<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1999
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from __________ to _________
Commission file number: 1-12110
CAMDEN PROPERTY TRUST
(Exact Name of Registrant as Specified in Its Charter)
TEXAS 76-6088377
(State or Other Jurisdiction of (I.R.S. Employer Identification
Incorporation or Organization) Number)
3 Greenway Plaza, Suite 1300, Houston, Texas 77046
(Address of Principal Executive Offices) (Zip Code)
(713) 354-2500
(Registrant's Telephone Number, Including Area Code)
N/A
(Former Name, Former Address and Former Fiscal Year,
If Changed Since Last Report)
Indicate by check mark whether the registrant: (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
YES X NO
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date:
As of November 10, 1999, there were 40,213,320 shares of Common Shares of
Beneficial Interest, $0.01 par value outstanding.
<PAGE> 2
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
CAMDEN PROPERTY TRUST
CONSOLIDATED BALANCE SHEETS
(In thousands)
<TABLE>
<CAPTION>
ASSETS
SEPTEMBER 30, DECEMBER 31,
1999 1998
--------------- --------------
(Unaudited)
<S> <C> <C>
Real estate assets, at cost:
Land $ 349,388 $ 321,752
Buildings and improvements 2,070,162 1,917,026
--------------- --------------
2,419,550 2,238,778
Less: accumulated depreciation (230,431) (167,560)
--------------- --------------
Net operating real estate assets 2,189,119 2,071,218
Projects under development, including land 191,408 216,680
Investment in joint ventures 22,397 32,484
--------------- --------------
Total real estate assets 2,402,924 2,320,382
Accounts receivable - affiliates 1,252 831
Notes receivable:
Affiliates 1,800 1,800
Other 27,331
Other assets, net 16,406 15,036
Cash and cash equivalents 13,790 5,647
Restricted cash - escrow deposits 5,169 4,286
--------------- --------------
Total assets $ 2,468,672 $ 2,347,982
=============== ==============
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
Notes payable:
Unsecured $ 739,526 $ 632,923
Secured 345,960 369,645
Accounts payable 18,644 24,180
Accrued real estate taxes 26,731 21,474
Accrued expenses and other liabilities 34,927 28,278
Distributions payable 27,573 25,735
--------------- --------------
Total liabilities 1,193,361 1,102,235
Minority Interests:
Preferred units 132,712
Common units 65,539 71,783
--------------- -------------
Total minority interests 198,251 71,783
7.33% Convertible Subordinated Debentures 3,451 3,576
Shareholders' Equity:
Preferred shares of beneficial interest 42 42
Common shares of beneficial interest 447 447
Additional paid-in capital 1,303,395 1,299,539
Distributions in excess of net income (123,788) (98,897)
Unearned restricted share awards (9,316) (10,039)
Less: treasury shares, at cost (97,171) (20,704)
--------------- --------------
Total shareholders' equity 1,073,609 1,170,388
--------------- --------------
Total liabilities and shareholders' equity $ 2,468,672 $ 2,347,982
=============== ==============
See Notes to Consolidated Financial Statements.
</TABLE>
<PAGE> 3
CAMDEN PROPERTY TRUST
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(In thousands, except per share amounts)
<TABLE>
<CAPTION>
Three Months Nine Months
Ended September 30, Ended September 30,
------------------------- -------------------------
1999 1998 1999 1998
----------- ------------ ----------- ------------
<S> <C> <C> <C> <C>
REVENUES
Rental income $ 86,753 $ 79,802 $ 252,582 $ 219,601
Other property income 6,006 4,973 16,585 13,539
----------- ---------- ----------- -----------
Total property income 92,759 84,775 269,167 233,140
Equity in income of joint ventures (472) 317 472 1,039
Fee and asset management 1,404 510 3,627 859
Other income 486 947 1,158 1,690
----------- ---------- ----------- -----------
Total revenues 94,177 86,549 274,424 236,728
----------- ---------- ----------- -----------
EXPENSES
Property operating and maintenance 28,205 25,506 80,344 72,755
Real estate taxes 9,165 8,153 27,669 23,122
General and administrative 2,473 2,013 7,272 5,532
Interest 14,709 13,414 42,227 36,680
Depreciation and amortization 22,703 20,411 65,541 57,388
----------- ---------- ----------- -----------
Total expenses 77,255 69,497 223,053 195,477
----------- ---------- ----------- -----------
Income before gain on sale of properties and joint
venture interests and minority interests 16,922 17,052 51,371 41,251
Gain on sale of properties and joint venture interests 2,259 2,979
----------- ---------- ----------- -----------
Income before minority interests 19,181 17,052 54,350 41,251
Minority interests
Preferred unit distributions (2,411) (5,392)
Minority interest (892) (59) (1,850) (1,043)
----------- ----------- ----------- -----------
Total minority interests (3,303) (59) (7,242) (1,043)
----------- ----------- ----------- -----------
Net income 15,878 16,993 47,108 40,208
Preferred share dividends (2,343) (2,343) (7,029) (7,029)
----------- ----------- ----------- -----------
Net income to common shareholders $ 13,535 $ 14,650 $ 40,079 $ 33,179
=========== =========== =========== ===========
Basic earnings per share $ 0.33 $ 0.33 $ 0.96 $ 0.83
Diluted earnings per share $ 0.32 $ 0.31 $ 0.94 $ 0.79
Distributions declared per common share $ 0.520 $ 0.505 $ 1.560 $ 1.515
Weighted average number of common shares
outstanding 40,939 44,370 41,668 40,115
Weighted average number of common and
common dilutive equivalent shares outstanding 42,025 47,437 44,728 43,116
</TABLE>
See Notes to Consolidated Financial Statements.
<PAGE> 4
CAMDEN PROPERTY TRUST
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(In thousands)
<TABLE>
<CAPTION>
Nine Months
Ended September 30,
----------------------------
1999 1998
------------ ------------
<S> <C> <C>
CASH FLOW FROM OPERATING ACTIVITIES
Net income $ 47,108 $ 40,208
Adjustments to reconcile net income to net cash provided by operating
activities:
Depreciation and amortization 65,541 57,388
Equity in income of joint ventures, net of cash received 1,963 486
Gain on sale of properties and joint venture interests (2,979)
Minority interest 1,850 1,043
Accretion of discount on unsecured notes payable 223 124
Net change in operating accounts 7,464 (3,789)
------------ ------------
Net cash provided by operating activities 121,170 95,460
CASH FLOW FROM INVESTING ACTIVITIES
Cash of Oasis at acquisition 7,253
Net proceeds from Third Party Transaction 226,128
Increase in real estate assets (166,990) (271,742)
Net proceeds from sale of properties 13,226 42,513
Net proceeds from sale of joint venture interests 5,465 6,841
Increase in investment in joint ventures (2,012) (4,795)
Decrease in investment in joint ventures 6,400 1,478
Net (increase) decrease in notes receivable (27,331) 1,750
Net decrease in affiliate notes receivable 5,389
Other (1,488) (1,146)
------------ ------------
Net cash (used in) provided by investing activities (172,730) 13,669
CASH FLOW FROM FINANCING ACTIVITIES
Net (decrease) increase in unsecured lines of credit and short-term
borrowings (147,000) 113,792
Debt repayments from Third Party Transaction (114,248)
Proceeds from notes payable 253,380 50,600
Proceeds from issuance of preferred units, net 132,712
Repayment of notes payable (23,685) (65,001)
Distributions to shareholders and minority interests (79,722) (63,055)
Repurchase of common shares and units (79,247) (1,616)
Other 3,265 (120)
------------ ------------
Net cash provided by (used in) financing activities 59,703 (79,648)
------------ ------------
Net increase in cash and cash equivalents 8,143 29,481
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 5,647 6,468
------------ ------------
CASH AND CASH EQUIVALENTS, END OF PERIOD $ 13,790 $ 35,949
============ ============
SUPPLEMENTAL INFORMATION
Cash paid for interest, net of interest capitalized $ 35,526 $ 31,767
Interest capitalized $ 12,306 $ 6,385
SUPPLEMENTAL SCHEDULE OF NONCASH
INVESTING AND FINANCING ACTIVITIES
Acquisition of Oasis (including the Third Party Transaction), net of cash acquired
and fair value adjustment from the acquisitions of Oasis and Paragon:
Fair value of assets acquired $ 835 $ 783,500
Liabilities assumed 835 495,708
Common shares issued 395,528
Preferred shares issued 104,125
Fair value of minority interest 21,520
Conversion of 7.33% subordinated debentures to common shares, net $ 125 $ 2,242
Value of shares issued under benefit plans, net $ 2,004 $ 6,180
Conversion of operating partnership units to common shares $ 387 $ 9,581
Note payable assumed upon purchase of a property $ 22,424
</TABLE>
See Notes to Consolidated Financial Statements.
<PAGE> 5
CAMDEN PROPERTY TRUST
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
1. INTERIM UNAUDITED FINANCIAL INFORMATION
The accompanying interim unaudited financial information has been
prepared according to the rules and regulations of the Securities and Exchange
Commission. Certain information and footnote disclosures normally included in
financial statements prepared in accordance with generally accepted accounting
principles have been condensed or omitted according to such rules and
regulations, although management believes that the disclosures are adequate to
make the information presented not misleading. In the opinion of management, all
adjustments and eliminations, consisting only of normal recurring adjustments,
necessary to present fairly the financial position of Camden Property Trust as
of September 30, 1999 and the results of operations for the three and nine
months ended September 30, 1999 and 1998 and cash flows for the nine months
ended September 30, 1999 and 1998 have been included. The results of operations
for such interim periods are not necessarily indicative of the results for the
full year.
BUSINESS
We are a Houston-based real estate investment trust ("REIT") and report
as a single business segment with activities related to the ownership,
development, acquisition, management and disposition of multifamily apartment
communities in the Southwest, Southeast, Midwest and Western regions of the
United States. At September 30, 1999, we owned interests in, operated or were
developing 159 multifamily properties containing 55,785 apartment homes located
in nine states. Eight of our multifamily properties containing 3,570 apartment
homes were under development at September 30, 1999. Two of our newly developed
multifamily properties containing 820 apartment homes were in lease-up at
September 30, 1999. We have several additional sites which we intend to develop
into multifamily apartment communities.
ACQUISITION OF OASIS RESIDENTIAL, INC.
On April 8, 1998, we acquired, through a tax-free merger, Oasis
Residential, Inc., a publicly traded Las Vegas-based multifamily REIT. The
acquisition increased the size of our portfolio from 100 to 152 completed
multifamily properties, and from 34,669 to 50,183 apartment homes at the date of
acquisition. Each share of Oasis common stock outstanding on April 8, 1998 was
exchanged for 0.759 of a Camden common share. Each share of Oasis Series A
cumulative convertible preferred stock outstanding on April 8, 1998 was reissued
as one Camden Series A cumulative convertible preferred share with terms and
conditions comparable to the Oasis preferred stock. We issued 12.4 million
common shares and 4.2 million preferred shares in exchange for the outstanding
Oasis common and preferred stock, respectively. Approximately $484 million of
Oasis debt, at fair value, was assumed in the merger.
In connection with the merger with Oasis, on June 30, 1998, we completed
a transaction in which Camden USA, Inc., one of our wholly owned subsidiaries,
and TMT-Nevada, L.L.C., a Delaware limited liability company, formed
Sierra-Nevada Multifamily Investments, LLC. We entered into this transaction to
reduce our market risk in the Las Vegas area. TMT-Nevada holds an 80% interest
in Sierra-Nevada and Camden USA holds the remaining 20% interest.
In this transaction, we transferred to Sierra-Nevada 19 apartment
communities containing 5,119 apartment homes for an aggregate of $248 million.
Prior to the merger, Oasis owned 100% of each of these communities. In the
merger, Camden USA acquired these communities. As a result, after the merger and
prior to the Sierra-Nevada transaction, Camden USA owned 100% of each of these
19 properties. These properties are located in Las Vegas, Nevada. This
transaction was funded with capital invested by the members of Sierra-Nevada,
<PAGE> 6
the assumption of $9.9 million of existing nonrecourse indebtedness, the
issuance of 17 nonrecourse cross collateralized and cross defaulted loans
totaling $180 million and the issuance of two nonrecourse second lien mortgages
totaling $7 million.
REAL ESTATE ASSETS AT COST
We capitalized $19.2 million and $18.7 million in the nine months ended
September 30, 1999 and 1998, respectively, of renovation and improvement costs
which we believe extended the economic lives and enhanced the earnings of our
multifamily properties. If we had adopted the accounting policy described below
as of January 1, 1998, the amounts capitalized for the nine months ended
September 30, 1998 would have been $19.8 million.
Effective April 1, 1998, we implemented prospectively a new accounting
policy where expenditures for floor coverings, appliances and HVAC unit
replacements are capitalized and depreciated over their estimated useful lives.
Previously, all such replacements had been expensed. We believe that the newly
adopted accounting policy is preferable as it is consistent with standards and
practices utilized by the majority of our peers and provides a better matching
of expenses with the related benefit of the expenditure. The change in
accounting principle is inseparable from the effect of the change in accounting
estimate and is therefore treated as a change in accounting estimate. See Recent
Accounting Pronouncements below for the effect of this change and our adoption
of a recent accounting pronouncement on our financial results for the nine
months ended September 30, 1998.
PROPERTY OPERATING AND MAINTENANCE EXPENSES
Property operating and maintenance expenses included normal repairs and
maintenance totaling $6.8 million and $18.4 million for the three and nine
months ended September 30, 1999, and $6.0 million and $15.7 million for the
three and nine months ended September 30, 1998, respectively.
COMMON SHARE DIVIDEND DECLARATION
In September 1999, we announced that our Board of Trust Managers had
declared a dividend in the amount of $0.52 per share for the third quarter of
1999 which was paid on October 15, 1999 to all common shareholders of record as
of September 30, 1999. We paid an equivalent amount per unit to holders of
common operating partnership units. This distribution to common shareholders and
holders of common operating partnership units equates to an annualized dividend
rate of $2.08 per share or unit.
PREFERRED SHARE DIVIDEND DECLARATION
In September 1999, we announced that our Board of Trust Managers had
declared a quarterly dividend on our preferred shares in the amount of $0.5625
per share payable November 15, 1999 to all preferred shareholders of record as
of September 30, 1999.
RECENT ACCOUNTING PRONOUNCEMENTS
On March 19, 1998, the Emerging Issues Task Force of the Financial
Accounting Standards Board reached a consensus decision on Issue No. 97-11,
Accounting for Internal Costs Relating to Real Estate Property Acquisitions,
which requires that internal costs of identifying and acquiring operating
properties be expensed as incurred for transactions entered into on or after
March 20, 1998. Prior to our adoption of this policy, we had been capitalizing
such costs. Had we adopted Issue No. 97-11 and the new accounting policy for
floor coverings, appliances and HVAC unit replacements as of January 1, 1998,
net income to common shareholders would have increased $650,000 or $0.02 per
basic and diluted earnings per share for the nine months ended September 30,
1998.
<PAGE> 7
EARNINGS PER SHARE
The following table presents information necessary to calculate basic
and diluted earnings per share for the three and nine months ended September 30,
1999 and 1998:
<TABLE>
<CAPTION>
THREE MONTHS NINE MONTHS
ENDED SEPTEMBER 30, ENDED SEPTEMBER 30,
------------------------ -------------------------
1999 1998 1999 1998
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
BASIC EARNINGS PER SHARE:
Weighted Average Common Shares Outstanding 40,939 44,370 41,668 40,115
=========== =========== =========== ===========
Basic Earnings Per Share $ 0.33 $ 0.33 $ 0.96 $ 0.83
=========== =========== =========== ===========
DILUTED EARNINGS PER SHARE:
Weighted Average Common Shares Outstanding 40,939 44,370 41,668 40,115
Shares Issuable from Assumed Conversion of:
Common Share Options and Awards Granted 452 387 414 414
Minority Interest Units 634 2,680 2,646 2,587
----------- ----------- ----------- -----------
Weighted Average Common Shares Outstanding, as Adjusted 42,025 47,437 44,728 43,116
=========== =========== =========== ===========
Diluted Earnings Per Share $ 0.32 $ 0.31 $ 0.94 $ 0.79
=========== =========== =========== ===========
EARNINGS FOR BASIC AND DILUTED COMPUTATION:
Net Income $ 15,878 $ 16,993 $ 47,108 $ 40,208
Less: Preferred Share Dividends 2,343 2,343 7,029 7,029
----------- ----------- ----------- -----------
Net Income to Common Shareholders 13,535 14,650 40,079 33,179
(Basic Earnings Per Share Computation)
Minority Interest 59 1,850 1,043
----------- ----------- ----------- -----------
Net Income to Common Shareholders, as Adjusted
(Diluted Earnings Per Share Computation) $ 13,535 $ 14,709 $ 41,929 $ 34,222
=========== =========== =========== ===========
</TABLE>
RECLASSIFICATIONS
Certain reclassifications have been made to amounts in prior year financial
statements to conform with current year presentations.
2. NOTES RECEIVABLE
We have entered into agreements with unaffiliated third parties to develop,
construct, and manage four multifamily projects. We are providing financing for
a portion of each project in the form of four year notes receivable. These notes
earn interest at 10% and are secured by liens on the assets and partial
guarantees by the third party owners. At September 30, 1999, these notes had
principal balances totaling $21.0 million. We anticipate funding up to an
aggregate of $41 million in connection with these projects. We earn fees for
managing the development, construction and eventual operations of these
properties. We have the option to purchase these properties in the future at a
price to be determined based upon the property's performance and an agreed
valuation model.
<PAGE> 8
3. NOTES PAYABLE
The following is a summary of our indebtedness:
(In millions)
<TABLE>
<CAPTION>
September 30, December 31,
1999 1998
----------------- ----------------
<S> <C> <C>
Senior Unsecured Notes:
6.73% - 7.28% Notes, due 2001-2006 $ 523.0 $ 323.9
6.68% - 7.63% Medium Term Notes, due 2000 - 2009 181.5 127.0
Unsecured Lines of Credit and Short-Term Borrowings 35.0 182.0
--------------- -------------
739.5 632.9
Secured Notes - Mortgage loans (5.45% - 8.63%), due 2001 - 2028 346.0 369.7
--------------- -------------
Total notes payable $ 1,085.5 $ 1,002.6
=============== =============
</TABLE>
In August 1999, we entered into a line of credit with 14 banks for a total
commitment of $375 million. This line of credit replaces our three previous
lines of credit which totaled $275 million. The new line of credit is scheduled
to mature in August 2002. The scheduled interest rate on the line of credit is
currently based on a spread over LIBOR or Prime. The scheduled interest rates
are subject to change as our credit ratings change. Advances under the line of
credit may be priced at the scheduled rates, or we may enter into bid rate loans
with participating banks at rates below the scheduled rates. These bid rate
loans have terms of six months or less and may not exceed the lesser of $187.5
million or the remaining amount available under the line of credit. The line of
credit is subject to customary financial covenants and limitations.
During September 1999, we executed three interest rate swap agreements
totaling $70 million which are scheduled to mature in October 2000. These swaps
are being used as a hedge of interest rate exposure on our $90 million medium
term notes issued in October 1998 which mature in October 2000. Currently, the
interest rate on the medium term notes is fixed at 7.23%. The interest rates on
the swaps are based on the one-month LIBOR rate plus a spread resulting in an
effective interest rate on the swaps of 6.58% at September 30, 1999.
During the first quarter of 1999, we issued $39.5 million aggregate
principal amounts of senior unsecured notes from our $196 million medium-term
note shelf registration. These fixed rate notes, due in January 2002 through
January 2009, bear interest at a weighted average rate of 7.07%, payable
semiannually on January 15 and July 15. The net proceeds were used to reduce
indebtedness outstanding under the unsecured lines of credit.
In April 1999, we issued $15 million aggregate principal amounts of senior
unsecured notes from our $196 million medium-term note shelf registration. These
fixed rate notes, due in March 2002, bear interest at a rate of 6.74%, payable
semiannually on March 15 and September 15. The net proceeds were used to reduce
indebtedness outstanding under the unsecured lines of credit.
In April 1999, we issued from our $500 million shelf registration an
aggregate principal amount of $200 million of five-year senior unsecured notes.
Interest on the notes accrues at an annual rate of 7.0% and is payable
semi-annually on April 15 and October 15, commencing on October 15, 1999. The
notes are direct, senior unsecured obligations and rank equally with all other
unsecured and unsubordinated indebtedness. The notes may be redeemed at any time
at our option subject to a make-whole provision. We used the net proceeds of
$197.7 million to reduce $171 million of indebtedness under the unsecured lines
of credit and for general working capital purposes.
<PAGE> 9
At September 30, 1999, the weighted average interest rate on floating rate
debt was 6.07%.
4. NET CHANGE IN OPERATING ACCOUNTS
The effect of changes in the operating accounts on cash flows from
operating activities is as follows:
(In thousands)
<TABLE>
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30,
--------------------------
1999 1998
----------- -----------
<S> <C> <C>
Decrease (increase) in assets:
Accounts receivable - affiliates $ (175) $ 1,298
Other assets, net (1,787) 421
Restricted cash - escrow deposits (883) 1,337
Increase (decrease) in liabilities:
Accounts payable (6,551) (5,027)
Accrued real estate taxes 5,257 5,028
Accrued expenses and other liabilities 11,603 (6,846)
----------- -----------
Net change in operating accounts $ 7,464 $ (3,789)
=========== ===========
</TABLE>
<PAGE> 10
5. PREFERRED UNITS
In February 1999, our operating partnership issued $100 million of 8.5%
Series B Cumulative Redeemable Perpetual Preferred Units. Distributions on the
preferred units are payable quarterly in arrears. The preferred units are
redeemable for cash by the operating partnership on or after the fifth
anniversary of issuance at par plus the amount of any accumulated and unpaid
distributions. The preferred units are convertible after 10 years by the holder
into our 8.5% Series B Cumulative Redeemable Perpetual Preferred Shares. The
preferred units are subordinate to present and future debt.
During the third quarter of 1999, our operating partnership issued $35.5
million of 8.25% Series C Cumulative Redeemable Perpetual Preferred Units.
Distributions on the preferred units are payable quarterly in arrears. The
preferred units are redeemable for cash by the operating partnership on or after
the fifth anniversary of issuance at par plus the amount of any accumulated and
unpaid distributions. The preferred units are convertible after 10 years by the
holder into our 8.25% Series C Cumulative Redeemable Perpetual Preferred Shares.
The preferred units are subordinate to present and future debt.
6. RESTRICTED SHARE AND OPTION AWARDS
During the first nine months of 1999, we granted 132,144 restricted shares
in lieu of cash compensation to certain key employees and non-employee trust
managers. The restricted shares were issued based on the market value of
ourcommon shares at the date of grant and have vesting periods of up to five
years. We also granted 603,071 options with an exercise price equal to the
market value of our common shares on the date of grant. The options become
exercisable in equal increments over three years, beginning on the first
anniversary of the grant. During the nine month period ended September 30, 1999,
previously granted options to purchase 649,119 shares became exercisable and
113,324 restricted shares vested.
7. COMMON SHARE REPURCHASE PROGRAM
In March 1999, the Board of Trust Managers authorized us to repurchase up
to $50 million of our common shares and units through open market purchase and
private transactions. This amount is in addition to the initial $50 million the
Board of Trust Managers authorized for repurchase in September 1998. As of
<PAGE> 11
September 30, 1999, we had repurchased 3,900,560 common shares and units for a
total cost of $100.0 million. Additionally, in October 1999, the Board of Trust
Managers authorized us to repurchase up to $100 million of our common shares and
units through open market purchases and private transactions. Subsequent to
September 30, 1999, we repurchased 722,200 shares and units at a total cost of
$19.2 million under the new program.
8. CONVERTIBLE PREFERRED SHARES
The 4,165,000 preferred shares issued in conjunction with the Oasis merger
pay a cumulative dividend quarterly in arrears in an amount equal to $2.25 per
share per annum. The preferred shares generally have no voting rights and have a
liquidation preference of $25 per share plus accrued and unpaid distributions.
The preferred shares are convertible at the option of the holder at any time
into common shares at a conversion price of $32.4638 per common share
(equivalent to a conversion rate of 0.7701 per common share for each preferred
share), subject to adjustment in certain circumstances. The preferred shares are
not redeemable prior to April 30, 2001.
9. CONTINGENCIES
Prior to our merger, Oasis had been contacted by certain regulatory
agencies with regards to alleged failures to comply with the Fair Housing
Amendments Act (the "Fair Housing Act") as it pertained to nine properties
(seven of which we currently own) constructed for first occupancy after March
31, 1991. On February 1, 1999, the Justice Department filed a lawsuit against us
and several other defendants in the United States District Court for the
District of Nevada alleging (1) that the design and construction of these
properties violates the Fair Housing Act and (2) that we, through the merger
with Oasis, had discriminated in the rental of dwellings to persons because of
handicap. The complaint requests an order that (i) declares that the defendants'
policies and practices violate the Fair Housing Act; (ii) enjoins us from (a)
failing or refusing, to the extent possible, to bring the dwelling units and
public use and common use areas at these properties and other covered units that
Oasis had designed and/or constructed into compliance with the Fair Housing Act,
(b) failing or refusing to take such affirmative steps as may be necessary to
restore, as nearly as possible, the alleged victims of the defendants' alleged
unlawful practices to positions they would have been in but for the
discriminatory conduct and (c) designing or constructing any covered
multi-family dwellings in the future that do not contain the accessibility and
adaptability features set forth in the Fair Housing Act; and requires us to pay
damages, including punitive damages, and a civil penalty.
With any acquisition, we plan for and undertake renovations needed to
correct deferred maintenance, life/safety and Fair Housing matters. We are
currently in the process of determining the extent of the alleged noncompliance
on the properties discussed above and the remaining changes that may be
necessitated. At this time, we are not able to provide an estimate of costs and
expenses associated with the resolution of this matter, however, management does
not expect the amount to be material. There can be no assurance that we will be
successful in the defense of the Justice Department action.
10. SUBSEQUENT EVENTS
In the ordinary course of our business, we issue letters of intent
indicating a willingness to negotiate for the purchase or sale of multifamily
properties or development land. In accordance with the local real estate market
practice, such letters of intent are non-binding, and neither party to the
letter of intent is obligated to pursue negotiations unless and until a
definitive contract is entered into by the parties. Even if definitive contracts
are entered into, the letters of intent and resulting contracts contemplate that
such contracts will provide the purchaser with time to evaluate the properties
and conduct due diligence and during which periods the purchaser will have the
ability to terminate the contracts without penalty or forfeiture of any deposit
or earnest money. There can be no assurance that definitive contracts will be
entered into with respect to any properties covered by letters of intent or that
<PAGE> 12
we will acquire or sell any property as to which we may have entered into a
definitive contract. Further, due diligence periods are frequently extended as
needed. An acquisition or sale becomes probable at the time that the due
diligence period expires and the definitive contract has not been terminated. We
are then at risk under an acquisition contract, but only to the extent of any
earnest money deposits associated with the contract, and are obligated to sell
under a sales contract.
We are currently in the due diligence period on contracts for the purchase
of land for development. No assurance can be made that we will be able to
complete the negotiations or become satisfied with the outcome of the due
diligence.
We seek to selectively dispose of assets that have a lower projected net
operating income growth rate than the overall portfolio, or no longer conform to
our operating and investment strategies. The proceeds from these sales may be
reinvested in acquisitions or developments, used to retire debt or repurchase
shares.
<PAGE> 13
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
RESULTS OF OPERATIONS
OVERVIEW
The following discussion should be read in conjunction with all of the
financial statements and notes appearing elsewhere in this report as well as the
audited financial statements appearing in our 1998 Annual Report to
Shareholders. Where appropriate, comparisons are made on a dollars
per-weighted-average-unit basis in order to adjust for changes in the number of
apartment homes owned during each period. The statements contained in this
report that are not historical facts are forward-looking statements, and actual
results may differ materially from those included in the forward-looking
statements. These forward-looking statements involve risks and uncertainties
including, but not limited to, the following: changes in general economic
conditions, changes in financial markets and interest rates, our failure to
qualify as a real estate investment trust ("REIT") and unexpected Year 2000
problems.
BUSINESS
We are a Houston-based REIT and report as a single business segment with
activities related to the ownership, development, acquisition, management and
disposition of multifamily apartment communities in the Southwest, Southeast,
Midwest and Western regions of the United States. At September 30, 1999, we
owned interests in, operated or were developing 159 multifamily properties
containing 55,785 apartment homes located in nine states. Eight of our
multifamily properties containing 3,570 apartment homes were under development
at September 30, 1999. Two of our newly developed multifamily properties
containing 820 apartment homes were in lease-up at September 30, 1999. We have
several additional sites which we intend to develop into multifamily apartment
communities.
ACQUISITION OF OASIS RESIDENTIAL, INC.
On April 8, 1998, we acquired, through a tax-free merger, Oasis
Residential, Inc., a publicly traded Las Vegas-based multifamily REIT. The
acquisition increased the size of our portfolio from 100 to 152 completed
multifamily properties, and from 34,669 to 50,183 apartment homes at the date of
acquisition. Each share of Oasis common stock outstanding on April 8, 1998 was
exchanged for 0.759 of a Camden common share. Each share of Oasis Series A
cumulative convertible preferred stock outstanding on April 8, 1998 was reissued
as one Camden Series A cumulative convertible preferred share with terms and
conditions comparable to the Oasis preferred stock. We issued 12.4 million
common shares and 4.2 million preferred shares in exchange for the outstanding
Oasis common and preferred stock, respectively. Approximately $484 million of
Oasis debt, at fair value, was assumed in the merger.
In connection with the merger with Oasis, on June 30, 1998, we completed a
transaction in which Camden USA, Inc., one of our wholly owned subsidiaries, and
TMT-Nevada, L.L.C., a Delaware limited liability company, formed Sierra-Nevada
Multifamily Investments, LLC. We entered into this transaction to reduce our
market risk in the Las Vegas area. TMT-Nevada holds an 80% interest in
Sierra-Nevada and Camden USA holds the remaining 20% interest.
In this transaction, we transferred to Sierra-Nevada 19 apartment
communities containing 5,119 apartment homes for an aggregate of $248 million.
Prior to the merger, Oasis owned 100% of each of these communities. In the
merger, Camden USA acquired these communities. As a result, after the merger and
prior to the Sierra-Nevada transaction, Camden USA owned 100% of each of these
19 properties. These properties are located in Las Vegas, Nevada. This
transaction was funded with capital invested by the members of Sierra-Nevada,
the assumption of $9.9 million of existing nonrecourse indebtedness, the
<PAGE> 14
issuance of 17 nonrecourse cross collateralized and cross defaulted loans
totaling $180 million and the issuance of two nonrecourse second lien mortgages
totaling $7 million.
PROPERTY PORTFOLIO
Our multifamily property portfolio, excluding land held for future
development and joint venture properties that we do not manage, is summarized as
follows:
<TABLE>
<CAPTION>
September 30,1999 December 31, 1998
------------------------------- -----------------------------
Apartment Apartment
Homes Properties % (a) Homes Properties % (a)
----------- ------------ ------ --------- ------------ ------
<S> <C> <C> <C> <C> <C> <C>
Operating Properties
Texas
Houston 7,502 18 15% 6,345 15 13%
Dallas (b) 9,381 26 18 9,381 26 17
Austin 1,745 6 4 1,745 6 4
Other 1,641 5 3 1,641 5 3
----------- ------------ ------ --------- ------------ ------
Total Texas Operating Properties 20,269 55 40 19,112 52 37
Arizona 2,326 7 5 2,326 7 5
California 1,272 3 3 1,272 3 3
Colorado (b) 1,972 6 3 1,972 6 3
Florida 7,335 17 15 7,261 17 14
Kentucky 1,016 4 2 1,142 5 2
Missouri 3,327 8 7 3,327 8 7
Nevada (b) 11,963 41 14 12,163 41 14
North Carolina (b) 2,735 10 4 2,735 10 4
----------- ----------- ------ --------- ------------ ------
Total Operating Properties 52,215 151 93 51,310 149 89
----------- ----------- ------ --------- ------------ ------
Properties Under Development
Texas
Houston (c) 756 1 1 2,213 5 4
Dallas 620 1 1 600 1 1
----------- ----------- ------ --------- ------------ ------
Total Texas Development Properties 1,376 2 2 2,813 6 5
Arizona 332 1 1 325 1 1
California 380 1 1 380 1 1
Colorado 558 2 1 558 2 1
Florida (c) 492 1 1 1,150 3 2
Kentucky 432 1 1 432 1 1
----------- ----------- ------ --------- ------------ ------
Total Properties Under Development 3,570 8 7 5,658 14 11
----------- ----------- ------ --------- ------------ ------
Total Properties 55,785 159 100% 56,968 163 100%
=========== =========== ====== ========= ============ ======
Less: Joint Venture
Apartment Homes (b) 6,504 6,704
----------- -----------
Total Apartment Homes
- Owned 100% 49,281 50,264
=========== ===========
</TABLE>
(a) Based on number of apartment homes owned 100%
(b) The figures include properties held in joint ventures as follows: one
property with 708 apartment homes in Dallas and two properties with 556
apartment homes in North Carolina in which we own a 44% interest, the
remaining interest is owned by unaffiliated private investors; one
property with 321 apartment homes in Colorado in which we own a 50%
interest, the remaining interest is owned by an unaffiliated private
investor; and 19 properties with 4,919 apartment homes (5,119 apartment
homes at December 31, 1998) in Nevada owned through Sierra-Nevada
Multifamily Investments, LLC in which we own a 20% interest.
(c) The September 30, 1999 amounts exclude one property with 300 apartment
homes in Houston which is now classified as land held for future
development and one property with 352 apartment homes in Florida which was
sold during the year.
<PAGE> 15
At September 30, 1999, we had two completed properties under lease-up as
follows:
<TABLE>
<CAPTION>
Product Number of % Leased Estimated
Type Apartment at 11/10/99 Date of Date of
Property and Location Homes Completion Stabilization
- ----------------------------------------- ------------ -------------- ------------- -------------- -----------------
<S> <C> <C> <C> <C> <C>
The Park at Goose Creek
Baytown, TX Affordable 272 77% 3Q99 4Q99
The Park at Holly Springs
Houston, TX Garden 548 49% 3Q99 4Q00
</TABLE>
At September 30, 1999, we had 8 development properties in various stages of
construction as follows:
<TABLE>
<CAPTION>
Product Number of Estimated Estimated Estimated
Type Apartment Cost Date of Date of
Property and Location Homes ($ millions) Completion Stabilization
- ----------------------------------------- ------------------- ------------ -------------- -------------- ---------------
<S> <C> <C> <C> <C> <C>
In Lease-up
The Park at Interlocken
Denver, CO Garden 340 $ 34.9 4Q99 1Q00
The Park at Greenway
Houston, TX Urban 756 57.5 4Q99 3Q00
The Park at Caley
Denver, CO Garden 218 18.3 1Q00 2Q00
The Park at Lee Vista
Orlando, FL Garden 492 32.8 1Q00 1Q01
The Park at Oxmoor
Louisville, KY Garden 432 22.1 1Q00 1Q01
---------- -----------
Subtotal 2,238 165.6
---------- -----------
Under Construction
The Park at Arizona Center
Phoenix, AZ Urban 332 24.5 1Q00 1Q01
The Park at Farmers Market, Phase I
Dallas, TX Urban 620 49.8 4Q00 4Q01
The Park at Crown Valley
Mission Viejo, CA Garden 380 42.0 1Q01 3Q01
---------- ----------
Subtotal 1,332 116.3
---------- -----------
Total for 8 development properties 3,570 $ 281.9
========== ===========
</TABLE>
We stage our construction to allow leasing and occupancy during the
construction period which we believe minimizes the lease-up period following
completion of construction. Our accounting policy related to properties in the
development and leasing phase is that all operating expenses, excluding
depreciation, associated with occupied apartment homes are expensed against
revenues generated by those apartment homes as they become occupied. All
construction and carrying costs are capitalized and reported on the balance
sheet in "Projects under development, including land" until such apartment homes
are completed. Upon completion of each building of the project, the total cost
of that building and the associated land is transferred to "Land" and "Buildings
and improvements" and the assets are depreciated over their estimated useful
lives using the straight-line method of depreciation. Upon achieving 90%
occupancy, all apartment homes are considered operating and we begin expensing
all items that were previously considered as carrying costs. Generally, this
occurs within one year of opening the leasing office, with some allowances for
larger than average properties.
<PAGE> 16
COMPARISON OF THE QUARTER ENDED SEPTEMBER 30, 1999 AND SEPTEMBER 30, 1998
The changes in operating results from period to period are primarily due to
the development of five properties totaling 1,759 apartment homes, the
acquisition of three properties containing 1,626 apartment homes, the
disposition of two properties containing 358 apartment homes and an increase in
net operating income generated by the stabilized portfolio. The weighted average
number of apartment homes for the third quarter of 1999 increased by 1,986
apartment homes, or 4.5%, from 44,006 to 45,992. Total operating properties were
128 and 125 at September 30, 1999 and 1998, respectively. The 45,992 weighted
average apartment homes and the 128 operating properties exclude the impact of
our ownership interest in properties owned in joint ventures. The 125 operating
properties at September 30, 1998 have been restated to reflect the combination
of operations of two adjacent properties in Nevada, Texas and Florida at
December 31, 1998.
Rental income for the quarter ended September 30, 1999 increased $7.0
million or 8.7% over the quarter ended September 30, 1998. Rental income per
apartment home per month increased $25 or 4.1%, from $604 to $629 for the third
quarters of 1998 and 1999, respectively. The increase was primarily due to
increased revenue growth from the stabilized real estate portfolio and higher
average rental rates on two of the three acquired properties and four of the
five completed development properties. Additionally, the two disposed properties
had average rental rates significantly lower than the portfolio average. Overall
average occupancy increased slightly from 93.8% for the quarter ended September
30, 1998 to 94.0% for the quarter ended September 30, 1999.
Other property income for the quarter ended September 30, 1999 increased
$1.0 million over the quarter ended September 30, 1998. The increase in other
property income was due primarily to a $700,000 increase from revenue sources
such as telephone, cable and water.
Property operating and maintenance expenses increased $2.7 million or
10.6%, from $25.5 million to $28.2 million and increased as a percent of total
property income from 30.1% to 30.4% for the quarters ended September 30, 1998
and 1999, respectively. The increase in operating expense was due to a larger
number of apartment homes owned and in operation. Our operating expense ratios
increased primarily as a result of an increase in repairs and maintenance costs.
Real estate taxes increased $1.0 million from $8.2 million to $9.2 million
for the third quarters of 1998 and 1999, respectively, which represents an
annual increase of $56 per apartment home. The increase was primarily due to
increases in the valuations of properties held in our Texas and Florida
portfolios and increases in property tax rates.
General and administrative expenses increased $460,000 from $2.0 million to
$2.5 million, and increased as a percent of revenues from 2.3% to 2.6% for the
quarters ended September 30, 1998 and 1999, respectively. The increase is
primarily due to increases in salary and payroll related costs.
Interest expense increased from $13.4 million to $14.7 million primarily
due to interest on debt incurred to repurchase our shares under the common share
repurchase program. Interest capitalized was $4.1 million and $2.9 million for
the quarters ended September 30, 1999 and 1998, respectively.
Depreciation and amortization increased from $20.4 million to $22.7
million. This increase was due primarily to developments, renovations and
property acquisitions.
Gains on sale of properties and joint venture investments increased $2.3
million due to gains from the disposition of one multifamily property containing
232 units and our joint venture investment in two commercial office buildings.
The gains recorded on these dispositions were partially offset by a loss on the
<PAGE> 17
sale of a retail/commercial center. These gains do not include a loss on the
sale of a 408 unit property held in a joint venture of $738,000 which is
included in "Equity in Income of Joint Ventures".
COMPARISON OF THE NINE MONTHS ENDED SEPTEMBER 30, 1999 AND SEPTEMBER 30, 1998
The changes in operating results from period to period are primarily due to
the Oasis merger, the transfer of 19 properties totaling 5,119 apartment homes
into the Sierra-Nevada joint venture, development of five properties aggregating
1,759 apartment homes, the acquisition of five properties containing 2,226
apartment homes, the disposition of eight properties containing 1,752 apartment
homes and an increase in net operating income generated by the stabilized
portfolio. The weighted average number of apartment homes for the first nine
months of 1999 increased by 3,592 apartment homes, or 8.6%, from 41,712 to
45,304. Total operating properties were 128 and 125 at September 30, 1999 and
1998, respectively, and exclude those owned through joint venture investments.
The weighted average number of apartment homes of 45,304 and 41,712 exclude the
impact of our ownership interest in apartment homes owned in joint ventures
throughout the nine month periods. The 125 operating properties at September 30,
1998 have been restated to reflect the combination of operations of two adjacent
properties in Nevada, Texas and Florida at December 31, 1998.
Rental income increased $33.0 million or 15.0% from $219.6 million to
$252.6 million for the nine months ended September 30, 1998 and 1999,
respectively. Rental income per apartment home per month increased $34 or 5.8%,
from $585 to $619 for the nine months ended September 30, 1998 and 1999,
respectively. The increase was primarily due to increased revenue growth from
the stabilized real estate portfolio, higher average rental rates on properties
added to the portfolio through the Oasis merger, four of the five acquired
properties and completion of new development properties. Additionally, seven of
the eight disposed properties had average rental rates significantly lower than
the portfolio average.
Other property income increased $3.0 million from $13.5 million to $16.6
million for the nine months ended September 30, 1998 and 1999, respectively. The
increase in other property income was due to a larger number of apartment homes
owned and in operation and a $1.9 million increase from revenue sources such as
telephone, cable and water.
Property operating and maintenance expenses increased $7.6 million, from
$72.8 million to $80.3 million, but decreased as a percent of total property
income from 31.2 % to 29.8% for the nine months ended September 30, 1998 and
1999, respectively. Our operating expense ratio decreased from the prior year
primarily as a result of the impact of our April 1, 1998 adoption of a new
accounting policy, whereby expenditures for floor coverings, appliances and HVAC
unit replacements are expensed in the first five years of a property's life and
capitalized thereafter. Prior to the adoption of this policy, we had been
expensing these costs. Had this policy been adopted as of January 1, 1998, the
nine months ended September 30, 1998 operating expense ratio would have been
30.7%.
Real estate taxes increased $4.5 million from $23.1 million to $27.7
million for the nine months ended September 30, 1998 and 1999, respectively,
which represents an annual increase of $75 per apartment home. The increase was
primarily due to increases in the valuations of renovated, acquired and
developed properties and increases in property tax rates. This increase per
apartment home was partially offset by lower property taxes in the portfolio
added through the Oasis merger.
General and administrative expenses increased $1.7 million from $5.5
million to $7.3 million, and increased as a percent of revenues from 2.3% to
2.6%. The general and administrative expense ratio increase is mainly
attributable to the impact of our March 20, 1998 adoption of Issue No. 97-11,
Accounting for Internal Costs Relating to Real Estate Property Acquisitions,
discussed in Note 1, which is partially offset by efficiencies resulting from
operating a larger portfolio.
<PAGE> 18
Interest expense increased from $36.7 million to $42.2 million due to
increased indebtedness related to the Oasis merger, completed developments,
renovations and property acquisitions. Additionally, interest expense increased
due to interest on debt incurred to repurchase our shares under the common share
repurchase program. Interest capitalized was $6.4 million and $12.3 million for
the nine months ended September 30, 1998 and 1999, respectively.
Depreciation and amortization increased from $57.4 million to $65.5
million. This increase was due primarily to the Oasis merger, developments,
renovations and property acquisitions.
Gains on sale of properties and joint venture investments increased $3.0
million due to gains from the disposition of two multifamily properties
containing 358 units and our joint venture investment in two commercial office
buildings. The gains recorded on these dispositions were partially offset by a
loss on the sale of a retail/commercial center. These gains do not include a
loss on the sale of a 408 unit property held in a joint venture of $738,000
which is included in "Equity in Income of Joint Ventures".
LIQUIDITY AND CAPITAL RESOURCES
FINANCIAL STRUCTURE
We intend to continue maintaining what management believes to be a
conservative capital structure by:
(i) using a prudent combination of debt and common and preferred
equity;
(ii) extending and sequencing the maturity dates of our debt where
possible;
(iii) managing interest rate exposure using fixed rate debt and
hedging, where appropriate;
(iv) borrowing on an unsecured basis in order to maintain a
substantial number of unencumbered assets; and
(v) maintaining conservative coverage ratios.
The interest expense coverage ratio, net of capitalized interest, was 3.8
and 3.7 times for the nine months ended September 30, 1999 and 1998,
respectively, and 3.7 times and 3.8 times for the quarters ended September 30,
1999 and 1998, respectively. At September 30, 1999 and 1998, 75.7% and 70.6%,
respectively, of our properties (based on invested capital) were unencumbered.
LIQUIDITY
We intend to meet our short-term liquidity requirements through cash flows
provided by operations, our unsecured line of credit discussed in the financial
flexibility section and other short-term borrowings. We expect that our ability
to generate cash will be sufficient to meet our short-term liquidity needs,
which include:
(i) normal operating expenses;
(ii) debt service requirements;
(iii) capital expenditures;
(iv) property developments;
(v) common share repurchases; and
(vi) common and preferred distributions.
We consider our long-term liquidity requirements to be the repayment of
maturing secured debt and borrowings under our unsecured line of credit and
funding of acquisitions. We intend to meet our long-term liquidity requirements
through the use of common and preferred equity capital, senior unsecured debt
and property dispositions. As of September 30, 1999, we had $340 million
available under the unsecured line of credit, $75 million available under our
<PAGE> 19
universal shelf registration, and $14.5 million available under our medium-term
note program. We have significant unencumbered real estate assets which could be
sold or used as collateral for financing purposes should other sources of
capital not be available.
In September 1999, we announced that our Board of Trust Managers had
declared a dividend in the amount of $0.52 per share for the third quarter of
1999 which was paid on October 15, 1999 to all common shareholders of record as
of September 30, 1999. We paid an equivalent amount per unit to holders of the
common operating partnership units. This distribution to common shareholders and
holders of common operating partnership units equates to an annualized dividend
rate of $2.08 per share or unit.
In September 1999, we declared a quarterly dividend on our Series A
Cumulative Preferred Shares, which were issued in conjunction with the merger of
Oasis. The dividend in the amount of $0.5625 per share is payable November 15,
1999 to all preferred shareholders of record as of September 30, 1999.
FINANCIAL FLEXIBILITY
We concentrate our growth efforts toward selective development and
acquisition opportunities in our current markets, and through the acquisition of
existing operating portfolios and development properties in selected new
markets. During the nine months ended September 30, 1999, we incurred $154.9
million in development costs and no acquisition costs. We are developing eight
additional properties at an aggregate cost of approximately $281.9 million. We
fund our developments and acquisitions through a combination of equity capital,
partnership units, medium-term notes, construction loans, other debt securities
and the unsecured line of credit. We also seek to selectively dispose of assets
that have a lower projected net operating income growth rate than the overall
portfolio, or no longer conform to our operating and investment strategies. Such
sales generate capital for acquisitions and new developments or for debt
reduction.
In August 1999, we entered into a line of credit with 14 banks for a total
commitment of $375 million. This line of credit replaces our three previous
lines of credit which totaled $275 million. The new line of credit is scheduled
to mature in August 2002. The scheduled interest rate on the line of credit is
currently based on a spread over LIBOR or Prime. The scheduled interest rates
are subject to change as our credit ratings change. Advances under the line of
credit may be priced at the scheduled rates, or we may enter into bid rate loans
with participating banks at rates below the scheduled rates. These bid rate
loans have terms of six months or less and may not exceed the lesser of $187.5
million or the remaining amount available under the line of credit. The line of
credit is subject to customary financial covenants and limitations.
As an alternative to our unsecured line of credit, we from time to time
borrow using competitively bid unsecured short-term notes with lenders who may
or may not be a part of the unsecured line of credit bank group. Such borrowings
vary in term and pricing and are typically priced at interest rates below those
available under the unsecured line of credit.
During the third quarter of 1999, our operating partnership issued $35.5
million of 8.25% Series C Cumulative Redeemable Perpetual Preferred Units.
