturing within 120 days from the date of acquisition
thereof, (ii) marketable direct obligations issued by any State of the
United States or any political subdivision of any such State or any
public instrumentality thereof maturing within 120 days from the date
of acquisition thereof and, at the time of acquisition, having the
highest or second highest rating obtainable from S&P or Moody's; (iii)
commercial paper maturing within 120 days from the date of the
acquisition thereof, and, at the time of acquisition, having a rating
of A-1 or higher by S&P or P-1 or higher by Moody's, (iv) certificates
of deposit maturing no more than 120 days from the date of creation
thereof issued by commercial banks incorporated under the laws of the
United States of America, each having combined capital, surplus and
undivided profits of not less than $500,000,000 and having a rating of
A or better by a nationally recognized rating agency; (v) time
deposits maturing no more than 30 days from the date of creation
thereof with commercial banks or savings banks or savings and loan
associations each having membership either in the FDIC or the deposits
of which are insured by the FDIC and in amounts not exceeding the
maximum amounts of insurance thereunder; (vi) eligible bankers'
acceptances, repurchase agreements and tax-exempt municipal bonds
having a maturity of less than one year and in each case having a
rating, or being the full recourse obligation of a Person whose senior
debt rating has a rating, of A or higher by S&P or Moody's; or (vii)
any money market fund organized under the laws of the United States or
any State thereof;
(c) investments in Real Estate Entities in which the general
partner or other managing interest is held by a Person in which IPT or
a wholly-owned Subsidiary of IPT owns the controlling interest;
provided (i) an aggregate of up to $5,000,000 may be invested in Real
Estate Entities in which the general partner interest or other
managing interest is not held by a Person in which IPT or a
wholly-owned Subsidiary of IPT owns the controlling interest; (ii) not
more than 50% of the aggregate cost of all limited partner or other
equity interests purchased by the Borrower subsequent to June 30, 1997
may be funded from the proceeds of any Loan; and (iii) the Borrower
shall have invested at least $50,000,000 of its own funds in such
limited partner or other equity interests at all times that any Loan
is outstanding;
(d) investments in the form of the acquisition of general
partner or other managing interests in Real Estate Entities;
(e) investment of up to $10,000,000 in the aggregate in one or
more new Subsidiaries (each, a "Special-Purpose Subsidiary") to
acquire interests in real estate and in Real Estate Entities, and such
Special-Purpose Subsidiaries shall be permitted to incur Debt of up to
an aggregate of $40,000,000 at any time outstanding, the payment of
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which may be secured by a security interest in the limited partner or
other equity interests owned by the relevant Special-Purpose
Subsidiary, provided:
(i) Recourse for payment of such Debt shall be
limited to the Special-Purpose Subsidiary and its assets and
all limited partner or other equity interests pledged by the
Special-Purpose Subsidiary as collateral for such Debt, and
neither the Borrower, IPT nor any other Subsidiary of IPT or
the Borrower shall be liable for the payment of such Debt,
contingently or otherwise;
(ii) The equity of each Special-Purpose Subsidiary
shall be pledged as collateral for the Obligations; and
(f) investments by IPT in Subsidiaries and Affiliates
which hold the general partner interest in Real Estate Entities.
SECTION 9.5 Limitations on Mergers and Liquidation. Merge,
consolidate or enter into any similar combination with any other Person or
liquidate, wind-up or dissolve itself (or suffer any liquidation or
dissolution), except:
(a) The merger of Angeles Mortgage Investment Trust into IPT;
(b) Any Subsidiary may merge into the Person such Subsidiary
was formed to acquire in connection with an acquisition permitted by
Section 9.4(c); and
(c) Any Person may merge with IPT or the Borrower, provided
such Person is engaged in a similar or complementary line of
business to that of IPT or the Borrower, no Event of Default shall
result from such merger and IPT or the Borrower shall be the surviving
Person.
SECTION 9.6 Limitations on Sale of Assets . Convey, sell, lease,
assign, transfer or otherwise dispose of any of its property, business or
assets (including, without limitation, any capital stock or other ownership
interest in any Subsidiary or Affiliate or the sale of any receivables and
leasehold interests and any sale-leaseback or similar transaction), whether now
owned or hereafter acquired, except:
(a) The sale of obsolete assets no longer used or usable
in the business of IPT or any of its Subsidiaries, including the
Borrower;
(b) The sale of interests in Real Estate Entities;
(c) Inter-company sales; and
(d) The sale of assets, other than as otherwise permitted
hereunder, not to exceed an aggregate of $10,000,000 in any Fiscal
Year.
SECTION 9.7 Limitations on Distributions. Purchase, redeem, retire or
otherwise acquire, directly or indirectly, any shares of its capital stock or
other ownership interests, or make any distribution of cash, property or assets
among the holders of its shares or of its
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partnership interests or other ownership interests, during such time as any
Default or Event of Default has occurred and is continuing or would result
therefrom, or make any change in its capital structure or amend any
organizational document which change or amendment could reasonably be expected
to have a Material Adverse Effect.
SECTION 9.8 Transactions with Affiliates. Except as set forth on
Schedule 9.8 and as otherwise expressly permitted hereunder, directly or
indirectly: (a) make any loan or advance to, or purchase or assume any note or
other obligation to or from, any of its partners or officers, directors or
shareholders of any partner or any other Affiliates, or to or from any member
of the immediate family of any officer, director or shareholder of any partner
or other Affiliates, or subcontract any operations to any of its Affiliates, or
(b) enter into, or be a party to, any transaction with any of its Affiliates,
in both cases except upon fair and reasonable terms no less favorable to it
than it would obtain in a comparable arm's length transaction with a Person not
its Affiliate.
SECTION 9.9 Certain Accounting Changes. Change its Fiscal Year end,
or make any change in its accounting treatment and reporting practices except
as permitted by GAAP.
SECTION 9.10 Lines of Business. Change the lines of business in which
it currently is engaged and those reasonably related thereto or change,
directly or indirectly, or substantially alter its method of doing business in
a manner which would have a Material Adverse Effect.
SECTION 9.11 Restrictive Agreements. Incur any Debt which (a) contains
any negative pledge on assets or any other covenants more restrictive (taken as
a whole) than the provisions of Articles VII, VIII and IX hereof, or (b)
restricts, limits or otherwise encumbers its ability to incur Liens on or with
respect to any of its assets or properties, other than (in any such case) the
assets or properties securing such Debt.