Distributions on the preferred units are payable quarterly in arrears. The
preferred units are redeemable for cash by the operating partnership on or after
the fifth anniversary of issuance at par plus the amount of any accumulated and
unpaid distributions. The preferred units are convertible after 10 years by the
holder in to our 8.25% Series C Cumulative Redeemable Perpetual Preferred
Shares. The preferred units are subordinate to present and future debt.
On February 23, 1999, our operating partnership issued $100 million of 8.5%
Series B Cumulative Redeemable Perpetual Preferred Units. Distributions on the
preferred units are payable quarterly in arrears. The preferred units are
redeemable for cash by the operating partnership on or after the fifth
anniversary of issuance at par plus the amount of any accumulated and unpaid
distributions. The preferred units are convertible after 10 years by the holder
<PAGE> 20
into our 8.5% Series B Cumulative Redeemable Perpetual Preferred Shares. The
preferred units are subordinate to present and future debt.
During the first quarter of 1999, we issued $39.5 million aggregate
principal amounts of senior unsecured notes from our $196 million medium-term
note shelf registration. These fixed rate notes, due in January 2002 through
January 2009, bear interest at a weighted average rate of 7.07%, payable
semiannually on January 15 and July 15. The net proceeds were used to reduce
indebtedness outstanding under the unsecured lines of credit.
On April 9, 1999, we issued $15 million principal amounts of senior
unsecured notes from our $196 million medium-term note shelf registration. These
fixed rate notes, due in March 2002, bear interest at a rate of 6.74%, payable
semiannually on March 15 and September 15. The net proceeds were used to reduce
indebtedness outstanding under the unsecured lines of credit.
On April 15, 1999, we issued from our $500 million shelf registration an
aggregate principal amount of $200 million of five-year senior unsecured notes.
Interest on the notes accrues at an annual rate of 7.0% and is payable
semi-annually on April 15 and October 15, commencing on October 15, 1999. The
notes are direct, senior unsecured obligations and rank equally with all other
unsecured and unsubordinated indebtedness. The notes may be redeemed at any time
at our option subject to a make-whole provision. The proceeds from the sale of
the notes were $197.7 million, net of issuance costs. We used the net proceeds
to reduce $171 million of indebtedness under the unsecured lines of credit and
for general working capital purposes.
During September 1999, we executed three interest rate swap agreements
totaling $70 million which are scheduled to mature in October 2000. These swaps
are being used as a hedge of interest rate exposure on our $90 million medium
term notes issued in October 1998 which mature in October 2000. Currently, the
interest rate on the medium term notes is fixed at 7.23%. The interest rates on
the swaps are based on the one-month LIBOR rate plus a spread resulting in an
effective interest rate on the swaps of 6.58% at September 30, 1999.
At September 30, 1999, the weighted average interest rate on floating rate
debt was 6.07%.
FUNDS FROM OPERATIONS
Management considers FFO to be an appropriate measure of performance of an
equity REIT. The National Association of Real Estate Investment Trusts currently
defines FFO as net income (computed in accordance with generally accepted
accounting principles), excluding gains (or losses) from debt restructuring and
sales of property, plus real estate depreciation and amortization, and after
adjustments for unconsolidated partnerships and joint ventures. Our definition
of diluted FFO assumes conversion at the beginning of the period of all dilutive
convertible securities, including minority interest, which are convertible into
common equity.
We believe that in order to facilitate a clear understanding of our
consolidated historical operating results, FFO should be examined in conjunction
with net income as presented in the consolidated financial statements and data
included elsewhere in this report. FFO is not defined by generally accepted
accounting principles. FFO should not be considered as an alternative to net
income as an indication of our operating performance or to net cash provided by
operating activities as a measure of our liquidity. Further, FFO as disclosed by
other REITs may not be comparable to our calculation. Our diluted FFO for the
three months ended September 30, 1999 increased slightly over the three months
ended September 30, 1998. The increase in diluted FFO during the three months
ended September 30, 1999 from property acquisitions, developments and
improvements in the performance of the stabilized properties was offset by the
repurchase of our shares under our common share repurchase program. Our diluted
<PAGE> 21
FFO for the nine months ended September 30, 1999 increased $14.4 million over
the nine months ended September 30, 1998. This increase in diluted FFO was due
to the Oasis merger, property acquisitions, developments and improvements in the
performance of the stabilized properties in our portfolio.
The calculation of basic and diluted FFO for the three and nine months
ended September 30, 1999 and 1998 follows:
(In thousands)
<TABLE>
<CAPTION>
Three Months Nine Months
Ended September 30, Ended September 30,
------------------------- -------------------------
1999 1998 1999 1998
---------- ---------- ----------- ----------
<S> <C> <C> <C> <C>
FUNDS FROM OPERATIONS:
Net income to common shareholders $ 13,535 $ 14,650 $ 40,079 $ 33,179
Real estate depreciation 22,315 20,070 64,388 56,364
Real estate depreciation from unconsolidated ventures 797 754 2,423 1,498
Preferred share dividends 2,343
Loss on sale of property held in unconsolidated ventures 738 738
Gain on sale of properties and joint venture interests (2,259) (2,979)
---------- ---------- ----------- ----------
FUNDS FROM OPERATIONS - BASIC 35,126 35,474 104,649 93,384
Preferred share dividends 2,343 2,343 7,029 4,686
Minority interest 892 59 1,850 1,043
Interest on convertible subordinated debentures 63 69 195 249
Amortization of deferred costs on convertible debentures 7 6 19 24
---------- ---------- ----------- ----------
FUNDS FROM OPERATIONS - DILUTED $ 38,431 $ 37,951 $ 113,742 $ 99,386
========== ========== =========== ==========
WEIGHTED AVERAGE SHARES - BASIC 40,939 44,370 41,668 40,115
Common share options and awards granted 452 387 414 414
Preferred shares 3,207 3,207 3,207 2,150
Minority interest units 2,621 2,680 2,646 2,587
Convertible subordinated debentures 145 156 148 188
========== ========== =========== ==========
WEIGHTED AVERAGE SHARES - DILUTED 47,364 50,800 48,083 45,454
========== ========== =========== ==========
</TABLE>
INFLATION
We lease apartments under lease terms generally ranging from six to
thirteen months. Management believes that such short-term lease contracts lessen
the impact of inflation due to our ability to adjust rental rates to market
levels as leases expire.
YEAR 2000 CONVERSION
We have recognized the need to ensure that our computer equipment and
software ("computer systems"), other equipment and operations will not be
adversely impacted by the change to the calendar Year 2000. As such, we have
taken steps to identify and resolve potential areas of risk by implementing a
comprehensive Year 2000 action plan. The plan is divided into four phases:
identification, assessment, notification/certification, and testing/contingency
plan development; and includes three major elements: computer systems, other
equipment and third parties. We are on the fourth phase for our computer
systems, other equipment and third party services.
We believe that the Year 2000 issue will not pose significant operating
problems for our computer systems, since the majority of computer equipment and
software products we utilize are already compliant or were converted or modified
as part of system upgrades unrelated to the Year 2000 issue. We are in the
<PAGE> 22
process of completing a contingency plan which will permit our primary computer
systems operations to continue if the on-going testing of such conversions and
modifications reveals any Year 2000 issues presently unknown to us.
Our estimated total cost of addressing the Year 2000 issues with respect to
our own computer systems, other equipment and operations is expected to be
minimal since the cost of any computer systems upgrades and conversions to
specifically address the Year 2000 issues have been and are expected to be
minimal. Additionally, the majority of Year 2000 issues are being addressed by
use of internal resources and such future internal costs are expected to be
minimal as well. We do not separately track internal cost, which primarily
consist of payroll and related costs, incurred on Year 2000 issues. We have not
estimated any time or other internal costs that may be incurred by us as a
result of the failure of any third parties to become Year 2000 ready or costs to
implement any contingency plans.
We are communicating with our key third party service providers and
vendors, including those who have previously sold equipment to us, to obtain
information and compliance certificates, if possible, regarding their state of
readiness with respect to the Year 2000 issue. As of November 10, 1999, 99% of
key third party service providers have responded with compliance certificates.
Failure of certain third parties to remediate Year 2000 issues affecting their
respective businesses on a timely basis, or to implement contingency plans
sufficient to permit uninterrupted continuation of their businesses in the event
of a failure of their systems, could have a material adverse impact on our
business and results of operations. Final determination of third party Year 2000
readiness is substantially complete. None of the responses received from third
party service providers as of November 10, 1999 have indicated any problem with
bringing their services into Year 2000 compliance. We intend to continue to
monitor the progress made by third parties, test critical system interfaces and
formulate appropriate contingency and business continuation plans to address
third party issues identified through our evaluations and assessments.
We presently believe that the worst case scenario with respect to the Year
2000 issues is the failure of third party service providers, including utility
suppliers and banks, to become Year 2000 compliant. This could result in
interruptions in services to our apartment communities for a period of time and
could adversely affect our access to credit and money markets which, in turn,
could result in loss of normal operating capacity. If our computer systems
completely fail, we would be able to continue affected functions either manually
or through non-Year 2000 compliant systems. We do not believe that the increased
costs associated with such interruptions from both third party service failure
and computer system failure could exceed $1 million.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
No material changes have occurred since our Annual Report on Form 10-K for
the year ended December 31, 1998.
<PAGE> 23
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
None
Item 2. Changes in Securities and Use of Proceeds
None
Item 3. Defaults Upon Senior Securities
None
Item 4. Submission of Matters to a Vote of Security Holders
None
Item 5. Other Information
None
Item 6. Exhibits and Reports on Form 8-K
(a) 10.1 Form of Credit Agreement dated August 18, 1999 between Bank
of America, N.A. and the registrant
11.1 Statement regarding Computation of Earnings Per Common Share
27.1 Financial Data Schedule (filed only electronically with the
Commission)
(b) Reports on Form 8-K
No reports on Form 8-K have been filed by the registrant during
the quarter for which this report is filed.
<PAGE> 24
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on our behalf by the
undersigned thereunto duly authorized.
CAMDEN PROPERTY TRUST
/s/ G. Steven Dawson November 12, 1999
- -------------------------------- --------------------------
G. Steven Dawson Date
Sr. Vice President of Finance,
Chief Financial Officer and Treasurer
(Duly Authorized Officer and
Principal Financial and Accounting Officer)
/s/ Dennis M. Steen November 12, 1999
- -------------------------------- --------------------------
Dennis M. Steen Date
Vice President - Controller and Chief
Accounting Officer
<PAGE> 25
EXHIBIT 10.1
FORM OF
CREDIT AGREEMENT
AMONG
CAMDEN PROPERTY TRUST
AS BORROWER
BANK OF AMERICA, N.A.
AS ADMINISTRATIVE AGENT
AND
THE LENDERS NAMED HEREIN
AS LENDERS
AS ARRANGED BY
BANC OF AMERICA SECURITIES LLC
AS SOLE LEAD ARRANGER
DATED AS OF
AUGUST 18, 1999
<PAGE> 26
vi
TABLE OF CONTENTS
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ARTICLE I
TERMS DEFINED.....................................................................................................1
SECTION 1.1. DEFINITIONS..........................................................................1
SECTION 1.2. SINGULAR AND PLURAL; GENDER.........................................................23
SECTION 1.3. SUBSTANTIVE DEFINITIONS.............................................................23
SECTION 1.4. MONEY...............................................................................23
SECTION 1.5. CAPTIONS; REFERENCES................................................................23
SECTION 1.6. ACCOUNTING TERMS AND DETERMINATIONS.................................................23
ARTICLE II
COMMITMENT.......................................................................................................24
SECTION 2.1. COMMITMENT..........................................................................24
SECTION 2.2. METHOD OF BORROWING.................................................................25
SECTION 2.3 Competitive Bid Loans...............................................................26
SECTION 2.4. FEES................................................................................30
SECTION 2.5. DISBURSEMENT AND PERFORMANCE BY LENDERS.............................................31
ARTICLE III
TERMS OF THE CREDIT FACILITIES...................................................................................33
SECTION 3.1. NOTES...............................................................................33
SECTION 3.2. MATURITY; MANDATORY PRINCIPAL REDUCTIONS............................................33
SECTION 3.3. INTEREST RATE.......................................................................33
SECTION 3.4. INTEREST PAYMENTS...................................................................33
SECTION 3.5. CONVERSION OF ADVANCES AND INTEREST RATE ELECTIONS..................................34
SECTION 3.6. REDUCTION OF COMMITMENT AMOUNT; CONSEQUENTIAL LOSS..................................35
SECTION 3.7. SCHEDULES ON NOTES..................................................................36
SECTION 3.8. GENERAL PROVISIONS AS TO PAYMENTS...................................................36
SECTION 3.9. APPLICATION OF PAYMENTS.............................................................37
SECTION 3.10. POST-DEFAULT INTEREST; PAST DUE PRINCIPAL AND INTEREST..............................37
SECTION 3.11. COMPUTATION OF INTEREST AND FEES....................................................37
SECTION 3.12. LENDERS' CAPITAL ADEQUACY............................................................37
SECTION 3.13. REGULATORY CHANGES; INDEMNIFICATION FOR FAILURE TO PAY WHEN DUE.....................38
SECTION 3.14. TAXES...............................................................................39
SECTION 3.15. EXTENSION OPTION....................................................................41
SECTION 3.16. ANNUAL RENEWAL......................................................................42
SECTION 3.17. REPLACEMENT OF A LENDER.............................................................44
ARTICLE IV
CONDITIONS TO CLOSING AND ADVANCES...............................................................................44
SECTION 4.1. CONDITIONS TO CLOSING...............................................................44
SECTION 4.2. CONDITIONS TO ALL ADVANCES..........................................................46
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<PAGE> 27
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ARTICLE V
UNENCUMBERED PROPERTIES POOL AND GUARANTIES......................................................................46
SECTION 5.1. UNENCUMBERED PROPERTIES POOL........................................................46
SECTION 5.2. NEGATIVE PLEDGE AGREEMENTS..........................................................47
SECTION 5.3. ADDITIONAL GUARANTOR SUBSIDIARIES...................................................48
SECTION 5.4. OWNERSHIP OF GUARANTOR SUBSIDIARIES.................................................48
SECTION 5.5. PARTNERSHIP MATTERS.................................................................49
SECTION 5.6. GUARANTY PROCEEDS...................................................................49
ARTICLE VI
REPRESENTATIONS AND WARRANTIES...................................................................................50
SECTION 6.1. EXISTENCE AND POWER OF BORROWER.....................................................50
SECTION 6.2. EXISTENCE AND POWER OF GUARANTOR SUBSIDIARIES.......................................50
SECTION 6.3. AUTHORIZATION; CONTRAVENTION........................................................50
SECTION 6.4. ENFORCEABLE OBLIGATIONS.............................................................50
SECTION 6.5. FINANCIAL INFORMATION...............................................................51
SECTION 6.6. LITIGATION..........................................................................51
SECTION 6.7. ERISA...............................................................................52
SECTION 6.8. TAXES AND FILING OF TAX RETURNS.....................................................52
SECTION 6.9. OWNERSHIP OF ASSETS.................................................................52
SECTION 6.10. BUSINESS; COMPLIANCE................................................................53
SECTION 6.11. LICENSES, PERMITS...................................................................53
SECTION 6.12. COMPLIANCE WITH LAW.................................................................53
SECTION 6.13. UTILITIES AND ACCESS................................................................53
SECTION 6.14. FULL DISCLOSURE.....................................................................54
SECTION 6.15. ENVIRONMENTAL MATTERS...............................................................54
SECTION 6.16. PURPOSE OF CREDIT...................................................................55
SECTION 6.17. GOVERNMENTAL REGULATIONS............................................................55
SECTION 6.18. INSURANCE...........................................................................55
SECTION 6.19. SOLVENCY............................................................................55
SECTION 6.20. YEAR 2000 COMPLIANCE................................................................56
ARTICLE VII
AFFIRMATIVE COVENANTS............................................................................................56
SECTION 7.1. INFORMATION FROM BORROWER...........................................................56
SECTION 7.2. BUSINESS OF BORROWER; REIT STATUS; NYSE LISTING.....................................58
SECTION 7.3. RIGHT OF INSPECTION; CONFIDENTIALITY................................................58
SECTION 7.4. MAINTENANCE OF INSURANCE............................................................59
SECTION 7.5. MAINTENANCE AND USE.................................................................59
SECTION 7.6. PAYMENT OF TAXES, IMPOSITIONS AND CLAIMS............................................60
SECTION 7.7. COMPLIANCE WITH LAWS AND DOCUMENTS..................................................60
SECTION 7.8. ENVIRONMENTAL LAW COMPLIANCE AND INDEMNITY..........................................60
SECTION 7.9. COVENANT COMPLIANCE.................................................................61
SECTION 7.10. QUANTITY AND QUALITY OF DOCUMENTS...................................................61
SECTION 7.11. USE OF PROCEEDS.....................................................................61
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<PAGE> 28
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Section 7.12. Development Funds...................................................................62
SECTION 7.13 YEAR 2000 COMPLIANCE................................................................62
SECTION 7.14. ADDITIONAL DOCUMENTS................................................................62
ARTICLE VIII
NEGATIVE COVENANTS...............................................................................................62
SECTION 8.1. MINIMUM NET WORTH...................................................................62
SECTION 8.2. LIABILITIES TO ASSETS RATIOS........................................................62
SECTION 8.3. INTEREST COVERAGE RATIO.............................................................63
SECTION 8.4. FIXED CHARGE COVERAGE RATIO.........................................................63
SECTION 8.5. DEBT LIMITATIONS....................................................................63
SECTION 8.6. LIMITATION ON SALE OR TRANSFER OF ASSETS............................................63
SECTION 8.7. PERMITTED LIENS.....................................................................63
SECTION 8.8. CONSOLIDATIONS, MERGERS, AND MAINTENANCE............................................63
SECTION 8.9. MANAGEMENT OF PROPERTY..............................................................64
SECTION 8.10. INTENTIONALLY DELETED...............................................................64
SECTION 8.11. LIMITATION ON DISTRIBUTIONS.........................................................64
SECTION 8.12. INVESTMENTS.........................................................................64
SECTION 8.13. NEGATIVE PLEDGE.....................................................................65
SECTION 8.14. TRANSACTIONS WITH AFFILIATES........................................................66
SECTION 8.15. EMPLOYEE PLANS......................................................................66
SECTION 8.16. USE VIOLATIONS......................................................................66
SECTION 8.17. EXCEPTIONS TO COVENANTS.............................................................66
SECTION 8.18. FISCAL YEAR AND ACCOUNTING METHODS..................................................67
SECTION 8.19. GOVERNMENTAL REGULATIONS............................................................67
SECTION 8.20. TREASURY STOCK......................................................................67
ARTICLE IX
DEFAULTS AND REMEDIES............................................................................................67
SECTION 9.1. EVENTS OF DEFAULT...................................................................67
SECTION 9.2. NOTICE AND CURE.....................................................................70
SECTION 9.3. REMEDIES............................................................................70
SECTION 9.4. RIGHTS OF SET-OFF...................................................................71
SECTION 9.5. REMEDIES CUMULATIVE, CONCURRENT AND NON-EXCLUSIVE...................................72
SECTION 9.6. NO CONDITIONS PRECEDENT TO EXERCISE REMEDIES........................................72
SECTION 9.7. WAIVERS.............................................................................72
SECTION 9.8. DISCONTINUANCE OF PROCEEDINGS.......................................................73
SECTION 9.9. APPLICATION OF PROCEEDS.............................................................73
ARTICLE X
AGENTS AND THE LENDERS...........................................................................................73
SECTION 10.1. APPOINTMENT AND AUTHORIZATION OF AGENTS.............................................73
SECTION 10.2. POSSESSION OF INSTRUMENTS BY ADMINISTRATIVE AGENT...................................74
SECTION 10.3. EXPENSES............................................................................75
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<PAGE> 29
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SECTION 10.4. DELEGATION OF DUTIES; RELIANCE; CONSULTATION........................................75
--------------------------------------------
SECTION 10.5. LIMITATION OF LIABILITY.............................................................76
-----------------------
SECTION 10.6. DEFAULT.............................................................................77
-------
SECTION 10.7. LENDERS=DECISIONS...................................................................77
-----------------
SECTION 10.8. LIMITATION OF LIABILITY OF LENDERS..................................................78
----------------------------------
SECTION 10.9. RELATIONSHIP OF LENDERS.............................................................78
-----------------------
SECTION 10.10. DEBTOR-CREDITOR RELATIONSHIP........................................................78
----------------------------
SECTION 10.11. CREDIT DECISIONS....................................................................78
----------------
SECTION 10.12. REMOVAL OF ANY AGENT................................................................79
--------------------
SECTION 10.13. RESIGNATION BY ANY AGENT............................................................79
------------------------
SECTION 10.14. SHARING OF PAYMENTS AND SETOFFS.....................................................80
-------------------------------
SECTION 10.15. NON-ADVANCING LENDERS...............................................................80
---------------------
SECTION 10.16. BENEFIT OF LENDERS..................................................................81
------------------
SECTION 10.17. ROLES OF AGENTS.....................................................................81
---------------
ARTICLE XI
MISCELLANEOUS....................................................................................................81
SECTION 11.1. CONTINUING AGREEMENT................................................................81
SECTION 11.2. NOTICES.............................................................................82
SECTION 11.3. NO WAIVERS..........................................................................82
SECTION 11.4. EXPENSES; DOCUMENTARY TAXES; INDEMNIFICATION........................................82
SECTION 11.5. AMENDMENTS, WAIVERS AND CONSENTS....................................................83
SECTION 11.6. SURVIVAL............................................................................83
SECTION 11.7. PRIOR UNDERSTANDINGS; NO DEFENSES; RELEASE; NO ORAL AGREEMENTS......................83
SECTION 11.8. LIMITATION ON INTEREST..............................................................84
SECTION 11.9. INVALID PROVISIONS..................................................................85
SECTION 11.10. LENDER ASSIGNMENTS AND PARTICIPATIONS...............................................85
SECTION 11.11. BINDING EFFECT......................................................................87
SECTION 11.12. SENIOR DEBT; BORROWER SUBORDINATION.................................................87
SECTION 11.13. NONLIABILITY OF AGENT AND LENDER....................................................88
SECTION 11.14. PAYMENT SET ASIDE...................................................................88
SECTION 11.15. CONSTRUCTION........................................................................88
SECTION 11.16. TIME OF ESSENCE.....................................................................89
SECTION 11.17. INCONSISTENT PROVISIONS.............................................................89
SECTION 11.18. CONSOLIDATED GROUP..................................................................89
SECTION 11.19. SUBMISSION TO JURISDICTION; SERVICE OF PROCESS......................................89
SECTION 11.20. JURY TRIAL WAIVER...................................................................89
SECTION 11.21. APPLICABLE LAW......................................................................90
SECTION 11.22. COUNTERPARTS........................................................................90
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<PAGE> 30
SCHEDULES AND EXHIBITS
SCHEDULE I AGENTS, SOLE LEAD ARRANGER, LENDERS AND BORROWER
SCHEDULE II LIBOR MARGIN; VARIABLE RATE MARGIN; FACILITY FEE PERCENTAGE
SCHEDULE III ORGANIZATIONAL CHART
EXHIBIT A-1 FORM OF NOTE
EXHIBIT A-2 FORM OF COMPETITIVE BID NOTE
EXHIBIT B ADVANCE REQUEST
EXHIBIT C COMPLIANCE CERTIFICATE
EXHIBIT D ASSIGNMENT AND ACCEPTANCE
EXHIBIT E-1 COMPETITIVE BID QUOTE REQUEST
EXHIBIT E-2 INVITATION FOR COMPETITIVE BID QUOTE
EXHIBIT E-3 COMPETITIVE BID QUOTE
EXHIBIT F FORM OF GUARANTY AGREEMENT
EXHIBIT G CONTRIBUTION AGREEMENT
<PAGE> 31
CREDIT AGREEMENT
THIS CREDIT AGREEMENT is entered into as of the 18th day of August, 1999,
by and among CAMDEN PROPERTY TRUST, a Texas real estate investment trust, as
borrower, BANK OF AMERICA, N.A., a national banking association, as
administrative agent, CHASE BANK OF TEXAS, NATIONAL ASSOCIATION, as syndication
agent, FIRST NATIONAL BANK OF CHICAGO, as documentation agent, WELLS FARGO BANK,
N.A., as managing agent, and the financial institutions, and other entities
designated as "Lenders" on Schedule I hereto, as Schedule I may be modified or
supplemented from time to time.
PRELIMINARY STATEMENT
Camden Property Trust has requested that Agents and Sole Lead Arranger
(each as herein defined) arrange a credit facility in an amount equal to Three
Hundred Seventy-Five Million and No/100 Dollars ($375,000,000), with the ability
to further increase such credit facility up to Four Hundred Million and No/100
Dollars ($400,000,000). Upon and subject to the terms of this Agreement and the
other Loan Documents, Agents and the Lenders are willing to fund such credit
facility. Accordingly, in consideration of the mutual covenants contained
herein, Borrower, the Guarantor Subsidiaries, Agents and the Lenders (each as
herein defined) agree as follows:
ARTICLE I
TERMS DEFINED
SECTION 1.1. DEFINITIONS. The following terms, as used herein, have the
following meanings:
ADJUSTED CONSOLIDATED EBITDA Means, for any period, determined in
accordance with GAAP on a consolidated basis for Borrower and its Consolidated
Subsidiaries, an amount equal to the sum of consolidated net income before
taxes, extraordinary gains or losses, and preferred dividends (as determined in
accordance with GAAP), plus depreciation, plus amortization, plus interest
expense, each as deducted in determining such consolidated net income before
taxes, for such period, as adjusted for (i) any non-recurring items during such
period, (ii) any acquisitions and dispositions of Real Estate during such
period, and (iii) deduction of the Capital Improvement Reserve for all the Real
Estate.
ADJUSTED LIBOR RATE means on the applicable Effective Date, with
respect to a LIBOR Rate Advance, a rate per annum equal to the SUM OF (a) the
quotient of (i) the LIBOR Rate on the applicable Effective Date, divided by (ii)
the remainder of 1.00 minus the LIBOR Reserve Requirement, if any, on the
applicable Effective Date, plus (b) the LIBOR Margin in effect on such date.
<PAGE> 32
ADMINISTRATIVE AGENT means Bank of America, N.A., a national banking
association, in its capacity as administrative agent for the Lenders hereunder,
or any successor administrative agent pursuant to SECTION 10.12 or SECTION
10.13.
ADVANCE means an advance made by the Lenders (including advances under
Competitive Bid Notes) to Borrower under the Credit Facility pursuant to the
terms and conditions of this Agreement.
ADVANCE REQUEST has the meaning set forth in SECTION 2.2(A).
AFFILIATE means, as to any Person, any Subsidiary of such Person, or
any Person which, directly or indirectly, controls, is controlled by, or is
under common control with such Person. For the purposes of this definition,
"control" means the possession of the power to direct or cause the direction of
management and policies of such Person, whether through the ownership of voting
securities or other equity interests, by contract or otherwise.
AGENTS means Administrative Agent, Syndication Agent, Documentation
Agent and Managing Agent.
AGGREGATE LOAN PERCENTAGE means, with respect to each Lender, the
fraction, expressed as a percentage, obtained by dividing (a) the sum of the
aggregate principal amount outstanding on the date of determination under the
Note and the Competitive Bid Note payable to such Lender, by (b) the aggregate
principal amount outstanding on the date of determination under all of the Notes
and Competitive Bid Notes.
AGREEMENT means this Credit Agreement, including the Schedules and
Exhibits hereto, together with all renewals, extensions, modifications,
amendments, supplements, rearrangements and restatements thereof.
APPLICABLE DEBT RATING means at any time the Moody's Rating and the S&P
Rating if equivalent, and the lower of the Moody's Rating and the S&P Rating if
such ratings are not equivalent.
APPLICABLE ENVIRONMENTAL LAWS has the meaning set forth in SECTION 7.8.
APPLICABLE LENDING OFFICE means with respect to each Lender, such
Lender's domestic lending office (as designated by such Lender) for Variable
Rate Advances and Competitive Bid Fixed Rate Loans and such Lender's Eurodollar
lending office (as designated by such Lender) for LIBOR Rate Advances and
Competitive Bid Advances and Competitive Bid Pricing Loans.
APPLICABLE RATE means at any time, (a) with respect to a Variable Rate
Advance, a rate per annum equal to the Variable Rate, and (b) with respect to a
LIBOR Rate Advance, a rate per annum equal to the Adjusted LIBOR Rate.
ASSIGNMENT AND ACCEPTANCE has the meaning set forth in SECTION 11.10.
<PAGE> 33
AUTHORIZED OFFICER means, as to Borrower or any other Person, any of
its Chairman, Vice-Chairman, Chief Executive Officer, President, Executive Vice
President(s), Chief Financial Officer, Chief Accounting Officer, Treasurer or
Assistant Treasurer, who is duly authorized by the Board of Directors or other
governing board of such Person to execute the Loan Documents or any other
documents or certificates to be executed by such Person hereunder or in
connection with any Advance or any reporting requirements hereunder.
BASE RATE means, on any date of determination, the greater of (a) the
rate of interest per annum most recently announced by Administrative Agent as
its prime rate in effect at its principal office automatically fluctuating
upward and downward until and at the time specified in each such announcement
without special notice to Borrower or any other Person, which prime rate may not
necessarily represent the lowest or best rate actually charged to a customer or
(b) the sum of the Federal Funds Rate plus 100 basis points.
BORROWER means Camden Property Trust, a Texas real estate investment
trust, and its successors.
BORROWER CONTROL GROUP means a management group which includes the
President, the Chief Executive Officer, the Chief Financial Officer, and such
other officers and Trust Managers approved by the President, the Chief Executive
Officer and Chief Financial Officer.
BORROWING DATE means the date on which an Advance is made under this
Agreement.
BUSINESS DAY means (a) for all purposes other than as covered by clause
(b) of this definition, any day of the week, other than Saturday, Sunday or
other day Administrative Agent or any Lender is required or authorized by law or
executive order to close, and (b) with respect to all requests, notices and
determinations in connection with LIBOR Rate Advances and Competitive Bid
Pricing Loans, a day that is a Business Day described in clause (a) of this
definition and that is a day other than a day on which banks are required or
authorized to close in the London interbank market.
CAMDEN L.P. means Camden Operating L.P.,a Delaware limited partnership,
and its successors.
CAMDEN USA means Camden USA, Inc., a Delaware corporation, and its
successors.
CAPITAL EXPENDITURES means expenditures by Borrower or any of its
Consolidated Subsidiaries for fixed or capital assets, including without
limitation expenditures for maintenance and repairs.
<PAGE> 34
CAPITAL IMPROVEMENT RESERVE means with respect to all Real Estate or
all the Unencumbered Properties, as indicated, a reserve for Capital
Expenditures in an amount equal to the greater of (a) $200 per year multiplied
by a number which is the weighted average of the number of apartment units on
all Real Estate or all Unencumbered Properties, as the case may be, for the
applicable fiscal quarter, or (b) actual Capital Expenditures and reserves for
Capital Expenditures for or attributable to all the Real Estate or all the
Unencumbered Properties, as the case may be, on the books of Borrower for the
applicable quarter.
CASH EQUIVALENTS means, as to any Person, (a) securities issued or
directly and fully guaranteed or insured by the United States or any agency or
instrumentality thereof (PROVIDED that the full faith and credit of the United
States is pledged in support thereof) having maturities of not more than six
months from the date of acquisition, (b) time deposits and certificates of
deposit of any commercial bank organized under the laws of the United States,
any State thereof or the District of Columbia having, or which is the principal
banking subsidiary of a bank holding company organized under the laws of the
United States, any State thereof, or the District of Columbia having, capital,
surplus and undivided profits aggregating in excess of $200,000,000 and having a
long-term unsecured debt rating of at least "A" or the equivalent thereof from
S&P, or "A2" or the equivalent thereof from Moody's, with maturities of not more
than six months from the date of acquisition by such Person, (c) repurchase
obligations with a term of not more than seven days for underlying securities of
the types described in clause (a) above entered into with any bank meeting the
qualifications specified in clause (b) above, (d) commercial paper issued by any
Person incorporated in the United States rated at least A-1 or the equivalent
thereof by S&P or at least P-1 or the equivalent thereof by Moody's and in each
case maturing not more than six months after the date of acquisition by such
Person, (e) investments in money market funds substantially all of whose assets
are comprised of securities of the types described in clauses (a) through (d)
above.
CHANGE IN CONTROL means (a) the acquisition by a person (as such term
is used in Section 13(d) and Section 14(d)(2) of the Exchange Act) or related
persons constituting a group (as such term is used in Rule 13d-5 under the
Exchange Act) (other than the Borrower Control Group) of the beneficial
ownership of issued and outstanding shares of the voting stock or similar
ownership interests of Borrower, the result of which acquisition is that such
person or such group possess in excess of 50% of the combined voting power of
all the issued and outstanding voting stock or other similar ownership interests
of Borrower, or (b) either one of the individuals currently serving,
respectively, as (i) the Chairman and Chief Executive Officer of Borrower or
(ii) the President and Chief Operating Officer of Borrower, shall no longer be a
member of the Board of Trust Managers of Borrower, except in the case that the
replacement for such officer becomes a member of the Board of Trust Managers and
has been approved by Required Lenders in the manner described in SECTION
9.1(M)(1) such that no Event of Default has occurred thereunder, and in which
case this clause (b) shall thereafter apply to such replacement officer of
Borrower.
CLOSING DATE means the effective date of execution of this Agreement as
designated in the first paragraph of this Agreement.
CODE means the Internal Revenue Code of 1986, as amended.
<PAGE> 35
COMMITMENT means, with respect to each Lender, the amount indicated as
the Commitment for such Lender on SCHEDULE I, as such amount (a) may be reduced
or increased from time to time as a result of a reduction in the Total
Commitment pursuant to SECTION 3.6 or an increase in the Total Commitment
pursuant to SECTION 2.1(B), or as otherwise provided herein, or (b) may be
adjusted from time to time to account for any assignment of a Lender's interest
as provided in SECTION 11.10 of this Agreement, or pursuant to SECTION 3.16 or
otherwise.
COMMITMENT FEES means the Initial Commitment Fee and any commitment or
upfront fees to be paid to any Lenders upon any increase in the Total Commitment
as determined at the time of such increase.
COMMITMENT PERCENTAGE means, with respect to each Lender, the
percentage indicated for such Lender as its Commitment Percentage on SCHEDULE I,
as such percentage may be adjusted from time to time as a result of reduction or
increase in the Total Commitment as provided herein, or to account for any
assignments of a Lender's interest as provided in SECTION 11.10, or pursuant to
SECTION 3.16 or otherwise.
COMPETITIVE BID ACCEPTANCE NOTICE is defined in SECTION 2.3(F).
COMPETITIVE BID ADVANCE means a borrowing hereunder consisting of the
aggregate amount of the Competitive Bid Loans made on the same Borrowing Date by
some or all of the Lenders to Borrower on the same terms pursuant to Section
2.3.
COMPETITIVE BID AUCTION means a solicitation of Competitive Bid Quotes
setting forth Competitive Bid Margins and/or Competitive Bid Fixed Rates
pursuant to SECTION 2.3.
COMPETITIVE BID AUCTION FEE has the meaning set forth in SECTION
2.4(G).
COMPETITIVE BID FIXED RATE means a rate per annum equal to the Base
Rate plus or minus a margin, or other fixed interest rate, offered by a Lender
for a Competitive Bid Fixed Rate Loan.
COMPETITIVE BID FIXED RATE LOAN means a Competitive Bid Loan made by a
Lender pursuant to SECTION 2.3, which bears interest at a Competitive Bid Fixed
Rate selected by Borrower.
COMPETITIVE BID LOAN means either a Competitive Bid Pricing Loan or a
Competitive Bid Fixed Rate Loan.
COMPETITIVE BID MARGIN means the margin above or below, as applicable,
the applicable Adjusted LIBOR Rate offered for a Competitive Bid Pricing Loan,
expressed as a percentage (rounded to the nearest 1/100 of 1%).
<PAGE> 36
COMPETITIVE BID NOTE means a promissory note in substantially the form
of EXHIBIT A-2, with appropriate insertions, evidencing Competitive Bid Loans
made by a Lender, duly executed and delivered by Borrower and payable to the
order of each Lender, each in the principal face amount equal to 50% of the
Total Commitment (provided, that, in no event shall the aggregate amount funded
under all Competitive Bid Notes ever exceed 50% of the Total Commitment), as
such notes may be amended, renewed or extended from time to time, and all notes
given in amendment, replacement or restatement thereof, in whole or in part,
including without limitation in connection with an assignment of a Lender's
interest hereunder or the addition of a new Lender hereunder.
COMPETITIVE BID PRICING LOAN means a Competitive Bid Loan made by a
Lender pursuant to SECTION 2.3, which bears interest at a Eurodollar Bid Rate
selected by Borrower.
COMPETITIVE BID QUOTE means a Competitive Bid Quote substantially in
the form of EXHIBIT E-3 hereto completed and delivered by a Lender to
Administrative Agent in accordance with SECTION 2.3.
COMPETITIVE BID QUOTE REQUEST means a Competitive Bid Quote Request
substantially in the form of EXHIBIT E-1 hereto completed and delivered by
Borrower to Administrative Agent in accordance with SECTION 2.3.
COMPLIANCE CERTIFICATE means a certificate to be delivered by Borrower
to Administrative Agent as a condition to closing pursuant to SECTION 4.1(E),
and quarterly thereafter as required under SECTION 7.1(C), each such Compliance
Certificate to be in the form of EXHIBIT C hereto, with appropriate information
for the period covered thereby.
CONSEQUENTIAL LOSS has the meaning set forth in SECTION 3.6(B).
CONSOLIDATED or COMBINED means with reference to any term defined
herein, that term as applied to the accounts of the Borrower and its
Subsidiaries, consolidated or combined in accordance with GAAP.
CONSOLIDATED ASSETS means the aggregate book value of all assets of
Borrower and its Consolidated Subsidiaries, after deducting assets classified as
intangible assets, all as determined in accordance with GAAP.
CONSOLIDATED INTEREST EXPENSE means, for any period, the interest
expense (including capitalized interest) that is incurred and required to be
shown as such on the financial statements of Borrower and its Subsidiaries, on a
consolidated basis, prepared in accordance with GAAP.
CONSOLIDATED LIABILITIES means the amount of liabilities shown on the
consolidated balance sheet of Borrower and it Consolidated Subsidiaries prepared
in accordance with GAAP.
CONSOLIDATED NET WORTH means, as of any date, Consolidated Assets minus
Consolidated Liabilities.
CONSOLIDATED SUBSIDIARY means at any date any Subsidiary of Borrower
the accounts of which, in accordance with GAAP, would be consolidated with the
accounts of Borrower on the consolidated financial statements of Borrower as of
such date.
<PAGE> 37
CONTINGENT OBLIGATION of any Person means any obligation, contingent or
otherwise, of such Person (a) with respect to any Debt, lease, dividend or other
obligation of another Person if the primary purpose or intent of the Person
incurring such liability, or the primary effect, thereof, is to provide
assurance to the obligee of such liability that such liability will be paid or
discharged, or that any agreements relating thereto will be complied with, or
that the holders of such liability will be protected (in whole or in part)
against loss with respect thereto, including, without limitation, any obligation
to (i) to purchase or pay (or advance or supply funds for the purchase or
payment of) such Debt or other obligation (whether arising by virtue of
partnership arrangements, by agreements to keep-well, to purchase any Real
Estate or other assets, goods, securities or services, to take-or-pay, or to
maintain financial statement conditions, by "comfort letter" or other similar
undertaking of support or otherwise), or (ii) 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), (b) creating any exposure, contingent or otherwise, directly
or indirectly, under any forward equity type products, derivatives or any other
exposure considered or treated as debt by any Ratings Agency, or (c) assuring
any creditor or purchaser from such Person against loss, including without
limitation, any recourse obligation with respect to loans or other receivables
sold with recourse to such Person, provided that the term Contingent Obligation
shall not include endorsements for collection or deposit in the ordinary course
of business.
CONTRIBUTION AGREEMENT means the Contribution Agreement in the form
attached hereto as EXHIBIT G, to be dated of even date herewith, executed by and
among the Borrower and the Guarantor Subsidiaries as of the Closing Date, and by
each other Person that becomes a Guarantor Subsidiary after the Closing Date,
which joinder may be by a supplement thereto, or any separate new or replacement
Contribution Agreement signed by one or more Guarantor Subsidiaries after the
Closing Date, and all amendments, supplements, replacements and restatements
thereof.
CREDIT FACILITY means the revolving line of credit created pursuant to
this Agreement in an amount equal to $375,000,000 as of the Closing Date,
subject to increase up to $400,000,000 as provided in SECTION 2.1(B).
CREDIT PERIOD means the period commencing on the date of this Agreement
and ending on the Termination Date.
DEBENTURES means those certain 7.33% Convertible Subordinated
Debentures issued by Borrower prior to the date hereof.
<PAGE> 38
DEBT of any Person means at any date, without duplication, (a) all
indebtedness, obligations and liabilities of such Person which, in accordance
with GAAP and practices thereof, would be included in determining liabilities as
shown in the liability section of the balance sheet of such Person, including,
without limitation, the Obligations and all other indebtedness, obligations and
liabilities evidenced by bonds, debentures, notes or other similar instruments,
whether recourse or non-recourse and whether secured or unsecured, trade
payables, and structured financing transactions of any type, (b) all other
indebtedness (including capitalized lease obligations) of such Person on which
interest charges are customarily paid or accrued, (c) all obligations for
indebtedness in respect of Contingent Obligations of such Person and obligations
under interest rate swaps, hedge agreements and other similar agreements, (d)
the unfunded or unreimbursed portion of all letters of credit issued for the
account of such Person, (e) all obligations to purchase under agreements to
acquire, or otherwise to contribute money with respect to Development
Properties, and (f) all personal liability of such Person as a general partner
or joint venturer of a partnership or joint venture for obligations of such
partnership or joint venture of the nature described in (a) through (e)
preceding.
DEBT OFFERING means the issuance and sale to the general public or as a
private placement by the Borrower or any Consolidated Subsidiary subsequent to
the Closing Date of any debt securities of Borrower or any Consolidated
Subsidiary for cash or the right to receive payment in the future.
DEBTOR RELIEF LAWS means any applicable Laws pertaining to liquidation,
conservatorship, bankruptcy, moratorium, rearrangement, insolvency,
reorganization, receivership, composition, extension or adjustment of debt, or
similar Laws, domestic or foreign, affecting the rights or remedies of creditors
generally, in effect from time to time.
DEFAULT means any condition or event which constitutes an Event of
Default or which with the giving of notice or lapse of time or both would,
unless cured or waived, become an Event of Default.
DEFAULT RATE means the fluctuating per annum rate of interest equal to
the lesser of (a) four percent (4.0%) plus the Base Rate, or (b) the Maximum
Lawful Rate.
DESIGNATED SUCCESSOR AGENT means, at any given time, the Lender (other
than Administrative Agent) which has the largest Commitment, or if the Lenders
have no further commitment to lend hereunder, the largest Aggregate Loan
Percentage; PROVIDED, HOWEVER, if two or more such Lenders have the same
Commitment or Aggregate Loan Percentage, as the case may be, at such time, then
the Designated Successor Agent shall be such of those Lenders having the same
Commitment or Aggregate Loan Percentage, as the case may be, which has the
largest net worth; and, PROVIDED FURTHER, that if the Required Lenders object to
the newly named Designated Successor Agent, or if any Lender determined to be a
Designated Successor Agent declines to serve as successor Administrative Agent
in writing delivered to the outgoing Administrative Agent, within seven (7)
Business Days after such Designated Successor Agent is determined, then the
Lender other than Administrative Agent or such rejected or declining Designated
Successor Agent which has the next largest Commitment or Aggregate Loan
Percentage, as the case may be, shall be the Designated Successor Agent. For
each such Lender that is a member of a bank holding company, its net worth shall
be deemed to be the consolidated net worth of its bank holding company.
DEVELOPMENT PROPERTIES means Real Estate comprised of multi-family
projects under construction, or in pre-construction phases of the development
process, but not yet completed.
<PAGE> 39
DIDMCA means the Depositary Institutions Deregulation and Monetary
Control Act of 1980, Public Law 96-221, as amended, codified at 12 U.S.C.
'1735f-7.
DISTRIBUTION by any Person, means (a) with respect to any stock of any
class issued by such Person or any partnership, joint venture or other
beneficial ownership or equity interest of such Person, the retirement,
redemption, repurchase, or other acquisition for value of such stock,
partnership, joint venture or other equity interest, (b) the declaration or
payment (without duplication) of any dividend or other distribution, whether
monetary or in kind, on or with respect to any stock, partnership, joint venture
or other equity interest of any Person, and (c) any other payment or
distribution of assets of a similar nature or in respect of an equity
investment.
DOCUMENTATION AGENT means First National Bank of Chicago, in its
capacity as documentation agent for the Lenders hereunder, or any successor
documentation agent pursuant to SECTION 10.12 or SECTION 10.13.
EFFECTIVE DATE means the date selected by Borrower to be the first day
of the applicable Interest Period related to a LIBOR Rate Advance or a
Competitive Bid Pricing Loan.
ELIGIBLE ASSIGNEE means (a) a Lender; (b) an Affiliate of a Lender; and
(c) any other Person approved by Administrative Agent and, so long as no Default
is in existence and no Event of Default has occurred and is continuing, by
Borrower (which approval by Borrower and Administrative Agent shall not be
unreasonably withheld or delayed); provided, HOWEVER, that none of Borrower nor
any Affiliate of Borrower shall qualify as an Eligible Assignee.
EMPLOYEE PLAN means at any time an employee benefit plan as defined in
Section 3(3) of ERISA that is now or was previously maintained, sponsored or
contributed to by Borrower or any Guarantor Subsidiary or any ERISA Affiliate of
Borrower or any Guarantor Subsidiary.
EQUITY INTERESTS has the meaning set forth in SECTION 8.13.
EQUITY OFFERING means the issuance and sale by Borrower or any
Consolidated Subsidiary subsequent to the Closing Date of any equity securities
of Borrower or any Consolidated Subsidiary.
ERISA means the Employee Retirement Income Security Act of 1974, as
amended from time to time, together with all regulations issued pursuant
thereto.
ERISA AFFILIATE means any person that is treated as a single employer
with Borrower or any Guarantor Subsidiary under Section 414 of the Code.
ERISA REPORTABLE EVENT means a reportable event with respect to a
Guaranteed Pension Plan within the meaning of Section 4043 of ERISA and the
regulations promulgated thereunder as to which the requirement of notice has not
been waived.
<PAGE> 40
EURODOLLAR BID RATE means, with respect to a Competitive Bid Pricing
Loan made by a given Lender for the relevant Interest Period, the sum of (a) the
Adjusted LIBOR Rate (less the LIBOR Margin), and (b) the Competitive Bid Margin
offered by such Lender and accepted by Borrower pursuant to SECTION 2.3.
EVENT OF DEFAULT has the meaning set forth in SECTION 9.1.
EXCESS OUTSTANDINGS means the amount (if any) by which the then
outstanding aggregate principal balances of all the Notes and the Competitive
Bid Notes exceed the Maximum Available Amount, as determined on any date during
the term of this Agreement.
EXCHANGE ACT shall mean the Securities Exchange Act of 1934, as
amended.
EXTENSION FEE has the meaning set forth in SECTION 3.15(E).
EXTENSION OPTION has the meaning set forth in SECTION 3.15.
FACILITY FEE means the non-refundable annual fee equal to the product
of (a) the applicable percentage in effect based on the Applicable Debt Rating
as shown in SCHEDULE II, times (b) the Total Commitment, irrespective of usage,
calculated and payable as provided in SECTION 2.4(B).
FEDERAL FUNDS RATE means, for any day, the rate per annum (rounded
upwards if necessary, to the nearest 1/100th of 1%) equal to the weighted
average of the rates on overnight Federal funds transactions with members of the
Federal Reserve System arranged by Federal funds brokers on such day, as
published by the Federal Reserve Bank of New York on the Business Day next
succeeding such day, provided that (a) if such day is not a Business Day, the
Federal Funds Rate for such day shall be such rate on such transactions on the
next preceding Business Day as so published on the next succeeding Business Day,
and (b) if no such rate is so published on such next succeeding Business Day,
the Federal Funds Rate for such day shall be the average rate quoted to
Administrative Agent on such day on such transactions from three Federal funds
brokers of recognized standing.
FEE LETTERS means the various letter agreements to be executed by and
among Borrower, Administrative Agent and each Lender setting forth various fees
payable by Borrower to such Lender relating to the Credit Facility and all
amendments, modifications and supplements thereto and any restatements or
replacements thereof.
FISCAL YEAR means any fiscal year of Borrower commencing on January 1
and ending on December 31.
FIXED CHARGES means with respect to Borrower and its Consolidated
Subsidiaries for any period, the sum of all interest expense incurred (including
capitalized interest), and all scheduled principal payments (excluding balloon
payments) made or to have been made during such period, plus any Distributions
made during such period with respect to any stock or other similar ownership
interests other than common stock (or ownership interests equivalent to common
stock).
<PAGE> 41
FUNDS FROM OPERATIONS means the term "Funds from Operations" as such
term is defined by the National Association of Real Estate Investment Trusts, as
such term may be modified, revised or redefined from time to time by said
association, or if said association no longer exists or no longer promulgates a
definition for such term, then such other meaning as is selected by
Administrative Agent in its reasonable determination.
GAAP means principles that are (a) consistent with the principles
promulgated or adopted by the Financial Accounting Standards Board and its
predecessors, as in effect from time to time and (b) consistently applied with
past financial statements of the Borrower or any of its Subsidiaries adopting
the same principles; PROVIDED that a certified public account would, insofar as
the use of such accounting principles is pertinent, be in a position to deliver
an unqualified opinion (other than a qualification regarding changes in
generally accepted accounting principles) as to financial statements in which
such principles have been properly applied.
GENERAL PARTNER means CPT-GP, Inc., a Delaware corporation, the sole
general partner of Camden L.P., and its successors.
GOVERNMENTAL AUTHORITY means any government, any state or other
political subdivision thereof, any court, any governmental body, agency or
instrumentality, or any Person exercising executive, legislative, judicial,
regulatory or administrative functions of or pertaining to government, or any
arbitration authority.
<PAGE> 42
GROSS ASSET VALUE means on any date of determination, the sum of the
following: (a) all cash and Cash Equivalents of Borrower and the Consolidated
Subsidiaries, including without limitation restricted cash and escrow deposits
(as shown on Borrower's consolidated balance sheet), plus (b) the aggregate
value of all Development Properties, determined at cost, until the earlier of,
for each Development Property, (i) the first fiscal quarter in which
construction of such Development Property was completed for the entire fiscal
quarter or (ii) the first fiscal quarter in which the occupancy rate for the
average number of units (computed on a weighted average basis) in such
Development Property is at least 65%, plus (c) the quotient obtained by dividing
(i) Adjusted Consolidated EBITDA as of the last day of the immediately preceding
calendar quarter, and then annualized, adjusted to exclude in the calculation
thereof any income from Development Properties included under preceding clause
(b), by (ii) the Implied Capitalization Rate, plus (d) the book value determined
in accordance with GAAP (all as are shown on Borrower's consolidated balance
sheet) of (i) all undeveloped Real Estate, (ii) Investments of Borrower and its
Consolidated Subsidiaries in joint ventures and partnerships, (iii) notes,
mortgages and other evidences of indebtedness held by Borrower or any
Consolidated Subsidiary, and (iv) accounts receivable of Borrower and its
Consolidated Subsidiaries. In computing Gross Asset Value, once the aggregate of
all Investments by Borrower and its Consolidated Subsidiaries in any joint
ventures and partnerships (other than as a guarantor) exceeds two and one-half
percent (2.5%) of Gross Asset Value, then all such Investments shall be treated
on a pro rata basis such that Borrower shall be credited with a pro rata share
of income and investment and will be charged with a pro rata share of the
applicable expense and liability, with respect to such Investments, as if such
Investments were reflected on a consolidated basis. The pro rata treatment of
such Investments shall continue only so long as the aggregate amount of such
Investments is greater than two and one-half percent (2.5%) of Gross Asset
Value.
GROSS ASSET VALUE OF UNENCUMBERED PROPERTIES means on any date of
determination the sum of the following, provided that such values shall be
determined and included with respect only to Property that qualifies as an
Unencumbered Property and is in the Pool at such date: (a) the aggregate value
of all Development Properties, determined at cost, until the earlier of (i) the
first fiscal quarter in which construction of such Development Property was
completed for the entire fiscal quarter or (ii) the first fiscal quarter in
which the occupancy rate for the average number of units (computed on a weighted
average basis) in such Development Property is at least 65%, and (b) the
quotient obtained by dividing (i) Unencumbered Adjusted NOI for the immediately
preceding calendar quarter, and then annualized, adjusted to exclude in the
calculation thereof any income from Development Properties included under
preceding clause (a), by (ii) the Implied Capitalization Rate.
GROUND-LEASED QUALIFYING PROPERTIES means the following three (3)
properties in which the interest of Borrower or the respective Guarantor
Subsidiary is or may become a leasehold interest pursuant to a ground lease
approved by Administrative Agent: (a) property in Corpus Christi, Nueces County,
Texas, containing 7.494 and 4.841 acres, respectively, subject to ground leases
from Texas A&M University to Borrower as lessee, consisting of two tracts, and
commonly known as Miramar Apartments; (b) property in Louisville, Kentucky,
commonly known as the Park at Oxmoor; and (c) property in Phoenix, Maricopa
County, Arizona, subject to a future ground lease from the City of Phoenix, to
Camden USA, as lessee, commonly known as The Park at Arizona Center, in each
case only so long as the applicable ground lease remains in effect and Borrower
or Camden USA, as applicable, is not in default thereunder.
GUARANTEED PENSION PLAN means any employee pension benefit plan within
the meaning of Section 3(2) of ERISA maintained or contributed to by the
Borrower or any ERISA Affiliate the benefits of which are guaranteed on
termination in full or in part by the PBGC pursuant to Title IV of ERISA, other
than a Multiemployer Plan.
GUARANTOR SUBSIDIARIES means initially Camden USA and Camden L.P., and
each Consolidated Subsidiary of Borrower that becomes a Guarantor Subsidiary
after the date hereof pursuant to SECTION 5.3(A) or otherwise, and their
respective successors and assigns.
GUARANTY AGREEMENT means the Guaranty Agreement of even date herewith
executed by each of Camden USA and Camden L.P. and each Guaranty Agreement
executed by a Guarantor Subsidiary subsequent to the date hereof pursuant to
Section 5.3 or otherwise, in favor of Administrative Agent, for the ratable
benefit of the Lenders (subject, however, to the provisions in favor of Senior
Debt holders included in SECTION 5.6), guaranteeing full payment and performance
of the Obligations, as it may be amended, modified, supplemented, replaced or
restated from time to time, each such Guaranty Agreement to be substantially in
the form attached hereto as EXHIBIT F.
GUARANTY PROCEEDS has the meaning set forth in SECTION 5.6.
<PAGE> 43
IMPLIED CAPITALIZATION RATE means a capitalization rate per annum equal
to nine percent (9.0%), as such rate may be adjusted by Administrative Agent at
any time and from time to time in its reasonable discretion based on a national
index set by Korpacz Real Estate Investor Survey for multi-family properties;
provided that (i) after the first adjustment of the Implied Capitalization Rate
(which may be made by Administrative Agent at any time), such subsequent
adjustments shall not be made by Administrative Agent more than once in any
twelve (12) month period; (ii) no annual adjustment will increase the then
effective Implied Capitalization Rate by more than one-quarter percent (.25%)
per annum; and (iii) in no event shall the Implied Capitalization Rate at any
time be less than 9.0%.
IMPOSITIONS means all real estate and personal property taxes; charges
for any easement, license or agreement maintained for the benefit of any of the
real property of Borrower or any Guarantor Subsidiary, or any part thereof; and
all other taxes, charges and assessments and any interest, costs or penalties
with respect thereto, general and special, ordinary and extraordinary, foreseen
and unforeseen, of any kind and nature whatsoever, which at any time prior to or
after the execution hereof may be assessed, levied or imposed upon any of the
Real Estate, or any part thereof, or the ownership, use, sale, occupancy or
enjoyment thereof, in each case which, if not timely paid or otherwise
discharged, would materially and adversely affect (a) such ownership, use, sale,
occupancy or enjoyment, or (b) the financial condition of Borrower or any
Consolidated Subsidiary.
IMPROVEMENTS means all improvements now or at any time hereafter
located on any of the Real Estate (or any designated part thereof).
INITIAL COMMITMENT FEE has the meaning set forth in SECTION 2.4(A).
INITIAL UNENCUMBERED PROPERTIES means those Unencumbered Properties
comprising the Pool on the Closing Date, as set forth in the initial Compliance
Certificate attached hereto as SCHEDULE C.
INTEREST ADJUSTMENT DATE means the earlier of either the last day of an
Interest Period or the Termination Date.
<PAGE> 44
INTEREST PERIOD means, with respect to a LIBOR Rate Advance, or
Competitive Bid Pricing Loan, a period selected by Borrower of seven (7) days,
fourteen (14) days or of one month, two months, three months, four months, five
months, six months or twelve months, commencing on the Effective Date of such
LIBOR Rate Advance or the Borrowing Date with respect to a Competitive Bid Loan;
provided that (a) any Interest Period related to, and ending on a date later
than, the Termination Date, shall be deemed to end on the Termination Date; (b)
if any Interest Period would otherwise end on a day that is not a Business Day,
such Interest Period shall end on the next succeeding Business Day, except that
if the next Business Day would fall in the next calendar month, the Interest
Period shall end on the immediately preceding Business Day; (c) any Interest
Period that begins 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 such calendar month; and (d) with respect to a Competitive Bid
Pricing Loan, an Interest Period shall not be seven (7) days or twelve months.
INVESTMENTS means with respect to any Person, all shares of capital
stock, evidences of Debt and other securities issued by any other Person, all
loans, advances, or extensions of credit to, or contributions to the capital of,
any other Person, all purchases of the securities or business or integral part
of the business of any other Person and commitments and binding options to make
such purchases, all interests in real property, and all other investments;
PROVIDED, HOWEVER, that the term "Investment" shall not include (i) equipment,
inventory and other tangible personal property acquired in the ordinary course
of business, or (ii) current trade and customer accounts receivable for services
rendered in the ordinary course of business and payable in accordance with
customary trade terms. In determining the aggregate amount of Investments
outstanding at any particular time: (a) the amount of any investment represented
as a guaranty shall be taken at not less than the principal amount of the
obligations guaranteed and still outstanding, but without duplication if such
Investment is included elsewhere in this definition; (b) there shall be included
as an Investment all interest accrued with respect to Debt constituting an
Investment unless and until such interest is paid; (c) there shall be deducted
in respect of each such Investment any amount received as a return of capital
(but only by repurchase, redemption, retirement, repayment, liquidating dividend
or liquidating distribution); (d) there shall not be deducted in respect of any
Investment any amounts received as earnings on such Investment, whether as
dividends, interest or otherwise, except that accrued interest included as
provided in the foregoing clause (b) may be deducted when paid; and (e) there
shall not be deducted from the aggregate amount of Investment any decrease in
the value thereof.
INVITATION FOR COMPETITIVE BID QUOTES means an Invitation for
Competitive Bid Quotes substantially in the form of EXHIBIT E-2 hereto,
completed and delivered by Administrative Agent to the Lenders in accordance
with SECTION 2.3(C).
LAWS means all constitutions, treaties, statutes, laws, ordinances,
codes, regulations, rules, orders, decisions, writs, injunctions, or decrees of
the United States of America or any other Governmental Authority, now in effect
and hereafter amended, issued, promulgated, or otherwise coming into effect.
LEGAL REQUIREMENTS means (a) any and all present and future judicial
decisions, laws, permits, licenses or certificates, of any Governmental
Authority in any way applicable to Borrower or any Consolidated Subsidiary, (b)
the presently or subsequently effective bylaws and articles or certificate of
incorporation, partnership agreement and any other form of business association
agreement of Borrower or any Consolidated Subsidiary, (c) any and all covenants,
conditions or restrictions applicable to the Real Estate or the ownership, use
or occupancy thereof, and (d) any and all leases or contracts (written or oral)
of any nature that relate in any way to any Property or any portion thereof, or
to which Borrower or any Consolidated Subsidiary may be bound, and in each case
which, if violated, would materially and adversely affect (i) the present or
potential ownership, use, sale, occupancy or possession of the Property or any
material part thereof, by Borrower or any Consolidated Subsidiary, or (ii) the
financial condition of Borrower or any Consolidated Subsidiary.
<PAGE> 45
LENDERS means the financial institutions and other entities listed as a
"Lender" on SCHEDULE I attached hereto, as SCHEDULE I may be modified, amended
or supplemented from time to time.
LIBOR MARGIN means the applicable margin based on the Applicable Debt
Rating described in, and determined pursuant to, SCHEDULE II.
LIBOR RATE means, with respect to a LIBOR Rate Advance for the Interest
Period applicable thereto, the rate of interest determined by Administrative
Agent at which deposits in dollars for the relevant Interest Period are offered
based on information presented on the Telerate Screen as of 11:00 A.M. (London
time) on the day which is two (2) Business Days prior to the first day of such
Interest Period; PROVIDED, that if at least two such offered rates appear on the
Telerate Screen in respect of such Interest Period, the arithmetic mean of all
such rates (as determined by Administrative Agent) will be the rate used;
PROVIDED, FURTHER, that if the Telerate System ceases to provide LIBOR
quotations, such rate shall be the average rate of interest determined by
Administrative Agent (rounded upward to the nearest .01%) at which deposits in
Dollars are offered for the relevant Interest Period by Administrative Agent (or
its successor) to banks with combined capital and surplus in excess of
$500,000,000 in the London interbank market as of 11:00 A.M. (London time) on
the applicable Effective Date.
LIBOR RATE ADVANCE means an Advance under the Credit Facility
(including Competitive Bid Pricing Loans) which bears interest computed with
reference to the LIBOR Rate.
LIBOR RATE PRINCIPAL means any portion or portions of the outstanding
principal balance of the Notes which bears interest at an applicable LIBOR Rate
at the time in question.
LIBOR RESERVE REQUIREMENT means, on any day, that percentage (expressed
as a decimal fraction) which is in effect on such date, as provided by the
Federal Reserve System for determining the maximum reserve requirements
generally applicable to financial institutions regulated by the Federal Reserve
Board comparable in size and type to Administrative Agent (including, without
limitation, basic supplemental, marginal and emergency reserves) under
Regulation D with respect to "Eurocurrency liabilities" as currently defined in
Regulation D, or under any similar or successor regulation with respect to
Eurocurrency liabilities or Eurocurrency funding (or, if reserves for
Eurocurrency liabilities are not separately stated in such regulations, the
other applicable category of liabilities which includes deposits by reference to
which the interest rate on a LIBOR Rate Advance is determined). Each
determination by Administrative Agent of the LIBOR Reserve Requirement, shall,
in the absence of manifest error, be conclusive and binding.
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.
<PAGE> 46
LITIGATION means any proceeding, claim, suit, action, arbitration,
mediation, case or investigation by, before or involving any Governmental
Authority.
LOAN DOCUMENTS means this Agreement, the Notes, the Competitive Bid
Notes, the Guaranty Agreements, the Contribution Agreement, the Fee Letters, and
all other agreements, statements, certificates, documents or instruments
evidencing, securing or pertaining to the Credit Facility or the Notes or
otherwise executed and/or delivered from time to time pursuant to or in
connection with this Agreement, as the same may be supplemented, modified,
amended, renewed, extended, rearranged, restated or replaced from time to time.
MANAGING AGENT means Wells Fargo Bank, N.A., in its capacity as
managing agent for the Lenders hereunder.
MARGIN REGULATIONS mean Regulations T, U and X of the Board of
Governors of the Federal Reserve System, as in effect from time to time.
MARGIN STOCK means "margin stock" as defined in Regulation U.
MATERIAL ADVERSE EFFECT means an effect resulting from any circumstance
or event of whatever nature (including the filing of, or any adverse
determination in, any Litigation) which does, or could reasonably be expected
to, (i) impair the validity or enforceability of any Loan Document, (ii)
materially and adversely affect the condition (financial or otherwise),
operations, business, management or assets of Borrower or the Guarantor
Subsidiaries, (iii) materially impair the ability of Borrower and the Guarantor
Subsidiaries, taken as a whole, to fulfill any material part of the Obligations,
or (iv) cause a Default or an Event of Default.
MAXIMUM AVAILABLE AMOUNT means the maximum aggregate principal balances
of the Notes and all Competitive Bid Notes that may be outstanding at the time
in question without resulting in a breach of the requirements and covenants of
this Agreement, including without limitation those set forth in SECTION 5.1 and
SECTION 8.2.
MAXIMUM LAWFUL RATE means the maximum rate (or, if the context so
permits or requires, an amount calculated at such rate) of interest which, at
the time in question would not cause the interest charged on the Credit Facility
at such time to exceed the maximum amount which Lenders would be allowed to
contract for, charge, take, reserve, or receive under applicable federal or
state law after taking into account, to the extent required by applicable law,
any and all relevant payments, fees or charges under the Loan Documents. For
purposes of determining the Maximum Rate under the applicable Laws of the State
of Texas, the applicable rate ceiling shall be the "weekly ceiling" from time to
time in effect under Chapter 1D of the Texas Credit Title, as amended or
supplemented; provided that to the extent permitted by applicable Laws and
subject to any notice or other requirements under applicable Laws,
Administrative Agent may from time to time change the rate ceiling. If under
applicable law there is no legal limitation on the amount or rate of interest
that may be charged on amounts outstanding under the Credit Facility, there
shall be no Maximum Lawful Rate, notwithstanding any reference thereto herein or
in any of the Loan Documents.
<PAGE> 47
MINIMUM NOTICE REQUIREMENT has the meaning set forth in SECTION 3.5(B).
MOODY'S means Moody's Investors Service, Inc., or, if Moody's no longer
publishes ratings, such other ratings agency reasonably acceptable to
Administrative Agent
MOODY'S RATING means the most recently announced rating from time to
time of Moody's assigned to any class of long-term senior, unsecured liability
securities issued by Borrower, as to which no letter of credit, guaranty, or
third party credit support is in place, regardless of whether all or any part of
such liability has been issued at the time such rating was issued.
NON-RECOURSE INDEBTEDNESS means Debt of Borrower or any Consolidated
Subsidiary which is secured by one or more parcels of Real Estate and related
personal property or interests therein and is not a general obligation of the
Borrower or any Consolidated Subsidiary, the holder of such Debt having recourse
solely to the Real Estate securing such Debt, the Improvements thereon, related
personal property and leases thereon, and the rents and profits thereof securing
such Debt.
NON-U.S. LENDER has the meaning set forth in SECTION 3.14(D).
NOTES means the promissory notes substantially in the form of EXHIBIT
A-1 hereto with appropriate insertions evidencing Advances under the Credit
Facility other than Competitive Bid Advances, executed by Borrower, payable to
the order of each Lender, each in the principal face amount of the respective
Lender's Commitment, as such notes may be amended, renewed or extended from time
to time, and all notes given in amendment, replacement or restatement thereof,
in whole or in part, including without limitation in connection with an
assignment of a Lender's interest hereunder or the addition of a new Lender
hereunder.
<PAGE> 48
OBLIGATIONS means all present and future indebtedness, obligations and
liabilities, or any part thereof, of Borrower or any Guarantor Subsidiary now or
hereafter existing or arising under or in connection with this Agreement, the
Notes, the Competitive Bid Notes or any other of the Loan Documents
(specifically including, without limitation, the principal amount outstanding
under the Notes and Competitive Bid Notes), together with: (a) all interest
accrued thereon; (b) all reasonable costs, expenses, and attorneys= fees of
counsel to Administrative Agent and of counsel to any Lender (subject to any
limitations set forth in SECTION 11.4) incurred in the documentation of any
amendments, waivers or extensions of the Loan Documents or administration,
enforcement or collection thereof (specifically including, without limitation,
any of the foregoing incurred in connection with any bankruptcy or other
insolvency proceedings of Borrower or any Guarantor Subsidiary or any other
Consolidated Subsidiary); (c) the reimbursement and payment of all sums which
might be advanced by Administrative Agent or any Lender to pay or satisfy
amounts required to be paid by Borrower or any Guarantor Subsidiary under this
Agreement or under any other Loan Document; (d) all liability which Borrower or
any Guarantor Subsidiary may incur with respect to any interest rate swap or
hedge agreements between Borrower or any Guarantor Subsidiary and any Lender
pertaining to the Advances under the Credit Facility; and (e) all costs,
charges, reasonable commissions, reasonable attorneys= fees and expenses owing
and to become owing in connection with the documentation, administration,
enforcement and collection of the foregoing obligations and indebtedness, and
those owing or to become owing in connection with the repossession, operation,
maintenance, preservation or foreclosure of any collateral that may ever be
given for the obligations and indebtedness hereunder; regardless of whether such
indebtedness, obligations and liabilities are direct, indirect, fixed,
contingent, liquidated, unliquidated, joint, several or joint and several. The
Obligations shall include all renewals, extensions, modifications,
rearrangements and replacements of any of the above-described obligations and
indebtedness.
PARTICIPANT has the meaning set forth in SECTION 11.10(D).
PBGC means the Pension Benefit Guaranty Corporation, or its successors.
PENSION PLAN means any Employee Plan that is now or was previously
covered by Title IV of ERISA or subject to the minimum funding standards under
Section 412 of the Code.
PERMITTED LIENS means (a) Liens granted to Administrative Agent to
secure the Obligations, (b) pledges or deposits made to secure payment of
worker's compensation (or to participate in any fund in connection with worker's
compensation insurance), unemployment insurance, pensions or social security
programs, (c) encumbrances consisting of zoning restrictions, easements, or
other restrictions on the use of real property, provided that such items do not
materially impair the use of such property for the purposes intended and none of
which is violated in any material respect by existing or proposed structures or
land use, (d) Liens for taxes, assessments and governmental charges not yet due
and payable or that are being contested in good faith by appropriate proceedings
diligently conducted, and for which reserves in accordance with GAAP or
otherwise reasonably acceptable to Administrative Agent have been provided, or
Liens imposed by mandatory provisions of law such as for materialmen's,
mechanics=, warehousemen's and other similar Liens arising in the ordinary
course of business, securing payment of any liability whose payment is not yet
due, (e) Liens on Property where Borrower is insured against such Liens by title
insurance, (f) Liens securing assessments or charges payable to a property owner
association or similar entity, which assessments are not yet due and payable or
that are being contested in good faith by appropriate proceedings diligently
conducted, and for which reserves in accordance with GAAP or otherwise
reasonably acceptable to Administrative Agent have been provided, (g) Liens
securing assessment bonds, so long as Borrower is not in default under the terms
thereof, or (h) Liens filed by mechanics and materialmen which are being
diligently contested in good faith, for which appropriate reserves have been
established on the books of Borrower or the appropriate Subsidiary as required
by GAAP, and which, if reasonably requested by Administrative Agent, have been
bonded or insured around in full in form and by a surety commonly accepted in
the industry.
PERSON means an individual, a corporation, a limited liability company,
a partnership, a joint venture, an association, a trust or any other entity or
organization, including a government or political subdivision or an agency or
instrumentality thereof.
POOL means collectively all Unencumbered Properties meeting all
requirements of ARTICLE V at the time in question.
<PAGE> 49
POOL VIOLATION means a violation of any provision in Article V or any
other covenants in this Agreement related to the Pool or the Unencumbered
Properties taken as a whole which would occur if an Unencumbered Property were
excluded from the Pool because there existed a condition related thereto which
violates a particular representation, warranty or covenant contained in this
Agreement.
PROPERTY means, collectively, the Real Estate, the Improvements, and
all other real or personal property and assets, and any interests therein, owned
at any time by Borrower or any of its Consolidated Subsidiaries.
RATINGS AGENCY means S&P or Moody's, or any other ratings agency
replacing either of S&P or Moody's as provided in the definitions thereof.
REAL ESTATE means all real property and Improvements at any time owned
or leased (as lessee or sublessee) by Borrower or any of its Consolidated
Subsidiaries.
REGISTER has the meaning set forth in SECTION 11.10(B).
REGULATION U means Regulation U of the Board of Governors of the
Federal Reserve System, as in effect from time to time and shall include any
successor or other regulation or official interpretation of the Board of
Governors relating to the extension of credit by banks for the purpose of
purchasing or carrying margin stocks that is applicable to member banks of the
Federal Reserve System.
REGULATORY CHANGE shall mean the adoption of any applicable law, rule
or regulation, or any change in any applicable law, rule or regulation, or any
change in the interpretation or administration thereof by any Governmental
Authority charged with the administration thereof.
RENEWAL FEE has the meaning set forth in SECTION 3.16(IV).
REPRESENTATIVES has the meaning set forth in SECTION 10.4.
REQUIRED LENDERS means:
(a) All Lenders in order to make any amendment or modification
to (i) change the definitions of Commitment, Commitment Percentage or Aggregate
Loan Percentage, (ii) extend the due date for, decrease the amount or rate of
calculation of, or waive the late or non-payment of, any scheduled payment or
mandatory prepayment of principal or interest on any of the Notes or the
Competitive Bid Notes or under this Agreement or any fees payable to the Lenders
under the Loan Documents, except, in each case, any adjustments or reductions
expressly contemplated hereby or in any Loan Document, (iii) increase the amount
of the Total Commitment except as provided in SECTION 2.1(B), (iv) reinstate any
of the Notes and other indebtedness pursuant to the provisions in SECTION 9.3,
(v) release Borrower or, except as otherwise provided in this Agreement, any
Guarantor Subsidiary from its liability for payment of the Obligations, or (vi)
change this paragraph (a) of this definition.
<PAGE> 50
(b) Except as provided in paragraph (a) above, Lenders whose
Commitments at the time in question in the aggregate equal or exceed 66-2/3% of
the Total Commitment; PROVIDED, HOWEVER, that if the Termination Date has
occurred, or the Lenders have no commitment to lend hereunder, or an Event of
Default is in existence, then it shall mean the Lenders holding Notes and
Competitive Bid Notes with an aggregate unpaid principal balance equal to or
greater than 66-2/3% of the aggregate unpaid principal balance of all the Notes
and all the Competitive Bid Notes at the time in question.
RIGHTS means rights, remedies, powers, privileges and benefits.
S&P means Standard & Poor's Rating Group, a division of McGraw Hill,
Inc., a New York corporation, or if S&P no longer publishes ratings, then such
other ratings agency reasonably acceptable to Administrative Agent.
S&P RATING means the most recently announced rating from time to time
of S&P assigned to any class of long-term senior, unsecured liability securities
issued by Borrower, as to which no letter of credit, guaranty, or third party
credit support is in place, regardless of whether all or any part of such
liability has been issued at the time such rating was issued.
SEC means the federal Securities and Exchange Commission, and its
successors.
SECURED INDEBTEDNESS means Debt of Borrower and its Consolidated
Subsidiaries that is directly or indirectly secured by a Lien on any Real
Estate, including (without duplication) all Contingent Obligations associated
with such Debt.
SECURED RECOURSE DEBT means all Secured Indebtedness that is not
Non-Recourse Indebtedness.
SOLE LEAD ARRANGER means Banc of America Securities LLC, and its
successors.
SENIOR DEBT has the meaning set forth in SECTION 5.6.
SUBSIDIARY means, for any Person, any corporation, partnership,
association, trust or other business entity (a) 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
persons performing similar functions (including that of a general partner) is at
the time directly or indirectly owned by, or the management is otherwise
controlled by, such Person and any Subsidiaries of such Person, or (b) the
accounts of which would be consolidated with the accounts of Borrower on
Borrower's consolidated financial statements prepared in accordance with GAAP.
The term Subsidiary shall include Subsidiaries of Subsidiaries (and so on).
Unless otherwise qualified, references to "Subsidiary" or "Subsidiaries" herein
shall refer to those of Borrower and its Subsidiaries.
<PAGE> 51
SYNDICATION AGENT means Chase Bank of Texas, National Association, in
its capacity as syndication agent for the Lenders hereunder, or any successor
syndication agent pursuant to SECTION 10.12 or SECTION 10.13.
TARGET MONTHLY AMORTIZATION means the hypothetical monthly payment of
principal and interest which would be required for each month if Total Unsecured
Debt, as of the date of determination of the Target Monthly Amortization, was
amortized in level payments of principal and interest over twenty-five (25)
years at an interest rate per annum equal to the greater of (a) eight and
one-quarter (8.25%), or (b) one and three quarters percent (1.75%) plus the rate
of interest per annum on U.S. Treasury Notes having a maturity of seven (7)
years in the "this week" column under the heading "Treasury Constant
Maturities," of the FEDERAL RESERVE statistical release FORM H.15 which has been
most recently published (or, if for any reason that published rate as of a date
not more than ten (10) days prior to such date is not available, another rate
determined by Administrative Agent to be comparable, in its discretion
reasonably exercised, shall be used for this purpose).
TAXES means all taxes, assessments, filing or other fees, levies,
imposts, duties, deductions, withholdings, stamp taxes, interest equalization
taxes, capital transaction taxes, foreign exchange taxes or other charges of any
nature whatsoever, from time to time or at any time imposed by law or any
federal, state or local governmental agency. "Tax" means any one of the
foregoing.
TELERATE SCREEN means the display designated as Screen 3750 (as to
Dollars) on the Telerate System or such other screen on the Telerate System as
shall display the London interbank offered rates for deposits in U.S. dollars
quoted by selected banks.
TERMINATION DATE means August 18, 2001, as the same may be extended
from time to time in accordance with this Agreement.
TOTAL COMMITMENT means, at any time, the sum of the Commitments of all
of the Lenders.
TOTAL CONSOLIDATED DEBT at any time of determination means the sum of
(a) consolidated Debt of Borrower and its Consolidated Subsidiaries which would
be reflected on the consolidated balance sheet of Borrower prepared in
accordance with GAAP if such balance sheet were prepared as of such date of
determination, plus (b) the unfunded obligations of Borrower or any Consolidated
Subsidiary under outstanding letters of credit, plus (c) the amount of any
Contingent Obligations that are reasonably quantifiable by Borrower (as
confirmed by Administrative Agent) and which do not duplicate any amounts
otherwise included under this definition of Total Consolidated Debt.
TOTAL UNSECURED DEBT means Total Consolidated Debt excluding all
Secured Indebtedness, which includes, without limitation, the aggregate
outstanding principal balance of the Notes and the Competitive Bid Notes.
<PAGE> 52
UCC means the Uniform Commercial Code in effect under the laws of the
State of Texas, as amended, or, if stated with reference to another
jurisdiction, the Uniform Commercial Code as adopted in the relevant
jurisdiction.
UNENCUMBERED ADJUSTED NOI means for any period the aggregate net
operating income from all the Unencumbered Properties in the Pool (as calculated
by Borrower in a manner reasonably acceptable to Administrative Agent), as
adjusted (a) for any non-recurring items during such period, (b) for any
dispositions or acquisitions of Unencumbered Properties during such period, and
(c) to include in expenses property supervision expenses and the Capital
Improvement Reserve for the Unencumbered Properties for such period.
UNENCUMBERED PROPERTIES means the Ground-Leased Qualifying Properties
and other Real Estate that is owned one hundred percent (100%) in fee simple by
the Borrower or a Guarantor Subsidiary, and which in each case satisfies all of
the following conditions:
(a) each Unencumbered Property shall be free and clear of
all Liens other than Permitted Liens;
(b) no Unencumbered Property shall have any material
environmental, structural, title, survey or other defects that would give rise
to a materially adverse effect as to the value, use of, or ability to develop,
lease, sell or refinance such property; and
(c) each Unencumbered Property shall consist solely of Real
Estate located in the United States of America (i) that is a Development
Property, or (ii) is fully operational as a multi-family residential apartment
community (specifically excluding, without limitation, assisted living
facilities, low income housing or any federally subsidized housing facility) and
with respect to which all necessary valid certificates of occupancy for all
improvements thereon have been issued and are in full force and effect.
VARIABLE RATE means a fluctuating rate of interest equal to the Base
Rate plus the Variable Rate Margin.
VARIABLE RATE ADVANCE shall mean an Advance under the Credit Facility
which bears interest computed with reference to the Variable Rate.
VARIABLE RATE MARGIN means the applicable margin based on the
Applicable Debt Rating of Borrower as described in, and determined pursuant to,
SCHEDULE II.
VOTING INTERESTS means stock or similar ownership interests, of any
class or classes (however designated) the holders of which are at the time
entitled, as such holders, (a) to vote for the election of a majority of the
directors (or persons performing similar functions) of the corporation,
association, partnership, limited liability company, trust or other business
entity involved, or (b) to control, manage, or conduct the business of the
corporation, partnership, limited liability company, association, trust or other
business entity involved.
<PAGE> 53
WORK means the furnishing of labor, materials, components, furniture,
furnishings, fixtures, appliances, machinery, equipment, tools, power, water,
fuel, lubricants, supplies, goods and/or services with respect to any part of
the Property.
SECTION 1.2. SINGULAR AND PLURAL; GENDER. Each term defined in the
singular form in SECTION 1.1 shall mean the plural thereof when the plural form
of such term is used in this Agreement, and each term defined in the plural form
in SECTION 1.1 shall mean the singular thereof when the singular form of such
term is used in this Agreement. Words of any gender shall include each other
gender where appropriate.
SECTION 1.3. SUBSTANTIVE DEFINITIONS. The terms, provisions and
agreements set forth in the definitions contained in SECTION 1.1 shall be
substantive terms of this Agreement and fully binding on the parties hereto.
SECTION 1.4. MONEY. Unless stipulated otherwise, all references herein
or in any of the Loan Documents to "Dollars," "$," "money," "payments" or other
similar financial or monetary terms are references to lawful money of the United
States of America.
SECTION 1.5. CAPTIONS; REFERENCES. The captions in this Agreement and
in the table of contents hereof are for convenience of reference only and shall
not define, affect or limit any of the terms or provisions hereof. All
references herein to Articles and Sections are, unless specified otherwise,
references to articles and sections of this Agreement. Unless specifically
indicated otherwise, all references herein to an "Exhibit," "Annex" or
"Schedule" are references to exhibits, annexes or schedules attached hereto, all
of which are incorporated herein and made a part hereof for all purposes, the
same as if set forth fully herein, it being understood that if any exhibit,
annex or schedule attached hereto which is to be executed and delivered contains
blanks, the same shall be completed correctly and in accordance with this
Agreement prior to or at the time of the execution and delivery thereof. The
words "herein," "hereof," "hereunder" and other similar compounds of the word
"here" when used in this Agreement shall refer to the entire Agreement and not
to any particular provision or section unless specifically indicated otherwise.
SECTION 1.6. ACCOUNTING TERMS AND DETERMINATIONS. Unless otherwise
specified herein, all accounting terms used herein shall be interpreted, all
accounting determinations hereunder shall be made, and all financial statements
required to be delivered hereunder shall be prepared in accordance with GAAP.
ARTICLE II
COMMITMENT
SECTION 2.1. COMMITMENT. Subject to and upon the terms, covenants and
conditions of this Agreement:
<PAGE> 54
(a) ADVANCES. Each Lender severally agrees to make in the manner
set forth in SECTION 2.2, its pro rata part (based on its Commitment Percentage)
of one or more Advances under the Credit Facility (excluding Competitive Bid
Loans) for the acquisition and development of multi-family properties, working
capital and general corporate purposes, which, subject to the terms hereby and
the other Loan Documents, Borrower may borrow, repay, and reborrow under this
Agreement; PROVIDED that, (i) each such Advance must occur on a Business Day and
no later than the Business Day immediately preceding the Termination Date, (ii)
each such Advance must be in an amount not less than the limitations provided in
SECTION 2.2, and (iii) on any date of determination, the outstanding principal
balance of the Credit Facility (including the outstanding balance of all
Competitive Bid Loans) shall never exceed the lesser of (A) the Maximum
Available Amount, or (B) the Total Commitment. Except as provided in SECTION 2.3
hereof, in no event shall any Lender be required to make any Advances in excess
of its Commitment Percentage of the amount required to be advanced by the
Lenders under the above provisions of this SECTION 2.1 or which would cause any
Lender to have made Advances (excluding under Competitive Bid Loans) in excess
of such Lender's Commitment. The amount outstanding under the Credit Facility
set forth on the books and records of Administrative Agent maintained in the
ordinary course of business shall be presumptive evidence of the principal
amount thereof owing and unpaid from time to time, but the failure to record any
such amount shall not limit or affect the Obligations.
(b) INCREASE IN TOTAL COMMITMENT. So long as no Default or Event
of Default shall have occurred and be continuing, Borrower shall have the right
from time to time upon not less than ten (10) days prior written notice to
Administrative Agent to increase the Total Commitment to an amount up to but not
exceeding $400,000,000, by the addition of one or more new Lenders hereunder
and/or by an increase in any one or more of the then existing Lender's
Commitments hereunder (as previously identified and approved by Borrower and
Administrative Agent) (provided that in no event shall any Lender be obligated
at any time to increase its Commitment, nor shall any Lender be entitled to an
increase in its Commitment, in connection with any increase in the Total
Commitment under this SECTION 2.1(B), any such increase to be allocated to
existing or new Lenders in such amounts as Borrower and Sole Lead Arranger
determine in their sole and absolute discretion with the concurrence only of
Administrative Agent); subject to and upon the following terms and conditions:
(1) No Event of Default shall have occurred and be continuing,
and no Default shall be in existence at the time Borrower elects to
increase the Total Commitment as provided herein or on the effective
date of such increase.
(2) Any new Lender pursuant to this SECTION 2.1(B) shall be an
Eligible Assignee and shall be subject to the consent of
Administrative Agent, which consent shall not be unreasonably
withheld.
<PAGE> 55
(3) This Agreement will be amended to reflect the addition of any
new Lender hereunder, and Administrative Agent will deliver an updated
SCHEDULE I to Borrower and each of the Lenders, reflecting the revised
Total Commitment and the Commitment and Commitment Percentage of each
of the Lenders (including any new Lender(s)) upon such increase.
(4) The outstanding Advances under the Notes will be reallocated
on the effective date of such increase among the Lenders in accordance
with their revised Commitment Percentages (and Borrower shall pay any
and all costs required pursuant to SECTION 3.6(B) in connection with
such reallocation as if such reallocation were a prepayment)
(provided, that, any such reallocation shall be applied to the extent
possible to avoid any Consequential Loss), and Borrower will deliver a
Note to each new Lender in the amount of its Commitment and, if
applicable, to any existing Lender in the amount of its increased
Commitment, and Borrower shall deliver new Competitive Bid Notes to
all Lenders, each in the principal face amount equal to 50% of the
Total Commitment as increased.
(5) From and after the effective date of any increase in the
Total Commitment pursuant to this SECTION 2.1(B), all references
herein to the Total Commitment and, to the extent applicable, the
Commitments and Commitment Percentages of each Lender, shall mean such
amounts as increased or adjusted hereunder.
(6) Borrower shall pay to Administrative Agent for the account of
the applicable Lenders any Commitment Fees to be paid in connection
with any such increase.
SECTION 2.2. METHOD OF BORROWING UNDER CREDIT FACILITY. Subject to the
terms and conditions of this Agreement, Borrower shall be entitled to obtain
Advances (other than Competitive Bid Advances) under the Credit Facility from
Lenders pursuant to SECTION 2.1 in the following manner:
(a) REQUEST FOR ADVANCE. Borrower shall request an Advance by
delivering to Administrative Agent an irrevocable written request (an "ADVANCE
REQUEST") in the form of EXHIBIT B, duly executed by Borrower not later than
11:00 a.m. (Dallas time), (i) at least one (1) Business Day before each Variable
Rate Advance and (ii) at least three (3) Business Days before each LIBOR Rate
Advance, of its intention to borrow, specifying (A) the date of such Advance,
which shall be a Business Day, (B) the amount of such Advance, which shall be in
an aggregate principal amount of $5,000,000 or a whole multiple of $1,000,000 in
excess thereof with respect to LIBOR Rate Advances and $1,000,000 or a whole
multiple of $100,000 in excess thereof with respect to Variable Rate Advances,
(C) whether such Advance is to be a LIBOR Rate Advance or Variable Rate Advance,
and (D) in the case of a LIBOR Rate Advance, the duration of the Interest Period
applicable thereto. Notices received after 11:00 a.m. (Dallas time), shall be
deemed received on the next Business Day.
<PAGE> 56
(b) NOTICE TO LENDERS. Administrative Agent shall promptly notify
Lenders of each Advance Request received from Borrower. Each Lender shall, not
later than 11:00 (a.m.) Dallas, Texas time, on the requested Borrowing Date for
any such Advance, deliver to Administrative Agent, at its address set forth
herein, such Lender's Commitment Percentage of such Advance, in immediately
available funds in accordance with Administrative Agent's instructions. Prior to
2:00 p.m., Dallas, Texas time, on the date of any Advance hereunder
Administrative Agent shall, subject to satisfaction of the conditions set forth
in ARTICLE IV, disburse the amounts made available to Administrative Agent by
the Lenders by (i) transferring such amounts by wire transfer pursuant to
Borrower's instructions, or (ii) in the absence of such instructions, crediting
such amounts to the account of Borrower maintained with Administrative Agent.
All Advances under the Credit Facility shall be made by each Lender according to
its Commitment Percentage.
(c) Absent contrary written notice from a Lender, Administrative
Agent may assume that each Lender has made its Commitment Percentage of the
requested Advance available to Administrative Agent on the applicable Borrowing
Date, and Administrative Agent may, in reliance upon such assumption (but is not
required to), make available to Borrower a corresponding amount. If a Lender
fails to make its Commitment Percentage of any requested Advance available to
Administrative Agent on the applicable Borrowing Date, Administrative Agent
shall seek to recover the applicable amount on demand (i) from that Lender,
together with interest at the Federal Funds Rate, for the period commencing on
the date the amount was made available to Borrower by Administrative Agent and
ending on (but excluding) the date Administrative Agent recovers the amount from
that Lender, or (ii) if that Lender fails to pay its amount upon demand, then
from Borrower, together with interest at an annual interest rate equal to the
rate applicable to the requested Advance for the period commencing on the
Borrowing Date and ending on (but excluding) the date Administrative Agent
recovers the amount from Borrower. No Lender is responsible for the failure of
any other Lender to make its Commitment Percentage of any Advance.
SECTION 2.3 COMPETITIVE BID LOANS
(a) COMPETITIVE BID ADVANCES. In addition to Advances pursuant to
SECTIONS 2.1 AND 2.2, but subject to all of the terms and conditions of this
Agreement (including, without limitation, the limitation set forth in SECTION
2.1 as to the maximum aggregate principal amount of all outstanding Advances
under the Credit Facility), so long as the Applicable Debt Rating is not less
than BBB-/Baa3, Borrower may, in accordance with this SECTION 2.3, prior to the
Termination Date from time to time, request the Lenders to make offers to make
Competitive Bid Advances to Borrower. Each Lender may, but shall have no
obligation to, make such offers and Borrower may, but shall have no obligation
to, accept any such offers in the manner set forth in this SECTION 2.3.
Competitive Bid Advances shall be evidenced by the Competitive Bid Notes. In no
event shall the aggregate amount of Competitive Bid Loans outstanding at any
time exceed an amount equal to fifty percent (50%) of the Total Commitment.
(b) COMPETITIVE BID QUOTE REQUEST. When Borrower wishes to
request offers to make Competitive Bid Loans under this SECTION 2.3, Borrower
shall transmit to Administrative Agent by telecopy a Competitive Bid Quote
Request (in form as attached hereto as EXHIBIT E-1) to be received no later than
11:00 a.m., Dallas time, at least five (5) Business Days prior to the Borrowing
Date proposed therein in the case of a Competitive Bid Pricing Loan and three
(3) Business Days prior to the Borrowing Date proposed therein in the case of a
Competitive Bid Fixed Rate Loan, specifying in accordance with all of the terms
of this Agreement:
<PAGE> 57
(i) the proposed Borrowing Date for the proposed
Competitive Bid Advance;
(ii) the aggregate principal amount of such
Competitive Bid Advance (which must be at least $10,000,000 or
a larger multiple of $1,000,000);
(iii) the Interest Period applicable thereto in the
case of a Competitive Bid Pricing Loan (provided that the
seven (7) day and the twelve (12) month Interest Period
options shall not be available in the case for Competitive Bid
Pricing Loans) or the term in the case of Competitive Bid
Fixed Rate Loan (which term must be not shorter than fourteen
(14) days and not longer than six (6) months), and in the case
of any Competitive Bid Loan such Interest Period or term, as
the case may be, shall not extend past the Termination Date;
(iv) whether such request is for a Competitive Bid
Pricing Loan or a Competitive Bid Fixed Rate Loan; and
(v) whether a Competitive Bid Auction Fee is due in
connection with such Competitive Bid Quote Request and, if so,
an agreement to pay same.
Borrower may request offers to make Competitive Bid Loans for more than one
Interest Period and term and for both Competitive Bid Pricing Loans and
Competitive Bid Fixed Rate Loans in a single Competitive Bid Quote Request. No
Competitive Bid Quote Request shall be given within five (5) Business Days (or
upon reasonable prior notice to the Lenders, such other number of days as
Borrower and Administrative Agent may agree) of any other Competitive Bid Quote
Request. Each Competitive Bid Quote Request shall be in a minimum amount of
$10,000,000 or a larger multiple of $1,000,000. Borrower shall not be entitled
to have more than four (4) Competitive Bid Loans outstanding at any time. A
Competitive Bid Quote Request that does not conform substantially to the format
of EXHIBIT E-1 hereto, or for which any Competitive Bid Auction Fee, if
applicable, is not timely paid, shall be rejected, and Administrative Agent
shall promptly notify Borrower of such rejection by telecopy.
(c) INVITATION FOR COMPETITIVE BID QUOTES. Promptly upon receipt
of a Competitive Bid Quote Request that is not rejected pursuant to SECTION
2.3(B), Administrative Agent shall send to each of the Lenders by telecopy an
Invitation for Competitive Bid Quotes (in form as attached hereto as EXHIBIT
E-2) which shall constitute an invitation by Borrower to each Lender to submit
Competitive Bid Quotes (in form as attached hereto as EXHIBIT E-3) offering to
make the Competitive Bid Loans to which such Competitive Bid Quote Request
relates in accordance with this SECTION 2.3.
(d) SUBMISSION AND CONTENTS OF COMPETITIVE BID QUOTES.
<PAGE> 58
(i) Each Lender may, in its sole discretion, submit a
Competitive Bid Quote containing an offer or offers to make Competitive
Bid Loans in response to any Invitation for Competitive Bid Quotes.
Each Competitive Bid Quote must comply with the requirements of this
SECTION 2.3 and must be submitted to Administrative Agent by telecopy
at its offices specified in or pursuant to SECTION 11.2 not later than
10:00 a.m., Dallas time, at least three (3) Business Days prior to the
proposed Borrowing Date in the case of a Competitive Bid Pricing Loan
and two (2) Business Days prior to the proposed Borrowing Date in the
case of a Competitive Bid Fixed Rate Loan (or upon reasonable prior
notice to the Lenders, such other time and date as Borrower and
Administrative Agent may agree). Any Competitive Bid Quote so made
shall be irrevocable except with the written consent of Borrower.
(ii) Each Competitive Bid Quote shall in any case
specify: (1) the proposed Borrowing Date, which shall be the same as
that set forth in the applicable Invitation for Competitive Bid Quotes;
(2) the principal amount of the Competitive Bid Loan for which each
such offer is being made, (x) which principal amount may be greater
than, less than or equal to the Commitment of the quoting Lender, but
in no case greater than an amount which would cause the then
outstanding Advances under the Credit Facility and the outstanding
balances of all Competitive Bid Loans to exceed the Total Commitment or
the Maximum Available Amount, (y) which principal amount must be at
least $5,000,000 and an integral multiple of $1,000,000, and (z) which
principal amount may not exceed the principal amount of Competitive Bid
Loans for which offers were requested; (3) whether the quote is for a
Competitive Bid Pricing Loan or a Competitive Bid Fixed Rate Loan if
quotes are being requested for both types of Advances in the same
Competitive Bid Quote Request; (4) the Competitive Bid Margin offered
for each such Competitive Bid Pricing Loan; (5) the minimum or maximum
amount, if any, of each Competitive Bid Loan which may be accepted by
Borrower; (6) the applicable Interest Period or term of each
Competitive Bid Loan; and (7) the identity of the quoting Lender.