ARTICLE
DEFAULT AND REMEDIES
SECTION 10.1 Events of Default. Each of the following shall constitute
an Event of Default, whatever the reason for such event and whether it shall be
voluntary or involuntary or be effected by operation of law or pursuant to any
judgment or order of any court or any order, rule or regulation of any
Governmental Authority or otherwise:
(a) Default in Payment of Principal of Loans. The Borrower
shall default in any payment of principal of any Loan or
Revolving Credit Note when and as due (whether at maturity, by reason
of acceleration or otherwise).
(b) Other Payment Default. The Borrower shall default in the
payment when and as due (whether at maturity, by reason of
acceleration or otherwise) of interest on any Loan or Revolving Credit
Note or the payment of any other Obligation and such payment shall not
have been made within five (5) Business Days thereafter.
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(c) Misrepresentation. Any representation or warranty made
or deemed to be made by the Borrower or any of its Subsidiaries
under this Agreement, any Loan Document or any amendment hereto or
thereto, shall at any time prove to have been incorrect in any
material respect when made or deemed made.
(d) Default in Performance of Certain Covenants. The Borrower
shall default in the performance or observance of any covenant or
agreement contained in Articles VIII or IX of this Agreement.
(e) Default in Performance of Other Covenants and Conditions.
The Borrower or any Subsidiary thereof shall default in the
performance or observance of any term, covenant, condition or
agreement contained in this Agreement (other than as specifically
provided for otherwise in this Section 10.1) or any other Loan
Document and such default shall continue for a period of thirty (30)
days after written notice thereof has been given to the Borrower by
the Administrative Agent.
(f) Hedging Agreement. Any termination payment shall be due
by the Borrower under any Hedging Agreement and such amount is
not paid within ten (10) Business Days of the due date thereof.
(g) Other Cross-Defaults. The Borrower shall default in the
payment when due, or in the performance or observance, of any material
obligation or condition of any Material Contract involving monetary
liability in an amount in excess of $5,000,000 unless, but only as
long as, the existence of any such default is being contested by the
Borrower or such Subsidiary in good faith by appropriate proceedings
and adequate reserves in respect thereof have been established on the
books of the Borrower or such Subsidiary to the extent required by
GAAP.
(h) Voluntary Bankruptcy Proceeding. The Borrower thereof
shall (i) commence a voluntary case under the federal bankruptcy laws
(as now or hereafter in effect), (ii) file a petition seeking to take
advantage of any other laws, domestic or foreign, relating to
bankruptcy, insolvency, reorganization, winding up or composition for
adjustment of debts, (iii) consent to or fail to contest in a timely
and appropriate manner any petition filed against it in an involuntary
case under such bankruptcy laws or other laws, (iv) apply for or
consent to, or fail to contest in a timely and appropriate manner, the
appointment of, or the taking of possession by, a receiver, custodian,
trustee, or liquidator of itself or of a substantial part of its
property, domestic or foreign, (v) admit in writing its inability to
pay its debts as they become due, (vi) make a general assignment for
the benefit of creditors, or (vii) take any corporate action for the
purpose of authorizing any of the foregoing.
(i) Involuntary Bankruptcy Proceeding. A case or other
proceeding shall be commenced against the Borrower thereof in any
court of competent jurisdiction seeking (i) relief under the federal
bankruptcy laws (as now or hereafter in effect) or under any other
laws, domestic or foreign, relating to bankruptcy, insolvency,
reorganization, winding up or adjustment of debts, or (ii) the
appointment of a trustee, receiver, custodian, liquidator or the like
for the Borrower or any Material Subsidiary thereof or for all or any
substantial part of their respective assets, domestic or foreign, and
such case or proceeding shall
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continue undismissed or unstayed for a period of ninety (90)
consecutive days, or an order granting the relief requested in such
case or proceeding (including, but not limited to, an order for
relief under such federal bankruptcy laws) shall be entered.
(j) Failure of Agreements. Any material provision of this
Agreement or of any other Loan Document shall for any reason cease to
be valid and binding on the Borrower or the Borrower shall so state in
writing, or this Agreement or any Security Document shall for any
reason cease to create a valid and perfected first priority Lien on,
or security interest in, any material portion of the collateral
purported to be covered thereby, in each case other than in accordance
with the express terms hereof or thereof and except where due solely
to the failure to file, on a timely basis, appropriate financing or
continuation statements under the Uniform Commercial Code.
(k) Termination Event. The occurrence of any of the following
events: (i) the Borrower or any ERISA Affiliate fails to make full
payment when due of all amounts which, under the provisions of any
Pension Plan or Section 412 of the Code, the Borrower or any ERISA
Affiliate is required to pay as contributions thereto, (ii) an
accumulated funding deficiency in excess of $250,000 occurs or exists,
whether or not waived, with respect to any Pension Plan, (iii) a
Termination Event or (iv) the Borrower or any ERISA Affiliate as
employers under one or more Multiemployer Plan makes a complete or
partial withdrawal from any such Multiemployer Plan and the plan
sponsor of such Multiemployer Plans notifies such withdrawing employer
that such employer has incurred a withdrawal liability requiring
payments in an amount exceeding $5,000,000.
(l) Judgment. A judgment or order for the payment of money not
covered by insurance which causes the aggregate amount of such
undischarged, unstayed and not removed judgments to exceed $3,000,000
in any Fiscal Year shall be entered against the Borrower by any court
and such judgment or order shall continue undischarged, unstayed or
not removed to bond for a period of thirty (30) days.
SECTION 10.2 Remedies. Upon the occurrence of an Event of Default,
with the consent of the Required Lenders, the Administrative Agent may, or upon
the request of the Required Lenders, the Administrative Agent shall, by notice
to the Borrower:
(a) Acceleration; Termination of Facilities. Declare the
principal of and interest on the Loans, the Revolving Credit Notes at
the time outstanding, and all other amounts owed to the Lenders and
Agents under this Agreement or any of the other Loan Documents and all
other Obligations, to be forthwith due and payable, whereupon the same
shall immediately become due and payable without presentment, demand,
protest or other notice of any kind, all of which are expressly
waived, anything in this Agreement or the other Loan Documents to the
contrary notwithstanding, and terminate the Credit Facility and any
right of the Borrower to request borrowings thereunder; provided, that
upon the occurrence of an Event of Default specified in Section
10.1(h) or (i), the Credit Facility shall be automatically terminated
and all Obligations shall automatically become due and payable.