(iii) Administrative Agent shall reject any
Competitive Bid Quote that: (1) is not substantially in the form of
EXHIBIT E-3 hereto or does not specify all of the information required
by SECTION 2.3(D)(ii); (2) contains qualifying, conditional or similar
language, other than any such language contained in EXHIBIT E-3 hereto;
(3) proposes terms other than or in addition to those set forth in the
applicable Invitation for Competitive Bid Quotes, except as
contemplated by SECTION 2.3(D)(II); or (4) arrives after the time set
forth in SECTION 2.3(D)(I).
(iv) If any Competitive Bid Quote shall be rejected
pursuant to SECTION 2.3(D)(III), then Administrative Agent shall notify
the applicable Lender of such rejection as soon as practicable.
(v) If Administrative Agent, in its capacity as a
Lender, elects to submit a Competitive Bid Quote for any Competitive
Bid Quote Request, it shall submit its Competitive Bid Quote directly
to Borrower at least one-half hour earlier than the latest time at
which the Lenders are required to submit a Competitive Bid Quote under
this SECTION 2.3(D).
<PAGE> 59
(e) NOTICE TO BORROWER. Administrative Agent shall promptly
notify Borrower of (1) the terms of any Competitive Bid Quote submitted by a
Lender that is in accordance with this SECTION 2.3 and (2) if not disregarded by
Administrative Agent in accordance with the immediately succeeding sentence, of
any Competitive Bid Quote that is in accordance with this SECTION 2.3 which
amends, modifies or is otherwise inconsistent with a previous Competitive Bid
Quote submitted by such Lender with respect to the same Competitive Bid Quote
Request. Any such subsequent Competitive Bid Quote shall be disregarded by
Administrative Agent unless such subsequent Competitive Bid Quote specifically
states that it is submitted solely to correct a manifest error in such former
Competitive Bid Quote. Administrative Agent's notice to Borrower shall specify
the aggregate principal amount of Competitive Bid Loans for which offers have
been received for each Interest Period and/or term specified in the related
Competitive Bid Quote Request and the respective principal amounts and
Competitive Bid Margins and/or fixed interest rates so offered.
(f) ACCEPTANCE AND NOTICE BY BORROWER. Subject to the receipt of
the notice from Administrative Agent referred to in this SECTION 2.3, not later
than 11:00 a.m. (Dallas time) at least three (3) Business Days prior to the
proposed Borrowing Date in the case of a Competitive Bid Pricing Loan and two
(2) Business Days prior to the proposed Borrowing Date in the case of a
Competitive Bid Fixed Rate Loan, Borrower shall notify Administrative Agent of
Borrower's acceptance or rejection of each offer received by it pursuant to this
SECTION 2.3 using the form attached hereto as EXHIBIT E-4; PROVIDED, HOWEVER,
that the failure by Borrower to give such notice to Administrative Agent shall
be deemed to be a rejection by Borrower of all such offers. In the case of
acceptance, such notice (a "COMPETITIVE BID ACCEPTANCE NOTICE") shall specify
the aggregate principal amount of offers for each Interest Period or term that
are accepted. Borrower may accept or reject any Competitive Bid Quote in whole
or in part (subject to the terms of this SECTION 2.3); PROVIDED THAT:
(i) the aggregate principal amount of each
Competitive Bid Advance may not exceed the applicable amount set forth
in the related Competitive Bid Quote Request;
(ii) acceptance of offers may only be made on the
basis of ascending Competitive Bid Margins or fixed interest rates with
respect to comparable Interest Periods or terms (provided, that,
Borrower may, in its sole discretion, select between Competitive Bid
Margins and fixed interest rates); and
(iii) Borrower may not accept any offer of the type
described in this SECTION 2.3 that otherwise fails to comply with the
requirements of this Agreement for the purpose of obtaining a
Competitive Bid Loan under this Agreement.
<PAGE> 60
(g) ALLOCATION BY ADMINISTRATIVE AGENT. If offers are made by two
or more Lenders with the same Competitive Bid Margins or the same fixed interest
rate for a greater aggregate principal amount than the amount in respect of
which offers are permitted to be accepted for the related Interest Period or
term, as the case may be, the principal amount of Competitive Bid Loans in
respect of which such offers are accepted shall be allocated by Administrative
Agent among such Lenders as nearly as possible (in such multiples as
Administrative Agent may deem appropriate) in proportion to the aggregate
principal amount of such offers; PROVIDED, HOWEVER, that Administrative Agent
shall endeavor to allocate each Competitive Bid Advance so that no Lender shall
be allocated a portion of any Competitive Bid Advance which is less than
$5,000,000. Allocations by Administrative Agent of the amounts of Competitive
Bid Loans shall be conclusive in the absence of manifest error. Administrative
Agent shall promptly, but in any event on the same Business Day, notify each
Lender of its receipt of a Competitive Bid Acceptance Notice and the aggregate
principal amount of each Competitive Bid Advance allocated to that participating
Lender.
(h) FUNDING OF COMPETITIVE BID LOANS. If Borrower accepts one or
more offers made by any Lender or Lenders pursuant to SECTION 2.3(F), each such
Lender shall, not later than 11:00 a.m. (Dallas, Texas time) on the applicable
Borrowing Date, make the funds under its applicable Competitive Bid Loan
available to Borrower by wire transfer of the full amount of such funds to
Administrative Agent pursuant to Administrative Agent's wire transfer
instructions (or as otherwise directed by Administrative Agent) in funds that
are available for immediate use by Administrative Agent. The amount so received
by Administrative Agent shall, subject to the terms and conditions of this
Agreement, be made available to Borrower on the applicable Borrowing Date by
depositing same, in immediately available funds, not later than 2:00 p.m.
(Dallas, Texas time) in an account that Borrower maintains with Administrative
Agent.
(i) COMMITMENT TO LEND NOT REDUCED. The agreement of a Lender to
make a Competitive Bid Loan hereunder shall not reduce such Lender's obligation
to fund other Advances under the Credit Facility to the extent of such Lender's
Commitment, it being expressly acknowledged and agreed that the agreement to
make a Competitive Bid Loan is optional on the part of such Lender and in
addition to its Commitment. The amount of Competitive Bid Loans shall not reduce
the Commitment of any Lender.
SECTION 2.4. FEES.
(a) COMMITMENT FEES. In consideration for the commitment of each
Lender to make Advances under the Credit Facility upon the terms and conditions
set forth in this Agreement and the reserving of sufficient funds by each Lender
from which to make disbursement of the Advances under the Credit Facility,
Borrower shall pay to the Administrative Agent, for the benefit and account of
each Lender, on the Closing Date, a one-time non-refundable commitment fee (the
"INITIAL COMMITMENT FEE") in the amount for each Lender determined in accordance
with each Lender's Fee Letter. The Initial Commitment Fee has been earned in
full. Upon the addition of a new Lender or the increase of an existing Lender's
Commitment in connection with an increase in the Total Commitment under SECTION
2.1(B), Borrower shall pay to Administrative Agent, for the account of the
applicable Lenders, any Commitment Fees agreed to in connection with any such
addition or increase.
<PAGE> 61
(b) FACILITY FEE. Throughout the Credit Period, Borrower shall
pay to Administrative Agent the Facility Fee for the account of each Lender in
accordance with each Lender's Commitment Percentage, such annual fee to be due
and payable in quarterly installments in advance, with the first payment thereof
to be due on the Closing Date for the period from the Closing Date through
September 30, 1999 (prorated for such period), and subsequent payments to be
made on the first day of each fiscal quarter for that ensuing quarter,
commencing on October 1, 1999, and continuing on the first day of each calendar
quarter thereafter, with a final payment of such Facility Fee being due and
payable on the Termination Date. In the event of any increase in the Total
Commitment during any fiscal quarter, Borrower shall promptly upon the
effectiveness of such increase pay to Administrative Agent for the account of
those Lenders entitled to same, the increased Facility Fee for the number of
days remaining in such quarter after the effective date of such increase.
(c) EXTENSION FEE. Borrower shall pay the Extension Fee to
Administrative Agent (for the benefit of the Lenders) in the amount and manner
set forth in SECTION 3.15(D) at the time Borrower delivers to Administrative
Agent notice of its election to exercise the Extension Option.
(d) RENEWAL FEE. Borrower shall pay to Administrative Agent, for
the benefit of the Lenders participating in any renewal of the Credit Facility
provided for in SECTION 3.16, the Renewal Fee for each such renewal in the
amount and manner set forth in SECTION 3.16.
(e) COMPETITIVE BID AUCTION FEE. In consideration for
Administrative Agent's services in administering the auctions for all
Competitive Bid Loans, Borrower shall pay to Administrative Agent a fee (a
"COMPETITIVE BID AUCTION FEE") in the amount of $2,500 for each Competitive Bid
Auction in excess of two such auctions in each calendar month, with such
Competitive Bid Auction Fee to be paid at the time of submission by Borrower of
each Competitive Bid Quote Request after the second Competitive Bid Auction in
the applicable calendar month, which fee shall be non-refundable (even if
Borrower cancels the proposed Competitive Bid Auction or no offers are made by
the Lenders).
SECTION 2.5. DISBURSEMENT AND PERFORMANCE BY LENDERS. (a) If Borrower
fails to pay or perform any of the Obligations when due and there exists any
Event of Default which is continuing, or Borrower has requested Administrative
Agent to make an Advance to pay such Obligation, refrain from making an Advance
or take any action, Administrative Agent, in Borrower's name or in its own name,
shall have the right but not the obligation, to pay or perform such Obligation,
including (i) payment to any Governmental Authority of taxes, assessments and
other charges with respect to any of the Property; (ii) payment to insurers to
maintain insurance; (iii) payment to the holder of any unpermitted lien or
encumbrance against the Unencumbered Properties to remove same; (iv) performing
any other Obligation including payment to any third party Administrative Agent
deems necessary or advisable in connection with any Work or expenses incident to
the Property or the Credit Facility; and (v) taking any action and paying any
amounts Administrative Agent deems necessary or advisable to protect and
preserve Borrower's title to the Property, or any security that may at any time
be given for the Obligations. Borrower hereby assigns and pledges the proceeds
of the Credit Facility to Administrative Agent and the Lenders for such purpose.
No such action, payment or disbursement or failure to act, pay or disburse,
shall cure or waive any Default or Event of Default or waive any right or remedy
of Administrative Agent or the Lenders.
<PAGE> 62
(b) Any funds of the Lenders paid or used for any of the purposes
referred to in SECTION 2.5(A) shall constitute an Advance and be a part of the
Obligations, even if in excess of the Total Commitment, and the Lenders=
obligation to make future Advances shall be correspondingly reduced.
Administrative Agent and the Lenders may rely on any statement, invoice, claim
or notice without inquiry into the validity or accuracy thereof, and without
liability for the sufficiency or adequacy of any such action or payment except
for the gross negligence or willful misconduct of Administrative Agent or the
Lenders. Upon making any such payment the Lenders shall be subrogated to all
rights of the Person receiving such payment. The amount and nature of any such
expense or expenditure and the time when paid shall be presumptively established
by the statement of Administrative Agent of the amount and nature thereof.
(c) All costs, expenses and disbursements incurred by
Administrative Agent or the Lenders under this SECTION 2.5, in connection with
any Default or Event of Default, to protect or preserve the Property, or which
are reimbursable by Borrower under any provision of this Agreement or any Loan
Document shall be a part of the Obligations, even if in excess of the Total
Commitment. Except as provided otherwise in the Loan Documents, if incurred
before the Termination Date, such costs, expenses and disbursements shall be
paid or reimbursed to Lenders upon demand and shall bear interest until paid (i)
from the date incurred or paid until the date ten (10) days after demand, at the
per annum rate equal to the lesser of the Maximum Lawful Rate or the Variable
Rate, provided that if at any time the Variable Rate would exceed the Maximum
Lawful Rate then the Variable Rate shall be limited to the Maximum Lawful Rate,
but, to the extent permitted by applicable Laws, any subsequent reductions in
the Variable Rate shall not reduce the Variable Rate below the Maximum Lawful
Rate until the total amount of interest accrued at the Maximum Lawful Rate
equals the amount of interest which would have accrued if the Variable Rate had
not been limited by the Maximum Lawful Rate, and (ii) from and after the date
ten (10) days after demand, at the per annum rate equal to the lesser of the
Maximum Lawful Rate or the Default Rate. Except as provided otherwise in the
Loan Documents, if incurred after the Termination Date, all such costs and
expenses shall be reimbursed by Borrower to Lenders upon demand by
Administrative Agent and shall bear interest until paid at the per annum rate
equal to the lesser of the Maximum Lawful Rate or the Default Rate.
ARTICLE III
TERMS OF THE CREDIT FACILITIES
SECTION 3.1. NOTES. All Advances under the Credit Facility other than
Competitive Bid Advances shall be evidenced by the Notes, and each Lender shall
receive an original executed Note in an amount equal to such Lender's
Commitment. Competitive Bid Advances shall be evidenced by the Competitive Bid
Notes, and each Lender shall receive an original executed Competitive Bid Note
in an amount equal to 50% of the Total Commitment.
<PAGE> 63
SECTION 3.2. MATURITY; MANDATORY PRINCIPAL REDUCTIONS. (a) All
outstanding principal of the Notes, together with all accrued but unpaid
interest and other amounts owed with respect thereto, shall be due and payable
in full on the Termination Date. All outstanding principal of any Competitive
Bid Note shall be due and payable on the last day of the applicable Interest
Period or maturity date for such Competitive Bid Loan and in any event on or
prior to the Termination Date
(b) Within five (5) Business Days after the determination of the
existence of any Excess Outstandings, Borrower shall reduce the outstanding
principal amount of the Credit Facility by an amount not less than the Excess
Outstandings. Borrower shall pay to Administrative Agent on demand the amount of
any Consequential Loss, if any, that may be due in connection therewith pursuant
to SECTION 3.6(B); provided any principal reductions shall be applied first to
Variable Rate Advances or Advances that will not result in Consequential Loss.
SECTION 3.3. INTEREST RATE. Interest on the Notes shall accrue at a
rate per annum equal to the lesser of (a) the Applicable Rate as selected by
Borrower pursuant to this Agreement, subject, however, to the provisions of
SECTION 11.8, or (b) the Maximum Lawful Rate; PROVIDED, HOWEVER, if at any time
the Applicable Rate exceeds the Maximum Lawful Rate, resulting in the charging
of interest hereunder to be limited to the Maximum Lawful Rate, then any
subsequent reduction in the Applicable Rate shall not reduce the rate of
interest below the Maximum Lawful Rate until the total amount of interest
accrued on the indebtedness evidenced by the Notes equals the amount of interest
which would have accrued on such indebtedness if the Applicable Rate had at all
times been in effect.
Without notice to Borrower or any other Person, the Variable Rate and
the Maximum Lawful Rate shall each automatically fluctuate upward and downward
as and in the amount by which the Base Rate and Maximum Lawful Rate,
respectively, fluctuate, subject always to limitations contained in this
Agreement. In addition, the Adjusted LIBOR Rate and the Variable Rate with
regard to Advances under the Credit Facility shall fluctuate upward and downward
as and in the amount by which the LIBOR Margin or the Variable Rate Margin
fluctuates, subject always to limitations contained in this Agreement, any such
changes in the LIBOR Margin or the Variable Rate Margin, to occur as provided in
SCHEDULE II.
SECTION 3.4. INTEREST PAYMENTS. (a) Interest on the Notes shall be due
and payable as it accrues on (a) the tenth (10th ) day of each calendar month
commencing on September 10, 1999, and continuing on the tenth (10th) day of each
month thereafter until the Termination Date (except that interest on seven and
fourteen day LIBOR Rate Advances shall only be payable on the last day of the
applicable Interest Period), and (b) at the end of each Interest Period as to
any LIBOR Rate Portion then expiring, and on demand after the Termination Date
so long as any principal of any Note remains unpaid.
(b) Interest on the Competitive Bid Notes shall be due and
payable as it accrues on the tenth (10th ) day of each calendar month on which
any Competitive Bid Loan is outstanding under a Competitive Bid Note, on the
last day of the respective Interest Period in the case of Competitive Bid
Pricing Loan, and on the respective maturity date in the case of a Competitive
Bid Fixed Rate Loan, with all accrued unpaid interest on all Competitive Bid
Notes due and payable on the Termination Date.
<PAGE> 64
SECTION 3.5. CONVERSION OF ADVANCES AND INTEREST RATE ELECTIONS.
(a) CONVERSION TO VARIABLE RATE. Borrower may, on any Interest
Adjustment Date (other than the Termination Date), convert amounts of any LIBOR
Rate Advances into Variable Rate Advances with interest accruing thereon with
reference to the Variable Rate, as provided in SECTION 3.3.
(b) SELECTION OF LIBOR RATE PRICING. Upon at least three (3)
Business Days= prior written notice from Borrower to Administrative Agent
("MINIMUM NOTICE REQUIREMENT"), and subject to the conditions provided in this
Agreement, Borrower may, on any date prior to the Termination Date, convert
amounts of not less than Five Million and No/100 Dollars ($5,000,000.00) in the
aggregate on the same date, or any whole multiple of One Million and No/100
Dollars ($1,000,000.00) in excess thereof of any Variable Rate Advances into
LIBOR Rate Advances, as applicable, with interest accruing thereon with
reference to the Adjusted LIBOR Rate, for the Interest Period selected in such
notice.
Each notice of Adjusted LIBOR Rate election by Borrower (whether
in connection with an initial funding or a conversion of an existing funding)
shall include (i) the amount of the proposed aggregate LIBOR Rate Advances, (ii)
the Interest Period selected by Borrower, and (iii) the Effective Date, and is
subject to the following conditions: (1) the Interest Period shall be limited to
a period commencing on the Effective Date and ending on a date that is 7 days,
14 days, or one, two, three, four, five, six or twelve months later, as elected
by Borrower in its notice to Administrative Agent; (2) Borrower's written notice
of an election shall be received by Administrative Agent in time to satisfy the
Minimum Notice Requirement; (3) the last day of the Interest Period will not be
subsequent in time to the Termination Date, (4) in the case of a continuation of
a LIBOR Rate Advance, the Interest Period applicable after such continuation
shall commence on the last day of the preceding Interest Period; (5) no LIBOR
Rate election shall be made if Administrative Agent reasonably determines by
reason of circumstances affecting the interbank Eurodollar market that either
adequate or reasonable means do not exist for ascertaining the Adjusted LIBOR
Rate for any Interest Period, or it becomes impracticable for Administrative
Agent or any Lender to obtain funds by purchasing U.S. dollars in the interbank
Eurodollar market, or if Administrative Agent or any Lender reasonably
determines that the Adjusted LIBOR Rate will not adequately or fairly reflect
the costs to such Lender of maintaining the applicable LIBOR Rate Advances, at
such rate, or if as a result of any Regulatory Change, it shall become unlawful
or impossible for Lenders to maintain any such LIBOR Rate election; (6) there
shall never be more than seven (7) LIBOR Rate Advances, in the aggregate, in
effect at any one time under the Credit Facility (with no more than two (2) of
these being for an Interest Period of 7 days); and (7) no LIBOR Rate election
shall be made after the occurrence and during the continuance of a Default or
Event of Default.
<PAGE> 65
(c) ELECTION AND CONVERSION TO VARIABLE RATE. To the extent
Borrower has not made an effective election under and in accordance with SECTION
3.5(A) OR (B) above (including without limitation at the expiration of an
Interest Period), the Applicable Rate shall be the Variable Rate. If Borrower
has failed to make such election at the end of an Interest Period, the Lenders
shall be deemed to have made a Variable Rate Advance in the amount, and in
replacement, of the LIBOR Rate Advance then maturing.
SECTION 3.6. REDUCTION OF COMMITMENT AMOUNT; CONSEQUENTIAL LOSS.
(a) Borrower may, from time to time if an Event of Default is not
then continuing, fully or partially, reduce the Total Commitment, provided that
(i) notice of such reduction must be received by Administrative Agent by 10:00
a.m. Dallas, Texas, time on the fifth (5th) Business Day preceding the effective
date of such reduction, (ii) each such reduction in the Commitment must be in a
minimum amount of $20,000,000.00 or any whole multiple of $1,000,000.00 in
excess thereof, (iii) Borrower shall not be entitled to an increase in the Total
Commitment pursuant to SECTION 2.1(B) or otherwise once it has been so reduced,
(iv) if the sum of the aggregate outstanding principal balance of the Credit
Facility (including amounts outstanding under Competitive Bid Notes), exceeds
the Total Commitment as so reduced, Borrower shall make a mandatory principal
prepayment in at least the amount of such excess, together with any
Consequential Loss arising as a result thereof (provided, any such prepayment
shall be applied first to Advances that will not result in Consequential Loss),
and (v) in no event shall Borrower be entitled to so reduce the Total Commitment
below $100,000,000.00, unless Borrower has elected to terminate the Credit
Facility in full.
(b) If Borrower shall prepay any LIBOR Rate Advance or a
Competitive Bid Pricing Loan prior to the expiration of its applicable Interest
Period or if Borrower shall fail to obtain an Advance or convert any amounts
after delivering and pursuant to an election satisfying the Minimum Notice
Requirement, Borrower shall pay to Lenders or the applicable Lender of such
Competitive Bid Loan an amount (the "CONSEQUENTIAL LOSS") equal to any actual
loss, expense or reduction in yield that any such Lender reasonably incurs as a
result of such event. Any Consequential Loss required to be paid by Borrower
pursuant to this SECTION 3.6 or any other provisions of this Agreement or of the
other Loan Documents in connection with the prepayment of any LIBOR Rate
Advances or Competitive Bid Loans shall be due and payable whether such
prepayment is being made voluntarily or involuntarily, including, without
limitation, as a result of an acceleration of sums due under LIBOR Rate Advances
or Competitive Bid Loans or any part thereof due to an Event of Default. A
Lender (through the Administrative Agent) must request compensation under this
SECTION 3.6(B) as promptly as practicable after it obtains knowledge of the
event which entitles it to such compensation, but in any event within 180 days
after it obtains such knowledge and pursuant to a certificate which sets forth
the amount such Lender is entitled to receive pursuant to this SECTION 3.6(B)
and the basis for determining such amount, which certificate shall be
presumptively correct as to the matters set forth therein in the absence of
manifest error. Any amounts received by Administrative Agent from Borrower
pursuant hereto shall be disbursed by Administrative Agent in immediately
available funds to the Lenders requesting such amounts.
<PAGE> 66
SECTION 3.7. SCHEDULES ON NOTES. Each Lender is hereby authorized to
record the date and amount of the initial principal balance of its Note and its
Competitive Bid Note and the date and the amount of each advance and repayment
of principal on such notes, and to attach any such recording as a schedule to
the applicable note whereupon such schedule shall constitute a part of such note
for all purposes. Any such recording shall constitute PRIMA FACIE evidence of
the accuracy of the information so recorded; PROVIDED that the absence or
inaccuracy of any such schedule or notation thereon shall not limit or otherwise
affect the liability of Borrower for the repayment of all amounts outstanding
under the Notes and the Competitive Bid Notes, together with interest thereon.
SECTION 3.8. GENERAL PROVISIONS AS TO PAYMENTS. All payments and
indemnities required to be made by Borrower under any of the Loan Documents
shall be joint and several obligations of Borrower and each Guarantor
Subsidiary. Borrower shall make each payment of principal and interest on the
Credit Facility and all fees payable hereunder or under any other Loan Document
not later than 12:00 noon (Dallas time) on the date when due, in Federal or
other funds immediately available in Dallas, Texas, to Administrative Agent at
Administrative Agent's Dallas address for payments set forth in SCHEDULE I,
without setoff, counterclaim or reduction. Administrative Agent will promptly
(and if such payment is received by Administrative Agent by 12:00 noon (Dallas,
Texas time), and otherwise if reasonably possible, on the same Business Day, and
in any event not later than the next Business Day after receipt of such payment)
distribute to each Lender a payment on the applicable Note or Competitive Bid
Note, in accordance with such Lender's pro rata share of each such payment
received by Administrative Agent. For purposes of calculating accrued interest
on the Credit Facility, any payment received by Administrative Agent as
aforesaid by 12:00 noon (Dallas, Texas time) on any Business Day shall be deemed
made on such day; otherwise, such payment shall be deemed made on the next
Business Day after receipt by Administrative Agent. Whenever any payment of
principal or interest on the Credit Facility, or any fees under the Loan
Documents, shall be due on a day which is not a Business Day, the date for
payment thereof shall be extended to the next succeeding Business Day. If the
date for any payment of principal is extended pursuant to the preceding or
operation of law or otherwise, interest thereon shall be payable for such
extended time. If Administrative Agent shall fail to deliver to any Lender such
Lender's pro rata portion of any principal, interest or fees received by
Administrative Agent as required by this Agreement, then in addition to its pro
rata portion of such payment, such Lender shall be entitled to receive from
Administrative Agent interest on the amount which has failed to be timely paid
at the Federal Funds Rate, for the period commencing on the date Administrative
Agent was required to deliver such payment and ending on (but excluding) the
date such payment is made.
<PAGE> 67
SECTION 3.9. APPLICATION OF PAYMENTS. (a) So long as no Event of
Default has occurred and is continuing, all payments (including prepayments)
received by Administrative Agent or Lenders hereunder from or on behalf of
Borrower shall be applied first to pay any unpaid fees owing to Administrative
Agent, Sole Lead Arranger or the Lenders under SECTION 2.4 or otherwise, then to
pay any accrued interest then due and payable first on the Notes and then on the
Competitive Bid Notes, then to repay the principal amount first of the Notes and
then of the Competitive Bid Notes, (in inverse order of maturity, in the case of
partial prepayments), and then to pay any other Obligations in the manner and
order determined by Administrative Agent in its sole discretion. Notwithstanding
the foregoing, so long as no Event of Default has occurred and is continuing and
after application of any payment to accrued interest, Administrative Agent shall
apply the payment to that portion of the principal amount of the Notes or
Competitive Bid Notes as is designated by Borrower in a written notice delivered
to Administrative Agent simultaneously with the payment; PROVIDED, HOWEVER, that
Administrative Agent shall not assist Borrower with any determination of the
portion of the principal amount of the Notes or Competitive Bid Notes to which
the payment will be applied.
(b) After the occurrence and during the continuance of an Event
of Default, all payments (including prepayments) received by Administrative
Agent or any Lender hereunder from or on behalf of Borrower shall be applied to
the Obligations in the manner and order determined by the Required Lenders as
provided in SECTION 9.9 hereof (subject to the terms and provisions of ARTICLE X
hereof).
SECTION 3.10. POST-DEFAULT INTEREST; PAST DUE PRINCIPAL AND INTEREST.
After maturity of the Notes or the occurrence of an Event of Default, the
outstanding principal balance of the Notes and the Competitive Bid Notes shall,
at the option of the Required Lenders, bear interest at the Default Rate. Any
past due principal of and, to the extent permitted by law, past due interest on
the Notes and the Competitive Bid Notes shall bear interest, payable as it
accrues on demand, for each day until paid at the Default Rate. Such interest
shall continue to accrue at the Default Rate notwithstanding the entry of a
judgment with respect to any of the Obligations, except as otherwise provided by
applicable law.
SECTION 3.11. COMPUTATION OF INTEREST AND FEES. All interest payable on
the Notes and the Competitive Bid Notes, and the amount of all fees payable
hereunder (except as otherwise specifically provided for in the Fee Letters or
in SECTION 2.4), shall be computed based on the number of days elapsed and, with
respect to LIBOR Rate Portions, 360 days per year, and, in all other instances,
365 days per year, subject to the provisions hereof limiting interest to the
maximum permitted by applicable law.
SECTION 3.12. LENDERS= CAPITAL ADEQUACY. If any present or future law,
governmental rule, regulation, policy, guideline or directive (whether or not
having the force of law) or the interpretation thereof by a court or
Governmental Authority with appropriate jurisdiction affects the amount of
capital required or expected to be maintained by any Lender or any corporation
controlling such Lender and such Lender reasonably determines that as a
consequence of its obligations under the Credit Facility the rate of return on
it capital has been reduced to a level below that which it otherwise would have
achieved (taking into consideration its policies with respect to capital
adequacy) then such Lender may notify Borrower of such fact, and commencing
ninety (90) days following such notice, Borrower shall pay to such Lender or
Administrative Agent (for such Lender) from time to time on demand, as an
additional fee payable hereunder, such amount as Lender shall determine in good
faith and certify in a notice to Borrower in reasonable detail to be an amount
that will adequately compensate such Lender in light of these circumstances for
such loss. Each Lender shall allocate such cost increases among its customers in
good faith and on an equitable basis.
SECTION 3.13. REGULATORY CHANGES; INDEMNIFICATION FOR FAILURE TO PAY
WHEN DUE.
<PAGE> 68
(a) If, on or after the Closing Date, any Regulatory Change shall
make it unlawful, impracticable or impossible for any Lender (or its Eurodollar
lending office) to make, maintain or fund LIBOR Rate Advances or Competitive Bid
Pricing Loans, as applicable, and such Lender shall so notify Administrative
Agent, Administrative Agent shall forthwith give notice thereof to the other
applicable Lenders and Borrower, whereupon until such Lender notifies Borrower
and Administrative Agent that the circumstances giving rise to such suspension
no longer exist, the obligation of such Lender to maintain or fund LIBOR Rate
Portions or the funding under a Competitive Bid Note, as the case may be, shall
be suspended. If such Lender shall determine that it may not lawfully continue
to maintain and fund any of its outstanding LIBOR Rate Advances or amounts under
a Competitive Bid Note, to maturity and shall so specify in such notice,
Borrower shall immediately prepay in full the then outstanding principal amount
of such Lender's portion of the LIBOR Rate Advances or Competitive Bid Notes, as
the case may be, together with accrued interest thereon. Concurrently with
prepaying such portion of the LIBOR Rate Advances, Borrower shall borrow a
Variable Rate Advance in an equal principal amount from such Lender (on which
interest and principal shall be payable contemporaneously with the related LIBOR
Rate Advances of the other Lenders), and such Lender shall make such Variable
Rate Advance. If a Lender shall be unable to make, maintain or fund LIBOR Rate
Advances or Competitive Bid Pricing Loans, as above provided for more than sixty
(60) days, and the other Lenders are not similarly restricted, Borrower shall be
entitled to designate an Eligible Assignee acceptable to Administrative Agent to
purchase the interest of the Lender which is unable to fund LIBOR Rate Advances
or make Competitive Bid Pricing Loans, as the case may be, and such Lender shall
sell its interest to such Eligible Assignee within ten (10) Business Days of
Borrower's request. Any such purchase shall be in accordance with and subject to
the provisions of SECTION 11.10.
(b) Borrower shall promptly indemnify (i) Administrative Agent
and the Lenders against any actual loss or expense which Administrative Agent
or the Lenders may, as a consequence of Borrower's failure to make a payment on
the date such payment is due hereunder, or the payment, prepayment or
conversion of any LIBOR Rate Advances or amounts due under Competitive Bid
Notes hereunder on a day other than an Interest Adjustment Date or, in the case
of Competitive Bid Notes, the last day of the applicable Interest Period
or term of such notes, reasonably sustain or incur in liquidating or employing
deposits from third parties acquired to effect, fund or maintain any such LIBOR
Rate Advances or Competitive Bid Notes or any part thereof, including, without
limitation, any Consequential Loss; and (ii) the Lenders against and reimburse
the Lenders for increased costs to Lenders, as a Result of any Regulatory
Change, in the maintaining of any LIBOR Rate Advances or Competitive Bid Loans
(Administrative Agent shall give Borrower written notice of such costs within
ninety (90) days of its or any Lender's implementation and/or compliance
with any such Regulatory Change, and such costs shall be reimbursed to such
Lender prior to the earlier of (A) the Termination Date, or (B) ten (10) days
following written notice thereof from Administrative Agent to Borrower). All
payments made pursuant to this paragraph shall be made free and clear, without
reduction for, or account of, any present or future taxes or other levies of
any nature, excluding net income and franchise taxes.
SECTION 3.14. TAXES.
<PAGE> 69
(a) NO DEDUCTION FOR TAXES. Except as provided in SECTION
3.14(D), any and all payments by Borrower hereunder or under the Notes or the
Competitive Bid Notes shall be made free and clear of and without deduction for
any and all present or future Taxes, excluding, (i) in the case of each Lender
and the Agents, income and franchise taxes imposed by the jurisdiction under the
laws of which such Lender or 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 Applicable Lending Office or
any political subdivision thereof. If Borrower shall be required by law to
deduct any Taxes from or in respect of any sum payable hereunder or under any
Note or any Competitive Bid Note to any Lender or any Agent, (i) 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 3.14) such Lender or Agent (as the case may be) receives an amount
equal to the amount such party would have received had no such deductions been
made, (ii) Borrower shall make such deductions, (iii) Borrower shall pay the
full amount deducted to the relevant taxing authority or other authority in
accordance with applicable law, and (iv) Borrower shall deliver to
Administrative Agent evidence of such payment to the relevant taxing authority
or other authority in the manner provided in SECTION 3.14(C); PROVIDED that
Borrower shall not be required to increase any payment by any amount which such
Lender shall be entitled to have repaid by the taxing authority upon filing of
the appropriate documents.
(b) INDEMNIFICATION. Borrower shall indemnify each Lender and
Administrative Agent for the full amount of Taxes (including, without
limitation, any Taxes imposed by any jurisdiction on amounts payable under this
SECTION 3.14) paid by any Lender or Administrative Agent (as the case may be),
except for the Lender's income or franchise Taxes of Administrative Agent or any
Lender and withholding therefor as required by the applicable taxing authority,
and any liability (including penalties, interest and expenses) arising therefrom
or with respect thereto, whether or not such Taxes were correctly or legally
asserted. Such indemnification shall be made within thirty (30) days from the
date any Lender or Administrative Agent (as the case may be) makes written
demand therefor. Each Lender and Administrative Agent agree to notify Borrower
of any event occurring after the Closing Date entitling such Lender or
Administrative Agent to indemnification under this Section as promptly as
practicable; provided, that except as otherwise limited by the next sentence,
the failure of any Lender or Administrative Agent to give such notice shall not
result in any liability to such Lender or Administrative Agent or release
Borrower from any of its obligations hereunder. Each Lender and Administrative
Agent, as applicable, shall only be entitled to indemnification under this
SECTION 3.14 for Taxes paid during the ninety (90) day period ending on the date
Borrower receives the notice described in the immediately preceding sentence;
PROVIDED, that from and after such notice, such Lender or Administrative Agent
shall be entitled to compensation for Taxes occurring after such notice until
such time as such Taxes cease to exist.
(c) TAX PAYMENT RECEIPT. Within thirty (30) days after the date
of any payment of Taxes, Borrower shall furnish to Administrative Agent the
original or a certified copy of a receipt evidencing payment thereof or other
evidence of payment satisfactory to Administrative Agent.
<PAGE> 70
(d) TAX FORMS. Each Lender or Participant that is not a
corporation or partnership created or organized in or under the laws of the
United States, any estate that is subject to federal income taxation regardless
of the source of its income, or any trust which is subject to the supervision of
a court within the United States and the control of a United States fiduciary as
described in section 7701 (a) (30) of the Internal Revenue Code (a ANON-U.S.
LENDER@) shall deliver to Borrower and Administrative Agent (or, in the case of
a Participant, to the Lender from which the related participation shall have
been purchased ) on or before the date on which it becomes a party to this
Agreement (or, in the case of a Participant, on or before the date on which such
Participant purchases the related participation) either:
(i) (x) two duly completed and signed copies of
either Internal Revenue Service Form 1001 (relating to such Non-U.S.
Lender and entitling it to a complete exemption from withholding of
U.S. Taxes on all amounts to be received by such Non-U.S. Lender
pursuant to this Agreement and the other Loan Documents) or Form 4224
(relating to all amounts to be received by such Non-U.S. Lender
pursuant to this Agreement and the other Loan Documents), or successor
and related applicable forms, as the case may be, or (y) two duly
completed and signed copies of Internal Revenue Service Form W-8 or
W-9, or successor and related applicable forms, as the case may be; or
(ii) in the case of a Non-U.S. Lender that is not a
"bank" within the meaning of Section 881 (c) (3) (A) of the Code and
that does not comply with the requirements of clause (a) hereof, (x) a
statement in a form as shall be reasonably requested by Borrower from
time to time to the effect that such Non-U.S. Lender is eligible for a
complete exemption from withholding of U.S. Taxes under Code Section
87(b) or 881(c), and (y) two duly completed and signed copies of
Internal Revenue Service Form W-8 or successor and related applicable
forms.
<PAGE> 71
Further, each Non-U.S. Lender agrees to deliver to Borrower and Administrative
Agent, and if applicable, the assigning Lender (or, in the case of a
Participant, to the Lender from which the related participation shall have been
purchased) two further duly completed and signed copies of such Forms 1001,
4224, W-8 or W-9, as the case may be, or successor and related applicable forms,
on or before the date that any such form expires or becomes obsolete and
promptly after the occurrence of any event requiring a change from the most
recent form(s) previously delivered by it to Borrower (or, in the case of a
Participant, to the Lender from which the related participation shall have been
purchased) in accordance with applicable United States laws and regulations;
UNLESS, in any such case, any change in law or regulations has occurred
subsequent to the date such Lender became a party to this Agreement ( or in the
case of a Participant, the date on which such Participant purchased the related
participation) which renders all such forms inapplicable or which would prevent
such Lender (or Participant) from properly completing and executing any such
form with respect to it and such Lender promptly notifies Borrower and
Administrative Agent (or, in the case of a Participant, the Lender from which
the related participation shall have been purchased) if it is no longer able to
deliver, or if it is required to withdraw or cancel, any form or statement
previously delivered by it pursuant to this SECTION 3.14. A Non-U.S. Lender
shall not be required to deliver any form or statement pursuant to the
immediately preceding sentences in this SECTION 3.14 that such Non-U.S. Lender
is not legally able to deliver, it being understood and agreed that Borrower
shall withhold or deduct such amount from any payments made to any Non-U.S.
Lender that Borrower reasonably determines is required by law and that payments
resulting from a failure to comply with this SECTION 3.14 shall not be subject
to payment or indemnity by Borrower and Guarantors pursuant to this SECTION
3.14.
SECTION 3.15. EXTENSION OPTION. Borrower shall have the option (the
"EXTENSION OPTION") to extend the Credit Facility by extending the Termination
Date for a one-year period from and after the initial Termination Date of August
18, 2001, or any previously extended Termination Date pursuant to SECTION 3.16,
such Extension Option being exercisable only once as provided below, and subject
to satisfaction of each of the following conditions:
(a) Administrative Agent shall have received written notice of
the Borrower's election to exercise the Extension Option at least thirty (30)
but no more than ninety (90) days before the Termination Date (as then in
effect).
(b) There shall exist no Default or Event of Default at the
time Borrower elects to exercise the Extension Option or at the Termination Date
(as then in effect).
(c) Borrower and each Guarantor Subsidiary shall have executed
and delivered to Administrative Agent a modification and extension agreement,
confirming that the entity documents for Borrower and Guarantor Subsidiaries
previously delivered to Administrative Agent are still in force and effect,
without modification, and such other documents as are reasonably requested by
Administrative Agent to properly document the extension.
(d) Borrower shall pay to Administrative Agent, for the
benefit of the Lenders in accordance with the respective Commitment Percentages
of the Lenders as of the effective date of the extension, an additional
non-refundable commitment fee in the amount of .15% of the Total Commitment (the
"EXTENSION FEE") in consideration of the commitment of the Lenders to continue
to make Advances to Borrower until the new extended Termination Date, which
Extension Fee shall be due and payable at the time Borrower delivers its written
notice of election to extend pursuant to SECTION 3.15(A). As of the date of
Borrower's delivery of written notice regarding the Extension Option, the
Extension Fee will have been earned in full and be a bona fide commitment fee
intended as reasonable compensation to Lenders for the commitment to make
Advances until the extended Termination Date.
(e) Borrower shall pay to Administrative Agent all reasonable
costs and expenses, including reasonable attorneys= fees, incurred in connection
with such extension and the documentation thereof.
(f) During the extended term, all terms and conditions of the
Loan Documents (including but not limited to interest rates and payments)
pertaining to the Credit Facility shall continue to apply; PROVIDED, HOWEVER,
that the term "Termination Date" and all references to such term in this
Agreement and the other Loan Documents shall mean and refer to the extended
Termination Date which shall be one year from the Termination Date as then in
effect.
<PAGE> 72
All references in this Agreement or any other Loan Document to the
exercise of the Extension Option shall be deemed to refer to satisfaction of all
conditions set forth above.
SECTION 3.16. ANNUAL RENEWAL. In addition to Borrower's right to
exercise the Extension Option in SECTION 3.15, Borrower shall be entitled from
time to time to request one-year extensions of the then current Termination Date
by delivering written notice of such request under this SECTION 3.16 to
Administrative Agent (which notice Administrative Agent shall immediately
forward to all Lenders) at least 60 but no more than 120 days prior to each
anniversary of the Closing Date prior to the Termination Date (including any
prior extensions thereof). For example, if the Closing Date is August 18, 1999,
Borrower, 60-120 days prior to August 18, 2000, may request that the Termination
Date be extended to August 18, 2002 and may continue to do so each year so that
the Credit Facility continues to have at least one year remaining on its term
(plus the right to exercise the Extension Option). Each Lender shall have the
right, in its sole and absolute discretion, to accept or reject such request by
written notice to Administrative Agent delivered within 30 days after delivery
to Lenders of Borrower's notice requesting the extension under this SECTION 3.16
(provided that the failure of any Lender to respond within such 30-day period
shall be deemed a rejection by such Lender of such request). Administrative
Agent shall give notice to Borrower on or before the last day of such thirty
(30) day period as to which Lenders have accepted or rejected (or deemed to have
rejected) such request, provided that the failure of Administrative Agent to so
notify Borrower shall be deemed a notice that all the Lenders have rejected such
request. In the event that some but not all of the Lenders have so accepted
Borrower's request to extend, then Borrower may elect to either (a) cancel such
request to extend the Credit Facility, or (b) so long as the Lenders whose
Commitments in the aggregate equal or exceed 80% of the Total Commitment have
agreed to extend, reduce the Total Commitment by the aggregate amount of the
Commitments of the non-extending Lenders, and proceed with the extension with
just the Lenders who have accepted Borrower's request to extend (provided that
the Total Commitment shall not be reduced to an amount less than 80% of the
Total Commitment at the time Borrower made the request for extension); or (c)
replace some or all of the Commitments of the non-extending Lenders with one or
more Eligible Assignees, as assignees of the non-extending Lenders. Any
extension of the Credit Facility under this SECTION 3.16 shall be subject to
satisfaction of the following terms and conditions:
(i) There shall exist no Default or Event of Default
at the time Borrower requests an extension under this SECTION 3.16 or
at the effective date of such extension.
(ii) Borrower and each Guarantor Subsidiary shall
have executed and delivered to Administrative Agent a modification and
extension agreement, and such other agreements, documents or
amendments to the Loan Documents as are reasonably requested by
Administrative Agent to properly document the extension, and any
modifications or amendments to this Agreement or the other Loan
Documents that may have been agreed to by Borrower, Administrative
Agent and the Lenders agreeing to extend under this SECTION 3.16, as a
term or condition of the extension, all in form and content reasonably
satisfactory to Administrative Agent.
<PAGE> 73
(iii) Borrower shall pay to Administrative Agent, for
the benefit of the Lenders in accordance with the respective
Commitment Percentages of the Lenders as of the effective date of the
extension, an additional non-refundable renewal commitment fee in an
amount mutually satisfactory to Borrower and Administrative Agent (the
"RENEWAL FEE") in consideration of the commitment of those Lenders
agreeing to extend and to continue to make Advances to Borrower until
the extended Termination Date, which Renewal Fee shall be due and
payable on the effective date of the applicable extension under this
SECTION 3.16, as of which time the Renewal Fee will have been earned
in full and be a bona fide commitment fee intended as reasonable
compensation to Lenders for the commitment to make Advances until the
extended Termination Date.
(iv) Borrower shall pay to Administrative Agent all
reasonable costs and expenses, including reasonable attorneys= fees,
incurred in connection with such extension and the documentation
thereof.
(v) During each extended term of the Credit Facility
under this SECTION 3.16, all terms and conditions of the Loan
Documents (including but not limited to interest rates and payments)
pertaining to the Credit Facility shall continue to apply, subject to
any modifications and amendments agreed to by Borrower, Administrative
Agent and the extending Lenders as a condition to or otherwise in
connection with the applicable extension; PROVIDED, HOWEVER, that the
term "Termination Date" and all references to such term in this
Agreement and the other Loan Documents shall mean and refer to the
extended Termination Date, which shall be one year from the
Termination Date as then in effect.
(vi) Any extension accomplished in the manner
provided in clause (b) or clause (c) of this SECTION 3.16 shall be
evidenced, if appropriate, by an amendment to this Agreement
reflecting the addition of any Lender hereunder, and Administrative
Agent will deliver an updated SCHEDULE I to Borrower and each of the
Lenders, reflecting the Total Commitment and the Commitment and
Commitment Percentage of each of the Lenders (including any new
Lender(s)). The outstanding Advances under the Notes will be
reallocated on the effective date of such extension among the Lenders
in accordance with their revised Commitment Percentages, and Borrower
will deliver a Note to each new Lender in the amount of its Commitment
and, if applicable, to any existing Lender in the amount of any
increase in its Commitment agreed to by such Lender. In addition,
Borrower will issue to Lenders new Competitive Bid Notes, if
necessary, to reflect any decrease in the maximum amount of
Competitive Bid Loans which can be requested by Borrower.
<PAGE> 74
SECTION 3.17. REPLACEMENT OF A LENDER. If Borrower is required pursuant
to SECTION 3.12 OR 3.14 to make any additional payment to any Lender (any Lender
so affected an "AFFECTED LENDER"), Borrower may elect, if such amounts continue
to be charged, to replace such Affected Lender as a Lender under this Agreement,
provided that no Default or Event of Default shall have occurred and be
continuing at the time of such replacement, and provided further that,
concurrently with such replacement, (a) an Eligible Assignee shall agree, as of
such date, to purchase for cash the Advances and other Obligations due to the
Affected Lender pursuant to an Assignment and Acceptance and to become a Lender
for all purposes under this Agreement and to assume all obligations of the
Affected Lender to be terminated as of such date, and (b) Borrower shall pay to
such Affected Lender in same day funds on the day of such replacement all
interest, fees and other amounts then accrued but unpaid to such Affected Lender
by Borrower hereunder to and including the date of termination, including
without limitation payments due to such Affected Lender under SECTIONS 3.12 AND
3.14.
ARTICLE IV
CONDITIONS TO CLOSING AND ADVANCES
SECTION 4.1. CONDITIONS TO CLOSING. The obligation of the Lenders to
fund the first Advance under the Credit Facility after the Closing Date, or of
any Lender to fund a Competitive Bid Loan, whichever is first, as provided
herein is subject to the satisfaction of the following conditions and
requirements:
(a) receipt by Administrative Agent of (i) this Agreement,
properly executed by Borrower and each Guarantor Subsidiary as of the Closing
Date, and (ii) evidence acceptable to Administrative Agent that Borrower has
paid all fees and expenses required to be paid by Borrower as of the date of
such Advance;
(b) receipt by each Lender of its Note and Competitive Bid Note,
properly executed by Borrower, together with its portion of the Initial
Commitment Fee;
(c) receipt by Administrative Agent of a Guaranty Agreement
executed by each Guarantor Subsidiary as of the Closing Date;
(d) receipt by Administrative Agent of the Contribution Agreement
in form and substance satisfactory to Administrative Agent, executed by Borrower
and each Guarantor Subsidiary as of the Closing Date;
(e) receipt by Administrative Agent of (i) the audited annual
financial statements for Borrower and its Consolidated Subsidiaries dated
December 31, 1998, (ii) the unaudited financial statements of Borrower and its
Consolidated Subsidiaries, dated June 30, 1999, and (ii) a Compliance
Certificate effective as of the last day of the fiscal quarter immediately
preceding the Closing Date (with any material changes since the end of such
fiscal quarter being noted therein), executed by Borrower, in the form attached
hereto as EXHIBIT C.
(f) receipt by Administrative Agent of an opinion of legal
counsel for Borrower, each Guarantor Subsidiary and General Partner, opining as
to the due organization and existence of Borrower, each Guarantor Subsidiary and
General Partner, the due authorization and execution of each of the Loan
Documents and the enforceability of each of the Loan Documents, and such other
matters as Administrative Agent may request, in form and substance reasonably
satisfactory to Administrative Agent;
<PAGE> 75
(g) receipt by Administrative Agent of all resolutions,
certificates or documents it may reasonably request relating to the formation,
existence and good standing of Borrower, each Guarantor Subsidiary and General
Partner on the Closing Date, corporate authority for the execution and validity
of this Agreement and the other Loan Documents, and any other matters relevant
to this Agreement, all in form and substance satisfactory to Administrative
Agent, which resolutions, certificates and documents shall include, without
limitation, (i) the certificates of incorporation and bylaws, trust agreement,
partnership agreement or other appropriate organizational documents for
Borrower, each Guarantor Subsidiary and General Partner, (ii) resolutions of the
Board of Trust Managers of Borrower and the Board of Directors of Camden USA and
General Partner, and any required partner resolutions or consents of Camden L.P.
authorizing the execution of the Loan Documents on behalf of Borrower, each
Guarantor Subsidiary and General Partner, (iii) certificates of incumbency for
the officers of Borrower, each Guarantor Subsidiary and General Partner, and
(iv) certificates of corporate or limited partnership existence and good
standing issued by the state of organization of (and to the extent provided by
the state of organization with regard to) Borrower, each Guarantor Subsidiary
and General Partner, and, as requested by Administrative Agent, from the
appropriate Governmental Authority of each state in which Borrower, each
Guarantor Subsidiary and General Partner is required by applicable law to be
qualified;
(h) receipt by Administrative Agent of filing officer
certificates (or commercial reports similar thereto, if satisfactory to
Administrative Agent) under Section 9-407(2) of the UCC, releases or partial
releases of liens or financing statements, and/or other evidence satisfactory to
Administrative Agent that there are no Liens against the Unencumbered
Properties, except Permitted Liens;
(i) satisfaction of all conditions contained in SECTION 4.2 if an
Advance is being made;
(j) receipt by Administrative Agent of copies of certificates of
insurance for each insurance policy maintained by Borrower or any Consolidated
Subsidiary with respect to the Property;
(k) receipt by Administrative Agent of an organizational chart
showing Borrower and all of its Subsidiaries and detailing ownership of the
equity interests in each Subsidiary, and all joint ventures and partnerships in
which Borrower or any Consolidated Subsidiary has an interest, and in which
States Borrower and each such Subsidiary are incorporated or organized, as in
effect on the last day of the fiscal quarter preceding the Closing Date (with
any material changes thereto being noted thereon), being attached hereto as
SCHEDULE III; and
(l) receipt by Administrative Agent and/or Lenders of all other
documents, instruments, certificates and information to be delivered on or
before the Closing Date pursuant to the terms of this Agreement and the other
Loan Documents.
<PAGE> 76
All the documents, instruments, certificates, information, evidences and
opinions referred to in this SECTION 4.1 shall be delivered to Administrative
Agent no later than the Closing Date, and Lenders shall not be bound by or
obligated hereunder until Administrative Agent has received all such items.
SECTION 4.2. CONDITIONS TO ALL ADVANCES. The obligation of Lenders to
fund any Advance as provided herein is subject to the satisfaction of the
following conditions and requirements:
(a) timely receipt by Administrative Agent of an Advance Request
in the case of an Advance under the Notes;
(b) immediately before and after giving effect to such Advance,
no Default shall have occurred and be continuing and the making of such Advance
shall not cause a Default;
(c) the representations and warranties contained in this
Agreement and in the other Loan Documents shall be true and correct in all
material respects on and as of the date of such Advance, except that all
representations and warranties that speak as of a particular date shall only be
required on the date of each such Advance to be true and correct in all material
respects as of the date to which such representation or warranty speaks and not
as of any subsequent date; and
(d) such other information and documentation as Administrative
Agent shall reasonably deem necessary or desirable in connection with the
funding of such Advance.
ARTICLE V
UNENCUMBERED PROPERTIES POOL AND GUARANTIES
SECTION 5.1. UNENCUMBERED PROPERTIES POOL. As of any date during the
term of this Agreement, and until all of the Obligations have been paid in full
and the Lenders have no commitment to lend hereunder, Borrower and the Guarantor
Subsidiaries must own and maintain the Pool in accordance with the following
parameters:
(a) For each of the Unencumbered Properties in the Pool, Borrower
shall have received from a third-party independent environmental consultant, and
delivered to Administrative Agent upon Administrative Agent's request, a written
environmental assessment in form and in substance acceptable to Administrative
Agent that does not disclose any material environmental conditions or risks
related to such Unencumbered Property or any violation of Applicable
Environmental Laws (or if there exists a material environmental condition, risk
or violation, describes the remedial actions being taken); PROVIDED, HOWEVER,
that Administrative Agent shall have given Borrower thirty (30) days= prior
written notice identifying any project that Administrative Agent determines must
be excluded as an Unencumbered Property in the Pool due to a material
environmental condition before such exclusion shall become effective.
<PAGE> 77
(b) The Pool must have no more than an aggregate of $200,000 in
Liens described in subsection (h) of the definition of the term "Permitted
Liens" set forth in ARTICLE I, PROVIDED, HOWEVER, that in the event the Pool has
more than an aggregate of $200,000 in said Liens, Borrower shall designate in
writing to Administrative Agent which project or projects with said Liens shall
be excluded from the Pool so that this requirement is once again satisfied, and
FURTHER PROVIDED, that such exclusion shall terminate upon reduction of said
Liens below an aggregate of $200,000 and notice by Borrower to Administrative
Agent thereof.
(c) Collectively, the Unencumbered Properties in the Pool, other
than the Development Properties, must have an aggregate occupancy level based on
bona fide tenant leases requiring current rent payments of at least eighty-five
percent (85%), where the occupancy level is the weighted average of the
occupancy level for the prior fiscal quarter.
(d) The Gross Asset Value of Unencumbered Properties shall be
equal to or greater than two hundred percent (200%) of Total Unsecured Debt.
(e) No more than ten percent (10%) of the Gross Asset Value of
Unencumbered Properties shall be attributable to Development Properties.
(f) The ratio of (i) Unencumbered Adjusted NOI for the
immediately preceding fiscal quarter, and then annualized, to (ii) that portion
of Consolidated Interest Expense attributable solely to Total Unsecured Debt for
the immediately preceding calendar quarter, and then annualized, shall not at
any time be less than or equal to 2.00 to 1.00.
(g) Total Unsecured Debt shall not at any time exceed an amount
equal to the maximum hypothetical principal loan amount on which the Target
Monthly Amortization can be calculated with the result that Unencumbered
Adjusted NOI for the immediately preceding fiscal quarter, and then annualized,
for Unencumbered Properties in the Pool, excluding Development Properties and
other Unencumbered Properties that have not been completed and stabilized, would
not be less than one hundred fifty percent (150%) of the Target Monthly
Amortization for such fiscal quarter and then annualized.
SECTION 5.2. NEGATIVE PLEDGE AGREEMENTS. Borrower shall not, and shall
not permit any of its Consolidated Subsidiaries to, (a) grant or suffer to exist
any Lien against any of the Unencumbered Properties in the Pool if such Lien
would be in violation of this ARTICLE V or SECTION 8.7, (b) enter into any
negative pledge agreements with any other Person such that Borrower shall be
prohibited at any time from granting, or causing any Consolidated Subsidiaries
to grant, to Administrative Agent, for the benefit of the Lenders, a first
priority lien and security interest in any of the Unencumbered Properties as
security for the Obligations, or (c) enter into any negative pledge agreements
with respect to the Equity Interests of any Guarantor Subsidiary in violation of
SECTION 8.13, or grant any Lien with respect to the Equity Interests of any
Guarantor Subsidiary.
<PAGE> 78
SECTION 5.3. ADDITIONAL GUARANTOR SUBSIDIARIES. Contemporaneously with
the execution of this Agreement, Borrower has caused each of Camden USA and
Camden L.P. to execute and deliver to Administrative Agent for the benefit of
Lenders a Guaranty Agreement. Borrower will promptly notify Administrative Agent
of the formation of any material new Consolidated Subsidiary and all assets
owned or to be owned by such Consolidated Subsidiary (and, in any event, will
disclose with the quarterly financial information provided to Administrative
Agent, all Consolidated Subsidiaries formed during the fiscal quarter then
ending). In the event that any Consolidated Subsidiary, whether newly formed or
pre-existing, is a material Consolidated Subsidiary or owns or becomes the owner
of any material Unencumbered Property (including any Unencumbered Property which
is necessary to enable Borrower to satisfy any representation or covenant
contained in this Agreement) or that Borrower desires to include in the Pool,
the Borrower shall cause each such Consolidated Subsidiary, as soon as
practically possible, to execute and deliver to Administrative Agent for the
benefit of Lenders a Guaranty Agreement (substantially in the form of EXHIBIT F)
and a Contribution Agreement in the form of EXHIBIT G (or supplement thereto).
Contemporaneously with the delivery of any such Guaranty AGREEMENT, Borrower
shall cause to be delivered to Administrative Agent appropriate certifications,
governmental and corporate certificates, resolutions, incumbency certificates,
legal opinions and other documents, reasonably deemed necessary or appropriate
by Administrative Agent relating to the formation, existence and good standing
of such Consolidated Subsidiary, the corporate authority of such Consolidated
Subsidiary for the execution and validity of such Guaranty Agreement, and
otherwise to evidence the legal, binding, and enforceable effect of each such
Guaranty Agreement. Borrower and all existing and future Guarantor Subsidiaries
acknowledge and agree that the provisions of this SECTION 5.3 are a material
inducement to the Lenders entering into this Agreement and making Advances
hereunder, and that this Agreement and Advances hereunder constitutes good and
valuable consideration for the execution and delivery of any and all Guaranty
Agreements as contemplated herein.
SECTION 5.4. OWNERSHIP OF GUARANTOR SUBSIDIARIES. At all times,
Borrower must have the necessary control of each of the Guarantor Subsidiaries
so that Borrower, without the consent of any other Person, may (i) transfer, by
dividend or otherwise, cash and capital from any Guarantor Subsidiary to
Borrower and (ii) transfer, sell or convey, or grant a Lien on any and all of
the assets, real or personal, of each Guarantor Subsidiary. Without limiting the
foregoing, Borrower shall at all times directly or indirectly own (A) 100% of
the Voting Interest of General Partner and not less than 66.7% of the limited
partnership Voting Interests in Camden L.P., and (B) not less than 51% of all of
the stock or other equity or ownership interests of Camden USA and each other
Guarantor Subsidiary.
SECTION 5.5. PARTNERSHIP MATTERS. Borrower shall not, without the prior
written consent of Administrative Agent, consent to or permit General Partner to
consent to any amendment, supplement, or other modification of the Third Amended
and Restated Agreement of Limited Partnership of Camden L.P. dated as of April
15, 1997, as amended, supplemented, restated or replaced from time to time, that
would (i) replace General Partner as the general partner of Camden L.P. (other
than with an Affiliate of Borrower), (ii) impair General Partner's ability to
fully manage and control the day-to-day operations of Camden L.P., or (iii)
detrimentally or otherwise materially alter General Partner's rights or benefits
under such partnership agreement.
<PAGE> 79
SECTION 5.6. GUARANTY PROCEEDS. (a) Notwithstanding anything to the
contrary contained in this Agreement or any Guaranty Agreement, Administrative
Agent and the Lenders covenant and agree with Borrower that any funds, payments,
claims, or distributions actually received by Administrative Agent and the
Lenders as a result of, or pursuant to any Guaranty Agreement ("GUARANTY
PROCEEDS"), shall be made available for distribution equally and ratably among
the holders of the Obligations and the trustee or trustees of any senior,
unsecured, non-subordinated Debt of Borrower issued in offerings registered
under the Securities Act of 1933 or exempt from registration pursuant to Rule
144A of Section 4 thereof and holders of borrowed money incurred by Borrower
(the "SENIOR DEBT") which is outstanding on the date Administrative Agent and
the Lenders receive such Guaranty Proceeds. This SECTION 5.6 shall not apply to
any payments, funds, claims or distributions received by Administrative Agent or
any Lender directly or indirectly from Borrower or any other Person other than
from a Guarantor Subsidiary pursuant to a Guaranty Agreement, but shall apply
solely to Guaranty Proceeds. Borrower has been supplied a copy of each Guaranty
Agreement and specifically understands and agrees with Administrative Agent and
Lenders that, to the extent Guaranty Proceeds are distributed to holders of the
Senior Debt, each Guarantor Subsidiary has agreed that the Obligation shall not
be deemed reduced by any such distribution, and each Guarantor Subsidiary will
continue to make payments pursuant to its Guaranty Agreement until such time as
the Obligation has been paid in full after taking into effect any distributions
of Guaranty Proceeds to holders of Senior Debt.
(b) Nothing herein contained shall be deemed to limit, modify, or
alter the rights of Administrative Agent and the Lenders under any Guaranty
Agreement. Nothing herein contained shall be deemed to subordinate the
Obligations to the Debentures or the Senior Debt or any other Debt of Borrower
and its Consolidated Subsidiaries, nor give to any holder of any such Debt any
rights of subrogation.
(c) Nothing contained in this Agreement or any Guaranty Agreement
shall be deemed for the benefit of any holders of the Senior Debt or any other
Debt (other than the Obligations) nor shall anything be construed to impose on
Administrative Agent or the Lenders any fiduciary duties, obligations or
responsibilities to the holders of any such Debt. This SECTION 5.6 and each
Guaranty Agreement is for the sole benefit of Administrative Agent and the
Lenders and their respective successors and assigns.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
Borrower and each Guarantor Subsidiary represent and warrant to Agents
and Lenders that:
<PAGE> 80
SECTION 6.1. EXISTENCE AND POWER OF BORROWER. Borrower is a trust duly
created and validly existing under the laws of the State of Texas, and qualifies
in all respects as a Areal estate investment trust@ under Section 856(a) of the
Code. Borrower (a) is or will be qualified to do business and in good standing
under the laws of each state where such qualification is necessary for Borrower
to conduct its business; and (b) has all powers and all governmental licenses,
authorizations, consents and approvals required to carry on its business as now
conducted and as contemplated to be conducted, except where the failure to have
any such item would not have a material adverse effect on Borrower's business
and financial condition.
SECTION 6.2. EXISTENCE AND POWER OF GUARANTOR SUBSIDIARIES. Each
Guarantor Subsidiary and General Partner (a) is a corporation or partnership, as
appropriate, duly created, validly existing and in good standing under the laws
of the state, province or country under which it is organized, and is or will be
qualified and in good standing as a foreign corporation or partnership, as
appropriate, under the laws of each state where such qualification is necessary
for such Guarantor Subsidiary or General Partner to conduct its business; and
(b) has all corporate or partnership, as appropriate, powers and all
governmental licenses, authorizations, consents and approvals required to carry
on its business as now conducted and as contemplated to be conducted, except
where the failure to have any such item would not have a material adverse effect
on such Guarantor Subsidiary's business and financial condition.
SECTION 6.3. AUTHORIZATION; CONTRAVENTION. The execution, delivery and
performance of this Agreement, the Notes, the Competitive Bid Notes, the
Guaranty Agreements, the Contribution Agreement and the other Loan Documents by
Borrower and each Guarantor Subsidiary as appropriate, are within Borrower's or
such Guarantor Subsidiary's corporate, partnership or trust, as appropriate,
powers, have been duly authorized by all necessary corporate, partnership or
trust, as appropriate, action, require no action by or in respect of, or filing
with, any governmental body, agency or official and do not contravene, or
constitute a default under, any provision of applicable law or regulation or of
the certificate of incorporation, bylaws, partnership agreement or trust
agreement, as appropriate, of Borrower or any such Guarantor Subsidiary or of
any agreement, judgment, injunction, order, decree or other instrument binding
upon Borrower or any such Guarantor Subsidiary or result in the creation or
imposition of any Lien on any asset of Borrower or any such Guarantor
Subsidiary.
SECTION 6.4. ENFORCEABLE OBLIGATIONS. This Agreement, the Notes, and
the other Loan Documents each constitutes a valid and binding agreement of
Borrower to the extent Borrower is a party thereto, enforceable in accordance
with its terms except as (a) the enforceability thereof may be limited by
bankruptcy, insolvency, fraudulent transfer or similar laws affecting creditors
rights generally, and (b) the availability of equitable remedies may be limited
by equitable principles of general applicability. The Guaranty Agreements and
the other Loan Documents each constitutes a valid and binding agreement of each
Guarantor Subsidiary to the extent such Guarantor Subsidiary is a party thereto,
enforceable in accordance with its terms except as (a) the enforceability
thereof may be limited by bankruptcy, insolvency, fraudulent transfer or similar
laws affecting creditors rights generally, and (b) the availability of equitable
remedies may be limited by equitable principles of general applicability.
SECTION 6.5. FINANCIAL INFORMATION.
<PAGE> 81
(a) The current financial statements of Borrower and each
Guarantor Subsidiary and all of the other financial reports and information of
Borrower and each Guarantor Subsidiary that have been delivered to
Administrative Agent or Lenders are true and correct in all material respects as
of the date of such current financial statements and other reports and
information.
(b) Except as disclosed in writing to Lenders prior to the
execution and delivery of this Agreement, since December 31, 1998, there has
been no material adverse change in the business, financial position or results
of operations of Borrower or any Guarantor Subsidiary; and, there exists no
condition, event or occurrence that, individually or in the aggregate, could
reasonably be expected to result in a material adverse change in the business,
financial position or results of operations of Borrower or any Guarantor
Subsidiary.
SECTION 6.6. LITIGATION. There is no pending or, to Borrower's
knowledge, threatened Litigation involving or affecting the Property, Borrower,
or its Consolidated Subsidiaries in which there is a reasonable possibility of
an adverse decision which could have a Material Adverse Effect, or involving or
affecting the validity, enforceability, or priority of any of the Loan
Documents. If any Litigation is threatened or commenced (a) that seeks to
enjoin, prevent or declare invalid or unlawful Borrower's renovation, occupancy,
use or operation of the Improvements; (b) that endangers, questions or attacks
the title to any part of the Real Estate or the validity, enforceability, or
priority of any Loan Document; (c) that seeks to levy upon or seize any part of
the Real Estate; (d) for any condemnation or taking of any part of or interest
in the Real Estate; (e) regarding any claimed damage, default, or diminution or
offset against Rent; or (f) with respect to any claimed personal injury, death
or property damage on or about the Property, and if an adverse decision therein
could constitute a Material Adverse Effect, then Borrower shall promptly and
vigorously contest such Litigation in good faith, resist the entry of any
temporary or permanent injunction, and seek the stay of any such injunction that
may be entered. After the occurrence and during the continuance of an Event of
Default, Administrative Agent may (but shall not be obligated to) commence,
appear in, or defend any such Litigation, compromise or discharge adverse claims
made with respect to the Property, purchase tax titles, remove prior liens or
security interests, and pay all necessary expenses, including attorneys= fees,
incurred in connection with such Litigation, which Borrower shall reimburse to
Administrative Agent on demand and which shall be part of the Obligations, even
if in excess of the Total Commitment.
SECTION 6.7. ERISA.
(a) Each Employee Plan has been maintained and administered in
substantial compliance with the applicable requirements of the Code and ERISA.
No circumstances exist with respect to any Employee Plan that could have a
material adverse effect on Borrower and its Consolidated Subsidiaries taken as a
whole.
<PAGE> 82
(b) With respect to each Pension Plan, (i) no accumulated funding
deficiency (within the meaning of Section 412(a) of the Code), whether waived or
unwaived, exists; (ii) the present value of accrued benefits (based on the most
recent actuarial valuation prepared for each such plan, if any, in accordance
with ongoing assumptions) does not exceed the current value of plan assets
allocable to such benefits by a material amount; (iii) no reportable event
(within the meaning of Section 4043 of ERISA) other than purchases and sales of
securities from a plan trustee as reported in the audited financial statements
of such plan has occurred; (iv) no uncorrected prohibited transactions (within
the meaning of Section 4975 of the Code) exist which could have a material
adverse effect on Borrower and its Consolidated Subsidiaries taken as a whole;
(v) to the extent such plan is covered by PBGC, no material liability to the
PBGC exists and no circumstances exist that could reasonably be expected to
result in any such liability; and (vi) no material withdrawal liability (within
the meaning of Section 4201(a) of ERISA) exists and no circumstances exist that
could reasonably be expected to result in any such liability.
(c) As of the date hereof, neither Borrower nor any Consolidated
Subsidiary has any obligation under any Employee Plan to provide post-employment
health care benefits to any of its current or former employees, except as may be
required by Section 4980B of the Code.
SECTION 6.8. TAXES AND FILING OF TAX RETURNS. Borrower and each
Consolidated Subsidiary have filed all material tax returns required to have
been filed and has paid all Taxes shown to be due and payable on such returns,
including interest and penalties, and all other Taxes which are payable by such
party, to the extent the same have become due and payable other than Taxes with
respect to which a failure to pay would not have a Material Adverse Effect or
which are being contested as permitted by SECTION 7.6. All Tax liabilities of
Borrower and each Consolidated Subsidiary are adequately provided for. No income
tax liability of Borrower or any Consolidated Subsidiary has been asserted by
the Internal Revenue Service for Taxes in excess of those already paid, the
payment of which would have a Material Adverse Effect.
SECTION 6.9. OWNERSHIP OF ASSETS. On the Closing Date and all times
during the Credit Period: (a) except for Permitted Liens, there is no Lien on
any of the Unencumbered Properties, and the execution, delivery, performance or
observance of the Loan Documents will not require or result in the creation of
any Lien on any such property; (b) Borrower or one of its Consolidated
Subsidiaries owns full legal and equitable title, in fee simple absolute (except
with respect to the Ground-Leased Qualified Properties), to all Property in the
Pool, and, except to the extent defects are being contested or otherwise
corrected by actions taken by Borrower in good faith, all other Real Estate; (c)
substantially all of the Property, in Administrative Agent's determination, is,
and at all times shall be, owned directly (and in fee simple absolute with
respect to Real Estate other than the Ground-Leased Qualifying Properties) by
Borrower or one of the Guarantor Subsidiaries; and (d) Real Estate which is
owned by Borrower or one of the Guarantor Subsidiaries that is not encumbered by
any Liens securing Secured Indebtedness shall at all times represent and
comprise at least 95% of the aggregate value of all Real Estate that is not
encumbered by Liens securing Secured Indebtedness, as confirmed by
Administrative Agent in its reasonable discretion.
SECTION 6.10. BUSINESS; COMPLIANCE. Borrower and each Consolidated
Subsidiary have performed and abided by all obligations required to be performed
by them under any license, permit, order, authorization, grant, contract,
agreement, or regulation to which they are a party or by which they or any of
their assets are bound and which, if Borrower or such Consolidated Subsidiary
were to fail to perform or abide by, such failure would have a Material Adverse
Effect.
<PAGE> 83
SECTION 6.11. LICENSES, PERMITS. Borrower and each Consolidated
Subsidiary possess such valid franchises, licenses, permits, consents,
authorizations, exemptions and orders of Governmental Authorities, as are
necessary to carry on their business as now being conducted, other than
violations which would not (either individually or collectively) have a Material
Adverse Effect, and, if related to any Unencumbered Properties, would not cause
a Pool Violation.
SECTION 6.12. COMPLIANCE WITH LAW. The business and operations of
Borrower and each Guarantor Subsidiary have been and are being conducted in
accordance with all applicable Laws, other than violations which would not
(either individually or collectively) have a Material Adverse Effect, and, if
such violation is related to any Unencumbered Properties, would not cause a Pool
Violation. Each of Borrower and its Consolidated Subsidiaries (a) has complied
and will comply, with all Legal Requirements relating to or affecting the
Property, the Credit Facility (including all reporting requirements applicable
to the Lenders) or Borrower or its Consolidated Subsidiaries except where the
failure to so comply would not cause a Material Adverse Effect, and, if such
failure is related to any Unencumbered Properties, would not cause a Pool
Violation; and (b) has no knowledge of, and has received no notice of, any
material violation of any Legal Requirement relating to or affecting any of the
Property, Borrower or any of its Consolidated Subsidiaries, unless such
non-compliance would not have a Material Adverse Effect and, if such
non-compliance is related to any Unencumbered Properties, would not cause a Pool
Violation. The Property, and the intended use, occupancy, or operation thereof,
complies and will comply with all applicable Legal Requirements unless such
non-compliance would not have a Material Adverse Effect and would not, if such
non-compliance is related to an Unencumbered Property, cause a Pool Violation.
No part of the Property constitutes (or will constitute) a nonconforming use
under any zoning Law or similar Legal Requirement, unless such nonconforming use
would not cause a Material Adverse Effect or, if such nonconforming use is
related to an Unencumbered Property, would not cause a Pool Violation.
SECTION 6.13. UTILITIES AND ACCESS. With respect to all Real Estate:
(a) all utility and municipal services required for the renovation, occupancy,
use and operation of the Improvements are available for use and are or will be
available in sufficient amounts for the intended use of the Improvements; (b)
all binding agreements, allocations or commitment letters, required to ensure
the provision of such services have been obtained or will be available from the
applicable utility companies and/or Governmental Authorities providing such
services; (c) all public and private roads necessary for the intended occupancy,
use and operation of the Improvements are completed and available for vehicular
ingress to and egress from the Real Estate and have been publicly dedicated and
accepted for maintenance by all applicable Governmental Authorities; (d) all
necessary or required utility, private roadway, parking, access (including curb
cuts), easements, covenants and permits have been granted or issued; and (e) all
impact, connection or other requisite fees therefor have been paid, unless the
failure to have any of the above would not result in a Material Adverse Effect,
and, if such failure is related to any Unencumbered Properties, would not cause
a Pool Violation.
<PAGE> 84
SECTION 6.14. FULL DISCLOSURE. All information heretofore furnished by
Borrower or any Guarantor Subsidiary (or any other party on Borrower's or any
Guarantor Subsidiary's behalf) to Agents and Lenders for purposes of or in
connection with this Agreement or any transaction contemplated hereby is, and
all such information hereafter furnished by Borrower or any Guarantor Subsidiary
to Agents and any Lender will be, true and accurate in every material respect
and shall be, to the best of the knowledge and belief of the party furnishing
such information, without material omission. Borrower and each Guarantor
Subsidiary have, to the best of their knowledge, disclosed to Administrative
Agent in writing any and all facts which might reasonably be expected to
materially and adversely affect the business, operations, prospects or
condition, financial or otherwise, of Borrower or any Guarantor Subsidiary, or
the ability of Borrower or any Guarantor Subsidiary to perform its obligations
under this Agreement or the other Loan Documents.
SECTION 6.15. ENVIRONMENTAL MATTERS. With respect to all Real Estate,
(i) no portion of the Real Estate is contaminated by any substance or material
presently identified to be toxic or hazardous according to any Applicable
Environmental Law, including, without limitation, any asbestos, polychlorinated
biphenyl, radioactive substance, methane, volatile hydrocarbons, industrial
solvents or any other material or substance which has in the past or could
foreseeably at the present time or at any time in the future cause or constitute
a material health, safety or other environmental hazard to any Person or
property, unless such contamination would not have a Material Adverse Effect,
and, if such contamination affects any Unencumbered Properties, would not cause
a Pool Violation, (ii) neither Borrower nor any Consolidated Subsidiary nor, to
the knowledge of Borrower, any other Person has caused or suffered to occur a
discharge, spillage, uncontrolled loss, seepage or filtration of oil or
petroleum or chemical liquids or solids, liquid or gaseous products or hazardous
waste, or hazardous substance at, upon, under or within any portion of the Real
Estate or any contiguous real estate which in either circumstance could cause a
Material Adverse Effect or, if related to any Unencumbered Properties, could
result in a Pool Violation, and either (A) would be a violation of Applicable
Environmental Law or (B) has not been remediated so as to cure any violation of
Applicable Environmental Law (such remediation having been accomplished without
increasing the potential environmental liability of Borrower or any Consolidated
Subsidiary or any Agent or Lender), (iii) neither Borrower nor any Consolidated
Subsidiary nor, to the knowledge of Borrower, any other Person, has been or is
involved in operations at or near any portion of the Real Estate which could
lead to the imposition of liability under any Applicable Environmental Law on
Borrower, any Consolidated Subsidiary or any operator of such Real Estate which
could have a Material Adverse Effect, or, if related to any Unencumbered
Properties, could result in a Pool Violation, (iv) neither Borrower, any
Consolidated Subsidiary nor any other Person has permitted any tenant or
occupant of any portion of the Real Estate, to engage in any activity that could
lead to the imposition of liability under any Applicable Environmental Law on
such tenant or occupant, Borrower, any Consolidated Subsidiary or any operator
of any of such property which could have a Material Adverse Effect, or, if
related to any Unencumbered Properties, could result in a Pool Violation, or (v)
to the knowledge of Borrower and the Guarantor Subsidiaries, no part of the Real
Estate is contaminated by any substance or material presently identified to be
toxic or hazardous according to any Applicable Environmental Law if such
contamination could have a Material Adverse Effect, or, if related to any
Unencumbered Properties, could result in a Pool Violation.
<PAGE> 85
SECTION 6.16. PURPOSE OF CREDIT. Borrower will use the proceeds of the
Credit Facility for the purposes stated in SECTION 2.1(A) hereof. No part of the
proceeds of the Credit Facility will be used, directly or indirectly, for a
purpose which violates any Laws. Borrower will not, directly or indirectly, use
any of the proceeds of the Credit Facility for the purpose of purchasing or
carrying, or retiring any Debt which was originally incurred to purchase or
carry, any "margin stock@ as defined in the Margin Regulations, or to purchase
or carry any Asecurity that is publicly-held" within the meaning of Regulation T
of the Board of Governors of the Federal Reserve System, or otherwise take or
permit any action to the extent any of the foregoing would involve a violation
of such Margin Regulations or any other regulation of such Board of Governors.
The Credit Facility is not secured, directly or indirectly, in whole or in part,
by collateral that includes any "margin stock" within the meaning of the Margin
Regulations. Borrower will not engage principally, or as one of its important
activities, in the business of extending credit for the purpose of purchasing or
carrying any "margin stock" within the meaning of the Margin Regulations.
SECTION 6.17. GOVERNMENTAL REGULATIONS. Neither Borrower nor any
Consolidated Subsidiary is subject to regulation under the Investment Advisers
Act of 1940, as amended. Neither Borrower nor any Consolidated Subsidiary is
subject to regulation under the Investment Company Act of 1940, as amended, the
Public Utility Holding Company Act of 1935, as amended, any Margin Regulations
or any other law, rule or regulation which regulates the incurrence of Debt.
SECTION 6.18. INSURANCE. Borrower and each Consolidated Subsidiary
maintain with financially sound, responsible and reputable insurance companies
or associations (or, as to workers= compensation or similar insurance, with an
insurance fund or by self-insurance authorized by the jurisdictions in which it
operates) insurance concerning its properties and business against such
casualties and contingencies and of such types and in such amounts (and with
co-insurance and deductibles) as is customary for the same or similar
businesses, including without limitation, with respect to all the Unencumbered
Properties.
SECTION 6.19. SOLVENCY. On a consolidated basis as of the Closing Date
(a) the aggregate fair market value of Borrower's and the Guarantor
Subsidiaries= assets exceeds their liabilities (whether contingent,
subordinated, unmatured, unliquidated, or otherwise), (b) Borrower and the
Guarantor Subsidiaries have sufficient cash flow to enable them to pay their
Debts as they mature, and (c) each of Borrower and the Guarantor Subsidiaries
has a reasonable amount of capital to conduct its respective businesses as
presently contemplated.
<PAGE> 86
SECTION 6.20. YEAR 2000 COMPLIANCE. Borrower has (a) initiated a review
and assessment of all areas within its and each of its Consolidated
Subsidiaries= business and operations (including those affected by suppliers,
vendors and customers) that could be adversely affected by the "Year 2000
Problem" (that is, the risk that computer applications used by the Borrower or
any of its Consolidated Subsidiaries (or suppliers, vendors or customers) may be
unable to recognize and perform properly date-sensitive functions involving
certain dates prior to and any date after December 31, 1999), (b) developed a
plan and timeline for addressing the Year 2000 Problem on a timely basis, and
(c) to date, implemented that plan in accordance with that timetable. Based on
the foregoing, Borrower believes that all mission critical computer applications
that are material to Borrower and its Consolidated Subsidiaries= business and
operations are reasonably expected on a timely basis to be able to perform
properly date-sensitive functions for all dates before and after January 1, 2000
(that is, to be "Year 2000 compliant"), except to the extent that a failure to
do so could not reasonably be expected to have a Material Adverse Effect.
ARTICLE VII
AFFIRMATIVE COVENANTS
Borrower and each Guarantor Subsidiary covenant and agree that, so long
as this Agreement or any commitment of the Lenders to make Advances hereunder
remains in effect, or any of the Obligations remain unpaid:
SECTION 7.1. INFORMATION FROM BORROWER. Borrower will deliver, or cause
to be delivered, to Administrative Agent on behalf of Lenders:
(a) As soon as available and in any event within one hundred
(100) days after the end of each Fiscal Year of Borrower, a consolidated balance
sheet of Borrower and its Consolidated Subsidiaries as of the end of such Fiscal
Year and the related statements of income and cash flow for such Fiscal Year,
setting forth in each case in comparative form the figures for the previous
Fiscal Year, all reported by Borrower in accordance with GAAP and audited by
Deloitte & Touche, L.L.P. (or its successors) or other independent public
accountants reasonably acceptable to Administrative Agent (the financial
statements required by this clause (a) may be included in the reports delivered
pursuant to clause (d) below).
(b) As soon as available and in any event within fifty (50) days
after the end of each fiscal quarter, a consolidated cash flow statement and a
consolidated balance sheet and related statement of income of Borrower and its
Subsidiaries as of the end of such quarter and year-to-date, all certified by
the chief financial officer, the chief accounting officer or Treasurer of
Borrower as to fairness of presentation and as to whether such financial
statements fairly reflect the financial condition of Borrower and its
Subsidiaries as of the date of delivery thereof, subject to year-end adjustments
(the financial statements required by this clause (b) may be included in the
reports delivered pursuant to clause (d) below). Such financial statements shall
be prepared in conformity with GAAP, except that certain information and note
disclosures normally included in annual financial statements prepared in
accordance with GAAP may be condensed or omitted provided that the disclosures
made are adequate to make the information presented not misleading, and GAAP
shall be applied on a basis consistent with the financial statements referred to
in SECTION 7.1(A).
<PAGE> 87
(c) Simultaneously with the delivery of each set of financial
statements referred to in SECTIONS 7.1(A) AND (B), a Compliance Certificate
executed by an Authorized Officer of Borrower, in the form as attached hereto as
EXHIBIT C, (i) setting forth, among other things, in reasonable detail the
calculations required to establish whether Borrower was in compliance with the
requirements of ARTICLE V and ARTICLE VIII on the date of such financial
statements, and (ii) stating, to the best of such Authorized Officer's knowledge
and belief, whether or not such financial statements fairly reflect the
financial condition of Borrower and its Consolidated Subsidiaries and results of
Borrower's and its Consolidated Subsidiaries= operations as of the date of the
delivery of such financial statements.
(d) Promptly after the filing thereof, a true, correct and
complete copy of each Form 10-K and Form 10-Q and each other report filed by or
on behalf of Borrower with the SEC.
(e) Immediately upon obtaining knowledge of the occurrence of any
Default, a certificate of an Authorized Officer of Borrower setting forth the
details thereof and the action which Borrower or any applicable Guarantor
Subsidiary is taking or proposes to take with respect thereto.
(f) Prompt notification of (i) any material adverse change in the
financial condition of Borrower or any Guarantor Subsidiary, including without
limitation the occurrence of any Litigation which could reasonably be expected
to have a Material Adverse Effect; (ii) the occurrence of any acceleration of
the maturity of any indebtedness owing by Borrower or any Guarantor Subsidiary,
or any default under any indenture, mortgage, agreement, contract or other
instrument to which Borrower or any Guarantor Subsidiary is a party or by which
Borrower or any Guarantor Subsidiary or any properties of Borrower or any
Guarantor Subsidiary are bound, if such default or acceleration might have a
Material Adverse Effect; (iii) the existence of any Default or Event of Default;
(iv) any material default by Borrower or any of its Consolidated Subsidiaries
under any Legal Requirement, or any default by Borrower or any of its
Consolidated Subsidiaries in the performance of any obligation which constitutes
a Material Adverse Effect; (v) any actual or threatened (but only if such threat
is communicated to Borrower in writing) condemnation or other taking of any
material portion of any Unencumbered Property, any negotiations with respect
thereto, or any loss of or substantial damage to any portion of the Unencumbered
Property, if any of the foregoing could result in a Pool Violation; and (vi) any
cancellation, adverse alteration or non-renewal of any insurance coverage
required by this Agreement with respect to any Real Estate or other Property,
including any Unencumbered Property, unless such insurance can be, and is being,
replaced within a reasonable period of time after any such event.
(g) Prompt notification, and in any event within five (5)
Business Days of the occurrence, of any change in the Moody's Rating or the S&P
Rating. Borrower shall promptly upon the receipt of notice thereof, also notify
Administrative Agent of any change in the definition of the term "Funds from
Operations" as promulgated by the National Association of Real Estate Investment
Trusts.
(h) From time to time such additional information regarding the
financial position or business of Borrower and its Consolidated Subsidiaries as
Administrative Agent, at the request of any Lender, may reasonably request,
including, without limitation, financial projections of Borrower and its
Consolidated Subsidiaries and information (including current certificates of
insurance) concerning the insurance being maintained by Borrower and any
Consolidated Subsidiary.
<PAGE> 88
SECTION 7.2. BUSINESS OF BORROWER; REIT STATUS; NYSE LISTING. The
primary business of Borrower and its Consolidated Subsidiaries is, and Borrower
and each Guarantor Subsidiary covenant that their primary business shall remain,
the acquisition, ownership, development and operation of residential
multi-family properties and in related activities, such business to be conducted
by Borrower as a real estate investment trust. Borrower shall at all times
maintain its qualification as a real estate investment trust under Section 856
of the Code, and the regulations of the United States Treasury Department
promulgated thereunder. Borrower shall at all times maintain its eligibility for
and listing on the New York Stock Exchange.
SECTION 7.3. RIGHT OF INSPECTION; CONFIDENTIALITY. Borrower and each
Guarantor Subsidiary will permit Administrative Agent or any Lender, or any
officer, employee or agent of any Administrative Agent or any Lender, to visit
and inspect any of the Property of Borrower or any Consolidated Subsidiary,
examine the books of record and accounts of Borrower or any Consolidated
Subsidiary, take copies and extracts therefrom, and discuss the affairs,
finances and accounts of Borrower or any Consolidated Subsidiary with the
respective officers, accountants and auditors of Borrower or any Guarantor
Subsidiary, all at such reasonable times and as often as Administrative Agent or
any Lender may reasonably require, all at the expense of Borrower. Borrower will
cooperate and assist, and will cause its Consolidated Subsidiaries to cooperate
and assist, in such inspections, including furnishing all plans, shop drawings
and specifications in Borrower's possession or the possession of its
Consolidated Subsidiaries relating to the Improvements. Each Lender covenants
and agrees to preserve the confidentiality of any financial data and other
information concerning Borrower, any Affiliate of Borrower or related to
Borrower's, or any Borrower's Affiliate=s businesses or operations, except to
the extent such Lender is required to disclose such information pursuant to any
applicable law, rule, regulation or order of any Governmental Authority;
provided that (i) any information contained in any annual report, or any Form
10-K, Form 10-Q or Form 8-K reports (if any) which have been delivered to the
SEC, or any other annual or quarterly reports to the stockholders of Borrower
subject to the reporting requirements of the Securities Exchange Act of 1934, as
amended, proxy material delivered to the stockholders of any Borrower or any
report delivered to the SEC, or any other information that is in the public
domain or has become publicly known, shall not in any event be deemed
confidential, and (ii) each Lender may make any information received by it
available (A) to a transferee of or Participant in any interest in the Credit
Facility or the Notes, provided that such transferee or participant agrees in
writing to be bound by the provisions of this SECTION 7.3, (B) to any
accountants or other professionals engaged by such Lender, provided that each
such accountant or professional agrees to be bound by the provisions of this
SECTION 7.3, or (C) in connection with the enforcement of any of the Loan
Documents or any litigation in connection therewith.
<PAGE> 89
SECTION 7.4. MAINTENANCE OF INSURANCE. Borrower and each Consolidated
Subsidiary will at all times maintain or cause to be maintained, with
financially sound and reputable insurance companies having an A.M. Best Rating
of B+ or better, insurance with respect to all the Property owned by Borrower
and its Consolidated Subsidiaries covering its respective risks as are
customarily carried by businesses similarly situated including, without
limitation, the following: (a) worker's compensation insurance; (b)
comprehensive general public liability and property damage insurance in respect
of all activities in which Borrower or such Consolidated Subsidiary might incur
personal liability for the death or injury of an employee or third person, or
damage to or destruction of another's property; (c) insurance against loss or
damage by fire, lightning, hail, tornado, explosion and other similar risk; and
(d) comprehensive automobile liability insurance. Borrower and each Consolidated
Subsidiary shall maintain coverage with respect to the foregoing risks in at
least such coverage amounts as are customarily carried by businesses similarly
situated.
SECTION 7.5. MAINTENANCE AND USE. Borrower will keep, and will cause
its Consolidated Subsidiaries to keep, the Real Estate in first class order,
repair, operating condition and appearance, causing all necessary repairs,
renewals, replacements, additions and improvements to be promptly made, and will
not allow any of the Real Estate to be misused, abused or wasted or to
deteriorate. Borrower will not and will not allow its Consolidated Subsidiaries
to, without the prior written consent of Administrative Agent, (a) remove from
any Unencumbered Property any fixtures or personal property except such as is
worn or obsolete or is replaced by Borrower or one of its Consolidated
Subsidiaries by an article of equal suitability and value, owned by Borrower or
one of its Consolidated Subsidiaries, free and clear of any Lien except
Permitted Liens or any other liens permitted under this Agreement; (b) make any
structural alteration to any Unencumbered Property after completion of the
Improvements thereon if such alteration impairs the value thereof or any other
alteration thereto which impairs the value thereof; (c) initiate or permit any
zoning reclassification of any Unencumbered Property, seek any variance under
existing zoning ordinances, or use or permit the use of any Unencumbered
Property in a manner that is a nonconforming use under applicable zoning
ordinances or other Legal Requirements, except for any such actions taken in the
ordinary course of Borrower's business and which would not result in a Pool
Violation; (d) impose any easement, restrictive covenant or encumbrance upon any
Unencumbered Property, execute or file any subdivision plat or condominium
declaration affecting any Unencumbered Property, or consent to the annexation of
any Unencumbered Property to any municipality, other than in the ordinary course
of business or which would not result in a Pool Violation; (e) perform, or
consent to, any drilling or exploration for or extraction, removal or production
of any mineral, hydrocarbon, gas, natural element, compound or substance
(including sand and gravel) from the surface or subsurface of any Unencumbered
Property, or (f) use or occupy or allow the use or occupancy of any Unencumbered
Property in any manner that violates any Legal Requirement, constitutes a public
or private nuisance, or makes void, voidable or cancelable, or increases the
premium of, any insurance, if the taking of any such action could result in a
Pool Violation.
<PAGE> 90
SECTION 7.6. PAYMENT OF TAXES, IMPOSITIONS AND CLAIMS. Borrower and
each Guarantor Subsidiary shall pay, and shall cause all the Consolidated
Subsidiaries to pay, (a) all Taxes imposed upon it or any of its assets or with
respect to any of its franchises, business, income or profits, and all
Impositions not later than the due date thereof, or before any material penalty
or interest may accrue thereon and (b) all material claims (including, without
limitation, claims for labor, services, materials and supplies) for sums which
have become due and payable and which by law have or might become a Lien on any
of its assets; provided, however, payment of Taxes, Impositions or claims shall
not be required if and for so long as (i) the amount, applicability or validity
thereof is currently being contested in good faith by appropriate action
promptly initiated and diligently conducted in accordance with good business
practices and no material part of the property or assets of Borrower or any
Consolidated Subsidiary are subject to levy or execution, (ii) Borrower or such
Consolidated Subsidiary as required in accordance with GAAP, shall have set
aside on its books reserves (segregated to the extent required by GAAP) deemed
by it to be adequate with respect thereto, and (iii) if material, Borrower or
such Consolidated Subsidiary has notified Administrative Agent of such
circumstances, in detail satisfactory to Administrative Agent, and, provided
further, that Borrower or such Consolidated Subsidiary shall pay any such Tax,
Imposition or claim if such contest is not successful and in any event prior to
the commencement of any action to realize upon or foreclose any Lien against any
Unencumbered Property.
SECTION 7.7. COMPLIANCE WITH LAWS AND DOCUMENTS. Borrower shall at all
times comply, and cause each of its Consolidated Subsidiaries to comply, with
all Legal Requirements, the articles of incorporation and bylaws, trust
agreement, partnership agreement or other organizational documents of Borrower
and each of the Consolidated Subsidiaries, and any other agreement to which
Borrower, or any Consolidated Subsidiary of Borrower is a party, unless its
failure to so comply alone or in the aggregate would not have a Material Adverse
Effect.
<PAGE> 91
SECTION 7.8. ENVIRONMENTAL LAW COMPLIANCE AND INDEMNITY. Each of
Borrower and the Guarantor Subsidiaries agrees to promptly pay and discharge
when due all debts, claims, liabilities and obligations with respect to any
clean-up measures necessary for Borrower or any Consolidated Subsidiary to
comply with Applicable Environmental Laws affecting Borrower or any Consolidated
Subsidiary. Borrower and the Guarantor Subsidiaries hereby, jointly and
severally, indemnify and agree to defend and hold Administrative Agent and each
Lender and their respective successors and assigns harmless from and against any
and all claims, demands, causes of action, loss, damage, liabilities, costs and
expenses (including reasonable attorneys' fees and court costs) of any and every
kind or character, known or unknown, fixed or contingent, asserted against or
incurred by Administrative Agent or any Lender at any time and from time to time
including, without limitation, those asserted or arising subsequent to the
payment or other satisfaction of the Notes, by reason of, arising out of or
related in any way to the failure of Borrower or any Consolidated Subsidiary to
comply with any Applicable Environmental Law or Agent's and Lenders= entering
into this Agreement and the transactions herein contemplated, INCLUDING MATTERS
WHICH IN WHOLE OR IN PART ARE CAUSED BY OR ARISE OUT OF THE NEGLIGENCE (SOLE,
COMPARATIVE, CONTINGENT OR OTHERWISE) OF ADMINISTRATIVE AGENT OR ANY LENDER OR
FOR WHICH ADMINISTRATIVE AGENT OR ANY LENDER MAY HAVE STRICT LIABILITY, BUT
EXCLUDING MATTERS ARISING OUT OF THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF
ADMINISTRATIVE AGENT OR ANY LENDER. It shall not be a defense to the covenant of
Borrower and the Guarantor Subsidiaries to indemnify that the act, omission,
event or circumstance did not constitute a violation of any Applicable
Environmental Law at the time of its existence or occurrence. The terms
"HAZARDOUS SUBSTANCE" and "RELEASE" shall have the meanings specified in the
Superfund Amendments and Reauthorization Act of 1986 ("SARA"), and the terms
"SOLID WASTE" and "DISPOSED" shall have the meanings specified in the Resource
Conservation and Recovery Act of 1976 ("RCRA"); provided, to the extent that any
other applicable laws of the United States of America or political subdivision
thereof establish a meaning for "hazardous substance," "release," "solid waste,"
or "disposed" which is broader than that specified in either SARA or RCRA, such
broader meaning shall apply. As used in this Agreement, "APPLICABLE
ENVIRONMENTAL LAW" shall mean and include the singular, and "APPLICABLE
ENVIRONMENTAL LAWS" shall mean and include the collective aggregate of the
following: Any law, statute, ordinance, rule, regulation, order or determination
of any governmental authority or any board of fire underwriters (or other body
exercising similar functions), or any restrictive covenant or deed restriction
(recorded or otherwise) affecting Borrower or any Consolidated Subsidiary
pertaining to health, safety or the environment, including, without limitation,
all applicable flood disaster laws and health, safety and environmental laws and
regulations pertaining to health, safety or the environment, including without
limitation, the Comprehensive Environmental Response, Compensation, and
Liability Act of 1980, the Resource Conservation and Recovery Act of 1976, the
Superfund Amendments and Reauthorization Act of 1986, the Occupational Safety
and Health Act, the Texas Water Code, the Texas Solid Waste Disposal Act, the
Texas Workers= Compensation Laws, and any federal, state or municipal laws,
ordinances, regulations or law which may now or hereafter require removal of
asbestos or other hazardous wastes from any of the Property or impose any
liability on Administrative Agent or any Lender related to asbestos or other
hazardous wastes in any of the Property. The provisions of this SECTION 7.8
shall survive the repayment of the Obligations. In the event of the transfer of
the Notes or any portion thereof, each Lender or any prior holder of the Notes
and any Participants shall continue to be benefitted by this indemnity and
agreement with respect to the period of such holding of the Notes.