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(b) Rights of Collection. Exercise on behalf of the Lenders
all of its other rights and remedies under this Agreement, the other Loan
Documents and Applicable Law, in order to satisfy all of the Borrower's
Obligations.
SECTION 10.3 Rights and Remedies Cumulative; Non-Waiver; etc. The
enumeration of the rights and remedies of the Agents and the Lenders set forth
in this Agreement is not intended to be exhaustive and the exercise by the
Agents and Lenders of any right or remedy shall not preclude the exercise of
any other rights or remedies, all of which shall be cumulative, and shall be in
addition to any other right or remedy given hereunder or under the Loan
Documents or that may now or hereafter exist in law or in equity or by suit or
otherwise. No delay or failure to take action on the part of any Agent or
Lender in exercising any right, power or privilege shall operate as a waiver
thereof, nor shall any single or partial exercise of any such right, power or
privilege preclude other or further exercise thereof or the exercise of any
other right, power or privilege or shall be construed to be a waiver of any
Event of Default. No course of dealing between the Borrower, the Agents and
Lenders or their respective agents or employees shall be effective to change,
modify or discharge any provision of this Agreement or any of the other Loan
Documents or to constitute a waiver of any Event of Default.
ARTICLE
THE AGENTS
SECTION 11.1 Appointment and Authorization. Each of the Lenders hereby
irrevocably designates and appoints First Union as Administrative Agent of such
Lender and Lehman as Syndication Agent of such Lender under this Agreement and
the other Loan Documents and each such Lender irrevocably authorizes First
Union as Administrative Agent for such Lender and Lehman as Syndication Agent
for such Lender, to take such action on its behalf under the provisions of this
Agreement and the other Loan Documents and to exercise such powers and perform
such duties as are expressly delegated to such Agent by the terms of this
Agreement and such other Loan Documents, together with such other powers as are
reasonably incidental thereto. Notwithstanding any provision to the contrary
elsewhere in this Agreement or such other Loan Documents, no Agent shall have
any duties or responsibilities, except those expressly set forth herein and
therein, or any fiduciary relationship with any Lender, and no implied
covenants, functions, responsibilities, duties, obligations or liabilities
shall be read into this Agreement or the other Loan Documents or otherwise
exist against any Agent.
SECTION 11.2 Delegation of Duties. Each Agent may execute any of its
respective duties under this Agreement and the other Loan Documents by or
through agents or attorneys-in-fact and shall be entitled to advice of counsel
concerning all matters pertaining to such duties. No Agent shall be responsible
for the negligence or misconduct of any agents or attorneys-in-fact selected by
such Agent with reasonable care.
SECTION 11.3 Exculpatory Provisions. Neither any Agent nor any of its
officers, directors, employees, agents, attorneys-in-fact, Subsidiaries or
Affiliates shall be (a) liable for any action lawfully taken or omitted to be
taken by it or such Person under or in connection with this Agreement or the
other Loan Documents (except for actions occasioned by its or such Person's
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own gross negligence or willful misconduct), or (b) responsible in any manner
to any of the Lenders for any recitals, statements, representations or
warranties made by the Borrower or any officer of the General Partner contained
in this Agreement or the other Loan Documents or in any certificate, report,
statement or other document referred to or provided for in, or received by such
Agent under or in connection with, this Agreement or the other Loan Documents
or for the value, validity, effectiveness, genuineness, enforceability or
sufficiency of this Agreement or the other Loan Documents or for any failure of
the Borrower to perform its obligations hereunder or thereunder. No Agent 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 to inspect the properties, books or records of the
Borrower.
SECTION 11.4 Reliance by the Agents. Each Agent shall be entitled to
rely, and shall be fully protected in relying, upon any note, writing,
resolution, notice, consent, certificate, affidavit, letter, cablegram,
telegram, telecopy, telex or teletype message, statement, order 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, without limitation, counsel to the
Borrower), independent accountants and other experts selected by such Agent.
Each Agent may deem and treat the payee of any Revolving Credit Note as the
owner thereof for all purposes unless such Revolving Credit Note shall have
been transferred in accordance with Section 12.8 hereof. Each Agent shall be
fully justified in failing or refusing to take any action under this Agreement
and the other Loan Documents unless it shall first receive such advice or
concurrence of the Required Lenders (or, when expressly required hereby or by
the relevant other Loan Document, all the Lenders) as it deems appropriate or
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 except for its own gross negligence or
willful misconduct. Each Agent shall in all cases be fully protected in acting,
or in refraining from acting, under this Agreement and the Revolving Credit
Notes in accordance with a request of the Required Lenders (or, when expressly
required hereby, all the Lenders), and such request and any action taken or
failure to act pursuant thereto shall be binding upon all the Lenders and all
future holders of the Revolving Credit Notes.
SECTION 11.5 Notice of Default. No Agent shall be deemed to have
knowledge or notice of the occurrence of any Default or Event of Default
hereunder unless it has received notice from a Lender or the Borrower referring
to this Agreement, describing such Default or Event of Default and stating that
such notice is a "notice of default". In the event that an Agent receives such
a notice, it shall promptly give notice thereof to the other Agent and Lenders.
Each Agent shall take such action with respect to such Default or Event of
Default as shall be reasonably directed by the Required Lenders; provided that
unless and until such Agent shall have received such directions, such Agent 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 in the best interests of the Lenders.
SECTION 11.6 Non-Reliance on the Agents and Other Lenders. Each Lender
expressly acknowledges that neither any Agent nor any of its respective
officers, directors, employees, agents, attorneys-in-fact, subsidiaries or
affiliates has made any representations or warranties to it and that no act by
any Agent hereinafter taken, including any review of the affairs of the
Borrower, shall be deemed to constitute any representation or warranty by such
Agent to any Lender. Each Lender represents to the Agents that it has,
independently and without reliance
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upon any Agent or any other Lender, and based on such documents and information
as it has deemed appropriate, made its own appraisal of and investigation into
the business, operations, property, financial and other condition and
creditworthiness of the Borrower and made its own decision to make its Loans
and enter into this Agreement. Each Lender also represents that it will,
independently and without reliance upon 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 analysis, appraisals and decisions in
taking or not taking action under this Agreement and the other Loan Documents,
and to make such investigation as it deems necessary to inform itself as to the
business, operations, property, financial and other condition and
creditworthiness of the Borrower. Except for notices, reports and other
documents expressly required to be furnished to the Lenders by an Agent
hereunder or by the other Loan Documents, such Agent shall not have any duty or
responsibility to provide any Lender with any credit or other information
concerning the business, operations, property, financial and other condition or
creditworthiness of the Borrower which may come into the possession of such
Agent or any of its respective officers, directors, employees, agents,
attorneys-in-fact, Subsidiaries or Affiliates.