SECTION 7.9. COVENANT COMPLIANCE. Borrower and each Guarantor
Subsidiary shall perform and comply with all covenants, obligations and
agreements contained in this Agreement and in the other Loan Documents.
SECTION 7.10. QUANTITY AND QUALITY OF DOCUMENTS. All certificates,
opinions, reports and documents to be delivered from time to time hereunder
shall be in such number of counterparts as Administrative Agent may reasonably
request and in form reasonably acceptable to Administrative Agent, and
counterpart signature pages to any such documents may be attached to and shall,
together with all counterparts, constitute one and the same document.
SECTION 7.11. USE OF PROCEEDS. Borrower and each Guarantor Subsidiary
will use the proceeds of the Credit Facility solely for the purposes represented
in this Agreement and shall not use such proceeds, directly or indirectly, for
the purpose, whether immediate, incidental or ultimate, of purchasing or
carrying any Margin Stock in violation of any Legal Requirements, and none of
such proceeds will be used in violation of any other Legal Requirements.
SECTION 7.12. DEVELOPMENT FUNDS. Borrower shall at all times have
identifiable and available sources of funds to complete construction and
development of all Development Properties, in amounts sufficient to cover all
such construction and development costs.
SECTION 7.13 YEAR 2000 COMPLIANCE. Borrower will promptly notify
Administrative Agent in the event Borrower discovers or determines that any
computer application (including those of its suppliers and vendors) that is
material to the business and operation of Borrower and its Consolidated
Subsidiaries, will not be Year 2000 compliant, except to the extent that such
failure could not reasonably be expected to have a Material Adverse Effect.
<PAGE> 92
SECTION 7.14. ADDITIONAL DOCUMENTS. Within ten (10) Business Days after
request by Administrative Agent, Borrower and each Guarantor Subsidiary agree
that they will execute and deliver or cause to be executed and delivered to
Administrative Agent such other and further instruments, documents or
certificates as in the reasonable judgment of Administrative Agent may be
required to better effectuate the transactions contemplated herein or to create,
evidence, preserve or maintain the Lenders= rights hereunder or under the other
Loan Documents, and Borrower and each Guarantor Subsidiary shall do all such
additional acts, give such assurances and execute such instruments as
Administrative Agent may reasonably require to vest more completely in and
assure to Lenders their rights under this Agreement and the other Loan
Documents.
ARTICLE VIII
NEGATIVE COVENANTS
Borrower and each Guarantor Subsidiary covenant and agree that without
the prior written consent of the Required Lenders, so long as Lenders=
commitment to make Advances under the Credit Facility remains in effect, or any
of the Obligations remain unpaid:
SECTION 8.1. MINIMUM NET WORTH. Consolidated Net Worth shall not at any
time be less than the sum of (a) One Billion One Hundred Twenty-One Million One
Hundred Seventy-Two Thousand Three Hundred and No/100 Dollars ($1,121,172,300),
as adjusted for accumulated depreciation deducted in determining Consolidated
Net Worth for the period after December 31, 1998, and for any completed mergers
or acquisitions by Borrower or its Consolidated Subsidiaries occurring after the
Closing Date, plus (b) an amount equal to ninety percent (90%) of the amount of
any proceeds (less reasonable and customary transaction costs) received by
Borrower or any Consolidated Subsidiary from any Equity Offering or Debt
Offering.
SECTION 8.2. LIABILITIES TO ASSETS RATIOS. (a) The ratio of (i) Total
Consolidated Debt excluding the Debentures, to (ii) Gross Asset Value, shall not
at any time be greater than .50 to 1.0.
(b) The ratio of (i) Secured Indebtedness to (ii) Gross Asset
Value shall not at any time be greater than .30 to 1.0.
(c) The ratio of (i) Secured Recourse Debt to (ii) all Secured
Indebtedness, shall not at any time be greater than .50 to 1.0.
(d) On a loan-by-loan basis, Borrower and its Consolidated
Subsidiaries shall not incur Secured Recourse Debt that exceeds 75% of the
current appraised value (or cost if a current appraisal is not available or the
current appraised value is otherwise uncertain) of the Real Estate securing such
loan.
SECTION 8.3. INTEREST COVERAGE RATIO. The ratio of (i) Adjusted
Consolidated EBITDA for the immediately preceding fiscal quarter, and then
annualized, to (ii) Consolidated Interest Expense for the immediately preceding
fiscal quarter, and then annualized, shall not at any time be less than 2.00 to
1.00.
<PAGE> 93
SECTION 8.4. FIXED CHARGE COVERAGE RATIO. The ratio of (a) Adjusted
Consolidated EBITDA for the immediately preceding fiscal quarter, and then
annualized, to (b) Fixed Charges for the immediately preceding calendar quarter,
and then annualized, shall not at any time be less than or equal to 1.75 to
1.00.
SECTION 8.5. DEBT LIMITATIONS. Neither Borrower nor any Consolidated
Subsidiary shall incur any Debt, the occurrence of which would cause a violation
or breach of any covenant or term of this Agreement, including without
limitation those contained in SECTION 5.1 or SECTION 8.2.
SECTION 8.6. LIMITATION ON SALE OR TRANSFER OF ASSETS. Neither Borrower
nor any Consolidated Subsidiary shall sell, assign, convey, exchange, lease,
transfer or otherwise dispose of any of its Property, except (a) for leasing and
sales in the ordinary course of its business, (b) transfers of assets by a
Consolidated Subsidiary to Borrower or to another Guarantor Subsidiary, or
between Borrower and any Guarantor Subsidiary or between Guarantor Subsidiaries,
and (c) transfers of assets by a Consolidated Subsidiary to another Consolidated
Subsidiary.
SECTION 8.7. PERMITTED LIENS. Borrower shall not , and Borrower shall
not permit any of its Consolidated Subsidiaries to, create, incur, assume or
suffer to exist any Lien upon any of the Property, except for (a) Permitted
Liens, (b) capitalized leases with respect to computer and other office
equipment or inventory and purchase money liens with respect to personal
property so long as (i) the Debt secured by any such Lien does not exceed the
purchase price of such personal property (ii) any such Lien encumbers only the
personal property so purchased and the proceeds upon sale, disposition, loss or
destruction thereof is used to pay the Debt secured thereby, and (iii) such
Lien, after giving effect to the Debt secured thereby, does not give rise to an
Event of Default, and (c) Liens on Property securing Secured Indebtedness to the
extent such Liens and Secured Indebtedness does not result in a violation of the
terms and covenants hereof.
<PAGE> 94
SECTION 8.8. CONSOLIDATIONS, MERGERS, AND MAINTENANCE. Borrower shall
not, and Borrower shall not permit any of its Consolidated Subsidiaries to: (a)
consolidate or merge with or into any other Person except for (i) mergers of any
Guarantor Subsidiary into Borrower (with Borrower as the survivor of any such
merger) or another Guarantor Subsidiary, (ii) a consolidation or merger by any
Consolidated Subsidiary of Borrower that is not a Guarantor Subsidiary with a
Guarantor Subsidiary or with another Person in which Borrower remains the direct
or indirect owner of all of the outstanding capital stock and other equity
securities of the continuing or surviving entity, or (iii) a merger or
consolidation with another Person if (A) such Person is organized under the laws
of United States of America or one of its States, (B) Borrower or a Guarantor
Subsidiary is the surviving entity, (C) each of the Moody's Rating and the S&P
Rating are reaffirmed to be the same or higher after such transaction, or if not
reaffirming, the Applicable Debt Rating does not fall below the Applicable Debt
Rating as of the Closing Date, being BBB (by S&P) and Baa2 (by Moody's), and (D)
Borrower continues to be in compliance with all financial and other covenants
contained in this Agreement, and no Change in Control or Default or Event of
Default results (including a change in management prohibited by SECTION 9.1(M))
or would result from such transaction; or (b) other than in connection with a
consolidation or merger permitted in clause (a) immediately above terminate, or
fail to maintain, its corporate existence or qualification, as applicable, in
the state of its incorporation and any other applicable jurisdiction where the
business of such Consolidated Subsidiary requires such qualification (provided
that nothing herein shall permit the dissolution of Borrower or the failure of
Borrower to maintain its trust existence and qualification to do business as
elsewhere required in this Agreement), or (c) terminate, or fail to maintain,
its good standing and qualification to transact business in all jurisdictions
where the failure to maintain its good standing or qualification to transact
business could have a material adverse effect on its financial condition or
operations.
SECTION 8.9. MANAGEMENT OF PROPERTY. No material change shall be made
in the manner in which the Property is being leased, managed and operated
without the prior written consent of Administrative Agent.
SECTION 8.10. INTENTIONALLY DELETED.
SECTION 8.11. LIMITATION ON DISTRIBUTIONS. Unless necessary to comply
with SECTION 7.2 with respect to Borrower's qualification as a real estate
investment trust, or solely as a result of a conversion of convertible
debentures, Borrower shall not, directly or indirectly, declare or pay any
Distribution with respect to any class of stock of Borrower unless, immediately
after giving effect to such proposed Distribution, the aggregate of all
Distributions made during any Fiscal Year would not exceed ninety-five percent
(95%) of Funds from Operations for Borrower and its Consolidated Subsidiaries
attributable to such period.
SECTION 8.12. INVESTMENTS. Borrower shall not, and shall not permit any
of its Consolidated Subsidiaries to, make any Investments, other than
Investments in the following:
(a) Unimproved Real Estate (excluding Development Properties), to
the extent only that the cost thereof, when added to the aggregate cost of all
unimproved Real Estate (excluding Development Properties) then owned by Borrower
and its Consolidated Subsidiaries, would not exceed five percent (5.0%) of Gross
Asset Value.
(b) Ownership interests in partnerships, joint ventures or
similar entities accounted for on an equity basis (determined in accordance with
GAAP), to the extent only that the aggregate amount of such Investments does not
exceed five percent (5%) of Gross Asset Value.
Once the aggregate of all Investments by Borrower and its
Consolidated Subsidiaries in such joint ventures and partnerships (other than as
a guarantor) exceeds two and one-half percent (2.5%) of Gross Asset Value, then
all such Investments shall be treated on a pro rata basis such that Borrower
shall be credited with a pro rata share of income and investment and will be
charged with a pro rata share of the applicable expense and liability, with
respect to such Investments, as if such Investments were reflected on a
consolidated basis. The pro rata treatment of such Investments shall continue
only so long as the aggregate amount of such Investments is greater than two and
one-half percent (2.5%) of Gross Asset Value.
<PAGE> 95
(c) The stock or other beneficial or equity ownership interests
of any Persons other than Consolidated Subsidiaries and Affiliates, to the
extent only that the aggregate amount of such Investments does not exceed five
percent (5%) of Gross Asset Value.
(d) The stock or other beneficial or equity ownership interests
of any Affiliates other than Consolidated Subsidiaries, to the extent only that
the aggregate amount of such Investments does not exceed five percent (5%) of
Gross Asset Value.
(e) Property that is not multi-family projects, or other assets,
so long as the aggregate undepreciated book value (as determined in accordance
with GAAP) of such non-multi-family projects and other assets does not exceed
seven and one-half percent (7.5%) of Gross Asset Value.
(f) Development Properties to the extent only that the aggregate
amount of such Investments does not exceed fifteen percent (15%) of Gross Asset
Value.
(g) Notes, mortgages and accounts receivable evidencing
indebtedness payable to Borrower and its Consolidated Subsidiaries, to the
extent only that the aggregate amount of such Investments does not exceed ten
percent (10%) of Gross Asset Value.
In addition to the limitations set forth above, in no event shall
the aggregate value of all the Investments permitted under SECTION 8.12(A)
through (G) above exceed twenty percent (20%) of Gross Asset Value at any time.
The value of the Investments for the purpose of this section shall be the
aggregate undepreciated book value thereof, as determined in accordance with
GAAP.
SECTION 8.13. NEGATIVE PLEDGE. Borrower and each Consolidated
Subsidiary shall not (a) enter into any negative pledge agreements with any
other Person such that Borrower or any of Guarantor Subsidiaries shall be
prohibited from granting to Administrative Agent, for the benefit of Lenders, as
security for the Obligations, a first priority security interest in all the
stock or other equity interests of Borrower in any of such Guarantor
Subsidiaries ("EQUITY INTERESTS"); or (b) grant any Liens with respect to any
Equity Interests.
SECTION 8.14. TRANSACTIONS WITH AFFILIATES. Neither Borrower nor any
Consolidated Subsidiary shall engage in any transaction with an Affiliate of
Borrower unless such transaction is (a) between Borrower and any Consolidated
Subsidiary or between Guarantor Subsidiaries or (b) is generally as favorable to
Borrower or such Consolidated Subsidiary as could be obtained in an arm's length
transaction with an unaffiliated Person in accordance with prevailing industry
customs and practices.
SECTION 8.15. EMPLOYEE PLANS.
<PAGE> 96
(a) Neither Borrower nor any Guarantor Subsidiary shall, nor
shall any such Person cause any member of its Controlled Group (as that term is
defined in the Code) to, fail to maintain and administer any Employee Plan in
accordance with the applicable requirements of the Code and ERISA. Neither
Borrower nor any Guarantor Subsidiary shall permit or suffer to exist any
circumstances with respect to any Employee Plan that could have a material
adverse effect on Borrower or such Guarantor Subsidiary.
(b) With respect to any Pension Plan, neither Borrower nor any
Guarantor Subsidiary shall (i) permit any accumulated funding deficiency (within
the meaning of Section 412(a) of the Code), whether waived or unwaived, to
exist; (ii) permit the present value of accrued benefits (based on the most
recent actuarial valuation prepared for each such plan, if any, in accordance
with ongoing actuarial assumptions) to exceed the current value of plan assets
allocable to such benefits by a material amount; (iii) permit any reportable
event (within the meaning of Section 4043 of ERISA) to occur, other than
purchases and sales of securities from a plan trustee as reported in the audited
financial statements of such plan; (iv) permit a prohibited transaction (within
the meaning of Section 4975 of the Code) to occur which has or could have a
material adverse effect on Borrower or any Guarantor Subsidiary; (v) incur any
material liability to the PBGC; or (vi) incur any material withdrawal liability
(within the meaning of Section 4201(a) of ERISA).
(c) Neither Borrower nor any Guarantor Subsidiary shall incur a
material obligation to provide post-employment health care benefits to any of
its current or former employees, except as may be required by Section 4980B of
the Code or otherwise required by law.
SECTION 8.16. USE VIOLATIONS. Neither Borrower nor any Guarantor
Subsidiary shall use, maintain, operate or occupy, or allow the use,
maintenance, operation or occupancy of, any of its properties in any manner that
(a) violates any Legal Requirement, (b) may be dangerous unless safeguarded as
required by law, (c) constitutes a public or private nuisance, (d) makes void,
voidable or cancelable any insurance then in force with respect thereto or (e)
makes void, voidable, or cancelable any governmental permit, unless the
occurrence of any such event would not have a Material Adverse Effect on
Borrower or any Guarantor Subsidiary.
SECTION 8.17. EXCEPTIONS TO COVENANTS. Neither Borrower nor any
Guarantor Subsidiary shall take or permit to be taken any action or fail to take
any action which is permitted by any of the covenants contained in this
Agreement if such action or omission would result in the breach of any other
covenant contained in this Agreement.
SECTION 8.18. FISCAL YEAR AND ACCOUNTING METHODS. Neither Borrower nor
any Guarantor Subsidiary will change its Fiscal Year or its method of accounting
(other than changes as are concurred with by Borrower's independent public
accountants as being required by GAAP).
SECTION 8.19. GOVERNMENTAL REGULATIONS. Neither Borrower nor any
Guarantor Subsidiary will conduct its business in such a way that it will become
subject to regulation under the Investment Advisers Act of 1940, as amended.
Neither Borrower nor any Guarantor Subsidiary will conduct its business in such
a way that it will become subject to regulation under the Investment Company Act
of 1940, as amended, or the Public Utility Holding Company Act of 1935, as
amended, or any other laws, rules or regulations which regulate the incurrence
of Debt.
<PAGE> 97
SECTION 8.20. TREASURY STOCK. Borrower shall not purchase any of its
stock or beneficial interests or other equity securities during the continuance
of an Event of Default.
ARTICLE IX
DEFAULTS AND REMEDIES
SECTION 9.1. EVENTS OF DEFAULT. The term "EVENT OF DEFAULT" as used in
this Agreement, shall mean any one of the following:
(a) FAILURE TO PAY OBLIGATIONS. The failure of Borrower to pay
any principal of any Advance (including under any Note or any Competitive Bid
Note), any installment thereof, any interest thereon, or any fees or other
amount required to be paid to Administrative Agent or the Lenders hereunder or
under the Notes or the other Loan Documents when due and payable, whether at
scheduled maturity or any other payment date, upon acceleration, or otherwise.
(b) NONPERFORMANCE OF PARTICULAR COVENANTS. Borrower shall fail
to observe or perform any covenant contained in ARTICLE V, SECTIONS 7.1, 7.2,
AND 7.LL and ARTICLE VIII (other than SECTIONS 8.9 AND 8.12).
(c) NONPERFORMANCE OF OTHER COVENANTS. The failure of Borrower
(and, if applicable, any of the Guarantor Subsidiaries or other Consolidated
Subsidiaries) to timely and properly observe, keep or perform any covenant,
agreement or condition required herein or any other Loan Document, other than an
Event of Default specifically addressed in another subsection of this SECTION
9.1, and the continuation of such failure for ten (10) days after written notice
thereof has been given to Borrower by Administrative Agent, of if such default
is of such a nature that it cannot reasonably be completely remedied within said
ten (10) day period, such additional period of time as may be reasonably
necessary to cure same, provided Borrower commences such cure within such ten
(10) day period and diligently prosecutes same, until completion, but in no
event shall such extended period exceed thirty (30) days.
(d) REPRESENTATIONS AND WARRANTIES. Any statement, representation
or warranty made by or on behalf of Borrower or any Guarantor Subsidiary herein
or any other Loan Document, or in any financial statement or any other writing
heretofore or hereafter delivered to Administrative Agent or any Lender in
connection with the Obligations is false, fraudulent, misleading or erroneous in
any material respect and the defect causing such representation or warranty to
be incorrect when made or deemed made (but only if such defect is of such a
nature that it can be cured within the following cure period and is not as a
result of fraud or intentional misrepresentation) is not removed within thirty
(30) days after written notice thereof from Administrative Agent to Borrower.
(e) BANKRUPTCY OR INSOLVENCY. Borrower or Guarantor Subsidiary or
any other Consolidated Subsidiary of Borrower:
<PAGE> 98
(i) (A) executes an assignment for the benefit of
creditors, or takes any action in furtherance thereof; (B) admits in
writing its inability to pay, or fails to pay, its debts generally as
they become due; (C) as a debtor, files a petition, case, proceeding
or other action pursuant to, or voluntarily seeks the benefit of any
Debtor Relief Law, or takes any action in furtherance thereof; or (D)
seeks the appointment of a receiver, trustee, custodian or liquidator
of any part of the Property; or
(ii) suffers the filing of a petition, case,
proceeding or other action against it as a debtor under any Debtor
Relief Law or seeking appointment of a receiver, trustee, custodian or
liquidator of any part of the Property, and (A) admits, acquiesces in
or fails to contest diligently the material allegations thereof; (B)
the petition, case, proceeding or other action results in entry of any
order for relief or order granting relief sought against it; (C) in a
proceeding under the Title 11 of the United States Code, the case is
converted from one chapter to another; or (D) fails to have the
petition, case, proceeding or other action permanently dismissed or
discharged on or before the earlier of trial thereon or ninety (90)
days next following the date of its filing; or
(iii) conceals, removes, or permits to be concealed
or removed, any part of its Property, with intent to hinder, delay or
defraud its creditors or any of them, or makes or suffers a transfer
of any of its Property which may be fraudulent under any bankruptcy,
fraudulent conveyance or similar Law; or suffers or permits, while
insolvent, any creditor to obtain a lien (other than as described in
subparagraph (iv) below) upon any of its Property through legal
proceedings which are not vacated and such lien discharged prior to
enforcement of such lien and in any event within ninety (90) days from
the date thereof; or
(iv) fails to have discharged within a period of
thirty (30) days any attachment sequestration, or similar writ levied
upon any of its Property; or
(v) fails to pay any final money judgment in excess
of $500,000 against it within thirty (30) days after the entry of such
judgment.
(f) LIQUIDATION. The liquidation, termination, dissolution,
merger, or consolidation of Borrower, any Guarantor Subsidiary or any other
Consolidated Subsidiary of Borrower, other than a merger or consolidation,
permitted under the terms and conditions of SECTION 8.8.
(g) MATERIAL ADVERSE CHANGE. Any circumstance or event of
whatever nature (including the filing of, or any adverse determination or
development in, any Litigation) occurs which (a) impairs the validity or
enforceability of any Loan Document with respect to a material term, (b)
materially and adversely affects or changes the condition (financial or
otherwise), operations, business, management or assets of Borrower and the
Guarantor Subsidiaries, taken as a whole, or (c) impairs the ability of Borrower
to make any payment of principal or interest due on the Notes or any Competitive
Bid Note or to fulfill any other material Obligation.
<PAGE> 99
(h) ENFORCEABILITY; PRIORITY. Any Loan Document shall for any
reason cease to be in full force and effect, be declared null and void or
unenforceable in whole or in part cease to have the priority required herein, or
the validity or enforceability thereof, in whole or in part shall be challenged
or denied but, in the case of a challenge by a party other than Borrower or any
of its Consolidated Subsidiaries, only if Administrative Agent reasonably
determines that such challenge is serious.
(i) EMPLOYEE PLAN ASSETS; REPORTABLE EVENT. The characterization
of the assets of Borrower or any of its Consolidated Subsidiaries as assets of
an Employee Plan if such plan owns stock in Borrower or any of its Consolidated
Subsidiaries; or with respect to any Guaranteed Pension Plan, an ERISA
Reportable Event shall have occurred and Administrative Agent shall have
determined in its discretion that such event could reasonably be expected to
result in liability of Borrower or any Consolidated Subsidiary to the PBGC.
(j) OTHER LOAN DOCUMENTS. A default or event of default occurs
under any Loan Document other than this Agreement and the same is not remedied
within the applicable period of grace (if any) provided in such Loan Document.
(k) OTHER DEBT. In respect of any borrowed Debt (OTHER THAN the
Obligations) of Borrower or any Consolidated Subsidiary individually or
collectively in an amount equal to or greater than at least $5,000,000, (a) any
default or other event or condition occurs or exists beyond the applicable grace
or cure period, the effect of which is to cause or to permit any holder of such
Debt to cause, whether or not it elects to cause, any of that Debt to become due
before its stated maturity or regularly scheduled payment dates, or (b) any of
such Debt is declared to be due and payable or required to be prepaid by
Borrower or any Consolidated Subsidiary before its stated maturity.
(l) GUARANTOR DENIAL. Any Guarantor Subsidiary denies that it has
any liability or obligation under its Guaranty Agreement, or shall notify
Administrative Agent or any of the Lenders of its intention to attempt to cancel
or terminate its Guaranty Agreement, or shall fail to observe or comply with any
term, covenant, condition or agreement under its Guaranty Agreement or
pertaining to such Guarantor Subsidiary hereunder.
<PAGE> 100
(m) MANAGEMENT; CONTROL. (1) Two or more of the individuals
currently serving as officers of Borrower in the respective capacities of
Chairman and Chief Executive Officer, President and Chief Operating Officer, and
Chief Financial Officer, shall cease to serve in such capacity and to be
actively involved in the management of Borrower (regardless of whether such
withdrawal or cessation to serve is simultaneous); PROVIDED, HOWEVER, (i) that
in the event that such circumstances described in this subsection (1) have
occurred as a result of the termination or resignation of any of such Persons or
for any other reason not covered by clause (ii) following, the same shall not
constitute an Event of Default so long as within six (6) months from the date of
such termination, resignation or other event, Borrower shall have replaced each
such individual with an individual approved by Required Lenders in their sole
discretion, (ii) in the event that such circumstances described in this
subsection (m) have occurred as a result of the death, disability or mental
incapacity of such Persons, the same shall not constitute an Event of Default so
long as within six (6) months from the date of such death, disability or mental
incapacitation, Borrower shall have replaced each such individual with an
individual approved by Required Lenders in their reasonable discretion, and
(iii) in the event that any such officer or officers are so replaced and
approved by Required Lenders, then the provisions of this subsection (m) shall
apply with respect to such new officer or officers; or (2) without the prior
written approval of the Required Lenders there shall be any other material
change in the management of Borrower, or the day-to-day leasing, management and
operation of the Real Estate; or (3) a Change in Control occurs.
It is understood and agreed by Borrower and each Guarantor
Subsidiary that any of the foregoing "Events of Default" shall constitute a
default under each of the Notes and Competitive Bid Notes, and that such "Events
of Default" are cumulative and in addition to any default or events of default
contained in any of the other Loan Documents, and that in the event of any
discrepancy or inconsistency between any Event of Default hereunder and any
default or event of default contained in any other Loan Document, the
description of the Event of Default stated herein shall control.
SECTION 9.2. NOTICE AND CURE. If any Loan Document provides for
Administrative Agent to give to Borrower any notice regarding a Default or an
Event of Default, and if Administrative Agent fails to give such notice to
Borrower as provided, the sole and exclusive remedy of Borrower for such failure
(unless such failure was a result of the gross negligence or willful misconduct
of Administrative Agent or any Lender) shall be to seek appropriate equitable
relief to enforce the agreement to give such notice and to have any acceleration
of the maturity of the Obligations postponed or revoked pending or upon the
curing of such Default to Administrative Agent's satisfaction in the manner and
during the period of time permitted by such agreement, if any, and Borrower
waives any and all right to damages and any other relief.
<PAGE> 101
SECTION 9.3. REMEDIES. Upon the occurrence of an Event of Default,
Administrative Agent may, and at the direction and election of the Required
Lenders shall, acting by or through any of its agents, trustees or other
Persons, without notice (unless expressly provided for herein), demand or
presentment (including, without limitation, notice of default, notice of intent
to accelerate or of acceleration) all of which are hereby waived, and in
addition to any other provision of this Agreement or any other Loan Document,
exercise any or all of the following rights, remedies and recourses: Terminate
the Lenders= commitment to make Advances hereunder and declare the unpaid
principal balance of each of the Notes, and each of the Competitive Notes, and
the accrued and unpaid interest thereon, and any other accrued but unpaid
portion of the Obligations to be immediately due and payable, without notice
(expressly including, but not limited to, notice of default, notice of intent to
accelerate or of acceleration), except any notice that is expressly required by
the terms of this Agreement, presentment, protest, demand or action of any
nature whatsoever, each of which hereby is expressly waived by Borrower and each
of its Consolidated Subsidiaries, whereupon the same shall become immediately
due and payable, and reduce any claim to judgment. Notwithstanding the foregoing
or anything to the contrary contained herein or in any other Loan Document, upon
the occurrence of an Event of Default described in SECTION 9.1(E)(I)(C) or
9.1(E)(II) the entire unpaid principal balance of the Notes and the Competitive
Bid Notes, and all accrued, unpaid interest thereon shall automatically be
accelerated and immediately be due and payable in full and the Lenders=
Commitment automatically terminated, without notice (expressly including, but
not limited to, notice of default, intent to accelerate or of acceleration),
presentment, protest, demand or action of any nature whatsoever, each of which
hereby is expressly waived by Borrower; PROVIDED, however, that if accelerated
automatically pursuant to this sentence, the Notes and the Competitive Bid Notes
and all such indebtedness may be reinstated at the option and upon the written
approval of the Required Lenders.
SECTION 9.4. RIGHTS OF SET-OFF.
(a) Each of Borrower and the Guarantor Subsidiaries hereby
expressly grants to Administrative Agent and the Lenders the right of setoff
against all deposits and other sums at any time held or credited by or due from
Administrative Agent or any Lender to Borrower or any Guarantor Subsidiary, in
accordance with the provisions of this SECTION 9.4. The rights of Administrative
Agent and each Lender under this SECTION 9.4 are in addition to other rights and
remedies (including, without limitation, other rights of setoff under law or
equity) that Administrative Agent and each Lender may have under law or by
agreement.
(b) Upon the occurrence and during the continuance of any Event
of Default, each Lender is hereby authorized at any time and from time to time,
to the fullest extent permitted by law, at its option, without notice or demand
and without liability, to set off and apply any and all deposits (general or
special, time or demand, provisional or final, excepting, however, any fiduciary
or escrow accounts established by Borrower or any Guarantor Subsidiary into
which only funds of unrelated third-parties are deposited, and provided that
Borrower or such Guarantor Subsidiary has informed such Lender and
Administrative Agent of the nature of such accounts) at any time held, and other
indebtedness at any time owing, by any Lender to or for the credit or the
account of Borrower or any Guarantor Subsidiary against any and all of the
Obligations now or hereafter existing under this Agreement, the Notes and the
other Loan Documents, in such order and manner as such Lender may determine,
subject, however, to the agreements contained in SECTION 10.14 hereof,
regardless of whether such Lender shall have made any demand under this
Agreement or the Notes or the Competitive Bid Notes and although such
obligations may be unmatured.
(c) Borrower and each Guarantor Subsidiary agree, to the fullest
extent it may effectively do so under applicable law, that each Lender and any
holder of a participation in any of the Notes (with the appropriate consent of
such Lender) may exercise rights of setoff or counterclaim and other rights with
respect to such participation as fully as if such holder of a participation were
a direct creditor of Borrower or such Guarantor Subsidiary in the amount of such
participation.
<PAGE> 102
SECTION 9.5. REMEDIES CUMULATIVE, CONCURRENT AND NON-EXCLUSIVE.
Administrative Agent and the Lenders shall have all rights, remedies and
recourses granted in the Loan Documents, and available at law or equity, and
same (a) shall be cumulative and concurrent, (b) may be pursued separately,
successively or concurrently against Borrower or any Guarantor Subsidiary, or
any others obligated under any of the Notes or Competitive Bid Notes, or against
any one or more of them, at the sole discretion of Lenders, (c) may be exercised
as often as the occasion therefor shall arise, it being agreed by Borrower and
each Guarantor Subsidiary that the exercise or failure to exercise any of same
shall in no event be construed as a waiver or release thereof or of any other
right, remedy or recourse, and (d) are intended to be, and shall be,
non-exclusive.
SECTION 9.6. NO CONDITIONS PRECEDENT TO EXERCISE REMEDIES. Borrower and
each other Person hereafter obligated for payment or fulfillment of all or any
part of the Obligations shall not, except as otherwise provided by applicable
law, be relieved of such obligation by reason of (a) the release, regardless of
consideration, of any Person obligated with respect to the Obligations, and (b)
any other act or occurrence, save and except the complete payment of the
Obligations. Borrower and each Guarantor Subsidiary waive any right to require
Lenders to proceed against any other Person, or pursue any other remedy in
Lenders' power. All dealings between Borrower, any Guarantor Subsidiary,
Administrative Agent and any Lender, whether or not resulting in the creation of
the Obligations, shall conclusively be presumed to have been had or consummated
upon reliance upon this Agreement. Borrower and each Guarantor Subsidiary
authorize Lenders, without notice or demand and without any reservation of
rights against Borrower or any Guarantor Subsidiary and without affecting
liability hereunder or on the Obligations, from time to time, to renew, extend
for any period, accelerate, modify, compromise, settle, or release the
obligation of any other Person that may be obligated with respect to any or all
of the Obligations.
SECTION 9.7. WAIVERS. To the full extent permitted by law, Borrower and
each Guarantor Subsidiary hereby irrevocably and unconditionally waive and
release (a) except as specifically provided for herein, all notices of any
Default or Event of Default or of the election by Administrative Agent or the
Lenders to exercise any right, remedy or recourse provided for under the Loan
Documents, (b) any right to a marshaling of assets with respect to the Notes or
any Debt of Borrower or any Guarantor Subsidiary, and (c) except as specifically
provided for herein, any and all right to receive demand, grace, notice,
presentment for payment, protest, notice of intention to accelerate the
Obligations or notice of acceleration of the Obligations.
SECTION 9.8. DISCONTINUANCE OF PROCEEDINGS. In case Administrative
Agent shall have proceeded to invoke any right, remedy or recourse permitted
under the Loan Documents and shall thereafter elect to discontinue or abandon
same for any reason, Administrative Agent shall have the unqualified right to do
so and, in such event, Borrower, each Guarantor Subsidiary, Administrative Agent
and the Lenders shall be restored to their respective former positions with
respect to the Obligations, the Loan Documents, and otherwise, and the rights,
remedies, recourses and powers of Administrative Agent and Lenders shall
continue as if same had never been invoked.
SECTION 9.9. APPLICATION OF PROCEEDS. All payments on the Notes or the
Competitive Bid Notes received by Administrative Agent or any Lender during the
existence of an Event of Default, shall be applied as determined by the Required
Lenders (provided that, as among themselves, Lenders agree that any such
proceeds shall be applied as contemplated by ARTICLE X hereof); and all payments
received by a Lender on its Competitive Bid Note during the existence of an
Event of Default shall be applied as determined by the applicable Lender.
<PAGE> 103
ARTICLE X
AGENTS AND THE LENDERS
SECTION 10.1. APPOINTMENT AND AUTHORIZATION OF AGENTS.
(a) Each Lender hereby irrevocably appoints and authorizes
Administrative Agent as its nominee and agent, in its name and on its behalf:
(i) to act as nominee for and on behalf of such Lender in and under all Loan
Documents; (ii) to arrange the means whereby the funds of the Lenders are to be
made available to Borrower under the Loan Documents; (iii) to take such action
as may be requested by any Lender under the Loan Documents (when such Lender is
entitled to make such request under the Loan Documents and after such requesting
Lender has obtained the concurrence of such other Lenders as may be required
under the Loan Documents); (iv) to receive all documents and items to be
furnished to Lenders under the Loan Documents; (v) to promptly distribute to
each Lender the material information, requests, documents and items received
from Borrower or the Guarantor Subsidiaries under the Loan Documents, including,
without limitation, the documents delivered by Borrower to Administrative Agent
pursuant to SECTION 7.1 hereof; (vi) to promptly distribute to each Lender such
Lender's Commitment Percentage (subject to the last paragraph of SECTION 10.6)
of each payment or prepayment in accordance with the terms of the Loan
Documents; and (vii) to deliver to the appropriate Persons requests, demands,
approvals and consents received from the Lenders.
(b) The obligations of each Agent and the Sole Lead Arranger
hereunder are only those expressly set forth herein. Each Lender and Borrower
and each Guarantor agree that no Agent nor the Sole Lead Arranger is a fiduciary
for Lenders or for Borrower or the Guarantor Subsidiaries but simply is acting
in the capacity described herein to alleviate administrative burdens for both
Borrower and Lenders and that no Agent has duties or responsibilities to the
Lenders, Borrower or of the Borrower's counsel or any Guarantor Subsidiaries
except those expressly set forth herein. Without limiting the generality of the
foregoing, Administrative Agent shall not be required to take any action or
exercise any right or remedy with respect to any Default or Event of Default,
except if requested by the Required Lenders. Notwithstanding the administrative
authority delegated to Administrative Agent, Administrative Agent shall not
cause or permit any modification of the Loan Documents or take other action
relating to the Credit Facility specifically requiring the consent or approval
of the Required Lenders without such consent or approval. Action taken by
Administrative Agent including, without limitation, any exercise of remedies or
initiation of suit or other legal proceedings made in accordance with the
instructions of the Required Lenders or as otherwise permitted by this Article
X, shall be binding upon each of the Lenders. Each Lender specifically
acknowledges that it has reviewed and approved the voting and other provisions
of this Agreement and the other Loan Documents setting forth the relative rights
and obligations among the Lenders and agrees to be bound by such provisions, and
acknowledges that Administrative Agent (and counsel for the Lenders, as a group)
are acting on behalf of all the Lenders.
(c) Each Agent, in its capacity as a Lender, shall have the same
Rights under the Loan Documents as any other Lender and may exercise the same as
though it were not acting as an Agent, and any resignation by any Agent
hereunder shall not impair or otherwise affect any Rights which it has or may
have in its capacity as an individual Lender.
<PAGE> 104
(d) Each Agent and Sole Lead Arranger may now or hereafter be
engaged in one or more loan, letter of credit, leasing, or other financing
transactions with Borrower or any Guarantor Subsidiary, act as trustee or
depositary for Borrower or any Guarantor Subsidiary or otherwise be engaged in
other transactions with Borrower, any Guarantor Subsidiary and/or their
Affiliates (collectively, the "OTHER ACTIVITIES") not the subject of the Loan
Documents. Without limiting the Rights of the Lenders specifically set forth in
the Loan Documents, no Agent nor Sole Lead Arranger shall be responsible to
account to the Lenders for such other activities, and no Lender shall have any
interest in any other activities, any present or future guaranties by or for the
account of Borrower or any Guarantor Subsidiary which are not contemplated or
included in the Loan Documents, any present or future offset exercised by any
Agent or Sole Lead Arranger in respect of such other activities, any present or
future property taken as security for any such other activities, or any property
now or hereafter in the possession or control of any Agent or Sole Lead Arranger
which may be or become security for the Obligations by reason of the general
description of indebtedness secured or of property contained in any other
agreements, documents or instruments related to any such other activities;
provided that, if any payments in respect of such guaranties, such property or
the proceeds thereof or any offset shall be applied to reduction of the
Obligations, then each Lender shall be entitled to share in such application
pursuant to the terms of this Agreement.
SECTION 10.2. POSSESSION OF INSTRUMENTS BY ADMINISTRATIVE AGENT.
Administrative Agent shall exercise all rights and remedies under the Loan
Documents and take all actions with respect thereto in accordance with the
request or direction of the Required Lenders, or otherwise as and to the extent
provided herein or in the other Loan Documents; PROVIDED, HOWEVER, that
Administrative Agent may take such actions in its name without the joinder of
the Lenders, and Borrower, the Guarantor Subsidiaries and all third parties,
including Borrower and Guarantor Subsidiaries, shall be entitled to rely on the
actions taken by Administrative Agent with respect to the execution by
Administrative Agent of any and all agreements, financing statements,
affidavits, notices or any other type of document or instrument pertaining
thereto, including, without limitation, in connection with the exercise of any
rights or remedies of the Lenders under the Loan Documents, and the same shall
be binding upon all the Lenders as to any third party relying on such actions of
Administrative Agent. Administrative Agent shall also be the named secured party
or beneficiary under any document hereafter given as security for the Credit
Facility and shall take and maintain any and all documents, instruments and
agreements pertaining to or evidencing any security for the Obligations, as
agent for and on behalf of all Lenders, and the grant to Administrative Agent of
any Lien under any Loan Document shall be for the ratable benefit of all
Lenders.
SECTION 10.3. EXPENSES. Each Lender shall pay its Commitment Percentage
of any expenses (including, without limitation, court costs, reasonable
attorneys= fees and other costs of collection) incurred by Administrative Agent
in connection with any of the Loan Documents if Administrative Agent does not
receive reimbursement therefor from other sources within thirty (30) days after
incurred; PROVIDED that, and subject to the terms and conditions of SECTION
11.4, each Lender shall be entitled to receive its Commitment Percentage of any
reimbursement for such expenses, or part thereof, which Administrative Agent
subsequently receives from such other sources.
<PAGE> 105
SECTION 10.4. DELEGATION OF DUTIES; RELIANCE; CONSULTATION. The Lenders
may perform any of their duties or exercise any of their Rights under the Loan
Documents by or through Administrative Agent, and the Lenders, Administrative
Agent and Sole Lead Arranger may perform any of their duties or exercise any of
their Rights under the Loan Documents by or through their respective officers,
directors, employees, attorneys, agents, or other representatives (collectively,
"REPRESENTATIVES"). Administrative Agent, Sole Lead Arranger, the Lenders, and
their respective Representatives shall (a) be entitled to rely upon (and shall
be protected in relying upon) any writing, resolution, notice, consent,
certificate, affidavit, letter, cablegram, telecopy, telegram, telex or teletype
message, statement, order or other documents or conversation believed by any of
them to be genuine and correct and to have been signed or made by the proper
Person and, with respect to legal matters, upon opinion of counsel selected by
Administrative Agent, Sole Lead Arranger or such Lender, (b) be entitled to deem
and treat each Lender as the owner and holder of its Commitment for all purposes
until, subject to SECTION 11.10, written notice of the assignment or transfer
thereof shall have been given to and received by Administrative Agent (and, any
request, authorization, consent or approval of any Lender shall be conclusive
and binding on each subsequent holder, assignee, or transferee of such Lender's
Commitment (or any part thereof) or Participant therein until such notice is
given and received), and (c) other than in connection with Borrower's failure to
pay required principal or interest under the Obligations, not be deemed to have
notice of the occurrence of a Default or an Event of Default unless notified
thereof by another Lender or Borrower. Administrative Agent may consult with
legal counsel, independent public accountants, consultants, appraisers and other
experts selected by Administrative Agent, and shall not be liable for any action
taken or omitted to be taken by Administrative Agent in good faith in accordance
with the advice of such counsel, accountants or experts. Any such counsel,
accountants or other experts shall be engaged to represent and render services
to all the Lenders as a group, unless otherwise specified by Administrative
Agent.
SECTION 10.5. LIMITATION OF LIABILITY.
(a) Neither Administrative Agent, Sole Lead Arranger, nor any of
their Representatives shall be liable for any action taken or omitted to be
taken by it or them under the Loan Documents in good faith and believed by it or
them to be within the discretion or power conferred upon it or them by the Loan
Documents or be responsible for the consequences of any error of judgment or
negligence, except for gross negligence or willful misconduct, and neither
Administrative Agent, Sole Lead Arranger nor any of its Representatives has a
fiduciary relationship with any Lender by virtue of the Loan Documents (provided
that nothing herein shall negate the obligation of Administrative Agent to
account for funds received by it for the account of any Lender).
<PAGE> 106
(b) Unless indemnified to its satisfaction against loss, cost,
liability, and expense, Administrative Agent shall not be compelled to do any
act under the Loan Documents or to take any action toward the execution or
enforcement of the powers thereby created or to prosecute or defend any suit in
respect of the Loan Documents. If Administrative Agent requests instructions
from the Lenders with respect to any act or action (including, but not limited
to, any failure to act) in connection with any Loan Document, Administrative
Agent shall be entitled (but shall not be required) to refrain (without
incurring any liability to any Person by so refraining) from such act or action
unless and until it has received such instructions. In no event, however, shall
Administrative Agent or any of its Representatives be required to take any
action which it or they reasonably determine could incur for it or them criminal
or civil liability.
(c) Neither Administrative Agent, Sole Lead Arranger nor any of
their Representatives shall be responsible in any manner to any Lender or any
Participant for, and each Lender represents and warrants that it has not relied
upon Administrative Agent, Sole Lead Arranger or their Representatives in
respect of, (i) the creditworthiness of Borrower or any Guarantor Subsidiary and
the risks involved to such Lender, (ii) the effectiveness, enforceability,
genuineness, validity, or the due execution of any Loan Document, (iii) any
representation, warranty, document, certificate, report, or statement made
therein or furnished thereunder or in connection therewith, (iv) the existence,
priority, or perfection of any Lien or negative pledge granted or purported to
be granted under any Loan Document, (v) the observation of or compliance with
any of the terms, covenants, or conditions of any Loan Document on the part of
Borrower or any Guarantor Subsidiary, or (vi) the relative Rights of the Lenders
as among themselves. Each Lender jointly and severally agrees to indemnify
Administrative Agent and Sole Lead Arranger and hold them harmless from and
against (but limited to such Lender's Commitment Percentage of) any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, reasonable expenses, and reasonable disbursements of any kind or nature
whatsoever (including counsel fees and disbursements) which may be imposed on,
asserted against, or incurred by Administrative Agent or Sole Lead Arranger in
any way relating to or arising out of the Loan Documents or any action taken or
omitted by Administrative Agent or Sole Lead Arranger under the Loan Documents;
PROVIDED THAT, ALTHOUGH ADMINISTRATIVE AGENT AND SOLE LEAD ARRANGER SHALL HAVE
THE RIGHT TO BE INDEMNIFIED FOR THEIR NEGLIGENCE [SOLE, COMPARATIVE, CONTINGENT
OR OTHERWISE], ADMINISTRATIVE AGENT AND SOLE LEAD ARRANGER SHALL NOT HAVE THE
RIGHT TO BE INDEMNIFIED HEREUNDER FOR THEIR OWN FRAUD, GROSS NEGLIGENCE, OR
WILLFUL MISCONDUCT.
<PAGE> 107
SECTION 10.6. DEFAULT. Upon the occurrence and continuance of a Default
or an Event of Default, Administrative Agent shall make a recommendation to the
Lenders of any actions to be taken, and each Lender agrees to promptly confer
with the other Lenders in order that the Lenders can consider such course of
action or any other actions to be taken for the enforcement of the Rights of the
Lenders; provided that Administrative Agent shall be entitled (but not
obligated) to proceed to take any actions necessary in its reasonable judgment
to preserve Rights, pending agreement by the Lenders on the course of action to
be taken. If the Required Lenders cannot agree on a course of action to be taken
within sixty (60) days following Administrative Agent's initial recommendation,
Administrative Agent shall thereafter take such action as Administrative Agent
deems advisable to enforce the Rights of the Lenders; PROVIDED, that if, after
Administrative Agent has begun taking such action, the Required Lenders agree on
a course of action contrary to that undertaken by Administrative Agent, then
Administrative Agent shall change its course of action so as to follow the
course of action agreed upon by the Required Lenders. Any action directed or
approved by the Required Lenders, including without limitation, any exercise of
remedies or initiation of suit or other legal proceedings, shall be binding upon
each Lender. In actions with respect to any property of Borrower or any
Subsidiary of Borrower, Administrative Agent is acting for the account of each
Lender to the extent of each Lender's Commitment Percentage. Any and all
agreements to subordinate (whether made heretofore or hereafter) other
indebtedness or obligations of Borrower or any Subsidiary to the Obligations
shall be construed as being for the benefit of each Lender to the extent of its
respective Commitment Percentage. If Administrative Agent acquires any security
for the Obligations or any guaranty of the Obligations, the same shall be held
for the benefit of each Lender in proportion to such Lender's respective
Commitment Percentage.
Lenders agree, among themselves, that unless otherwise agreed to by
Administrative Agent and the Required Lenders, all monies collected or received
by Administrative Agent after the occurrence and during the continuance of an
Event of Default in respect of any security that may be given for the
Obligations, directly or indirectly, or by exercise of Rights, judgment on the
Notes any other means shall be applied first to the payment of unpaid, past due
fees hereunder, and then to either interest or principal of the Obligations as
recommended by Administrative Agent and approved by the Required Lenders (except
that any amounts to be applied to interest or principal shall be distributed to
Lenders based on their Aggregate Loan Percentage until the Credit Facility
(including the Competitive Bid Loans) is paid in full).