SECTION 11.7 Indemnification. The Lenders agree to indemnify each Agent
in its capacity as such and (to the extent not reimbursed by the Borrower and
without limiting the obligation of the Borrower to do so), ratably according to
the respective amounts of their Commitment Percentages, from and against any
and all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind whatsoever which
may at any time (including, without limitation, at any time following the
payment of the Revolving Credit Notes) be imposed on, incurred by or asserted
against such Agent in any way relating to or arising out of this Agreement or
the other Loan Documents, or any documents contemplated by or referred to
herein or therein or the transactions contemplated hereby or thereby or any
action taken or omitted by such Agent under or in connection with any of the
foregoing; provided that no Lender shall be liable for the payment of any
portion of such liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements resulting from such Agent's
gross negligence or willful misconduct. The agreements in this Section 11.7
shall survive the payment of the Revolving Credit Notes and all other amounts
payable hereunder and the termination of this Agreement.
SECTION 11.8 Agent in Its Individual Capacity. Each Agent and its
respective subsidiaries and affiliates may make loans to, accept deposits from
and generally engage in any kind of business with the Borrower as though it
were not an Agent hereunder. With respect to any Loans made or renewed by it
and any Revolving Credit Note issued to it, each Agent shall have the same
rights and powers under this Agreement and the other Loan Documents as any
Lender and may exercise the same as though it were not an Agent, and the terms
"Lender" and "Lenders" shall include the Administrative Agent in its individual
capacity.
SECTION 11.9 Resignation of the Agent; Successor Agent. Subject (in the
case of the Administrative Agent) to the appointment and acceptance of a
successor as provided below, the Administrative Agent or the Syndication Agent
may resign at any time by giving notice thereof to the Lenders and the
Borrower. Upon any such resignation, the Required Lenders with, as long as no
Event of Default has occurred and is continuing, the consent of the Borrower,
which consent shall not be unreasonably withheld, shall have the right to
appoint a successor Administrative Agent, which successor shall have minimum
capital and surplus of at least $1,000,000,000. If no successor Administrative
Agent shall have been so appointed by the Required Lenders and shall
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<PAGE>
have accepted such appointment within thirty (30) days after the Administrative
Agent's giving of notice of resignation, then the Administrative Agent may, on
behalf of the Lenders and with, as long as no Event of Default has occurred and
is continuing, the consent of the Borrower (not to be unreasonably withheld),
appoint a successor Administrative Agent, which successor shall be any Lender
or a commercial bank organized under the laws of the United States or any
political subdivision thereof which has minimum capital and surplus of at least
$1,000,000,000. Upon the acceptance of any appointment as Administrative Agent
hereunder by a successor Administrative Agent, such successor Administrative
Agent shall thereupon succeed to and become vested with all rights, powers,
privileges and duties of the retiring Administrative Agent, and the retiring
Administrative Agent shall be discharged from its duties and obligations
hereunder. After any retiring Administrative Agent's resignation hereunder as
Administrative Agent, the provisions of this Section 11.9 shall continue in
effect for its benefit in respect of any actions taken or omitted to be taken
by it while it was acting as Administrative Agent. In the event of the
resignation of the Syndication Agent, the Administrative Agent immediately
shall assume the obligations of the Syndication Agent hereunder.
ARTICLE
MISCELLANEOUS
SECTION 12.1 Notices.
(a) Method of Communication. Except as otherwise provided in this
Agreement, all notices and communications hereunder shall be in writing, or by
telephone subsequently confirmed in writing. Any notice shall be effective if
delivered by hand delivery or sent via telecopy, recognized overnight courier
service or certified mail, return receipt requested, and shall be presumed to
be received by a party hereto (i) on the date of delivery if delivered by hand
or sent by telecopy, (ii) on the next Business Day if sent by recognized
overnight courier service and (iii) on the third Business Day following the
date sent by certified mail, return receipt requested.
(b) Addresses for Notices. Notices to any party shall be sent to it at
the following addresses, or any other address as to which all the other parties
are notified in writing.
If to the Borrower: Insignia Properties, L.P.
One Insignia Financial Plaza
P.O. Box 1089
Greenville, South Carolina 29602
Attention: James A. Aston
Telecopy Number: (864) 239-1699
With a copy to: John K. Lines, Esq.
General Counsel
Insignia Financial Group, Inc.
One Insignia Financial Plaza
P. O. Box 1089
Greenville, South Carolina 29602
49
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With a copy (in the case
of extraordinary notices
only) to (which shall not
constitute notice
hereunder): Simpson Thacher & Bartlett
425 Lexington Avenue - 19th Floor
New York, New York 10017-3954
Attention: Charles H. F. Garner
Telecopy Number: (212) 455-2502
If to First Union as First Union National Bank
Administrative Agent One Insignia Financial Plaza
P.O. Box 1329
Greenville, South Carolina 29602
Attention: Portfolio Management and
Relationship Manager
Telecopy Number: (864) 255-8357
With a copy to: First Union National Bank
One First Union Center
301 S. College Street, TW-10
Charlotte, North Carolina 28288-0608
Attention: Syndication Agency Services
Telecopy Number: (704) 383-0288
With a copy to
(which shall not
constitute notice
hereunder): Kennedy Covington Lobdell & Hickman, L.L.P.
Suite 4200
100 North Tryon Street
Charlotte, North Carolina 28202-4006
Attention: J. Donnell Lassiter, Esquire
Telecopy Number: (704) 331-7598
If to the
Syndication Agent: Lehman Commercial Paper Inc.
Three World Financial Center
10th Floor
New York, New York 10285
Attention: Michelle Swanson
Telecopy Number: (212) 528-0819
50
<PAGE>
If to any Lender: To its Address set forth on
Schedule 1
(c) Administrative Agent's Office. The Administrative Agent hereby
designates its office located at the address set forth above, or any subsequent
office which shall have been specified for such purpose by written notice to
the Borrower and Lenders, as the Administrative Agent's Office referred to
herein, to which payments due are to be made and at which Loans will be
disbursed.
SECTION 12.2 Expenses; Indemnity. The Borrower will (a) pay all
reasonable out-of-pocket expenses of the Agents in connection with: (i) the
preparation, execution and delivery of this Agreement and each other Loan
Document, whenever the same shall be executed and delivered, including without
limitation all reasonable out-of-pocket syndication and due diligence expenses
and reasonable fees and disbursements of a single counsel for the Agents (with
the right of such counsel to engage such special or local counsel as the Agents
reasonably deem necessary), (ii) the preparation, execution and delivery of any
waiver, amendment or consent by the Agents or the Lenders relating to this
Agreement or any other Loan Document, including without limitation reasonable
fees and disbursements of a single counsel for the Agents and (iii) the
administration and enforcement of any rights and remedies of the Agents and
Lenders under the Credit Facility, and (b) defend, indemnify and hold harmless
the Agents and Lenders, and their respective parents, Subsidiaries, Affiliates,
employees, agents, officers and directors (collectively, the "indemnitees"),
from and against any losses, penalties, fines, liabilities, settlements,
damages, costs and expenses, suffered by any such indemnitee in connection with
any claim, investigation, litigation or other proceeding (whether or not any
Agent or Lender is a party thereto) and the prosecution and defense thereof,
arising out of the Agreement, any other Loan Document or the Loans, including
without limitation reasonable attorney's and consultant's fees, except to the
extent that any of the foregoing result from the gross negligence or willful
misconduct of the party seeking indemnification therefor or the breach by the
Agents or the Lenders of this Agreement. If any claim, demand, action or cause
of action is asserted against any indemnitee, such indemnitee shall promptly
notify the Borrower, but the failure to so promptly notify the Borrower shall
not affect the Borrower's obligations under this Section 12.2 unless such
failure materially prejudices the Borrower's right to participate in the
contest of such claim, demand, action or cause of action, as hereinafter
provided. If requested by the Borrower in writing, and so long as no Default or
Event of Default shall have occurred and be continuing, such indemnitee shall
in good faith contest the validity, applicability and amount of such claim,
demand, action or cause of action and shall permit the Borrower to participate
in such contest. Any indemnitee that proposes to settle or compromise any claim
or proceeding for which the Borrower may be liable for payment of indemnity
hereunder shall give the Borrower written notice of the terms of such proposed
settlement or compromise reasonably in advance of settling or compromising such
claim or proceeding and shall obtain the Borrower's concurrence thereto. The
Agents are authorized at the Borrower's cost and expense to employ one counsel
in enforcing the rights of the Agents and Lenders hereunder and in defending
against any claim, demand, action or cause of action covered by this Section
12.2. In addition, each indemnitee shall have the right to employ its own
separate counsel in any such case, but the fees and expenses of such counsel
shall be at the expense of such indemnitee unless the employment of such
counsel shall have been authorized in writing by the Borrower in connection
with the defense of such action, in which case such fees and expenses shall be
paid by the Borrower. If an indemnitee shall have reasonably concluded (based
upon the
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written advice of counsel to the Administrative Agent) that the
representation by one counsel of the Agents and Lenders creates a conflict of
interest for such counsel, the reasonable fees and expenses of such additional
counsel as are necessary to resolve that conflict chosen by such indemnitee and
reasonably satisfactory to the Borrower (provided that the Borrower's approval
of such counsel shall not be unreasonably delayed or withheld) shall be borne
by the Borrower. Any obligation or liability of the Borrower to any indemnitee
under this Section 12.2 shall survive the expiration or termination of this
Agreement and the repayment of the Obligations.
SECTION 12.3 GOVERNING LAW. THIS AGREEMENT, THE REVOLVING CREDIT
NOTES AND THE OTHER LOAN DOCUMENTS, UNLESS OTHERWISE EXPRESSLY SET FORTH
THEREIN, SHALL BE GOVERNED BY, CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF SOUTH CAROLINA, WITHOUT REFERENCE TO THE CONFLICTS OR
CHOICE OF LAW PRINCIPLES THEREOF.
SECTION 12.4 CONSENT TO JURISDICTION. THE BORROWER HEREBY IRREVOCABLY
CONSENTS TO THE PERSONAL JURISDICTION OF THE STATE AND FEDERAL COURTS LOCATED
IN GREENVILLE COUNTY, SOUTH CAROLINA, IN ANY ACTION, CLAIM OR OTHER PROCEEDING
ARISING OUT OF ANY DISPUTE IN CONNECTION WITH THIS AGREEMENT, THE REVOLVING
CREDIT NOTES AND THE OTHER LOAN DOCUMENTS, ANY RIGHTS OR OBLIGATIONS HEREUNDER
OR THEREUNDER, OR THE PERFORMANCE OF SUCH RIGHTS AND OBLIGATIONS. THE BORROWER
HEREBY IRREVOCABLY CONSENTS TO THE SERVICE OF A SUMMONS AND COMPLAINT AND OTHER
PROCESS IN ANY ACTION, CLAIM OR PROCEEDING BROUGHT BY ANY AGENT OR LENDER IN
CONNECTION WITH THIS AGREEMENT, THE REVOLVING CREDIT NOTES OR THE OTHER LOAN
DOCUMENTS, ANY RIGHTS OR OBLIGATIONS HEREUNDER OR THEREUNDER, OR THE
PERFORMANCE OF SUCH RIGHTS AND OBLIGATIONS, ON BEHALF OF ITSELF OR ITS
PROPERTY, BY REGISTERED OR CERTIFIED MAIL, RETURN RECEIPT REQUESTED, OTHERWISE
IN THE MANNER SPECIFIED IN SECTION 12.1. NOTHING IN THIS SECTION 12.4 SHALL
AFFECT THE RIGHT OF ANY AGENT OR LENDER TO SERVE LEGAL PROCESS IN ANY OTHER
MANNER PERMITTED BY APPLICABLE LAW OR AFFECT THE RIGHT OF ANY AGENT OR LENDER
TO BRING ANY ACTION OR PROCEEDING AGAINST THE BORROWER OR ITS PROPERTIES IN THE
COURTS OF ANY OTHER JURISDICTIONS.