SECTION 10.7. LENDERS= DECISIONS. The Lenders agree as among themselves
that any decisions or elections to be made by the Lenders (and not
Administrative Agent) under this Agreement and the other Loan Documents shall be
made by the Required Lenders, except in the case, if any, where unanimity or a
specific different number or percentage of the Lenders is expressly required
under this Agreement or any other Loan Documents (use of the terms "Lenders" in
any of the Loan Documents, without an express provision for different voting
rights other than as set forth in the definition of Required Lenders, does not
imply that unanimous consent is thereby required). Administrative Agent may, at
its election, request any determination, vote, consent or approval by the
Lenders in writing or orally (by telephone or in person). In addition, if any
request by Administrative Agent for the Lenders= determination or approval
hereunder is made in writing and such writing contains written notice to the
Lenders requesting a response within ten (10) Business Days, or longer, from the
date the Lenders are deemed to have received notice as herein provided (and
setting forth the actual date of the last day of the Lender reply period), then
the Lenders shall use reasonable efforts to reply within the applicable reply
period, provided, that if any such Lender does not reply within the applicable
reply period, such Lender shall be deemed not to have approved of or consented
to or concurred with such recommendation or determination.
SECTION 10.8. LIMITATION OF LIABILITY OF LENDERS. To the extent
permitted by law, (a) neither any Lender nor any Participant shall incur any
liability to any other Lender or Participant except for acts or omissions in bad
faith, and (b) neither any Agent, Sole Lead Arranger nor any Lender or
Participant shall incur any liability to Borrower, any Guarantor Subsidiary or
any other Person for any act or omission of any other Lender or any Participant.
SECTION 10.9. RELATIONSHIP OF LENDERS. Nothing herein shall be
construed as creating a partnership or venture among any Agents, among any Agent
and the Lenders, or among the Lenders.
<PAGE> 108
SECTION 10.10. DEBTOR-CREDITOR RELATIONSHIP. Each Lender has and shall
maintain a direct creditor-debtor relationship with Borrower and will have
direct recourse, singly or in the aggregate, against Borrower and the Guarantor
Subsidiaries, subject to the terms and conditions of the Loan Documents.
Notwithstanding the foregoing, any right, remedy, action, omission or waiver
respecting this Agreement, the Notes, the Guaranty Agreements and the other Loan
Documents shall only be exercised, made, taken, or permitted by Administrative
Agent, acting upon the direction of the Required Lenders, as the agent for all
Lenders; PROVIDED, HOWEVER, that if the Required Lenders have elected and
directed Administrative Agent to institute suit against Borrower or any
Guarantor Subsidiary for payment of any past due amounts under the Notes, any
Competitive Bid Note or any other Obligations for which Lenders have recourse
against Borrower or any Guarantor Subsidiary, or in the event of any bankruptcy
proceedings or other legal proceedings relating to this Agreement against
Borrower or any Guarantor Subsidiary, each Lender shall be entitled, at its
option, to bring or join in such proceedings in its own name (subject, however,
to the terms of this Agreement).
SECTION 10.11. CREDIT DECISIONS. Each Lender acknowledges that it has,
independently and without reliance upon any Agent, Sole Lead Arranger or any
other Lender, and based on such documents and information as it has deemed
appropriate, made its own credit analysis and decision to enter into this
Agreement and each of the other Loan Documents to which it is a party or to
which any Agent is a party for its benefit. Each Lender also acknowledges that
it will, independently and without reliance upon any Agent, Sole Lead Arranger
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 decisions in
taking or not taking any action under this Agreement or with respect to either
Credit Facility.
SECTION 10.12. REMOVAL OF ANY AGENT. Lenders, acting by written notice
to Administrative Agent from and agreed to by the Required Lenders other than
Administrative Agent, may remove for cause Administrative Agent, as the agent
under the Credit Facility, and appoint one of the other Lenders as
Administrative Agent's successor, which successor Administrative Agent shall be
subject to Borrower's reasonable consent so long as no Event of Default has
occurred and is continuing. Upon the appointment of a successor Administrative
Agent, the removed Administrative Agent and the successor Administrative Agent
shall execute such documents as the Lenders may reasonably request to reflect
such appointment of a successor Administrative Agent and shall notify Borrower
of the change in such agent. The successor Administrative Agent shall be vested
with all rights, powers and privileges and be bound to all duties, obligations
and responsibilities of the Administrative Agent so removed in and under this
Agreement and the other Loan Documents; PROVIDED, HOWEVER, that until such time
as Borrower is notified in writing signed by both the removed and successor
Administrative Agent as to the appointment of the successor Administrative
Agent, Borrower and the Guarantor Subsidiaries shall be entitled to rely on any
decision, approval or other act by the removed Administrative Agent as binding
on Lenders, and, may pay to Administrative Agent any amounts due or owing by
Borrower under the Loan Documents.
<PAGE> 109
SECTION 10.13. RESIGNATION BY ANY AGENT. An Agent's status as an Agent
under this Agreement shall automatically terminate fifteen (15) days after the
closing or liquidation of such Agent or fifteen (15) days after such Agent is
adjudicated insolvent. Additionally, any Agent may resign its position as an
Agent at any time by giving at least thirty (30) days written notice thereof to
Borrower and the other Lenders. Upon any such occurrence causing a termination
of the Administrative Agent or the delivery of such notice of resignation from
such Agent, the Required Lenders and Borrower shall select a successor for the
Administrative Agent. If the Required Lenders and Borrower cannot agree upon the
choice of the successor Administrative Agent within ten (10) days after the
occurrence causing a termination in the case of a termination of such
Administrative Agent, or ten (10) days prior to the effective resignation date
set forth in such Administrative Agent's resignation notice in the case of a
resignation by such Administrative Agent, then the Designated Successor Agent
shall become the Administrative Agent's successor. Borrower shall be entitled to
participate in the selection of the replacement Administrative Agent only if no
Default has occurred and is continuing and no Event of Default has occurred. If
any Agent other than the Administrative Agent shall resign or be terminated,
Administrative Agent and, so long as no Event of Default has occurred and is
continuing, Borrower may select a successor for any other Agent. Upon any such
termination or resignation, (a) the successor Agent shall automatically be
vested with all rights, powers and privileges and be bound to all duties,
obligations and responsibilities of the Agent being replaced in and under this
Agreement and the other Loan Documents and shall thereafter be deemed the
"Administrative Agent", "Syndication Agent", "Documentation Agent", "Managing
Agent" or other designated Agent, for all purposes under the Loan Documents and
(b) such terminating or resigning Agent shall act only in a custodial capacity
for the holding by it of any funds theretofore received from Borrower and any
such funds shall be held in trust for the benefit of Lenders or Borrower, as the
case may be. Additionally, upon the successor Agent becoming an Agent as
provided in this SECTION 10.13, the terminating or resigning Agent and the new
Agent shall execute such documents as any Lender may reasonably request to
reflect such succession. All costs incurred in connection with the execution of
such documents shall be paid by the Lenders in proportion to each Lender's
Commitment Percentage. Sole Lead Arranger may resign its position at any time by
giving at least ten (10) days written notice thereof to Borrower and
Administrative Agent.
<PAGE> 110
SECTION 10.14. SHARING OF PAYMENTS AND SETOFFS. Each Lender agrees that
if it should receive any amount (whether by voluntary payment, by realization
upon any collateral, by the exercise of the right of setoff or banker's lien, by
counterclaim or cross action, by the enforcement of any right under the Loan
Documents or otherwise) which is applicable to the payment of the principal of
or interest on the Credit Facility, of a sum which with respect to the related
sum or sums received by the other Lenders exceeds such Lender's Commitment
Percentage, then such Lender receiving such excess payment shall purchase
without recourse or warranty from the other Lenders an interest in the
indebtedness of Borrower to such Lenders in such amount as shall result in a
proportional participation by all of the Lenders in such amount; provided that
if all or any portion of such excess amount is thereafter recovered from such
Lender, such purchase shall be rescinded and the purchase price restored to the
extent of such recovery, but without interest. This SECTION 10.14 shall not
impair the right of any Lender to exercise any right of setoff or counterclaim
it may have with respect to any funds in an account pledged to such Lender to
secure only indebtedness other than the Obligations, and to apply the amount
received or subject to such exercise to the payment of such other indebtedness,
it being expressly agreed by all Lenders, however, that until the Obligations
are paid and satisfied in full, any and all amounts received by any Lender from
offset of any account of Borrower or any Guarantor Subsidiary that either (a)
constitutes collateral for the Credit Facility (if any) or (b) contains funds
exclusively derived from or related to any collateral for the Credit Facility,
shall be applied to the Obligations, and not to any other indebtedness of
Borrower or any Guarantor Subsidiary to such Lender.
SECTION 10.15. NON-ADVANCING LENDERS. In the event that a Lender shall
fail or refuse to advance its Commitment Percentage of any Advance under the
Credit Facility, or any Lender shall fail or refuse to advance its Commitment
Percentage of any payment or reimbursement by Lenders as required hereunder, or
of any amount to be funded pursuant to SECTION 10.3, when it is obligated to do
so, Administrative Agent shall notify, in the case of the failure or refusal to
make an Advance under the Credit Facility, the Lenders, or any of them, may
elect, each at its sole option and discretion (without any obligation whatsoever
to do so), to advance such non-advancing Lender's portion, pro rata in
accordance with the proportion that the Commitment Percentage of each Lender
electing to make such advance bears to the Commitment Percentages of all Lenders
electing to make such advance. Upon making any such advance, and notwithstanding
anything to the contrary expressed or implied herein or in the Notes or any
other Loan Document, all subsequent payments made on the Credit Facility, and
all proceeds realized from the sale of any collateral securing the Credit
Facility (if any) or from the exercise of right of setoff or other remedies
under this Agreement or the other Loan Documents, shall be applied, in the
manner described below, only to the Lenders, other than the non-advancing Lender
(and the non-advancing Lender shall not be entitled to receive the same), until
the amounts advanced by such advancing Lenders, on behalf of the non-advancing
Lender (together with the interest earned thereon pursuant to this Agreement and
the applicable Notes), have been repaid in full. As among Lenders other than the
non-advancing Lender, Lenders that advanced funds on behalf of the non-advancing
Lender shall receive the portion the non-advancing Lender would have been
entitled to receive had it advanced (together with the interest earned thereon
pursuant to this Agreement and the applicable Notes), to be applied pro rata in
accordance with the amounts advanced by each such advancing Lender, until the
amounts advanced by such Lenders on behalf of the non-advancing Lender (together
with the interest earned thereon pursuant to this Agreement and the applicable
Notes), have been repaid in full; any Lender that advanced only on its own
behalf based on its Commitment Percentage shall be repaid based on such
Commitment Percentage or its Aggregate Loan Percentage, as applicable. In
addition, any Lenders that advance funds on behalf of a non-advancing Lender
pursuant to this SECTION 10.15 shall (i) receive a proportionate share (based on
the amounts so advanced by such Lenders) of the amount the non-advancing Lender
would have been entitled to receive of any distribution of any collateral that
may ever be given to secure the Credit Facility in the event the same is
distributed among Lenders, and (ii) have a claim against such non-advancing
Lender for the amounts so advanced and shall be entitled to all rights and
remedies at law or in equity to recover any unpaid amounts. A non-advancing
Lender shall not be entitled to vote on any matters under this Agreement or
related to the Credit Facility (and its interest shall be excluded for purposes
of determining the requisite percentage or number of Lenders for a vote or
otherwise in the determination of the "Required Lenders" for any purpose
hereunder) so long as such Lender remains a non-advancing Lender.
<PAGE> 111
SECTION 10.16. BENEFIT OF LENDERS. All terms, conditions and agreements
set forth in this ARTICLE X, specifically including, without limitation, the
provisions of SECTION 10.14 are for the sole and exclusive benefit of the
Lenders, and neither Borrower, any Guarantor Subsidiary nor any other Person
shall be entitled to rely on or seek the benefit of such provisions; PROVIDED,
HOWEVER, that Borrower and the Guarantor Subsidiaries shall be entitled to rely
on any decision, approval or other act by Administrative Agent as binding the
Lenders.
SECTION 10.17. ROLES OF AGENTS. Neither Syndication Agent,
Documentation Agent, Managing Agent nor any other agent other than
Administrative Agent shall have any duties or obligations, nor shall Syndication
Agent, Documentation Agent, Managing Agent or any such other agent take any
action as an Agent, under this Agreement or the other Loan Documents, other than
as may be specifically designated in writing by Administrative Agent. Any action
to be taken by Agents under this Agreement or the other Loan Documents, shall be
taken solely by Administrative Agent.
ARTICLE XI
MISCELLANEOUS
SECTION 11.1. CONTINUING AGREEMENT. This is a continuing Agreement and
all the rights, powers and remedies of the Administrative Agent and the Lenders
hereunder, and all agreements and obligations of Borrower, the Guarantor
Subsidiaries, the Administrative Agent and the Lenders hereunder, shall continue
to exist until the Notes and the Competitive Bid Notes have been paid in full,
the commitment of Lenders to make Advances hereunder has been terminated, and
all other Obligations have been paid in full.
<PAGE> 112
SECTION 11.2. NOTICES. All notices, requests and other communications
to any party hereunder shall be in writing (including bank wire, telecopy or
similar writing), except for any telephone notices as specifically provided for
herein, may be personally served or sent by telecopier, mail or the express mail
service of the United States Postal Service, Federal Express or other equivalent
overnight or expedited delivery service, and (a) if given by personal service or
telecopier (confirmed by telephone), it shall be deemed to have been given upon
receipt; (b) if sent by telecopier without telephone confirmation, it shall be
deemed to have been given twenty-four (24) hours after being given; (c) if sent
by mail, it shall be deemed to have been given upon the earlier of (i) actual
receipt, or (ii) three (3) Business Days after deposit in a depository of the
United States Postal Service, first class mail, postage prepaid; (d) if sent by
Federal Express, the express mail service of the United States Postal Service or
other equivalent overnight or expedited delivery service, it shall be deemed
given upon the earlier of (i) actual receipt or (ii) twenty-four (24) hours
after delivery to such overnight or expedited delivery service, delivery charges
prepaid, and properly addressed to Administrative Agent, Borrower, the
applicable Guarantor Subsidiary or the applicable Lender; provided that notices
to Administrative Agent under ARTICLE III and ARTICLE IV shall not be effective
until received. For purposes hereof, the address of the parties to this
Agreement shall be as set forth in SCHEDULE I attached hereto. Any party may, by
proper written notice hereunder to the other parties, change the address to
which notices shall thereafter be sent to it. Notwithstanding anything to the
contrary implied or expressed herein, the notice requirements herein (including
the method, timing or deemed giving of any notice) is not intended to and shall
not be deemed to increase the number of days or to modify the method of notice
or to otherwise supplement or affect the requirements for any notice required or
sent pursuant to any Legal Requirement (including, without limitation, any
applicable statutory or law requirement), or otherwise given hereunder, that is
not required under this Agreement or the other Loan Documents. The provisions of
this SECTION 11.2 shall control over any conflicting contractual notice
provisions contained in the Loan Documents.
SECTION 11.3. NO WAIVERS. No failure or delay by any Agent or any
Lender in exercising any right, power or privilege hereunder or under the Notes
or any other Loan Document shall operate as a waiver thereof, nor shall any
single or partial exercise thereof preclude any other or further exercise
thereof or the exercise of any other right, power or privilege. The rights and
remedies herein provided shall be cumulative and not exclusive of any rights or
remedies provided by law or in any of the other Loan Documents.
SECTION 11.4. EXPENSES; DOCUMENTARY TAXES; INDEMNIFICATION. Borrower
and the Guarantor Subsidiaries, jointly and severally, agree to pay (a) all
expenses of Administrative Agent and Sole Lead Arranger and the reasonable fees
and disbursements of legal counsel for Administrative Agent, in connection with
the negotiation, documentation and closing of the Credit Facility, and
thereafter all reasonable expenses of Administrative Agent, Sole Lead Arranger
and the Lenders in connection with any waiver, approval, or consent hereunder or
under the other Loan Documents or any amendment, supplement or replacement of
any of the Loan Documents, or any Default or alleged Default hereunder; and (b)
if a Default or an Event of Default occurs, all out-of-pocket expenses incurred
by Administrative Agent, Sole Lead Arranger or the Lenders, including reasonable
fees and disbursements of legal counsel in connection with such Event of Default
and collection and other enforcement proceedings resulting therefrom (including,
without limitation, any bankruptcy or other insolvency proceedings), fees of
auditors and consultants incurred in connection therewith and investigation
expenses incurred by Administrative Agent, Sole Lead Arranger and the Lenders in
connection therewith. Borrower and the Guarantor Subsidiaries, jointly and
severally, indemnify Administrative Agent, Sole Lead Arranger and each Lender
and hold Administrative Agent, Sole Lead Arranger and each Lender harmless from
and against any and all liabilities, losses, damages, costs and expenses of any
kind (including, without limitation, the reasonable fees and disbursements of
counsel for Administrative Agent, Sole Lead Arranger and the Lenders in
connection with any investigative, administrative or judicial proceeding,
whether or not Agents, Sole Lead Arranger or Lenders shall be designated a party
thereto) which may be incurred by Administrative Agent, Sole Lead Arranger or
any Lender relating to or arising out of this Agreement or any actual or
proposed use of proceeds of the Notes or the Competitive Bid Notes; PROVIDED
THAT NEITHER ADMINISTRATIVE AGENT, SOLE LEAD ARRANGER NOR ANY LENDER SHALL HAVE
THE RIGHT TO BE INDEMNIFIED HEREUNDER FOR ITS OWN GROSS NEGLIGENCE OR WILLFUL
MISCONDUCT, IT BEING THE INTENTION HEREBY THAT ADMINISTRATIVE AGENT, SOLE LEAD
ARRANGER AND EACH LENDER SHALL BE INDEMNIFIED FOR THE CONSEQUENCES OF ITS
NEGLIGENCE (SOLE, CONTRIBUTORY, CONTINGENT OR OTHERWISE) WHETHER WHOLE OR IN
PART.
<PAGE> 113
SECTION 11.5. AMENDMENTS, WAIVERS AND CONSENTS. Any provision of this
Agreement, the Notes or the other Loan Documents may be amended or waived, or
the Lenders may give approvals or consents hereunder, if, but only if, such
amendment, in writing and is signed by Borrower and by the Required Lenders or
by Administrative Agent on behalf of the Required Lenders.
SECTION 11.6. SURVIVAL. The obligations of Borrower and the rights of
Administrative Agent and the Lenders under the Loan Documents shall continue
until all Obligations have been paid in full and as provided in SECTION 11.14.
All representations, warranties and covenants (including, without limitation,
indemnities) made by Borrower herein or in any other Loan Document shall survive
the delivery of the Loan Documents to Administrative Agent and the Lenders, the
making of Advances, and the termination of the commitment of the Lender's to
lend hereunder, and, with respect to indemnities herein (and any other
provisions in any Loan Document specified to survive), shall survive the payment
in full of the Obligations and the release or termination of the Loan Documents,
any bankruptcy or other debtor relief proceeding, and any other event
whatsoever. No investigation at any time made by or on behalf of Administrative
Agent or the Lenders shall diminish the right of Administrative Agent and the
Lenders to rely on all representations and warranties made by Borrower under any
Loan Document.
SECTION 11.7. PRIOR UNDERSTANDINGS; NO DEFENSES; RELEASE; NO ORAL
AGREEMENTS. This Agreement supersedes all other prior understandings and
agreements, whether written or not, between the parties hereto relating
specifically to the transactions provided for herein. Borrower and each
Guarantor Subsidiary, for themselves and for all Consolidated Subsidiaries,
confirm that there are no existing defenses, claims, counterclaims or rights of
offset against Administrative Agent or any Lender in connection with the
negotiation, preparation, execution, performance or any other matters related to
this Agreement or any of the other Loan Documents and any of the transactions
contemplated thereby, and Borrower and each Guarantor Subsidiary, for themselves
and for all Consolidated Subsidiaries, hereby expressly release and discharge
Administrative Agent and each Lender, and the Representatives of Administrative
Agent and each Lender, from any and all such claims, known or unknown. Borrower
and each Guarantor Subsidiary further confirm that neither Administrative Agent
nor any Lender has made any agreements with, or commitments or representations
to, Borrower or any Guarantor Subsidiary or any other Consolidated Subsidiary
(either in writing or orally) other than as expressly stated herein or in the
other Loan Documents.
THIS WRITTEN LOAN AGREEMENT, TOGETHER WITH THE OTHER WRITTEN LOAN
DOCUMENTS, REPRESENTS THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY
NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR
SUBSEQUENT ORAL AGREEMENT OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL
AGREEMENTS BETWEEN THE PARTIES.
To the fullest extent applicable, Borrower, each Guarantor Subsidiary,
Administrative Agent and each Lender acknowledge and agree that this Agreement
and each of the other Loan Documents shall be subject to Section 26.02 of the
Texas Business and Commerce Code.
<PAGE> 114
SECTION 11.8. LIMITATION ON INTEREST. It is expressly stipulated and
agreed to be the intent of Borrower, Administrative Agent and the Lenders at all
times to comply with the applicable law governing the maximum rate or amount of
interest payable on or in connection with the Notes, the Competitive Bid Notes
and the Credit Facility. If the applicable law is ever judicially interpreted so
as to render usurious any amount called for under the Notes or the Competitive
Bid Notes, this Agreement or under any of the other Loan Documents, or
contracted for, charged, taken, reserved or received with respect to any of the
Notes, the Competitive Bid Notes, this Agreement or any other Loan Document, or
if acceleration of the maturity of the Notes or any Competitive Bid Note, any
prepayment by Borrower, or any other circumstance whatsoever, results in any
Lender having been paid any interest in excess of that permitted by applicable
law, then it is the express intent of Borrower, Administrative Agent and all the
Lenders that all excess amounts theretofore collected by Lenders be credited on
the balance of the Notes (or, if the Notes have been or would thereby be paid in
full, credited to the Competitive Bid Notes, and if the Competitive Bid Notes
have been paid in full, refunded to Borrower), and the provisions of the Notes,
any Competitive Bid Notes and the other applicable Loan Documents immediately be
deemed reformed and the amounts thereafter collectible hereunder and thereunder
reduced, without the necessity of the execution of any new document, so as to
comply with the applicable law, but so as to permit the recovery of the fullest
amount otherwise called for hereunder and thereunder. The right to accelerate
the maturity of the Notes or any Competitive Bid Note does not include the right
to accelerate any interest which has not otherwise accrued on the date of such
acceleration, and Lenders do not intend to collect any unearned interest in the
event of acceleration. All sums paid or agreed to be paid to Administrative
Agent or the Lenders for the use, forbearance or detention of the indebtedness
evidenced hereby or by the Notes or any Competitive Bid Note shall, to the
extent permitted by applicable law, be amortized, prorated, allocated and spread
throughout the full term of such indebtedness until payment in full so that the
rate or amount of interest on account of such indebtedness does not exceed the
Maximum Lawful Rate or maximum amount of interest permitted under applicable
law. The term "APPLICABLE LAW" as used herein shall mean the laws of the State
which govern this Agreement, or DIDMCA or any other applicable United States
federal law to the extent that it permits Lenders to contract for, charge, take,
reserve or receive a greater amount of interest than under laws of the state
which govern this Agreement. The provisions of this SECTION 11.8 shall control
all agreements between Borrower, Administrative Agent or the Lenders.
SECTION 11.9. INVALID PROVISIONS. If any provision of the Loan
Documents is held to be illegal, invalid, or unenforceable under present or
future laws effective during the term thereof, such provision shall be fully
severable, the Loan Documents shall be construed and enforced as if such
illegal, invalid, or unenforceable provision had never comprised a part thereof,
and the remaining provisions thereof shall remain in full force and effect and
shall not be affected by the illegal, invalid, or unenforceable provision or by
its severance therefrom. Furthermore, in lieu of such illegal, invalid, or
unenforceable provision there shall be added automatically as a part of the Loan
Documents a provision as similar in terms to such illegal, invalid, or
unenforceable provision as may be possible and be legal, valid and enforceable.
<PAGE> 115
SECTION 11.10. LENDER ASSIGNMENTS AND PARTICIPATIONS. (a) Lenders may
assign to one or more Eligible Assignees all or a portion of its rights and
obligations under this Agreement (including, without limitation, all or a
portion of its Note, its Competitive Bid Note and its Commitment); PROVIDED,
HOWEVER, that
(i) each such assignment shall be to an Eligible Assignee;
(ii) except in the case of an assignment to another Lender or
an Affiliate of any Lender, or an assignment of all of a Lender's
rights and obligations under this Agreement, any such partial
assignment shall be in an amount at least equal to Ten Million and
No/100 Dollars ($10,000,000.00) in Commitment amount, unless
Administrative Agent otherwise consents to a lesser amount;
(iii) each such assignment by a Lender shall be of a constant,
and not varying, percentage of all of its rights and obligations under
this Agreement and the applicable Note and Competitive Bid Note; and
(iv) the parties to such assignment shall execute and deliver
to Administrative Agent for its acceptance, with a copy to Borrower, an
Assignment and Acceptance in the form of EXHIBIT D hereto, together
with any Note subject to such assignment and a processing fee of
$3,500, and payment of all legal fees and expenses incurred by
Administrative Agent with respect to such Assignment.
Upon execution, delivery, and acceptance of such Assignment and
Acceptance, the assignee thereunder shall be a party hereto and, to the
extent of such assignment, have the obligations, rights, and benefits
of a Lender hereunder and the assigning Lender shall, to the extent of
such assignment, relinquish its rights and be released from its
obligations under this Agreement. Upon the consummation of any
assignment pursuant to this Section, the assignor, Administrative Agent
and Borrower shall make appropriate arrangements so that, if required,
a new Note and any new Competitive Bid Notes are issued to the assignor
and the assignee. If the assignee is not incorporated under the laws of
the United States of America or a state thereof, it shall deliver to
Borrower and Administrative Agent certification as to exemption from
deduction or withholding of Taxes in accordance with SECTION 3.14.
(b) Administrative Agent shall maintain a copy of each Assignment and
Acceptance delivered to and accepted by it and a register for the recordation of
the names and addresses of the Lenders and the Commitments and Commitment
Percentages and Aggregate Loan Percentages of each Lender from time to time (the
"REGISTER"). The entries in the Register shall be conclusive and binding for all
purposes, absent manifest error, and Borrower, 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 Borrower or any Lender at any reasonable time and from time to
time upon reasonable prior notice.
<PAGE> 116
(c) Upon its receipt of an Assignment and Acceptance executed by the
parties thereto, together with the Note and any Competitive Bid Note(s) subject
to such assignment, and payment of the processing fee, Administrative Agent
shall, if such Assignment and Acceptance has been completed and is in
substantially the form of EXHIBIT D hereto, (i) accept such Assignment and
Acceptance, (ii) record the information contained therein in the Register and
(iii) give prompt notice thereof to the parties thereto, and Borrower shall
promptly execute and deliver one or more new Notes and Competitive Bid Notes
payable to the assignee (and to the assigning Lender in the case of less than a
full assignment of such Lender's interest in the Credit Facility), in the
appropriate amount(s) of any such Note(s) and Competitive Bid Notes to be
substantially in the form of EXHIBIT A-1 and A-2 as applicable, with the
addition of a provision indicating that each such Note and any Competitive Bid
Note is in renewal and replacement of the applicable prior Note or Competitive
Bid Note.
(d) Each Lender may sell participations to one or more Persons in all
or a portion of its rights and obligations under this Agreement (including all
or a portion of its Commitment and its Note, any such purchaser of such a
participation interest a "PARTICIPANT"); PROVIDED, HOWEVER, that (i) such
Lender's obligations under this Agreement shall remain unchanged, (ii) such
Lender shall remain solely responsible to the other parties hereto for the
performance of such obligations, (iii) prior to an Event of Default which has
occurred and is continuing, such Participant (unless it is an Affiliate of a
Lender) shall be approved by Borrower, such approval not to be unreasonably
withheld or delayed by Borrower and such approval to be deemed given by Borrower
if no objection is received by the selling Lender from Borrower within two (2)
Business Days after notice of such proposed participation has been provided by
the selling Lender to Borrower, (iv) the Participant shall be entitled to the
benefit of the yield protection provisions contained in ARTICLE III, (v) any
such participation shall be in an amount at least equal to Ten Million and
No/100 Dollars ($10,000,000) in Commitment Amount, and (vi) Borrower shall
continue to deal solely and directly with such Lender in connection with such
Lender's rights and obligations under this Agreement, and such Lender shall
retain the sole right to enforce the obligations of Borrower relating to its
Note and Competitive Bid Note and to approve any amendment, modification, or
waiver of any provision of this Agreement (other than amendments, modifications,
or waivers decreasing the amount of principal of or the rate at which interest
is payable on such notes, extending any scheduled principal payment date or date
fixed for the payment of interest on such notes or extending the Termination
Date other than as provided for herein or releasing Borrower or any Guarantor
Subsidiary from liability).
(e) Notwithstanding any other provision set forth in this Agreement,
any Lender may at any time assign and pledge all or any portion of its Note or
its Competitive Bid Note or any amount outstanding thereunder to any Federal
Reserve Bank as collateral security pursuant to Regulation A and any Operating
Circular issued by such Federal Reserve Bank; provided that any foreclosure or
similar action pursuant to such assignment or pledge shall be subject to the
provisions of this SECTION 11.10 concerning assignments. Additionally, any
Lender may, with the consent of Administrative Agent, pledge all or any portion
of its Note and Competitive Bid Note to any trustee for, or any other
representative of, holders of obligations owed by such Lender, as security for
such obligations; provided that any foreclosure or similar action by such
trustee shall be subject to the provisions of this SECTION 11.10 concerning
assignments. No such assignment shall release the assigning Lender from its
obligations hereunder.
<PAGE> 117
(f) Any Lender may furnish any information concerning Borrower or any
of the Subsidiaries in the possession of such Lender from time to time to
assignees and Participants (including prospective assignees and participants),
subject, however, to the provisions of SECTION 7.3; PROVIDED that, until
Borrower has approved (or deemed to have approved) or disapproved a prospective
assignee or Participant pursuant to this Agreement (if such approval is
indicated by this Agreement at such time), any Lender may provide to such
prospective assignee or Participant only information available to the public.
SECTION 11.11. BINDING EFFECT. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
permitted assigns; PROVIDED THAT none of Borrower nor any Guarantor Subsidiary
or other Consolidated Subsidiary shall, directly or indirectly, assign or
transfer, or attempt to assign or transfer, any of its rights, duties or
obligations under this Agreement without the express prior written consent of
all of the Lenders.
SECTION 11.12. SENIOR DEBT; BORROWER SUBORDINATION. The indebtedness of
Borrower and the Guarantor Subsidiaries hereunder and under the Notes and all of
the Obligations is intended to be and shall be senior to any subordinated
indebtedness of Borrower or any Guarantor Subsidiary (the foregoing shall not in
any way imply Lenders' consent to any such subordinate debt which is not
otherwise permitted by this Agreement). The Notes and any other amounts advanced
to or on behalf of Borrower or any other Person pursuant to the terms of this
Agreement or any other Loan Document, shall never be in a position subordinate
to any Debt of Borrower or any Guarantor Subsidiary owing to any other Person,
except with the knowledge and written consent of the Lenders. If Borrower or any
Guarantor Subsidiary is now or hereafter becomes indebted to Borrower or any
other Guarantor Subsidiary, (a) such indebtedness and all interest thereon
shall, at all times, be subordinate in all respects to the Obligations and to
all liens, security interests and rights now or hereafter existing to secure the
Obligations; and (b) Borrower or any other Guarantor Subsidiary holding such
inter-company indebtedness shall not be entitled after the occurrence of a
Default to enforce or receive payment, directly or indirectly, of any such
indebtedness until the Obligations have been fully and finally paid and
performed.
<PAGE> 118
SECTION 11.13. NONLIABILITY OF AGENT AND LENDER. The relationship
between Borrower and the Guarantor Subsidiaries, on the one hand, and that of
Administrative Agent and the Lenders, on the other, shall be solely that of
debtor and creditor. Neither Administrative Agent nor any Lender shall have any
fiduciary responsibility to Borrower, the Guarantor Subsidiaries or any other
Subsidiary of Borrower. Borrower agrees that neither Administrative Agent nor
any Lender shall have liability to Borrower or any Guarantor Subsidiary or other
Subsidiary of Borrower (whether sounding in tort, contract or otherwise) for
losses suffered by Borrower or any Guarantor Subsidiary or other Subsidiary in
connection with, arising out of, or in any way related to, the transactions
contemplated and the relationship established by the Loan Documents, or any act,
omission or event occurring in connection therewith, unless it is determined by
a court of competent jurisdiction in a final and non-appealable order that such
losses resulted from the gross negligence or willful misconduct of the party
from which recovery is sought. Neither Administrative Agent nor any Lender shall
have any liability with respect to, and Borrower, each Guarantor Subsidiary and
each other Subsidiary hereby waives, releases and agrees not to sue for, any
special, indirect or punitive damages suffered by Borrower or any Subsidiary in
connection with, arising out of, or in any way related to the Loan Documents or
the transactions contemplated thereby.
SECTION 11.14. PAYMENT SET ASIDE. To the extent that Borrower or any
other Person pays the Obligations or any part thereof to Administrative Agent or
the Lenders, or Administrative Agent or the Lenders enforce any of their Rights
under any Loan Document, and such payment or enforcement or any part thereof is
subsequently invalidated, declared to be fraudulent or preferential, set aside,
and/or required to be repaid to Borrower or such other Person, its estate, a
trustee, receiver, or any other Person under any Law, then to the extent of such
repayment, the Obligations or part thereof originally intended to be satisfied,
together with all Loan Documents (including all the terms thereof and all of
Agent's and Lenders= rights thereunder), notwithstanding any prior termination
and/or delivery of the Loan Documents to Borrower (it being agreed that the
provisions of this Section shall survive any such termination and/or delivery),
shall be revived and continued in effect as if such payment had not been made or
such enforcement had not occurred. Administrative Agent shall be entitled to
retain the Loan Documents in its possession for one (1) year after the date on
which all Obligations have been paid in full; provided, that such retention or
non-retention of such documents after payment in full of all Obligations shall
not impair the revival provisions in this Section or the survival provisions in
SECTION 11.6.
SECTION 11.15. CONSTRUCTION. The parties hereto acknowledge and agree
that neither this Agreement nor any other Loan Document shall be construed more
favorably in favor of one than the other based upon which party drafted the
same, it being acknowledged that all parties hereto contributed substantially to
the negotiations and preparation of this Agreement and the other Loan Documents.
SECTION 11.16. TIME OF ESSENCE. Time shall be of the essence in this
Agreement.
SECTION 11.17. INCONSISTENT PROVISIONS. In the event of any conflict
or inconsistency between the terms of this Agreement and the terms of the other
Loan Documents, the terms of this Agreement shall control.
SECTION 11.18. CONSOLIDATED GROUP. Borrower and the Guarantor
Subsidiaries are engaged in the businesses set forth in SECTION 7.2 of this
Agreement. These operations require financing on a basis such that the credit
supplied can be made available from time to time to Borrower and the Guarantor
Subsidiaries, as required for the continued successful operation of Borrower and
the Guarantor Subsidiaries. Borrower and the Guarantor Subsidiaries have
requested that Lenders make the Credit Facility available primarily for the
purposes of financing the operations of Borrower and the Guarantor Subsidiaries.
Borrower and the Guarantor Subsidiaries expect to derive benefit (and the boards
of directors or other governing body of each of Borrower and the Guarantor
Subsidiaries may reasonably be expected to derive benefit), directly or
indirectly, from the Credit Facility established by Lenders, both in their
separate capacities and as members of the group of companies, since the
successful operation and condition of Borrower and each Guarantor Subsidiary is
dependent on the continued successful performance of the functions of the group
as a whole.
<PAGE> 119
SECTION 11.19. SUBMISSION TO JURISDICTION; SERVICE OF PROCESS.
(a) Any legal action or proceeding with respect to this Agreement or
the Notes or any other Loan Document may be brought in the courts of the State
of Texas or of the United States of America for the Southern District of Texas,
and, by execution and delivery of this Agreement, Borrower and each Guarantor
Subsidiary hereby accepts for itself and in respect of its property, generally
and unconditionally, the jurisdiction of the aforesaid courts. The parties
hereto hereby irrevocably waive any objection, including, without limitation,
any objection to the laying of venue or based on the grounds of FORUM NON
CONVENIENS, which any of them may now or hereafter have to the bringing of any
such action or proceeding in such respective jurisdictions.
(b) Borrower and each Guarantor Subsidiary irrevocably consent to the
service of process of any of the aforesaid courts in any such action or
proceeding by the mailing of copies thereof by registered or certified mail,
postage prepaid, to Borrower or such Guarantor Subsidiary at its address
provided herein.
(c) Nothing contained in this SECTION 11.19 shall affect the right of
any Agent, any Lender or any holder of a Note to serve process in any other
manner permitted by law or commence legal proceedings or otherwise proceed
against Borrower in any other jurisdiction.
SECTION 11.20. JURY TRIAL WAIVER. BORROWER, EACH GUARANTOR SUBSIDIARY,
ADMINISTRATIVE AGENT AND EACH LENDER EACH HEREBY WAIVE ANY RIGHT TO A JURY TRIAL
WITH RESPECT TO ANY MATTER ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE
NOTES, THE COMPETITIVE BID NOTES, OR THE OTHER LOAN DOCUMENTS OR THE
TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.
SECTION 11.21. APPLICABLE LAW. THIS AGREEMENT, THE NOTES AND ALL THE
OTHER LOAN DOCUMENTS SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE
LAWS OF THE STATE OF TEXAS, EXCEPT TO THE EXTENT THAT UNITED STATES FEDERAL LAW
APPLIES PURSUANT TO SECTION 11.8 OR OTHERWISE.
SECTION 11.22. COUNTERPARTS. This Agreement and all amendments hereto,
and all the other Loan Documents may be executed in any number of original
counterparts, each of which when so executed and delivered shall be an original,
and all of which, collectively, shall constitute one and the same agreement, it
being understood and agreed that the signature pages may be detached from one or
more counterparts and combined with the signature pages from any other
counterpart in order that one or more fully executed originals may be assembled.
<PAGE> 120
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized officers effective as of the
Closing Date.
BORROWER:
Borrower's Tax ID No.: CAMDEN PROPERTY TRUST, a Texas real estate
76-6088377 investment trust
By:
G. Steven Dawson
Senior Vice President and Chief
Financial Officer
GUARANTOR SUBSIDIARIES:
CAMDEN USA, INC., a Delaware corporation
By:
Name:
Title:
CAMDEN OPERATING, L.P., a Delaware limited
partnership
By: CPT-GP, INC., a Delaware corporation, General
Partner
By:
Name:
Title:
ADMINISTRATIVE AGENT AND LENDER:
BANK OF AMERICA, N.A.
By:
Cynthia C. Sanford
Senior Vice President
<PAGE> 121
SYNDICATION AGENT AND LENDER:
CHASE BANK OF TEXAS, NATIONAL ASSOCIATION
By:
Name:
Title:
DOCUMENTATION AGENT AND LENDER:
FIRST NATIONAL BANK OF CHICAGO
By:
Name:
Title:
MANAGING AGENT AND LENDER:
WELLS FARGO BANK, N.A.
By:
Name:
Title:
SOLE LEAD ARRANGER:
BANC OF AMERICA SECURITIES LLC
By:
Name:
Title:
<PAGE> 122
CO-AGENTS AND LENDERS:
COMMERZBANK AG
NEW YORK BRANCH
By:
Name:
Title:
By:
Name:
Title:
FIRST UNION NATIONAL BANK
By:
Name:
Title:
LENDERS:
BANK AUSTRIA CREDITANSTALT CORPORATE
FINANCE,INC.
By:
Name:
Title:
By:
Name:
Title:
GUARANTY FEDERAL BANK, F.S.B.
By:
Name:
Title:
<PAGE> 123
SOUTHTRUST BANK, N.A.
By:
Name:
Title:
COMERICA BANK
By:
Name:
Title:
COMPASS BANK
By:
Name:
Title:
LASALLE BANK N.A.
By:
Name:
Title:
MELLON BANK, N.A.
By:
Name:
Title:
PNC BANK, NATIONAL ASSOCIATION
By:
Name:
Title:
<PAGE> 124
SCHEDULE I
AGENTS, LENDERS AND BORROWER
I. AGENTS, ARRANGER AND LENDERS
A. ADMINISTRATIVE AGENT AND LENDER
BANK OF AMERICA, N.A.
901 Main Street, 51st Floor
Dallas, Texas 75202
Attention: Real Estate Loan Administration/
Pat Silva
Tel: (214) 209-0281
Fax: (214) 209-1571
with copy to
BANK OF AMERICA, N.A.
700 Louisiana, 5th Floor
Houston, Texas 77002
Attn: Cynthia C. Sanford
Tel: (713) 247-7093
Fax: (713) 247-6124
B. SOLE LEAD ARRANGER
BANC OF AMERICA SECURITIES LLC
100 North Tryon Street, 11th Floor
Mail Code NC1-007-11-07
Charlotte, North Carolina 28255
Attn: Cynthia Stanford
Tel: (704) 386-8305
Fax: (704) 386-0255
C. SYNDICATION AGENT AND LENDER
CHASE BANK OF TEXAS, NATIONAL ASSOCIATION
707 Travis, 6th Floor North
Houston, Texas 75252-8047
Attn: Susan M. Tate
Tel: (713) 216-1511
Fax: (713) 216-7713
D. DOCUMENTATION AGENT AND LENDER
FIRST NATIONAL BANK OF CHICAGO
One First National Plaza
Chicago, Illinois 60670
Mail Code IL1-0315
Attention: Todd Popovich
Tel: (602) 221-2375
Fax: (602) 221-4435
<PAGE> 125
E. MANAGING AGENT AND LENDER
WELLS FARGO BANK, N.A.
1000 Louisiana, 4th Floor
Houston, Texas 70002
Attention: Steve May
Tel: (713) 319-1424
Fax: (713) 739-1077
F. CO-AGENT AND LENDER
COMMERZBANK AG, NEW YORK AND GRAND CAYMAN BRANCHES
2 World Financial Center
New York, New York 10281
Attention: Lisa C. Miller
Tel: (212) 266-7583
Fax: (212) 266-7565
G. CO-AGENT AND LENDER
FIRST UNION NATIONAL BANK
301 South College Street, 6th Floor
Charlotte, North Carolina 28288
Attention: Rex E. Rudy
Tel: (704) 383-6505
Fax: (704) 383-6205
H. LENDERS
BANK AUSTRIA CREDITANSTALT CORPORATE FINANCE, INC.
Two Ravinia Drive, Suite 1680
Atlanta, Georgia 30346
Attention: Richard Varalla
Tel: (770) 390-1850
Fax: (770) 390-1851
GUARANTY FEDERAL BANK, F.S.B.
8333 Douglas Avenue, Suite 1000
Dallas, Texas 75225
Attention: Roger Davis
Tel: (214) 360-2849
Fax: (214) 360-1661
SOUTHTRUST BANK, N.A.
420 North 20th Street, 11th Floor
Birmingham, Alabama 35203
Attention: Samuel L. Boroughs
Tel: (205) 254-5039
Fax: (205) 254-8270
<PAGE> 126
COMERICA BANK
500 Woodward Avenue, MC 3256
Detroit, Michigan 48226
Attention: Leslie A. Vogel
Tel: (313) 222-9290
Fax: (313) 222-9295
COMPASS BANK
24 Greenway Plaza, Suite 1400
Houston, Texas 77046
Attention: Denise M. Traylor
Tel: (713) 993-8569
Fax: (713) 993-8524
LASALLE BANK N. A.
135 South LaSalle Steet, Suite 1225
Chicago, Illinois 60603-3499
Attention: Klay Schmeisser
Tel: (312) 904-0647
Fax: (312) 904-6691
MELLON BANK, N.A.
One Mellon Bank Center, Room 5325
Pittsburgh, Pennsylvania 15258
Attention: James McDunn
Tel: (412) 234-5344
Fax: (412) 234-8657
PNC BANK, NATIONAL ASSOCIATION
One PNC Plaza, 19th Floor
249 Fifth Avenue, Mail Code P1-POPP-19-2
Pittsburgh, Pennsylvania 15222-2707
Attention: Theron D. Imbrie
Tel: (412) 762-4464
Fax: (412) 762-6500
<PAGE> 127
COMMITMENT AMOUNTS AND
PERCENTAGES
<TABLE>
<CAPTION>
COMMITMENT
LENDER COMMITMENT PERCENTAGE
<S> <C> <C>
Bank of America, N.A. $35,000,000 9.33333333333333333333%
Chase Bank of Texas, National Association. $35,000,000 9.33333333333333333333%
First National Bank of Chicago $35,000,000 9.33333333333333333333%
Wells Fargo Bank, National Association $35,000,000 9.33333333333333333333%
Commerzbank AG, New York and Grand Cayman $30,000,000 8.0000000000000000000%
Branches
First Union National Bank $30,000,000 8.0000000000000000000%
Bank Austria Creditanstalt Corporate $25,000,000 6.666666666666666666%
Finance, Inc.
Guaranty Federal Bank, F.S.B. $25,000,000 6.666666666666666666%
SouthTrust Bank, N.A. $25,000,000 6.666666666666666666%
Comerca Bank $20,000,000 5.333333333333333333%
Compass Bank $20,000,000 5.333333333333333333%
LaSalle Bank N.A. $20,000,000 5.333333333333333333%
Mellon Bank, N.A. $20,000,000 5.333333333333333333%
PNC Bank, National Assocation $20,000,000 5.333333333333333333%
- --------------------------------------------------------------------------------------------------------------------
Total $375,000,000 100%
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
II. BORROWER
CAMDEN PROPERTY TRUST
3 Greenway Plaza
Suite 1300
Houston, Texas 77046
Attn: Mr. G. Steven Dawson
Fax No.: (713) 354-2710
<PAGE> 128
SCHEDULE II
<TABLE>
<CAPTION>
LIBOR MARGIN; VARIABLE RATE MARGIN; FACILITY FEE PERCENTAGE
TIERS Applicable Debt Rating1 LIBOR Variable Facility
S&P/Moody's Margin Rate Fee
Margin Percentage
<S> <C> <C> <C> <C>
I A/A2 or Higher 65 bps 0 bps 15 bps
II A-/A3 75 bps 0 bps 15 bps
III BBB+/Baa1 90 bps 0 bps 20 bps
IV BBB/Baa22 100 bps 0 bps 20 bps
V BBB-/Baa3 110 bps 0 bps 25 bps
VI Less than BBB-/Baa3 160 bps 50 bps 30 bps
_____________________________
1. As defined in Section 1.1, the Applicable Debt Rating is the lower of
the Moody's Rating or the S&P Rating at the time in question.
2. Current Applicable Debt Rating on the Closing Date.
</TABLE>
<PAGE> 129
EXHIBIT A-1
REVOLVING PROMISSORY NOTE
$____________________ Dallas, Texas ______________, 1999
FOR VALUE RECEIVED, CAMDEN PROPERTY TRUST, a Texas real estate investment
trust ("MAKER"), hereby promises to pay to the order of , a ___________________
("LENDER"), in care of Administrative Agent, at its banking house in the City of
Dallas, Dallas County, Texas, or at such other address given to Maker by
Administrative Agent, the principal sum of and ___/100 Dollars ($ . ), or so
much thereof as may be advanced and outstanding, together with interest, as
hereinafter described.
This Note has been executed and delivered pursuant to the terms of that
certain Credit Agreement (as the same may be modified, amended, supplemented,
extended or restated from time to time, the "CREDIT AGREEMENT") dated the date
hereof, executed by and among Maker, Bank of America, N.A., as Administrative
Agent ("ADMINISTRATIVE AGENT"), Chase Bank of Texas, National Association, as
Syndication Agent, First National Bank of Chicago, as Documentation Agent, Wells
Fargo Bank, N.A, as Managing Agent, and the Lenders (which includes the payee of
this Note), and is one of the notes defined therein as a "NOTE", the terms and
provisions of the Credit Agreement related to this Note being incorporated
herein by reference for all purposes. Each capitalized term used but not defined
herein shall have the meaning given to such term in the Credit Agreement. The
terms of the Credit Agreement shall govern in the case of any inconsistency
between such terms and the terms hereof.
Payment and performance of this Note is guaranteed by the Guarantor
Subsidiaries pursuant to each Guaranty Agreement. Any holder hereof shall be
entitled to all benefits and remedies and security set forth in the Credit
Agreement, the Guaranty Agreements and all the other Loan Documents.