SECTION 12.5 WAIVER OF JURY TRIAL. TO THE EXTENT PERMITTED BY
APPLICABLE LAW, EACH AGENT AND LENDER AND THE BORROWER HEREBY IRREVOCABLY WAIVE
THEIR RESPECTIVE RIGHTS TO A JURY TRIAL WITH RESPECT TO ANY ACTION, CLAIM OR
OTHER PROCEEDING ARISING OUT OF ANY DISPUTE IN CONNECTION WITH THIS AGREEMENT,
THE REVOLVING CREDIT NOTES OR THE OTHER LOAN DOCUMENTS, ANY RIGHTS OR
OBLIGATIONS HEREUNDER OR THEREUNDER, OR THE PERFORMANCE OF SUCH RIGHTS AND
OBLIGATIONS.
SECTION 12.6 Reversal of Payments. To the extent the Borrower makes a
payment or payments to any Agent for the ratable benefit of the Lenders or any
Agent receives any payment or proceeds of the collateral which payments or
proceeds or any part thereof are
52
<PAGE>
subsequently invalidated, declared to be fraudulent or preferential, set aside
and/or required to be repaid to a trustee, receiver or any other party under
any bankruptcy law, state or federal law, common law or equitable cause, then,
to the extent of such payment or proceeds repaid, the Obligations or part
thereof intended to be satisfied shall be revived and continued in full force
and effect as if such payment or proceeds had not been received by such Agent.
SECTION 12.7 Accounting Matters. All financial and accounting
calculations, measurements and computations made for any purpose relating to
this Agreement, including, without limitation, all computations utilized by the
Borrower or any Subsidiary thereof to determine compliance with any covenant
contained herein, shall, except as otherwise expressly contemplated hereby or
unless there is an express written direction by the Agents to the contrary
agreed to by the Borrower, be performed in accordance with GAAP. In the event
of changes in GAAP in accordance with the definition thereof, the Borrower and
the Lenders will thereafter negotiate in good faith to revise, by amendment of
this Agreement, any covenants of this Agreement affected thereby in order to
make such covenants consistent with GAAP then in effect. All projections and
estimates of financial results shall be made in good faith and based on
reasonable assumptions.
SECTION 12.8 Successors and Assigns; Participations.
(a) Benefit of Agreement. This Agreement shall be binding upon and
inure to the benefit of the Borrower, the Agents and Lenders, all permitted
future holders of the Revolving Credit Notes, and their respective successors
and assigns, except that the Borrower shall not assign or transfer any of its
rights or obligations under this Agreement without the prior written consent of
each Lender.
(b) Assignment by Lenders. Each Lender may, with the consent of the
Agents, which consent shall not be unreasonably withheld or delayed, and, as
long as no Event of Default has occurred and is continuing, the consent of the
Borrower, which consent of the Borrower shall not be unreasonably withheld or
delayed, assign to one or more Eligible Assignees all or a portion of its
interests, rights and obligations under this Agreement (including, without
limitation, all or a portion of the Loans at the time owing to it and the
Revolving Credit Notes held by it); provided that:
(i) each such assignment shall be of a constant, and not
a varying, percentage of all the assigning Lender's rights and
obligations under this Agreement;
(ii) if less than all of the assigning Lender's
Commitment is to be assigned, the Commitment so assigned shall not be
less than $5,000,000 and the assigning Lender shall retain a Commitment
of at least $5,000,000;
(iii) the parties to each such assignment shall execute and
deliver to the Administrative Agent, for its acceptance and recording
in the Register, an Assignment and Acceptance in the form of Exhibit E
(an "Assignment and Acceptance"), together with any Revolving Credit
Note or Revolving Credit Notes subject to such assignment;
(iv) such assignment shall not, without the consent of the
Borrower, require the Borrower to file a registration statement with
the Securities and Exchange Commission or
53
<PAGE>
apply to or qualify the Loans or the Revolving Credit Notes under the
blue sky laws of any state; and
(v) the assigning Lender shall pay to the Administrative Agent
an assignment fee of $3,000 upon the execution by such Lender of the
Assignment and Acceptance; provided that no such fee shall be payable
upon any assignment by a Lender to an Affiliate thereof or upon any
assignment requested by the Borrower pursuant to the terms of Sections
2.8 or 3.12.
Upon such execution, delivery, acceptance and recording, from and after the
effective date specified in each Assignment and Acceptance, which effective
date shall, unless the Administrative Agent otherwise agrees, be at least five
(5) Business Days after the execution thereof, (A) the assignee thereunder
shall be a party hereto and, to the extent provided in such Assignment and
Acceptance, have the rights and obligations of a Lender hereby and (B) the
Lender thereunder shall, to the extent provided in such assignment, be released
from its obligations under this Agreement.
(c) Rights and Duties Upon Assignment. By executing and delivering an
Assignment and Acceptance, the assigning Lender thereunder and the assignee
thereunder confirm to and agree with each other and the other parties hereto as
set forth in such Assignment and Acceptance.
(d) Register. The Administrative Agent shall maintain a copy of each
Assignment and Acceptance delivered to it and a register for the recordation of
the names and addresses of the Lenders and the amount of the Loans with respect
to each Lender from time to time (the "Register"). The entries in the Register
shall be conclusive, in the absence of manifest error, and the Borrower, the
Administrative Agent and the Lenders may treat each Person whose name is
recorded in the Register as a Lender hereunder for all purposes of this
Agreement. The Register shall be available for inspection by the Borrower or
Lender at any reasonable time and from time to time upon reasonable prior
notice.
(e) Issuance of New Revolving Credit Notes. Upon its receipt of an
Assignment and Acceptance executed by an assigning Lender and an Eligible
Assignee together with any Revolving Credit Note or Revolving Credit Notes
subject to such assignment and the written consent to such assignment, the
Administrative Agent shall, if such Assignment and Acceptance has been
completed and is substantially in the form of Exhibit E:
(i) accept such Assignment and Acceptance;
(ii) record the information contained therein in the Register;
(iii) give prompt notice thereof to the Lenders and the Borrower;
and
(iv) promptly deliver a copy of such Assignment and Acceptance to
the Borrower.