1. INTEREST AND PAYMENT.
(a) MATURITY. The principal of this Note and all accrued but
unpaid interest hereon shall be due and payable in full on the Termination Date
as in effect under the Credit Agreement.
(b) ACCRUAL OF INTEREST. Subject to Paragraph 1(f) below,
interest on this Note shall accrue at a rate per annum equal to the lesser of
(i) at Maker's option, the Variable Rate or the Adjusted LIBOR Rate, subject,
however, to the provisions of the Credit Agreement, or (ii) the Maximum Lawful
Rate; provided, however, that as to any portion of the outstanding principal
balance hereof that is not subject to an effective election of or conversion to
the Adjusted LIBOR Rate in accordance with the terms of the Credit Agreement,
interest on such portion of this Note shall accrue interest at the lesser of (i)
the Variable Rate or (ii) the Maximum Lawful Rate. Interest on this Note shall
be calculated at a daily rate equal to 1/360 of the annual percentage rate which
this Note bears, subject to the provisions hereof limiting interest to the
Maximum Lawful Rate. Without notice to Maker or any other Person, the Variable
Rate and the Maximum Lawful Rate shall each automatically fluctuate upward and
downward as and in the amount by which the Base Rate and the Maximum Lawful
Rate, respectively, fluctuate, subject always to limitations contained in this
Note and the Credit Agreement.
(c) AGREEMENTS CONCERNING PRICING ELECTION. Reference should
be made to the provisions of SECTION 3.5 of the Credit Agreement concerning the
terms, manner and agreements related to the interest rate elections available to
Maker under this Note.
(d) INTEREST PAYMENTS. Accrued interest hereon shall be due
and payable as is provided in ARTICLE III of the Credit Agreement, which
provides, in part, for (i) monthly payments of interest on the tenth (10th ) day
of each calendar month, commencing on _________ ___, 199__, and continuing
thereafter on the tenth (10th) day of each month during the Credit Period, and
(ii) to the extent applicable, payment on the last day of each Interest Period.
<PAGE> 130
(e) COSTS DUE TO REGULATORY CHANGES. Maker shall indemnify
Lender against and reimburse Lender for costs to Lender, as a result of any
Regulatory Change, in the maintaining of any LIBOR Rate Advance as provided in
the Credit Agreement.
(f) DEFAULT RATE. After maturity of this Note or the
occurrence of an Event of Default, the outstanding principal balance of this
Note shall, at the option of the Lenders, bear interest at the Default Rate. Any
past due principal, and to the extent permitted by law, past due interest on
this Note shall bear interest, payable as it accrues on demand, for each day
until paid at the Default Rate. Such interest shall continue to accrue at the
Default Rate notwithstanding the entry of a judgment with respect to any of the
Obligations or any other event, unless otherwise provided by law.
(g) MAXIMUM LAWFUL RATE ADJUSTMENTS. If at any time the
Applicable Rate shall be limited to the Maximum Lawful Rate, any subsequent
reductions in the Applicable Rate shall not reduce the rate of interest on this
Note below the Maximum Lawful Rate until the total amount of interest accrued
equals the amount of interest which would have accrued if the Applicable Rate
had at all times been in effect. In the event that at maturity (stated or by
acceleration), or at the final payment of the Credit Facility, the total amount
of interest paid or accrued on the Credit Facility is less than the amount of
interest which would have accrued if the Applicable Rate had at all times been
in effect with respect thereto, then at such time, to the extent permitted by
law, Maker shall pay to Administrative Agent, for the ratable benefit of the
Lenders, an amount equal to the difference between (a) the lesser of the amount
of interest which would have accrued if the Applicable Rate had at all times
been in effect and the amount of interest which would have accrued if the
Maximum Lawful Rate had at all times been in effect, and (b) the amount of
interest actually paid on the Credit Facility.
2. DEFAULT. The occurrence of a Default or an Event of Default, under
and as defined in the Credit Agreement, shall constitute, respectively, a
Default or an Event of Default under this Note.
3. REMEDIES.
(a) ALL REMEDIES AVAILABLE. Upon the occurrence of an Event of
Default, the holder hereof, acting by and through Administrative Agent in
accordance with the terms of Articles IX and X of the Credit Agreement, shall
have the right to declare the entire unpaid principal balance of, and all
accrued unpaid interest on, this Note at once due and payable (and upon such
declaration, the same shall be at once due and payable), to foreclose any liens
and security interests securing payment hereof (if any), to offset against this
Note any sum or sums owed by it to Maker, and to exercise any of its other
rights, powers and remedies under this Note, under the Credit Agreement or any
other Loan Document, or at law or in equity.
(b) NO WAIVER. Neither the failure by the holder hereof to
exercise, nor delay by the holder hereof in exercising, the right to accelerate
the maturity of this Note or any other right, power or remedy upon any Default
or Event of Default shall be construed as a waiver of such Default or Event of
Default or as a waiver of the right to exercise any such right, power or remedy
at any time. No single or partial exercise by the holder hereof of any right,
power or remedy shall exhaust the same or shall preclude any other or further
exercise thereof, and every such right, power or remedy may be exercised at any
time and from time to time. All rights and remedies provided for in this Note
and in any other Loan Document are cumulative of each other and of any and all
other rights and remedies existing at law or in equity, and the holder hereof
shall, in addition to the rights and remedies provided herein or in any other
Loan Document, be entitled to avail itself of all such other rights and remedies
as may now or hereafter exist at law or in equity for the collection of the
indebtedness owing hereunder, and the resort to any right or remedy provided for
hereunder or under any such other Loan Document or provided for by law or in
equity shall not prevent the concurrent or subsequent employment of any other
appropriate rights or remedies. Without limiting the generality of the foregoing
provisions, the acceptance by the holder hereof from time to time of any payment
under this Note which is past due or which is less than the payment in full of
all amounts due and payable at the time of such payment, shall not (i)
constitute a waiver of or impair or extinguish the rights of the holder hereof
to accelerate the maturity of this Note or to exercise any other right, power or
remedy at the time or at any subsequent time, or nullify any prior exercise of
any such right, power or remedy, or (ii) constitute a waiver of the requirement
of punctual payment and performance, or a novation in any respect.
<PAGE> 131
4. USURY SAVINGS PROVISIONS.
(a) GENERAL LIMITATION. Notwithstanding anything herein or in
any other Loan Document, expressed or implied, to the contrary, in no event
shall any interest rate charged hereunder or under any of the other Loan
Documents, or any interest contracted for, collected or received by Lender or
any holder hereof, exceed the Maximum Lawful Rate or the maximum amount
permitted under law.
(b) INTENT OF PARTIES. It is expressly stipulated and agreed
to be the intent of Maker and Lender at all times to comply with the applicable
law governing the maximum rate or amount of interest payable on or in connection
with this Note. If the applicable law is ever judicially interpreted so as to
render usurious any amount called for under this Note or under any of the other
Loan Documents, or contracted for, charged, taken, reserved or received with
respect to this Note, or if acceleration of the maturity of this Note, any
prepayment by Maker, or any other circumstance whatsoever, results in Lender
having been paid any interest in excess of that permitted by applicable law,
then it is the express intent of Maker and Lender that all excess amounts
theretofore collected by Lender be credited on the principal balance of this
Note (or, if this Note has been or would thereby be paid in full, refunded to
Maker), and the provisions of this Note and the other applicable Loan Documents
immediately be deemed reformed and the amounts thereafter collectible hereunder
and thereunder reduced, without the necessity of the execution of any new
document, so as to comply with the applicable law, but so as to permit the
recovery of the fullest amount otherwise called for hereunder and thereunder.
The right to accelerate the maturity of this Note does not include the right to
accelerate any interest which has not otherwise accrued on the date of such
acceleration, and Lender does not intend to collect any unearned interest in the
event of acceleration. All sums paid or agreed to be paid to Lender for the use,
forbearance or detention of the indebtedness evidenced hereby or by any other
Loan Document shall, to the extent permitted by applicable law, be amortized,
prorated, allocated and spread throughout the full term of such indebtedness
until payment in full so that the rate or amount of interest on account of such
indebtedness does not exceed the Maximum Lawful Rate. The term "APPLICABLE LAW"
as used herein shall mean the laws of the State of Texas, or DIDMCA or any other
applicable United States federal law to the extent that it permits Lender to
contract for, charge, take, reserve or receive a greater amount of interest than
under the laws of the state which governs the Credit Agreement. The provisions
of this paragraph shall control all agreements between Maker and Lender.
5. GENERAL PROVISIONS.
(a) BUSINESS DAYS. Whenever any payment shall be due under
this Note on a day which is not a Business Day, the date on which such payment
is due shall be extended to the next succeeding Business Day, and such extension
of time shall be included in the computation of the amount of interest then
payable.
(b) MANNER OF PAYMENT. The manner in which payments are to be
made on this Note shall be governed by the provisions hereof and the Credit
Agreement, including without limitation ARTICLE III of the Credit Agreement.
(c) PREPAYMENTS. Voluntary prepayments may be made on this
Note subject to and in accordance with SECTION 3.6 of the Credit Agreement. A
principal payment may be required on this Note from time to time subject to and
in accordance with SECTION 3.2(B) of the Credit Agreement.
(d) APPLICATION OF PAYMENTS. All payments made on this Note
shall be applied in accordance with SECTIONS 3.6, 3.9 and 9.9 of the Credit
Agreement, as applicable. Nothing herein shall limit or impair any rights of any
holder hereof to apply as provided in the Loan Documents any past due payments
or other collections after default. Except to the extent specific provisions are
set forth in this Note or another Loan Document with respect to application of
payments, all payments received by the holder hereof shall be applied, to the
extent thereof, to the indebtedness owing by Maker to the holder hereof in such
order and manner as the Lenders shall deem appropriate, any instructions from
Maker or anyone else to the contrary notwithstanding.
(e) COSTS OF COLLECTION. If any holder of this Note retains an
attorney in connection with any default or at maturity or to collect, enforce or
defend this Note or any other Loan Document in any lawsuit or in any probate,
reorganization, bankruptcy or other proceeding, or if Maker sues any holder of
this Note in connection with this Note or any other Loan Document and does not
prevail, then Maker agrees to pay to each such holder, in addition to principal
<PAGE> 132
and interest, all costs and expenses incurred by such holder in trying to
collect this Note or in any such suit or proceeding, including reasonable
attorneys= fees.
(f) WAIVERS AND ACKNOWLEDGMENTS. Maker and all sureties,
endorsers, guarantors and any other party now or hereafter liable for the
payment of this Note in whole or in part, hereby severally (i) waive demand,
presentment for payment, notice of dishonor and of nonpayment, protest, notice
of protest, notice of intent to accelerate, notice of acceleration and all other
notice (except only for any notice that is specifically required by the terms of
the Credit Agreement or any other Loan Document), filing of suit and diligence
in collecting this Note or enforcing any security herefor; (ii) agree to any
substitution, subordination, exchange or release of any party primarily or
secondarily liable hereon or any security that may ever be given; (iii) agree
that the holder hereof shall not be required first to institute suit or exhaust
its remedies against Maker or others liable or to become liable hereon or to
enforce its rights against them or any security herefor; (iv) consent to any
extension or postponement of time of payment of this Note for any period or
periods of time and to any partial payments, before or after maturity, and to
any other indulgences with respect hereto, without notice thereof to any of
them; and (v) submit (and waive all rights to object) to personal jurisdiction
in the State of Texas, and venue in Harris County, Texas, for the enforcement of
any and all obligations under the Loan Documents.
(g) AMENDMENTS IN WRITING. This Note may not be changed,
amended or modified except in a writing expressly intended for such purpose and
executed by the party against whom enforcement of the change, amendment or
modification is sought.
(h) NOTICES. Any notice required or which any party desires to
give under this Note shall be given and effective as provided in SECTION 11.2 of
the Credit Agreement.
(i) ASSIGNMENTS/PARTICIPATIONS. Maker acknowledges and agrees
that the holder of this Note may, at any time and from time to time, assign all
or a portion of its interest in the Credit Facility or transfer to any Person a
participation interest in the Credit Facility, subject to and in accordance with
the terms and conditions of the Credit Agreement, including SECTION 11.10
thereof.
(j) SUCCESSORS AND ASSIGNS. All of the covenants,
stipulations, promises and agreements contained in this Note by or on behalf of
Maker shall bind its successors and assigns and shall be for the benefit of
Lender and any holder hereof, and its successors and assigns, whether so
expressed or not, subject, however, to the provisions of SECTION 11.10 of the
Credit Agreement.
(k) TIME OF THE ESSENCE. Time shall be of the essence in this
Note with respect to all of Maker's obligations hereunder.
(l) GOVERNING LAW. THIS NOTE SHALL BE CONSTRUED IN ACCORDANCE
WITH AND GOVERNED BY TEXAS LAW, EXCEPT TO THE EXTENT THAT UNITED STATES FEDERAL
LAW APPLIES PURSUANT TO SECTION 11.8 OF THE CREDIT AGREEMENT OR OTHERWISE.
(m) INTEGRATION. THIS NOTE AND THE OTHER LOAN DOCUMENTS
REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY
EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.
THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
IN WITNESS WHEREOF, Maker has duly executed this Note as of the date
first above written.
<PAGE> 133
MAKER:
CAMDEN PROPERTY TRUST, a Texas real
estate investment trust
By: ___________________________________________
Name: _________________________________________
Title: ________________________________________
<PAGE> 134
EXHIBIT A-2
$187,500,000 Dallas, Texas ____________
(Date)
COMPETITIVE BID NOTE
FOR VALUE RECEIVED, CAMDEN PROPERTY TRUST, a Texas real estate
investment trust ("MAKER") hereby promises to pay to the order of ("LENDER") the
aggregate unpaid principal amount of all Competitive Bid Loans made by Lender to
Maker pursuant to each Competitive Bid Acceptance Notice, in immediately
available funds at the main Dallas, Texas office of Bank of America, N.A., a
national banking association, as Administrative Agent under the Credit Agreement
(hereinafter defined), together with interest on the unpaid principal amount
hereof at the rates and on the dates included in each Competitive Bid Acceptance
Notice. Maker shall pay the principal of and accrued and unpaid interest on each
Competitive Bid Loan as indicated in each Competitive Bid Acceptance Notice and
SECTION 2.3 of the Credit Agreement.
This Note is being executed and delivered pursuant to the terms of that
certain Credit Agreement (as the same may be modified, amended, supplemented,
extended or restated from time to time, the "CREDIT AGREEMENT"), dated _________
__, 1999, executed by and among Maker, Bank of America, N.A., as administrative
agent ("ADMINISTRATIVE AGENT"), Chase Bank of Texas, National Association, as
Syndication Agent, First National Bank of Chicago, as Documentation Agent, Wells
Fargo Bank, N.A., as Managing Agent, and the Lenders (which includes the payee
of this Note), and is one of the notes defined therein as a "COMPETITIVE BID
NOTE", the terms and provisions of the Credit Agreement related to this Note
being incorporated herein by reference for all purposes. Each capitalized term
used but not defined herein shall have the meaning given to such term in the
Credit Agreement. The terms of the Credit Agreement shall govern in the case of
any inconsistency between such terms and the terms hereof.
Lender may from time to time submit to Maker a Competitive Bid Quote
pursuant to SECTION 2.3 of the Credit Agreement. In the event that Maker accepts
all or a portion of the offer reflected in any such Competitive Bid Quote
pursuant to the terms of a Competitive Bid Acceptance Notice , this Note shall
evidence the indebtedness created by the applicable Competitive Bid Loan and
Maker's obligations to pay same in accordance with the terms of the respective
Competitive Bid Acceptance Notice and the Credit Agreement.
Lender shall, and is hereby authorized to, record on each Schedule
attached hereto for each Competitive Bid Loan made by Lender, or to otherwise
record in accordance with its usual practice, the date and amount of each
Competitive Bid Loan made by Lender and the date and amount of each principal
and/or interest payment thereon, provided that Lender's failure to do so shall
not absolve Maker of its obligations hereunder or under any other Loan Document
or in any way affect Maker's obligations to pay all principal of and accrued
interest on each Competitive Bid Loan.
Payment and performance of this Note is guaranteed pursuant to each
Guaranty Agreement. Any holder shall be entitled to all benefits and remedies
set forth in the Credit Agreement, the Guaranty Agreements and all the other
Loan Documents.
DEFAULT. The occurrence of a Default or an Event of Default, under and
as defined in the Credit Agreement, shall constitute, respectively, a Default or
an Event of Default under this Note.
REMEDIES.
(a) ALL REMEDIES AVAILABLE. Upon the occurrence of an Event of Default,
the holder hereof, acting by and through Administrative Agent in accordance with
the terms of Articles IX and X of the Credit Agreement, shall have the right to
declare the entire unpaid principal balance of, and all accrued unpaid interest
on, this Note at once due and payable (and upon such declaration, the same shall
be at once due and payable), to foreclose any liens and security interests
securing payment hereof (if any), to offset against this Note any sum or sums
owed by it to Maker, and to exercise any of its other rights, powers and
<PAGE> 135
remedies under this Note, under the Credit Agreement or any other Loan Document,
or at law or in equity.
(b) NO WAIVER. Neither the failure by the holder hereof to exercise,
nor delay by the holder hereof in exercising, the right to accelerate the
maturity of this Note or any other right, power or remedy upon any Default or
Event of Default shall be construed as a waiver of such Default or Event of
Default or as a waiver of the right to exercise any such right, power or remedy
at any time. No single or partial exercise by the holder hereof of any right,
power or remedy shall exhaust the same or shall preclude any other or further
exercise thereof, and every such right, power or remedy may be exercised at any
time and from time to time. All rights and remedies provided for in this Note
and in any other Loan Document are cumulative of each other and of any and all
other rights and remedies existing at law or in equity, and the holder hereof
shall, in addition to the rights and remedies provided herein or in any other
Loan Document, be entitled to avail itself of all such other rights and remedies
as may now or hereafter exist at law or in equity for the collection of the
indebtedness owing hereunder, and the resort to any right or remedy provided for
hereunder or under any such other Loan Document or provided for by law or in
equity shall not prevent the concurrent or subsequent employment of any other
appropriate rights or remedies. Without limiting the generality of the foregoing
provisions, the acceptance by the holder hereof from time to time of any payment
under this Note which is past due or which is less than the payment in full of
all amounts due and payable at the time of such payment, shall not (i)
constitute a waiver of or impair or extinguish the rights of the holder hereof
to accelerate the maturity of this Note or to exercise any other right, power or
remedy at the time or at any subsequent time, or nullify any prior exercise of
any such right, power or remedy, or (ii) constitute a waiver of the requirement
of punctual payment and performance, or a novation in any respect.
USURY SAVINGS PROVISIONS.
(a) GENERAL LIMITATION. Notwithstanding anything herein or in any other
Loan Document, expressed or implied, to the contrary, in no event shall any
interest rate charged hereunder or under any of the other Loan Documents, or any
interest contracted for, collected or received by Lender or any holder hereof,
exceed the Maximum Lawful Rate or the maximum amount permitted under law.
(b) INTENT OF PARTIES. It is expressly stipulated and agreed to be the
intent of Maker and Lender at all times to comply with the applicable law
governing the maximum rate or amount of interest payable on or in connection
with this Note. If the applicable law is ever judicially interpreted so as to
render usurious any amount called for under this Note or under any of the other
Loan Documents, or contracted for, charged, taken, reserved or received with
respect to this Note, or if acceleration of the maturity of this Note, any
prepayment by Maker, or any other circumstance whatsoever, results in Lender
having been paid any interest in excess of that permitted by applicable law,
then it is the express intent of Maker and Lender that all excess amounts
theretofore collected by Lender be credited on the principal balance of this
Note (or, if this Note has been or would thereby be paid in full, refunded to
Maker), and the provisions of this Note and the other applicable Loan Documents
immediately be deemed reformed and the amounts thereafter collectible hereunder
and thereunder reduced, without the necessity of the execution of any new
document, so as to comply with the applicable law, but so as to permit the
recovery of the fullest amount otherwise called for hereunder and thereunder.
The right to accelerate the maturity of this Note does not include the right to
accelerate any interest which has not otherwise accrued on the date of such
acceleration, and Lender does not intend to collect any unearned interest in the
event of acceleration. All sums paid or agreed to be paid to Lender for the use,
forbearance or detention of the indebtedness evidenced hereby or by any other
Loan Document shall, to the extent permitted by applicable law, be amortized,
prorated, allocated and spread throughout the full term of such indebtedness
until payment in full so that the rate or amount of interest on account of such
indebtedness does not exceed the Maximum Lawful Rate. The term "APPLICABLE LAW"
as used herein shall mean the laws of the State of Texas, or DIDMCA or any other
applicable United States federal law to the extent that it permits Lender to
contract for, charge, take, reserve or receive a greater amount of interest than
under the laws of the state which governs the Credit Agreement. The provisions
of this paragraph shall control all agreements between Maker and Lender.
COSTS OF COLLECTION. If any holder of this Note retains an attorney in
connection with any default or at maturity or to collect, enforce or defend this
Note or any other Loan Document in any lawsuit or in any probate,
<PAGE> 136
reorganization, bankruptcy or other proceeding, or if Maker sues any holder of
this Note in connection with this Note or any other Loan Document and does not
prevail, then Maker agrees to pay to each such holder, in addition to principal
and interest, all costs and expenses incurred by such holder in trying to
collect this Note or in any such suit or proceeding, including reasonable
attorneys= fees.
AMENDMENTS IN WRITING. This Note may not be changed, amended or
modified except in a writing expressly intended for such purpose and executed by
the party against whom enforcement of the change, amendment or modification is
sought.
ASSIGNMENTS/PARTICIPATIONS. Maker acknowledges and agrees that the
holder of this Note may, at any time and from time to time, assign all or a
portion of its interest in the Credit Facility or transfer to any Person a
participation interest in the Credit Facility, subject to and in accordance with
the terms and conditions of the Credit Agreement, including SECTION 11.10
thereof.
SUCCESSORS AND ASSIGNS. All of the covenants, stipulations, promises
and agreements contained in this Note by or on behalf of Maker shall bind its
successors and assigns and shall be for the benefit of Lender and any holder
hereof, and its successors and assigns, whether so expressed or not, subject,
however, to the provisions of SECTION 11.10 of the Credit Agreement.
THIS NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY TEXAS
LAW, EXCEPT TO THE EXTENT THAT UNITED STATES FEDERAL LAW APPLIES PURSUANT TO
SECTION 11.8 OF THE CREDIT AGREEMENT OR OTHERWISE.
Time shall be of the essence in this Note with respect to all of
Maker's obligations hereunder.
THIS NOTE AND THE OTHER LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT
BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.
THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
IN WITNESS WHEREOF, Maker has duly executed this Note as of the date
first above written.
MAKER:
CAMDEN PROPERTY TRUST, a Texas real estate
investment trust
By: _____________________________________
Name: ___________________________________
Title: __________________________________
<PAGE> 137
SCHEDULE [I]
TO
COMPETITIVE BID NOTE OF CAMDEN PROPERTY TRUST,
PAYABLE TO [LENDER]
DATED ____________, _______
___ Competitive Bid Pricing Loan/___ Competitive Bid Fixed Rate Loan (check one)
Made on ______________, _______. Principal Amount $_____________
<TABLE>
<CAPTION>
- --------------------- ---------------------------- ------------------------------ ----------------------------------
Principal
PAYMENT DATE AMOUNT PAID INTEREST PAID UNPAID BALANCE
- --------------------- ---------------------------- ------------------------------ ----------------------------------
<S> <C> <C> <C>
- --------------------- ---------------------------- ------------------------------ ----------------------------------
- --------------------- ---------------------------- ------------------------------ ----------------------------------
- --------------------- ---------------------------- ------------------------------ ----------------------------------
- --------------------- ---------------------------- ------------------------------ ----------------------------------
- --------------------- ---------------------------- ------------------------------ ----------------------------------
</TABLE>
<PAGE> 138
EXHIBIT B
REQUEST FOR ADVANCE
This Request for Advance is being delivered by Camden Property Trust
("BORROWER") pursuant to that certain Credit Agreement (the "CREDIT AGREEMENT"),
dated as of , 1999 executed by Borrower, Bank of America, N.A., as
Administrative Agent, Chase Bank of Texas, National Association, as Syndication
Agent, First National Bank of Chicago , as Documentation Agent, Wells Fargo
Bank, N.A., as Managing Agent, and the Lenders, as therein defined. Unless
defined herein or indicated otherwise, each capitalized term used herein shall
have the meaning given to such term in the Credit Agreement.
1. Borrower hereby requests an Advance under the Credit Facility in an amount
equal to $________ . Borrower requests that the proceeds of such Advance be
wired to ___________________________ or deposited in
______________________________. Borrower represents and warrants to Lenders
that the Advance herein requested does not exceed the amount which Borrower
is entitled to receive pursuant to Section 2.1 (or any other provisions) of
the Credit Agreement.
2. The aggregate Advance herein requested consists of:
___(a) An Advance for the purposes set forth in Section 2.1(a) of the
Credit Agreement in the amount of $__________. Such Advance is to
be used for _______________________________________________________
_____________________________________.
3. ___(a) Borrower requests that of the Advance requested hereby,
$____________ bear the Applicable LIBOR Rate. With respect to the
LIBOR Rate Advance, the Interest Period shall be months, with the
Effective Date being _______________________________.
4. Borrower hereby certifies, represents and warrants to Administrative Agent
and the Lenders that:
(a) This Request for Advance has been duly
authorized by all necessary action on the
part of Borrower.
(b) The representations and warranties contained
in the Credit Agreement and the other Loan
Documents remain true and correct on and as
of the date hereof with the same force and
effect as though made on the date hereof
(except with respect to those
representations and warranties which are
made as of a particular date).
(c) No Default or Event of Default has occurred
and is continuing, and the making of the
Advance requested hereby shall not
constitute a Default or Event of Default.
(d) The proceeds of the Advance herein requested
will not be used in violation of any
provision of the Credit Agreement or any
other Loan Document.
5. Borrower acknowledges and agrees that the making of the Advance requested
hereby shall not (a) constitute a waiver of any condition precedent to the
obligation of the Lenders to make further Advances or (b) preclude the
Lenders from thereafter declaring the failure of Borrower to satisfy all
such conditions precedent to be a Default.
[1. Attached hereto is a true and correct schedule
showing the Maximum Available Amount after giving
effect to the Advance requested hereby.]
EXECUTED as of ______________________, _______.
BORROWER:
CAMDEN PROPERTY TRUST, a Texas real estate
investment trust
By: _____________________________________
Name: ___________________________________
Title: __________________________________
<PAGE> 139
EXHIBIT C
CERTIFICATE OF COMPLIANCE
This Certificate is being delivered pursuant to that certain Credit
Agreement dated as of , 1999 (the "CREDIT AGREEMENT"), among Camden Property
Trust ("BORROWER), Bank of America, N.A., as administrative agent
(AADMINISTRATIVE AGENT"), Chase Bank of Texas, National Association, as
syndication agent, First National Bank of Chicago, as documentation agent, Wells
Fargo Bank, N.A., as managing agent, and the lenders (the "LENDERS") named in
the Credit Agreement. All terms used but not defined herein shall have the
meanings set forth in the Credit Agreement. This Certificate is submitted on a
quarterly basis on or before the fiftieth (50th) day following the end of
Borrower's fiscal quarter for the period ended , . The undersigned hereby
further certifies to the following as of the date set forth below:
1. The representations and warranties of Borrower and the Guarantor
Subsidiaries under the Credit Agreement are true and complete in all material
respects as of the date hereof (except with respect to those representations and
warranties which are made as of a particular date).
2. No event has occurred which constitutes a Default or Event of
Default.
3. As of __________________, _____ (being the last day of Borrower's
most recently ended fiscal quarter), Borrower and its Consolidated Subsidiaries
are in compliance with the financial covenants contained in SECTIONS 5.1, 8.1,
8.2, 8.3 AND 8.4 of the Credit Agreement, and the following information is true,
accurate and complete as of such date:
A. Pertinent Information
1. Gross Asset Value of Unencumbered Properties is $______.
2. Total Unsecured Debt is $__________.
3. Unencumbered Adjusted NOI is $_________.
4. Consolidated Interest Expense attributable solely to
Total Unsecured Debt is $______.
5. Total Consolidated Debt excluding Debentures is $______.
6. Gross Asset Value is $________.
7. Secured Indebtedness is $________.
8. Secured Recourse Debt is $________.
9. Adjusted Consolidated EBITDA is $________.
10. Fixed Charges are $_________.
<PAGE> 140
11. Attached hereto is a list of the Unencumbered Properties
showing total units, occupancy rate, Unencumbered
Adjusted NOI, and Gross Asset Value among other
information.
B. Covenants
1. The aggregate amount of Liens described in subsection
(h) of the definition of Permitted Liens that the Pool
has is $__________.
2. The aggregate occupancy level of the Unencumbered
Properties in the Pool, other than the Development
Properties, based on bona fide tenant leases requiring
current rent payments is ______%.
3. The Gross Asset Value of Unencumbered Properties is
______% of the Total Unsecured Debt.
4. The percent of Gross Asset Value of Unencumbered
Properties attributable to Development Properties is
______%.
5. The ratio of (a) Unencumbered Adjusted NOI to (b) the
portion of the Consolidated Interest Expense
attributable solely to Total Unsecured Debt is ____ to
1.00.
6. The Total Unsecured Debt is $_________, and the Target
Monthly Amortization is $__________________(annualized).
7. The Consolidated Net Worth is $_______.
8. The ratio of (a) Total Consolidated Debt excluding
Debentures to (b) Gross Asset Value is _____ to 1.0.
9. The ratio of (a) Secured Indebtedness to (b) Gross
Asset Value is ____ to 1.0.
10. The ratio of (a) Secured Recourse Debt to (b) Secured
Indebtedness is ____ to 1.0.
11. The ratio of (a) Adjusted Consolidated EBITDA to (b)
Consolidated Interest Expense is ____ to 1.00.
12. The ratio of (a) Adjusted Consolidated EBITDA to (b)
Fixed Charges is ____ to 1.00.
4. I hereby certify that I am the duly elected Chief Financial Officer (or
other duly Authorized Officer permitted under the Credit Agreement) of Borrower.
I hereby further certify, in my capacity as the Chief Financial Officer (or such
other Authorized Officer as indicated below) of Borrower, that the information
set forth herein and on the attachments hereto is true and correct in all
material respects to the best of my knowledge and prepared in accordance with
GAAP.
5. If this Certificate is being delivered in connection with the fiscal
year-end financial statements of Borrower, I hereby certify that, to the best of
my knowledge and belief, the financial statements of Borrower being delivered
herewith fairly reflect the financial condition of Borrower and its Consolidated
Subsidiaries and the results of Borrower's and its Consolidated Subsidiaries=
operations as of the date of delivery of such financial statements.
IN WITNESS WHEREOF, I have executed this Certificate as of the ______
day of _________________, _______.
<PAGE> 141
__________________________________
Title: ___________________________
EXHIBIT D
ASSIGNMENT AND ACCEPTANCE
This ASSIGNMENT AND ACCEPTANCE is made and entered into effective as of the
__ day of ____________, _____, by and between ________________ ("ASSIGNOR"), and
________________ ("ASSIGNEE").
R E C I T A L S:
I. Pursuant to the terms and provisions of that certain Credit Agreement
(as amended from time to time, the "CREDIT AGREEMENT") dated as of __________
__, 1999, executed by and among Camden Property Trust, a Texas real estate
investment trust ("BORROWER"), Bank of America, N.A., a national banking
association, as administrative agent ("ADMINISTRATIVE AGENT"), Chase Bank of
Texas, National Association, as Syndication Agent, First National Bank of
Chicago, as Documentation Agent, Wells Fargo Bank, N.A., as Managing Agent, and
the lenders (collectively, the >Lenders@) from time to time party to the Credit
Agreement, a revolving credit facility (the "CREDIT FACILITY") was made
available to Borrower. Each capitalized term defined in the Credit Agreement and
used herein without definition shall have the same meaning assigned to such term
in the Credit Agreement.
II. Assignor has a Commitment under the Credit Facility in the amount of
$________, and owns and holds a ____ % Commitment Percentage in the Credit
Facility, and, therefore, has an interest the Credit Agreement, and all of the
other Loan Documents, as one of the Lenders thereunder, as more particularly set
forth therein.
III. Assignor desires to assign to Assignee a _____________ percent
(_________%) interest in all of Assignor's right, title and interest in, to and
under the Credit Facility, and a proportionate interest in the Credit Agreement
and all of the other Loan Documents.
NOW, THEREFORE, for and in consideration of Ten and No/100 Dollars
($10.00), and other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged and confessed, Assignor and Assignee hereby
covenant and agree as follows:
1. Assignor has SOLD, ASSIGNED, TRANSFERRED and CONVEYED, and by
these presents does hereby SELL, ASSIGN, TRANSFER and CONVEY,
unto Assignee as of the Assignment Date (hereinafter defined)
a __________ percent ( %) interest in all of Assignor's
rights, interests and obligations as a Lender under the Credit
Agreement and all of the other Loan Documents (the "ASSIGNED
INTEREST").
2. Assignee hereby assumes all obligations of Assignor with
respect to the Assigned Interest.
3. Assignor hereby represents and warrants to Assignee that
Assignor (a) is the legal and beneficial owner of the Assigned
Interest and (b) is legally authorized to enter into this
Assignment and Acceptance.
4. Assignee hereby confirms and acknowledges that, except as
specifically set forth herein, Assignor: (i) makes no
representation or warranty and assumes no responsibility with
respect to any statements, warranties or representations made
in or in connection with any Loan Document, or the execution,
legality, validity, enforceability, genuineness, sufficiency
or value of any Loan Document or any other instrument or
document furnished pursuant thereto, other than that Assignor
is the legal and beneficial owner of the Assigned Interest and
that such interest is free and clear of any adverse claim;
(ii) makes no representation or warranty and assumes no
responsibility with respect to the value or condition of, or
title to, any of the Property, or the financial condition of
Borrower or any of the Guarantor Subsidiaries; and (iii)
makes no representation or warranty and assumes no
responsibility with respect to the performance or observance
by Borrower of any of its obligations under any Loan Document
<PAGE> 142
or any other instrument or document furnished pursuant
thereto.
5. Assignor hereby requests that Administrative Agent exchange
Assignor's Note and Competitive Bid Note, respectively, as
follows:
NOTE
Note Payable to Amount of
THE ORDER OF: NOTE
[Assignor] $____________
[Assignee] $____________
COMPETITIVE
BID NOTE
[Assignor] $____________
[Assignee] $____________
6. Assignee hereby represents and warrants that Assignee (a) is
legally authorized to enter into this Assignment and
Acceptance, and (b) is an Eligible Assignee.
7. Assignee hereby: (i) appoints Administrative Agent as the
Administrative Agent under the Credit Agreement and the
other Loan Documents and authorizes Administrative Agent
to take such action as agent on its behalf and to exercise
such powers under the Credit Agreement and the other Loan
Documents as are delegated to Administrative Agent by the
terms thereof; (ii) confirms that it has received a copy of
the Credit Agreement and other Loan Documents, together
with copies of such financial statements of Borrower and such
other documents and information as it has deemed appropriate
to make its own credit analysis and decision to enter
into this Assignment and Acceptance; (iii) agrees that it
will, independently and without reliance upon Assignor,
any other Lender, Administrative Agent or any other Person,
and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit
decisions in taking or not taking action under the Loan
Documents, subject to and in accordance with ARTICLE X of
the Credit Agreement; (iv) agrees with Assignor for the
benefit of Administrative Agent, each other Lender and
<PAGE> 143
Borrower and any other Person that it will perform all of the
obligations which by the terms of the Loan Documents are
required to be performed by it as a Lender thereunder, and
that it shall be liable directly to Assignor, Administrative
Agent, Borrower, each other Lender or any other Person for the
performance of such obligations; and (v) agrees not to
disclose any financial information of the Borrower or other
confidential information regarding the Credit Facility as and
to the extent provided in SECTION 7.3 of the Credit Agreement.
8. The effective date of this Assignment and Acceptance shall be
________ __, ____ (the "ASSIGNMENT Date"), determined in
accordance with SECTION 11.10(C) of the Credit Agreement.
Following the execution of this Assignment and Acceptance,
each party hereto and each Person consenting hereto shall
deliver its duly executed counterpart hereof to Administrative
Agent for acceptance and recording in the Register by
Administrative Agent.
9. As of the Assignment Date, (i) Assignee shall be a "Lender"
under the Loan Documents and, to the extent provided in this
Assignment and Acceptance and subject to the terms of ARTICLE
X of the Credit Agreement, shall have the rights and
obligations of a Lender thereunder, and (ii) Assignor shall,
with respect only to the Assigned Interest, relinquish its
rights and be released from its obligations under the Loan
Documents, subject to SECTION 11.10 of the Credit Agreement.
10. In accordance with SECTION 11.10 (A) (IV) of the Credit
Agreement, Assignor and Assignee agree to pay Administrative
Agent a processing fee in the sum of $3,500.00, together with
any legal fees of Administrative Agent incurred in connection
with this Assignment.
11. Upon acceptance and recording of this Assignment and
Acceptance, from and after the Assignment Date, Administrative
Agent shall make all payments in respect of the Assigned
Interest (including payments of principal, interest, fees and
other amounts) to Assignee.
12. If Assignee is organized under the laws of a jurisdiction
outside the United States, it hereby represents that it has
delivered to Assignor and Administrative Agent completed and
signed copies of any forms that may be required by the United
States Internal Revenue Service in order to certify Assignee's
exemption from United States withholding taxes with respect to
any payment or distributions made or to be made to Assignee
with respect to the Credit Facilities or under the Credit
Agreement or such other documents as are necessary to indicate
that all such payments or distributions are subject to such
taxes at a rate reduced by an applicable tax treaty.
13. THIS ASSIGNMENT AND ACCEPTANCE SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF TEXAS,
WITHOUT GIVING EFFECT TO THE CONFLICT OF LAWS PRINCIPLES
THEREOF.
<PAGE> 144
14. This Assignment and Acceptance may be executed in any number
of counterparts which shall together constitute but one and
the same agreement.
[REMAINDER OF PAGE LEFT BLANK -
SIGNATURES TO FOLLOW]
<PAGE> 145
IN WITNESS WHEREOF, Assignor and Assignee have executed this Assignment
and Acceptance as of the date first above written.
ASSIGNOR:
_______________________________________
By: __________________________________
Name: ________________________________
Title: _______________________________
ASSIGNEE:
Address of Assignee:
_______________________________________
By: __________________________________
Fax No.: ___________________ Name: ________________________________
Title: _______________________________
ACKNOWLEDGED and ACCEPTED as of the _____ day of _________, ____.
ADMINISTRATIVE AGENT:
BANK OF AMERICA, N.A.,
as Administrative Agent
By: _________________________
Name: _______________________
Title: _______________________
BORROWER:
CAMDEN PROPERTY TRUST, a Texas real estate investment trust
By: _________________________
Name: _______________________
Title: ______________________
<PAGE> 146
EXHIBIT E-1
COMPETITIVE BID QUOTE REQUEST
(SECTION 2.3(B))
______________________, _________
(Date)
To: Bank of America, N.A.., as
administrative agent (the "ADMINISTRATIVE AGENT")
From: Camden Property Trust ("BORROWER")
Re: Credit Agreement (as the same may be modified, amended, supplemented,
extended or restated from time to time, the "CREDIT AGREEMENT") dated
_________ __, 1999, executed by and among Borrower, Administrative
Agent, Chase Bank of Texas, National Association, as Syndication Agent,
First National Bank of Chicago, as Documentation Agent, Wells Fargo
Bank, N.A., as Managing Agent, and the Lenders.
1. Capitalized terms used herein have the meanings assigned to them in the
Credit Agreement.
2. We hereby give notice pursuant to SECTION 2.3(B) of the Credit Agreement
that we request Competitive Bid Quotes for the following proposed
Competitive Bid Advance(s):
A. _________ Competitive Bid Pricing Loan [check if applicable]
Borrowing Date: __________________, ________
PRINCIPAL AMOUNT1 INTEREST PERIOD2
B. _________ Competitive Bid Fixed Rate Loan [check if applicable]
Borrowing Date: _______________, _______
PRINCIPAL AMOUNT1 TERM3
3. Competitive Bid Quotes for a Competitive Bid Pricing Loan should offer
a Competitive Bid Margin. Competitive Bid Quotes for a Competitive Bid
Fixed Rate Loan should offer a fixed rate of interest for the term.
1 Amount must be at least US $10,000,000 and an integral multiple of US
$1,000,000.
2 Fourteen days or one, two, three, four, five or six months subject to
the definition of Interest Period.
3 Not longer than six months.
<PAGE> 147
4. Upon acceptance by the undersigned of any or all of the Competitive Bid
Advances offered by any of the Lenders in response to this request, the
undersigned shall be deemed to affirm as of the Borrowing Date thereof the
representations and warranties made in ARTICLE VI of the Credit Agreement
and that all conditions specified in SECTION 4.2 of the Credit Agreement
have been satisfied.
CAMDEN PROPERTY TRUST, a Texas real estate
investment trust
By: _____________________________________
Name: ___________________________________
Title: __________________________________
<PAGE> 148
EXHIBIT E-2
INVITATION FOR COMPETITIVE BID QUOTES
(SECTION 2.3(C))
_____________________________
(Date)
To: Each of the Lenders party to the
Credit Agreement referred to below
Re: Invitation for Competitive Bid Quotes to
Camden Property Trust ("BORROWER")
Pursuant to SECTION 2.3 of that certain Credit Agreement (as the same may
be modified, amended, supplemented, extended or restated from time to time, the
"CREDIT AGREEMENT") dated ________ __, 1999, executed by and among Borrower,
Bank of America, N.A., as Administrative Agent, Chase Bank of Texas, National
Association, as Syndication Agent, First National Bank of Chicago, as
Documentation Agent, Wells Fargo Bank, N.A., as Managing Agent, and the Lenders,
(defined therein) we are pleased on behalf of the Borrower to invite you to
submit Competitive Bid Quotes to the Borrower for the following proposed
Competitive Bid Advance(s):
A. _____ Competitive Bid Pricing Loan [check if applicable]
Borrowing Date: ________________, __________
PRINCIPAL AMOUNT INTEREST PERIOD
B. _____ Competitive Bid Fixed Rate Loan [check if applicable]
Borrower Date: __________________, __________
PRINCIPAL AMOUNT TERM
Such Competitive Bid Quotes should offer a Competitive Bid Margin or a
fixed interest rate, as applicable. Your Competitive Bid Quote must comply with
SECTION 2.3(D) of the Credit Agreement and the foregoing.
Capitalized terms used herein have the meanings assigned to them in the
Credit Agreement
Please respond to this invitation by no later than [____ P.M.] [____ __.M.]
(Dallas, Texas time) on ______________, _________.
BANK OF AMERICA, N.A.,
as Administrative Agent
By: _____________________________________
Name: ___________________________________
Title: __________________________________
<PAGE> 149
EXHIBIT E-3
COMPETITIVE BID QUOTE
(SECTION 2.3(D))
To: Bank of America, N.A.,
as Administrative Agent
Re: Competitive Bid Quote to Camden Property Trust ("BORROWER")
In response to your invitation on behalf of the Borrower dated _________ we
hereby make the following Competitive Bid Quote pursuant to SECTION 2.3(D) of
the Credit Agreement hereinafter referred to and on the following terms:
1. Quoting Lender:
2. Person to contact at Quoting Lender:
3. Borrowing Date: ___________________________ 1/
4. A. We hereby offer to make COMPETITIVE BID PRICING LOAN(S) in
the following principal amounts, for the following Interest
Periods and at the following rates:
--------------------------- ------------- --------------------
Principal Interest Competitive
AMOUNT1/ PERIOD1/ BID MARGIN1/
--------------------------- ------------- --------------------
--------------------------- ------------- --------------------
B. We hereby offer to make COMPETITIVE BID FIXED RATE LOAN(S) in
the following principal amounts, for the following term at the
following rates:
------------------------- ---------------- -------------------
Principal Term/Maturity
AMOUNT2/ DATE1/ INTEREST RATE1/
-------------------------- ---------------- -------------------
-------------------------- ---------------- -------------------
We understand and agree that the offer(s) set forth above, subject to the
satisfaction of the applicable conditions set forth in that certain Credit
Agreement (as the same may be modified, amended, supplemented, extended or
restated from time to time, the "CREDIT AGREEMENT") dated _________ __, 1999,
executed by and among Borrower, Administrative Agent, Chase Bank of Texas,
National Association, as Syndication Agent, First National Bank of Chicago, as
Documentation Agent, Wells Fargo Bank, N.A., as Managing Agent, and the Lenders,
irrevocably obligates us to make the Competitive Bid Loan(s) for which any
offer(s) are accepted, in whole or in part. Capitalized terms used herein and
not otherwise defined herein shall have their meanings as defined in the Credit
Agreement.
Very truly yours,
[NAME OF LENDER]
By: _____________________________________
Name: ___________________________________
Title: __________________________________
<PAGE> 150
- --------
1/ As specified in the related Invitation For Competitive Bid Quotes.
1/ Principal amount bid for each Interest Period or term may not exceed
the principal amount requested. Bids must be made for at least
$5,000,000 and an integral multiple of $1,000,000.
1/ Fourteen days, one, two, three, four, five or six months, as specified
in the related Invitation for Competitive Bid Quotes.
1/ Competitive Bid Margin over or under the Applicable LIBOR Rate
(excluding the LIBOR Margin) determined for the applicable Interest
Period. Specify percentage (rounded to the nearest 1/100 of 1%) and
specify whether "PLUS" or "MINUS".
1/ Any period of days up to six months.
1/ Specify fixed per annum interest rate.
<PAGE> 151
EXHIBIT 11.1
CAMDEN PROPERTY TRUST
COMPUTATION OF EARNINGS PER COMMON SHARE
(In thousands, except per share amounts)
<TABLE>
<CAPTION>
Three Months Six Months
Ended June 30, Ended June 30,
---------------------- ----------------------
1999 1998 1999 1998
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
BASIC EARNINGS PER SHARE:
Weighted Average Common Shares Outstanding 40,939 44,370 41,668 40,115
========== ========== ========== ==========
Basic Earnings Per Share $ 0.33 $ 0.33 $ 0.96 $ 0.83
========== ========== ========== ==========
DILUTED EARNINGS PER SHARE:
Weighted Average Common Shares Outstanding 40,939 44,370 41,668 40,115
Shares Issuable from Assumed Conversion of:
Common Share Options and Awards Granted 452 387 414 414
Minority Interest Units 634 2,680 2,646 2,587
---------- ---------- ---------- ----------
Weighted Average Common Shares Outstanding, as Adjusted 42,025 47,437 44,728 43,116
========== ========== ========== ==========
Diluted Earnings Per Share $ 0.32 $ 0.31 $ 0.94 $ 0.79
========== ========== ========== ==========
EARNINGS FOR BASIC AND DILUTED COMPUTATION:
Net Income $ 15,878 $ 16,993 $ 47,108 $ 40,208
Less: Preferred Share Dividends 2,343 2,343 7,029 7,029
---------- ---------- ---------- ----------
Net Income to Common Shareholders 13,535 14,650 40,079 33,179
(Basic Earnings Per Share Computation)
Minority Interest 59 1,850 1,043
---------- ---------- ---------- ----------
Net Income to Common Shareholders, as Adjusted
(Diluted Earnings Per Share Calculation) $ 13,535 $ 14,709 $ 41,929 $ 34,222
========== ========== ========== ==========
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> SEP-30-1999
<CASH> 18,959
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 2,633,355
<DEPRECIATION> 230,431
<TOTAL-ASSETS> 2,468,672
<CURRENT-LIABILITIES> 0
<BONDS> 1,085,486
0
42
<COMMON> 447
<OTHER-SE> 1,073,120
<TOTAL-LIABILITY-AND-EQUITY> 2,468,672
<SALES> 0
<TOTAL-REVENUES> 274,424
<CGS> 0
<TOTAL-COSTS> 108,013
<OTHER-EXPENSES> 65,541
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 42,227
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 47,108
<EPS-BASIC> 0.96
<EPS-DILUTED> 0.94
</TABLE>