Within five (5) Business Days after receipt of notice, the Borrower shall
execute and deliver to the Administrative Agent, in exchange for the
surrendered Revolving Credit Note or Revolving Credit Notes, a new Revolving
Credit Note or Revolving Credit Notes to the order of such Eligible
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Assignee in amounts equal to the Commitment assumed by it pursuant to such
Assignment and Acceptance and a new Revolving Credit Note or Revolving Credit
Notes to the order of the assigning Lender in an amount equal to the Commitment
retained by it hereunder. Such new Revolving Credit Note or Revolving Credit
Notes shall be in an aggregate principal amount equal to the aggregate
principal amount of such surrendered Revolving Credit Note or Revolving Credit
Notes, shall be dated the effective date of such Assignment and Acceptance and
shall otherwise be in substantially the form of the assigned Revolving Credit
Notes delivered to the assigning Lender. Each surrendered Revolving Credit Note
or Revolving Credit Notes shall be canceled and returned to the Borrower.
(f) Participations. Each Lender may sell participations to one or more
banks or other financial institutions which are not competitors of the Borrower
in all or a portion of its rights and obligations under this Agreement
(including, without limitation, all or a portion of its Loans and the Revolving
Credit Notes held by it); provided that:
(i) such Lender's obligations under this Agreement (including,
without limitation, its Commitment) shall remain unchanged;
(ii) such Lender shall remain solely responsible to the other
parties hereto for the performance of such obligations;
(iii) such Lender shall remain the holder of the Revolving
Credit Notes held by it for all purposes of this Agreement;
(iv) the Borrower, the Agents and the other Lenders shall
continue to deal solely and directly with such Lender in connection
with such Lender's rights and obligations under this Agreement;
(v) such Lender shall not permit such participant the right to
approve any waivers, amendments or other modifications to this
Agreement or any other Loan Document other than (to the extent that
such Lender would have an approval right with respect thereto)
waivers, amendments or modifications which would reduce the principal
of or the interest rate on any Loan or extend the term or increase
the amount of the Commitment, reduce the amount of any fees to which
such participant is entitled, extend any scheduled payment date for
principal of any Loan; and
(vi) any such disposition shall not, without the consent of the
Borrower, require the Borrower to file a registration statement with
the Securities and Exchange Commission to apply to qualify the Loans
or the Revolving Credit Notes under the blue sky law of any state.
(g) Disclosure of Information; Confidentiality. The Agents and each
Lender agree to hold any confidential information which it may receive from the
Borrower pursuant to this Agreement in confidence, except for disclosure to (i)
legal counsel, accountants, and other professional advisors, on a need-to-know
basis, (ii) regulatory officials, (iii) as required by law or legal process
(including by subpoena) or in connection with any legal proceeding, and (iv)
another financial institution in connection with a disposition or proposed
disposition of any of its interests hereunder or under any Loan Document, upon
execution by such institution of an agreement to
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keep such information confidential to the extent described in this Section
12.8(g). The Agents and Lenders agree that the breach of this Section 12.8(g),
including the disclosure of any confidential information received from the
Borrower pursuant to this Agreement, shall constitute a material breach of this
Agreement. Notwithstanding (ii) and (iii) above, in the event that any such
Person is requested pursuant to, or required by, Applicable Law or Governmental
Authority to disclose any such information, such Person will provide the
Borrower with prompt notice of such request or requirement, unless prohibited
by law or regulation, in order to enable the Borrower to seek an appropriate
protective order or other remedy, or to consult with such Person with respect
to the Borrower's taking steps to resist or narrow the scope of such request or
legal process. If, in such event, the Borrower has not provided such Person
with a protective order or other remedy in sufficient time, with such Person
acting in good faith and otherwise in its sole discretion, for such Person to
avoid unlawful nondisclosure of such information, such Person may disclose such
information pursuant to such Applicable Law or Governmental Authority, as the
case may be, without any recourse or remedy against such Person by the Borrower
or any Affiliate of the Borrower, which the Borrower hereby expressly waives.
(h) Certain Pledges or Assignments. Nothing herein shall prohibit any
Lender from pledging or assigning any Revolving Credit Note to any Federal
Reserve Bank in accordance with Applicable Law.
SECTION 12.9 Amendments, Waivers and Consents. Except as set forth
below, any term, covenant, agreement or condition of this Agreement or any of
the other Loan Documents may be amended or waived by the Lenders, and any
consent given by the Lenders, if, but only if, such amendment, waiver or
consent is in writing signed by the Required Lenders (or by the Administrative
Agent with the consent of the Required Lenders) and delivered to the
Administrative Agent and, in the case of an amendment, signed by the Borrower;
provided, that no amendment, waiver or consent shall (a) except as specifically
set forth in Section 2.8, increase the amount or extend the time of the
obligation of the Lenders to make Loans (including without limitation pursuant
to Section 2.6), (b) extend the originally scheduled time or times of payment
of the principal of any Loan or the time or times of payment of interest on any
Loan, (c) reduce the rate of interest or fees payable on any Loan, (d) permit
any subordination of the principal or interest on any Loan, (e) release any
collateral or Security Document (other than as specifically permitted in this
Agreement) or (f) amend the provisions of this Section 12.9 or the definition
of Required Lenders, without the prior written consent of each Lender directly
affected thereby. In addition, no amendment, waiver or consent to the
provisions of Article XI shall be made without the written consent of the
Agents.
SECTION 12.10 Performance of Duties. The Borrower's obligations under
this Agreement and each of the Loan Documents shall be performed by the
Borrower at its sole cost and expense.
SECTION 12.11 No Fiduciary Relationship. Notwithstanding any provision
to the contrary elsewhere in this Agreement or the other Loan Documents,
neither the Agent nor any Lender shall have any duties or responsibilities,
except those expressly set forth herein and therein, or any fiduciary
relationship with the Borrower or any of its Subsidiaries, any Guarantor or any
Pledgor.
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SECTION 12.12 All Powers Coupled with Interest. All powers of attorney
and other authorizations granted to the Lenders, the Agents and any Persons
designated by any Agent or Lender pursuant to any provisions of this Agreement
or any of the other Loan Documents shall be deemed coupled with an interest and
shall be irrevocable so long as any of the Obligations remain unpaid or
unsatisfied or the Credit Facility has not been terminated.
SECTION 12.13 Survival of Indemnities. Notwithstanding any termination
of this Agreement, the indemnities to which the Agents and the Lenders are
entitled under the provisions of this Article XII and any other provision of
this Agreement and the Loan Documents shall continue in full force and effect
and shall protect the Agents and Lenders against events arising after such
termination as well as before.
SECTION 12.14 Titles and Captions. Titles and captions of Articles,
Sections and subsections in this Agreement are for convenience only, and
neither limit nor amplify the provisions of this Agreement.
SECTION 12.15 Severability of Provisions. Any provision of this
Agreement or any other Loan Document which is prohibited or unenforceable in
any jurisdiction shall, as to such jurisdiction, be ineffective only to the
extent of such prohibition or unenforceability without invalidating the
remainder of such provision or the remaining provisions hereof or thereof or
affecting the validity or enforceability of such provision in any other
jurisdiction.
SECTION 12.16 Counterparts. This Agreement may be executed in any
number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed shall be deemed to be an original
and shall be binding upon all parties, their successors and assigns, and all of
which taken together shall constitute one and the same agreement.
SECTION 12.17 Term of Agreement. This Agreement shall remain in effect
from the Closing Date through and including the date upon which all Obligations
shall have been paid and satisfied in full. No termination of this Agreement
shall affect the rights and obligations of th parties hereto arising prior to
such termination.
SECTION 12.18 Independent Effect of Covenants. The Borrower expressly
acknowledges and agrees that each covenant contained in Articles VII, VIII or
IX hereof shall be given independent effect. Accordingly, the Borrower shall
not engage in any transaction or other act otherwise permitted under any
covenant contained in Articles VII, VIII or IX if, before or after giving
effect to such transaction or act, the Borrower shall or would be in breach of
any other covenant contained in Articles VII, VIII or IX.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed by their duly authorized officers, all as of the day and year first
written above.
INSIGNIA PROPERTIES, L.P.
By Its General Partner
Insignia Properties Trust
By: /s/ C D Vinson
----------------------------------------
Name: C D VINSON
----------------------------------
Title: C O O
----------------------------------
BORROWER
INSIGNIA PROPERTIES TRUST
By: /s/ C D Vinson
----------------------------------------
Name: C D VINSON
Title: C O O
GUARANTOR
<PAGE>
FIRST UNION NATIONAL BANK,
As Administrative Agent and Lender
By: /s/ Charles P. Cecil
-----------------------------------
Name: Charles P. Cecil
Title: SVP
<PAGE>
LEHMAN COMMERCIAL PAPER INC., as
Syndication Agent and Lender
By: /s/ Dennis J. Dee
------------------------------------
Name: DENNIS J. DEE
Title: ASSISTANT SECRETARY
<PAGE>
EXHIBIT A
TO
CREDIT AGREEMENT
BY AND AMONG
INSIGNIA PROPERTIES, L.P.,
FIRST UNION NATIONAL BANK, AS ADMINISTRATIVE AGENT FOR THE LENDERS
AND LEHMAN COMMERCIAL PAPER INC.
DATED
DECEMBER 30, 1997
REVOLVING CREDIT NOTE
---------------------
<PAGE>
EXHIBIT B
TO
CREDIT AGREEMENT
BY AND AMONG
INSIGNIA PROPERTIES, L.P.,
FIRST UNION NATIONAL BANK, AS ADMINISTRATIVE AGENT FOR THE LENDERS
AND LEHMAN COMMERCIAL PAPER INC.
DATED
DECEMBER 30, 1997
NOTICE OF BORROWING
-------------------
<PAGE>
EXHIBIT C
TO
CREDIT AGREEMENT
BY AND AMONG
INSIGNIA PROPERTIES, L.P.,
FIRST UNION NATIONAL BANK, AS ADMINISTRATIVE AGENT FOR THE LENDERS
AND LEHMAN COMMERCIAL PAPER INC.
DATED
DECEMBER 30, 1997
NOTICE OF CONVERSION/CONTINUATION
---------------------------------
<PAGE>
EXHIBIT D
TO
CREDIT AGREEMENT
BY AND AMONG
INSIGNIA PROPERTIES, L.P.,
FIRST UNION NATIONAL BANK, AS ADMINISTRATIVE AGENT FOR THE LENDERS
AND LEHMAN COMMERCIAL PAPER INC.
DATED
DECEMBER 30, 1997
OFFICER'S COMPLIANCE CERTIFICATE
--------------------------------
<PAGE>
EXHIBIT E
TO
CREDIT AGREEMENT
BY AND AMONG
INSIGNIA PROPERTIES, L.P.,
FIRST UNION NATIONAL BANK, AS ADMINISTRATIVE AGENT FOR THE LENDERS
AND LEHMAN COMMERCIAL PAPER INC.
DATED
DECEMBER 30, 1997
ASSIGNMENT AND ACCEPTANCE
-------------------------
<PAGE>
EXHIBIT F
TO
CREDIT AGREEMENT
BY AND AMONG
INSIGNIA PROPERTIES, L.P.,
FIRST UNION NATIONAL BANK, AS ADMINISTRATIVE AGENT FOR THE LENDERS
AND LEHMAN COMMERCIAL PAPER INC.
DATED
DECEMBER 30, 1997
GUARANTY AGREEMENT
------------------
<PAGE>
EXHIBIT G
TO
CREDIT AGREEMENT
BY AND AMONG
INSIGNIA PROPERTIES, L.P.,
FIRST UNION NATIONAL BANK, AS ADMINISTRATIVE AGENT FOR THE LENDERS
AND LEHMAN COMMERCIAL PAPER INC.
DATED
DECEMBER 30, 1997
IPLP PLEDGE AGREEMENT
---------------------
<PAGE>
EXHIBIT H
TO
CREDIT AGREEMENT
BY AND AMONG
INSIGNIA PROPERTIES, L.P.,
FIRST UNION NATIONAL BANK, AS ADMINISTRATIVE AGENT FOR THE LENDERS
AND LEHMAN COMMERCIAL PAPER INC.
DATED
DECEMBER 30, 1997
IPT PLEDGE AGREEMENT
--------------------
<PAGE>
EXHIBIT I
TO
CREDIT AGREEMENT
BY AND AMONG
INSIGNIA PROPERTIES, L.P.,
FIRST UNION NATIONAL BANK, AS ADMINISTRATIVE AGENT FOR THE LENDERS
AND LEHMAN COMMERCIAL PAPER INC.
DATED
DECEMBER 30, 1997
NOTICE OF ACCOUNT DESIGNATION
-----------------------------
